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MARKET COMMENTARY 2 Background Although it it is is useful in in these pages to to focus focus on on where where rate So In short, there environment. is there a lot is is of no Turmoil good doubt news in that Libya the on the last the is last unlikely economic decade to was affect front was a a but oil The the markets world last quarter continues are at has at a point a seen to point be a an continuation time, interesting time, it’s important it’s of place important many that and of that the prices a very few difficult very much, large one unless one risks for for it investors. spreads the economic This to This was other recovery the was and first the bigger that first need oil first issues every quarter now that have and of then 2011 disrupted then we was we take take investment very a step a eventful. step back markets back and Markets think and over think are the producing decade in many nations. many where Finally, where risk dominated government risk dominated reward. debt is reward. likely to to be overcome. There no easy fix and these issues about how our funds are performing in in the longer term. be However, a big problem even if if for this peripheral was the case, eurozone the figures countries above in the down last 12 overall months in and Euro continued terms to the contribute first 3 to months investors’ of They are, after all, long term funds – they are designed short-term will take time show that, and for those a to big work who problem out. Global had for the the stomach rest policy to of makers to the hang West are on on in 2011, concerns. mainly Sovereign as a result debt of issues negative continued returns in to March. be a to provide a good balance of risk and reward for money the working in through long hard term. on long term solutions. Many major of concern. the human In May, stories Portugal – from became the revolution the latest in the worst of of times, the the downside wasn’t as as that investors want to to put put away away for for the the long long run. run. For For extreme as the peak-to-trough figures would have you Tunisia Eurozone and country Egypt to to agree the an despair EU/IMF and bailout destruction package. in instance, take Evergreen as as an an example of a of typical a typical However, Outlook believe. even with increasing interest rates borrowing Japan Portugal – have non-guaranteed joined enormous diversified Ireland consequences managed and Greece for fund where in people’s seeking many remains Different quite fund cheap. managers Global will have economic different growth opinions remains on lives assistance investors but probably invested when it not in became the much last no of decade. an longer impact There possible on is is the no no for global point it to strong where It’s vital and equity however companies markets that that we are will learn we generally move in learn from the from in decade. very the the good short decade. shape term. economy. raise in talking funds They about on international are, Evergreen’s however, markets 9%* 9%* another return return – at in layer least 2010 in of 2010 not and risk at and the for – Interestingly Investment so there is risk, a the positive consensus which for backdrop view for many years for years stock appears seemed markets, to be like like a in that a the markets price 10%* being return to worry asked in 2009 about by investors. without and their acknowledging impact should the the falls not falls in be in short equities theory, term will proved at perform least. itself itself to 2011 positively to be be all looks too between all too real. like real. being Unprotected now Unprotected a and tale the of funds end two dismissed 2007 and 2008. too lightly. Further unrest in the Arab world worlds of like funds the Evergreen year. like – developing Evergreen I am can however provide can countries provide a excellent strong outgrowing excellent believer returns that returns for the investors the West, short for could The ongoing increase Greece an already debt saga volatile continued oil price with to levels the latest that companies term but investors they the need but markets having they to be need able very is notoriously little be withstand able debt to difficult while withstand periods to Governments of call periods extreme so I do would aid You instalment are seriously very very likely of likely hamper €12 aware aware billion economic that euro that Evergreen, being Evergreen, growth. released like Meanwhile most like by most the have not volatility. of extreme try far to call too volatility. it much, short term. peripheral The issues eurozone that drive countries short the EU/IMF. managed nuclear This funds, crisis followed suffered in suffered Japan a divisive a peak-to-trough is a already peak-to-trough Greek parliament having fall of serious fall vote of struggling term market while movements the big core change countries too frequently. push for structural political which approximately passed impact a 40% around further in in the the austerity the period period world from package from – the while the collapse amid collapse the riots Green of on of changes Outlook in return for loans. Plenty of opportunities for to the of the market in March 2009. Although it it can be be difficult to to lift lift our our heads heads out out of our Party the Lehmans streets. in Ireland to Work the bottom is continuing without of the a on market single a second in Dail March bailout seat, 2009. the for I prefer to focus on the longer term picture which of our is in casts a long shadow over the fund but investors to domestic make money, economic but a problems, our need our to keep a funds close funds are eye That figure casts a long shadow over the fund but German Greece which tell Green is due the full party to story is be of now finalised doesn’t tell the full story how of Evergreen the by dominant mid September. keeping with my own long term investment ideals. I how Evergreen has force in on has driven risk are driven by along the the by global way. the global economy economy and and the outlook the outlook is on is on Baden With no Württemberg, sign of a permanent performed for for investors a investors over stronghold solution, over the term of the of Angela you can their Merkel’s expect assess my investment prospects by asking simple term of their balance positive. As always, As always, risks abound. risks abound. In ruling Greece’s investments. party debt for issues the past to 6 influence decades. investment World economic markets questions such as ‘Do I believe economies will continue In particular, pressures on the the euro euro area area well are well growth for some is time unlikely to come. to grow over the longer term’ or ‘Do I think that the issues to be affected, but the attractiveness documented. Equally there are are concerns about about how how the troubling markets at present will be resolved positively from The Fund an investment Centre on on our our perspective website is is a of very very clean useful vs. tool tool dirty for US the will US fare will when fare when monetary monetary support support comes comes to an end. to an for Even judging judging the mighty the the long long US term term is having performance performance strong of of questions funds. funds. You asked over the longer term?’ If the answer is ‘Yes’ then I can industries probably will (the Kleinworth Benson can end. can about graph graph its ability the progress the progress to manage of the of the its unit unit debt. price price The for up for US to up congress the to the is expect last 10 On the other my investment side, fears to of a perform double well dip recession (over the in longer Investors Alternative Energy Fund is one of the few the last set to years. 10 agree At years. an the At time the increase of time writing of in writing the US the most the debt most ceiling recent recent above term). price was US On are This the fading. is the other side, In essence Germany, of fears of confidence long term investing. equity funds in positive territory this quarter). a double dip levels recession are very in price $14.3 for 31 was trillion December for 31 in December the 2010. next 2010. I few produced I produced weeks. a While a graph graph this of strong. the US Worldwide, are fading. corporates In Germany, are confidence for the most levels part are The of agreement Evergreen Evergreen US continues prices is prices practically which which to a allowed grow, certainty, allowed me albeit me warnings compare compare at a from the the slightly price debt Many managing risks very strong. costs remain Worldwide, very in well the market corporates and keeping as discussed are a close for the eye above most on that disappointing agencies price that an that investor an about investor pace, might rating might China have downgrades have paid continues for paid a for unit US to a in unit grow debt the in fund the are at at a will debt. part managing make for costs turbulent very well markets and keeping in the a short close eye term. fund anytime at anytime over the over previous the previous 10 years 10 years with price the slightly new issue alarming for markets pace to contend and a with. two-tier Neither Europe the as US is at However, on debt. over the longer term I believe these will be price 31 December as at 31 December 2010. It is useful 2010. It to is break useful the to decade break the into This is the nature of investment. The risk and rewards struggling or investment to pull markets together. themselves At time are of used writing to any resolved simply because they must. We have seen the decade three: into three: go hand in hand. The wide range of funds included ECB question looks being about raised to announce about the an increase world’s number in interest 1 possibly This is the (and nature hopefully) of investment. the worst The fall risk in markets and rewards any of here allows investors choose the mix that they are rates economy’s go hand in hand. The wide range of funds included 1. Those and who Portugal ability to invested looks repay in set debt. the to A period get real a January so-called sign of the 2001 bailout times us are likely experience in the run up to the equity to comfortable with. With all of the funds the best risk (in 1. Those who invested in the period January 2001 to here allows investors choose the mix that they are December we the live form in. market bottom March 2009. It is worth noting that the 2004 of a very and remain expensive invested: loan – whatever about management tool is time. December 2004 and remain invested: S&P comfortable 500 index with. has With nearly all of doubled the funds (in the local best currency risk a These bail-out investors it’s certainly suffered the not full a brunt hand-out). of the market Increasing On These the economic investors suffered front, in the Eurozone full brunt there of the continues market management tool is time. interest collapse. However, none of these investors were down terms) * Performance since that is quoted market gross bottom. of taxation This is reflected and net of in the collapse. rates However, while several none of countries these investors are suffering were rising down unemployment on to be their a divergence original investment between at the stronger end of 2010. core countries On performance 1.5% p.a. fund of management our equity based charges. investment The figures funds, given with on their original and investment struggling at to the make end of ends 2010. meet On average of Germany they are and up by France, somewhere whose in the economies region of are our are * Performance estimates managed fund only is quoted and increasing are gross not by a of reliable approx. taxation guide 55%* and to since net the of that suggests average they a lot more are up effort by and somewhere political will in the is needed region tof 12%*. performing strongly, and the weaker peripheral market performance 1.5% p.a. bottom. fund of your There management investment. is still ground charges. Past to performance be The made figures up make is but 12%*. the eurozone work. countries who continue to struggle. This disparity will this not given a does reliable are estimates show guide the to only future power and performance. of are the not market a reliable to guide resolve 2. Those who invested between January 2005 and to the performance of your investment. Past Despite likely result July 2. Those the 2008 who difficulties, in further and remain invested the interest invested: between global rate economy hikes as January continues the ECB 2005 and to serious issues given the time. The key for us at times performance is not a reliable guide to future perform keeps its These July 2008 well eye investors and and on inflation. remain the corporate are still invested: sector remains low in such currently down on their performance. as these is to maintain our focus on the longer term debt investments. These and investors quite profitable. The worst are affected still Most currently metrics were those down suggest who on stock their picture. markets The US economy invested investments. are around continues in May The “fair 07 and worst value”, to be they affected but quite with resilient are currently were plenty down those of and overand have we by who around invested under-valued now 20%*. in seen May companies On average 07 8 continuous and those they the are quarters mix. who currently of invested in down positive * Source: Moneymate. Performance of the Pension Managed this by economic period around are 20%*. growth. down On approximately average This has those supported 10%*. who invested US markets Fund from 10 in this th March 2009 to 30 th June 2011 is quoted gross Outlook though period are concerns down approximately still remain over 10%*. how the economy will of tax and fund management charges. The react credit when crisis the started stimulus in the measures commercial are sector removed. with sub-prime 3. Those who invested since July 2008 and remain Concerns invested: 3. Those who continue mortgages invested to and grow since a about collapsing July China’s 2008 banking economy and system. remain as It has now largely shifted to the sovereign sphere – Again, inflation invested: corporate all becomes of debt these a is pretty investors bigger and low, are bigger government up on their issue. debt investments. This looks is pretty In likely Again, fact to those result all who of in higher these invested interest investors after rates March are which 2009 up will did on dampen very their enormous. Risks remain high in many areas. well investments. indeed. In fact those who invested after March Quantitative economic activity. easing Recently, (Governments China printing once money) again cannot displayed 2009 did continue very the well sheer forever, indeed. scale nor of can its the capabilities current low in opening interest the Jiaozhou bay bridge, the worlds longest cross sea Eoin Kennedy, bridge which is a staggering 26 miles long. Head of Products, New Ireland
KEY METRICS KEY MACRO FACTORS INFLUENCING FUND PERFORMANCE IN QUARTER 2 Numerous economic factors may create either a positive or negative impact on the performance of investment funds and specific asset classes over time. We have captured below a number of key metrics, some of which will have had an influence on New Ireland's Investment funds over the past number of months. Interest Rates* Current rate as at 30 June 2011 31 December 2010 30 June 2010 EUR 1.25% 1.00% 1.00% GBP 0.50% 0.50% 0.50% USD 0.25% 0.25% 0.25% Source: Bloomberg & Factset Stock Markets** As at 30 June 2011 1 Month change QTD change 12 Months change S&P 500 1320.64 -1.83% 12.93% 28.13% Nasdaq 100 2325.07 -2.00% 18.73% 33.69% FTSE 100 5945.71 -0.74% 4.68% 20.92% Eurostoxx 50 2810.39 -2.07% -4.54% 8.74% Topix 849.22 1.28% -13.24% 0.93% ISEQ 2953.29 -0.55% -7.06% 2.59% Source: Bloomberg & Factset. Price Return in Local Currency of each Index Exchange Rate Movements** As at 30 June 2011 1 Month change QTD change 12 Months change EUR/GBP 0.905 3.63% 2.70% 10.73% EUR/USD 1.447 0.41% 1.76% 17.85% GBP/USD 1.603 -1.45% 2.38% 5.67% EUR/JPY 116.367 -1.06% -1.21% 6.86% Source: Bloomberg & Factset Commodities** As at 30 June 2011 1 Month change QTD change 12 Months change Brent Crude Index ($) 110.82 -3.43% 36.38% 46.39% Gold USD/oz 1500.35 -2.31% 34.77% 20.78% Source: Bloomberg & Factset 10 Year Government Bond Yields Current Yield As at 30 June 2011 31 December 2010 30 June 2010 US 3.16% 3.29% 2.93% UK 3.38% 3.40% 3.36% Germany 3.03% 2.96% 2.58% China 3.89% 3.91% 3.31% Source: Bloomberg & Factset * Interest rates quoted are the ECB main refinance rate, UK Bank of England official bank rate and the Fed funds target rate. ** Note: Figures are based on movements from 01 June 2011 to 30 June 2011, from 01 April 2011 to 30 June 2011 and 01 July 2010 to 30 June 2011. 3
Page 1: INVESTMENTS INVESTMENT PLUS quarter
Page 6 and 7: OUR INVESTMENT PARTNERS About New I
Page 8 and 9: SECUREADVANTAGE INDEX LEVELS The In
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