1. 2010 - a bumpy road ahead? Speakers Tristan Hanson Jonathan Schiessl Craig Farley Investment Presentation Jersey – February 2010

2. Climate change Tom Zambon Welcome Jersey Investment presentation July 2010

3. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Today’s Speakers Tristan Hanson - Ashburton Investment strategist Tristan is the Manager of Asset Allocation and Strategy, having joined in 2008. He has responsibility for Ashburton’s Multi Asset Funds and Cash & Fixed Income Funds, and related research. Tristan holds a Masters in Public Administration in International Development (MPA/ID) from Harvard University's Kennedy School of Government, a BA (Hons) in Economics from Durham University and the Securities Institute Diploma.

4. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Ashburton Sterling Asset Management Source: Lipper – As at end May 2010 % Growth Ashburton’s Asset Management Service, which encapsulates our investment philosophy, has experienced the highs and lows of booms and recessions, high and low inflation, high and low interest rates, and its performance over the years speaks for itself. a 28 year track record

5. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 % GrowthYTD3 Years5 Years Multi Asset Funds Replica Sterling Asset Management0.555.1122.26 Sector Average-0.49-3.7218.42 Multi Asset Cautious Fund GBP1.570.30- Sector Average0.67-0.17- Multi Asset Balanced Fund GBP0.69-0.91- Sector Average-0.49-3.72- Multi Asset Balanced Fund USD-0.82-6.42- Sector Average-5.53-17.22- Multi Asset Balanced Fund EUR2.17-- Sector Average1.22-- Multi Asset Aggressive Fund GBP-3.49-10.14- Sector Average-1.40-6.03- Investment Performance - as at 30 June 2010 Source: Lipper

6. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Source: Lipper as at 30 June 2010 Ashburton Sterling Asset Management vs MSCI World Hedged GBP 0 5 10 15 20 25 30 35 40 45 50 Equity Exposure (%) Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 -50 -40 -30 -20 -10 0 10 20 30 MSCI World Hedged GBP

7. Climate change Tristan Hanson The ‘double dip’ debate July 2010

8. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Introduction I.The “double-dip” debate II.Implications for asset allocation III.Ashburton strategy update

9. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Heightened macro anxiety  Europe: sovereign debt crisis, austerity packages, banking risks  China: deflating a property bubble  US: cyclical concerns amid fading fiscal stimulus

10. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 From stimulus to austerity: fiscal policy exhausted Source: Barclays Capital Government Budget Deficits 2010 -14 -12 -10 -8 -6 -4 -2 0 Ireland UK US Spain Japan Portugal France Greece Germany Italy % of GDP

11. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Fears of a double-dip are common  1992: “The US economy remains almost comatose…“structural” burdens as opposed to familiar “cyclical” problems…will take years to work out. Among them: the job drought, the debt hangover, the banking collapse, the real estate depression, the health-care cost explosion, and the runaway federal deficit” Source: TIME (Sep 1992) via ISI.  Subsequent 12mth GDP growth: 2.7%  Subsequent 12mth US equity return: 12.9%

12. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Fears of a double-dip are common  2003: “Investors may not have to worry about whether the economy might plunge back into recession for much longer…it looks as though the plunge has already begun” Source: CNN/Money.com (Mar 2003)  Subsequent 12mth GDP growth: 4.1%  Subsequent 12mth US equity return: 35.1%

13. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Although US double-dips rare  Credit Suisse research: three US “double-dips” in last 126 years (1880s, 1913/1914, 1980-1982)  National Bureau of Economic Research (NBER): since 1854, four US recessions within 12 months of exiting prior downturn (1894-1897, 1912-1914, 1919-1921, 1980-82)

14. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Some good news  Strong growth in emerging market countries  V-shaped recovery in corporate profits  China’s tightening measures have been effective and inflation is low  Low interest rates for longer  Indications of financial stress easing  European Stabilisation Mechanism  European divergence: Germany vs Spain

15. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Global growth has surprised positively – led by EM IMF growth forecasts: 2010 -2 0 2 4 6 8 10 12 EUJapanUSAAsian NICs BrazilIndiaChina % Apr '09 forecast Apr '10 forecast Jul '10 forecast Source: IMF

16. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Corporate profits have rebounded strongly Source: S&P

17. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Europe’s largest economy is performing well German Industrial Production (%, YoY) -25 -20 -15 -10 -5 0 5 10 15 Jan-92 Jan-95Jan-98Jan-01Jan-04Jan-07 Jan-10 % Source: Bloomberg

18. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 US labour market: the key economic indicator Source: Bloomberg 90 100 110 120 130 140 150 Dec-05Dec-06Dec-07Dec-08 Dec-09 Dec 2005 = 100 US consumer spending Household wages & salaries Government transfers

19. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Conclusion  Fears of a “double-dip” recession have intensified  Economic risks exist: structural & cyclical  But “double-dip” a possibility rather than probability

20. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Climate change II. Asset Allocation implications

21. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Asset Allocation philosophy  Financial markets are not a ‘random walk’ – exploitable opportunities exist  Behavioural biases typically create such opportunities  “Be fearful when others are greedy; be greedy when others are fearful” (Buffett)  Patience will be rewarded

22. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Asset Allocation process Valuation Macro Analysis Investment opportunities Sentiment Technical Inter-market  Starting point of analysis: seek valuations that are at odds with objective view of fundamentals Source: Ashburton

23. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Equity risk premium is elevated S&P 500 Implied Equity Risk Premium using Trend EPS (growth ~6%) -2 0 2 4 6 8 10 12 Dec-64 Dec-69Dec-74Dec-79Dec-84Dec-89Dec-94 Dec-99Dec-04 Dec-09 % Source: Ashburton, S&P

24. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Equities: odds favour outperformance vs bonds y=x Source: Ashburton, Barclays Capital

25. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Equities: Shiller valuations suggest moderate returns Source: Ashburton, Shiller data

26. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 US P/E ratio (on 12m forecast EPS) 10 12 14 16 18 20 22 24 26 28 Jul-90Jul-93Jul-96Jul-99Jul-02Jul-05Jul-08 x Equities: valuations cheaper on forecast earnings P/E: 12.7x E/P: 7.8% Source: Factset

27. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 US AA Individual Investors Survey: % bullish on equities 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan-00Jan-01Jan-02 Jan-03Jan-04Jan-05Jan-06Jan-07Jan-08Jan-09Jan-10 Sentiment is extremely negative Source: Bloomberg 6 mth avg return when first crosses 30%: 7.5% Success Ratio: 9/11

28. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 VIX Index - US implied equity volatility 0 10 20 30 40 50 60 70 80 Dec-94Dec-95 Dec-96Dec-97Dec-98Dec-99Dec-00Dec-01Dec-02Dec-03Dec-04Dec-05Dec-06 Dec-07Dec-08Dec-09 Volatility has spiked Source: Bloomberg

29. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 US Bond Yields 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% US High Yield (BB-B) US Investment Grade US Investment Grade: Non- Financial US 30yr Treasury US 10yr Treasury US 2yr Treasury US High Yield bonds: attractive spreads Government Corporate Source: Barclays Capital, Bloomberg

30. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Are there any attractive hedges out there?  Given fear levels, attractive hedges are hard to come by currently  Possible contenders:  Short Euro vs USD  US & UK 30yr government bonds  Canadian government bonds  O/W Asian equities versus developed

31. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Conclusion  Macro-related fears have driven up the price of safe-haven assets and driven down the price of risky assets  Expected medium-term relative returns from risky assets are therefore high…although absolute returns may be low relative to long-term averages  Sentiment indicators confirm pessimism implicit in valuations  Markets likely to display short-term volatility  Catalyst for higher equity prices: greater earnings certainty underpins valuation case

32. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Climate change III. Ashburton strategy update

33. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Replica Asset Management: performance YTD Source: Bloomberg 3.7% 0.6% -8.2% 90 92 94 96 98 100 102 104 106 108 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 RAM£ Global Bonds (hedged) Global Equities (hedged)

34. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Major changes since prior investment briefing  Equities:  Purchased put options (Apr); closed out in early May  Some Japan exposure shifted towards Europe, Korea (May)  Overall equity exposure increased modestly in mid/late May  Bonds:  Duration increased in early April; reduced early May  US TIPS: increased Feb-Apr; closed out early May  Added Canadian bonds (Apr, May)  FX:  GBP & USD funds: reduced Asian FX exposure (Mar/Apr)  EUR funds: large FX exposures outside base scaled back in May; added exposure to USD, GBP, SEK (mid-June)

35. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Replica Asset Management Asset Allocation (12/07/10) 18 11 7 7 10 20 11 16 Equities - US Equities - EU Equities - Japan Equities - Asia ex-Jap Corporate Bonds DM - Government Bonds EM - Government Bonds Cash/Equivalents Asset Allocation Source: Ashburton Equities43 Fixed Income41 Cash Equivalents16

36. The ‘double dip’ debate | Ashburton Investment presentation | July 2010 Q&A

37. Thank you Active Investment Managers

38. DISCLAIMER Ashburton (Jersey) Limited is referred to in this context as ‘Ashburton’. This document does not constitute an offer or solicitation to any person in any jurisdiction in which Ashburton is not authorised or permitted to communicate with potential investors, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The original recipient is solely responsible for any actions in further distributing this document, and should be satisfied in doing so that there is no breach of local legislation or regulation. The information is intended solely for use by Ashburton clients or prospective clients, and should not be reproduced or distributed except via original recipients acting as professional intermediaries. This document is not for distribution in the United States. Prospective investors should inform themselves and if need be take appropriate advice regarding applicable legal, taxation and exchange control regulations in countries of their citizenship, residence or domicile which may be relevant to the acquisition, holding, transfer, redemption or disposal of any investments herein solicited. Any opinions expressed herein are those at the date this material is issued. Data, models and other statistics are sourced from our own records, unless otherwise stated. Ashburton believes that the information contained is from reliable sources, but we do not guarantee the relevance, accuracy or completeness thereof. We caution that the value of investments and the income derived, may fluctuate and it is possible that an investor may incur losses, including a loss of the principal invested. Past performance is not generally indicative of future performance. Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments. Ashburton (Jersey) Limited (Company Registration No. 26087) is a member of the FirstRand Group, is regulated by the Jersey Financial Services Commission and has its registered office at 17 Hilary Street, St Helier, Jersey JE4 8SJ. Ashburton (Jersey) Limited is registered as a Foreign Investment Services Provider in South Africa in accordance with Section 8 of the Financial Advisory & Intermediary Services Act 2002.