OpenWorld Dynamic Assets Fund

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1 FUND BROCHURE OpenWorld Dynamic Assets Fund Protecting and generating wealth For Professional Investors only

2 Russell s OpenWorld fund range offers investors access to some of Russell s highest conviction manager research selections, focusing specifically on specialist boutique managers and innovative investment strategies. Russell actively manages the managers on the platform, providing investors with the necessary governance and control required to invest in managers operating in specialist, thematic areas. In keeping with our manager of managers model, each manager is hired to run a separate account for Russell, and all assets are administered and custodied independently with our global custodian, ensuring a high level of transparency and control. Should our conviction in a manager decrease, this manager will be changed within the OpenWorld fund, without any need for an investor to redeem out of the fund, and buy into another. The majority of funds are offered through a Dublinbased UCITS IV fund platform. Our manager research and due diligence is broadly accepted as being one of the best in the industry. For example, the latest FUNDfire survey of investment managers awarded Russell top place for most thorough manager due diligence in the consulting industry, scoring over twice as many votes as our nearest competition. The OpenWorld range comprises of several innovative strategies and new asset classes where we feel our manager research capabilities and the access that we can negotiate with managers is a strong benefit to clients. OpenWorld Dynamic Assets Fund Why this fund? We believe that investors increasingly wish to reflect capital preservation strategies in their investment programmes. Absolute return investing has been around for a long time in the hedge fund world, but liquid UCITS vehicles based on absolute return investing allow a rare and compelling new opportunity for portfolio diversification in a volatile market environment. This fund provides access to a contrarian boutique manager with a proven track record of global absolute return investing. The founding partners have been managing money together this way since Russell OpenWorld provides access to a compelling manager not widely available. In addition, investors in the fund benefit from Russell s robust investment and operational due diligence on money managers, and ongoing monitoring and replacement when necessary in order to preserve the value proposition. The money manager Founded in 1989 by Martin Mack and Herwig Weise in Hamburg, Mack & Weise (M&W) have a cautious absolute return approach. Equal and co-owners of the firm, Mack and Weise are supported by 3 other investment professionals who together manage over 500 million. These assets are all global and multi-asset in nature and all follow a contrarian, long-term absolute return strategy. M&W are principally long term global equity investors, although if the risk reward trade-off for global equities is not attractive, they will invest in alternative asset classes that offer positive returns, or hold cash. Other than equities, M&W will typically hold cash, short duration sovereign bonds, and precious metals. Allocation to these other asset classes may be aggressive depending on prevailing market conditions such asset allocation decisions have been a major source of added value historically. They may also employ options, primarily for risk management purposes. Philosophy The two founding partners have been refining their investment approach through their 22 years experience of maneuvering in the financial markets together. M&W have always been contrarian investors, as they believe that markets are being driven by psychology in the shape of greed and fear. Towards the end of the 1990 s they gradually transitioned from a focus on stock selection to their current global macro approach. They observe that markets are not operating freely, and they blame governments and central banks for the accelerating economic boom and bust cycles, caused by their loose fiscal and monetary policies. Contrarian stock picking remains an important part of their process, but as conditions dictate decisions are now driven to a much larger degree by global macro developments.

3 Strategy M&W adopt a long term, macro, contrarian, and benchmark agnostic investment approach. They are continuously evaluating the global macro picture in order to identify trends, inflection points, mispricing and imbalances. They seek to take long term positions in attractively valued assets and use active cash management not only to protect real capital, but also to be in a position to take advantage of investment opportunities as and when they present themselves. Short term trading is avoided, due to an opinion that this will erode returns. The manager is specialised in managing drawdown risk. This is achieved through effective asset allocation, and the use of out of the money options (equities, commodities and currencies) to protect against tail events. Historically volatility has been very low, although it would not be unusual for this to spike over the short-term due to their high conviction style and contrarian approach. The manager has historically provided diversification against broader equity, bond, commodity markets as well as other alternative strategies. M&W have shown skill in protecting capital during a range of market shocks. Herwig Weise, co-founding partner and portfolio manager, has 26 years investment experience. He started in a bank apprenticeship in a savings bank in Luebeck, Germany, before setting up M&W in 1989 in co-operation with Martin Mack. Fund Overview Fund TYPE Dublin domiciled UCITS IV Fund MONEY MANAGER Mack & Weise ( M&W ) Fund objective* To protect capital and to deliver absolute returns in excess of theecb rate over the medium term by allocating between equity and other asset classes globally BENCHMARK Broad Investment Guidelines Equities: 0-100% Maximum in a single position: 4% Sub-sectors <25% Exposure to emerging markets <25% Cash: 0-100% in main currencies Bonds: 0-60% Developed and Sovereigns Duration < 2 years Max 5% in bonds that don t fit above criteria Commodities: % Primarily precious metals No agriculture Options: 0-5% Martin Mack, co-founding partner and portfolio manager, has 26 years investment experience. He started his career in a bank apprecticeship in a savings bank in Luebeck, Germany, before setting up M&W in 1989 in co-operation with Herwig Weise. Main ECB refinancing rate FUND INCEPTION November 2011 NOTIFICATION PERIOD Orders must be sentbefore 14:00 (Irish time) on the dealing day VALUATION Daily forward pricing; NAV publishedat T+1 at 10:00 (Irish time) SETTLEMENT T+3

4 M&W are concerned that rising debt levels are not being addressed. Trying to kick-start the global economy by taking on even more debt from what are already unsustainable levels is not the solution. Sovereign debt levels are soaring 160% 140% 120% 153% 131% Greece Japan 100% 100% Italy 80% 60% 81% 73% 57% France United States 40% UK 20% Germany 0% Dec-80 Dec-83 Dec-86 Dec-89 Dec-92 Dec-95 Dec-98 Dec-01 Dec-04 Dec-07 Dec-10 Source: Bloomberg & IMF. The chart higlights annual development in the net general government debt outstanding as a percentage of GDP for key global economies (as measured by the IMF). Net debt is calculated as gross debt minus financial assets corresponding to debt instruments. Effective asset allocation achieves the objective of absolute returns over the medium and long term, with downside protection. Asset allocation evolves over time reflecting M&W s careful assessment of the investment environment. Asset allocation evolution 100% 90% 80% 70% % of portfolio 60% 50% 40% 30% 20% 10% 0% May 07 Oct 07 Mar 08 Aug 08 Jan 09 Jun 09 Nov 09 Apr 10 Sep 10 Feb 11 Jul 11 Dec 11 Options Precious metals Equities ETFs Bonds Cash Source: Mack & Weise & Russell. Asset allocation up until November 2011 is based on the Mack & Weise Privat Fund, and on the OpenWorld Dynamic Assets Fund thereafter.

5 Portfolio characteristics, asset classes and instruments used: M&W can invest up to 100% of the fund in global, listed, liquid equities. Although fundamentals are very important, technical analysis is also used to assess long term trends, support and resistance levels. Given their very conservative approach, they will not invest in expensive, high beta stocks that they expect or hope will get more expensive. Ideally, they will look for stocks that fit their macro outlook and are strong on both a fundamental and technical perspective. M&W will not short stocks, but can invest in short ETFs on markets/sectors such as the DAX and Industrials sector. This is limited to 10% of the fund s NAV. Cash & FX: If equities do not look attractive, cash is the default proposition for M&W. Cash positions will be split into deposits and short dated Fixed Income (see below). Their base currency is the Euro and they seldom have active currency calls, but keep the option of moving out of the Euro if conditions warrant. They will only invest in the big currencies. They rely more on technicals than fundamentals in this space. Fixed Income: M&W do not consider themselves as bond specialists and will not play credit or duration. Fixed income exposure is primarily used for defensive and diversification purposes and is limited to short-dated, and what they perceive to be safe, sovereigns. In exceptional circumstances they may have some exposure to a sure bet for example the position in Russian bonds they took in Precious Metals and other commodities: Given their appreciation of Austrian Economics, they believe that the debasement of currencies will lead to gold and silver being bid up. Access to these investments is achieved primarily through ETCs (physical) and mining stocks. Although they are prepared to invest in other commodities such as copper, agricultural commodities are not considered as they feel that these are out of their core area of expertise. Options and other derivatives Call and put options on equity, commodity and currency are used primarily for risk management purposes, and to protect the fund from any black swan events, in which case, they will become performance drivers. The writing of options is prohibited, and total exposure to options is limited to 5% of the fund. They do not use futures and/or forwards. The OpenWorld platform and funds offered OpenWorld specifically targets niche boutique managers who are often unavailable or unknown to a broad investor base. By leveraging Russell s global research operation, these managers can be accessed by a wider audience. Commodities Long Neutral Dynamic Assets Euro Credit US Credit Global High Dividend Equity Global Listed Infrastructure Global Listed Property Europe Focus Equity India Focus Equity

6 For more information: Call: +44 (0) Visit: IMPORTANT INFORMATION This material is not intended for distribution to retail clients. This material does not constitute an offer or invitation to anyone in any jurisdiction to invest in any Russell product or use any Russell services where such offer or invitation is not lawful, or in which the person making such offer or invitation is not qualified to do so, nor has it been prepared in connection with any such offer or invitation. Unless otherwise specified, Russell Investments is the source of all data. All information contained in this material is current at the time of issue and, to the best of our knowledge, accurate. Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and, unless it relates to a specified investment, does not constitute the regulated activity of advising on investments for the purposes of the Financial Services and Markets Act Issued by Russell Investments Limited. Company No Registered in England and Wales with registered office at: Rex House, 10 Regent Street, London SW1Y 4PE. Telephone Authorised and regulated by the Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS. 085/April 2012