Schroders Private Bank

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1 Schroders Private Bank Schroder Fund Investment Account Fund based discretionary asset management

2 2 3 The advantages at a glance Active asset management for assets from CHF 250,000 Balanced asset management covering all markets and asset classes can only be achieved with investment funds. With so many funds to choose from, Schroders attaches great importance to the right selection. The Schroder Fund lnvestment Account provides active asset management using Schroder funds and best-in-class third party funds. Full expertise and resources of the Schroder Group With funds under management of over CHF 250 billion and 200 years of experience, the Schroder Group is a world leader in asset management. Our research team is free to exercise its own judgement in its investment decisions, and is not tied to any sales organization. This expertise is available to both the investment funds we manage and the portfolio managers of the Schroder Fund lnvestment Account. Schroder funds and more Schroders manages a broad range of investment funds, many of which are considered among the best products in their class. In those individual markets or investment sectors which may not be covered by the Schroder fund universe, however, the Schroder Fund lnvestment Account also employs a carefully selected range of funds run by other investment managers. A team of research specialists carefully selects the third party funds used. Swiss private banking services Schroders has been operating in Switzerland for over 30 years. The Schroder Fund lnvestment Account is managed by professionals located in Zurich and Geneva. As an investor, you deal with a local relationship manager and have all the advantages of a Swiss private bank. Asset management at a competitive price The pricing of the Schroder Fund lnvestment Account is transparent and simple. The portfolio management fee covers all costs arising from the management of the fund account by Schroder & Co Bank AG, such as custody account maintenance, strategy adjustments, fund selection and administration. Only a small transaction fee is charged for purchases and sales of Schroder Funds. A choice of four risk profiles Choosing the right degree of risk for the individual investor is of utmost importance. To this end, the Schroder Fund lnvestment Account offers investors four different risk profiles, from income oriented to growth oriented as well as an investment model with emphasis on alternative investments. Each risk profile has a defined maximum equity allocation and a choice of four reference currencies: Swiss Franc, Euro, Sterling or US Dollar.

3 Schroder Fund Investment Account Your money is invested exclusively in investment funds, and in accordance with your chosen risk profile. In exceptional cases, structured products may also be used. The portfolio management function involves adjusting the individual asset classes (cash, bonds, equities, alternative investments) to changes in market developments, and selecting appropriate funds. This way, you can leave the time-consuming task of managing your investments to the experts. The Schroder Fund lnvestment Account is available to clients who invest at least CHF 250,000 of assets. Performance Schroder & Co Bank AG s portfolio managers have consistently produced good investment performance combined with careful monitoring of risk. Many funds managed by the Schroder Group are among the best products in their class. In the interests of our clients, however, our asset managers also employ third party funds selected on the basis of strict quality criteria.

4 4 5 Investment process and fund selection The Schroder Fund Investment Account team attaches great importance to the careful selection of funds. Investment policy Our general investment policy, which is based upon a comprehensive evaluation of the economy and the capital and foreign exchange markets, is the very first step of the selection process. Experts define the risk profile of each strategy by allocating assets to individual asset classes. Further steps consist of determining the geographic distribution within the equity portfolio as well as the risk profile underlying the fund selection (e.g. dynamic long term growth or income oriented). Simultaneously, the range of bond maturities to be invested in is defined. The assessment of foreign currency risk, which may have to be hedged, is the final stage of this process. Fund selection Once the investment policy has been defined, the fund selection takes place based on quantitative and qualitative criteria. A fund selection merely based on rankings seldom leads to positive results. A behavioural fund analysis carried out in different market phases, though, is of crucial importance. A fair number of fund managers achieve good performance in certain market conditions but not over a full investment cycle. This means that an investment fund may be successful on a short term basis but not necessarily over the long term. Our fund investment team carries out this analysis using well recognised statistical methods. The analysis is completed with a qualitative fund management assessment which comprises management continuity, experience, fund size and quality of reporting. Even though each fund selection is continuously reassessed, frequent changes from one fund to another are avoided.

5 Investment Policy Schroder & Co Bank AG Asset Allocation Equities Bonds Alternative Investments Cash Regions Style Duration Quality Quality Style Currency Consolidated view Fund Selection Fund Portfolio Selected profile Asset management with funds: the reasons why Today s global financial markets make it imperative to consult analysts specialised in specific regions or types of investments. The individual asset manager and client advisor rely, therefore, on the expertise of a whole team. With the exception of very large portfolios, the required risk diversification within a particular portfolio is only possible through the use of investment funds. By not investing in individual equities the investment strategy can be adjusted in a much more costeffective way. In other words, this approach achieves a good level of diversification with the resulting positive impact on risk. The broad range of funds available to our clients, be it Schroder funds or third party funds, permits not only a flexible reaction to market conditions but also the selection of funds which comply with the investment style and risk behaviour of the selected strategy.

6 6 7 Client service and reporting As an investor, you can discuss the investment strategy and fund selection with your personal relationship manager at any time. In addition, you receive a detailed quarterly report on the status of your investments and the performance of your portfolio. On request, we will also supply you with the quarterly reports of the individual funds in your portfolio. Risk profiles The choice of risk profile has a major influence on both the future performance and the risk potential of your portfolio. The reference currencies available within the four risk profiles are Swiss Franc, Euro, Sterling and US Dollar. You can choose from the following four risk profiles:

7 Risk profiles Income oriented This risk profile emphasises the generation of income from fixed income investments and, to a lesser degree, capital gains from equity investments. Investments in uncorrelated alternative investments provide stability to the portfolio. Investments in correlated alternative investments add potential for further capital gains. 4 5 Risk categorization: Moderate 3 2 Long term growth With a higher proportion of equity investments and correlated alternative investments, this risk profile generates less income but provides a higher degree of potential for capital gains with more risk. Investments in uncorrelated alternative investments provide additional stability to the portfolio. 4 5 Risk categorization: Considerable 2 3 Within alternative investments, there are correlated and uncorrelated investment categories. The difference between these two categories is established by their expected price behaviour in relation to traditional investment categories (equities/bonds). Correlated alternative investments (e.g. private equity) show similar price trends to equity markets whereas the performance of uncorrelated alternative investments (e.g. hedge fund of funds) should not be dependent on traditional markets.

8 8 9 Dynamic long term growth This risk profile emphasises capital gains with up to 90% of the portfolio invested in equities and a lower proportion of uncorrelated alternative investments. With considerable investments in correlated alternative investments, this investment profile carries higher risks Risk categorization: High 3 Enhanced return This risk profile aims for stable returns exceeding traditional fixed income securities through emphasis on uncorrelated alternative investments. It also allows for investments in equities. 2 Risk categorization: Moderate 4 3 Within these risk profiles, the chosen reference currency determines the currency allocation of your portfolio. Occasionally, the currency exposure may be hedged. Cash 2 Bonds 3 Equities 4 Uncorrelated alternative investments 5 Correlated alternative investments Disclaimer This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Income and risk expectations specified above are based on past performance and are not a guarantee of future returns. The value of investments in all risk categories and over different time frames may fall or rise. Readers should consult additional information on each individual risk profile mentioned.

9 Terms and conditions Investment universe The investment universe covers those investment funds which have been selected by Schroder & Co Bank AG, as well as structured products, cash on current account, fiduciary investments and money market funds. With regard to alternative investments, fund of funds products and publicly quoted private equity investment companies are permitted. Fees Investment strategy, fund selection, custody account fee and administration: Asset value up to CHF million: 0.90% p.a. Asset value above CHF million: 0.75% p.a. Charged quarterly on a pro-rata basis Minimum fee CHF 600 per quarter Portfolio management Schroder & Co Bank AG is responsible for selecting funds and investing in line with its internal investment guidelines and the chosen risk profile. Portfolio management adheres to the investment guidelines of the Swiss Bankers Association and the provisions of Schroder & Co Bank AG s asset management mandate. Size of account The Schroder Fund lnvestment Account is suitable for portfolios with assets of at least CHF 250,000. Transaction costs: CHF 00 all-in fee for the purchase and sale of funds. In individual cases, a front end fee may also be charged by third party funds. Stamp duty and VAT, where applicable, are not included. Additional services (numbered custody accounts, retain mail held at the bank, securities deliveries, tax statements and other services) are charged according to a separate fee schedule. Reporting Confirmations are issued for each transaction made. Custody account statements and performance reports are prepared each quarter. Quarterly reports on individual funds are available on request. This fee schedule applies to Schroder Fund Investment Account discretionary asset management mandates. When investment guidelines or other particular restrictions have been defined on an individual basis, the standard Schroder & Co Bank AG fee schedule applies.

10 Comprehensive Wealth Management Advisory services Discretionary management Loans and financing Trust and foundation services Art consulting Custody and execution services Schroder & Co Bank AG Central 2 Postfach 820 CH-802 Zürich Telefon +4 (0) Telefax +4 (0) contact@schroders.ch Schroder & Co Banque SA 8, rue d Italie Case Postale 3655 CH-2 Genève 3 Telefon +4 (0) Telefax +4 (0) contact@schroders.ch