all in all what we experienced has been a

most volatile quarter. Our portfolios have

reflected this and although we have

performed much better than the markets,

bringing home plus sided figures, we still

have felt the squeeze. However, we

reverted to cash on a good proportion of

the portfolios back in April taking the cash

ratio to 20%. This gave us a more conser-

vative stance overall. One of the assets

we dropped out of was B.P, where we

sold out our positions whilst still 8%

positive in this stock. During this last

quarter we have seen the market take us

to our pre-determined stop losses. Of

course it was disappointing to see the

market do this, but we also have a strat-

egy and a disciplines to maintain.

continued on page 3.

Outlook

On an Economic stance, we have seen Q2

which has been influenced by new uncer-

tainty regarding the future as the budget

deficit in Greece, Spain and Portugal

which has put the equity market into a

tail spin and a flight to safety. Leading EU

governments have now put the pressure

on all the other EU countries to get their

houses in order. This will for some coun-

tries mean hard time to come – but it will

benefit the euro zone in the future.

We have experienced very mixed signals

from the key figures front, which shows

that growth is slowing down, but still

moving forward. We do not believe in

double dip, as the global recovery is

shown to be broad based from the

emerging market , US and through into

Europe. The key figures have recently

shown that consumption, speed in gen-

eral of the global economy, have slowed

down. A part of this can be explained by

the stimulation packet from 2008/09

which is now ending, meaning that there

will be impact in the shorter term. Sover-

eign deficits and Chinese growth have

also contributed to risk aversion creeping

back over these last several months and

making this an area to be very aware of.

So for Q3? We believe it will shift from

global economy to the company earnings

which will be coming in mid July. We also

can see that soon there may be a shift

from the focus on Europe, crossing the

Atlantic and addressing some of the US

deficit problems. Once again an area we

will be keeping a close eye on. Although

we talk about risk aversion in the mar-

kets, we also see the equity market as

showing good value at present levels and

some of the bad news seems to be priced

in. So therefore our main objective for Q3

will looking for value, looking for the

downside risk and watching the unravel-

ling deficit debacle.

Strategy

Q2 We have seen the stock market in

general trading down with between 6% to

12% year to date, caused by the Euro

zone sovereign debt issues. Standing

alongside these issues we have seen the

Euro falling to an 8 year low against the

JPY and 5 years low against the USD. So

Special points of interest:

Europe starts the summer season in a

bit of a “Haze”

AlphaCapita looks at the U.K

An insight to what makes AlphaCapita

stand out amongst its piers

Europe starts the summer season in a bit of a “Haze”

Inside this issue:

VODAFONE 2

MODERN ASSET SECURITY 2

B.P DROPPED 3

STRATEGY CONTINUED 3

WHY ALPHACAPITA? 4

JULY 2010 NEWS LETTER

“Spain and Portugal feeling the heat this

summer”

Vodafone Group Plc is the world's leading

mobile telecommunications company,

with a significant presence in Europe, the

Middle East, Africa, Asia Pacific and the

United States through the Company's

subsidiary undertakings, joint ventures,

associated undertakings and investments.

The Group's mobile subsidiaries operate

under the brand name 'Vodafone'. In the

United States the Group's associated

undertaking operates as Verizon Wire-

less. During the last few years, Vodafone

Group has entered into arrangements

with network operators in countries

where the Group does not hold an equity

stake. Under the terms of these Partner

Market Agreements, the Group and its

partner operators co-operate in the

development and marketing of global

products and services, with varying levels

of brand association.

At 31 March 2010, based on the regis-

tered customers of mobile telecommuni-

cations ventures in which it had owner-

ship interests at that date, the Group had

341 million customers, excluding paging

customers, calculated on a proportionate

basis in accordance with the Company's

percentage interest in these ventures.

The Company had a total market capitali-

sation of approximately £71.2 billion at

12 November 2009.

· Establisded in 1982

· Revenue £44,472 million

(March 2010)

· Market Cap approximatly

£88.0 billion

· Employees approximatly

85,000

The idea was to protect our clients funds

at a "multi-level". We identified the areas

When we created AlphaCapita we

worked hard on listening. Listening to

what our clients where

saying. One of the things

that we heard a lot was

security of assets.

We looked at this long and

hard and came up with the

idea of segregated account

management. Not "rocket

science" we hear you say,

but why then do we hear

about this issue time and

time again? maybe it's

because other asset man-

agers are not doing it?

of risk for the clients. Firstly there was

Brokerage risk, the risk of the trading

platform. Secondly the risk of Alpha-

Capita as a business. We set about ad-

dressing these two risk areas by:

Firstly, making sure that our brokerage

held all Accounts in the "Clients name"

not pooled accounts.

Secondly we looked at the business risk

of AlphaCapita. We look to manage our

clients funds, we do not want to have

clients cash or assets under our name.

Meaning that we have the right to make

investment decisions on behalf our

clients under our discretionary man-

date. However, we have no ability to

transfer or remove funds.

Modern Asset Security

financial year, as economic recovery

should benefit our key markets.”

Vittorio Colao, CEO

“Vodafone’s financial results exceeded

our upgraded guidance on all measures.

Revenue trends have improved again in

Q4 driven by growth in mobile data and

fixed broadband. Cost reduction targets

were delivered ahead of schedule ena-

bling commercial reinvestment to im-

prove market share and further

strengthen our technology platforms.

Free cash flow of £7.2 billion and confi-

dence in Vodafone’s prospects have

enabled us to increase dividends by 7%

and to target 7% per annum growth in

total dividends per share for the next

three years. We are creating a stronger

Vodafone, which is positioned to return

to revenue growth during the 2011

VODAFONE

Page 2

“AlphaCapita

(Switzerland) SA buys

into Vodaphone to

secure the allocation

within the tele-

communications sector”

“Chart shows Vodaphone 2007 to

present”

“Not "rocket science"

we hear you say, but

why then do we hear

about this issue time

and time again? ”

We all watched as the B.P disaster

revealed itself in the Gulf of Mex-

ico. B.P has been a house hold

name, not just to our portfolio, but

pretty much every fund manager

across the planet. It is probably the

most held private stock in a retail

portfolio in the U.K. so what a

shocker to see the news literally

poor out. AlphaCapita has a "buy

and hold" strategy, however we

always have a get out of jail card

for abnormal market scenarios. We

classified B.P as one such scenario

back when the news was out and

after assessing the short term

damage report.

We made the decision to drop B.P

if we got to a 8% net positive of the

stock. In reality that figure was

reached very quickly and we took

our 8% and sidelined to cash on

this allocation. The price was at the

time "510" and as this is written is

at "323". It is our fundamental

belief at AlphaCapita to protect our

clients money whenever we can

and this was certainly one of those

situations.

On the upside we took home the 8% profit, but we also liked the short term opportunities and therefore went long the stock utilising CFD's to trade the

upside from 309 with a reasonable stop and take profit orders catalogued.

B.P “dropped” by AlphaCapita

Page 3

“B.P dropped but

with 8% profit

and short term

upside

opportunities

taken into

consideration”

Strategy—continued from page 1.

We have kept our focus on well driven

companies with a high exposure to

emerging markets and high dividend. We

have used a part of the cash to re-enter

the market, Vodafone for example where

we bought in at a discounted price.

AlphaCapita is working hard to utilise

these market conditions, not only to buy

in high quality stocks at a right prices, but

to find opportunities to smooth the yield

curve by hedging our down side risk. We

are continually looking at the short term

risk management as well as the long term

goals.

In regards to currencies, we re-opened a

long EURJPY position, we believe a rever-

sal and a correction in the near future off

the back of the 8 year low levels as we

have mentioned before. We recognise

why the EUR has fallen in recent times,

but we must look at the two currencies with

open eyes, the EUR was designed to

strengthen and the JPY was designed to

weaken. Sometimes, as experience has

shown us, following the crowd can be a bad

thing. We do take a long term view on this

position.

On the bond site we have added more to our

position on short term variable bonds, and

taken home good profit on some of our

corporate and short term mortgage bond

portfolio as part of our laddering strategy. A

part of this revenue we reinvested and

bought new corporate bonds with a high

yield to boost the average yield. on the bond

portfolio.

“Chart showing the EURJPY

from 2000 to present”

from the opening assets under manage-

ment for the year. Why? Because then

the client knows exactly, what he or she

is going to have to pay for their money

under management for that twelve

month period. Also, AlphaCapita is not

having just to make the bottom line by

trading, meaning that trades are only

made when they are of use to our clients

portfolio. Also we believe in liquidity. If

we need to realise any part of a portfolio,

we want to be able to do it for our clients

on any business day without penalties

attached. How refreshing?

Security of Assets

When we started we listened to what

our clients wishes were. One of the

biggest in this market was “security of

funds” We answered these questions by

segregated accounts. Please see article

on page 2 “Modern asset security”

Can you remember when wealth manage-

ment was a personal and rewarding

experience? These days banking has

changed dramatically, it's all about the

bottom line and hard sales. It's about the

bank and not so much the client. In the

last few years banks and large financial

organisation have been under a lot of

pressure to keep their business viable.

Turnover and volume are words that are

synonymous in these institutions, which

in our minds has lead to increasing cost

and ever decreasing service to the clients.

AlphaCapita wants to revert to the old

times when a wealth management client

was a V.I.P and treated in a manner that

reflects this. it's not about volume to us,

it's about good old fashioned service.

Striving to get the best for our clients and

to protect and make his or her assets

grow in a stable and reliable way. Alpha-

Capita was built round understanding this

fundamental problem in banking.

Commissions or management

fee?

In regards to this

matter, we reckon, it’s

a “no brainer”. If your

bank or wealth man-

ager is charging com-

missions only, why

then are you indeed

surprised when they

phone you yet again

to recommend their

next greatest fund?

No doubt because of

this funds greatness, it

has a rather large

premium attached?

No doubt an upfront

fee? plus a yearly

management fee?

Even, dare we say it,

an early withdrawal fee?

Here at AlphaCapita, we want to make

things so transparent, so clear. We do not

believe in heavy commissions, but

prefer a management fee that is taken

Disclaimer

None of the information contained herein constitute an offer to purchase or sell a financial instrument, or to make any investments. AlphaCapita (Switzerland) SA does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability to the accuracy or completeness of the information nor for any loss arising from any investment based on a recommendation, forecast or other information supplied from any employee of AlphaCapita (Switzerland) SA, third party, or otherwise. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of AlphaCapita (Switzerland) SA.

Why AlphaCapita? AlphaCapita (Switzerland) SA

Chlewigenring 4

6064 Kerns

Switzerland

Phone: +41 795 610 145

E-mail: info@alphacapita.com

web : www.alphacapita.com

AlphaCapita (Switzerland) SA

Flexibility

On the matter of flexibility we find that

large financial institutions by definition

are big, but big does not necessarily make

them great. Moreover it makes them

rather rigid, like an old truck, difficult to

manoeuvre, slow and rather costly. The

flexibility of AlphaCapita makes it stand

apart from its larger competitors. We are

not tied to certain products or organisa-

tion. In fact we have the whole market to

find our clients the best deals around.

Not only that, having the flexibility to

satisfy most apetite’s, creating "tailor

made" products and solutions to our

clients request, from hedging oil exposure

to creating specific “thematic” bonds.

“AlphaCapita views on the transparency not only

allows the client to see the process, but with online

access to real time positioning and NAV, allows the

client to have a “window” into their portfolio”