BL-Global

BL Global Flexible

July 2010
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BL Global Flexible
BL-Global

High Conviction Investing

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BL Global Flexible
BL-Global

BL Gl b l Flexible
BL-Global Fl ibl isi a balanced
b l d fund:
f d

• with no specific predefined orientation (defensive, neutral, aggressive)

• investing in equities, bonds and money-market products

• in all geographical regions: Europe, United States, Asia, emerging markets

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BL Global Flexible
BL-Global

BL-Global
BL Global Flexible's
Flexible s objectives:

- to deliver absolute returns

- with low volatility

- and preservation of capital over the medium to long term

BL-Global Flexible is not a capital guarantee fund and its NAV may decline
over shorter periods of time
BL-Global
BL Gl b l Fl
Flexible
ibl is
i therefore
th f nott appropriate
i t for
f investors
i t with
ith an
investment horizon of less than three years
5/18

BL Global Flexible
BL-Global

BL-Global Flexible's investment p

philosophy
p y is based on the following
gpprinciples:
p

- In the long term, the financial markets reflect economic reality and businesses’
f d
fundamentals
t l

- However,, attempting
p g to forecast short-term fluctuations on the markets is a vain
exercise

- The price paid determines the return

- The best wayy to control risk is to buyy with a high

g margin
g of safety
y
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BL Global Flexible
BL-Global

The weight given to the main asset classes in BL-Global Flexible depends on:

- The valuation of the various asset classes

- Individual investment opportunities within each asset class

- BL-Global Flexible's structural investment themes

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BL Global Flexible
BL-Global

The equity portion invests in quality companies.

A quality company is defined as having the following characteristics:
- Low levels of debt
- Low capital intensity
- High profitability

BL-Global Flexible applies a free cash flow model to assess the value of
companies.
Th portfolio's
The f li ' equity
i weighting
i h i may b
be adjusted
dj d using
i d derivatives.
i i
The portfolio's structure is not dependent on a benchmark index; rather it is a
combination of individual investment opportunities.
8/18

BL Global Flexible
BL-Global

The bond portion of BL-Global Flexible invests mainly in government bonds

denominated in euros (the fund’s reference currency). Duration management is
mainly based on inflation expectations.
From time to time, the fund invests in bonds denominated in other currencies or
corporate bonds when attractive opportunities in terms of risk/return arise.
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BL Global Flexible
BL-Global

Currency breakdown – July 2010

before currency hedging after currency hedging

10/18

BL Global Flexible
BL-Global

Asset allocation – July 2010

2 %

24.5%
Bonds

Equities (1)

83 5%
83.5% C h
Cash

(1) of which 42% is covered through the sale of futures

11/18

BL Global Flexible
BL-Global

Geographical breakdown of equity portfolio (07/2010)

before hedging after hedging

Eurozone 21.0% 6.5%
United States 27.5% 8.0%
United Kingdom 11.5% 3.5%
Japan 3.0% 3.0%
Asia ex Japan 12 5%
12.5% 12 5%
12.5%
Switzerland 5.0% 5.0%
Other 3.0% 3.0%
12/18

BL Global Flexible
BL-Global

Breakdown of bond portfolio (07/2010)

by issuer type by currency

10,0% 10,0%
9,0% 9,0%
8 0%
8,0% 8 0%
8,0%
7,0% 7,0%
6,0% 6,0%
5,0%
5,0%
4,0%
4 0%
4,0%
3,0%
3,0%
2,0%
2,0%
1,0%
0,0% 1,0%
Etats/ Organismes SecteurBonds
privé 0,0%
Government Bonds/ Corporate
supranationaux EUR BRL Autres
Others
Supranationals
13/18

BL Global Flexible
BL-Global

Performance of S&P 500 and equity weighting in BL-Global Flexible

14/18

BL Global Flexible
BL-Global

10-year yield(1) and bond weighting in BL-Global Flexible

(1) German government bond

15/18

BL Global Flexible: Performance since 2009

BL-Global

* BL‐Global Flexible ‐ capitalisation shares
16/18

BL Global Flexible: Performance over 5 years

BL-Global
17/18

Contact

Guy WAGNER

Chief Economist / Fund Manager

Tel.: (+352) 26 26 99 - 3317

E-mail: guy.wagner@blfram.com

Banque de Luxembourg Fund Research & Asset Management

7, Boulevard Prince Henri - L-1724 Luxembourg
Tel.: (+352) 26 26 99 - 1
Fax: (+352) 26 26 99 - 33 33
E-mail: info@blfram.com
www.blfram.com