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EDM Strategy Fund Fund’s Performance Higher return and lower volatility Relative Year EDM STRATEGY STOXX 50 Performance 2000 15,83% 1,88% 13,95% 2001 -8,55% -18,66% 10,11% 2002 -34,36% -35,05% 0,69% 2003 2,35% 10,50% -8,16% 2004 6,96% 4,30% 2,66% 2005 23,96% 20,70% 3,26% 2006 15,98% 10,39% 5,59% 2007 2,55% -0,36% 2,91% 2008 -28,74% -43,43% 14,69% 2009 25,50% 24,06% 1,43% 2010 11,88% 0,04% 11,84% 2011 -5,00% -8,39% 3,39% 2012 13,45% 6,91% 6,54% Total Return 20,66% -47,74% 68,40% Annual Return 1,50% -5,03% 6,53% Annualized Volatility 12,85% 16,32% -3,47% All EDM return data are expressed in euros and are stated net of expenses and fees. 4 Each Set of comparisons takes into account: a) Retail class at fund level (the one with the highest charge). b) Price returns at Indice level (ex dividends)
EDM Strategy Fund Fund’s Performance Consistent Alpha generation in both bear and bull markets EDM Strategy Stoxx 50 EDM STRATEGY STOXX 50Stoxx 50 has been selected due to its high concentration (50 weights) in European Equities, including relevant countries such as Switzerland and the UK. 5Each Set of comparisons takes into account: a) Retail class at fund level (the one with the highest charge). b) Price returns at Indice level (ex dividends)
EDM Strategy Fund Fund’s Performance Beating all the main european indices EDM Strategy 6 Each Set of comparisons takes into account: a) Retail class at fund level (the one with the highest charge). b) Price returns at Indice level (ex dividends)
EDM Strategy Fund Fund’s Performance Ratings & Ranking Ranking 2011: 35 / 345 EU Equity Funds Ranking Allfunds Bank: 5 YEARS 3 YEARS 1 YEAR VOLATILITY EDM Strategy Sicav -3,3% 39,7% -0,8% 13,8% European Equity Funds -26,0% 35,7% -8,1% 19,2% Data as of: 30.04.2012 Rating Lipper: Rating Morningstar 5Y: 7
EDM Strategy Fund Investment Philosophy Portfolio construction • Long-only traditional investment style (bottom-up) • Stock picking. No benchmarking (low overlapping against its benchmark) • Long-term investment horizon (5 years on average) • Low turnover (15% average for the last 6 years) • High liquidity (92% of the portfolio can be sold within one trading day) • Restricted investment universe: only 100 companies globally • Concentrated portfolio, maximum 30 companies • Always fully equity invested (competition among stocks) • European currency diversification (EUR, GBP, CHF, DKK) • 100 % currency hedged (we do not predict currency fluctuations) 9
EDM Strategy Fund Investment Philosophy Stock picking methodology • Demanding criteria: High quality of the business (Average Portfolio ROE=31%) • Sustainable EPS growth (5Y Average EPS growth= 11%) • Low debt balance-sheet (Average Net Debt/EBITDA = 0,9) • Recurrent and solid cash-flows • Focus on understandable and predictable businesses at reasonable prices • Management quality & integrity are crucial for us 10
EDM Strategy Fund Investment Philosophy How do we manage to obtain such a low volatility? • Following certain long-term Macro-trends: Economic hub shifting from West to East Transformation of world demographics • Lack of sectors whose profits are not easily foreseen: Banking & Insurance Cyclical sectors Regulated tariffs Commodities High leveraged sectors 11
EDM Strategy Fund Investment Philosophy How do we manage to obtain such a low volatility? ∆ EPS EDM Strategy: +12,1% CAGR40% ∆ EPS Stoxx 50: + 3,5% CAGR30%20% 10% 0%-10%-20%-30% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e 12 EDM Strategy DJ Stoxx 50
EDM Strategy Fund Investment Philosophy How do we manage to obtain such a low volatility? Over the last three years, our profit growth forecasts for EDM Strategy companies have barely deviated from their eventual full-year results. This is particularly significant, as our investment strategy is based on the profits of our selected companies: 2009 2010 2011 EDM forecast at year start 8.30% 8.70% 11.90% Reported result at year end 9.10% 8.30% 12.30% -0.80% 0.40% -0.40% * EDM 2012 Profit growth forecast is +9% 13
EDM Strategy Fund Portfolio Companies DescriptionCOMPANY DEFINITION FINANCIAL SITUATION COUNTRYAGGREKO World leader in rental of electric power generators and temperature control systems. Also for events (Olympics, concerts…) and natural disasters. 29 countries. Net Debt/EBITDA 0.7x UKAIR LIQUIDE World leader in production and distribution of industrial gases. 75 countries. Asia 22%, USA 23%, EU 50%. Market share of 27% in large industries and 30% in healthcare Net Debt/EBITDA 1.5x FRANCEALSTOM World leader in high-speed rail. Construction of power plants. Responsible for building 25% of the installed MW base in the world. Emerging markets: 60% Net Debt/EBITDA 1.6x FRANCEBME Leader in securities markets and financial systems in Spain. Dividend of 10%. Stable business. Stock Exchanges, AIAF , MEFF, IBERCLEAR, MAB, Infobolsa… Positive net cash. No debt. SPAINBRENNTAG World leader in chemical product distribution (7% market share). 70 countries, 150,000 clients (TOP 10 represent just 4% of sales), 2,000 suppliers and 10,000 products. Net Debt/EBITDA 2.3x GERMANYCAPITA Leader in UK professional services, support and outsourcing for companies (23% market share). Sales split between public sector (50%) and private sector (50%) Net Debt/EBITDA 2.5x UKCHRISTIAN DIOR European leader in luxury sector: Moet Chandon, Dom Perignon / Louis Vuitton, Céline, Loewe, Kenzo/ Tag Heuer, Hublot, Bulgari / Sephora, Le Bon Marché. Japan (8%) and Asia (27%) Debt/EBITDA 1x Net FRANCECOLOPLAST Leader in Ostomy and Urology. Also wound care products. Specialised business with few players. Market share of 45% in breast prostheses. Net Debt/EBITDA 0.1x DENMARKDANONE One of the largest food groups in the world, leader in dairy products (50%), water and childrens foods. 120 countries. 50% in emerging markets Net Debt/EBITDA 0.9x FRANCEESSILOR World leader in ophthalmic lenses (30% market share). Strong in R&D (200 prods./year). Low penetration (2,400 million people need glasses and dont use them). 80% USA and EU Net Debt/EBITDA 0.6x FRANCEEUTELSAT European leader and 3rd worldwide providing services through satellites (27 in total, 23 of which are owned). 3,800 TV channels. Net Debt/EBITDA 2.5x FRANCEGRIFOLS European leader (and 3rd worldwide) in hemoderivatives and treatment of diseases via blood or blood components (80%). Also Diagnosis and hospitals (20%) Net Debt/EBITDA 3.8x SPAININDITEX World leader in fashion retailing -Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe - 5,527 retail outlets. 82 markets. Positive net cash. No debt. SPAININTERTEK GROUP International leader in services related to quality, certification and security for many sectors. Asia 37%, USA 34%, EMEA 29%. 100 countries Net Debt/EBITDA 1.9x UKLINDT & SPRUE Leader in premium chocolates (35% market share). 5% world market share in chocolates. 80% of sales through its own network. Vertically integrated Positive net cash. No debt. SWITZERLANDNOVO NORDISK World leader in treatment of diabetes, with over 80 years of experience in the field. (75% of sales). Low competition. 179 countries. Positive net cash. No debt. DENMARKRECKITT BENCKISE European leader in personal and household hygiene products. Air Wick, Calgon, Cillit Bang, Flor, Strepsils, Durex. 35% of sales come from products launched in the last 3 years. 130 countries Net Debt/EBITDA 0.7x UKROCHE World leader in oncology and virology drugs. 150 countries. 40% Americas, 30% Europe and 30% Asia. Low exposure to generic drugs. 78% pharma and 22% diagnosisNet Debt/EBITDA < 1x SWITZERLANDSAP AG World leader in business software. 120 countries. Contracts last minimum 5 years (20% of cost of software). EMEA 32%, Germany 18%, Americas 36% and Asia 16% Slightly leveraged GERMANYSODEXO World leader in social catering and restaurant vouchers. High customer retention rate (94%). Low capital intensiveness. 76 countries Net Debt/EBITDA 0.9x FRANCESTRAUMANN World leader in development, production and sale of dental implants (19% market share). R&D represents 6% of Sales. 60 countries. Banking on USA for growth Positive net cash. No debt. SWITZERLANDTALKTALK Leader among UK broadband operators (25% share in individuals segment). Developing "Last-Mile Telephony" Net Debt/EBITDA 1.5x UKTELEFONICA Leading integrated telecoms operator at a worldwide level. 25 countries and customer base in excess of 306.6 million Net Debt/EBITDA 2.6x SPAINTESCO Leader in retail in UK and 3rd worldwide. Warren Buffett is the major shareholder. 13 countries. UK (65%), EU (15%) and Asia (17%) Net Debt/EBITDA 2.5x-3x UKWINCOR NIXDORF A leading supplier in I.T. solutions for Retailers and Banks. 50% software/services and 50% hardware. EU (43%), Germany (29%), Americas (13%) and Asia (15%) Net Debt/EBITDA 0.7x GERMANY 16
EDM Strategy Fund Portfolio Sector Market Cap Consumer goods Chemicals Small 4% Distribution 4% 8% Food 8% Medical Devices IT 11% 8% Giant 40% Retail Mid Pharma 10% 43% 16% Specialised industries Services 9% Large 24% 13% Country Currency CHF Great Britain Switzerland 15% 15% 24% EUR DKK Germany 53% 8% 14% Denmark GBP France 8% 24% 22% 17 Spain 16%
EDM Strategy Fund Portfolio Following Macrotrends MACROTRENDS TRENDS MICROTRENDS COMPANIES Outsourcing of services. CAPITA, SAP, SODEXO Crisis in the Western economic Low-Cost model prevailing. INDITEX model. Deleveraging of governments, businesses and individuals. Economic hub shifting Improving economic conditions Globalisation of the Western lifestyle. CHRISTIAN DIOR, RECKITT BENCKISER, LINDT&SPURGI from West to East for emerging economies. Business models seek efficiency / Mechanisation of traditional industry. WINCOR, AIR LIQUIDE, BRENNTAG, TEMENOS INTERTEK, BOLSAS Y MERCADOS, KUEHNE&NAGEL, Globalisation of markets. DSV Growing dependency on telecommunications. Economic globalisation. TELEFONICA, EUTELSAT, TALK TALK Increased international conflicts. ROCHE, STAUMMAN, GRIFOLS, ESSILOR, COLOPLAST, Ageing populations in Growing healthcare spending. NOVO NORDISK developed countries. Sophistication of consumer trends. TESCO Growing demand for nutritional diets. DANONE Changing population pyramids in emerging countries. Implementation of new technologies. Transformation of world demographics Transformation of the energy model. ALSTOM, AGREKKO Global climate change. Waste and emissions management. Incorporation of economic sustainability Streamlining of raw materials consumption. 19
EDM Strategy Fund Performance over the crisis period EDM Strategy vs. Stoxx50 since the beginning of the crisis (performance) +4% -38% +66,50% EDM Strategy -31% -58% Stoxx 50 +51% 21
EDM Strategy Fund Performance over the crisis period EDM Strategy vs. Stoxx50 since the beginning of the crisis (volatility) 22
EDM Strategy Fund Performance over the crisis period EDM Strategy vs. Competitors since the beginning of the crisis (performance/volatility) Annualized Allianz Fund/ Benchmark/Category Volatility Return EDM Strategy 0,88 13,95 Carmignac Portf Grande Europe A -3,85 15,69 Franklin LFP Europe Impact Emergent R -2,54 16,36 EDM Franklin European Growth A 2,33 16,14 Invesco Bestinver Invesco European Growth A -0,63 16,13 JPM Tocqueville Value Europe P -5,29 16,46 Fidelity Fidelity European Dynamic Grth A -1,11 18,87 LFP Category Agressor Carmignac Allianz RCM Europe Eq Growth AT 6,05 19,54 Agressor -2,57 22,66 JOHCM JPM Europe Strategic Div D -4,10 18,94 Tocqueville JOHCM European Select Val -0,40 19,21 Stoxx Bestinver Internacional -0,80 22,71 STOXX 50EDM -8,16 17,91 ED EDM EDED EURO STOXX 50 M -11,63 21,74M M Euro Stoxx Europe Large-Cap Growth Equity Category -2,03 17,50 23
EDM Strategy Fund Fund Managers Ricardo Vidal, 42. CO-CIO Consumption Sector Specialist Holds an MBA from ESADE University (Barcelona). Worked at Banco Vitalicio (Insurance Company) and Gesindex SGIIC (Financial Services) from 1993 until 1997. Holds the Certified of European Financial Analyst (CEFA). Joined EDM in July 1997. He is currently a Board Member of EDM Gestión, SGIIC. EDM partner since 2005. Adolfo Monclús, 38. CO-CIO. Retail, Business Services and TMT´s Sector Specialist Graduated in Business Administration by the Universitat Internacional de Catalunya & in Economics Finance by Bentley College (USA). Holds an International MBA from Instituto de Empresa (Madrid). Worked at Argentaria and BBVA in the Mid-Corporate Banking area. Joined EDM in July 2005 after finishing his MBA. EDM partner since 2010. Beatriz López, 34. Fund Manager & analyst Medical, Food and Insurance Specialist Graduated in Economics from Universitat Pompeu Fabra (UPF) in 1999, followed by a Masters Degree in Finance from CEMFI (Bank of Spain) in 2001. Holds the Chartered Alternative Investment Analyst (CAIA) by the CAIA Association. She started her career at Banco Sabadell where she became Senior Equity Analyst. Joined EDM in 2007. EDM partner since 2011. 25
EDM Strategy Fund Fund Managers Juan Grau,66 Gonzalo Cuadrado,41 EDM Inversión Fund Manager Fund Manager & analyst Spanish Stocks Specialist Pharmacy, construction and infrastructure Sector Specialist Business education. Graduate in business Management from IESE, Graduate in Financial Graduated in Economy by UB. Holds a Analysis and Tax from EADA and Analysis and Master in Finances by the IEF, the CEFA, the Budget Control form TEA-CEGOS. He worked in CIIA and the CAIA. Holds the “Certificado de several industrial companies as CFO during 16 Experto en Valoración de Empresas”(CEVE) years. Partner and Founder, in 1989, of EDM by IEAF. Worked as a fund manager and Group. He is currently Chairman of EDM Gestión, analyst in Caixa Penedès. Analyst and asset SGIIC and a Board Member of EDM Holding. manager in EDM since 2004. EDM partner since 2010. Alberto Fayos,39 Fund Manager & analyst • No distinction between analyst & portfolio manager Specialised industries and Financials Sector Specialist • Collective discussion & Individual decision Holds a Bachelor in Actuarial and Finances and a Degree in Statistics from University of Barcelona • Investment Team over the last 6 years: (UB) . Holds the CEFA Certified. Worked at Gaesco Gestión SCIIC from 1997 until 2005. Worked at Non-existent staff turnover Banc Sabadell Gestión SGIIC from 2006 until 2009. Joined EDM in March 2009 as an Analyst and Portfolio Manager.In 1995 EDM entrusted the management of its EDM Strategy Fund to the asset management group Comgest, under the same principles that govern the fund today. One of the current fund managers, Ricardo Vidal, joined EDM in 1997 wherehe spent nine years monitoring the companies that Comgest included in the fund. In 2005 the EDM Investments Team began taking an active role in managing the fund, and ultimately Comgest officially ceased to supervise the fund in 2009. 26Since then it has been managed exclusively by EDM Asset Management.
EDM Strategy Fund European Equities European Equities valuation reaching 30 years low P/E FRANCE GERMANY Source: SocGen 28
EDM Strategy Fund European Equities Divergences between profits and prices during 2010 & 2011 Source: Bloomberg 29
EDM Strategy Fund European Equities P/E Ratios USA vs. Europe USA EUROPE S&P500 13,5x Stoxx600 11,3x Walmart 12,6x Tesco 9,5x Procter & 16,9x Reckitt Benckiser 14,5x Gamble 13,0x Alstom 9,2x General Electric 19,0x Air Liquide 17,6x Praxair 16,4x BME 11,5x CME 20,7x Tod’s 18,2x Coach 13,5x Telefónica 8,5x ATT 30
EDM Strategy Fund About EDM Asset Management Regulated companies in three European domiciles EDM HOLDING, S.A. 100% EDM SERVICIOS EDM GESTIÓN EDM FUND EDM ASSETCompany FINANCIEROS S.A. SGIIC MANAGEMENT, S.A. MANAGEMENT, Ltd S.A. AVCountry SPAIN SPAIN LUXEMBOURG IRELAND Since 1989 Since 1989 Since 1990 Since 1999Service Discretionary Domestics Funds International Fuds Fund of Management SICAV SICAV Hegde Funds 33
EDM Strategy Fund About EDM Asset Management Our Principles • Independence: •Transparency: Interests aligned with those of the investor Information that can be understood by investors Capital held by the executive team Reports audited since 1989 • Experience: • Solvency: Highly experienced executive team Assets deposited at banks Very low staff turnover Equity in excess of requirements • Differentiation: • Continuity: Investment based on fundamentals 23 years in asset management Traditional management style Corporate governance: independent directors 34
EDM Strategy Fund About EDM Asset Management EDM Senior Managers Eusebio Díaz-Morera, 66 Antonio Estabanell, 52 EXECUTIVE CHAIRMAN CEO Graduated in Economy from Barcelona Holds an MBA from ESADE University University and MBA from IESE (Barcelona). (Barcelona). Worked at KPMG and two Before founding EDM in 1989, he was General international food companies in the Financial Director of PAS (Fund Management and Area. Joined EDM in 1990 and since then has Corporate Finance), Chairman of Caja de been involved in all investment management Barcelona (Savings Bank), Chairman of Banca activity within the company. Until 2010 he was Catalana, and Chairman of Tunel del Cadí the Managing Director and CIO. (tollway concession) Javier Prada, 62 Luis Fortuny , 45 DIRECTOR HEAD OF BACK-OFFICE & COMPLIANCE Graduated in Law, he holds a Master in Graduated in Economics and Finances from Finance (University of Paris). He started his UAB. In 2006, he received a BA degree in PDD career in Banif Private Bank (Santander) where from IESE Business School. He was working at he was Regional Manager and Former SONY from 1990 to 2000 as Accounting Managing Director. In 1991 he joined Indosuez- Manager and Control Manager. He was Senior Credit Agricole where he was Private Banking Consultant at Cap Gemini Ernst & Young. He General Manager and Regional President. He was also Finance Director at Baker & Mc Kenzie joined EDM in 2005. (Law firm). He joined EDM in 2008. 35
EDM Strategy Fund About EDM Asset Management EDM performance with other asset types 20 Years 15 Years 10 Years 7 Years 3 Years 2 Years 2012 FUND CATEGORY Inception Date ISIN RETURN RETURN RETURN RETURN RETURN VOLATILITY RETURNEDM Strategy Europe Equity Large Cap 241,68 81,18 0,70 40,15 28,54 11,28 4,04 31/10/1995 LU0028445327EDM Ahorro Euro Corporate Credit 115,95 48,55 25,23 17,64 9,29 1,81 1,62 01/04/1991 ES0168673038EDM Inversión Spanish Equity 331,87 170,68 63,37 18,62 6,94 17,25 -10,87 01/04/1991 ES0168674036EDM Renta Euro Fixed Income 47,62 23,82 16,27 4,10 0,63 1,00 22/12/1994 ES0127795039EDM American Growth (USD) US Equity Large Cap Growth -24,22 3,19 45,70 12,58 12,92 31/05/1999 LU0095539242EDM Cartera Global Equity Large Cap 10,09 11,60 -0,26 11/07/2008 ES0128331008EDM American Growth (EUR) US Equity Large Cap Growth 41,91 18,24 7,76 10/09/2008 LU0388590050EDM Credit Portfolio A (EUR) High Yield Fixed Income 43,65 7,89 4,76 08/10/2008 LU0028445590EDM Emerging Markets Emerging Markets Equity 12,72 1,77 21/12/2009 LU0051440435EDM High Yield Short Duration High Yield Fixed Income 2,70 06/10/2011 LU0146855530EDM Credit Portfolio (USD) High Yield Fixed Income -2,29 15/04/2012 LU0761040426 37 All EDM return data are expressed in euros and are stated net of expenses and fees.
EDM Strategy Fund Summary 10 reasons for investing in EDM Strategy Sicav 1. Consistent returns above benchmark (+6% annual outperformance) 2. Very small volatility for an equity fund (-4% annual bellow benchmark) 3. Excellent relative performance throughout the financial crisis (2007-2011) 4. Stable investment philosophy all over 23 years 5. Unique and tested investment process developed by an experienced management team 6. Very high quality (ROE) and liquid concentrated portfolio 7. Defensive strategy: focus on "ensured growth" without leveraged or cyclical sectors 8. Portfolio valuation at historial minimum levels 9. Poor overlapping and low correlation with other fund managers 10. Complementary with other equity styles 39
www.edm.es Ignacio Pedrosa Head of Investor Relations +34 636814186 +34 914110398 email@example.com http://es.linkedin.com/in/ipedrosaLEGAL NOTICE1) This information represents disclosure by EDM and is intended merely to inform those to whom it is addressed in compliance with the code of cunsuct applying to all investment services in Spain. For this reasonefforts have been made to ensure that it is sufficient and understandable to anybody likely to receive it.Given that the information may refer to or include separate additional documentation, the recipient is invited to request this from EDM.If, within the body of information in this notification, there should be any offer regarding products, financial instruments or services, the recipients thereof also have at their disposition supplementary or additionaldocumentation which will enable them to authorise all the terms and conditions pertaining to the offer of interest to them.2) EDM is a securities broker registered in Spain (Avda. Diagonal 399 3º 1ª, 08008 Barcelona) and is authorised to provide investment services with regard to securities and financial instruments for clients, in relationto whom it is subject to the supervision of the Comisión Nacional del Mercado de Valores (National Securities Market Commission) (CNMV, Paseo de la Castellana 19, 28046 Madrid), where it is registered undernumber 139. The broker is a member of the Fondo de Garantía de Inversiones (FOGAIN, the Investment Guarantee Fund).3) The recipients of this information should bear in mind that any results or data provided may be subject to fees, commission, taxes, expenses or duties, which could lead to a reduction in the gross return, whichwill depend on the particular nature of each case.4) It is here left on record that the instruments described in this information are subject to the impact of various common causes, such as:i- Alterations to the markets due to unforeseen circumstancesi- Liquidity risks and others which affect the progress of the investment.5) Within this information here figures appear that refer to past returns for the products mentioned. It is obvious that such information should be used as a reference and as valid background data to reach one’sown conclusions, but under no circumstances should it be employed as an indicator guaranteeing future performance.By the same token, the information contained that might simulate future trends for any product and its performance must, for identical reasons as those cited for past data, be considered as a valid reference toreach one’s own conclusions but in no way seen as a guarantee of returns that will be obtained.6) Within this documentation there may be figures based on currencies other than those used by recipients hereof. For this reason consideration should be given to any possible change upwards or downwards in thevalue of the currency and how this affects the results for the products or instruments proposed. 41This document is reserved for professional investors only as defined by the MIFID