Element Global Opportunities Equity Portfolio

July 2012

The Element Global Opportunities Equity Portfolio has the mandate to go anywhere in pursuit of attractive investment opportunities, using a bottom-up investment approach. Being equity focused, the portfolio has at least 70% of its assets invested in international equity markets. The portfolio uses as benchmark the MSCI World (Local) but it does not seek to mimic or track this index in any way, which may lead both geographic and sectorial allocation differences.

Portfolio Details
Net Asset Value : Portfolio Assets (): Launch date: Portfolio Managers: 95.27 67300 14-January-2011 Filipe Alves da Silva, CAIA Afonso Janurio

Investment Highlights
The way we manage Element is very simple: in a cautiously greedy way we invest in companies we consider undeservedly cheap. We dont focus much on macroeconomic issues or waste time/money guesstimating wheather markets will go up or down in the next few days. In the long-run we know the way is up. This month we were very happy to come across a study by Merrill Lynch, stating that Wall Streets sell side strategists are now more bearish (negative) on equities than they were at any point in the last 27 yrs (Annex 1). It is known that this group as a whole tends to get it wrong, especially at times of extreme euphoria / panic. Its always good coming across numbers like this one. Stock price volatility is one of our best friends as it presents us with many interesting opportunities. A good example of how we use volatility to our advantage is our purchase of Chatham Lodging Trust this month. Chatham is a US based REIT (Real Estate Investment Trust) that owns a portfolio of premium branded extended stay hotels. The company came public about 2 yrs ago at $20 and used the money to buy a portfolio of 18 hotels, which it then performed renovation works on. Because the company fully renovated 13 of its 18 hotels, its profits were not at cruise speed for the last year, as many of the rooms were put out of commission due to the renovation works. Shares are now selling at less than $14, 30% below the issue price and at 4.75 times the expected EBITDA for 2012. We would argue that a portfolio of 18 premium branded hotels that was acquired (and renovated) by a seasoned management team two years ago is not worth 30% less than what the company paid for it then. While we wait for this to correct, we will be collecting a 6% dividend yield. We look forward for those dividend checks! The portfolio underperformed its benchmark by -0.65% this month.

Investment Guidelines
Max. Long Exposure: Min. Long Exposure: Equity Hedging: 130% 70% May use options on single name equities or equity indices to hedge downside risk Hedged on a best effort basis

Currency Hedging:

Weekly Performance Chart

106 103
100 97 94

91 88
85 82 14-Jan 18-Feb 25-Mar 29-Apr 3-Jun 1-Jul 5-Aug

MSCI World Local Portfolio

9-Sep 14-Oct 18-Nov 16-Dec 20-Jan 17-Feb 16-Mar 20-Apr 18-May 15-Jun 20-Jul

Monthly Performance
Jan 2011 2012 -1,11% 7,06% Feb 1,61% 5,19% Mar -2,05% 1,62% Apr 3,30% -0,86% May -1,25% -6,98% Jun -1,72% 2,62% Jul -1,37% 0,62% Aug -7,23% Sep -7,20% Oct 8,70% Nov -2,83% Dec YTD -1,18% -12,57% 8,96%

Disclaimer: Past performance is not indicative of future performance. Reference in this document to specific securities should not be construed as a
recommendation to buy or sell these securities.

Element Global Opportunities Equity Portfolio

Allocation by Sector
Cash Real Estate 1,0% 0,6% 4,2% 4,3% 6,3% 4,1%

Allocation by Country
Cash Others Brazil China Netherlands Italy Sweden Spain Switzerland Germany Australia France Canada United Kingdom Japan United States 0% 4,1% 7,8% 1,7% 6,5% 0,2% 0,2% 0,2% 7,5% 0,6%

Utilities
Telecommunication Services Materials Health Care

Consumer Staples
Consumer Discretionary Energy Industrials Information Technology Financials 0% 5% 10% 1,8% 1,9%

13,7%
20,5%

30,4%
11,1% 15% 20% 25% 30% 35%

4,4% 0,6% 2,2% 4,8% 1,9% 1,6%

55,7% 10% 20% 30% 40% 50% 60%

Top 10 Positions
i Sha res MSCI Worl d ETF Hedged Appl e Inc Mi cros oft Corpora ti on IBM Peps i Co Fi del i ty Chi na Speci a l Si tua ti ons Ama deus IT Hol di ngs Teva Pha rma ceuti ca l s BMW GAP Inc

Weight
15,9% 8,0% 7,0% 6,6% 6,1% 5,8% 4,3% 4,2% 3,8% 3,6%
120% 100% 80%
103,4%

Currency Exposure

60% 40% 20% 0%

-20% -40% EUR USD CNY BRL CAD GBP UAH
-17,7% 6,5% 1,7% 3,9% 0,3% 2,0%

Total

65,2%

Glossary
Bottom-up Investing A bottom-up strategy overlooks broad sector and economic conditions and instead focuses on selecting a stock based on the individual attributes of a company. Advocates of the bottom-up approach simply seek strong companies with good prospects, regardless of industry or macroeconomic factors. Net Asset Value The total value of a companys assets less the total value of its liabilities is its net asset value (NAV). For valuation purposes it is common to divide net assets by the number of shares in issue to give the net assets per share, also known as the price per share. Long Exposure Percentage of the Portfolios assets that are invested in equity markets and that benefit from the appreciation of equity markets. Currency Hedging Transaction implemented to protect the Portfolios foreign currency positions (non-Euro) from an unwanted move in exchange rates. Top 10 Positions Top holdings are those securities in which the latest percentage of the Portfolios total assets are invested. They do not include hedging derivatives. A full list of holdings, including derivatives, is available upon request.
E L E M E N T C A P I T A L

Contacts
For more information please contact Afonso Janurio or Filipe Alves da Silva directly or send an email to element.cap@gmail.com

LONDON

GENEVA

Disclaimer: Past performance is not indicative of future performance. Reference in this document to specific securities should not be construed as a
recommendation to buy or sell these securities.

Element Global Opportunities Equity Portfolio

Complete List of Holdings

Name
iShares MSCI World ETF Hedged Apple Inc Microsoft Corporation IBM PepsiCo Fidelity China Special Situations Amadeus IT Holdings Teva Pharmaceuticals BMW GAP Inc Archer Daniels Midlands Berkshire Hathaway BlackRock Telefnica Avangard Lowe's Corning Inc Jakks Pacific MRV Engenharia Renault Energold Drilling Monument Mining IMAX Corporation Chatham Lodging Trust Telefonica 11 PUT 06/2013 OPAP Cninsure Premier Exhibitions Ted Baker Addvantage Technologies La Seda de Barcelona Cash

Weight
15,9% 8,0% 7,0% 6,6% 6,1% 5,8% 4,3% 4,2% 3,8% 3,6% 3,4% 3,3% 2,6% 2,1% 2,0% 2,0% 1,9% 1,8% 1,7% 1,6% 1,5% 1,2% 1,2% 1,0% 0,9% 0,9% 0,7% 0,5% 0,2% 0,2% 0,1% 4,1% 100,0%

Total

Disclaimer: Past performance is not indicative of future performance. Reference in this document to specific securities should not be construed as a
recommendation to buy or sell these securities.

Element Global Opportunities Equity Portfolio

Annex 1