MANAGERS’ MONTHLY COMMENTARY

AUGUST 2012

INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years’ experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years’ experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

August was another positive month for risk assets and for the performance for our portfolios. In view of our cautious positioning we continue to view performance for 2012 as quite satisfactory. We continue to feel that caution is warranted given slowing growth and abundance of macro risks. To that end we have adjusted our fixed interest exposure by selling our emerging market debt and adding global ‘safe haven’ government debt. We have some concerns toward these socalled safe havens, however we are minded to agree that, although offering poor value over the medium term, it seems most likely to us that these so-called safe havens will see yields fall further as growth falters and central banks intervene with further quantitative easing. As for our equity exposure, we are neutrally weighted, that being said, our equity exposure is more defensive than the market. In such circumstances one would have expected that we would have lagged our benchmark year to date, however investment selection has added materially to our performance, particularly within the UK equity space which is running over 6 ½ % ahead of the FT All Share. The focus of attention in August has been ECB intervention. At the time of writing a fair number of the hopes have materialised and markets have moved higher, particularly in the periphery of Europe. We expected that more QE would transpire as growth (economic/corporate) in the West failed to live up to expectations. Our thought has been that markets would price in lower growth and, consequent to that sell off, there would be more QE. This has not materialised as yet and has slightly wrong-footed us, with investors having chosen to ignore the slowdown in growth and focus on the printing press. There will be a number of managers who would espouse a pro-cyclical stance as the best way to benefit from the QE stimulus. We do not. We see some issues in the growth outlook. We consider earnings forecasts are overstated for the last quarter of 2012 and for 2013. By way of illustration I have added a table showing S&P 500 index earnings, courtesy of Barclays Research. Barclays consider that earnings are over-egged by 3% for 2012 and 8% for 2013. This implies that prospective valuations are not that cheap, particularly of those companies which are geared towards growth (cyclicals). We have expressed this view by being lowly weighted toward cyclicals and instead having a meaningful position in gold - another prime beneficiary of QE. We consider gold looks the better investment: firstly, given that the S&P 500 Index has outperformed Gold by 23% over the last year, and secondly, as stated above, cyclical stocks in particular may be more expensively valued than the market thinks, given the likely downgrades to earnings. Ray Dalio of Bridgewater Associates (the world’s largest hedge fund) offered some insights into the bull case for gold in his latest investment letter: “Gold is primarily an alternative to fiat currency and a storehold [sic] of wealth…In addition, one of the primary disadvantages of gold relative to fiat currencies, that it doesn’t pay interest, is mitigated by low rates in the current environment. Real interest rates are likely to remain very low and below real growth rates as a means of combating deleveraging and improving debt sustainability. As such, deleveragings [sic] strongly favor shifts from financial assets into gold and other tangible assets.”
Source: Barclays Research

For further information call :

0113 274 7700
Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

IMPORTANT INFORMATION This information has been approved for distribution to professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs.

We thought we would take the opportunity to announce Myddleton Croft’s new offering, the TACTICAL GROWTH PORTFOLIO, which focuses our best investment ideas and themes into a portfolio which is not hampered by needing to adhere to risk limits; as such the portfolio can be 0-100% in equities. There are some early adopters (including yours truly).

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Defensive Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years’ experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

AUGUST 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years’ experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

Model portfolios include cost of underlying investments and Myddleton Croft’s annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

2012 PERFORMANCE

For further information call :

0113 274 7700
Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients’ portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Cautious Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years’ experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

AUGUST 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years’ experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Croft’s annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700
Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Moderate Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years’ experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

AUGUST 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years’ experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Croft’s annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700
Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients’ portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Adventurous Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years’ experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

AUGUST 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years’ experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Croft’s annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700
Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

IMPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Highly Adventurous Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years’ experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

AUGUST 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years’ experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Croft’s annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700
Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

MPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Balanced Speculative Portfolio
INVESTMENT MANAGERS
Patrick Toes
Investment Director with over 20 years’ experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

AUGUST 2012

PERFORMANCE SINCE LAUNCH

David Cowell
Chief Executive, possessing over 40 years’ experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

2012 PERFORMANCE
Model portfolios include cost of underlying investments and Myddleton Croft’s annual management fees, but not the charges for custodian, dealing and settlement (equivalent to platform charges)

For further information call :

0113 274 7700
Email : info@mcim.co.uk Or visit us at : www.myddletoncroft.co.uk

MPORTANT INFORMATION This information has been approved for distribution to retail and professional investors only. The information in this document is believed to be correct but cannot be guaranteed. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Before contemplating any transaction, you should consult your financial adviser. This material is not intended as an offer or solicitation for the purchase or sale of any security or any other action, without first seeking advice as to the suitability of it for your needs. *Clients portfolios may differ from model portfolios dependent on their specific objectives.

ASSET ALLOCATION

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

MCIM Enhanced Income Portfolio
INVESTMENT MANAGERS INVESTMENT MANAGERS
Patrick Toes Patrick Toes Investment Director with over 20 years’

AUGUST 2012

PERFORMANCE SINCE LAUNCH

Investment in experience Director with over 20 years’ fund management. experience fund management. Previously a inmember of Rensburg Previously Assetmember of and Fund a Sheppards Allocation Rensburg Sheppards Asset 9 years and Fund Selection Committees for overAllocation and former Selection Committees for over years and former chairman of those committees at9BWD Rensburg, he chairman of those committees at and is an Associate holds a MSC in Investment Analysis BWD Rensburg, he holds MSC Society of Investment and is an Membera of the in Investment AnalysisProfessionals Associate Member of the Society of Investment (ASIP). Professionals (ASIP).

David Cowell David CowellExecutive, possessing over 40 years’ Chief

Chief Executive, possessing over 40 over experience in financial services, withyears’ experience in financial services, with over 25 years being investment management 25 years David formulates the macro focussed. being investment management focussed. leads formulates the macro economic position andDavid the investment process economic portfolio range. He the investment10 years position and leads also has over process across the across the of business consultancy to small and experience portfolio range. He also has over 10 years experience of business medium sized enterprises. consultancy to small and medium sized enterprises.

12 MONTH PERFORMANCE
Model portfolios include cost of underlying Model portfolios include cost of underlying investments investments and and Myddleton Croft’s Myddleton Croft’s annual annual management fees, but not the charges for custodian, management fees, but not the charges for custodian, dealing and settlement (equivalent to platform dealing and settlement (equivalent to platform charges) charges)

For further information call For further information call : :

0113 274 7700 0113 274 7700
Email info@mcim.co.uk Email ::info@mcim.co.uk Or visit us at Or visit us at : : www.myddletoncroft.co.uk www.myddletoncroft.co.uk

The Enhanced Income Portfolio was launched at the beginning of 2011. It should be noted that the performance before that date (presented above) is from the back-tested portfolio and is provided for illustration purposes only.

ASSET ALLOCATION

IMPORTANT INFORMATION MPORTANT INFORMATION This information has been approved distribution to This information has been approved forfor distribution to and and professional investors only. The retailretailprofessional investors only. The information information in this believed to believed but correct in this document is document isbe correctto becannot . but cannot be Past performance is not a guide to be guaranteed. guaranteed. Past performance is not a guide to future and may not be may not be future performance performance andrepeated. The repeated. The value of the income and them may value of investments andinvestments fromthe income from them may go down as well as up not investors go down as well as up and investors may and get back may amounts originally invested. the not get back the amounts originally invested. Before Before contemplating any transaction, you should contemplating any transaction, you should consult consult your adviser. This material is not intendednot financial adviser. This material is as your financial intended solicitation for the purchase or sale of any an offer oras an offer or solicitation for the purchase or sale of or security or action, without without first security any any other any other action,first seeking seeking to the as to the suitability of needs. advice asadvice suitability of it for yourit for your needs. *Clients’ portfolios may differ from model portfolios *Clients portfolios may differ from model portfolios dependent on their specific objectives. dependent on their specific objectives.

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.