Lv= asset management

FOR UK PROFESSIONAL ADVISERS ONLY – NOT FOR USE WITH OR BY RETAIL CUSTOMERS

DOING IT CONTINENTAL STYLE


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ABOUT LV= ASSET MANAGEMENT

LV= Asset Management (LVAM) is the investment management arm of LV=, one of the UK’s best-known providers of insurance, pensions and investments.

– LV= is the largest friendly society in the UK with one of the strongest capital ratios in the industry (Association of Friendly Societies, Key Statistics 2009)

– LVAM has AUM of approximately £9.3 billion at 31 March 2010– 23 Investment Professionals supported by an extensive team– External distribution team established in 2008

OUR ASSET MANAGEMENT HERITAGE STRETCHES BACK TO 1843

Mark PageHead of European Equities

Tom CaddickHead of MM & Fund Selection

Michael WrightHead of Fixed Interest

Graham AshbyHead of UK Equities

Howard MeaneyHead of Property Investment

Piers HillierChief Investment Officer


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LV= EUROPEAN EX-UK GROWTH FUND

FUND EUROPE EX-UK MULTI CAP CORE

OBJECTIVE LONG-TERM CAPITAL GROWTH FROM CONTINENTAL EUROPE

SHAPE 50-80 STOCKS, TRACKING ERROR TARGET 4-8%

MANAGER MARK PAGE, 25 YEARS’ EXPERIENCE

RECORD BEAT BENCHMARK AND SECTOR IN ’04, ’05, 06, 07, 08 AND ‘09

RATING S&P ‘AA’ RATING


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EUROPEAN EQUITIES OUT OF FAVOUR

Source: Bank of America Merrill Lynch Global Fund Manager Survey, April 2010

11560

20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-50

-40

-30

-20

-10

0

10

Net % Under/Overweight Europe (LHS)Europe Relative to World (RHS)

80

85

90

95

100

105

EUROPE POTENTIALL

Y OVEROWNED

EUROPE POTENTIALL

Y UNDEROWNE

D

30

40

50110

IN APRIL 2010, 21% OF MANAGERS WERE UNDERWEIGHT EUROPE

Asset Allocation


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DON’T LET BAD APPLES SPOIL THE BARREL

THERE’S MORE TO EUROPE THAN PIIGS...

FTSE-W EUROPE EX UKFRANCEGERMANYSWITZERLANDSPAINITALY

%23.717.016.79.27.7

FTSE-W EUROPE EX UKNORWAYGREECEPORTUGALPOLANDAUSTRIA

%1.90.90.80.70.8

Source: Bloomberg. Components of FTSE-W Europe ex-UK Index at March 2010

NETHERLANDSSWEDENFINLANDDENMARKBELGIUM

6.55.82.62.42.1

IRELANDHUNGARY

0.70.5


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LOW CONCENTRATION – A STOCKPICKER’S MARKET

GREATER OPPORTUNITY TO UNCOVER HIDDEN VALUE THAN IN THE UK

Source: Bloomberg. Largest components of FTSE-W Europe ex-UK Index and FTSE All Share Index at March 2010

TOP TEN - EUROPENESTLETOTALNOVARTISROCHEBANCO SANTANDER

%3.82.82.52.32.2

TELEFONICASIEMENSBNP PARIBASE.ONSANOFI-AVENTIS

2.21.81.61.51.5

TOP TEN - UKBPROYAL DUTCH SHELLHSBCVODAFONEGLAXOSMITHKLINE

%6.96.96.94.73.9

RIO TINTOBHP BILLITONBATBARCLAYSASTRAZENECA

3.52.92.72.62.5

TOTAL 22.2 TOTAL 43.5


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WHERE ARE THE OPPORTUNITIES?

Stock Picks

Niche positionsHigh Barrier to Entry

Credible Growth Strategy

Sound Balance SheetHigh ROCE

High Cash Flow Conversion

Unloved Businesses

Depressed ValuationIntact Brand and Franchise

Under-ownedNew

Management/Structure

Long-Term Themes

Asset ReflationEmerging Market

GrowthDepressed Agriculture

PricesHigher-Yield Cash

Surrogates

ECONOMIC SENSITIVITY HIGHERLOWER


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EFFICIENT PORTFOLIO MANAGEMENT

Place your bets– But only where you have conviction

If you don’t get it, don’t take the risk– Index awareness

If you make good relative money, bank it– Option strategy

MINIMISE TURNOVER, MINIMISE COSTS


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DOING IT CONTINENTAL STYLE

IT’S A RISK TO TREAT EUROPEAN MARKETS AS ALL THE SAME!

Rate of Condom Use at First Sex

Source: Durex Sexual Wellbeing Global Survey 2007

63.2%59.8%

57.2%

47.9%44.6%44.0%42.8%42.0%40.5%

33.1%31.8%

POLANDGREECESPAINITALYGERMANYSWITZHOLLANDUKAUSTRIAFRANCERUSSIA


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SUMMARY

Breadth of Country and Stock choice The Big Turnaround story? Continental Europe still has a strong export sector Sufficient diversity to add value in different market environments

EUROPE OFFERS SIGNIFICANT OPPORTUNITIES FOR THE STOCKPICKER


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APPENDICES


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LV= EUROPEAN EX-UK GROWTH FUND

Past performance is not a guarantee of future returns

2004 2005 2006 2007 2008 2009

LV= European ex-UK Growth Fund

FTSE World Europe ex-UK Index

IMA Europe excluding UK sector

15.4

%

13.8

%

13.6

%

26.1

%

24.1

%

25.2

%

23.2

%

20.1

%

19.2

%

15.9

%

15.7

%

12.8

%

21.5

%

20.1

%

19.5

%

-23.6

%

-24.0

%

-24.3

%


2004 2005 2006 2007 2008 2009




15.4

%

13.8

%

13.6

%

15.4

%

13.8

%

13.6

%

26.1

%

24.1

%

25.2

%

23.2

%

20.1

%

19.2

%

15.9

%

15.7

%

12.8

%

21.5

%

20.1

%

19.5

%

-23.6

%

-24.0

%

-24.3

%

Last Six Calendar Years Sharpe Ratio

Over five years to end March 2010, the Fund returned +69.30% versus +61.28% for the benchmark index and +54.01% for the competitor sector

1 May 2003 to 31 March 2010


0.59


0.52


0.46

Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class shown. Competitor sector: IMA Europe excluding UK. Benchmark index: FTSE World Europe ex-UK. Launch 5 May 2003. See Appendices for

Standardised Performance table.



13

95

100

105

110

115

Mar 05 Sep 05 Mar 06 Sep 06 Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10

EXPERIENCED TEAM DELIVERING RESULTS

Mark PageHead of European Equities25 years’ investment experience

CONSISTENT OUTPERFORMANCE OVER MULTIPLE TIMEFRAMES

Richard FalleFund Manager16 years’ investment experience

Laurent MilletFund Manager9 years’ investment experience

Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class shown. Competitor sector: IMA Europe excluding UK. Launch 5 May 2003. See Appendix for Standardised Performance

table.

Period to end March 2010

1 Year 3 Years 5 Years Since Launch

Quartile 2 1 1 1


Performance Relative to Sector


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STANDARDISED PERFORMANCE

To end March (%) Fund FTSE-W Europe ex-UK Index

2010 45.53 48.76

2009 -26.85 -31.06

2008 0.22 2.84

2007 12.35 12.41

2006 41.24 36.04

Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class



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RECORD OF CONSISTENCY

Source : Lipper Hindsight. Bid to Bid with income net of UK tax reinvested. Retail share class shown.


The chart shows the number and extent of periods of outperformance of the sector average, based on rolling three-month periods over the three years to 31 March 2010

Over this period, the Fund has demonstrated a return profile similar to the IMA sector average, but with a skew towards outperformance

This is reflected in the Fund’s cumulative performance record relative to the sector average

5

8

9

8

1

4

Relative Performance (%)

1

-3 to -2 -2 to -1-1 to 0 0 to 1 1 to 2 2 to 3 3 to 4

Peri

od

Cou

nt

IMA Europe excl. UK average


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INDUSTRY BREAKDOWN

Source: Bloomberg, LVAM at end March 2010

These figures represent the positions taken in the Fund versus the broad industry groups within the benchmark FTSE World Europe excluding UK index.

TOP 5 OVERWEIGHTTRAVEL & LEISURESUPPORT SERVICESMEDIAHEALTHCARE FINANCIAL SERVICES

%2.92.62.62.01.8

TOP 5 UNDERWEIGHTCHEMICALSPHARMA & BIOTECHBEVERAGESELECTRICITYAUTOMOBILES & PARTS

%-2.3-2.2-1.9-1.8-1.6


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TOP 10 HOLDINGS BY ACTIVE WEIGHT

Relative to FTSE-W Europe ex-UK Index, at end March 2010

COMPANYTOTAL SAE.ON AGUBS AGSODEXOFRESENIUS MEDICAL CARE AGVINCI SAAXA SAVALLOUREC SASIEMENSRHOEN KLINIKUM

%+1.75+1.60+1.55+1.55+1.54+1.48+1.47+1.44+1.40+1.39

Total of 73 holdings, including sector futures


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MATTHEW WRIGHT HEAD OF DISCRETIONARY [email protected] 07802 484732

LVAM CONTACTS

www.LVAM.co.uk

TOM MILNES DISCRETIONARY SALES [email protected] 07825 122250

CAITRIONA MULHALL DISCRETIONARY SALES [email protected] 07747 615210


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IMPORTANT INFORMATION

This presentation is not to be distributed to any third party. The information constitutes Liverpool Victoria Asset Management Limited’s (LVAM) understanding of the situation at the date of the presentation, which is subject to change and does not constitute advice. LVAM and its staff are not responsible for an individual’s understanding or use of the information. This is a stock market related investment so the value of investments and any income from them may go down as well as up. Further information on the risks associated with this type of product can be found by reading the relevant Simplified Prospectus – available on our website www.LVAM.co.uk.

LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Friendly Society Limited and LV=, LV= Liverpool Victoria and LV= Asset Management are trading styles of the Liverpool Victoria group of companies.

Liverpool Victoria Asset Management Limited (LVAM) is the Investment Manager and Liverpool Victoria Portfolio Managers Limited (LVPM) the ISA manager and Authorised Corporate Director for the LV= European ex-UK Growth Fund. LVAM and LVPM are authorised and regulated by the Financial Services Authority, register numbers 185399 and 188521 respectively. Both companies are incorporated in England and Wales company numbers 3287943 and 3579650 and are members of the IMA.

The LV= European ex-UK Growth Fund is a sub-fund of LV= Investment Funds I ICVC, an open ended investment company (OEIC) with variable capital incorporated in England and Wales company number IC24 and authorised and regulated by the Financial Services Authority register number 188233.

Registered Address for all companies: County Gates, Bournemouth, BH1 2NF

Correct at May 2010

LVAM191 05/10

Lv= asset management

Economy & Finance

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