Investing for your world

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1 T R U S T E D H E R I T A G E A D V A N C E D T H I N K I N G Investing for your world Now that Schroders and Cazenove Capital have come together we re even better equipped to help you achieve your investment objectives. With 19 Morningstar OBSR rated funds in our enhanced fund range and 30 Citywire rated fund managers, you can rely on our experience and expertise across all major investment areas. Please remember, the value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Past performance is not a guide to future performance and may not be repeated. Talk to your fi nancial adviser about how Schroders could help you take care of your future. Find out more at: schroders.co.uk/yourworld Cazenove Capital is now part of the Schroders group. Source for ratings: Morningstar OBSR 31/08/13 and Citywire 31/08/13. Issued in September 2013 by Schroder Investments Limited, 31 Gresham Street, London EC2V 7QA. Registered No: England. Authorised and regulated by the Financial Conduct Authority. UK Turning the Corner

2 Managing Director s comment mandg.co.uk I recently watched an excellent BBC TV drama called The Wipers Times written by Ian Hislop. It s a true story of how two young British officers stationed in Ypres during the First World War enhanced the lives of the fighting men in desperate times by writing and producing a light-hearted and informative newsletter. Having once been a soldier myself, I would love to emanate their achievement by writing something encouraging to my clients at these uncertain times. Since the unspeakable events in Syria in August the world has held it s breath whilst a suitable response is considered. This has left the investor in a vulnerable situation whilst stock markets perform like a Blackpool ride. Amid this mayhem order can be found even today, so let me help you find it without advising you. Income yields from shares have continued to hold steady and grow and this has enabled investors to receive returns far in excess of that offered by bank and building society deposit accounts by investing in funds. The average yield from the four highlighted monthly income funds is currently 6.33% p.a. and if you wish to spread your investments further and include the four equity income funds, the yield is still 4.95% p.a. Not a bad return and one that will help pay the bills in these inflated financial times. the fund and manager s rating, charges, yield consistency, and performance over a number of years and selected periods. The surprising result is after so much research, the same funds just keep appearing. Likewise the same fund managers like Invesco s Neil Woodford, Fidelity s Ian Spreadbury and M&G s Richard Woolnough and a number of others, just keep coming to the top of the pile. So it is hard to ignore quality and consistency. There are currently over 2,000 funds available to investors and those I have highlighted may not suit your particular circumstances, but they give you good idea of what is available to you and how they have performed in the past. Please remember that we do not give advice so take this information with a pinch of salt and if in doubt about any fund or investment you should seek expert advice. I hope that the choice of funds in this booklet are of interest and helps you towards putting some sort of order in making your own investment choices. Of course capital is at risk with funds, but so long as you chose a good fund manager from a strong investment company and leave the managing of money to the experts you could also benefit from some capital growth. Prices may flu ctua not get back te and you may vestment. your original in This Financial Promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Services Authority and provides investment products. The registered office is Laurence Pountney Hill, London EC4R 0HH. Registered in England No NOV 12 / You must forgive me for mentioning a number of funds previously highlighted in newsletters. I have been running this business and writing newsletters to our clients for many years now, and when funds are researched, we look at Piers Rouse Managing Director Seymour Sinclair Investments Limited

3 Monthly Income Funds FUND Fidelity Moneybuilder Balanced Fund Invesco Perpetual Monthly Income Plus Fund Newton Global High Yield Bond Threadneedle High Yield Bond 4.24% 5.34% 8.35% 7.40% Income Payable Monthly (1st) Monthly (1st) Monthly (1st) Monthly (8th) 08/02/ /02/ /10/ /10/1999 Fund Size 320m 3,810m 177m 784m Managers Ian Spreadbury Neil Woodford, Paul Caser, Paul Read Howard Cunningham, Parmenwar Chadha Barrie Whitman, David Backhouse Minimum Investment ,000 2,000 Minimum Monthly Saving Normal Initial Charge 0.00% 5.00% 4.00% 3.75% Initial Charge after SSI Discount 0.00% 0.00% 0.00% 0.00% Annual Management Charge* 1.00% 1.13% 1.00% 1.10% Morningstar Category Mixed Investment 40-85% Sterling Strategic Bond Focus Mixed Asset Equity Sterling High Yield Global Fixed Interest Sterling High Yield Fixed Interest FE Risk ** FundsNetwork Code (Clean Share Class) fidelity.co.uk YRMBI (inc) invescoperpetual. co.uk INMPI (inc) INMPA (acc) bnymellon.co.uk NWGLI (inc) NWGLA (acc) threadneedle. co.uk THYIZ (inc) PERFORMANCE Position in sector over 1 Year 109/145 4/68 6/27 13/27 Position in sector over 3 Years 14/130 6/60 15/22 14/22 Fund Vs Average - 1 Year Fund Vs Average - 3 Years 11.30% vs 13.60% 32.20% vs 24.30% 13.40% vs 4.50% 25.50% vs 16.60% 11.50% vs 8.70% 21.20% vs 22.00% 8.90% vs 9.20% 21.70% vs 22.20% DESCRETE PERFORMANCE Year to Date 10.50% 6.50% 4.30% 2.90% % 20.20% 23.00% 18.40% % -3.60% -8.70% -3.20% % 12.50% 15.40% 12.00% CUMULATIVE PERFORMANCE 1 Year 11.40% 13.90% 12.10% 8.90% 3 Years 33.40% 26.00% 21.70% 21.70% 5 Years 61.20% 58.90% 53.20% 50.60% ANNUAL CHARGES Normal Initial Charge if investing direct % Initial Charge after SSI discount % Fidelity Moneybuilder Balanced Invesco Perpetual Monthly Income Plus Newton Global High Yield Bond *These charges include FundsNetwork and our fees. **FE Risk Scores provide a single simple measure of risk across a broad range of investments. In the UK FE Risk Scores measure the riskiness of instruments relative to the FTSE100. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. FE Risk Scores are calculated weekly and can be tracked over time. Cash type investments will have scores close to zero while mutual funds will tend to have scores in the range while equities will generally be in excess of 100. The FTSE 100 is always scored at 100. There is no upper limit. - A measure of relative rather than absolute risk. - Set in relation to intuitively understandable benchmarks. - Responsive to recent events without being over sensitive. Threadneedle High Yield Bond Normal Annual Management Charge % Reduced new Annual Management Fees after SSI Discount via FundsNetwork % The new annual fees will be made up of the following: % % % % Charge FundsNetwork Fee SSI Fee

4 Equity Income Funds FUND Jupiter M&G Cazenove Unicorn Strategic Bond Fund Optical Income Fund UK Equity Income Fund UK Income Fund 5.20% 2.93% 3.60% 2.60% Income Payable Quarterly Half Yearly Half Yearly Half Yearly 02/06/ /12/ /05/ /05/2004 Fund Size 1,505m 15,870.5m 428m 323m Managers Ariel Bezalel Richard Woolnough Matthew Hudson John McClure Minimum Investment 500 1,000 1,000 2,500 Minimum Monthly Saving ~ 100 Normal Initial Charge 4.00% 3.00% 5.00% 5.50% Initial Charge after SSI Discount 0.00% 0.00% 0.00% 0.00% Annual Management Charge* 1.00% 1.25% 1.25% 1.25% Morningstar Category Sterling Strategic Bond Sterling Strategic Bond UK Equity Income UK Equity Income Focus Fixed Interest Fixed Interest Equity Mixed FE Risk ** jupiteronline.com mandg.co.uk cazenovecapital. com unicornam.com FundsNetwork Code JUSII (inc) JUSIA (acc) MEOII (inc) MGOTA (acc) CXUEI (inc) CXUEA (acc) UCUII (inc) UCUIA (acc) PERFORMANCE Position in sector over 1 Year 17/68 23/68 15/96 1/96 Position in sector over 3 Years 5/60 7/60 4/87 1/87 Fund Vs Average - 1 Year Fund Vs Average - 3 Years 7.40% vs 4.50% 25.60% vs 16.60% 7.00% vs 4.50% 24.40% vs 16.60% 27.80% vs 21.90% 63.10% vs 41.90% 46.80% vs 21.90% 94.90% vs 41.90% DESCRETE PERFORMANCE Year to Date 2.80% 3.60% 21.70% 31.30% % 12.90% 20.40% 33.30% % 5.70% 1.00% -4.90% % 8.30% 17.30% 36.80% CUMULATIVE PERFORMANCE 1 Year 7.60% 7.20% 30.00% 48.00% 3 Years 25.90% 24.50% 64.70% 95.30% 5 Years 72.10% 65.90% 85.50% % ANNUAL CHARGES Normal Initial Charge if investing direct % Initial Charge after SSI discount % Jupiter M&G Cazenove Unicorn Strategic Bond Fund Optical Income Fund UK Equity Income Fund *These charges include FundsNetwork and our fees. **FE Risk Scores provide a single simple measure of risk across a broad range of investments. In the UK FE Risk Scores measure the riskiness of instruments relative to the FTSE100. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. FE Risk Scores are calculated weekly and can be tracked over time. Cash type investments will have scores close to zero while mutual funds will tend to have scores in the range while equities will generally be in excess of 100. The FTSE 100 is always scored at 100. There is no upper limit. - A measure of relative rather than absolute risk. - Set in relation to intuitively understandable benchmarks. - Responsive to recent events without being over sensitive. UK Income Fund Normal Annual Management Charge % Reduced new Annual Management Fees after SSI Discount via FundsNetwork % The new annual fees will be made up of the following: % % % % Charge FundsNetwork Fee SSI Fee

5 Growth Funds FUND Cazenove UK Smaller Companies Fund AXA Framlington Biotech Fund Schroder Recovery Fund Invesco Perpetual European Opportunities Fund 0.30% ~ 0.95% 0.32% Income Payable Half Yearly ~ Half Yearly Annual 02/08/ /11/ /05/ /12/2007 Fund Size 750m 225m 430m 38m Managers Paul Marriage, John Warren Linden Thompson Kevin Murphy, Nick Kerrage Adrian Bignell Minimum Investment 1,000 1,000 1, Minimum Monthly Saving ~ Normal Initial Charge 5.00% 5.50% 3.25% 5.00% Initial Charge after SSI Discount 0.00% 0.00% 0.00% 0.00% Annual Management Charge* 1.25% 1.25% 1.25% 1.25% Morningstar Category UK Smaller Companies Specialist UK Smaller Companies Europe excluding UK Focus Equity Equity Equity Equity FE Risk ** FundsNetwork Code (Clean Share Class) cazenovecapital. com CXUSI (inc) CXUSA (acc) am-im.co.uk FMBTA (acc) schroders.co.uk SZRYI (inc) SZRYA (acc) invescoperpetual. co.uk INEUU (inc) INEUO (acc) PERFORMANCE Position in sector over 1 Year 4/51 1/212 5/278 3/101 Position in sector over 3 Years 1/51 1/170 29/264 3/96 Fund Vs Average - 1 Year Fund Vs Average - 3 Years 46.20% vs 31.20% % vs 65.50% 46.20% vs 4.10% % vs 3.30% 45.30% vs 23.50% 61.20% vs 40.90% 36.40% vs 24.90% 51.80% vs 32.40% DESCRETE PERFORMANCE Year to Date 30.60% 54.60% 29.70% 26.00% % 24.30% 34.00% 15.60% % 7.70% % % % 9.80% 16.00% 27.60% CUMULATIVE PERFORMANCE 1 Year 45.70% 48.60% 48.10% 40.20% 3 Years % % 61.20% 51.10% 5 Years % % % 70.60% ANNUAL CHARGES Normal Initial Charge if investing direct % Initial Charge after SSI discount % Cazenove UK Smaller Companies Fund AXA Framlington Biotech Fund Schroder Recovery Fund *These charges include FundsNetwork and our fees. **FE Risk Scores provide a single simple measure of risk across a broad range of investments. In the UK FE Risk Scores measure the riskiness of instruments relative to the FTSE100. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. FE Risk Scores are calculated weekly and can be tracked over time. Cash type investments will have scores close to zero while mutual funds will tend to have scores in the range while equities will generally be in excess of 100. The FTSE 100 is always scored at 100. There is no upper limit. - A measure of relative rather than absolute risk. - Set in relation to intuitively understandable benchmarks. - Responsive to recent events without being over sensitive. Invesco Perpetual European Opportunities Fund Normal Annual Management Charge % Reduced new Annual Management Fees after SSI Discount via FundsNetwork % The new annual fees will be made up of the following: % % % % Charge FundsNetwork Fee SSI Fee

6 Monthly Income Fidelity Moneybuilder Balanced Fund Current Yield 4.24% p.a. Monthly Income Invesco Perpetual Monthly Income Plus Fund Current Yield 5.34% p.a. Fidelity Average Position in 109/145 14/ % - Payable Monthly (1st) 08-Feb-1993 Ian Spreadbury Fund Size 320m Min 500 0% after Seymour Sinclair discount Annual Management Charge 1.00% Mixed Investment 40%-85% YRMBI (inc) s S&P Gold Morningstar ~ Financial Express ***** Invesco Perpetual Average Position in 4/68 6/ % - Payable Monthly (1st) 06-Feb-1999 Neil Woodford, Paul Causer, Paul Read Fund Size 3,810m Min 500 0% after Seymour Sinclair discount Annual Management Charge 1.13% Sterling Strategic Bond INMPI (inc) / INMPA (acc) S&P Gold OBSR Gold Financial Express ***** The fund aims to achieve an attractive level of income with some long-term capital growth from a portfolio invested in UK equities and fixed income securities. The official benchmark of the fund is a composite index representing 65% of the FTSE All Share Index and 35% of the FTSE All Stocks Index. The stocks held in the equity portion of the fund result from bottom-up, fundamental analysis. While the manager invests across small, mid and large companies, there is likely to be a bias towards medium-sized companies. The fixedincome section is invested in UK government bonds, sterling-denominated corporate bonds and other fixed-income securities, such as interestpaying preference shares and convertibles. This fund is effectively an amalgamation of two separate portfolios and aims to combine and above-average yield with some capital growth and low volatility. Ian Spreadbury is a FE Trustnet FE Alpha Manager who has maintained a consistently high alpha score over a proven track record in rising and falling markets. Overall, performing better than the peer group composite. However, over a long track record, the manager has, period by period, over- and under-performed roughly equally. Good stockpicking has had a material positive impact on results, which have not been particularly exposed to falling markets. Ian Spreadbury is a Senior Portfolio Manager at Fidelity Worldwide Investment Ltd (FIL). Ian is also responsible for managing Money Builder Income Fund, Extra Income Fund, Sterling Bond Fund, Euro High Yield Fund amongst other funds. The Invesco Perpetual Monthly Income Plus Fund aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. In pursuing this objective, the fund managers may include investments that they consider appropriate which include transferable securities, money market instruments, warrants, collective investment schemes, deposits and other permitted investments and transactions. This fund combines the talents of Invesco Perpetual s bond managers Paul Causer and Paul Reed with their UK equity income manager Neil Woodford. Causer and Reed are arguably the most established and successful portfolio management partnership in the fixed income retail space, managing the Invesco Perpetual Corporate Bond and Tactical Bond funds, both of which are highly rated by FE Trustnet. Woodford has perhaps an even stronger reputation and is the long time manager of Invesco Perpetual s Income and High Income funds. He remains one of the best known and best performing fund managers in the UK market today. His key funds are the Invesco Perpetual High Income fund and Income fund. He also looks after the equity element of the Invesco Perpetual Distribution fund since January Neil Woodford is a FE Trustnet FE Alpha Manager who has maintained a consistently high alpha score over a proven track record in rising and falling markets. Overall, performing better than the peer group composite. Over a long track record, the manager has, period by period, consistently managed to outperform the peer group. Good stockpicking has had a material positive impact on results, which have not been particularly exposed to falling markets. The fund is co-managed by Paul Read and Paul Causer. Paul Causer is the Co- Head of Fixed Income based in Henley-on-Thames.

7 Monthly Income Newton Global High Yield Bond Fund Current Yield 8.35% p.a. Monthly Income Threadneedle High Yield Bond Fund Current Yield 7.40% p.a. Newton Average Position in 6/27 15/ % - Payable Monthly (1st) 02-Oct-2000 Howard Cunningham, Parmenwar Chadha Fund Size 177m Min 1,000 0% after Seymour Sinclair discount Annual Management Charge 1.00% Sterling High Yield NWGLI (inc) / NWGLA (acc) S&P ~ OBSR ~ Financial Express * Threadneedle Average Position in 13/27 14/22 7.4% - Payable Monthly (8th) 4-Oct-1999 Barrie Whitman, David Backhouse Fund Size 784m Min 2,000 0% after Seymour Sinclair discount S&P ~ Annual Management Charge 1.10% OBSR Bronze Sterling High Yield Financial Express * THYIZ (inc) The objective of the Fund is to achieve a high yield from a globally diversified portfolio which may include but is not limited to fixed interest bonds and other debt instruments (such as floating rate notes and index-linked notes). The Fund may also invest in deposits, derivative instruments, forward transactions and collective investment schemes. At least 80% of the Fund s assets should be in Sterling denominated assets or hedged back to Sterling. The Fund invests in fixed income securities denominated in Global currencies, predominantly from issuers below investment grade (rated below BBB or equivalent), and is therefore exposed to credit risk. The Fund can also be exposed to changes in currency rates and interest rates. These factors may affect the performance of the Fund. Charges are deducted from the capital of the Fund, which will affect its growth. Howard Cunningham - Overall, performing worse than the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group more often than not. Poor stockpicking has had a material downward effect on results, which have not been particularly exposed to falling markets. Howard Cunningham as a Analyst/investment manager, credit. He holds a BA degree and is a Associate of Chartered Institute of Bankers (ACIB),Associate Member of the United Kingdom Society of Investment Professionals (UKSIP).He has a experience from 2000 to date Newton Investment Management as a Analyst/investment manager, credit,from NatWest Group as a Head of credit rating and research. WARNING: Funds that pay a higher than average income yield can be more volatile than those of lower returns and should only form a small part of any portfolio. Charges are deducted from capital which will affect its growth. The aim of the Fund is to provide income. The Fund invests at least two-thirds of its assets in high income paying bonds (which are similar to a loan and pay a fixed or variable interest rate) issued by companies worldwide. High income paying bonds are bonds that have received lower ratings from international agencies that provide such ratings. These bonds are considered riskier than higher rated bonds but typically pay a higher income. The Fund invests at least two-thirds of its assets in high income paying bonds (which are simliar to a loan and pay a fixed or variable interest rate) issued by companies worldwide. High income paying bonds are bonds that have received lower ratings from international agencies that provide such ratings. These bonds are considered riskier than higher rated bonds but typically pay a higher income. High yield bonds remain in demand as investors seek income in a low interest rate environment. The fund s performance continues to be broadly in line with the sector. Barrie Whitman - Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group more often than not. Poor stockpicking has had a material downward effect on results, which have not been particularly exposed to falling markets. Barrie Whitman joined Threadneedle in 1999 as Head of High Yield. He manages the Threadneedle High Yield Bond, European High Yield Bond and Strategic Bond Funds, Lead Manager of Threadneedle Credit Opportunities Fund and a number of institutional mandates.

8 Jupiter Strategic Bond Fund Current Yield 5.20% p.a. Equity Income Jupiter Average Position in 17/68 5/60 M&G Optimal Income Fund Current Yield 2.93% p.a. M&G Average Position in 23/68 7/60 Equity Income 5.20% - Payable Quarterly 2.93% - Payable Half Yearly 02-June Dec-2006 Ariel Bezalel Richard Woolnough Fund Size 1,505m Fund Size 15,870m Min 500 0% after Seymour Sinclair discount Annual Management Charge 1.00% Sterling Strategic Bond S&P Gold OBSR ~ Financial Express ***** Min 1,000 0% after Seymour Sinclair discount Annual Management Charge 1.25% Sterling Strategic Bond S&P Silver OBSR Platinum Financial Express ***** JUSII (inc) / JUSIA (acc) MEOII (inc) / MGOTA (acc) The Fund aims to achieve a high income with the prospect of capital growth by seeking out the best opportunities within the fixed interest universe globally. The Fund invests in higher yielding assets including high yield bonds, investment grade bonds, government bonds, preference shares, convertible bonds and other bonds. The manager typically looks for situations offering value and good risk/reward positions. He takes a top down/bottom up approach to investment. That means spending a lot of time meeting management and researching company fundamentals with the help of Rhys Petheram, a former specialist at credit ratings agency Moody s. He prefers issues from companies with robust business models and competent management teams and invests for the medium to long-term. In this environment, subordination is very important to his investment criteria and, ideally, the Manager would invest at the highest possible end of a company s capital structure. Ariel Bezalel is a FE Trustnet FE Alpha Manager who has maintained a consistently high alpha score over a proven track record in rising and falling markets. Overall, performing better than the peer group composite. Over a fairly lengthy track record, the manager has, period by period, consistently managed to outperform the peer group. Good stockpicking has had a material positive impact on results, which have tended to be similar in rising and falling markets. Ariel has managed the Jupiter Strategic Bond Fund since its launch in June The fund aims to provide a total return by investing across the full fixed interest spectrum, including investment grade and high yield corporate bonds as well as government bonds. The manager also makes use of derivatives and unusually may include some equity exposure. The fund aims to outperform the sector average but has no yield target. The manager takes a primarily top-down approach, positioning the fund across the asset class according to prevailing market conditions. The M&G Optimal Income Fund is a fully flexible bond fund, allowing investment across a broad range of fixed income assets according to where the fund manager identifies value. This is a hugely popular fund and assets under management have growth to a staggering 15,871 million. A manager with a strong track record across all market conditions and fixed income mandates; combined with the resources of the M&G Group, make this a powerful investment proposition. This is Richard Woolnough s most flexible mandate and makes extensive use of derivatives, so it should be considered more aggressive than his other funds, M&G Strategic Corporate Bond and M&G Corporate Bond. Richard Woolnough is a FE Trustnet FE Alpha Manager who has maintained a consistently high alpha score over a proven track record in rising and falling markets. Overall, performing better than the peer group composite. Over a long track record, the manager has outperformed the peer group more often than not. Good stockpicking has had a material positive impact on results, which have tended to be relatively better in a falling market.

9 Cazenove UK Equity Income Fund Current Yield 3.60% p.a. Equity Income Newton Asian Average Position in 15/96 4/87 Unicorn UK Income Fund Current Yield 2.60% p.a. Equity Income Unicorn Average Position in 1/96 1/ % - Payable Half Yearly 06-May-2005 Matthew Hudson Fund Size 428m Min 1,000 0% after Seymour Sinclair discount Annual Management Charge 1.25% UK Equity Income CXUEI (inc) / CZUEA (acc) % - Payable Half Yearly 24-May-2004 John McClure Fund Size 323m Min 2,500 0% after Seymour Sinclair discount Annual Management Charge 1.25% UK Equity Income UCUII (inc) / UCUIA (acc) S&P ~ OBSR ~ Financial Express ***** S&P ~ OBSR ~ Financial Express ***** The fund aims to provide a high level of income together with long term capital growth by investing predominantly in United Kingdom equities. Whilst the Fund will invest primarily in United Kingdom equities it may also invest into fixed interest securities, cash, deposits and money market instruments and in other markets. Fund manager, Matt Hudson, is a pragmatic income investor, adopting a top-down business cycle investment approach, which seeks to deliver an income from the UK equity market whilst achieving long-term capital growth. The fund aims to outperform the benchmark, FTSE All-Share Index, by +1.5% (net of fees) over rolling 3 year periods and to achieve a minimum of 110% of the benchmark yield over the medium term. There is no guarantee that this target will be achieved. Matt Hudson is Citiwire AAA rated overall, performing better than the peer group composite. Over a long track record, the manager has outperformed the peer group more often than not. Stockpicking has made a contribution to results, which have not been particularly exposed to falling markets. Matt Hudson is a member of the pan-european equity team with responsibility for equity and income portfolios. Matt joined from AIB Govett Investment Management. He graduated from Cambridge University with a degree in History. Matt is a Director of Cazenove Capital and has 14 years investment experience. The Unicorn UK Income Fund aims to deliver a gross yield at least 10% greater than the yield produced by the FTSE All Share Index. Unicorn focuses on long term, long only investment in UK quoted companies and aims to achieve superior absolute returns through the application of traditional, fundamental principles of investment. The Unicorn UK Income Fund once again delivered strong performance. In absolute terms the Fund delivered a total return of 7.1% during July, outperforming the average return from the UK Equity Income sector by 1%. Outperformance came as a result of strong share price gains from a significant proportion of the holdings in the Fund. One stock, Conviviality Retail, was added to the portfolio in July. Conviviality Retail is one of the UK s largest franchised off-licence chains, which successfully completed its listing on the Alternative Investment Market at the end of the month. Following further strong fund inflows, weightings were increased in a number of existing holdings. John McClure is a FE Trustnet FE Alpha Manager and A rated by Citiwire who has maintained a consistently high alpha score over a proven track record in rising and falling markets. Overall performing is better than the peer group composite. Good stockpicking has had a material positive impact on results, which have not been particularly exposed to falling markets. John has specialised in investing in UK smaller companies for over 20 years. He manages the Unicorn UK Income Fund and the smaller companies portfolio within the Acorn Income Fund. He also co manages the Unicorn Free Spirit Fund and the Unicorn Smaller Companies and Outstanding British Companies Fund.

10 Growth Growth Cazenove UK Smaller Companies Fund Capital Growth AXA Framlington Biotech Fund Capital Growth Cazenove Average Position in 4/51 1/51 AXA Average Position in 1/212 1/ % - Payable Half Yearly 02-Aug-1996 Paul Marriage, John Warren Fund Size 750m Min 1,000 0% after Seymour Sinclair discount Annual Management Charge 1.25% UK Smaller Companies CXUSI (inc) / CXUSA (acc) ~ 26-Nov-2001 Linden Thompson Fund Size 225m Min 1,000 0% after Seymour Sinclair discount Annual Management Charge 1.25% Specialist FMBTA (acc) S&P Bronze OBSR Bronze Financial Express ***** S&P ~ OBSR ~ Financial Express ***** The fund aims to achieve long term capital growth by investing primarily in UK smaller companies. The Fund will invest at least 80 per cent of its assets in the UK listed companies that form the bottom 10 percent by market capitalisation. The Fund may also invest in companies which are headquartered or have significant activities in the UK which are quoted on a stock exchange outside the UK Paul Marriage has generated substantial outperformance in a variety of market conditions since taking control of this fund in 2006, though he has proved particularly effective during falling markets. He takes a common sense approach, generally looking for good businesses but also for an investment angle that will cause their share price to be re-rated. He is also pragmatic enough to include poor quality companies in the portfolio if he believes they are sufficiently undervalued. Paul Marriage does not confine himself to a particular investment style when stocking his portfolio for the Cazenove UK Smaller Companies fund. Instead, he concentrates on the business cycle and how companies earnings are affected during its different stages. Paul Marriage is a FE Trustnet FE Alpha Manager and AAA rated by Citiwire, who has maintained a consistently high alpha score over a proven track record in rising and falling markets. Paul Marriage joined Cazenove Capital in 2005 and is a member of the pan-european equity team Paul joined from Insight Investment where he was head of UK small cap investments valued at 750 million. The fund targets long term capital appreciation by investing principally in the equity securities of companies in the biotechnology, genomic and medical research industries. The fund invests worldwide in companies of all sizes, but the bulk of the portfolio will consist of US stocks, reflecting the location of much of the biotech industry. The biotech sector rebounded strongly from the generalised market weakness evident during June. Overall the Q financial results announced during the month for the larger cap stocks were stellar with most reporting better than expected results. However, given the share price performance of the sector year to date beating expectations proved necessary to continue this momentum as the share prices of stocks that only met expectations came under pressure. If more M&A deals are announced this would be a clear positive for the smaller and mid cap stocks within the sector. Longer term, the biotech sector looks healthy and fundamentally well supported. The longer term growth profile of the biotech sector appears robust and as such should continue to attract investor attention, underpinned by a combination of new drug approvals, commercialisation success, a strong pipeline of drugs in development, and ongoing merger and acquisition activity. Linden Thompson - Overall, performing better than the peer group composite. Over a short track record, the manager has outperformed the peer group more often than not. There is not sufficient data to say whether good stockpicking has had any real effect on results, which have not been particularly exposed to falling markets. The short track record means that the measurements quoted above need to be treated with some caution. WARNING: The Biotech and Healthcare sectors can return outstanding returns, but please be aware that they are also more volatile in poor markets and should only form a small part of any portfolio. This Fund may not be appropriate for investors who plan to withdraw their money within five years.

11 Growth Growth Schroders Recovery Fund Capital Growth Invesco Perpetual European Opportunies Fund Capital Growth Schroders Average Position in 5/278 29/264 Invesco Perpetual Average Position in 3/101 3/ % - Payable Half Yearly 05-May-1970 Kevin Murphy, Nick Kerrage Fund Size 430m Min 50 0% after Seymour Sinclair discount Annual Management Charge 1.25% UK All Companies SZRYI (inc) / SZRYA (acc) % - Payable Annually 12-Dec-2007 Adrian Bignell Fund Size 38m Min 500 0% after Seymour Sinclair discount Annual Management Charge 1.25% Europe excluding UK INEUU (inc) / INEUO (acc) S&P Bronze OBSR ~ Financial Express ** S&P Silver OBSR ~ Financial Express **** The scheme s investment objective is to achieve capital growth for investors through investment in companies that have suffered a setback. The scheme invests primarily in UK quoted shares. The investments are selected from those companies that have suffered a setback in terms of profits or share prices, but where the management and the prospects are believed to be good. The scheme s investment objective is to achieve capital growth for investors through investment in companies that have suffered a setback of profits or share prices, but where the management and the prospects are believed to be good. The fund may also invest in collective investment schemes, derivatives, warrants and money market instruments The fund s handsome gains have been made in some ugly sectors. General retail has been the strongest contributor to performance over the past 12 months, including widely unloved names such as Dixons. Nick Kirrage, co-manager on the fund with Kevin Murphy, says: Owning stocks in an environment where the consumer was under pressure but valuations were low has been very rewarding in the last 12 months. Kevin Murphy A rated with Citiwire - Overall, performing better than the peer group composite. However, over a fairly lengthy track record, the manager has underperformed the peer group more often than not. Good stockpicking has had a material positive impact on results, which have not been particularly exposed to falling markets. Kevin manages the Specialist Value UK equity portfolios and is the co-manager of the Schroder Recovery Fund since WARNING: The smaller company sector can return outstanding returns, but please be aware that they are also more volatile in poor markets and should only form a small part of any portfolio. This fund aims to achieve capital growth through a portfolio of investments primarily in European companies, excluding the UK. For those who want an exposure to European equities and take advantage of any growth prospects from the region. The fund is a high conviction / high alpha fund that is prepared to take large sector and country positions based on the manager s level of conviction. The fund will tend to hold stocks with the largest positions rarely exceeding 5 per cent. The top ten represent 29 per cent of the portfolio. The manager has a style-neutral approach but the natural skew is towards growth and for this reason the fund has a bias towards small/mid caps (defined as having a market capitalisation of less than 6bn). Style neutrality enables the fund to adapt to the macro and to be flexible over the long term. An example of this can be seen at the start of the 2012 when the manager felt markets had rallied ahead of fundamentals through December 09 and into January He took profits and held 10 per cent cash whilst the markets consolidated downwards at the start of the year. Adrian Bignell - Overall, performing about the same as the peer group composite. However, over a long track record, the manager has, period by period, over- and under-performed roughly equally. Poor stockpicking has had a material downward effect on results, which have not been particularly exposed to falling markets. Based in Henley-on-Thames, Adrian is responsible for a number of European equity portfolios, with a particular interest in the small cap sector. Adrian began his investment career at Cazenove in 1994 and became a director of the company and vicehead of their European Equities team.

12 Proceeds with caution. Why reinvesting income could grow on you. Real growth can seem elusive in today s markets. Especially when asset classes like cash and bonds simply can t deliver the growth you need to meet your goals. So how can you find better returns, while trying to manage the risk? Equity income: real growth potential We believe now is a very good time to look at equity income. Why? Because whilst an income fund is designed to generate a regular income, it can also be used to generate growth. Simply choose to reinvest the dividends, rather than taking them out. This technique can have a powerful compounding effect on the overall value of your investment. In fact, it s so effective that around 60 per cent* of total returns generated in the UK by equity investment come from reinvesting dividends. Please remember, past performance is not a reliable indicator of future results. Past performance (%) as of 30/08/2013 Aug 08 - Aug 09 Aug 09 - Aug 10 Aug 10 - Aug 11 Aug 11 - Aug 12 Aug 12 - Aug 13 Fidelity MoneyBuilder Dividend Fund FTSE All Share Index Source of performance: Fidelity and Morningstar as at 30 August 2013 on a bid to bid basis with income reinvested net of basic rate tax. These fi gures do not include an initial charge Morningstar, Inc. All Rights Reserved. The active approach to finding growth Equity income funds tend to invest in companies that pay regular dividends. But, at Fidelity, we go further. We look for solid companies with strong balance sheets and good cash flows. Ones with the potential for good and growing dividends. And to search them out, we have over 300 investment professionals all over the world, making an in-depth, first-hand assessment of every company we invest in. This active management approach means that we look for sustainable dividends and capital preservation, right across our equity income range: Fidelity MoneyBuilder Dividend Fund specialises in blue-chip UK equities Fidelity Global Dividend Fund is free to seek out high quality companies, anywhere in the world Fidelity Asian Dividend Fund looks for the best companies in the Asia Pacific Region For more information on Fidelity s fund range, please visit seymoursinclair.co.uk. The value of investments and income can go down as well as up and you may not get back the amount you invested. For funds that invest in overseas markets, changes in currency exchange rates may affect the value of your investment. Investments in small and emerging markets can be more volatile than other overseas markets. The annual management charge is taken from the fund value so the fund s capital may decrease which will affect future performance. The funds should only be considered as a long-term investment. Fidelity does not give advice, for recommendations contact an adviser. Strategies for real returns w seymoursinclair.co.uk t LONG-TERM INVESTMENT. A CHANCE TO LOOK BEYOND THE PLAIN. At Invesco Perpetual, we have always taken a long-term view. We look at investments over years, not weeks. We seek out fundamental value wherever it lies. And we aren t distracted by short-term fluctuations in the market. So, whatever the market conditions, our fund management teams use their 799 years of combined industry experience * to do what we always do: stay calm, stick to our principles, and hunt for long-term value. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Call , visit invescoperpetual.co.uk or contact your financial adviser. TAKE A LONGER VIEW *Source: Datastream as using FTSE All Share Index. The Key Investor Information Document is available in English and can be obtained from our website at co.uk/importantinformation or by calling The full prospectus may also be obtained from Fidelity. Issued by FIL Investments International, authorised and regulated by the Financial Conduct Authority. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and F symbol are trademarks of FIL Limited. CSO5345/0913 *Source: Invesco Perpetual as at 30 September Telephone calls may be recorded. Where Invesco Perpetual has expressed views and opinions, these may change. Information on our products is available from us at Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH. Invesco Perpetual is a business name of Invesco Asset Management Limited. Authorised and regulated by the Financial Services Authority. SS

13 Life assurance bonds can keep the taxman at bay Canada Life Flexible Interest Bond By Sam Barrett (Money Observer) Wed, 23rd May The taxman is always keen to take his share of everything, from your income to the wealth you leave your family, so finding ways to reduce your tax bill is a rewarding activity. The tax-planning opportunities available with life assurance bonds make them an appealing investment proposition. Life assurance bonds let you manage your tax liability in legitimate ways, says Ian Porter, head of wealth management at Alexander Forbes Consultants and Actuaries. With HM Treasury becoming increasingly aggressive, they will become more and more popular. Tax treatment Life assurance bonds - which are also known as investment bonds, distribution bonds and with-profits bonds - benefit from a unique tax position. Bob Perkins, technical manager at Origen Financial Services, says: If you hold a life assurance bond, the life company will pay corporation tax at 20% on any gains made in the fund, which is broadly in line with basic-rate tax. But the rate deducted is often lower than this, sometimes substantially, because of the way it is calculated. There may be additional tax to pay, but this is deferred until the bond is cashed in and assessed on your tax status at that point. Another unusual feature of a life assurance bond is that investors can withdraw 5% of the original investment every year, for up to 20 years, without incurring an immediate tax charge. Sarah Lord, managing director at Killik Chartered Financial Planners, says: Because there s no immediate tax liability, this works well for people looking to supplement their income in retirement from a capital lump sum. There s also some flexibility with these 5% tax-deferred withdrawals: you can defer them for as long as you like. For example, if you took out a bond while you were working and didn t need to take income from it until you retired in five years time, you could either take a tax-deferred lump sum of 30% of the original investments in the sixth year or increase the amount you took each year to make up the difference. Tax on gains When you come to cash in your bond, your gain will be subject to income tax rather than capital gains tax. Investors receive an effective tax credit of 20% for the tax the life company has already paid. This means most basic-rate taxpayers will have no further tax to pay, while higher- and additional-rate taxpayers will need to pay a further 20% and 30% respectively on the gain. If the profit on the bond pushes you from the basic-rate tax band into the higher-rate band, a technique known as top slicing is used to assess whether you have any further liability. Your liability will depend on the size of the gain and the length of time you ve held the bond. As an example, if you invested 100,000 and after 10 years it had grown to 120,000, the gain, of 20,000, would be divided by 10. This 2,000 would then be added to the taxable income you received that year. If this keeps you within the basic-rate tax band, there s no further tax to pay, but if it pushes you up into the higher or additional rates, you ll be subject to a further 20% or 30% respectively on the total gain. Perkins says: Most investors will delay cashing in the bond until they are a basic-rate taxpayer so that there s no further tax to pay, but if you re close to the top of the basic-rate tax band, top slicing may enable you to avoid paying any more tax on the gain. Onshore life assurance bonds Life company funds are subject to corporation tax at 20%, although in practice life companies pay less than this A 5% withdrawal of original investment is allowed each year, with tax deferred until the bond is cashed in Gains are taxed as income, and tax already paid is taken into account. This means basic-rate taxpayers have no further liability, while higher-rate taxpayers pay a further 20 or 30% Offshore life assurance bonds These offer gross roll-up, as no tax is deducted other than the 10% tax credit on UK dividends A 5% withdrawal of original investment is allowed each year, with tax deferred until the bond is cashed in Gains are taxed as income. Basic-rate taxpayers pay 20% and higher-rate taxpayers 40% Canada Life offer both Onshore and Offshore Flexible Investment Bonds through Seymour Sinclair Investments Limited. The Canada Life Flexible Investment Bond is a medium to long term investment with the aim of providing capital growth as well as offering a tax efficient income. It combines simplicity with clarity and choice in its charges. It is a single premium whole of life assurance policy that provides potential for capital growth and can be used to supplement income by allowing tax-deferred cash withdrawals. Flexible Investment Bond 5% Tax-Free Income for 20 years Special offer charges and fees - Currently a 50% reduction off the normal fees. A flexible range of transparent charging options - these have now just got better as Canada Life have currently halved their establishment charges for investments of 25,000. (This offer can close at any time). Introducing the Canada Life Flexible Investment Bond Throughout life your financial needs and goals will change. The Canada Life Flexible Investment Bond has been created to make sure it can adapt to the changing goals of clients and put you and them in control whether their strategy is to create, enhance, distribute or protect their wealth. The Canada Life Flexible Investment Bond is truly flexible allowing you to meet the needs of your investment requirements. It is suitable for those who have used their ISA allowance or wish to invest greater sums than an ISA allows. It offers: Award winning service backed by a service charter including non-performance penalties A wide range of internal and external funds with risk-rated portfolio funds Unlimited free fund switches Penalty free access to capital Fund specific withdrawals Phased investment facility and free switching Low fund charges 5% per annum tax free income for 20 years (*See key feature details) Up to four owners and four lives assured with the only age restriction being that a life assured is below 90 years of age at outset. For joint life first death, this must be the eldest life. About Canada Life We understand that you would want to be certain that the company you invest in is strong, safe and secure. As a part of the Great-West Lifeco group, Canada Life are a constituent of the Financial Times Global 500 world s largest companies and with combined assets under administration of more than 327 billion (as at 30 June 2012). Investors in the Canada Life Flexible Bond are covered by the Investors Compensation Scheme. In order to make an investment an illustration will have to be prepared. To arrange this, we will require your date(s) of birth, the investment amount, whether an income is to be taken and your chosen funds. Please contact us on or info@seymoursinclair.co.uk for further details and for a personal illustration - To prepare an illustration. To invest into the Canada Life Flexible Investment Bond, instead of the normal 5% initial commission payable, Canada Life will pay Seymour Sinclair Investments only 0.5% initially and 0.5% per annum and this is taken from the annual management charge. We make no further charges. Please note that this is not a guaranteed investment and that the value can fall as well as rise and that if you cash in your bond you could get back less than originally invested. If you are unsure about any aspect of the investment you should seek expert advice. Please note that past performance is not a guide for the future. If after seeking advice you are still not entirely happy with the investment, please do not invest. Please read the Clients Brochure and Key Features document.