May 2012

NEWS

Equity markets have enjoyed a very strong start to the year, despite a pause in March as concerns over the rate of Chinese growth resurfaced.

Having launched our private client division in May 2010 and raised £20m new monies, our total funds under management now is £200m.

Private clients are now able to benefit from our institutional and disciplined investment approach coupled with our unique investment style that enables our clients to access the corporate deals of the major City institutions.

PERFORMANCE

Our largest ethically managed charity has outperformed its benchmark during the total period of RCBIM’s management, impressive given the constraints that can exist on an ethically managed portfolio. It has outperformed in nine out of thirteen years.

The Marlborough UK Primary Opportunities Fund (formerly Marlborough Quantock UK Growth) remains one of the leading UK equity funds since its inception in 1996, returning 265% compared to 173% for the mean UK All Companies Fund. .*

Since 1 January 2009 Marlborough Ethical Fund has returned 54.6% compared with 50.2% for the mean Ethical Fund. .**(Source: Lipper/RCBIM)

INVESTMENT OUTLOOK

Stock markets often climb a wall of worry. The world has many factors to worry over. The Chinese growth rate is slowing and in a one party state, in the short term growth can be easily manipulated. The long term refinancing operation (LTRO) of European banks has helped calm markets but it will be a long time before the Eurozone emerges from its current issues. Spanish bond yields have recently moved close to the highs of last year, Italy’s bond yields remain at elevated levels. Greece has agreed further reforms as part of its latest bailout. Portugal is likely to follow suit.

Oil prices remain stubbornly high. Further unrest in the Middle East and an oil price spike would inevitably act as a drag on economic growth. Despite all these concerns, corporate newsflow has remained positive. The earnings season was notable for the growth in dividends announced by many of the UK’s largest constituents. M&A activity is on the up as valuations appear attractive. The US recovery remains intact.

Increased volatility has become an integral part of markets over the past few years as a risk on/off mentality besieges the market. For the longer term investor who can ride out setbacks, markets are modestly valued offering an attractive and growing dividend yield.

* Source: Lipper. Since inception to 1 May 2012. Ranked 10 out of 93.

** Source: RCBIM/Lipper to 1 May 2012. Benchmark: Selected Ethical Universe by RCBIM. Ranked 5 out of 15.

Past performance is not necessarily a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested.