Client Matters - Barclays Wealth

Client Matters
The magazine exclusively for clients of Barclays Personal Investment Management
October 2011
In this issue
Multi-Manager Update
Market Update
ISM Workshops

CLIENTMATTERS
Since the last edition of Client Matters
there has been continued volatility in the
markets. In this edition of Client Matters we
have summarised the activity in the market
over the last few months and our Product
Manager, Bobby King, provides an update on
the Multi-Manager Product.
Many of you have attended our BPIM Experience
Days this year and a number of clients have taken
advantage of the ISM Workshops. Donald McNichol,
Senior Investment Servicing Manager outlines the
benefits of the workshops and highlights some client
comments on page seven.
Our last BPIM Experience Day of 2011 is being held in
Harrogate on 15 December. Should you wish to attend
please contact your Investment Servicing Manager.
02 CLIENTMATTERS
Welcome to the
latest edition of
CONTENTS
3 Multi-Manager update
4 Market update
6 Investment Servicing Managers gallery
7 Investment Servicing Managers workshops
8 Keeping you informed
As part of BPIM’s community and charity program,
our management team volunteered at The Prince
& Princess of Wales hospice in Glasgow. This is a
fantastic organisation that helps patients achieve the
best quality of life possible in whatever time remains
for them. It was an honour to support such a great
organisation. You can read more about this on the
back page.
In this edition we have included pictures of all of our
Investment Servicing Managers, so you can put a face
to the voice at the end of the telephone. We want our
clients to feel that we are personable and understand
their needs to tailor our service to each individual.
I hope you enjoy this edition of Client Matters and
I look forward to meeting many of you at our BPIM
Experience Days.
ANDY GALLACHER Head of BPIM
Front cover: Angel of the North, Gateshead

MULTI-MANAGER
“Whilst investors in Multi-Manager have been
shielded from the full force of the decline
in equity markets, the second consecutive
quarter of equity falls has pushed returns
for Multi-Manager into negative territory
for the year to date, in a reversal of fortune
compared to the last two years”
Performance
All portfolios fell in value during the third quarter of
2011 as sharp declines in equities overshadowed
positive gains from longer duration government
bonds. With equities falling for the second consecutive
quarter, all portfolios are negative year to date,
although investors have been shielded from the full
force of the decline in equity markets through the
diversified nature of the portfolios.
Fixed income assets were the main beneficiaries
from negative market sentiment, with money
flowing towards government bonds, pushing
prices up and yields down. The Global High Grade
Bond Fund and Sterling Bond Funds were the two
strongest performers, returning 5.2% and 7.2% year
to date respectively. These two Funds were key to
dampening risk and reducing losses within the lower
risk portfolios, whilst the higher risk portfolios were
impacted the most by falling equity markets, including
via higher allocation to emerging markets which
declined 22.5% (in US dollars), a greater decline than
U P D AT E
Bobby King, Product Manager
European stocks (MSCI Europe ex-UK -20%) despite
much of the quarter’s woes emanating from Europe.
The other key developed equity markets, US (-14%),
Japan (-9.4%) and the UK (-13.5%) all fell, but less so
than continental European stocks.
Fund Manager Update
The underlying managers in aggregate were slightly
behind benchmark by approximately 0.2% (Balanced
Portfolio) during the third quarter. The greatest impact
came from the US Alpha Fund, 1.8% behind the S&P
500, impacted by an overweight to cyclical stocks such
as DuPont and Corning, maker of LCD glass used in
televisions. The UK Alpha Fund in contrast had a better
quarter, buoyed by Jupiter’s substantial underweight
to materials (including zero weights to Rio Tinto and
Xstrata), one of the worst hit sectors. The UK Alpha
Fund has beaten the FTSE All Share by 0.6% after fees.
Asset Allocation
The Portfolios were relatively aggressively positioned
during the quarter, holding higher allocations
in developed market equities at the expense of
developed government and investment grade
corporate bonds. This positioning has detracted from
returns so far this year. The investment committee
met frequently through the quarter to gauge market
developments and the view was that equity market
falls have gone too far and we maintained our positive
outlook on developed market equities into the fourth
quarter.
CLIENTMATTERS 03

MARKET UPDATE
By Derek Mackie and Leigh Badger
With the highs of spring far in the back of our
minds, we have faced a period of uncertainty
across global stock markets as investors
shunned risk for the safe havens of government
bonds and precious metals against the
backdrop of a world where worries over the
future of the Eurozone took centre stage in
media headlines.
Markets during August and September certainly seemed
to be pricing in another global recession and we struggled
to go a couple of days without another dramatic headline
and subsequent rise or fall in equity valuations. But the
situation is rarely as simple as headlines would make out
and we would encourage you to try to look beyond the
headline to see the full picture.
So where does that leave your Multi-Manager
portfolio?
We’ve long known that there can’t be a speedy resolution
to the Euro area’s difficulties but we remain focused on
the fundamentals that form the basis of the investment
04 CLIENTMATTERS
decisions we make and keep in mind that no-one can call
short term market movements during times where we
are reliant more on political statements than economic
data. With that in mind, we must maintain composure in
the face of these difficulties as we ultimately believe a lot
of the potential gloom has already been factored in and
there should be significant upside to equity valuations if
the worst case scenario fails to materialise.
The future of the Euro will be largely determined
by political considerations and it’s been the lack of
co-ordinated action from policymakers that has
threatened to destabilise markets and the fragile recovery
for economies.
At present, we lack all the detail to determine how the
‘muddle through’ scenario we have been forecasting
plays out, but further work on solutions which may
include bank recapitalisation will help confidence that
policymakers are trying to get ahead of the game, rather
than continually playing catch-up.

In our view we will be talking about European debt for
years to come and until we have a permanent agreed
framework to support the stabilisation of indebted
governments uncertainty will remain. We hope to hear
more of this in the coming weeks and months and each
time that policymakers find a way to relieve the pressure
and gradually move the euro area towards stability
investors will heave a sigh of relief. This process will
involve moving towards greater fiscal unity which will not
be straight forward and will take time to develop, which
we believe will happen.
We therefore continue to believe that equities will stabilise
through the end of the year and for this reason remain
overweight, that is hold a larger exposure than normal,
to these assets. Current valuations look cheap compared
to the earning guidance that we are being given by
companies and assuming these hold up then there is an
upside to valuations to exploit.
In recent weeks we have seen some more encouraging
signs from US manufacturing and payroll figures
indicating a slight improvement in the resilience of data
which has been welcome. As companies report earnings
for quarter 3 we are looking again for stability with some
Glossary of Terms
progression which we believe will prove beneficial to
valuations as market attention turns to the fundamental
health of business and away from the Eurozone.
Recent announcements from the Bank of England with
a further £75bn round of quantitative easing and the
European Central Bank providing further bond purchases
aim to increase liquidity in the financial system but alone
are likely to have little impact. We expect to see a rate
cut from the ECB announced in December and rates
to remain on hold in both areas for at least the next 12
months as the focus is firmly about promoting growth.
With these monetary policies, however, comes a risk of
increased inflation and we expect to see inflation rise
further before moderating throughout 2012.
We believe that diversification, rebalancing and tactical
portfolio adjustments are the key to successful investing
and you can be sure that we are doing what we believe
is correct for all of our clients. The surest way of reducing
long term returns is selling at the wrong time and this is
why we urge investors to remain calm. At a time when
everyone is worrying about doing something, we suggest
the best thing to do, is not to react impulsively.
Undervalued Equities A stock is undervalued when, based on fundamentals like earnings and growth prospects, it
should be selling at a higher price than it is.
Quantitative Easing A central bank buys financial assets to inject a set amount of electronically created money into
the economy
Credit Leveraging The degree to which an investor or business is using borrowed money. Those highly leveraged
may be at risk of not being able to make good on their payments and as a result find new lenders
difficult to come by.
GDP Gross Domestic Product measures the value of the goods and services produced by all sectors
of the economy and those purchased by households. It also includes the value of exports minus
imports.
Double Dip Recession When gross domestic product (GDP) growth slides back to negative after a short period of
positive growth. A double-dip recession refers to a recession followed by a short-lived recovery,
followed by another recession.
Bond Yields The rate of interest offered on a bond is dependent on the credit rating and or performance of
the Government or corporation issuing the bond. For example should a country’s credit rating be
downgraded then the risk associated is greater therefore the reward could be greater for the risk
the investor takes through a higher income yield.
Sovereign Debt Money owed by a central Government. As Government draws most of its income from the
population this is an indirect debt of the taxpayers. Governments will issue bonds to institutional
investors to raise money to meet their financial obligations.
PE (price to earnings) ratio The measure of the price paid for a stock relative to the profit of the firm. In normal
circumstances one would expect that the higher the net annual income or profit of the firm the
higher the share price.
CLIENTMATTERS 05

ISM
GALLERY
ALEXIS WRIGHT
0845 941 2106
NORMAN HUNTER
0845 941 2604
DEREK MACKIE
0845 941 2044
RACHEL MILLER
0845 941 2061
EMMA DORIS
0845 941 2155
VHARI WILSON
0845 941 2229
IAIN SHEPPARD
0845 941 2206
06 CLIENTMATTERS
COLIN DEGNIN
0845 941 2504
REHANA SADIQ
0845 941 2130
ELAINE CLELLAND
0845 941 2179
YASMIN ANDERSON
0845 941 2400
GARY LAWSON
0845 941 2542
ANGELA NAISMITH
0845 941 2027
JILLIAN MCGREGOR
0845 941 2267
GARY MILLIKEN
0845 941 2589
THOMAS WOULFE
0845 941 2107
LYNNE MAGOWAN
0845 941 2406
DONALD MCNICHOL
0845 941 2196
JENNIFER FORSYTH
0845 941 2107
COLIN LITTLEJOHN
0845 941 2465
JONATHON GRAHAM
0845 941 2305
JAMES PEER
0845 941 2193
BRYAN HUNTER
0845 941 2233
NEIL COCHRANE
0845 941 2608
DUNCAN MACKIE
0845 941 2131
LISA STEVENS
0845 941 2135
DAVID TAGGART
0845 941 2047
RICHARD WILSON
0845 941 2244
LEIGH BADGER
0845 941 2541
CRAIG MACKANZIE
0845 941 2087
NIKKI CHIM
0845 941 2090
ELAINE ALSTON
0845 941 2353
STUART RENNIE
0845 941 2432
HAZEL HALL
0845 941 2521
SHARON MEIGHAN
0845 941 2234

BPIM Experience Days offer our clients the opportunity to
meet our Investment Servicing Managers and also include
presentations from our Investment and Product Mangers.
Clients also have the chance to meet other BPIM clients and
our team informally over lunch.
In addition we have introduced ISM workshops.
These are thirty minute sessions with our Investment
Servicing Managers, for clients to discuss their portfolios and
the markets in private.
These meetings are held during the BPIM Experience
Days and have proved very beneficial for all clients
who have attended.
Some client comments about the ISM workshops
“We found our discussion very helpful; all queries were answered in a very efficient
manner by a very knowledgeable young lady”.
INVESTMENT
SERVICING
MANAGER
WORKSHOPS
Donald McNicol
“We were very impressed with how our own Investment Servicing Manager explained things to us”.
“The face to face meeting with the Investment Servicing Manager and us was very helpful”.
“Our Portfolio was explained perfectly, 100%”.
“Personal meetings like this are definitely a good thing, to be held around the same time as the
Experience Day, to add relevance for the individual in the big picture”.
If you are interested in attending our BPIM Experience Days or an ISM workshop please contact
your Investment Servicing Manager.
CLIENTMATTERS 07

KEEPING YOU INFORMED
Email: bpim.front.office@barclayswealth.com
Calls to and from Barclays Personal Investment Management may be recorded to ensure that high quality service standards are maintained.
This item can be obtained in Braille, large print or audio tape from your Investment Servicing Manager or by calling our helpdesk on 08459 412550
(or via TextDirect if appropriate).
Barclays Wealth is the wealth management division of Barclays and operates through Barclays Bank PLC and its subsidiaries. These subsidiaries include Barclays Bank
Trust Company Limited (Registered No: 920880) and Barclays Stockbrokers Limited (Registered No: 1986161), providers of the Barclays Investment Management
Service. All three companies are registered in England and are authorised and regulated by the Financial Services Authority, and their registered office is 1 Churchill Place,
London E14 5HP.
08 CLIENTMATTERS
Our product manager answers some topical
questions about the markets and the Multi-
Manager product.
Please visit www.barclayswealth.com/bpim
An audio version is available via BPIM RADIO
0800 883 0143 (freephone)
NEXT BPIM EXPERIENCE DAY: 15 DECEMBER, HARROGATE
We love meeting our clients face to face.
The events include topical presentations and the opportunity to meet the team.
Topics covered include:
Multi-Manager:
• How we manage your money
• How we provide access to some of
the world’s leading investment
managers
• What we are doing to ensure you
get the best performance and
returns
• Current market views.
BPIM in the community
Financial markets:
• What is happening around the globe
• How the markets could impact on
your investments
This month, the management team from BPIM
volunteered at the Prince and Princess of Wales
Hospice.
As a team, we give to charity on a regular basis, but wanted to
donate our time and energy to support a local charity.
The Prince and Princess of Wales Hospice provides a
comfortable environment and support to patients and their
families as part of end of life care. They depend on the
generosity of volunteers and supporters to maintain this
valuable service which costs £7000 per day.
The team helped prepare display packs for their charity
Christmas cards. This usually takes two weeks for one person
to complete!
• The reasons behind some of the
headlines in the financial press
• The outlook for each asset class.
Topical tax issues:
• What you need to know about tax
• How Inheritance Tax affects you
and what can be done to reduce its
impact
• Capital Gains Tax and the actions
you can take to mitigate it.
These packs will be used in schools, companies and other
organisations to help encourage the sale of these cards, and
generate much needed funds.
We all had a great time while doing something that will
hopefully raise lots of money for the Hospice.