Aberdeen Life Multi-Asset (ex Property) Fund

July 2010

Market review

• Global equity markets have performed poorly, with a broad global index down over 11%. All regions performed broadly in line, with Japan, Asia Pacific and Emerging markets marginally ahead of the other regions. In general, government bonds have performed well with the 10 year Treasury yield falling by almost one percentage point, finishing the quarter below a psychologically important 3% level. In contrast, peripheral European bonds, led by Greece, have been under pressure because of fears over sovereign defaults, with spreads over German bunds rising to record highs.

Fund review

• Following a tactical shift last quarter, we further de-risked the fund towards a neutral position on equities through the sale of overseas equities with the proceeds awaiting reinvestment when opportunities arise. The resulting asset allocation is still a marginal overweight to overseas equities at the expense of the UK. Within fixed income, we switched our tactical global bond exposure exposure back to UK bonds on currency concerns. Additionally, the overall allocation to alternative assets increased through the purchase of 3i Infrastructure.

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