HERALD INVESTMENT TRUST plc ANNUAL REPORT ...

INVESTMENT MANAGER’S REPORT continued
Equity markets
PERFORMANCE ATTRIBUTION (in sterling terms)
Comparative index Herald Performance* Contribution Contribution attributable to:
allocation asset allocation Comparative to relative Stock Asset
01.01.10 31.12.10 01.01.10 31.12.10 Herald index return selection allocation†
%
%
%
%
%
%
%
%
%
UK 66.7 66.7 66.2 65.4 42.4 31.5 5.3 5.4 (0.1)
Europe ex. UK – – 3.4 2.6 17.8 – (0.3) – (0.3)
Americas 33.3 33.3 25.7 25.5 52.6 41.1 1.5 1.9 (0.4)
Asia Pacific ex. Japan – – 8.5 6.3 27.5 – (0.5) – (0.5)
Emerging Markets – – 0.4 0.4 45.4 – – – –
Bonds – – 7.7 4.2 5.8 – (1.4) – (1.4)
Cash – – 4.7 8.0 2.8 – (2.0) – (2.0)
Swap – – (1.9) (1.9) n/a – (0.7) – (0.7)
Loans – – (14.7) (10.5) 1.4 – 3.5 – 3.5
Total 100.0 100.0 100.0 100.0 42.6 35.1 5.5 7.4 (1.8)
Past performance is not a guide to future performance.
Source: HSBC.
* The above returns are calculated on a total return basis with net income reinvested. Dividends and interest are reinvested on a cash
basis, unlike the NAV calculation where income is recognised on an accruals basis. Relative performance may differ as a result.
Contributions cannot be added together, as they are geometric; for example, to calculate how a return of 42.6% against a comparative
index return of 35.1% translates into a relative return of 5.5%, divide the portfolio return of 142.6 by the comparative index return of
135.1 and subtract one.
† Asset allocation includes the contribution attributable to currency movements.
Katie Potts
22 February 2011
INVESTMENT CHANGES (£’000)
Valuation at
31 December
2009
Net
acquisitions/
(disposals)
Appreciation/
(depreciation)
Valuation at
31 December
2010
Equities*
UK 225,100 (2,104) 87,338 310,334
Continental Europe 11,632 (1,871) 2,535 12,296
Americas 87,402 (10,099) 43,664 120,967
Asia Pacific 28,908 (5,354) 6,137 29,691
Emerging Markets 1,388 (48) 622 1,962
Total equities 354,430 (19,476) 140,296 475,250
Bonds:
UK bonds 19,620 – 531 20,151
US$ bonds 6,407 (6,191) (216) –
Total bonds 26,027 (6,191) 315 20,151
Total investments 380,457 (25,667) 140,611 495,401
Net liquid assets 16,737 21,014 347 38,098
Total assets 397,194 (4,653) 140,958 533,499
The total assets figure above comprises assets less current liabilities before deduction of bank loans and derivative financial instruments.
* Equities includes convertibles and warrants.
HERALD INVESTMENT TRUST plc 11