Sarasin EquiSar IIID Fund Quarterly Update - Bank Sarasin-Alpen

Sarasin EquiSar IIID Fund
Quarterly Update
TM
Source: Financial Express, 2012
as at 31 March 2012

Sarasin EquiSar IIID Fund - Quarterly Update as at 31 March 2012
EquiSar IIID Fund - Quarterly Update
Background
Launched in 2006 to complement the long only management style of its mother fund, EquiSar Global Thematic Fund, Sarasin
EquiSar IIID aims to smooth out the market volatility for shareholders whilst maintaining our global thematic investment
process at its core. EquiSar IIID deploys UCITS III powers to control net market exposure. The desired outcome is to deliver
a consistent total return profile, making it an obvious choice for long-term investors seeking a core global holding.
Short term performance (%)
Over the quarter, EquiSar IIID outperformed in absolute and
relative terms. Our two best performing themes were
Corporate Restructuring (CR) with Hartford Financial Services
and Nissan as notable contributors, and Pricing Power,
supported by Swiss Re, Corrections Corp and Kubota. Our
CR theme now represents approximately 25% of the portfolio
as we expect resilient performance from such ‘self-help’
propositions. IP&E was a solid performing theme, with Essilor
reporting solid numbers. Security of Supply and Strong get
Stronger were laggards.
We undertook a number of transactions over the quarter,
partly under a strategic restructuring in which we increased
the yield and sold a number of mid cap equities. New
additions to the fund that are yield enhancing include British
Land, Admiral, Coca-Cola, Leggett & Platt, SATS; with Alcatel-
Lucent, HSBC, IBM, Makita, Microsoft and Potash Corp other
core thematic additions. These were funded in part by the
sales of Arafura, Linc Energy, General Cable, AP Moller-
Maersk, Elekta, Fanuc, Alere, Informatica, SK Tel, Monitise,
Corrections Corp and P&G.
EquiSar IIID performance (%)
Q1 2012 2011 2010
EquiSar IIID A Shares 5.2 -8.5 10.7
MSCI World 1.3 -4.8 15.3
Benchmark 1 1.1 8.8 8.4
Discrete performance (%)
12 months ending 31st March
2012 2011 2010 2009 2008
EquiSar IIID A Shares -2.1 3.5 20.3 -18.8 10.9
MSCI World 0.9 7.4 44.0 -20.4 -4.5
Benchmark 1 7.4 9.2 7.3 4.3 7.7
Source: Sarasin & Partners LLP and Lipper as at 31.03.12. STG, NAV, net
income reinvested, net of fees. 1 Benchmark: RPI +3.5%. Please remember
that you should not base decisions on past performance and that prices may
fluctuate and you may not get back your original investment.The fund’s
Synthetic Risk & Reward Indicator is 5 (1 low to 7 high) and further details of
the risks can be found in the prospectus available from www.sarasin.co.uk
Overseas shares and bonds may be affected by currency exchange rates.
Annualised long-term volatility of returns (%)
Since Launch 10.05.06 to 31.03.12 1 year - 31.03.11 to 31.03.12
Max. Sortino Volatility Max. Sortino Volatility
Drawdown Ratio Drawdown Ratio
EquiSar IIID A Shares -27.3 0.0 12.0 -7.8 -0.8 6.7
MSCI World -38.3 0.1 2+.8 -18.3 -0.2 19.5
Source: Financial Express as at 31.03.12. STG, NAV, net income reinvested, net of fees. The annualised volatility measurement is expressed using the
standard deviation of the Fund's UK Sterling monthly returns over the most recent 36 month period. The Sortino Ratio is an adjustment on the Sharpe
Ratio in that it only penalizes downside volatility.
Asset class contribution Q1 2012 (%)
-6.22
-2.15
-0.02
-0.01
0.65
0.16
15.70
% -10 -5 0 5 10 15 20
Source: Sarasin & Partners LLP, 31.03.12
Options
Futures
Equities
Currency
hedging
Cash
Alternative
Investments
Quoted
Property
Our option positions were the largest detractor to
performance. This was predominantly an effect of the
aggressive market rally in January and February
during which the net equity exposure of the fund was
too low. We increased the net equity exposure to 74%
as the US data improved and the LTRO liquidity
injection was announced. We then reduced the
exposure back to 55% by the end of the quarter as
market confidence seemed to fade.
Asset allocation exposure at 31.03.12
Long Short Gross Net
% % % %
Fixed Interest 0.0 0.0 0.0 0.0
Equities 95.5 39.8 135.3 55.7
Property 0.0 0.0 0.0 0.0
Alternative Assets 0.0 0.0 0.0 0.0
Liquid Assets 4.6 0.0 0.0 4.6
Futures: Futures are used to manage the volatility
and, in part, the net equity exposure of the fund. The
short futures detracted from performance as the
market rallied.
The net sterling weight is c 60% of fund, with currency
forward contracts predominantly out of USD and also
EUR and JPY into sterling.
2

Sarasin EquiSar IIID Fund - Quarterly Update as at 31 March 2012
Top five contributors Q1 2012
JDSU performed strongly after a recovery in the optical
components space and some industry consolidation
Swiss Re reported a good set of results and announced a
9% dividend increase.
Fanuc: Japanese equities were strong. Fanuc benefitted
from a weak Yen, and also its orders from China.
Umicore is a materials technology company, extracting
metals from sources such as e-scrap, old auto catalysts
and mining waste streams. It uses many of the specialist
metals in products it manufactures and sells it security of
supply over its own inputs, as well as providing supply to its
customers. The company beat earnings estimates for FY11
Hartford continues to perform well as the Paulson-led
demand for restructuring has had some success in
encouraging management to realise greater shareholder
value.
Stock Weight Region Industry Theme Perf. Contribution
(%) Group (%) (bp)
1 JDS Uniphase Corp 1.3 North America Information Tech The Strong get Stronger 35.0 39.4
2 Swiss RE 2.5 Europe ex. UK Financials Pricing Power 21.1 45.9
3 Fanuc Corp 0.0 Japan Industrials IP&E 1 10.9 10.0
4 Umicore 2.3 Europe ex. UK Materials Security of Supply 29.4 58.4
5 Hartford Financial 2.6 North America Financials Corporate Restructuring 26.8 59.8
Total 8.7 214.2
Source: Sarasin & Partners LLP, 31.03.12.
1
IP&E: Intellectual Property & Excellence
Top five detractors Q1 2012
Barrick Gold: Gold weakening on economic recovery hopes /
more stimulus not forthcoming.
Pearson: Was subjected to profit taking after a strong
performance. This was on concerns over a weakening in US
higher education enrolments weakening and on the US
government’s budgetary constraints and pressure on text
book and e-book pricing. We continue to view this stock as
a core long term holding.
Rakuten: Investor attention was more focussed on export
related stocks given improving macro data and a weaker yen.
Had had a strong Q4 2011.
Novozymes: Profit taking at beginning of year as a competitor,
DSM, announced a JV with Poet to market 2G cellulosic bioethanol
technologies. We believe Novozyme’s IP remains in
tact and this was more about DSM wanting the £125m cash
Poet was offering. We added to the position on weakness.
Informatica: This was sold before the market rallied, after
Oracle’s profit warning. We felt this could impact Informatica.
Stock Weight Region Industry Theme Perf. Contribution
(%) Group (%) (bp)
1 Barrick Gold 1.2 North America Materials The Strong get Stronger -6.6 -13.9
2 Pearson 2.6 UK Financials The Strong get Stronger -3.6 -9.1
3 Rakuten 2.3 Japan Information Tech The Strong get Stronger -5.1 -8.7
4 Novozymes 2.0 Europe ex. UK Materials IP&E 1 -7.1 -17.9
5 Informatica 0.0 North America Consumer Staples IP&E 1 -4.7 -3.2
Total 8.1 -52.8
Source: Sarasin & Partners LLP, 31.03.12. 1
IP&E: Intellectual Property & Excellence
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Sarasin EquiSar IIID Fund - Quarterly Update as at 31 March 2012
Fund manager’s comment
Economic growth and market confidence will continue to
be dogged by ineffectual political processes and a lack
of clear agreement on how to resolve deep-seated
problems. The US presidential debate will dominate the
headlines until November with the Republican challenge
adopting a hard and uncompromising line. Immediately
afterwards attention will return to Congress and the
need for both parties to agree a deficit reduction plan,
to raise the debt ceiling again and whether to extend the
Bush tax cuts. Europe cannot continue to rely on the
ECB to fill the vacuum over the future of the Euro zone
and China too faces challenges in reforming its politics
as the leadership changes hands this autumn.
Whilst we see investors now putting a clear asset
allocation priority on equities over bonds, we expect
further bumps on the hard road ahead. However, we
expect our continued focus on particularly resilient
trends (such as ‘getting more from less’, and
‘demographic consequences’) to be rewarded as the
market refocuses onto fundamentals rather than QE
speculation. Thematically, we have particularly targeted
stocks set to benefit from Corporate Restructuring,
sustainable growth through Intellectual Property &
Excellence, and capital strength through Strong get
Stronger. We have high conviction in these positions.
Key drivers for Q2 2012
Markets seem fixated with the likelihood (or
otherwise) of forthcoming Central bank stimulus.
Following many $ trillions of liquidity injected at
the beginning of the year there is little likelihood
of more in the near term.
The portfolio has the right balance of stocks with
strong or improving fundamentals and should be
well positioned for this somewhat difficult
environment.
Who to contact at Sarasin & Partners
Andrew Thompson
Director, Distribution
Tel: 020 7038 7159
Mobile: 07968 934127
Email: andrew.thompson@sarasin.co.uk
www.sarasinsolutions.co.uk
Sarasin & Partners LLP
Juxon House
100 St. Paul's Churchyard
London EC4M 8BU
Tel: 020 7038 7000
Fax: 020 7038 6850
Disclaimer
This document has been issued by Sarasin & Partners LLP which is a limited liability partnership registered in England and Wales with
registered number OC329859 and is authorised and regulated by the Financial Services Authority. It has been prepared solely for information
purposes and is not a solicitation, or an offer to buy or sell any security. The information on which the document is based has been obtained
from sources that we believe to be reliable, and in good faith, but we have not independently verified such information and no representation
or warranty, express or implied, is made as to their accuracy. All expressions of opinion are subject to change without notice.
Please note that the prices of shares and the income from them can fall as well as rise and you may not get back the amount originally
invested. This can be as a result of market movements and also of variations in the exchange rates between currencies. Past performance
is not a guide to future returns and may not be repeated. The fund’s Synthetic Risk & Return Indicator is 5 (1 low to 7 high) and further
details for the risks can be found in the prospectus available from www.sarasin.co.uk. There is no minimum investment period, though we
would recommend that you view your investment as a medium to long term one (i.e. 5 to 10 years).
Sarasin & Partners LLP and/or any other member of the Bank Sarasin group accepts no liability or responsibility whatsoever for any
consequential loss of any kind arising out of the use of this document or any part of its contents. The use of this document should not be
regarded as a substitute for the exercise by the recipient of his or her own judgment. Sarasin & Partners LLP and/or any person connected
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