Sample - Market Sizing Study for Equity Natural Resources Funds_1_Feb 14

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Samples – Market Sizing Study for Equity Natural Resources Fund Prepared for XXX

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Outline

Global Summary

Regional Analysis

USA

Europe Asia Pacific Canada

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90 percent of the natural resources funds are equity funds of which 57 percent are European domiciled funds Net Assets of Natural Resources Funds from Bottom-up Approach – US$277 bn Equity Funds - US$248.6 bn

Commodity Funds - US$28.4 bn AsiaPacific 3%

Europe 57%

Canada 6%

USA 87%

Others 1%

USA 35% AsiaPacific 3%

Others 3%

Europe 3%

Canada # of Equity Funds by Region

# of Commodity Funds by Region

2%

53

52

7 49 48

169

165

7 7

150

11 7

118 340

330 269

6

4 2

218

27 29

58

3 1

4

25 23

33 47

33

2005

2006

2007

2008

2005

2006

Canada

Europe

USA

Others

4

5

5

3

3

2007

2008

4

3

Asia Pacific

4

1

Asia Pacific

Canada

Europe

USA

Others

Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

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… and most of the sales origination is domestic for all the funds except for offshore funds domiciled in Europe

Domicile Region

Total No. of funds by Domicile Type – Bloomberg

Domestic

Offshore

Total No. of different class of funds by Sales Region – Lipper

Domestic

AUM split by Domicile Type – Bloomberg (US$ bn)

Offshore

Domestic

Europe

182

162

453

302

43.21

Asia Pac

55

02

171

03

7.82

US

101

02

664

37

102.24

Canada

37

01

127

02

6.44

Remarks

Offshore

91.25

Significant share of sales origination from outside Europe

$0.06

Most of the sales origination from the region of domicile

2.9

Most of the sales origination from the region of domicile

0.36

Most of the sales origination from the region of domicile

European offshore funds, although lesser in numbers than domestic funds, have however managed to penetrate more in value terms comparatively by almost double.

About 95% of the overall US based global resource funds are sold primarily in US alone, coupled with 97% AUM penetration.

Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

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Natural resources funds have seen consistent growth in the past few years Region

AUM % Change FY 2006

AUM % Change FY 2007

AUM % Change FY 2008

% Fund Flow Increase in 2007 over 2006 Fund Flows

Global

80.0%

32.0%

26.0%

38.0%

Europe

73.0%

43.0%

-11.0%

251.0%

81.0%

28.0%

52.0%

27.0%

NA

NA

NA

NA

74.0%

32.0%

3.0%

-37.0%

United States

Asia-Pacific

Canada

 AUM increase in 2006 was mainly due to: • Increase in new fund launches: There were 101 new funds launched in 2006 as against 62 in 2005 • Attractive performance of overall commodity sector lead by emerging markets: MSCI commodity producer index for emerging markets increased by 42 percent as against 30 percent in 2005 Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

Note: Figures for year 2008 are as of May, 2008

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High net fund flows in utilities and precious metals funds in 2007 over that in 2006 have resulted in high net fund flows of the sector # of Funds and % AUM Increase

Number of Funds Break up by Category

14.00%

28.00%

Utilities

100 80 60 40 20 0

64%

51

62

2005

2006

Precious Metal

11.00%

47.00%

136

155

2006

60

59

2006

400

*Diversified Natural Resources Fund include funds investing in soft commodities along with funds with diverse commodity focus

200

254 60%

184

192

39%

37%

2007

2008

73%

100% 80% 60% 40% 20% 0%

66.0

46%

32.4

34%

113.6

-13%

AUM Increase (%)

68

2007

73

250% 200% 150% 100% 50% 0%

2008

AUM Increase (%)

305

318

80% 60% 40%

18%

100

22%

0

20% 0%

2005

2006

Total Funds

Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

40.2

AUM Increase (%)

39%

Total Funds

200

20%

2008

50% 2005

300

2007

44

0

Energy

31%

225%

80

20

60% 40%

78

94%

Total Funds

40

% Fund Flow Increase (06-07)

0%

2005

Diversified Natural Resources*

AUM FY 2008 (US$ bn) 80%

92

Total Funds

250 200 150 100 50 0

71%

2007

2008

AUM Increase (%)

Note: Figures for year 2008 are as of May, 2008

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Strong performance of all natural resources coupled with high demand from emerging economies have resulted in increased activity in natural resources funds sector

High growth rate in emerging economies of India, China and East European countries is driving Demand from emerging economies

Rising commodity prices

the demand for natural resources

High demand for resources have resulted in all time high prices of all the commodities

Staggering performance by the companies engaged in commodity industries have resulted High performance of into higher returns for the funds investing in these companies commodity sector

High growth of natural resource funds

Growing Awareness

Increased media coverage about natural resource funds has increased awareness among retail investors leading to increased interest in sector specific funds over traditional diversified natural resource funds

Source: Sutherland Primary Research

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Outline

Regional Analysis – USA

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The US market for natural resources funds has grown at a robust pace and is valued at US$105.2 bn as of May, 2008 US Net Assets of Mutual Funds (in US$ Billion) and Number of Mutual Funds 12,500 11,500 10,500 9,500 8,500 7,500 6,500 5,500 4,500 3,500 2,500

Net Assets

Number of Funds

12,021

8,150 8,100

8,118

Investors’ demand for mutual funds increased substantially in 2007 largely due to disruptions in the financial markets which began in the latter part of 2007 leading to switch from direct equity investments to mutual fund investments

8,050

8,041

8,029 7,975

2004

8,200

8,126

2003

The US mutual fund market, remains the largest in the world, accounting for 46 percent of the US$26.2 trillion in mutual fund assets worldwide

8,250

8,905

8,107

8,300

10,412

7,414

8,350

8,000 7,950 7,900

2005

2006

2007

CAGR 12.84%

US Number of Natural Resource Funds and percent Increase in Net Assets 150

100%

Total AUM 2008*= US$105.2 bn

130

The market for natural resource funds has also increased with most investors seeing a positive outlook for the natural resources sector

Due to rising demand, prices of all the resources have reached an all time high

High commodity prices have led to attractive performance of companies in commodity sector and in turn performance of natural resource funds

The performance has resulted into high growth in AUM of the natural resource funds

80% 81%

110 90

94

100

107 52%

76

70

60% 40% 20%

28%

50

0% 2005

2006 Number of Funds

2007

2008

% increase in AUM

Source: Investment Company Institute; Bloomberg; Lipper; Morningstar; Sutherland Analysis

Note: Figures for year 2008 are as of May, 2008

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Only precious metals witnessed positive fund flow in 2007 and accounts for 44% of natural resources assets under management % AUM Break up by Category

9%

# of Funds and % AUM Increase

Utilities

25 20 15 10 5 0

14

18 28%

Precious Metal

22

2005

1%

2007

75% 50%

9.05

-54%

46.71

36%

1.30

NA

48.14

-16%

2008

28

26

25 119%

44%

2006

2007

53%

150% 120% 90% 60% 30% 0%

2008

AUM Increase (%)

8 6 4 2

46%

100%

AUM Increase (%)

Total Funds

Diversified Natural Resources

72%

26%

% Fund Flow Increase (06-07)

0% 2006

Total Funds

44%

19

25% 2005

30 25 20 15 10 5 0

19

AUM FY 2008 (US$ bn)

0

5

6

6

2006

2007

2008

2 2005

Total Funds

Energy

60 50 40 30 20 10 0

37

45

54 38%

62%

6%

100% 75% 50% 25% 0%

2005

2006

Total Funds

Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

49

2007

2008

AUM Increase (%)

Note: Figures for year 2008 are as of May, 2008

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More than 90% of the sales of US domiciled funds originate from the US with Chile as the largest overseas market Total AUM (Offshore funds: $2.96 bn) Country Wise # of US Funds Sold in Canada Country Canada

Total number of offshore funds in US: 37

Total count

Country Wise # of US Funds Sold in Latin America Country

03

Chile

NORTH AMERICA

ASIA PACIFIC

25

LATIN AMERICA

EUROPE Country Wise # of US Funds Sold in Europe Country

Country Wise # of US Funds Sold in Asia Country

Total count

Total count

Total count

Austria

02

Germany

03

Switzerland

02

Singapore

02

Denmark

01

Korea

01

Luxembourg

01

Netherlands

04

Italy

01

About 95% of all US based funds are only sold to domestic investors . Chile followed by Europe, form the largest markets for US based offshore funds.

Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

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Outline

Regional Analysis - Europe

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Natural resources funds have shown negative growth in 2008 after outpacing the industry in 2006 and 2007 Net Assets of Mutual Funds (in US$ Billion) and Number of Mutual Funds 35.2

10,000

33.2

8,000 6,000

28.5

30.1

29.3

4,000 2,000

4,683

7,804

6,002

5,640

8,983

0 2003

2004

2005

Net Assets ($ Bn)

2006

36 34 32 30 28 26 24 22 20

2007

Net assets of the total mutual fund industry reported an 18 percent CAGR over the last five years

The net asset growth was the highest in 2006 at 30 percent, in 2007 it halved to 15 percent

The above was mainly due to higher number of fund launches in 2006

Number of Funds ('000)

CAGR 18%

Growth in Net Assets of Natural Resource Funds (in US$ Billion) and Number of Mutual Funds Total AUM in 2008* = US$134.46 Billion

 344

340 320 300 280 260 240 220 200

324 73%

43%

263

-11%

211 2005

2006

No of Funds Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

2007

90% 70% 50% 30% 10% -10% -30% -50%

Net assets of global natural resource funds totaled US$134 billion in May 2008

In the first five months of 2008, however, the net assets have witnessed negative growth after two years of high performance

2008*

% increase in AUM Note: Figures for year 2008 are as of May, 2008

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Singapore, Chile and Bahrain appear to be attractive sales destination for Europe domiciled funds as per number of funds sold in these countries

Total AUM (Offshore funds: $91.25 bn) Country Wise # of European Funds Sold in Asia Pacific Country

Total number of offshore funds in Europe: 302

# of Funds

Country Wise # of European Funds Sold in Latin America Country

# of Funds

Singapore

264

Chile

99

Taiwan

54

Peru

02

Macau

38

Korea

08

Hong Kong

77

Country Wise # of European Funds Sold in Middle East Country

# of Funds

Bahrain

96

Lebanon

08

ASIA LATIN AMERICA PACIFIC

MIDDLE EAST

AFRICA Country Wise # of European Funds Sold in Africa Country

# of Funds

South Africa

10

UCIT regulations and its acceptance in different countries has allowed many Europe domiciled funds to originate sales out of Europe

Of the Europe domiciled offshore funds, Luxembourg is a key country with 255 funds attracting sales from other region

Asia Pacific is the most important region in terms of offshore sales of Europe domiciled funds

As per industry reports, Asia pacific accounted for almost 30% of the total fund flows of European equity funds in fist half of 2007

Also, Blackcock raised around US$5 billion from Taiwan in 2007 for its different funds

Bahrain and Chile also have high attraction for Europe domiciled funds

UAE, also, is amending the regulation to allow sale of UCIT in the country

Source: Bloomberg; Lipper; Sutherland Analysis

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High growth of funds flow in natural resources funds was mainly due to higher funds flow in precious metal funds % AUM Break up by Category

# of Funds and % AUM Increase

Utilities

60 50 40 30 20 10 0

19.60% 21.30%

105%

32

37

2005

2006

Precious Metal

55

66

30 10

37.70%

100%

48

9%

50%

2007

2008

30 20

2005

2006

Total Funds

81

83 -15%

2007

2008

0%

28.7

-28.8%

50.7

-18%

AUM Increase (%)

35

36

50%

-34%

2007

105

131

AUM Increase (%)

160

60% 40% 163 -5%

0 2005

2006

Total Funds

250% 200% 150% 100% 50% 0% -50%

2008

35%

150 100

Source: Bloomberg; Lipper; Morningstar; Sutherland Analysis

818%

40% 20%

29%

54%

200

50

28.6

60%

0

Energy

92%

AUM Increase (%)

225%

40 20

52

-20% 2006

Total Funds

Diversified Natural Resources

26.3

150%

115%

49%

2005

21.40%

% Fund Flow Increase (06-07)

0% Total Funds

100 80 60 40 20 0

AUM FY 2008 (US$ bn)

2007

20% 0% -20%

2008

AUM Increase (%)

Note: Figures for year 2008 are as of May, 2008

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Outline

Regional Analysis – Asia Pacific

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The Asia-Pacific natural resources funds market is valued at US$7.9 billion.. Asia-Pacific Net Assets of Mutual Funds¹ (in US$ Billion) and Number of Mutual Funds² Net Assets

4,000

Number of Funds

14,847

3,500 13,479

2,500

3,678

2,000

1,000

Asia Pacific has emerged as a strong market for mutual funds over the past five years primarily due to emerging economies of China and India

Net assets of mutual funds witnessed a CAGR of 28.2 percent (over 2003-07 period) recording the highest growth rate globally

Number of mutual funds have witnessed a 6.3 percent CAGR, reflecting higher investments in existing funds

14,000

3,000

1,500

15,000

11,641

12,427

11,617

1,939

1,361

1,678

2003

2004

13,000 12,000

2,457

11,000 2005 2006 CAGR 28.2%

2007

Asia-Pacific Number of Natural Resources Funds Total AUM in 2008* = US$7.90 Billion

Number of global natural resources funds in Asia-Pacific doubled between 2006 and May 2008

Strong equity market growth in the past three years coupled with rise in industrialization and infrastructure growth led to rising interest in natural resources funds

100 80 60 40 20

23

29

2005

2006

49

60

0 2007

2008*

¹Includes Australia, China(2007), Hong Kong, India, Japan, Korea, New Zealand, Pakistan, Philippines, Taiwan ²Includes China (2007), Hong Kong, India, Japan, Korea, New Zealand, Pakistan, Philippines, Taiwan

Source: Investment Company Institute; Bloomberg; Lipper; Morningstar; Sutherland Analysis

Note: Figures for year 2008 are as of May, 2008

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Only 3 funds domiciled in Asia Pacific attract sales from other countries indicating low international sales of Asia Pacific funds

Asia Pacific funds are currently exploring its own markets for meeting their sales targets. Only about 0.8% of the overall AUM is managed for overseas clients.

Sr. No

Fund Name

1

JF Five Elements

2

Reliance Diversified Power

3

United Gold & General Fund

Domicile Country

Sales Region Other than Domicile Country

Hong Kong

Singapore

India

Bahrain

Singapore

Taiwan

Source: Lipper

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