August 6th
2009

In This Issue

Global Market and Fund Performance Overview

Taking a Wider Perspective

The Hare and the Tortoise

Quick Links

Fund Factsheet - August 2009

Fund Brochure

Learn More

Contact Us

Elite LWM East-West Value Fund
Performance & Market Update

The latest factsheet for the Elite LWM East-West Value Fund, which includes top holdings, diversification and performance figures, can be accessed by clicking this link.

Greetings,

In July, the global stock market rally resumed in full force.

The German DAX topped the bill with 10.89%. The French CAC gained over 9%. The MSCIW global index, FTSE 100 and Dow Jones all rose by 8% followed by the S&P 500 with 7%. The Japanese Nikkei, despite being the worst performing of the major markets, still posted a very respectable 3.93%.

The Elite LWM East-West Value Fund increased by 5.15%.

All of the stocks that we held were positive for July. Our best performers were Blue Scope Steel (Australia, +33.20%), Asia Satellite (Hong Kong, +25.99%) and new purchase Norsk Hydro (Norway, +13.84%).

Our worst performing stocks included new purchase Dassault Aviation (France, +0.85%) and two oil majors, Chevron (USA, +2.15%) and British Petroleum (UK, +4.01%).

All performance figures are in local currencies.

Click here for the latest fund factsheet

Taking a Wider Perspective

Since March the rally in major (and even more so emerging) stock markets has been breathtaking. Perceived good news (signs of life in key housing markets, rising consumer confidence, better than expected corporate earnings, a decrease in the rate of increase in unemployment figures and resurgence in China, India and Brazil) has engendered incredible and sustained enthusiasm.

As ever, we remain cautious. We continue to increase our allocation to global markets but, at the same time, to guard against downside should the incredible optimism currently in vogue peter out. We believe that there are simply too many issues out there (including but not limited to: huge levels of personal and government debt; massive and still increasing unemployment; housing markets that are often still a long way above historical norms; crumbling commercial property and credit card debt in the US; and, further likely waves of foreclosures over the next year or two) for investors to be unguardedly optimistic.

The Hare and the Tortoise

Let's take a wider view of the performance of our value investment strategy. We launched the strategy in October 2005. Due to our concerns over global markets we moved more and more into cash starting in January 2008. By the end of October 2008 we were 100% in cash. We then transferred our clients into the Elite LWM East-West Value Fund which launched on December 1st 2008 and began trading in January 2009. Since January we have been gradually moving back into global equity markets.

Complete_LWM_Performance_History

As can be seen from the graph above, the secret of successful investment management is not to generate spectacular returns. It is to generate decent returns whilst avoiding spectacular losses.

As Warren Buffett said "The first rule of investment management is don't lose money. The second rule of investment management is don't forget the first rule!"

Our cautious approach caused us to move to cash throughout the course of 2008. With the benefit of hindsight this protected our investors from appalling losses. Perhaps hindsight will show that we have been overly cautious in 2009. But, as George Michael once sang:

"This young gun says caution pays!"

Kind Regards,

Justin Lowes
Lowes Wealth Management
www.loweswealth.com

Performance Figures Prior to the Launch of the Fund

The performance figures quoted for the underlying strategy are the gross returns of our entire equity portfolio over the period beginning October 27th 2005. We measure only the performance of the money that was invested on behalf of our clients. We factor in any cash received in the form of dividends from stocks purchased and any realised cash that was held resultant of the sale of a stock. We do not however factor in sums received for investment that did not enter the investment cycle.

Lowes Wealth Management (LWM) is the exclusive provider of investment advice to the Elite LWM East-West Value Fund. The objective of the Fund is to significantly outperform all major markets whilst maintaining a comparatively low level of investment risk.

The Fund uses a classical value investment strategy which has been employed by Lowes Wealth Management since October 2005. Over the period the strategy has outperformed all major markets with lower volatility.

Important Notices:

This communication constitutes neither an offer to sell nor a solicitation of an offer to purchase/subscribe to any investment. All information and attachments (the "Material") are provided by Lowes Wealth Management ("LWM") as part of its internal research activity. This Material is solely for informational purposes, and LWM makes no representations as to accuracy or completeness. LWM is not responsible for errors contained herein and shall not be liable for any consequences arising out of reliance upon same. Opinions herein constitute the present judgement of LWM, which is subject to change without notice.

This communication is confidential and may be covered by legal, professional or other privilege. The information herein is solely for the intended recipient(s). Any other access is unauthorised. If you are not the intended recipient(s) please immediately delete it from your system. Any disclosure, copying or distribution, as well as any action taken or omitted to be taken in reliance on information herein, is strictly prohibited. This Material and its use may be restricted by law in some jurisdictions, and persons who receive or otherwise interact with it are required to inform themselves and to comply with any such restrictions. Specifically, the information herein is not for distribution to the United States or Switzerland, and it does not constitute an offer or a solicitation of an offer to buy or to sell securities in those countries or to sell securities to or for the benefit of any United States or Swiss resident.