Overview

MIR offers high conviction, concentrated strategies, which are constructed on the basis of a disciplined investment process which has been built on the basis of strong academic foundations and insights gained from significant years of investment experience. The MIR process targets investment in companies which exhibit strong value and momentum characteristics.

MIR's investment process has been endorsed by strong ratings from major asset consultants, and the company has received several awards in Australia, including:

• Standard & Poor's Fund Manager of the Year 2007
• Standard and Poor's Fund Manager of the Year 2007 - Australian Equity Large Caps Category
• Money Management Fund Manager of the Year 2006
• Money Management Fund Manager of the Year 2005 - Australian Equities Category

The following table outlines the main features of each strategy.

Strategy	Objective	Benchmark Index	Average Tracking Error	No. Of Stocks
Australian Equities
MIR Australian Equity Fund	+4.5%pa over rolling 5 year periods	S&P/ASX 200	7%pa	30–50
Asian Equities
Asia ex-Japan Equity	+5.5%pa over rolling 5 year periods	S&P Pan Asia x Japan x AU x NZ BMI (in USD)	8–9%pa	80–140
Asia Pacific ex-Japan Equity	+5.0%pa over rolling 5 year periods	S&P Pan Asia x Japan BMI (in USD)	6–7%pa	100–150
Greater China Equity	+5.0%pa over rolling 5 year periods	MSCI Golden Dragon index (in USD)	6–10%pa	60–100

MIR's Investment Process

MIR seeks to exploit market inefficiencies and stock mis-pricings that result from behavioural biases of investors, through the application of a combination of quantitative and qualitative investment disciplines. The process identifies stocks for potential investment utilising a number of quantitative signals and screens. The quantitative process has been built using a proprietary tiered database system which has been extensively cleansed for data inaccuracies by MIR's quantitative and qualitative analysts. The process screens stocks utilising multiple valuation, momentum, acceleration (rate of change of momentum) and corporate signals which are designed to capture the return premium that is available from value stocks, whilst at the same time avoiding investment in stocks which may continue to underperform and delay investing in others until there are early signs that the stocks are in the mean reverting stage of their pricing cycle. The quantitative process also captures the positive returns that are available from stocks displaying positive momentum over the short term but avoids higher volatility stocks and distressed stocks.

Qualitative analysis on the stocks that pass through the quantitative screening process is conducted by MIR's team of dedicated qualitative analysts. The qualitative analysts conduct on-the-ground research focusing on the current financial strength of the company and the likelihood of the company to improve earnings or be re-rated by the market, and equally to identify sources of earnings risk which may not be evident through quantitative analysis. The qualitative analysts focus on eliminating “losers” from the quantitatively screened stocks, those stocks that are likely to underperform, and increasing the weighting to “winners,” those stocks that are expected to significantly outperform. The application of qualitative research sequentially after the quantitative process is designed to improve the success rate in stock selection and enhance the magnitude of outperformance of the portfolio.

MIR's qualitative research is complemented by input from the MIR Industry Advisory Council, a group of senior business people, most of which are ex-CEO's of major companies, who have agreed to act as a sounding board for MIR's investment team. These individuals possess specific industry expertise, which allow the MIR analysts to benefit from their many years of “coal-face” experience.