1. Returns to Style using Style Research’s Markets Analyzer Hong Kong End March 2011

2. International Experience Style Investing works Value and Small Cap works long term Best Value Markets – Japan and Korea Most markets have small cap premium High beta stocks do not generally perform well

3. Overview Value works long term – like in other markets – Low Accruals best over 10 years – 5.1% pa xs return Small cap performs better than large cap – Like other markets High Beta does not work – like other markets Nothing works consistently – Top 10 inconsistent over different time periods

4. Approach Benchmark = market – All stocks with market cap of USD 100 million Analysis after sector adjustment – Factor screen within sectors – Eliminates sector bias Rebalanced every 6 months – Repriced every month – Includes dividends

5. Value

6. Book to Price

7. Dividend Yield

8. Earnings Yield

9. Cashflow Yield

10. Sales to Price

11. EBITDA to Price

12. Growth

13. Return on Equity

14. Growth in Earnings per Share

15. Income to Sales

16. Sales Growth

17. Forecast Earnings

18. Forecast Earnings Revisions

19. Other

20. Market Cap

21. Beta

22. Price Momentum – 6 months

23. Price Momentum – 12 months

24. Quality

25. Low Accrual

26. Debt to Equity

27. Stability of Earnings Growth

28. Sustainable Growth Rate

29. Stability of Sales Growth

30. Stability of Forecast Earnings

31. Returns to Style – last 10 years Quality and Value works! SA, annualised

32. 10 year XS returns

33. Weight: Market Cap, Rebal 6 mths Xs Return 5.1% pa T/over 78% pa

34. Weight: Market Cap, Rebal 3 mths Xs Return 5.4% pa T/over 94% pa

35. Weight: Total Earnings, Rebal 6 mths Xs Return 5.5% pa T/over 102% pa

36. overview Value works long term – like in other markets – Low Accruals best over 10 years Small cap works better than large cap – Like other markets High Beta does not work – like other markets Nothing works consistently – Top 10 inconsistent over different time periods – Rebalance and weighting schemes make a difference