advisor report q1 2016
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ADVISOR INVESTMENT SOLUTIONS
A GOVERNED CENTRALISED INVESTMENT PROCESS
QUARTERLY RISK AND PERFORMANCE REPORT
QUARTER ENDING 31 March 2016
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CONTENTS
Overview of the ADVISOR Process Pages 2 - 5 Risk Level 3 – Low Risk Pages 6 - 12
Risk Level 4 – Lowest Medium Risk Pages 13 - 19 Risk Level 5 – Low Medium Risk Pages 20 - 26
Risk Level 6 – High Medium Risk Pages 27 - 33
Risk Level 7 – Highest Medium Risk Pages 34 - 40 Risk Level 8 – High Risk Pages 41 – 45
Income Funds Pages 46 - 49 Summary of Results Page 50
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A BACKGROUND TO ADVISOR INVESTMENT SOLUTIONS ADVISOR Investment Solutions (ADVISOR) utilises Risk Profiling via the Distribution Technology (DT)
Dynamic Planner Tool which assesses both attitude to risk and capacity for loss. Risk is assessed on a scale of 1 to 10 where 1 is the least risky and 10 the highest level of risk.
ADVISOR then concentrates on risk levels 3 to 8 which are categorised as follows –
Level 3 Low Risk
Level 4 Lowest Medium Risk Level 5 Low Medium Risk Level 6 High Medium Risk Level 7 Highest Medium Risk
Level 8 High Risk The DT Quantitative Analysis team generates estimates as to how a wide range of asset classes are expected
to behave over the long-term with respect to returns, volatility and co-variance. The methods are based on
Modern Portfolio Theory techniques to derive efficient portfolios which maximise expected returns for any estimates of risk premiums, as well as other factors such as, current corporate debt default rates and inflation.
They are able to produce a spectrum of asset allocations that gradually increase in risk allowing them to
break the efficient frontier into risk bands and select a suitable target asset allocation as representative of
each band. Each target asset allocation is selected from a choice of 10 asset classes but typically focuses on 3-4 asset
classes per risk category. The process then has several outcomes each with a number of risk based asset allocations (or sub-funds)
which are all mapped to the risk targets determined by DT. Risk is measured by annualised volatility.
THE SOLUTIONS
FUND MANAGER RANGE TYPE TACTICAL AA (Y or N)
ACTIVE/PASSIVE INVESTMENTS
PREMIER LIBERATION FUND OF FUNDS N ACTIVE
7 IM AAP FUND OF FUNDS Y PASSIVE
**LIONTRUST/OMW ADVISOR PORTFOLIOS
MODEL PORTFOLIOS DISCRETIONARY
Y ACTIVE
CLOSE A M ADVISOR PORTFOLIOS
MODEL PORTFOLIOS DISCRETIONARY
N ACTIVE
VANGUARD LIFE STRATEGY INTERNAL F of F N PASSIVE
CLOSE A M BESPOKE FULL DMS Y ACTIVE
**The Liontrust/OMW performance data throughout this report is based on the asset allocation for the Liontrust WSS Portfolios. Asset Allocation will be fully replicated but a very small percentage of underlying funds will not be available under the OMW Platform so will be replaced using the alternative funds. This will have no significant impact on performance or risk levels.
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TARGET ASSET ALLOCATIONS
The DT Target Asset Allocations provide a basis for the Strategic Asset Allocations (SAA) for each of the
investment outcomes. Some of these outcomes follow this SAA – Liberation Funds and ADVISOR Portfolios Managed by Close – while others use both a Tactical Asset Allocation (TAA) based on current economic conditions, short term outlook for interest rates, growth, inflation, etc., and also use alternative investments
not covered by the DT Strategic Asset Allocation. Under the AAP options for 7 IM and Passive ADVISOR Portfolios managed by Liontrust Asset Allocation is active whilst the funds used are largely passive/trackers. NOTE: THE LIBERATION FUNDS WERE BROUGHT INTO LINE WITH DT ASSET ALLOCATIONS FROM 1 DECEMBER
2012 ONLY.
VOLATILITY AND RETURN ASSUMPTIONS
The assumed volatility and returns from 1 January 2016, based on rolling 15 year data for each asset class to 31 December 2015, are shown in the following table.
ASSET CLASS EXPECTED RETURN ANNUALISED VOLATILITY
CASH 1.9% 1.5% UK GILTS 2.3% 6.0%
UK CORPORATE BONDS 3.7% 6.4%
UK INDEX-LINKED GILTS 1.8% 7.6% INTERNATIONAL BONDS 1.8% 8.2%
GLOBAL HIGH YIELD BONDS 6.1% 10.8%
UK EQUITIES 6.8% 14.0%
EUROPEAN EQUITIES 7.0% 19.1% NORTH AMERICAN EQUITIES 6.6% 15.2%
JAPANESE EQUITIES 5.3% 16.2%
PACIFIC EX JAPAN EQUITIES 8.1% 18.6% EMERGING MARKET EQUITIES 9.0% 21.2%
UK PROPERTY 4.7% 10.7%
COMMODITIES 5.9% 20.4% ABSOLUTE RETURN 3.5% 8.6%
UNCLASSIFIED 4.5% 7.2%
Source: Distribution Technology 2016
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The actual return and volatility matrix, based on asset allocations outlined under each of the risk levels and over the 5 years to 31 March 2016, is shown below
Key Name Performance Annualised Volatil ity
A ADVISOR RISK 4 MARKETS TR in GB 38.90 6.41
B ADVISOR RISK 5 MARKETS TR in GB 37.34 7.79
C ADVISOR RISK 3 MARKETS TR in GB 37.23 4.62
D ADVISOR RISK 4 SECTORS TR in GB 35.93 6.46
E ADVISOR RISK 6 MARKETS TR in GB 35.46 8.96
F ADVISOR RISK 5 SECTORS TR in GB 35.23 8.03
G ADVISOR RISK 6 SECTORS TR in GB 34.25 9.37
H ADVISOR RISK 3 SECTORS TR in GB 33.81 4.60
I ADVISOR RISK 7 SECTORS TR in GB 31.52 10.65
J ADVISOR RISK 7 MARKETS TR in GB 30.64 10.15
K ADVISOR RISK 8 SECTORS TR in GB 22.78 11.76
L ADVISOR RISK 8 MARKETS TR in GB 21.80 11.29
Source: Financial Express 2016
RISK AND PERFORMANCE MEASUREMENT There are three contributors to the funds’ performance –
1. Market Return (Strategic Asset Allocation) 2. Tactical Asset Allocation 3. Fund Selection
For the Liberation Funds and ADVISOR Portfolios managed by Close items 1 and 3 apply. For the fully active portfolios (ADVISOR Portfolios managed by Liontrust) all three apply. Having established the above methodology for ADVISOR, the “sub-funds”/portfolios for each outcome are
tested on a quarterly basis to ensure the volatility targets are being maintained and that managers are adding value. For this purpose there are two primary benchmarks –
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Annualised Volatility Benchmark - the volatility benchmark is created using market indices
weighted by the Strategic Asset Allocation provided by DT. This then tests the DT volatility target so that managers are not penalised for excess volatility caused purely by excess market movement which breaches the targets set by DT. The volatility measurement ensures an early warning of any deviation
from the model which could be detrimental to client portfolios.
Performance Benchmark - the performance benchmark is created using IA sector averages weighted
by the Strategic Asset Allocation provided by DT. This is used as a primary performance benchmark for the active funds (Liberation and ADVISOR Portfolios ex AAP). However, for passive funds/portfolios (the Seven IM AAP Funds and ADVISOR AAP Portfolios) the Volatility Benchmark is used.
UNIQUE INTERNAL PORTFOLIO RATING
From the data provided in this report we are able to produce a unique rating to each of the portfolios we use on a scale of 1 to 5 where 1 is the lowest and 5 is the highest. The scores are calculated based on the 1 and 3 year data.
Methodology – In order to ensure the relevance of the rating having regard for the risk profiling we use with clients we apply a score relative to the benchmark to each of the following performance attributes – Cumulative Performance, Volatility and Maximum Drawdown. Placing a 50% weighting on Performance and
25% each on Volatility and Drawdown we then take the average score as the portfolios’ rating. The individual scores are achieved as follows:- Performance -
Benchmark Return +/- 10% 3 Benchmark Return -10% to -25% 2 Benchmark Return -25% or more 1
Benchmark Return +10% to +25% 4 Benchmark Return +25% or more 5 Volatility and Maximum Drawdown -
Benchmark +/- 10% 3 Benchmark -10% to -25% 4 Benchmark -25% or more 5 Benchmark +10% to +25% 2
Benchmark +25% or more 1
RISK-FREE RATE Throughout the report risk-free rates of return are included for comparison purposes. The risk-free rate used is based on MoneyFacts 90 Day £10K+. This is used in the calculations showing the excess annualised risk
adjusted returns at the end of each section.
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DISTRIBUTION TECHNOLOGY RISK LEVEL 3
ADVISOR CATEGORY: LOW RISK
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STRATEGIES AVAILABLE Launch Date
Premier Multi-Asset Absolute Return C Shares 10 November 2010 (Note: This fund is not volatility targeted and performance is likely to vary significantly from the benchmark) 7 IM Personal Injury S Shares 27 March 2008
ADVISOR Low Risk Growth Managed by Liontrust/OMW 30 June 2011 ADVISOR Low Risk Growth Managed by Close/Nucleus 30 June 2013
Vanguard 20% Equity 23 June 2011
Bespoke Service N/A CHARGES A summary of the total charges applying to each portfolio is set out below.
STRATEGY MANAGER/OCF *PLATFORM UNDERLYING PORTFOLIO **TOTAL
PREMIER MA ARF 1.19% 0.35% N/A 1.54%
7 IM PERSONAL INJURY 0.48% 0.25% N/A 0.73%
ADVISOR Low Risk (Liontrust) ̂ 0.20%-0.50% 0.54% 0.74%-1.04%
ADVISOR Low Risk (Close) ̂ 0.35% 0.72% 1.07%
VANGUARD 20% Equity 0.24% 0.35% N/A 0.59%
BESPOKE 0.9% VARIES ACCORDING TO PORTFOLIO CONSTRUCTION
*The platform charge is based on the internal platform or the typical charge for using the platform. **The total charge excludes ADVISOR charges and any additional product charges such as SIPPs and Bonds.
^The manager fees for ADVISOR Portfolios managed by Close are paid by the ADVISOR from the ADVISOR Fee. ^The manager fees for ADVISOR Portfolios managed by Liontrust are paid by the ADVISOR from the ADVISOR Fee.
ASSET ALLOCATION AND TARGET VOLATILITY - Distribution Technology Strategic Asset Allocation from 1
October 2015 (Different AA has applied previously and all changes are taken into account in the data provided):-
ASSET CLASS ALLOCATION ASSET CLASS ALLOCATION CASH 10% GLOBAL HY BONDS 5%
UK CORPORATE BONDS 23% UK EQUITIES 15%
INTERNATIONAL BONDS 7% US EQUITIES 9%
UK GILTS 16% UK PROPERTY 8%
INDEX LINKED BONDS 7%
DISTRIBUTION TECHNOLOGY TARGET ANNUALISED VOLATILITY FROM 1 OCTOBER 2015
TARGET VOLATILITY LOWER BOUNDARY UPPER BOUNDRY 5.4% 4.2% 6.3%
Note: The lower boundary is soft – ie in times of low volatility we do not expect managers to chase volatility in the expectation of higher returns. The upper boundary is regarded as hard – ie we expect this not to be breached.
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VOLATILITY & PERFORMANCE MEASURES FOR PERIOD TO 31 March 2016 Volatility is measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year data. However, the various strategi es do not all have a 3 year track record to date so 1 year or 2 ye ar data will be considered by the Investment Committee overseeing the process. Performance is also measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year figures. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
STRATEGY ANNUALISED
VOLATILITY
MAXIMUM
DRAWDOWN
WITHIN TARGET
VOLATILITY
CUMULATIVE
PERFORMANCE
ANNUALISED
PERFORMANCE
ABOVE/BELOW
BENCHMARK
INTERNAL
SCORE
PREMIER MA ABS RETURN
1 Year 1.95% 1.42% BELOW 0.13% 0.13% BELOW 3.00
2 Years 1.70% 1.42% BELOW 4.35% 2.15% BELOW
3 Years 1.93% 1.42% BELOW 9.34% 3.02% BELOW 3.00
5 Years 2.67% 3.31% BELOW 22.22% 4.09% BELOW
7IM PERSONAL INJURY
1 Year 5.66% 6.48% WITHIN -2.56% -2.56% BELOW 1.25
2 Years 4.70% 6.48% WITHIN 6.19% 3.05% BELOW
3 Years 4.70% 6.48% WITHIN 7.59% 2.47% BELOW 1.50
5 Years 3.97% 6.48% BELOW 20.79% 3.85% BELOW
ADVISOR LOW RISK GROWTH (LIONTRUST/OMW)
1 Year 4.41% 4.39% WITHIN -1.76% -1.76% BELOW 2.00
2 Years 4.00% 4.39% BELOW 7.30% 3.59% BELOW
3 Years 3.94% 4.39% BELOW 8.63% 2.80% BELOW 2.00
5 Years N/A N/A N/A N/A N/A N/A
ADVISOR LOW RISK GRWOTH (CLOSE)
1 Year 4.20% 3.28% WITHIN 0.53% 0.53% ABOVE 4.50
2 Years 3.52% 3.28% BELOW 8.12% 3.98% BELOW
3 Years N/A N/A N/A N/A N/A N/A
5 Years N/A N/A N/A N/A N/A N/A
VANGUARD 20%
EQUITY
1 Year 4.20% 3.13% WITHIN 1.42% 1.42% BELOW 3.50
2 Years 4.20% 3.13% WITHIN 12.56% 6.09% BELOW
3 Years 4.76% 5.00% WITHIN 12.34% 3.95% BELOW 2.00
5 Years N/A N/A N/A N/A N/A N/A
BENCHMARKS
DT SAA (INDICES)
1 Year 5.00% 3.52% WITHIN 1.47% 1.47%
2 Years 5.10% 3.52% WITHIN 13.81% 6.68%
3 Years 5.20% 3.52% WITHIN 15.85% 5.03%
5 Years 4.62% 3.52% WITHIN 37.49% 6.57%
DT SAA (SECTORS)
1 Year 4.65% 3.75% WITHIN 0.30% 0.30% 2 Years 4.66% 3.75% WITHIN 11.43% 5.56%
3 Years 4.92% 3.75% WITHIN 14.05% 4.48%
5 Years 4.60% 3.75% WITHIN 34.07% 6.04%
RISK FREE RETURN
1 Year N/A N/A N/A 0.76% 0.76% 2 Years N/A N/A N/A 1.49% 0.74%
3 Years N/A N/A N/A 2.30% 0.76%
5 Years N/A N/A N/A 4.79% 0.94%
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
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RISK ADJUSTED PERFORMANCE FOR PERIOD TO 31 March 2016 (SHARPE RATIO) The following chart shows the annualised returns achieved for each unit of risk (annualised volatility/standard deviation) by each strategy after deducting the risk free rate – a negative ratio shows that the investor would have been better leaving funds on deposit and not taking the investment risk making the ratio meaningless and therefore is rebalanced to zero. A positive ratio shows the investment has added to returns for the risk taken. The higher the ratio the better the manager has performed for the risk taken – either has produced higher returns for the same risk or has produced similar returns for less risk.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
MAXIMUM DRAWDOWN The following chart shows the maximum drawdown suffered by the portfolios within the periods shown. This represents the worst
possible return over a period — for example, buying at the maximum price over the period and selling at the worst price, based on monthly valuations.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/201 6
-0.20%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
PREMIER MA ARF
7IM PI
ADVISOR LOW RISK GTH(LION/OMW)
-7.00%
-6.00%
-5.00%
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
PREMIER MA ARF
7IM PI
ADVISOR LOW RISK GTH(LION/OMW)
ADVISOR LOW RISK GTH (CLOSE)
VANGUARD 20% EQUITY
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ACTUAL RETURNS RELATIVE TO EXPECTATIONS The following charts show how each portfolio has performed based on annualised returns, relative to the expected long term average, and the expected upper and lower boundaries, over the past 1 to 5 years. The expected average and upper and lower boundaries are based on data provided by Distribution Technology for long term average returns and the 95 th and 5th percentile returns based on 15 year rolling periods. In other words 90% of the time it would be expected that actual returns would remain between the upper and lower bo undaries. The returns do not allow for inflation but do make an allowance for charges. The portfolio returns are net of internal charges but may not allow for managers’ charges, ADVISOR fees or platform fees.
-10%
-5%
0%
5%
10%
15%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
PREMIER MA ARF
EXPECTED MAX
EXPECTED MIN
-10%
-5%
0%
5%
10%
15%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
7IM PI
EXPECTED MAX
EXPECTED MIN
-10%
-5%
0%
5%
10%
15%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LT AVERAGE
ADVISOR LRG
(LION/OMW)
EXPECTED MAX
EXPECTED MIN
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Source: Professional Fund Maintenance Ltd 2016
-10%
-5%
0%
5%
10%
15%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR LRG(CLOSE)
EXPECTED MAX
EXPECTED MIN
-10%
-5%
0%
5%
10%
15%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LT AVERAGE
VANGUARD 20% EQUITY
EXPECTED MAX
EXPECTED MIN
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HISTORIC INTERNAL RATINGS The following 2 charts show the historic internal ratings of the various portfolios over rolling 1 and 3 year periods since the introduction of the measure at the end of December 2015.
1 YEAR
3 YEARS
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Q4 2015 Q1 2016
PREMIER MAAR
7IM PI FUND
ADVISOR LRG
(LION/OMW)
VANGUARD 20%
EQUITY
ADVISOR LRG (CLOSE)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
PREMIER MAAR
7IM PI FUND
ADVISOR LRG
(LION/OMW)
VANGUARD 20%
EQUITY
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DISTRIBUTION TECHNOLOGY RISK LEVEL 4
ADVISOR CATEGORY: LOWEST MEDIUM RISK
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STRATEGIES AVAILABLE
Launch Date Premier Liberation IV C Shares 10 November 2010 7 IM AAP Moderately Cautious S Shares 27 March 2008
ADVISOR Lowest Medium Risk Growth (LMG) Managed by Liontrust/OMW 30 June 2011 ADVISOR Lowest Medium Risk Growth (LMG) Manged by Close/Nucleus 30 June 2013
Vanguard 40% Equity 23 June 2011
Bespoke Service N/A CHARGES A summary of the total charges applying to each portfolio is set out below.
STRATEGY MANAGER/OCF *PLATFORM UNDERLYING PORTFOLIO **TOTAL
LIBERATION IV 1.30% 0.35% N/A 1.65%
7 IM MOD CAUTIOUS AAP 0.42% 0.25% N/A 0.67%
ADVISOR (LMG) (Liontrust) ̂ 0.20%-0.50% 0.78% 0.98%-1.28%
ADVISOR (LMG) (Close) ̂ 0.35% 0.76% 1.11%
VANGUARD 40% Equity 0.24% 0.35% N/A 0.59%
BESPOKE 0.9% VARIES ACCORDING TO PORTFOLIO CONSTRUCTION
*The platform charge is based on the internal platform or the typical charge for using the platform. **The total charge excludes ADVISOR charges and any additional product charges such as SIPPs and Bonds.
^The manager fees for ADVISOR Portfolios managed by Close are paid by the ADVISOR from the ADVISOR Fee. ^The manager fees for ADVISOR Portfolios managed by Liontrust are paid by the ADVISOR from the ADVISOR Fee.
ASSET ALLOCATION AND TARGET VOLATILITY - Distribution Technology Strategic Asset Allocation from 1 October 2015
(Different AA has applied previously and all changes are taken into account in the data provided):
ASSET CLASS ALLOCATION ASSET CLASS ALLOCATION
CASH 5% PROPERTY 8% UK CORPORATE BONDS 27% UK EQUITIES 22%
UK INDEX LINKED BONDS 5% EUROPE EQUITIES 5%
UK GILTS 8% US EQUITIES 9%
GLOBAL HY BONDS 6% JAPAN EQUITY 5%
DISTRIBUTION TECHNOLOGY TARGET ANNUALISED VOLATILITY FROM 1 OCTOBER 2015
TARGET VOLATILITY LOWER BOUNDARY UPPER BOUNDRY 7.4% 6.3% 8.4%
Note: The lower boundary is soft – ie in times of low volatility we do not expect managers to chase volatility in the expectation of higher returns. The upper boundary is regarded as hard – ie we expect this not to be breached.
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VOLATILITY & PERFORMANCE MEASURES FOR PERIOD TO 31 March 2016 Volatility is measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year data. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Commit tee overseeing the process. Performance is also measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year figures. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
STRATEGY ANNUALISED VOLATILITY
MAXIMUM DRAWDOWN
WITHIN TARGET
VOLATILITY
CUMULATIVE PERFORMANCE
ANNUALISED PERFORMANCE
ABOVE/BELOW BENCHMARK
INTERNAL SCORE
LIBERATION IV
1 Year 6.40% 5.55% WITHIN -1.08% -1.08% BELOW 2.00
2 Years 5.45% 5.55% BELOW 9.97% 4.87% BELOW
3 Years 5.67% 5.55% BELOW 18.27% 5.75% ABOVE 3.00
5 Years 5.75% 6.93% BELOW 34.09% 6.04% BELOW
7IM MODERATELY CAUTIOUS AAP
1 Year 6.70% 7.48% WITHIN -2.85% -2.85% BELOW 1.50
2 Years 5.59% 7.48% BELOW 6.94% 3.41% BELOW
3 Years 5.66% 7.48% BELOW 8.32% 2.70% BELOW 1.50
5 Years 5.24% 7.48% BELOW 18.68% 3.48% BELOW
ADVISOR LOWEST MEDIUM RISK GROWTH (LIONTRUST/OMW)
1 Year 5.63% 5.38% BELOW -2.20% -2.20% BELOW 2.25
2 Years 4.99% 5.38% BELOW 8.51% 4.17% BELOW
3 Years 4.85% 5.38% BELOW 11.41% 3.67% BELOW 2.25
5 Years N/A N/A N/A N/A N/A N/A
ADVISOR LOWEST
MEDIUM RISK GRWOTH (CLOSE)
1 Year 6.19% 4.87% BELOW -0.36% -0.36% ABOVE 4.00
2 Years 5.00% 4.87% BELOW 9.05% 4.43% BELOW
3 Years N/A N/A N/A N/A N/A N/A
5 Years N/A N/A N/A N/A N/A N/A
VANGUARD 40%
EQUITY
1 Year 5.58% 4.70% BELOW 0.89% 0.89% ABOVE 4.50
2 Years 5.07% 4.70% BELOW 13.40% 6.49% ABOVE
3 Years 5.43% 4.70% BELOW 15.37% 4.88% BELOW 3.00
5 Years N/A N/A N/A N/A N/A N/A
BENCHMARKS
DT SAA (INDICES)
1 Year 6.46% 5.24% WITHIN -0.01% -0.01%
2 Years 5.86% 5.24% BELOW 13.20% 6.40%
3 Years 6.11% 5.24% BELOW 18.33% 5.77%
5 Years 6.41% 8.06% WITHIN 39.07% 6.82%
DT SAA (SECTORS)
1 Year 6.08% 5.19% BELOW -0.50% -0.50%
2 Years 5.40% 5.19% BELOW 11.19% 5.45%
3 Years 5.71% 5.19% BELOW 17.23% 5.44%
5 Years 6.46% 8.15% WITHIN 36.10% 6.36%
RISK FREE RETURN
1 Year N/A N/A N/A 0.76% 0.76% 2 Years N/A N/A N/A 1.49% 0.74%
3 Years N/A N/A N/A 2.30% 0.76%
5 Years N/A N/A N/A 4.79% 0.94%
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
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RISK ADJUSTED PERFORMANCE FOR PERIOD TO 31 March 2016 (SHARPE RATIO) The following chart shows the annualised returns achieved for each unit of risk (annualised volatility/standard deviation) by each strategy after deducting the risk free rate – a negative ratio shows that the investor would have been better leaving funds on deposit and not taking the investment risk making the ratio meaningless and therefore is rebalanced to zero. A positive ratio shows the investment has added to returns for the risk taken. The higher the ratio the better the manager has performed for the risk taken – either has produced higher returns for the same risk or has produced similar returns for less risk.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
MAXIMUM DRAWDOWN The following chart shows the maximum drawdown suffered by the portfolios within the periods shown. This represents the worst possible return over a period — for example, buying at the maximum price over the period and selling at the worst price, based on monthly valuations.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/201 6
-0.20%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION IV
7IM MC AAP
ADVISOR LMG
(LION/OMW)
ADVISOR LM GTH (CLOSE)
VANGUARD 40% EQUITY
-9.00%
-8.00%
-7.00%
-6.00%
-5.00%
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION IV
7IM MC AAP
ADVISOR LMG (LION/OMW)
ADVISOR LM GTH (CLOSE)
VANGUARD 40% EQUITY
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ACTUAL RETURNS RELATIVE TO EXPECTATIONS The following charts show how each portfolio has performed based on annualised returns, relative to the expected long term av erage, and the expected upper and lower boundaries, over the past 1 to 5 years. The expected average and upper and lower boundaries are based on data provided by Distribution Technology for long term average returns and the 95 th and 5th percentile returns based on 15 year rolling periods. In other words 90% of the time it would be expected that actual returns would remain between th e upper and lower boundaries. The returns do not allow for inflation but do make an allowance for charges. The portfolio returns are net of internal charg es but may not allow for managers’ charges, ADVISOR fees or platform fees.
-10%
-5%
0%
5%
10%
15%
20%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
LIBERATION IV
EXPECTED MAX
EXPECTED MIN
-10%
-5%
0%
5%
10%
15%
20%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
7IM MC AAP
EXPECTED MAX
EXPECTED MIN
-10%
-5%
0%
5%
10%
15%
20%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR LMG(LION/OMW)
EXPECTED MAX
EXPECTED MIN
18 | P a g e
Source: Professional Fund Maintenance Ltd 2016
-10%
-5%
0%
5%
10%
15%
20%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR LMG(CLOSE)
EXPECTED MAX
EXPECTED MIN
-10%
-5%
0%
5%
10%
15%
20%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
VANGUARD 40%EQUITY
EXPECTED MAX
EXPECTED MIN
19 | P a g e
HISTORIC INTERNAL RATINGS The following 2 charts show the historic internal ratings of the various portfolios over rolling 1 and 3 year periods since the introduction of the measure at the end of December 2015.
1 YEAR
3 YEARS
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
LIBERATION IV
7IM MOD CAUTIOUS
ADVISOR LMRG
(LION/OMW)
VANGUARD 40%
EQUITY
ADVISOR LMRG
(CLOSE)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
LIBERATION IV
7IM MOD CAUTIOUS
ADVISOR LMRG
(LION/OMW)
VANGUARD 40%
EQUITY
20 | P a g e
DISTRIBUTION TECHNOLOGY RISK LEVEL 5
ADVISOR CATEGORY: LOW MEDIUM RISK
21 | P a g e
STRATEGIES AVAILABLE Launch Date Premier Liberation V Class C Shares 10 November 2010
7 IM AAP Balanced S Shares 27 March 2008 ADVISOR Low Medium Risk Growth (LMG) Managed by Liontrust/OMW 30 June 2011
ADVISOR Low Medium Risk Growth (LMG) Managed by Close/Nucleus 30 June 2013 Vanguard 60% Equity 23 June 2011
Bespoke Service N/A
CHARGES A summary of the total charges applying to each portfolio is set out below.
STRATEGY MANAGER/OCF *PLATFORM UNDERLYING PORTFOLIO **TOTAL
LIBERATION V 1.44% 0.35% N/A 1.79%
7 IM BALANCED 0.42% 0.25% N/A 0.67%
ADVISOR LMG (Liontrtust) ̂ 0.20%-0.50% 0.76% 0.96%-1.26%
ADVISOR LMG (Close) ̂ 0.35% 0.77% 1.12%
VANGUARD 60% Equity 0.24% 0.35% N/A 0.59%
BESPOKE 0.9% VARIES ACCORDING TO PORTFOLIO CONSTRUCTION
*The platform charge is based on the internal platform or the typical charge for using the platform. **The total charge excludes ADVISOR charges and any additional product charges such as SIPPs and Bonds.
^The manager fees for ADVISOR Portfolios managed by Close are paid by the ADVISOR from the ADVISOR Fee. ^The manager fees for ADVISOR Portfolios managed by Liontrust are paid by the ADVISOR from the ADVISOR Fee.
ASSET ALLOCATION AND TARGET VOLATILITY - Distribution Technology Strategic Asset Allocation from 1 October 2015 (Different AA has applied previously and all changes are taken into account in the data provided):-
ASSET CLASS ALLOCATION ASSET CLASS ALLOCATION
UK GILTS 5% US EQUITIES 14%
UK CORPORATE BONDS 24% JAPAN EQUITIES 5%
GLOBAL HY BONDS 6% PACIFIC (Ex Japan) 6%
UK EQUITIES 28% UK PROPERTY 7%
EUROPE EQUITIES 5%
DISTRIBUTION TECHNOLOGY TARGET ANNUALISED VOLATILITY FROM 1 OCTOBER 2015
TARGET VOLATILITY LOWER BOUNDARY UPPER BOUNDRY
9.4% 8.4% 10.5%
Note: The lower boundary is soft – ie in times of low volatility we do not expect managers to chase volatility in
the expectation of higher returns. The upper boundary is regarded as hard – ie we expect this not to be breached.
22 | P a g e
VOLATILITY & PERFORMANCE MEASURES FOR PERIOD TO 31 March 2016 Volatility is measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year data. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 ye ar data will be
considered by the Investment Committee overseeing the process. Performance is also measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year figures. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data
will be considered by the Investment Committee overseeing the process.
STRATEGY ANNUALISED VOLATILITY
MAXIMUM DRAWDOWN
WITHIN TARGET
VOLATILITY
CUMULATIVE PERFORMANCE
ANNUALISED PERFORMANCE
ABOVE/BELOW BENCHMARK
INTERNAL SCORE
LIBERATION V
1 Year 8.78% 7.98% WITHIN -1.61% -1.61% BELOW 2.50
2 Years 7.08% 7.98% BELOW 10.33% 5.04% BELOW
3 Years 7.32% 7.98% BELOW 17.45% 5.51% ABOVE 3.00
5 Years 7.89% 8.30% BELOW 37.61% 6.59% ABOVE
7IM BALANCED AAP
1 Year 10.43% 11.12% WITHIN -5.51% -5.51% BELOW 1.00
2 Years 8.29% 11.12% BELOW 6.98% 3.43% BELOW
3 Years 8.07% 11.12% BELOW 11.00% 3.54% BELOW 1.25
5 Years 7.85% 11.12% BELOW 20.78% 3.85% BELOW
ADVISOR LOW MEDIUM RISK GROWTH (LIONTRUST/OMW)
1 Year 7.48% 7.04% BELOW -2.19% -2.19% BELOW 2.00
2 Years 6.18% 7.04% BELOW 9.73% 4.75% BELOW
3 Years 5.93% 7.04% BELOW 13.99% 4.46% BELOW 2.75
5 Years N/A N/A N/A N/A N/A N/A
ADVISOR LOW MEDIUM RISK GRWOTH (CLOSE)
1 Year 7.97% 6.30% BELOW 0.23% 0.23% ABOVE 4.25
2 Years 6.26% 6.30% BELOW 10.75% 5.24% BELOW
3 Years N/A N/A N/A N/A N/A N/A
5 Years N/A N/A N/A N/A N/A N/A
VANGUARD 60% EQUITY
1 Year 7.37% 6.51% BELOW 0.11% 0.11% ABOVE 4.25
2 Years 6.32% 6.51% BELOW 13.90% 6.72% ABOVE
3 Years 6.58% 6.51% BELOW 17.96% 5.66% BELOW 3.25
5 Years N/A N/A N/A N/A N/A N/A
BENCHMARKS
DT SAA (INDICES)
1 Year 8.06% 7.40% BELOW -0.75% -0.75% 2 Years 6.97% 7.40% BELOW 13.28% 6.43%
3 Years 7.20% 7.40% BELOW 18.28% 5.76%
5 Years 7.79% 10.34% BELOW 37.47% 6.57%
DT SAA (SECTORS)
1 Year 8.01% 7.36% BELOW -1.30% -1.30%
2 Years 6.74% 7.36% BELOW 11.15% 5.43% 3 Years 6.96% 7.36% BELOW 17.37% 5.48%
5 Years 8.03% 10.30% BELOW 35.36% 6.24%
RISK FREE RETURN
1 Year N/A N/A N/A 0.76% 0.76% 2 Years N/A N/A N/A 1.49% 0.74%
3 Years N/A N/A N/A 2.30% 0.76% 5 Years N/A N/A N/A 4.79% 0.94%
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
23 | P a g e
RISK ADJUSTED PERFORMANCE FOR PERIOD TO 31 March 2016 (SHARPE RATIO) The following chart shows the annualised returns achieved for each unit of risk (annualised volatility/standard deviation) by each strategy after deducting the risk free rate – a negative ratio shows that the investor would have been better leaving funds on deposit and not taking the investment risk making the ratio meaningless and therefore is rebalanced to zero. A positive ratio shows the investm ent has added to returns for the risk taken. The higher the ratio the better the manager has performed for the risk taken – either has produced higher returns for the same risk or has produced similar returns for less risk.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
MAXIMUM DRAWDOWN
The following chart shows the maximum drawdown suffered by the portfolios within the periods shown. This represents the worst possible return over a period — for example, buying at the maximum price over the period and selling at the worst price, based on monthly valuations.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/201 6
-0.10%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
1.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION V
7IM BAL AAP
ADVISOR LMG (LION/OMW)
ADVISOR LM GTH (CLOSE)
VANGUARD 60% EQUITY
-12.00%
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION V
7IM BAL AAP
ADVISOR LMG (LION/OMW)
ADVISOR LM GTH (CLOSE)
VANGUARD 60% EQUITY
24 | P a g e
ACTUAL RETURNS RELATIVE TO EXPECTATIONS The following charts show how each portfolio has performed based on annualised returns, relative to the expected long term av erage, and the expected upper and lower boundaries, over the past 1 to 5 years. The expected average and upper and lower boundaries are based on data provided by Distribution Technology for long term average returns and the 95 th and 5th percentile returns based on 15 year rolling periods. In other words 90% of the time it would be expected that actual returns would remain between the upper and lower bo undaries. The returns do not allow for inflation but do make an allowance for charges. The portfolio returns are net of internal charges but may not allow for managers’ charges, ADVISOR fees or platform fees.
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
LIBERATION V
EXPECTED MAX
EXPECTED MIN
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
7IM BAL AAP
EXPECTED MAX
EXPECTED MIN
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR LMG(LION/OMW)
EXPECTED MAX
EXPECTED MIN
25 | P a g e
Source: Professional Fund Maintenance Ltd 2016
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR LMG(CLOSE)
EXPECTED MAX
EXPECTED MIN
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
VANGUARD 60%EQUITY
EXPECTED MAX
EXPECTED MIN
26 | P a g e
HISTORIC INTERNAL RATINGS The following 2 charts show the historic internal ratings of the various portfolios over rolling 1 and 3 year periods since the introduction of the measure at the end of December 2015.
1 YEAR
3 YEARS
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Q4 2015 Q1 2016
LIBERATION V
7IM BALANCED
ADVISOR LMRG
(LION/OMW)
VANGUARD 60%
EQUITY
ADVISOR LMRG
(CLOSE)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
LIBERATION V
7IM BALANCED
ADVISOR LMRG
(LION/OMW)
VANGUARD 60%
EQUITY
27 | P a g e
DISTRIBUTION TECHNOLOGY RISK LEVEL 6
ADVISOR CATEGORY: HIGH MEDIUM RISK
28 | P a g e
STRATEGIES AVAILABLE Launch Date
Premier Liberation VI Class C Shares 10 November 2010 7 IM AAP Moderately Adventurous Class S Shares 27 March 2008
ADVISOR High Medium Risk Growth Managed by Liontrust/OMW 30 June 2011 ADVISOR High Medium Risk Growth Managed by Close/Nucleus 30 June 2013
Vanguard 80% Equity 23 June 2011 Bespoke Service N/A
CHARGES A summary of the total charges applying to each portfolio is set out below.
STRATEGY MANAGER/OCF *PLATFORM UNDERLYING PORTFOLIO **TOTAL
LIBERATION VI 1.43% 0.35% N/A 1.78%
7 IM AAP MOD ADV 0.41% 0.25% N/A 0.66%
ADVISOR HMG (Liontrust) ̂ 0.20%-0.50% 0.80% 1.00%-1.30%
ADVISOR HMG (Close) ̂ 0.35% 0.80% 1.15%
VANGUARD 80% Equity 0.24% 0.35% N/A 0.59%
BESPOKE 0.9% VARIES ACCORDING TO PORTFOLIO CONSTRUCTION
*The platform charge is based on the internal platform or the typical charge for using the platform. **The total charge excludes ADVISOR charges and any additional product charges such as SIPPs and Bonds.
^The manager fees for ADVISOR Portfolios managed by Close are paid by the ADVISOR from the ADVISOR Fee. ^The manager fees for ADVISOR Portfolios managed by Liontrust are paid by the ADVISOR from the ADVISOR Fee.
ASSET ALLOCATION AND TARGET VOLATILITY - Distribution Technology Strategic Asset Allocation from 1 October 2015 (Different AA has applied previously and all changes are taken into account in the data provided):
ASSET CLASS ALLOCATION ASSET CLASS ALLOCATION
UK CORPORATE BONDS 19% JAPAN EQUITIES 5%
GLOBAL HY BONDS 5% PACIFIC (Ex Japan) 10%
UK EQUITIES 31% EMERGING MKTS 11%
EUROPE EQUITIES 5% UK PROPERTY 5%
US EQUITIES 9%
DISTRIBUTION TECHNOLOGY TARGET ANNUALISED VOLATILITY FROM 1 OCTOBER 2015
TARGET VOLATILITY LOWER BOUNDARY UPPER BOUNDRY
11.7% 10.5% 12.6%
Note: The lower boundary is soft – ie in times of low volatility we do not expect managers to chase volatility in the expectation of higher returns. The upper boundary is regarded as hard – ie we expect this not to be breached.
29 | P a g e
VOLATILITY & PERFORMANCE MEASURES FOR PERIOD TO 31 March 2016
Volatility is measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year data. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
Performance is also measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year figures. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data
will be considered by the Investment Committee overseeing the process.
STRATEGY ANNUALISED VOLATILITY
MAXIMUM DRAWDOWN
WITHIN TARGET
VOLATILITY
CUMULATIVE PERFORMANCE
ANNUALISED PERFORMANCE
ABOVE/BELOW BENCHMARK
INTERNAL SCORE
LIBERATION VI
1 Year 10.62% 9.93% WITHIN -2.16% -2.16% ABOVE 3.25
2 Years 8.39% 9.93% BELOW 10.12% 4.94% ABOVE
3 Years 8.82% 9.93% BELOW 16.93% 5.35% ABOVE 3.00
5 Years 10.11% 13.05% BELOW 35.44% 6.26% ABOVE
7IM MODERATELY ADVENTUROUS AAP
1 Year 12.80% 13.20% WITHIN -6.50% -6.50% BELOW 1.00
2 Years 10.03% 13.20% BELOW 7.63% 3.74% BELOW
3 Years 9.83% 13.20% BELOW 14.45% 4.60% BELOW 1.75
5 Years 10.01% 13.33% BELOW 23.10% 4.24% BELOW
ADVISOR HIGH
MEDIUM RISK GROWTH
(LIONTRUST/OMW)
1 Year 8.56% 7.72% BELOW -1.85% -1.85% ABOVE 4.25
2 Years 6.88% 7.72% BELOW 10.66% 5.20% ABOVE
3 Years 6.55% 7.72% BELOW 17.33% 5.47% ABOVE 3.50
5 Years N/A N/A N/A N/A N/A N/A
ADVISOR HIGH MEDIUM RISK GRWOTH (CLOSE)
1 Year 9.40% 8.31% BELOW -1.92% -1.92% ABOVE 3.75
2 Years 7.42% 8.31% BELOW 9.25% 4.52% BELOW
3 Years N/A N/A N/A N/A N/A N/A
5 Years N/A N/A N/A N/A N/A N/A
VANGUARD 80%
EQUITY
1 Year 9.38% 8.64% BELOW -0.73% -0.73% ABOVE 4.00
2 Years 7.79% 8.64% BELOW 14.20% 6.86% ABOVE
3 Years 8.00% 8.64% BELOW 20.40% 6.38% ABOVE 3.50
5 Years N/A N/A N/A N/A N/A N/A
BENCHMARKS
DT SAA (INDICES)
1 Year 9.29% 9.52% BELOW -2.28% -2.28%
2 Years 7.85% 9.52% BELOW 11.86% 5.76%
3 Years 8.19% 9.52% BELOW 16.42% 5.20%
5 Years 8.96% 12.20% BELOW 35.46% 6.26%
DT SAA (SECTORS)
1 Year 9.35% 9.37% BELOW -2.52% -2.52%
2 Years 7.68% 9.37% BELOW 9.80% 4.79%
3 Years 8.03% 9.37% BELOW 16.04% 5.08%
5 Years 9.37% 12.29% BELOW 34.25% 6.07%
RISK FREE RETURN
1 Year N/A N/A N/A 0.76% 0.76%
2 Years N/A N/A N/A 1.49% 0.74%
3 Years N/A N/A N/A 2.30% 0.76%
5 Years N/A N/A N/A 4.79% 0.94%
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
30 | P a g e
RISK ADJUSTED PERFORMANCE FOR PERIOD TO 31 March 2016 (SHARPE RATIO) The following chart shows the annualised returns achieved for each unit of risk (annualised volatility/standard deviation) by each strategy after deducting the risk free rate – a negative ratio shows that the investor would have been better leaving funds on deposit and not taking the investment risk making the ratio meaningless and therefore is rebalanced to zero. A positive ratio shows the investment has added to returns for the risk taken. The higher the ratio the better the manager has performed for the risk taken – either has produced higher returns for the same risk or has produced similar returns for less risk.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
MAXIMUM DRAWDOWN
The following chart shows the maximum drawdown suffered by the portfolios within the periods shown. This represents the worst possible return over a period — for example, buying at the maximum price over the period and selling at the worst price, based on monthly valuations.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/201 6
-0.10%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION VI
7IM MA AAP
ADVISOR HM GTH (CLOSE)
ADVISOR HMG (LION/OMW)
VANGUARD 80% EQUITY
-14.00%
-12.00%
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION VI
7IM MA AAP
ADVISOR HM GTH (CLOSE)
ADVISOR HMG (LION/OMW)
VANGUARD 80% EQUITY
31 | P a g e
ACTUAL RETURNS RELATIVE TO EXPECTATIONS The following charts show how each portfolio has performed based on annualised returns, relative to the expected long term av erage, and the expected upper and lower boundaries, over the past 1 to 5 years. The expected average and upper and lower boundaries are based on data provided by Distribution Technology for long term average returns and the 95 th and 5th percentile returns based on 15 year rolling periods. In other words 90% of the time it would be expected that actual returns would remain between th e upper and lower boundaries. The returns do not allow for inflation but do make an allowance for charges. The portfolio returns are net of internal charg es but may not allow for managers’ charges, ADVISOR fees or platform fees.
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
LIBERATION VI
EXPECTED MAX
EXPECTED MIN
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
7IM MA AAP
EXPECTED MAX
EXPECTED MIN
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR HMG(LION/OMW)
EXPECTED MAX
EXPECTED MIN
32 | P a g e
Source: Professional Fund Maintenance Ltd 2016
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR HMG(CLOSE)
EXPECTED MAX
EXPECTED MIN
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
VANGUARD 80%EQUITY
EXPECTED MAX
EXPECTED MIN
33 | P a g e
HISTORIC INTERNAL RATINGS The following 2 charts show the historic internal ratings of the various portfolios over rolling 1 and 3 year periods since the introduction of the measure at the end of December 2015.
1 YEAR
3 YEARS
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
LIBERATION VI
7IM MOD ADV
ADVISOR HMRG
(LION/OMW)
VANGUARD 80%
EQUITY
ADVISOR HMRG
(CLOSE)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
LIBERATION VI
7IM MOD ADV
ADVISOR HMRG
(LION/OMW)
VANGUARD 80%
EQUITY
34 | P a g e
DISTRIBUTION TECHNOLOGY RISK LEVEL 7
ADVISOR CATEGORY: HIGHEST MEDIUM RISK
35 | P a g e
STRATEGIES AVAILABLE Launch Date
Premier Liberation VII Class C Shares 10 November 2010 7 IM AAP Adventurous Class S Shares 27 March 2008
ADVISOR Highest Medium Risk Growth Managed by Liontrust/OMW 30 June 2011 ADVISOR Highest Medium Risk Growth (Close) 30 June 2013
Vanguard 100% Equity 23 June 2011 Bespoke Service N/A
CHARGES A summary of the total charges applying to each portfolio is set out below.
STRATEGY MANAGER/OCF *PLATFORM UNDERLYING PORTFOLIO **TOTAL
LIBERATION VII 1.74% 0.35% N/A 2.09%
7 IM AAP ADV 0.39% 0.25% N/A 0.64%
ADVISOR HMG (Liontrust) ̂ 0.20%-0.50% 0.82% 1.02%-1.32%
ADVISOR HMG (Close) ̂ 0.35% 0.81% 1.16%
VANGUARD 100% Equity 0.24% 0.35% N/A 0.59%
BESPOKE 0.9% VARIES ACCORDING TO PORTFOLIO CONSTRUCTION
*The platform charge is based on the internal platform or the typical charge for using the platform. **The total charge excludes ADVISOR charges and any additional product charges such as SIPPs and Bonds. ^The manager fees for ADVISOR Portfolios managed by Close are paid by the ADVISOR from the ADVISOR Fee.
^The manager fees for ADVISOR Portfolios managed by Liontrust are paid by the ADVISOR from the ADVISOR Fee.
ASSET ALLOCATION AND TARGET VOLATILITY - Distribution Technology Strategic Asset Allocation from 1
October 2015 (Different AA has applied previously and all changes are taken into account in the data provided):
DISTRIBUTION TECHNOLOGY TARGET ANNUALISED VOLATILITY FROM 1 OCTOBER 2015
TARGET VOLATILITY LOWER BOUNDARY UPPER BOUNDRY 13.7% 12.6% 14.7%
Note: The lower boundary is soft – ie in times of low volatility we do not expect managers to chase volatility in the expectation of higher returns. The upper boundary is regarded as hard – ie we expect this not to be breached.
ASSET CLASS ALLOCATION ASSET CLASS ALLOCATION
UK CORPORATE BONDS 5% JAPANESE EQUITIES 5% GLOBAL HY BONDS 5% PACIFIC (Ex-Japan) EQUITIES 16%
UK EQUITIES 35% EMERGING MARKET EQUITIES 17%
EUROPEAN EQUITIES 5% UK PROPERTY 5%
US EQUITIES 7%
36 | P a g e
VOLATILITY & PERFORMANCE MEASURES FOR PERIOD TO 31 March 2016
Volatility is measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year data. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
Performance is also measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year figures. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
STRATEGY ANNUALISED VOLATILITY
MAXIMUM DRAWDOWN
WITHIN TARGET
VOLATILITY
CUMULATIVE PERFORMANCE
ANNUALISED PERFORMANCE
ABOVE/BELOW BENCHMARK
INTERNAL SCORE
LIBERATION VII
1 Year 12.22% 11.98% BELOW -3.42% -3.42% BELOW 2.75
2 Years 9.66% 11.98% BELOW 8.15% 4.00% ABOVE
3 Years 10.02% 11.98% BELOW 13.72% 4.38% BELOW 3.00
5 Years 11.54% 14.46% BELOW 28.15% 5.09% BELOW
7IM ADVENTUROUS AAP
1 Year 14.96% 14.41% WITHIN -6.46% -6.46% BELOW 1.25
2 Years 11.59% 14.41% BELOW 8.34% 4.09% BELOW
3 Years 11.30% 14.41% BELOW 17.46% 5.51% ABOVE 3.50
5 Years 11.82% 16.32% BELOW 24.94% 4.55% BELOW
ADVISOR HIGHEST MEDIUM RISK GROWTH (LIONTRUST/OMW)
1 Year 9.84% 8.92% BELOW -1.74% -1.74% ABOVE 4.25
2 Years 7.75% 8.92% BELOW 11.59% 5.64% ABOVE
3 Years 7.33% 8.92% BELOW 18.78% 5.90% ABOVE 4.50
5 Years N/A N/A N/A N/A N/A N/A
ADVISOR HIGHEST MEDIUM RISK GRWOTH (CLOSE)
1 Year 10.58% 9.59% BELOW -2.49% -2.49% ABOVE 4.25
2 Years 8.35% 9.59% BELOW 9.01% 4.41% ABOVE
3 Years N/A N/A N/A N/A N/A N/A
5 Years N/A N/A N/A N/A N/A N/A
VANGUARD 100% EQUITY
1 Year 11.51% 10.77% BELOW -1.60% -1.60% ABOVE 4.00
2 Years 9.37% 10.77% BELOW 14.54% 7.02% ABOVE
3 Years 9.57% 10.77% BELOW 22.83% 7.09% ABOVE 4.00
5 Years N/A N/A N/A N/A N/A N/A
BENCHMARKS
DT SAA (INDICES)
1 Year 10.82% 11.73% BELOW -3.57% -3.57%
2 Years 9.03% 11.73% BELOW 9.08% 4.44%
3 Years 9.30% 11.73% BELOW 13.27% 4.24%
5 Years 10.15% 13.93% BELOW 30.64% 5.49%
DT SAA (SECTORS)
1 Year 10.92% 11.39% BELOW -3.39% -3.39%
2 Years 8.88% 11.39% BELOW 7.87% 3.86%
3 Years 9.20% 11.39% BELOW 14.14% 4.51%
5 Years 10.65% 14.06% BELOW 31.52% 5.63%
RISK FREE RETURN
1 Year N/A N/A N/A 0.76% 0.76%
2 Years N/A N/A N/A 1.49% 0.74%
3 Years N/A N/A N/A 2.30% 0.76%
5 Years N/A N/A N/A 4.79% 0.94%
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
37 | P a g e
RISK ADJUSTED PERFORMANCE FOR PERIOD TO 31 March 2016 (SHARPE RATIO) The following chart shows the annualised returns achieved for each unit of risk (annualised volatility/standard deviation) by each strategy after deducting the risk free rate – a negative ratio shows that the investor would have been better leaving funds on deposit and not taking the investment risk making the ratio meaningless and therefore is rebalanced to zero. A positive ratio shows the investment has added to returns for the risk taken. The higher the ratio the better the manager has performed for the risk taken – either has produced higher returns for the same risk or has produced similar returns for less risk.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/2016
MAXIMUM DRAWDOWN The following chart shows the maximum drawdown suffered by the portfolios within the periods shown. This represents the worst
possible return over a period — for example, buying at the maximum price over the period and selling at the worst price, based on monthly valuations.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/201 6
-0.10%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION VII
7IM ADV AAP
ADVISOR H M GTH (CLOSE)
ADVISOR HMG
(LIONTRUST/OMW)
VANGUARD 100% EQUITY
-18.00%
-16.00%
-14.00%
-12.00%
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
LIBERATION VII
7IM ADV AAP
ADVISOR H M GTH (CLOSE)
ADVISOR HMG
(LIONTRUST/OMW)
VANGUARD 100% EQUITY
38 | P a g e
ACTUAL RETURNS RELATIVE TO EXPECTATIONS The following charts show how each portfolio has performed based on annualised returns, relative to the expected long term av erage, and the expected upper and lower boundaries, over the past 1 to 5 years. The expected average and upper and lower boundaries are based on data provided by Distribution Technology for long term average returns and the 95 th and 5th percentile returns based on 15 year rolling periods. In other words 90% of the time it would be expected that actual returns would remain between the upper and lower bo undaries. The returns do not allow for inflation but do make an allowance for charges. The portfolio returns are net of internal charges but may not allow for managers’ charges, ADVISOR fees or platform fees.
-20%
-10%
0%
10%
20%
30%
40%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
LIBERATION VII
EXPECTED MAX
EXPECTED MIN
-20%
-10%
0%
10%
20%
30%
40%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
7IM ADV AAP
EXPECTED MAX
EXPECTED MIN
-20%
-10%
0%
10%
20%
30%
40%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR HMG(LION/OMW)
EXPECTED MAX
EXPECTED MIN
39 | P a g e
Source: Professional Fund Maintenance Ltd 2016
-20%
-10%
0%
10%
20%
30%
40%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR HMG(CLOSE)
EXPECTED MAX
EXPECTED MIN
-20%
-10%
0%
10%
20%
30%
40%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
VANGUARD 100%EQUITY
EXPECTED MAX
EXPECTED MIN
40 | P a g e
HISTORIC INTERNAL RATINGS The following 2 charts show the historic internal ratings of the various portfolios over rolling 1 and 3 year periods since the introduction of the measure at the end of December 2015.
1 YEAR
3 YEARS
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
LIBERATION VII
7IM ADVENTUROUS
ADVISOR HMRG
(LION/OMW)
VANGUARD 100%
EQUITY
ADVISOR HMRG
(CLOSE)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
LIBERATION VII
7IM ADVENTUROUS
ADVISOR HMRG
(LION/OMW)
VANGUARD 100%
EQUITY
41 | P a g e
DISTRIBUTION TECHNOLOGY RISK LEVEL 8
ADVISOR CATEGORY: HIGH RISK
42 | P a g e
STRATEGIES AVAILABLE
Launch Date ADVISOR High Risk Growth (Close) 30 June 2013
Bespoke Service N/A
CHARGES A summary of the total charges applying to each portfolio is set out below.
STRATEGY MANAGER/OCF *PLATFORM UNDERLYING PORTFOLIO **TOTAL
ADVISOR HRG (Close) ̂ 0.35% 0.90% 1.25%
BESPOKE 0.9% VARIES ACCORDING TO PORTFOLIO CONSTRUCTION
*The platform charge is based on the internal platform or the typical charge for using Nucleus. **The total charge excludes ADVISOR charges and any additional product charges such as SIPPs and Bonds. ^The manager fees for ADVISOR Portfolios managed by Close are paid by the ADVISOR from the ADVISOR Fee.
ASSET ALLOCATION AND TARGET VOLATILITY
Distribution Technology Strategic Asset Allocation - Distribution Technology Strategic Asset
Allocation from 1 October 2015 (Different AA has applied previously and all changes are taken into account in
the data provided):
DISTRIBUTION TECHNOLOGY TARGET ANNUALISED VOLATILITY FROM 1 October 2015
TARGET VOLATILITY LOWER BOUNDARY UPPER BOUNDRY
15.4% 14.7% 16.8% Note: The lower boundary is soft – ie in times of low volatility we do not expect managers to chase volatility in the expectation of higher
returns. The upper boundary is regarded as hard – ie we expect this not to be breached.
ASSET CLASS ALLOCATION
GLOBAL HY BONDS 5%
UK EQUITIES 23%
EUROPEAN EQUITIES 5%
US EQUITIES 5%
JAPANESE EQUITIES 5%
PACIFIC (Ex-Japan) EQUITIES 22%
EMERGING MARKET EQUITIES 30%
UK POPERTY 5%
43 | P a g e
VOLATILITY & PERFORMANCE MEASURES FOR PERIOD TO 31 March 2016
Volatility is measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year data. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
Performance is also measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year figures. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
STRATEGY ANNUALISED
VOLATILITY
MAXIMUM
DRAWDOWN
WITHIN TARGET
VOLATILITY
CUMULATIVE
PERFORMANCE
ANNUALISED
PERFORMANCE
ABOVE/BELOW
BENCHMARK
INTERNAL
SCORE
ADVISOR HIGH RISK GROWTH (CLOSE)
1 Year 11.37% 11.03% BELOW -3.57% -3.57% ABOVE 3.75
2 Years 9.00% 11.03% BELOW 8.56% 4.19% ABOVE
3 Years N/A N/A N/A N/A N/A N/A
5 Years N/A N/A N/A N/A N/A N/A
BENCHMARKS
DT SAA (INDICES)
1 Year 12.53% 14.65% BELOW -4.77% -4.77%
2 Years 10.34% 14.65% BELOW 7.98% 3.91%
3 Years 10.31% 14.65% BELOW 8.43% 2.73%
5 Years 11.29% 15.21% BELOW 21.80% 4.02%
DT SAA (SECTORS)
1 Year 12.38% 13.60% BELOW -4.42% -4.42%
2 Years 10.01% 13.60% BELOW 6.73% 3.31%
3 Years 10.21% 13.60% BELOW 8.79% 2.85%
5 Years 11.76% 15.44% BELOW 22.78% 4.19%
RISK FREE RETURN
1 Year N/A N/A N/A 0.76% 0.76%
2 Years N/A N/A N/A 1.49% 0.74%
3 Years N/A N/A N/A 2.30% 0.76%
5 Years N/A N/A N/A 4.79% 0.94%
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Close AM/2016 RISK ADJUSTED PERFORMANCE FOR PERIOD TO 31 March 2016 (SHARPE RATIO) The following chart shows the annualised returns achieved for each unit of risk (annualised volatility/standard deviation) by each strategy after deducting the risk free rate – a negative ratio shows that the investor would have been better leaving funds on deposit and not taking the investment risk making the ratio meaningless and therefore is rebalanced to zero. A positive ratio shows the investment has added to returns for the risk taken. The higher the ratio the better the manager has performed for the risk taken – either has produced higher returns for the same risk or has produced similar returns for less risk.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Close AM/2016
-0.05%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
ADVISOR HIGH RISK GTH
(CLOSE)
44 | P a g e
MAXIMUM DRAWDOWN The following chart shows the maximum drawdown suffered by the portfolios within the periods shown. This represents the worst possible return over a period — for example, buying at the maximum price over the period and selling at the worst price, based on monthly valuations.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/Liontrust Ltd/Close AM/201 6
ACTUAL RETURNS RELATIVE TO EXPECTATIONS The following charts show how each portfolio has performed based on annualised returns, relative to the expected long term av erage, and the expected upper and lower boundaries, over the past 1 to 5 years. The expected average and upper and lower boundaries are based on data provided by Distribution Technology for long term average returns and the 95 th and 5th percentile returns based on 15 year rolling periods. In other words 90% of the time it would be expected that actual returns would remain between the upper and lower bo undaries. The returns do not allow for inflation but do make an allowance for charges. The portfolio returns are net of internal charges but may not allow for managers’ charges, ADVISOR fees or platform fees.
Source: Professional Fund Maintenance Ltd 2016
-16.00%
-14.00%
-12.00%
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
DT SAA (SECTORS)
DT SAA (INDICES)
ADVISOR HIGH RISK GTH
(CLOSE)
-30%
-20%
-10%
0%
10%
20%
30%
40%
1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
EXPECTED LTAVERAGE
ADVISOR HRG(CLOSE)
EXPECTED MAX
EXPECTED MIN
45 | P a g e
HISTORIC INTERNAL RATINGS The following 2 charts show the historic internal ratings of the various portfolios over rolling 1 and 3 year periods since the introduction of the measure at the end of December 2015.
1 YEAR
3 YEARS
3 year record not yet available
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Q4 2015 Q1 2016
ADVISOR HRG (CLOSE)
46 | P a g e
RESEARCHED INCOME FUNDS
ADVISOR CATEGORY: NOT RISK TARGETED
47 | P a g e
BACKGROUND
As part of the research carried out for ADVISOR a range of income funds have been selected for those clients requiring a natural income facility. These are not risk targeted but performance and volatility is measured against peer groups to ensure they continue to provide suitable investments for clients. FUND LAUNCH DATE IA SECTOR OCF
CF MITON UK MULTI-CAP INCOME 14/10/2011 UK EQUITY INCOME 0.82%
CF WOODFORD EQUITY INCOME 02/06/2014 UK EQUITY INCOME 0.75%
THREADNEEDLE UK EQUITY ALPHA INCOME 08/05/2006 UK EQUITY INCOME 0.88%
FIDELITY GLOBAL DIVIDENED FUND 30/01/2012 GLOBAL EQUITY INCOME 0.97%
NEWTON GLOBAL INCOME 30/11/2005 GLOBAL EQUITY INCOME 0.79%
VOLATILITY & PERFORMANCE MEASURES FOR PERIOD TO 31 March 2016
Volatility is measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year data. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
Performance is also measured on 1, 2, 3 and 5 year rolling periods with greatest weight placed on the 3 year figures. However, the various strategies do not all have a 3 year track record to date so 1 year or 2 year data will be considered by the Investment Committee overseeing the process.
STRATEGY ANNUALISED
VOLATILITY
MAXIMUM
DRAWDOWN
ABOVE/BELOW BM
VOLATILITY
CUMULATIVE
PERFORMANCE
ANNUALISED
PERFORMANCE
ABOVE/BELOW
BENCHMARK
CF MITON UK MULTI-
CAP INCOME
1 Year 5.85% 2.89% BELOW 12.54% 12.54% ABOVE
2 Years 5.57% 3.31% BELOW 18.07% 8.66% ABOVE
3 Years 6.73% 4.10% BELOW 58.50% 16.59% ABOVE
5 Years N/A N/A N/A N/A N/A N/A
CF WOODFORD EQUITY INCOME
1 Year 11.58% 6.45% ABOVE 2.62% 2.62% ABOVE
2 Years N/A N/A N/A N/A N/A N/A
3 Years N/A N/A N/A N/A N/A N/A
5 Years N/A N/A N/A N/A N/A N/A
THREADNEEDLE UK
EQUITY ALPHA INCOME
1 Year 10.93% 9.23% ABOVE -2.39% -2.39% ABOVE
2 Years 9.76% 9.23% ABOVE 8.72% 4.27% ABOVE
3 Years 10.66% 9.23% ABOVE 30.44% 9.26% ABOVE
5 Years 11.03% 11.25% ABOVE 69.89% 11.18% ABOVE
FIDELITY GLOBAL DIVIDENED FUND
1 Year 11.71% 7.65% BELOW 6.05% 6.05% ABOVE
2 Years 9.23% 7.65% ABOVE 26.92% 12.66% ABOVE
3 Years 9.05% 7.65% BELOW 37.85% 11.29% ABOVE
5 Years N/A N/A N/A N/A N/A N/A
NEWTON GLOBAL INCOME
1 Year 13.32% 6.97% ABOVE 11.85% 11.85% ABOVE
2 Years 10.19% 6.97% ABOVE 28.68% 13.44% ABOVE
3 Years 9.94% 6.97% ABOVE 33.20% 10.03% ABOVE
5 Years 9.55% 7.39% ABOVE 68.86% 11.05% ABOVE
BENCHMARKS
UK EQUITY INCOME
1 Year 10.56% 9.71% N/A -2.81% -2.81%
2 Years 8.60% 9.71% N/A 5.70% 2.81%
3 Years 9.44% 9.71% N/A 20.08% 6.29%
5 Years 10.25% 11.82% N/A 44.92% 7.70%
GLOBAL EQUITY
INCOME
1 Year 11.82% 10.69% N/A -1.14% -1.14%
2 Years 9.17% 10.69% N/A 11.72% 5.70%
3 Years 9.46% 10.69% N/A 20.91% 6.53%
5 Years 10.19% 11.36% N/A 45.07% 7.72% Source: Financial Express Ltd/Professional Fund Maintenance Ltd/2016
The following charts show the funds’ performance and volatility against the various ADVISOR risk targeted
benchmarks over the past 3 years and also 1 year as the CF Woodford Fund only has a track record from 02/06/2014.
48 | P a g e
1 YEAR
Key Name Performance Annualised Volatility
A CF - Miton UK Multi Cap Income B Inst Inc TR in GB 12.54 5.85
B Newton - Global Income W Inc GBP TR in GB 11.85 13.32
C Fidelity - Global Dividend W Inc TR in GB 6.05 11.71
D CF - Woodford Equity Income C Inc TR in GB 2.62 11.58
E ADVISOR RISK 3 MARKETS TR in GB 1.42 5.00
F ADVISOR RISK 4 MARKETS TR in GB -0.02 6.46
G ADVISOR RISK 5 MARKETS TR in GB -0.75 8.06
H ADVISOR RISK 6 MARKETS TR in GB -2.28 9.29
I Threadneedle - UK Equity Alpha Income Z Inc GBP TR in GB -2.39 10.93
J ADVISOR RISK 7 MARKETS TR in GB -3.57 10.82
K ADVISOR RISK 8 MARKETS TR in GB -4.77 12.53
3 YEARS
Key Name Performance Annualised Volatility
A CF - Miton UK Multi Cap Income B Inst Inc TR in GB 58.50 6.73
B Fidelity - Global Dividend W Inc TR in GB 37.85 9.05
C Newton - Global Income W Inc GBP TR in GB 33.20 9.94
D Threadneedle - UK Equity Alpha Income Z Inc GBP TR in GB 30.44 10.66
E ADVISOR RISK 4 MARKETS TR in GB 18.25 6.11
F ADVISOR RISK 5 MARKETS TR in GB 18.23 7.20
G ADVISOR RISK 6 MARKETS TR in GB 16.42 8.19
H ADVISOR RISK 3 MARKETS TR in GB 15.70 5.20
I ADVISOR RISK 7 MARKETS TR in GB 13.27 9.30
J ADVISOR RISK 8 MARKETS TR in GB 8.43 10.31
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/2016
49 | P a g e
RISK ADJUSTED PERFORMANCE FOR PERIOD TO 31 March 2016 (SHARPE RATIO) The following chart shows the total annualised returns achieved for each unit of risk (annualised volatility/standard deviation) by each fund after deducting the risk free rate – a negative ratio shows that the investor would have been better leaving funds on deposit and not taking the investment risk making the ratio meaningless and therefore is rebalanced to zero. A positive ratio shows the investment has added to returns for the risk taken. The higher the ratio the better the manager has performed for the risk taken – either has produced higher returns for the same risk or has produced similar returns for less risk.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/2016
MAXIMUM DRAWDOWN
The following chart shows the maximum drawdown suffered by the portfolios within the periods shown. This represents the worst possible return over a period — for example, buying at the maximum price over the period and selling at the worst price, based on monthly valuations.
Source: Financial Express Ltd/Professional Fund Maintenance Ltd/2016
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
GLOBAL EQUITY INCOME
UK EQUITY INCOME
CF MITON UK MULTI-CAPINCOME
CF WOODFORD EQUITY INCOME
THREADNEEDLE UK EQUITYALPHA INCOME
FIDELITY GLOBAL DIVIDENEDFUND
NEWTON GLOBAL INCOME
-12.00%
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
1 YEAR 2 YEARS 3 YEARS 5 YEARS
GLOBAL EQUITY INCOME
UK EQUITY INCOME
CF MITON UK MULTI-CAPINCOME
CF WOODFORD EQUITY INCOME
THREADNEEDLE UK EQUITYALPHA INCOME
FIDELITY GLOBAL DIVIDENEDFUND
NEWTON GLOBAL INCOME
50 | P a g e
SUMMARY OF RESULTS
Portfolios have remained below or within volatility ranges. Portfolios are all within expected performance ranges.
Significant increase in volatility has helped passives in the short term as stock-picking more difficult.
RISK 3
All portfolios have underperformed BMs except the 1 year period for Close. This shows difficulty in beating BMs with high FI content due to charges.
Premier and Vanguard best risk adjusted over 3 years, Close over 1 year.
7IM poorest RA and DD due to TAA decision to hold higher equity content. RISK 4
Performance largely below BMs again due to high FI content. Vanguard has best RA over 1 & 2 years with Liberation IV over 3 years+ Close best rating over 1 year and Premier & Vanguard over 3 years.
7IM poorest RA performance.
RISK 5
As Equity content increases more above BM performance. Vanguard best RA over 2 & 3 years – all look acceptable, ex-7IM. Close & Vanguard ratings excellent over 1 year. All look acceptable over 1 & 3 years ex-7IM.
RISK 6
Much more above BM performance.
Best RA Vanguard & Liontust, who along with Close also have excellent ratings. 7IM again poor over all periods.
RISK 7
Largely above BM performance. Best RA Vanguard & Liontust, who along with Close also have excellent ratings. 7IM again poor over 1 year but acceptable over 3 years.
RISK 8
Only 1 solution at this risk level – good RA and ratings. INCOME FUNDS
All funds have shown above BM performance both absolute and RA.
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