Slide 1 Ingenious Asset Managementwww.ingeniousmedia.co.uk Discretionary Portfolio Management Economic Overview Philip Todd 9th October 2012

Slide 2 Ingenious Asset Managementwww.ingeniousmedia.co.uk UK Government Debt 2 Source: Debt Management Office - Updated as at 02/07/12 Gilt Market – Net Issuance with Projection

Slide 3 Ingenious Asset Managementwww.ingeniousmedia.co.uk US Gross National Debt as % of GDP 3 Source: Office Management and Budget updated 02/07/2012

Slide 4 Ingenious Asset Managementwww.ingeniousmedia.co.uk Norwegian Net “Debt” Norway, General Government Net Debt % of GDP Graph Source: Thompson Reuters Datastream, The Economist (*6 Year),

Slide 5 Ingenious Asset Managementwww.ingeniousmedia.co.uk UK Inflation 5 Source: Office of National Statistics

Slide 6 Ingenious Asset Managementwww.ingeniousmedia.co.uk GBP/USD - A Poor Store of Value 6 Source: Thomson Reuters Datastream, BOE Trade Weighted Indices updated 31/08/2012

Slide 7 Ingenious Asset Managementwww.ingeniousmedia.co.uk Gold versus Sterling Number of Gold Troy Ounces per £1000 Source: Thompson Reuters Datastream

Slide 8 Ingenious Asset Managementwww.ingeniousmedia.co.uk Bonds & Equities Expensive or Cheap?

Slide 9 Ingenious Asset Managementwww.ingeniousmedia.co.uk Source: Bloomberg *Source: The Economist UK & US Government Bond Yield 9 US bond yields last at these levels in 1947 – returned -1.6% PA next 30 years.*

Slide 10 Ingenious Asset Managementwww.ingeniousmedia.co.uk Source: Thompson Reuters Datastream UK Equities – Cheap? 10 FTSE All-Share PE Ratio

Slide 11 Ingenious Asset Managementwww.ingeniousmedia.co.uk UK Equities – Cheap? FTSE All-Share Dividend Yield Source: Thompson Reuters Datastream

Slide 12 Ingenious Asset Managementwww.ingeniousmedia.co.uk US Equities – Cheap? S&P 500 PE Ratio Source: Thompson Reuters Datastream

Slide 13 Ingenious Asset Managementwww.ingeniousmedia.co.uk US Equities – Cheap? S&P 500 Dividend Yield Source: Thompson Reuters Datastream

Slide 14 Ingenious Asset Managementwww.ingeniousmedia.co.uk US Equities – Cyclically adjusted P/E - Expensive? S&P CAPE Ratio Source: Robert Shiller 02/07/2012

Slide 15 Ingenious Asset Managementwww.ingeniousmedia.co.uk US Equities – Q (Replacement Cost) - Expensive? Q Ratio Source: United States Federal Reserve, Flow of Funds Accounts

Slide 16 Ingenious Asset Managementwww.ingeniousmedia.co.uk Economic Overview - Summary 16 Debt Mountains mean economic growth will remain anaemic in most of the developed world  Focus on quality – companies with sustainable dividend growth, overweight Asia Pacific Interest rates will stay low  Be aware of likely negative real returns on cash Inflation will remain high(er)  Ensure portfolio contains inflation protection but be aware US & UK Government Bonds are expensive Sterling and US$ will continue to be poor stores of value  Ensure some Gold exposure & Norwegian, Swedish & Singaporean Government debt

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