May 2011 Performance Report

ASX200 Prime Momentum (MTM)

Monthly Report May 2011

Managers Comments for May 2011

MTM in 100% Cash as ASX200 falls over 7%

MTM returned -2.36% for May 2011. The benchmark S&P/ASX200 Accumulation Index returned -2.01% for May, outperforming the MTM (after management fees) by 0.35% for the month. Total return for MTM since inception (August 2010) is +4.32% vs the ASX 200 return of +9.68% for the same period.

Markets have fallen over 7% since early May to date, whilst MTM has been positioned in 100% cash. Aggressive selling of both domestic and international equities has fuelled negative market momentum through May and June. The major causes being the debt issues in Europe and concerns of a double dip recession in the U.S. economy.

Macro economic issues more specific to the domestic market are related to Chinese economic growth. Policy implemented by the Chinese government to cool housing prices and inflation has had a negative effect on the Chinese consumer and economic growth is slowing. This was the intention of Chinese policy makers, though the question of how hard these policies bite into the Asian leader is concerning markets.

Positioning the portfolio in cash upon receiving the signal to do so has served us well over the past two months while there was clear negative momentum in markets. We will continue to hold cash until the danger signs are reduced and market momentum turns positive again.

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About the manager

Porter Capital Management is a professional funds manager offering innovative, system-based investment solutions to institutions, financial advisors and individual investors.

For further information

Phone: 1300 13 44 22

Web: www.portercapital.com.au

Return % *	1m	6m	1yr	Inc.**
Prime Momentum (MTM)	-2.36	-6.93	N/A	4.32
S&P ASX200 Accumulation	-1.97	4.55	N/A	9.68

* Returns are after management + administration fees and before performance fees. ** Since inception of product (11th August 2010)

This product is for investors seeking...

Protection of Capital in a downturn: Moves to 100% cash in difficult economic conditions

Systematic Investment Process: A purely systematic and unemotional process which enforces discipline, objectivity and accountability during difficult investment cycles

Diversification: Low correlation to core fundamental equity managers and major indicies

A Strategy suitable for superannuation funds

Interests that are aligned with their own and a manager compensated on performance

Key Portfolio Features
Benchmark	S&P/ASX200 Accumulation Index
Suggested Timeframe	3 - 5 years
Typical Number of Stocks	0 - 20
Investment Fee	1.30%
Performance Fee	20% of outperformance
Historical Portfolio Turnover	Medium
Style	Growth
Investment Universe	S&P/ASX200
Process	Quantitative

This report provides general information only and does not take into account the investment objectives, financial circumstances or needs of any person. To the maximum extent permitted by law, Porter Capital Management (PCM), its directors and employees accept no liability for any loss or damage occurred as a result of any action taken or not taken on the basis of the information contained in the report or any omissions or errors within it. Before making an investment decision you should consider the latest Product Disclosure Statement and Financial Services Guide and assess whether the product and/or service is appropriate for you. It is advisable that you obtain professional independent financial, legal and taxation advice before making any financial investment decision. PCM does not guarantee the repayment of capital or payment of income, or the performance of its investments.