BNY Mellon Asset Management urges balanced investment outlook

LONDON, 18 February, 2009 — Despite continuing volatility across global capital markets, BNY Mellon Asset Management, the asset management arm of The Bank of New York Mellon Corporation, believes that high quality bonds and companies with strong cash flows, low debt to equity ratios and stable dividend streams are best positioned to benefit from future improvements in economic conditions.

At an Outlook 2009 conference recently held in Paris for professional investors, a panel of experienced equities and fixed income portfolio managers from BNY Mellon Asset Management's stable of investment boutiques analysed the impact of the economic downturn on the asset management industry and outlined their views on current investment opportunities.

BNY Mellon Asset Management has seen an evolution in professional investors' demand over the past 18 months and has identified some strong trends for 2009. Moving away from innovative and complex financial products, the focus is on getting back to basics with a renewed appetite for traditional asset classes.

Fund managers of Newton Investment Management Limited and Walter Scott & Partners Limited — both part of the BNY Mellon Asset Management multi-boutique structure — urge investors to stay invested with a long term view. Using Newton's thematic investment approach, Paul Brain, Head of Fixed Income at Newton believes there is a renewed demand for safe-haven assets. Rising unemployment and increased domestic savings rates should keep demand for government bonds high. With authorities' continuous efforts to solve the financial crisis the government bond markets should continue to benefit and a more diversified bond allocation should be planned for.

Raj Shant, Head of European Equities believes stock picking will be key in 2009. With a current portfolio overweight in defensive stocks, Shant strongly favours the medical and technology sector as well as the construction industry and remains underweight in financials.

Alan McFarlane, Managing Director at Edinburgh based global equity manager Walter Scott, sees value in long term global equities favouring a buy and hold strategy. With equities being at their cheapest level for fifty years, McFarlane believes careful stock selection can produce strong relative results even in the most difficult markets.

Jon Little, Vice Chairman of BNY Mellon Asset Management comments: "There is no doubt that the global credit crisis has shaped a new asset management landscape. The entire industry is now under intense scrutiny. It is clear that in this extremely tough economic environment consolidation is to be expected. We will witness a natural selection of companies of which only the ones with clear distribution structures, controlled cost environment and transparent fee policies will pull through. More than ever the focus will be on performance."

Paul Feeney, Head of International Distribution at BNY Mellon Asset Management says: "One of this year's main challenges for this industry will be to restore investors' confidence and it is our primary objective at BNY Mellon Asset Management to help our clients through these challenging times."

Newton Investment Management Limited is a London-based global asset management subsidiary of The Bank of New York Mellon Corporation and part of BNY Mellon Asset Management. With assets under management of more than £35 billion, the company provides a broad range of award-winning investment products and services to individuals, pension funds, charities and corporations. News and other information about Newton is available at www.newton.co.uk.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $20.2 trillion in assets under custody and administration, $928 billion in assets under management and services more than $11 trillion in outstanding debt. Additional information is available at www.bnymellon.com.

All information source BNY Mellon Asset Management International Limited as at 31 December 2008. This press release is qualified for issuance in the UK only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorised. This press release is issued by BNY Mellon Asset Management International Limited to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. Registered office: The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorised and regulated by the Financial Services Authority.
A Bank of New York Mellon Company.