July 2011 Performance Report

ASX200 Prime Momentum (MTM)

Monthly Report July 2011

Managers Comments for July 2011

Cash is King

Porter Capital’s Prime Momentum fund (MTM) returned +0.23% for July. The benchmark S&P/ASX200 Accumulation Index lost -3.97% for July. MTM therefore outperformed the S&P/ASX200 (after management fees) by +4.20% for the period. Total return for MTM since inception (August 2010) is +4.77% versus the benchmark return of +3.47% for the same period.

Cash is definitely king at the moment.

As financial markets nose-dived due to factors including debt and growth issues in the US and Europe, we have had our investors safely harboured in a defensive cash position. Our models identified negative momentum in markets over three months ago in early May. We then moved the portfolio to 100% cash to protect and preserve capital. The Australian equities market has fallen near 20% at its worst since then.

Currently, markets are experiencing a sharp and aggressive rally that is typical after such a sell down. We are not here to jump at shadows or to try and catch the proverbial “falling knife”. Our mandate is to mange capital in an active and disciplined way to the benefit of our investors. We continue to hold the portfolio in 100% cash and await the time when market momentum over the medium term turns to the positive and we can capitalise on this for investors.

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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)	0.23	-8.52	N/A	4.77
S&P ASX200 Accumulation	-3.97	-5.03	N/A	3.47

* 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.