03 March 2004

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The Income Funds - providing returns in uncertain times

Income is important in supplying a return from your investment. Income can also be used to provide growth through the principle of reinvestment. The Income Funds, denominated in three major currencies, have been planned to provide a regular income, payable on a quarterly basis. This can be paid directly to you or reinvested in the fund to provide income or growth.
The Income Funds invest in intermediate maturity BB rated bonds.
The Funds aim to provide income at a level of approximately 2.5 per cent to 3.5 per cent (dependent on market conditions) over that of intermediate maturity Government bonds. They are suitable as an additional investment unit to reduce overall portfolio risk, whilst increasing diversification and are ideally designed to fit in with a portfolio of investment grade bonds.

Investment philosophy
Uniquely, The Income Funds provide European investors with access to the largest and most significant high yield bond market. The funds appointment of one of the very best, specialist high yield managers in the US has provided the Euro and US funds with the ability to invest in a market that provides an abundance of investment choice combined with market liquidity, breadth and depth that simply cannot be matched elsewhere.
The Investment strategy begins with thorough fundamental and technical analysis of global economic themes to provide an initial top-down based asset allocation selection between the major global markets, assets classes and sectors within them. Once macro market weightings have been decided upon, emphasis switches to bottom-up stock selection that focuses on long term growth potential, balance sheet strength, earnings and dividend histories, market prospects for industry and management ability. Specific analysis is also made to identify undervalued situations.

Investment policy
The Income Fund’s objective is to achieve high total returns but with an over-riding responsibility to capital preservation. The Income Funds will seek to achieve a high level of Euro, USD and GBP income when compared to government bonds over the medium term, thereby allowing shareholders the benefit of including a credit dependent asset class within their overall investment portfolio. The Income Funds will invest in a well-diversified portfolio of intermediate term, high yield corporate bonds with an average credit rating of BB.

Currency matters
The Investment Advisors believe it is in the interests of the funds investors to allow for diversification across three different bond markets - The Euro High Yield Bond Market, the Sterling High Yield Bond Market and the US High Yield Bond Market. This strategy introduces foreign exchange as an element that can influence returns. We therefore have specific guidelines in respect of this element of the portfolio.
The Euro fund invests in both the base currency and the US Dollar. It will always maintain investments in the US Dollar. This currency exposure is always hedged back to Euro – this funds base currency. Investors can therefore be assured that all returns are received in Euros and are not affected by the currency fluctuation of the funds underlying investments.
The GBP fund invests in both the base currency and the Euro. It will always maintain investments in the Euro, which may or may not be hedged. The level of currency hedging is at the discretion of the Investment Adviser with due regard to the sub-funds’ investment objectives.
The USD fund will only invest in USD currency investments.

Brewin Dolphin Securities Ltd
Principal Investment Advisers to The Income Funds
Brewin Dolphin Securities Limited is a member of the London Stock Exchange and is regulated in the UK by the Financial Services Authority and in Jersey by the Jersey Financial Services Commission. Brewin Dolphin Holdings PLC, the ultimate parent company, is quoted on the London Stock Exchange. Brewin Dolphin Securities Limited are the appointed Investment Advisers to The Income Funds. In this capacity they direct investment strategy, investment philosophy and appoint, where necessary, expert external investment advisors.

Neuberger Berman
Brewin Dolphin Securities Ltd have appointed specialist high yield bond fund managers as Investment Advisors to the Euro and USD Funds, which are managed by Wayne Plewniak of Neuberger Berman Inc, New York. Wayne Plewniak is one of the most successful managers in the field and has achieved recognition from most fund rating companies for successfully implementing a conservative and disciplined investment strategy, producing returns that have placed him in the top percentile of performance in the high yield fund sector. The association between Wayne, his high yield investment team and The Income Funds began in the latter part of 2001.

Fully licensed regulated and listed on local stock exchanges
The Income Funds are sub-funds of an open ended investment company, Brewin Dolphin Portfolios Ltd, which was incorporated in Jersey on 24th October 1996.
The Income Funds are regulated by the Jersey Financial Services Commission and have a primary listing on the Channel Islands Stock Exchange – CISX, which is a Guernsey based exchange regulated by the Guernsey Financial Services Commission. The Income Funds are licensed as Collective Investment Schemes by the Malta Financial Services Authority and have a secondary listing on the Malta Stock Exchange.

The minimum initial investments are:
Income Fund (GBP) £1,000
Income Fund (Euro) EUR5,000
Income Fund (USD) $5,000

Web based information
Investors can check on the value of their investment and view other important information via the funds website. Upon investment clients will receive details of how to access the site using an account reference and personal identification number.

Contact details
For more details and a full Prospectus, including the Addendum to Maltese Investors, please contact:
Calamatta Cuschieri & Co. Ltd
Fifth Floor, Valletta Buildings,
South Street, Valletta, VLT 11
Tel: (+356) 25 688 688
Fax: (+356) 256 88 256
Email: info@cccshares.com

Past performance over a particular period will not necessarily be indicative of the results that may be expected in future periods. It should be remembered that the value of Participating Shares and the income derived from them can go down, as well as up, and that investors may not receive, on redemption of their shares, the amount that they invested. The value of shares in The Income Funds with part or all of its investments in overseas stock markets can rise or fall with movements in exchange rates.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | E-mail