TB Wise Multi-Asset Growth 1 OBJECTIVES AND POLICY 2 Investment - PowerPoint PPT Presentation

TB Wise Multi-Asset Growth 1

OBJECTIVES AND POLICY 2

Investment Objectives and Policy • Provide growth over the medium to long term in excess of the CBOE UK All Companies Index and in line with, or better than, the rate of UK inflation (based on the Bank of England’s preferred measure of UK inflation, which is currently the Consumer Price Index (CPI)) → Aims to outperform equities while providing some downside protection • Multi-asset : → Equities, Bonds, Private Equity, Property, Infrastructure, Commodities • Fully flexible : → Sits in the IA Flexible sector with no restriction on allocations between asset classes or geographic regions • Investments through third party funds, open-ended and closed-ended (investment trusts): → Expertise in the investment trusts sector (>60% of assets since inception) 3

Investment and Risk Characteristics TB Wise Multi-Asset Growth Benchmark CBOE UK All Companies Style Bias Value-biased Cap Bias Fully flexible Number of Holdings 36 Typically 30-40 holdings Position Size Min 1% (at inception) Size an outcome of conviction and liquidity Max 10% Yield 1.8% Yield not a target Outcome of macro view s, quality, valuations Asset Allocation: and liquidity Instrument Type Direct Equities 0% Only invests through collectives Investment Trusts 62% Historically > 60% Open-ended Funds 36% Historically < 40% Asset Classes Equities 65% Historically betw een 35-70% Fixed Interest 2% Historically < 10% Alternatives 30% Historically betw een 25-50% Property - Historically < 10% Cash 2% No hard limit Countries Fully flexible Active Share 99.5% Historically > 95% Beta 0.5 Beta an outcome of asset allocation Tracking Error 6.3% Tracking error an outcome of asset allocation Portfolio Volatility 6.5% Low er than benchmark's volatility (10.6%) Portfolio Liquidity Profile Weighted Average Market Cap £636m Redeemable under a week 51% Liquid profile w ith flexibility to look for 20% pro-rata 7 days opportunities low er dow n the market cap 50% pro-rata 17 days 100% 33 days Source: Wise Funds Ltd, Factset 31 Jan 2020 Source: Wise Funds Ltd, Factset – 31 st January 2020 4

TEAM 5

Fund Manager Profiles 22 years average fund management experience Vincent Ropers • Joined Wise Funds in 2017 • Previously managing multi-asset strategies at Standard Life Investments and Fidelity Intl. • 15 years of fund management experience Tony Yarrow • Founded Wise Funds (formerly Wise Investment) in 1992 • Previously a financial adviser • 31 years of fund management experience Philip Matthews • Joined Wise Funds in 2018 • Previously managing UK equities funds at Schroders and Jupiter Asset Management • 20 years of fund management experience 6

Wise Funds Org Chart Portfolio Managers John Newton Business Development Manager Nicole Harrington Compliance Manager Philip Matthews Vincent Ropers Tony Yarrow Co-portfolio Manager CEO & Co-portfolio Manager Co-portfolio Manager Joanna Scavuzzo-Blake Office Manager Rick Ashworth Analyst 7

PERFORMANCE 8

Track Record Keeping up with equities… Source: Factset – 31 st January 2020 9

Track Record … with consistently lower volatility … Source: Factset – 31 st January 2020 10

Track Record … and outperforming its peers Rolling 3-year performance versus the IA Flexible Sector Source: FE Analytics – 31 st December 2019 11

Strong Risk-Adjusted Returns 5-year risk/return profile Source: FE Analytics – 31st January 2020

INVESTMENT PHILOSOPHY 13

Investment Philosophy • We invest primarily in People: we only entrust our investors’ money with managers who take their fiduciary duties with the greatest of care • Valuations are critical: overpaying for assets, no matter how good they are, is a recipe for disaster • We believe that the fewer investment constraints the better for our investors: we use the widest possible remit and adopt a flexible approach • We believe that value can be added through both macro and bottom-up research : focusing only on one is missing out on opportunities and taking unnecessary risks • Similarly, it is important to pay attention to market technicals : we are long-term investors but price movements cannot be ignored and represent an important part of the equation 14

Valuations Matters Average 1-year Relative Performance Based on Discount at Entry Point Performance relative to Factset United Kingdom index Sample of Investment Trusts without strict discount mechanisms and 10-year history Source: Factset, Wise Funds 15

Asset Allocation Matters Historical GBP Total Returns EQUITIES CREDIT SOVEREIGN PROPERTY COMMODITIES Asia Europe Europe Europe Global UK US Japan Pacific Latam UK US UK US Commodities ex-UK ex-UK ex-UK Property ex-Japan 1990 -9.7 -19.3 - -46.8 - - - - - - - - - - 1991 20.8 35.7 - 13.1 - - - - - - - - - - 1992 20.5 33.4 - -3.5 - - - - - - - - - 23.7 1993 28.4 12.2 - 27.9 - - - - - - - - - -1.9 1994 -5.8 -3.8 - 14.9 - - - - - - - - - 5.8 1995 23.9 38.4 - 0.3 - - - - - - - - - 9.8 1996 16.7 11.4 - -23.8 - - - - - - - - - 6.1 1997 23.6 39.0 - -22.5 - - - - - - - - - -4.6 1998 13.8 28.3 - 5.4 - - - - - - - - - -31.3 1999 24.2 24.5 - 77.7 - - 0.1 - - -1.2 - - - 22.4 2000 -5.9 -1.1 - -23.4 - - 9.9 17.9 7.1 8.9 20.4 8.2 - 34.0 2001 -13.3 -10.5 -19.8 -27.4 -0.7 0.7 7.3 13.6 4.3 3.1 13.3 3.3 - -20.3 2002 -22.7 -29.8 -26.7 -18.0 -16.0 -29.4 9.0 -0.8 15.1 9.4 2.5 16.5 - 12.0 2003 20.9 15.4 30.1 23.0 32.6 54.3 7.5 -2.5 16.2 2.1 -4.0 12.5 - 10.3 2004 12.8 3.6 14.1 7.9 15.2 34.5 6.6 -2.0 8.4 6.3 -1.5 8.1 - 0.4 2005 22.0 18.9 25.3 39.7 35.5 68.8 8.8 13.7 0.9 8.2 17.2 2.2 - 31.5 2006 16.8 1.5 20.3 -7.4 17.2 26.7 0.8 -8.6 -1.6 0.5 -8.2 -2.4 26.1 -14.7 2007 5.3 4.2 16.4 -6.4 37.1 48.1 0.4 3.3 8.8 5.2 6.0 11.1 -6.3 9.2 2008 -29.9 -12.5 -25.9 -1.1 -33.0 -32.0 -9.9 32.8 26.4 12.4 44.1 43.7 -29.4 -12.2 2009 30.1 13.2 21.8 -5.8 55.5 82.2 15.1 3.5 6.6 -0.7 -2.4 -4.1 25.8 5.7 2010 14.5 18.8 6.6 19.0 23.9 19.5 8.7 12.1 1.0 7.6 10.9 -2.4 23.8 20.3 2011 -3.5 2.5 -15.0 -12.9 -14.8 -18.4 5.4 8.5 -0.8 16.6 10.0 0.8 -7.5 -12.7 2012 12.3 11.2 17.4 3.3 17.5 4.0 15.6 5.4 10.3 2.9 7.2 7.8 24.1 -5.5 2013 20.8 30.4 24.0 24.9 1.3 -15.7 1.9 -3.5 4.9 -4.2 -10.4 4.8 0.3 -11.3 2014 1.2 20.3 -1.4 2.7 10.0 -7.2 12.3 13.8 1.0 14.7 19.4 5.4 21.9 -11.9 2015 1.0 6.9 5.5 17.6 -3.5 -27.4 0.6 5.0 -5.7 0.4 2.8 -3.5 5.4 -20.3 2016 16.8 33.4 21.2 22.7 28.7 57.0 11.8 26.0 21.3 10.5 24.3 19.6 24.8 32.9 2017 13.1 11.5 16.9 14.4 23.4 12.3 5.0 -2.9 6.5 2.0 -0.4 4.1 5.1 -8.0 2018 -9.5 1.4 -9.1 -7.6 -8.5 -0.4 -2.2 3.6 -0.2 0.6 4.2 2.1 0.3 -7.6 2019 19.2 26.6 21.2 14.8 14.5 15.6 11.0 9.9 0.3 7.1 11.9 0.7 18.8 1.4 Source: Factset, Wise Funds – 31 st December 2019 16

Active Management Still Has a Part To Play Relative outperformance of top quartile fund vs its benchmark EQUITIES CREDIT SOVEREIGN PROPERTY Asia Europe Global UK US Japan Pacific GEM UK UK ex-UK Property ex-Japan 1990 8.0 1.6 - 11.6 - - - - - 1991 -1.4 11.6 - -0.1 - - - - - 1992 0.7 9.9 - 3.8 - - - - - 1993 12.8 9.4 - 3.6 - - - - - 1994 10.4 3.3 - 5.9 - 16.5 - - - 1995 -0.6 -3.5 - 2.5 - -12.3 - - - 1996 3.2 4.5 - 7.9 - 9.0 - - - 1997 0.5 -10.8 - 6.8 - 27.4 - - - 1998 5.1 4.1 - -2.1 - 3.4 - - - 1999 7.3 20.2 - 40.3 - 1.7 2.6 1.7 - 2000 13.7 13.2 - 4.3 - 23.2 -1.9 -1.5 - 2001 6.0 0.3 3.4 -3.2 -0.7 -9.5 -0.6 0.2 - 2002 5.3 2.0 5.6 -3.8 5.5 8.3 -2.3 -3.9 - 2003 -1.0 -9.7 -12.3 -4.2 -8.3 -2.7 1.6 2.0 - 2004 4.8 1.2 4.7 3.8 -1.8 3.4 2.8 1.4 - 2005 3.2 4.7 3.5 8.0 1.3 5.5 -0.2 -0.1 - 2006 6.8 1.4 3.5 6.6 6.8 7.7 1.5 1.2 10.9 2007 3.2 5.7 0.8 1.8 6.6 3.5 0.1 -1.8 2.8 2008 4.8 2.3 8.5 -0.9 6.8 8.1 8.0 1.5 7.3 2009 8.1 18.7 17.0 19.7 18.3 15.8 5.6 4.8 15.2 2010 8.0 4.2 6.6 4.4 6.9 8.0 0.2 -3.6 2.8 2011 6.4 4.3 10.2 10.3 6.9 6.7 1.2 -1.5 7.8 2012 7.8 1.5 4.6 2.6 0.8 1.8 1.5 0.2 -0.5 2013 10.4 -0.3 6.4 10.6 3.7 8.6 0.9 -0.2 8.4 2014 4.2 -0.7 3.7 1.3 0.3 -3.4 -1.9 -2.3 -2.7 2015 7.9 -0.1 3.3 -2.5 1.6 1.8 1.3 1.6 3.2 2016 -3.4 -2.7 -1.4 1.5 0.6 -4.9 -2.3 -1.8 -2.3 2017 5.3 5.5 6.9 9.1 6.7 7.2 2.3 1.6 8.7 2018 3.8 0.7 -0.2 0.0 4.3 1.9 2.2 1.4 1.3 2019 -0.3 -12.4 -5.9 -6.7 -1.3 -1.0 -0.8 1.3 -2.6 Source: Factset, IA sectors, Wise Funds – 31 st December 2019 17

FUND CHARACTERISTICS 18

A Genuinely Active Multi-Asset Portfolio Broad historical asset allocation Source: Factset, Wise Funds – 31 st January 2020 19

Harnessing The Diversity of Investment Trusts Historical allocation to open-ended funds and investment trusts 100 90 80 70 60 50 40 30 20 10 0 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Investment Trusts Open-Ended Funds [Cash] Source: Factset, Wise Funds – 31 st January 2020 20