Investec asset management

Is the commodity supercycle still alive?

George Cheveley - Portfolio Manager, Commodities & Resources

Citywire Wealth Manager Retreat, 17 - 19 October 2012

Page 2 | Citywire Wealth Manager Retreat | CONFIDENTIAL

10719

Target audience

This document is only for professional investors, professional financial advisors and, at

their exclusive discretion, their clients. No other person should rely on the information

contained in this document.

If you plan to show this to your clients, please ensure that you comply with any applicable

local marketing regulations.

This document is not to be generally distributed to the public.


10719

Global specialist asset manager

As at 31 August 2012

*Permanent employees

Investec Asset Management

● Founded in 1991 by current leadership

● Independently managed entity within

Investec Group

● Origins are African – presence and

perspective is global

● Investment and Operational hubs in

London & Cape Town

● Client group teams in Africa, Americas, Asia,

Australia, Europe, Japan, Middle East

and the UK

● Over 700 employees*

● Over £60 billion in assets under management

Investec Asset Management Offices

Short Pack


10719

Commodities & Resources Capability

● Team: Experienced investment team with fund management,

industry and operational, investment banking and

commodity research backgrounds

● Philosophy: Systematic investment process including two-

pronged approach to commodities and resource equities

● Investment process: Fundamental commodity market

analysis and resources equity research

● Comprehensive: Cover all commodities including energy,

precious metals, base and bulk metals and mining,

agriculture, softs and other commodities

● Innovative and flexible: Hold resource equities, commodity

ETCs and derivatives

● Capability AuM: $5.0 billion invested in commodities and

resource equities (as of 31 August 2012)

● Wide range of commodity and resource equity solutions,

both generalist and specialist


10719

Global Commodities and Resources Core team

GSF ENR

GSF GDR

OEIC ENR

GSY B GCR

GSF All Comms & Resources

Insti Comms & Resources

Updated

End Jun 2012

Dawid Heyl Agriculture

Scott Winship Precious metals

Simon Gardner-Bond Base, bulk & precious metals

Tom Solomon

Investment support analyst

Graeme Baker

Energy

Strategy Leaders

Bradley George Portfolio manager & team leader

George Cheveley Portfolio manager

Investment Specialists

Team of 2 dedicated traders

Daniel Sacks SA resources & gold

An experienced team with diverse backgrounds

Charles Whall* Energy

Tom Nelson* Energy

*New Joiner from 17 September 2012

Source: Investec Asset Management

● Heritage of investing in

commodities and resources

● Diverse mix of industry,

investment banking,

commodity and resource

equity research and portfolio

management

● Mix of skill sets resulting in

what we consider to be high

quality idea generation

● Average of 12 years

experience

● Leverages off the resources of

the SA Equity investment

team


10719

Where are we in the commodity cycle? September 2012 levels similar to late 2006

0

50

100

150

200

250

300

350

400

450

Dec -1998

Dec -1999

Dec -2000

Dec -2001

Dec -2002

Dec -2003

Dec -2004

Dec -2005

Dec -2006

Dec -2007

Dec -2008

Dec -2009

Dec -2010

Dec -2011

MSCI AC World Energy Index MSCI AC World Materials Index DJUBS TR Index

Source: Bloomberg, 27 September 2012


10719

Global commodities and resources Divergent commodity returns YTD 2012

● Commodities have had a mixed 2012

● Global growth concerns due to

uncertainty in the euro zone is the

main cause

● We still believe long term in the

structural commodity story

● Soft periods like the current one are

inevitable

Source: Bloomberg as at 9 October 2012. DJ UBS Sub-indices Excess Return except for those marked spot


10719

0

200

400

600

800

1,000

1,200

Aug-0

9

Oct-09

Dec-

09

Feb

-10

Apr-

10

Jun-1

0

Aug-1

0

Oct-10

Dec-

10

Feb

-11

Apr-

11

Jun-1

1

Aug-1

1

Oct-11

Dec-

11

Feb

-12

Apr-

12

Jun-1

2

Aug-1

2

Oct-12

US

$/t

EU HR Coil EU Rebar

Turkey Rebar

0

200

400

600

800

1,000

1,200

Oct-09

Dec-

09

Feb

-10

Apr-

10

Jun-1

0

Aug-1

0

Oct-10

Dec-

10

Feb

-11

Apr-

11

Jun-1

1

Aug-1

1

Oct-11

Dec-

11

Feb

-12

Apr-

12

Jun-1

2

Aug-1

2

Oct-12

US

$/t

China Rebar

China HRC

US HRC

US Rebar

US No.1 HMS Scrap

0

20

40

60

80

100

120

140

160

Oct-09

Dec-

09

Feb

-10

Apr-

10

Jun-1

0

Aug-1

0

Oct-10

Dec-

10

Feb

-11

Apr-

11

Jun-1

1

Aug-1

1

Oct-11

Dec-

11

Feb

-12

Apr-

12

Jun-1

2

Aug-1

2

Oct-12

US

$/t

0

40

80

120

160

200

Oct-09

Dec-

09

Feb

-10

Apr-

10

Jun-1

0

Aug-1

0

Oct-10

Dec-

10

Feb

-11

Apr-

11

Jun-1

1

Aug-1

1

Oct-11

Dec-

11

Feb

-12

Apr-

12

Jun-1

2

Aug-1

2

Oct-12

US

$/t

Iron ore bounces as Chinese steel recovers

Europe Steel

Thermal Coal Iron Ore

US and Asia Steel

Source: Bloomberg, MB, SBB


10719

Chinese infrastructure and construction indicators showing some

improvement

Source: Macquarie June 2012

Chinese infrastructure investment needs to catch up Positive signals from the Chinese construction sector


10719

..but overall growth has continued to slow as manufacturing

softens

Source: Macquarie June 2012

Chinese industrial growth continued to slow End use data are mixed


10719

Over 150 million tonnes of iron ore production has costs above

$100/t CIF China

Source: Macquarie, 2012

Supply curve to Chinese market for iron ore fines


10719

Long iron ore equities and short US steel equities

Source: Bloomberg, IAM October 11th 2012

Iron Ore equities have underperformed ..but steel equity shorts have provided some protection


10719

Platinum Supply & Demand Model

000oz 2010 2011 2012F 2013FCAGR

('00-'11)

CAGR

('11-'13)

SupplySouth Africa 4,635 4,855 4,317 4,467 2% -4%

Russia 825 835 777 797 -2% -2%

North America 210 350 350 350 2% 0%

Zimbabw e 280 340 338 379 14% 6%

Others 110 100 100 100 0% 0%

Total Producer Supply 6,060 6,480 5,882 6,093 2% -3%

DemandAutocatalyst 3,075 3,105 3,107 3,205 5% 2%

Chemical 445 470 492 511 4% 4%

Electrical 220 230 246 264 -6% 7%

Glass 385 555 562 579 7% 2%

Investment 655 460 0 0

Jew ellery 2,420 2,480 2,589 2,702 -1% 4%

Medical & Biomedical 230 230 232 233 -1% 1%

Petroleum 170 210 218 227 6% 4%

Other 300 355 367 380 0% 3%

Total Gross Demand 7,900 8,095 7,813 8,101 3% 0%

Recycling 1832 2045 1962 1958 8% -2%

Autocatalyst 1085 1225 1173 1189 8% -2%

Electrical 12 10 12 13 15%

Jew ellery 735 810 777 757 8% -3%

Total Net Demand 6,068 6,050 5,851 6,142 0% 1%

Surplus / (Deficit) -8 430 31 -49

Average Annual Price 1,613 1,758 1,538 1,650

Platinum market moves back into deficit as supplies are cut

Platinum supply losses in South Africa

Company Mine Yr Pt Removed Ounces Cut

Impala Strike (Feb/Mar) Impala Lease 2012 150,000

Eastern Platinum Mareesburg 2012 20,000

Aquarius/Anglo Platinum Marikana 2012 60,000

Aquarius Everest 2012 50,000

Lonmin Marikana 2012 85,000

Anglo Platinum Rustenburg 2012 67,000

Total 432,000

Lonmin Marikana 2013 50,000

Eastern Platinum Mareesburg 2013 50,000

Total 100,000


10719

Platinum 51% of production is loss making at current prices

Costs to remain high due to:

● Strong rand

● Uncertain electricity and water supply outlook,

● Organised labour demanding real pay increases

Platinum Industry Cost Curve including capex

Source: Renaissance Capital, April 2012

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Tw

icke

nham

(A

MS

)

Zim

plat

s (I

MP

)

Pla

t Mile

(A

QP

)*

Mim

osa

(IM

P)

Mim

osa

(AQ

P)*

RB

Pla

ts (

RB

P)*

PP

Rus

t (A

MS

)

WLT

R (

AM

S)

Tw

o R

iver

s (A

RI)

*

Impl

ats

Gro

up (

IMP

)

Mot

otol

o (X

TA

)*

Impa

la (

IMP

)

Mot

otol

o (A

MS

)

Tum

ela

A. (

AM

S)

AR

M G

roup

(A

RI)

*

Am

ande

lbul

t (A

MS

)

Ang

loP

lat G

roup

(A

MS

)

Aqu

ariu

s G

roup

(A

QP

)*

Bat

hope

le R

. (A

MS

)

Nor

tham

(N

HM

)

Kro

onda

l (A

QP

)*

Uni

on (

AM

S)

Kro

onda

l (A

MS

)

Mar

ikan

a (L

ON

)

Lonm

in G

roup

(LO

N)

Mod

ikw

a (A

MS

)

Dis

haba

A. (

AM

S)

Unk

i (A

MS

)

Sip

hum

ele

R. (

AM

S)

Mar

ikan

a (A

MS

)

Pan

dora

(LO

N)

Xst

rata

(X

TA

)*

The

mbe

lam

i R. (

AM

S)

Eve

rest

(A

QP

)*

Rus

tenb

urg

(AM

S)

Mod

ikw

a (A

RI)

*

Kho

man

ani R

. (A

MS

)

Mar

ikan

a (A

QP

)*

Khu

sele

ka R

. (A

MS

)

CT

RP

(A

QP

)*

Ela

nd (

XT

A)*

Mar

ula

(IM

P)

Eas

t Pla

ts (

EP

S)*

Bok

oni (

AR

Q)


10719

Platinum Palladium

Long platinum/palladium and short the equity

Lonmin has fallen as labour situation worsened

Bloomberg, 12 October 2012


10719

Crude oil supply The futures curve is suggesting something different from fundamentals longer term

Source: Bloomberg, 24 September 2012

Brent crude oil price Brent crude oil futures curve

0

20

40

60

80

100

120

140

160

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$/b

bl

90

95

100

105

110

115

Nov-1

2

Ma

r-1

3

Jul-1

3

Nov-1

3

Ma

r-1

4

Jul-1

4

Nov-1

4

Ma

r-1

5

Jul-1

5

Nov-1

5

Ma

r-1

6

Jul-1

6

Nov-1

6

Ma

r-1

7

Jul-1

7

Nov-1

7

Ma

r-1

8

Jul-1

8

Nov-1

8

Ma

r-1

9

Jul-1

9

Nov-1

9

Ma

r-2

0

Jul-2

0

Nov-2

0

$/b

bl


10719

Crude oil Demand – increasingly a Non-OECD story

Source: 1. Bloomberg, 2. IEA and Bernstein research, 3. BP, 4. Simmons and Co. – September 2012

1. Global demand remains robust

4. Per capita oil consumption (barrels per year)

2. Non-OECD set to overtake OECD

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

27.5

30.0

32.5

Oil

Co

nsu

mp

tio

per

Cap

ita

(Bar

rels

P

er Y

ear)

Japan USA South Korea China India

3. Strong growth from emerging markets

20

25

30

35

40

45

50

55

60

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

E

20

13

E

20

14

E

20

15

E

20

16

E

20

17

E

20

18

E

20

19

E

20

20

E

mn

bb

ls p

er

da

y

OECD demand Non-OECD demand

70

75

80

85

90

95

Aug 2

002

Jan 2

003

Jun 2

003

Nov

2003

Apr

200

4

Sep 2

004

Feb

2005

Jul 200

5

Dec

2005

May

2006

Oct 200

6

Apr

200

7

Sep 2

007

Feb

2008

Jul 200

8

Dec

2008

May

2009

Oct 200

9

Mar 2010

Aug 2

010

Jan 2

011

Jun 2

011

Dec

2011

May

2012

Glo

ba

l o

il d

em

an

d (m

n b

bl/

da

y) 1.8%

CAGR


10719

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2012E

2013E

2014E

2015E

2016E

2017E

2018E

2019E

2020E

2021E

000 b

bls

pe

r d

ay

Incremental demand Incremental decline

Crude oil Supply – Decline rates of existing oil fields and capex increasing on new fields

1. Increasing decline rates

● The IEA consensus estimates that global oil

production will decline at 2-5% per annum over the

next decade

● IAM forecast declines of over 5%

● What consensus appears to be missing…

− Majority of new fields are deep-water

− Increasing unconventional production

− Smaller field sizes

● All these have higher decline rates

− Over 83% of the world’s major oil fields are past

peak production

Source: 1, 2 IEA and IAM, 3. Barclays E&P survey 2012 – September 2012

2. The decline in major oil fields is serious

3. Rising capital expenditure requirements

GRAPH 3 – Have put a

white box over (in mn) We

need to change underlying

data but something is weird

with the link!!!!! Need to put

in energy files.

$0

$20

$40

$60

$80

$100

$120

$0

$200

$400

$600

$800

1985 1989 1992 1995 1998 2001 2004 2007 2010

$ p

er

bbl

E&

P S

pendin

g $

bn

Global E&P spending (in mn)

Inflation Adjusted WTI prices


10719

250,000

270,000

290,000

310,000

330,000

350,000

370,000

390,000

410,000

07

-Jan

21

-Jan

04

-Fe

b

18

-Fe

b

03

-Ma

r

17

-Ma

r

31

-Ma

r

14

-Ap

r

28

-Ap

r

12

-Ma

y

26

-Ma

y

09

-Jun

23

-Jun

07

-Jul

21

-Jul

04

-Au

g

18

-Au

g

01

-Se

p

15

-Se

p

29

-Se

p

13

-Oct

27

-Oct

10

-Nov

24

-Nov

08

-Dec

22

-Dec

000' bbls

DOE US invetories 2012 2011 2010 2009 2008 2007

2,500

2,550

2,600

2,650

2,700

2,750

2,800

2,850

Dec

Jan

Fe

b

Ma

r

Apr

Ma

y

Jun

Jul

Aug

Sep

Oct

Nov

Dec

mn b

bls

2012 2011 2010 2009

2008 2007 5 year average

Crude oil OECD stocks below five-year average and marginal costs rising

Source: 1. Bloomberg/IEA, 2. Bloomberg, 3. Goldman Sachs – September 2012

1. OECD oil inventories 2. US oil inventories

3. Rising marginal cost Strategic Petroleum Reserves (SPR)

● Statements from the IEA and US government

regarding potential SPR release to alleviate

consumer pressures

● Last SPR release in May 2011 was 30mn bbls

● Potential release driven by higher oil and gasoline

prices and desire to assist QE3 monetary policy with

stimulative measures

33240

33358

33476

33592

33714

33830

33949

34072

34190

34309

34429

34548

34667

34786

34905

35023

35143

35262

35377

35500

35619

35879

35998

36115

36236

36355

36472

36592

36710

36826

36949

37067

37186

37307

37425

37543

37663

37782

37900

38020

38139

38258

38377

38495

38614

38734

38852

38971

39087

39204

39323

39428

39537

39646

39756

39864

39973

40091

40211

40330

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E

US

$/b

l

Brent oil price required for marginal cost player to return cost of capital

Brent oil price required for average cost player to return cost of capital

5yr forward Brent oil price


10719

R² = 91%

100

200

300

400

500

600

700

0 200 400 600 800 1,000 1,200

Glo

bal

inte

gra

teds s

hare

price i

ndex

Global integrateds commodity indicator

Global integrateds 1998-2012

2011 and 2012

Current

Linear (Global integrateds 1998-2012)

Divergence between commodity prices and energy equities

● Short term disconnect between commodity and equity has moved out to levels seen

back at the end of September last year

● Since the beginning of 1998, there is a 91% correlation between the share price

performance and the overall energy commodity indicator (blue dots on chart below)

● 2011/12 data (navy blue dots below) highlight the significant divergence that occurred

Source: Investec Asset Management September 2012

current divergence


10719

0

20

40

60

80

100

120

140

160

180

Jan 2

007

May 2

007

Sep

2007

Jan 2

008

May 2

008

Aug

2008

Dec 2

008

Ap

r 2009

Aug

2009

Dec 2

009

Ap

r 2010

Aug

2010

Dec 2

010

Ap

r 2011

Aug

2011

Dec 2

011

Ap

r 2012

Aug

2012

Ind

exed

perf

orm

ance

XOM US equity CVX US equity TOT US equity E US equity RDS/A US equity

European integrated companies have decoupled from US peers We have seen negative sentiment towards European companies such as Total

● Royal Dutch Shell – 5.1% dividend yield backed up with 7.3% free-cash generation. Currently

trading on 5.0x 2013 EV/DACF and 7.2x 2013 Price/Earnings*

● Total – 7.4% dividend yield backed up with 7.8% free-cash generation. Currently trading on 4.6x

2013 EV/DACF and 6.5x 2013 Price/Earnings*

* Assuming $110/bl Brent oil and $5.00/mmcf US natural gas long term

Source: Bloomberg, 31 August 2012


10719

Energy sector outlook summary Oil outlook

Oil

Nea

r te

rm

• Non-OECD demand growth has remained strong through economic weakness

• OECD demand predominantly transportation, demand elasticity low

• Oil supply is tight but manageable

• QE3, stimulative environment supportive

• Geopolitical tensions high, SPR release potential

• OPEC production near all time highs; Saudi pumping hard to dampen price

• Non OPEC production, especially Russia at over 10mn bbls/day running hard

• OECD inventory levels below five-year average

• Large NYMEX open position suggests strong demand from speculative buying which exaggerates volatility

Forecast: $110/bl Brent for 2012, $110/bl Brent for 2013

Lo

ng te

rm

• New field start ups are disappointing (e.g. Thunder Horse and Jubilee)

• Non-OPEC production continues to frustrate outside North America

• Long term non-OECD demand growth will tighten markets further (IAM assume 3.9% p.a.)

• OPEC spare capacity should continue to fall as Saudi Arabia struggles to bring on more

• Industry cost inflation continues to increase, approximately 7-10%

• Oil price required to deliver marginal new fields is above $100/bl and require a return on capital

Forecast: $115/bl Brent increasing in real terms


10719

Summary views

At a glance – Commodity and Resource equity views over next 3-6 months

UPDATE

When needed

This is taken from

GSF GDR

presentation

Data provided by

from Commodities

team EMMA

Margetts

Slide is in:

ENR GSF

GNR GSF

GsyB GCR

Neutral Strongly up Sharply down Trending up Trending down

Views expressed for a resource equity sector are subjective and are for the sector as a whole. Investec will have different views

for different stocks within that sector. As at 10 October 2012

The shorter-term case

for commodities

Commodity Equity Commodity Equity Commodity Equity Commodity Equity

Energy Precious

Metals

Base and

Bulk Metals

Ags and

Softs

Crude Oil Gold Copper Corn

Natural Gas Silver Aluminium Soybean

Refiners n/a Platinum Zinc Wheat

Oil services n/a Palladium Nickel Sugar

Alternative

Energy n/a Diamonds Iron Ore Potash

Thermal Coal Coking Coal Phosphate

Uranium Steel Urea

OEIC Investec Enhanced Natural Resources Fund Bradley George and George Cheveley

Portfolio Managers

October 2012


10719

Diversif ied Energy eq, 20.6%Oil Services eq, 9.0%

Gold eq, 8.8%

Iron Ore eq, 8.1%

Diversif ied Metals eq, 6.2%

Seeds and crop protection eq, 5.8%

Oil & Gas E&P eq, 5.6%

Natural gas E&P eq, 5.6%

Phosphate eq, 4.2%

Sugar eq, 4.0%

PGMs eq, 3.4%

Copper eq, 3.2%Steel eq, 3.1%

Diversif ied Resources Eq, 2.3%

Oil E&P eq, 2.1%

Ag Equipment eq, 1.8%

Mineral Sands Eq, 1.2%

Zinc eq, 1.1%

Palm Oil eq, 1.0%

Silver eq, 0.9%Thermal Coal eq, 0.9%

Met Coal eq, 0.3%

Water eq, 0.3%

Palladium, 4.2%

Platinum, 3.0%

Soybeans, 2.4%

Gold, 2.3%

Crude oil, 1.8%

Tin, 1.3%

Commodities, 15.0%

Portfolio diversification Equity and Commodity exposure as at 30 September 2012


*Includes long and short positions

The portfolio may change significantly over a short period of time. This is not a buy or sell recommendation for any particular security 1 Volatility: Lipper 1 year standard deviation 2 VaR: Monthly VaR at 99th percentile based on an internal implementation of a third party model. The portfolio may change

significantly over a short period of time.

Commodities and resource gross exposure*

UPDATE

MONTHLY

Data provided by

Dawid Heyl

G:\Depts\Marketing\Presentations\Hamilton Brown Graphics\¬MASTER

OEIC\MASTER ENR (Bradley George)\¬Evidence\ENR

master.xlsx\Commod and Geo chart



master.xlsx\ENR_Exposure Table

As at

30 September 2012

Equity

Exposure

Commodity

Exposure

Gross 99.8% 15.0%

Long 77.8% 13.2%

Short 22.0% 1.8%

Net 55.8% 11.4%

Volatility 1)

VaR 2)

15.6%

-6.92% For VAR go here:

G:\Depts\Risk\reports\teams\Commodities\

EMAVARU1ENRES file

VaRReport tab.

Pick the 99% Monthly VaR figure. Use Portfolio

Change Percent value


10719

Country stock exchange exposure

Portfolio diversification Country stock exchange exposure and top holdings as at 30 September 2012


The portfolio may change significantly over a short period of time

This is not a buy or sell recommendation for any particular security

UPDATE

MONTHLY

Data provided by

Dawid Heyl



master.xlsx\Commod and Geo chart

Remember

to sort table

by weight %

Filter gross

exp %.

Column -

Top 10

US, 41.2%

UK, 33.8%

Canada, 14.1%

Australia, 5.3%

Italy, 4.3%

Switzerland, 4.0%

France, 3.0%

Europe, 2.3%

Poland, 2.2%

Russia, 2.1%

Belgium, 1.1%

China, 0.7%

Norway, 0.6%

Top 10 holdings Exposure %

Syngenta (short) Agriculture and Softs -4.0%

Goldcorp Precious metals 3.6%

AK Steel (short) Base and bulks -3.1%

Platinum ETC Precious metals 3.0%

Total SA Energy 3.0%

Purecircle Agriculture and Softs 2.7%

Suncor Energy Energy 2.7%

Palladium ETC Precious metals 2.6%

Rio Tinto Base and bulks 2.6%

Anglo American (short) Base and bulks -2.6%


10719

Gross and Net exposure since inception

Source: Investec Asset Management, 30 September 2012

UPDATE

MONTHLY

Chart is provided

by Dawid Heyl

G:\Depts\COMMODI

TY\Global Enhanced

Natural Resources

Fund\DDQ\OEIC\EN

R attribution,

exposure, pricing 29

July 11.xlsx\monthly

exposure tab

Paste as a link from

source in case

underlying data is

requested

-100%

-50%

0%

50%

100%

150%

May-0

8Jun-0

8Jul-08

Aug

-08

Sep

-08

Oct-

08

No

v-0

8D

ec-0

8Jan-0

9F

eb

-09

Mar-

09

Ap

r-09

May-0

9Jun-0

9Jul-09

Aug

-09

Sep

-09

Oct-

09

No

v-0

9D

ec-0

9Jan-1

0F

eb

-10

Mar-

10

Ap

r-10

May-1

0Jun-1

0Jul-10

Aug

-10

Sep

-10

Oct-

10

No

v-1

0D

ec-1

0Jan-1

1F

eb

-11

Mar-

11

Ap

r-11

May-1

1Jun-1

1Jul-11

Aug

-11

Sep

-11

Oct-

11

No

v-1

1D

ec-1

1Jan-1

2F

eb

-12

Mar-

12

Ap

r-12

May-1

2Jun-1

2Jul-12

Aug

-12

Sep

-12

Total longs Total shorts Total Net Total Gross


10719

Investec Enhanced Natural Resources Fund ‘A’ (Retail) Share Class Performance (GBP net of fees since launch 1 May 2008)

UPDATE

MONTHLY

Chart is provided

by Dawid Heyl

G:\Depts\Marketing\Presenta

tions\Hamilton Brown

Graphics\¬MASTER

OEIC\MASTER ENR

(Bradley

George)\Evidence\ENR

master.xlsx

TAB: ENR monthly

perf_£

Past performance figures are not audited and should not be taken as a guide to the future

Source: Lipper to 30 September 2012, NAV based, income reinvested (inclusive of management fees but excluding any initial charge)

net of UK basic rate tax, in GBP.

‘A’ Share Class Performance since ENR Fund launched 1 May 2008

Comparative index: 50% MSCI ACW Energy NR, 50% ACW Materials NR

Description Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

YTD

Cumulative

ENR OEIC Fund 2012 7.0% 1.8% -6.5% -1.6% -4.1% 0.3% 3.2% -1.6% 0.8% -1.3%

Comparative index 2012 6.5% 3.2% -4.6% -3.0% -7.9% 2.7% 1.5% 0.6% 3.1% 1.1%

ENR OEIC Fund 2011 -2.4% 1.1% 1.1% -0.7% -0.8% -0.2% 1.2% -4.8% -11.8% 8.3% -5.3% -0.5% -15.0%

Comparative index 2011 -0.9% 3.3% 2.9% -0.9% -3.2% 0.6% -2.7% -8.4% -11.7% 11.8% 0.0% -1.6% -11.9%

ENR OEIC Fund 2010 -1.8% 5.0% 1.9% 0.1% 0.9% -2.7% -0.3% 0.6% 2.4% 1.6% 3.2% 7.8% 21.0%

Comparative index 2010 -6.2% 6.8% 7.5% -0.6% -6.5% -7.7% 4.3% -1.4% 8.1% 3.3% 2.7% 10.0% 20.2%

ENR OEIC Fund 2009 8.1% 0.0% 7.5% 8.1% 5.6% -5.2% 2.3% 2.9% 3.7% -0.2% 3.4% 2.4% 45.3%

Comparative index 2009 -5.6% -6.1% 8.9% 7.6% 7.0% -7.0% 7.7% 3.3% 8.3% -2.5% 6.8% 3.7% 34.4%

ENR OEIC Fund 2008 3.0% -1.4% -12.1% -1.6% -9.8% -9.2% 1.9% 5.1% -22.9%

Comparative index 2008 6.5% -2.8% -11.0% 2.7% -18.3% -16.0% 0.2% 8.9% -29.1%


10719

87.786.7

91.3

102.4

113.8

20%

40%

60%

80%

100%

120%

140%

160%

May 0

8Jun 0

8Jul 0

8A

ug

08

Sep

08

Oct 08

No

v 0

8D

ec 0

8Jan 0

9F

eb

09

Mar

09

Ap

r 09

May 0

9Jun 0

9Jul 0

9A

ug

09

Sep

09

Oct 09

No

v 0

9D

ec 0

9Jan 1

0M

ar

10

Ap

r 10

May 1

0Jun 1

0Jul 1

0A

ug

10

Sep

10

Oct 10

No

v 1

0D

ec 1

0Jan 1

1F

eb

11

Mar

11

Ap

r 11

May 1

1Jun 1

1Jul 1

1A

ug

11

Oct 11

No

v 1

1D

ec 1

1Jan 1

2F

eb

12

Mar

12

Ap

r 12

May 1

2Jun 1

2Jul 1

2A

ug

12

Sep

12

Ind

exed

perf

orm

ance

Investec Enhanced Natural Resources A Acc Net GBP (MF) First State Global Resources A GBP Acc (MF)

JPM Natural Resources A Acc (MF) 50% MSCI ACW Energy NR50% ACW Materials NR (MP)

BlackRock World Mining Trust PLC (EQ)

Relative performance against comparative index and peer

group

Past performance figures are not audited and should not be taken as a guide to the future

Source: Lipper, 30 September 2012

Performance for all funds and comparative index in GBP net of fees, since 1 May 2008 inception date for

Investec Enhanced Natural Resources Fund


10719

The points to remember!

● We believe the 15-20 year secular bull market in commodities is real

● The journey will not be smooth, so maintain your exposure and lower your volatility

● Ensure your manager makes use of the widest opportunity set

● Commodities / Resource equities do not all move in the same direction

● Know when to play the underlying commodity or the resource equity

● Make sure your manager has an absolute return mindset

● Short exposure can generate additional returns and dampen volatility

● Derivatives have a part to play to improve your risk / return ratios

Appendix


10719

Investec Enhanced Natural Resources Fund Summary of Key Terms

Fund name: Investec Enhanced Natural Resources Fund

Investment advisor: Investec Asset Management Limited

Fund structure: UK domiciled, with extended UCITS investment

powers

Minimum investment: £1,000

Annual management fee: 1.50% p.a. (P shares)

Other charges: 0.09%

Performance fee: 20.00% p.a. of outperformance over hurdle rate

Hurdle rate: Sterling LIBOR +4.00%

URL: www.investecassetmanagement.com/enr

Fund ratings may be provided by independent rating agencies based on a range of investment criteria. For a full description of the

ratings please see www.investecassetmanagement.com/ratings

http://www.investecassetmanagement.com/enr


10719

Investec Enhanced Natural Resources Fund Attribution 1 January 2012 to 30 September 2012

● The Fund delivered returns with a total attribution of 32bps* YTD September 2012

Sector contribution in bps Equity Long Equity Short Commodity Long Commodity Short Total

Precious Metals 18 28 16 - 62

Base and Bulk Metals -465 88 13 23 -341

Energy 76 39 - 75 188

Agriculture and Softs 338 -40 -26 2 273

Diversified Resources/EPM -22 -49 - - -71

Total -55 66 2 100 111

Past performance figures are not audited and should not be taken as a guide to the future. * Cash positions contributed -80bps of return over this period

The total relative performance does not exactly equate to the sum of the attribution due to compounding differences at security,

position, asset class and sector level

Source: Investec Asset Management, This is not recommendation to buy, sell or hold a particular security

Performance from 1 January 2011 to 30 September 2012, in GBP gross of fees.

Stock contribution (top 10) Commodity bps

Ak Steel (Short) Steel 167

Purecircle Sugar 126

Anglo American (Short) Diversified Miner 86

WTI Crude Oil ETC (Short) Oil 75

Nexen Oil 64

Lonmin (Short) PGMs 62

Phosagro Phosphate 58

Lundin Mining Copper 58

Potash Corp. Of Saskatchewan Potash 49

Agco Ag. Equipment 48

Stock contribution (bottom 10) Commodity bps

SXPP Put Option Diversified Mining -115

London Mining Iron Ore -88

Northland Resources Iron Ore -79

Ultra Petroleum Natural Gas -63

Iluka Resources Minerals Sands -61

Fortescue Metals Group Iron Ore -54

Whitehaven Coal Coal -52

S&P 500 Put Option Diversified Resources -49

Syngenta Crop protection -40

United States Steel Steel -38

UPDATE

Quarterly

Data is provided

by Performance

team (Tom)


10719

Investec Enhanced Natural Resources Fund Attribution 4 January 2011 to 31 December 2011

● The Fund delivered returns with a total attribution of -1452bps* 2011

Sector contribution in bps Equity Long Equity Short Commodity Long Commodity Short Total

Precious Metals -531 21 -104 -7 -620

Base and Bulk Metals -662 150 0 93 -418

Energy -100 6 0 -15 -109

Agriculture and Softs -276 -2 -27 17 -289

Diversified Resources/EPM -32 43 0 0 11

Total 0 0 0 0 -1425

Past performance figures are not audited and should not be taken as a guide to the future.

* Cash positions contributed -27bps of return over this period

The total relative performance does not exactly equate to the sum of the attribution due to compounding differences at security,

position, asset class and sector level

Source: Investec Asset Management. This is not recommendation to buy, sell or hold a particular security.

Performance from 1 January 2011 to 31 December 2011, in GBP gross of fees

Stock contribution (top 10) Commodity bps

Iluka Resources Mineral sands 138

Petrohawk Energy Natural gas 106

Outokumpu Steel 85

Nickel Derivatives Nickel 85

Arcelormittal Steel 57

Boliden Zinc 46

Marathon Oil Oil and natural gas 46

Range Resources Natural gas 33

Petrofac Oilfield services 27

Murphy Oil Oil and natural gas 27

Stock contribution (bottom 10) Commodity bps

Teck Resources Diversified metals -119

Newcrest Mining Gold -112

Ultra Petroleum Natural gas -107

Lundin Mining Diversified metals -106

Ncondezi Coal Met. coal -104

Vedanta Resources Diversified metals -92

Aquarius Platinum Platinum -87

Rio Tinto Diversified metals -77

Fortescue Metals Iron ore -69

Palladium Derivatives Palladium -69

UPDATE

Monthly

Data is provided

by Performance

team (graeme

baker)


10719

Risk management

Risk Management System

● EMA Risk System

− Portfolio risk reports run on a daily basis

− Portfolio volatility

− Risk decomposition report shows breakdown of risk in the active portfolio:

Country risk factors, sector risk factors, valuation risk factors, asset risk factors

− Value-at-Risk (VaR) Matrix at 99%, 95% and 90% confidence level, daily, weekly

and monthly


10719

Risk management Current portfolio restrictions

● Cannot invest in companies with a market capitalisation of <$100 million

● Maximum of 10% of Net Asset Value may be invested in any one stock

● Maximum of 10% of Net Asset Value may be invested in the securities of any one issuer

● Maximum of 80% of Net Asset Value in Energy, 80% in Metals and Mining and 60% in Agriculture and Softs

● Maximum of 50% of Net Asset Value in securities listed in any one country

● Maximum of 20% in any one metal, energy or softs commodity security

● Derivative transactions used for efficient portfolio management and investment purposes (subject only to normal

gross and net exposure limits)

● Commodity ETC holdings (subject only to normal gross and net exposure limits)

● Maximum gross exposure allowed under UCITS 200%

● Minimum net exposure allowed under UCITS -50%

● Given max gross and minimum net exposure limits;

− maximum long and net exposure is 200% (scenario of 200% long and 0% short, which means 200% gross

and net)

− maximum short exposure is 125% (scenario of 75% long and 125% short, which means 200% gross and -

50% net)

These portfolio restrictions may change and not necessarily with notification to shareholders


10719

Biographies

Bradley George

Head of Commodities &

Resources, Portfolio Manager

6 years with the firm

16 years of industry experience

Updated to

2012

Bradley is the Head of Commodities & Resources at

Investec Asset Management having been appointed to

this role in 2006.

He joined Investec Asset Management in London, after

spending seven years at Goldman Sachs where he

worked as an Executive Director in the Commodity

Division, involved in selling the GSCI (Goldman Sachs

Commodity Index) to investors and commodity

derivative hedging products to resource corporates.

Prior to this he worked in the Goldman Sachs

Investment Banking Division on Natural Resources

M&A transactions in both London and South Africa.

Previously he spent three years at KPMG in the

Financial Services Division, Treasury Advisory Group,

offering clients consultancy advice on financial

derivatives risk management.

Bradley graduated from the University of Cape Town

with an Honours degree in Business Science in 1994.

He completed his Post Graduate Diploma in Accounting

(PGDA) from the University of Cape Town in 1995. In

1998 he was awarded the Chartered Accountant

designation CA (SA).

George Cheveley

Portfolio Manager



George is a Portfolio Manager and metals and mining

specialist in the Commodities & Resources team at

Investec Asset Management.

Prior to this he was Manager, Market Analysis - Base

Metals Marketing for BHP Billiton (the world’s largest

mining company) for three years, working in The Hague

and Singapore. At BHP Billiton, George conducted

extensive research into the base metals markets,

including a three month study, based in Shanghai, into

long term prospects for Chinese copper demand. He

was recruited to BHP Billiton in 2004 from CRU

(Commodities Research Unit), an independent

metals/chemicals related research company based in

London. At CRU, he had spent three years in the

Carbon Steel team and five years as Research

Manager – Copper, providing in-depth research and

forecasts to the industry, banks and hedge funds.

George began his career in 1990 in operations at British

Steel Strip Products, working for three years in the

Tinplate division.

George graduated from Oxford University in 1989 with

an Honours degree in Classics and in 1995 was

awarded an MBA from Warwick University.

Updated to

2012

Daniel Sacks

Portfolio Manager



Daniel is a Portfolio Manager at Investec Asset

Management and a member of the Commodities and

Resources team. He has portfolio management

responsibility for the South African Resources Strategy

as well as the Global Gold Strategy and is responsible

for the analysis of South African gold shares.

Daniel joined Investec Asset Management in

September 1997 as a portfolio administrator before

moving to the research department in 1999 as an

investment analyst in the resources sector.

Daniel graduated from the University of Cape Town with

a Bachelor of Business Science (Honours) degree in

Economics and is a CFA Charterholder.

Updated

for 2012

Bradley George

George Chevely

Daniel Sacks


10719

Scott Winship

Analyst



Scott is an Analyst within the Commodities & Resources

team at Investec Asset Management focusing on

precious metals.

His career in investment management began with

internships during his university vacations at TriAlpha

Asset Management in the UK and BoE private clients in

South Africa. Scott holds a Bachelor of Business Science

Finance degree, with distinction and is a CFA

charterholder.

Updated to

2012

Graeme Baker

Analyst



Graeme is an energy Analyst in the Commodities &

Resources team. He joined Investec Asset

Management in 2009 as an Institutional Client Manager,

working with some of Investec Asset Management’s

largest international clients and servicing clients with

commodities investments.

Prior to joining Investec Asset Management, Graeme

gained experience as an Investment Analyst at

Hargreaves Lansdown Asset Management. Graeme

graduated from the University of Bristol in 2006 with a

Bachelors of Science Honours degree in Economics.

Graeme holds the Investment Management Certificate

and is currently a level three candidate in the Chartered

Financial Analyst programme.

Updated to

2012

Dawid Heyl

Analyst



Dawid is an Analyst in the Commodities & Resources

team at Investec Asset Management. He is primarily

responsible for screening the commodities and

resources investment universe with a focus on

generating investment ideas for agriculture and soft

commodities.

Before joining Investec Asset Management, Dawid

spent 15 months at KBC Financial Products as a trade

accountant within credit derivatives. Prior to this, Dawid

spent a year working as a financial manager in the

tourism sector, and three years at Greenwoods Auditors

in Cape Town where responsibilities included managing

audits of companies in the agricultural and industrial

sector.

Dawid graduated from the University of Stellenbosch

with a Bachelors Degree in Law in 2000. In 2001 he

completed the Accountants Conversion Course at the

University of Cape Town and in 2002 he graduated from

the University of South Africa with an Honours Degree

in Accounting. Dawid was awarded the Chartered

Accountant designation CA (SA) in 2005 and he is also

a CFA charter holder.

Updated to

2012

Biographies

Scott Winship

Graeme Baker

David Heyl


10719

Simon Gardner-Bond

Analyst

1 year with the firm


Simon is an Analyst in the Commodities & Resources

team, covering mining companies in both precious and

industrial metals.

Prior to joining Investec Asset Management, Simon

worked for Ocean Equities covering companies with a

focus on all metals, including bulk commodities (iron ore

and coal), base and precious metals as well as more

esoteric minor and rare earth metals. He previously

spent three years with Argent Partners Limited, a

London-based corporate finance boutique specialising

in the metals and mining industries.

Simon holds a BSc in Geology and Physical Geography

from the University of Liverpool, and an MSc and

Diploma in Mineral Deposit Appraisal (Mineral

Exploration) from the Royal School of Mines (Imperial

College).

Updated to

2012

Biographies

Simon Gardner-Bond

Tom Solomon

Investment Support Analyst

1 year with the firm

1 year of industry experience

Tom is an Investment Support Analyst within the

Commodities & Resources team at Investec Asset

Management. Tom originally joined the firm in 2011 on

the Trading Desk where most recently he was an Equity

Dealer focussing on North and South American

execution.

Previously Tom undertook two internships with

Macquarie Capital Advisors within the Financials

Institutions Group and Equity Capital Markets divisions.

Prior to this he was employed part time as a tax

accountant with Grech Smith Bridle for three years and

separately as a paralegal for the Australian

Communications and Media Authority.

Tom graduated from the University of Sydney with a

Bachelor of Commerce, majoring in finance and

accounting, in 2007 and Bachelor of Laws in 2009.

Since then he has gained the Investment Management

Certificate.

Tom Nelson

Energy Investment

Specialist

First year with the firm


Tom is an Energy Investment Specialist in the


Management. He joined Investec Asset Management in

London, after spending seven years at Guinness Asset

Management. Tom was part of the team that managed

the outsourced Investec Global Energy Fund from 2005

to 2008, and was subsequently instrumental in the

launch of the Guinness Global Energy Fund in 2008.

Tom was co-portfolio manager of the Guinness Global

Energy Fund with a specific responsibility for

exploration and production companies and was also co-

portfolio manager of the Guinness Thematic Equity

Fund from its launch in 2010. He was also co-portfolio

manager of the Guinness Energy Hedge Fund.

Tom holds the UKSIP Level 3 Certificate in Investment

Management and an MA in Modern Languages (French

and German) from the University of Oxford.


10719

Biographies

Charles Whall

Energy Investment

Specialist

First year with the firm


Charles is an Energy Investment Specialist in the


Management. He joined Investec Asset Management in

London, having previously worked at Newton

Investment Management for 12 years where he led oil

and gas research, providing pricing models and a

thematic framework for investment within the sector.

Charles is the number one rated buyside Oil and Gas

Analyst in the Thomson Extel Survey for 2012. Prior to

this, Charles worked within the oil and gas industry,

initially at BNOC before moving to ARCO (subsequently

acquired by BP in 1999). In this role Charles held

various roles including oil reservoir management and

development. During his time at ARCO, Charles

completed an MBA and moved from engineering to

financial roles, including long-term financial planning,

mergers and acquisitions, long-term commodity

forecasting, optimising of financial and tax structure and

competitor analysis.

Charles graduated from the University of Leeds with a

BSc (Hons) in Civil Engineering. He also gained an

MBA at the University of Surrey and holds the

Investment Management Certificate.

Thank you www.investecassetmanagement.com


10719

Important information GSY B

OEIC

This communication is not for general public distribution. If you are a private investor and receive it as part of a general circulation, please

contact us at +44 (0)20 7597 1900. The value of this investment, and any income generated from it, will be affected by changes in

interest rates, general market conditions and other political, social and economic developments, as well as by specific matters relating to

the assets in which it invests. The Fund’s investment objective will not necessarily be achieved and investors are not certain to make

profits; losses may be made. Past performance should not be taken as a guide to the future. Performance would be lower had initial

charges been included and will vary between different share classes dependant upon their applicable charges. Returns to indiv idual

investors will vary in accordance with their personal tax status and tax domicile.

All the information contained in this communication is believed to be reliable but may be inaccurate or incomplete. Any opinions stated

are honestly held but are not guaranteed and should not be relied upon. This is not a buy, sell or hold recommendation for any particular

security. The portfolio may change significantly over a short period of time.

This communication is provided for general information only. It is not an invitation to make an investment nor does it consti tute an offer for

sale. The full documentation that should be considered before making an investment, including the Prospectus and Key Investor

Information Documents or Offering Memorandum, which set out the fund specific risks, is available from Investec Asset Management.

This communication should not be distributed to private customers who are resident in countries where the Fund is not registered for sale

or in any other circumstances where its distribution is not authorised or is unlawful. Please visit

www.investecassetmanagement.com/registrations to check registrations by country. For Funds registered in Switzerland, the Prospectus,

Key Investor Information Documents and Report & Accounts may be obtained free of charge from the Swiss Representative and Paying

Agent, RBC Dexia Investor Services Bank S.A., Esch-sur-Alzette, Badenerstrasse 567, P.O. Box 101, CH-8066 Zurich.

In the USA, this communication should only be read by institutional investors, professional financial advisers and, at their exclusive

discretion, their eligible clients, but must not be distributed to US Persons.

THIS INVESTMENT IS NOT FOR SALE TO US PERSONS.

Telephone calls may be recorded for training and quality assurance purposes. Issued by Investec Asset Management Limited, which is

authorised and regulated by the Financial Services Authority, October 2012.


10719

Contact details

[ ]

[ ]

Tel: +44 (0) 20 7597 [ ]

Email: [ ]@investecmail.com

[ ]

Relationship Manager

Tel: + 44 (0)20 7597 [ ]

Email: [ ]@investecmail.com

Investec Asset Management

Woolgate Exchange

25 Basinghall Street

London

EC2V 5HA

United Kingdom

www.investecassetmanagement.com

Telephone calls may be recorded for training and quality assurance purposes.

Issued by Investec Asset Management, October 2012.

Date post:	13-Nov-2014
Category:	Documents
Upload:	citywirewebsite
View:	1,402 times
Download:	0 times