Marlborough Investment Management Limited

Marlborough Investment Management Limited

USD Managed Portfolio Service October 2020

Marlborough Group

UFC PLC

MIM LTD

MFM LTD

IFSL LTD

MINT LTD

Discretionary Portfolio Management business with Circa £350mAUM

Core Unit TrustBusiness withCirca £6.1bnAUM

CoreAdministration business withCirca £4.28bnAUM

InternationalFunds business withCirca £300mAUM

Marlborough Investment Teams

Category Principal Manager(s) UK Funds / Products

Multi Asset Nicholas Cooling, Gurjit Soggi, Raj Manon

Marlborough DefensiveMarlborough CautiousMarlborough BalancedMarlborough GlobalAnd the Discretionary Service

Fixed InterestGeoff Hitchin, Daniel Fox & Niall McDermott

Steven Logan, Ben Pakenham & Team

Marlborough Bond IncomeMarlborough Global Bond

Marlborough High Yield Fixed Interest

UK Equities Giles Hargreave, Richard Hallett, Siddarth Chand Lall, Guy Feld, George Findlay, Eustace Santa Barbara.

Marlborough UK Multi-Cap Growth Marlborough Special Situations Marlborough Multi Cap Income Marlborough UK Micro-Cap Growth Marlborough Extra Income

Overseas Equities

Brad Weafer & Brad Gardner

David Walton & Team

Sally Macdonald & Jing Liang

Jing Liang & Sally Macdonald

Marlborough US Multi-Cap Income

Marlborough European Multi-Cap

Marlborough Far East Growth

Marlborough Emerging Markets

Andrew Johnstone FCSI, Chartered Wealth ManagerInvestment Analyst

26 Years of Investment Experience

Kerri Burden ACSI, IMC Investment Analyst and Support


Sarah Todino BCom IMC, Chartered MCSIInvestment Analyst


Raj Manon (BA) HonsChartered MCSI, Chartered Financial Analyst (CFA) Investment Manager


Gurjit Soggi (BA) HonsFCSI, IMC, PCIAM, Chartered Wealth ManagerInvestment Manager

24 Years Investment Experience

The Investment Team

4

Nicholas F.J. Cooling (BA) HonsChartered FCSI & Chartered Wealth Manager, Chief Investment Officer & Deputy Chairman Marlborough Group

34 Years Investment Experience

The Team collectively has 121 years’ experience and is supported by a dealer and an administrative assistant as well as having on site

compliance support in Lichfield and remote compliance support from the Bolton office.

Sarah Todino – Investment Analyst

Sarah Todino works as an analyst within the fund of funds team. Sarah was recruited by Marlborough in Autumn 2006 after graduating from The University of Birmingham with a Bachelor of Commerce degree. Within the programme, Sarah studied modules within the areas of economics, accounting and marketing. Sarah offers support to the Fund Managers with the Fund of Funds and also the Managed Portfolio Service.

Raj Manon – Fund Manager

Raj Manon was born in Middlesbrough in 1979 and was educated in Leicester. He graduated from Sheffield Hallam University in 2002 with a BA (Hons) in Financial Services. After a short period with Barclays and the Alliance & Leicester, Raj joined Marlborough in 2003. He has since become an invaluable member of the Fund of Funds team and he is the co-manager of the Fund of Funds and the Managed Portfolio Service.

Gurjit Soggi – Associate Director Managed Funds

Marlborough Cautious - From 1 October 2000 to Present Marlborough Global - From 22nd February 1999 to Present

Gurjit Soggi was born in Derby in 1973. He attended the University of the West of England, achieving a BA (Hons) in Financial Services. After graduation he joined Marlborough during 1996. He worked within the investment team from day one, initially analysing unit trusts and OEIC’s, and working closely with the investment director Nicholas Cooling. This gave him the platform to take responsibility for the Marlborough Global Fund of Funds in 1999, followed by the Marlborough Cautious fund in 2000. Gurjit is the co-manager of the Fund of Funds and the Managed Portfolio Service.

Nicholas Cooling - Deputy Chairman

Marlborough Balanced Growth Fund - From launch to Present

Nicholas Cooling was born in Liverpool in 1964 and was educated at Monmouth School. After graduating in 1985 with a BA (Hons) degree in Geography Nicholas joined Lloyds Life Assurance Limited in Peterborough. After a short period at TSB Unit Trust Management Ltd Nicholas was recruited by UFC to bring its investment operation, which had previously been contracted out, in-house and to redesign the Investment Process. Nicholas is the co-manager of the Fund of Funds and the Managed Portfolio Service.

Kerri Burden – Investment Analyst Support

Kerri was recruited as part of an apprentice programme by Marlborough in October 2013. Since joining she spent many years in the dealing department and studying, which has led to a recent move to become an Investment Analyst within the team. Kerri offers support to the Fund Managers with the Fund of Funds and also the Managed Portfolio Service.

Andrew Johnstone – Investment Analyst

Andrew Johnstone was born in Jersey, Channel Islands, in 1972 and was educated at Victoria College. Prior to joining in 2019 he worked for HSBC International in Jersey and Hong Kong. After 4 years in Bahrain working for a prominent Saudi family office he returned to Jersey where he part owned a regulated advisory firm that was ultimately acquired by Brooks Macdonald. Andrew offers support to the Fund Managers with the Fund of Funds and also the Managed Portfolio Service.

The Investment Team

Risk Graded Fund Management

• The regulated Collective Investment Scheme (CIS) market has come to be made up of funds where asset allocations are governed by sector/benchmark ‘rules’ established by entities such as the Investment Association, rather than being guided by fundamental investment reasons.

• As a result we have “Cautious” portfolios which can actually be up to 60% in Shares, and Balanced portfolios that rather than being a balance of asset classes are actually as much as 85% invested in Shares.

• This “old paradigm” dominates the investment landscape with the arbitrary structures it contains not particularly assisting clients to understand the risks to which they may be exposed or in understanding the investment returns which might be achieved.

• Marlborough therefore set about the process of specifying a new range of portfolios with the objective of targeting certain risk and return outcomes rather than complying with benchmark/sector rules.

• Our initial objective was to create an array of seven portfolios with risk and reward co-ordinates that define a straight line of progressively increasing equidistant outcomes.

• Our process involved utilising our knowledge and experience of the historic returns and volatility of the available range of asset classes to specify seven potential portfolios and to then plot their risk and reward co-ordinates, with the results being shown on the following slide.

Objective

Preliminary Results

• Through a process of reverse engineering the initial asset allocations of the seven portfolios, we were able to adjust our original results to achieve the desired outcome of seven portfolios exhibiting a series of progressively escalating risk and reward co-ordinates accommodating a wide range of outcomes.

• On an ongoing basis, again by utilising the reverse engineering process, we are able to ensure that asset allocations are progressively adjusted to achieve the desired set of outcomes, as shown on the following slide.

Desired range of risk and reward outcomes

Risk graded fund management

ModelMaximum

EquityWeighting

Yield Risk Profile Risk Grade

Defensive 20% 1.90% Low 2

Defensive/Cautious 40% 1.78% Low/Moderate 3

Cautious 60% 1.66% Moderate 4

Cautious/Balanced 73% 1.52% Moderate/High 5

Balanced 85% 1.38% Moderate/High 6

Balanced/Adventurous 93% 0.90% Moderate/High 7

Adventurous 100% 0.42% High 8

Defensive – Assets

Fund Allocation

Marlborough International Global Bond Cell 44.10%

Marlborough International Bond Income Cell 19.60%

Marlborough International High Yield Fixed Interest Cell 9.80%

Marlborough International US Multi-Cap Income Cell 17.15%

Marlborough International Global Cell 7.35%

Cash 2.00%

Total 100.00%

Portfolio Yield 1.90%

Risk Grade 2

Defensive – Top 20 Holdings

Top 20 Underlying Holdings of a Risk Grade 2 Portfolio %Microsoft Corp 1.42Apple Inc 1.08Broadridge Financial Solutions Inc 1.01Watsco Inc 0.99WR Berkley Corp 0.84Sherwin-Williams Co 0.82United States Treasury Bonds 2.25% 0.82Crown Castle International Corp 0.80Mastercard Inc A 0.78Equinix Inc 0.76Air Products & Chemicals Inc 0.75United Kingdom of Great Britain and Northern Ireland 4.5% 0.72Sky Limited 0.61CRH Finance Plc 4.12% 0.60McDonald's Corporation 0.60Enel - Societa per Azioni 5.75% 0.38U.S. Treasury Security Stripped Interest Security 0.38Verizon Communications Inc. 3.38% 0.37Tesco Personal Finance plc 5% 0.35AT&T Inc 4.38% 0.33Top 20 Weighting 14.40%# of holdings 753

Risk Grade 2

Defensive/Cautious – Assets

Fund Allocation




Marlborough International Global Cell 7.50%Marlborough International High Yield Fixed Interest

Cell 10.00%

Marlborough International European Multi-Cap Cell 2.50%

Marlborough International Multi-Cap Income Cell 2.50%

Marlborough International Far East Growth Cell 2.50%

Cash 2.00%

Total 100.00%


Risk Grade 3

Defensive/Cautious – Top 20 Holdings

Top 20 Underlying Holdings of a Risk Grade 3 Portfolio %Microsoft Corp 1.71Apple Inc 1.30Broadridge Financial Solutions Inc 1.23Watsco Inc 1.20WR Berkley Corp 1.02Sherwin-Williams Co 0.99Crown Castle International Corp 0.97Mastercard Inc A 0.94Equinix Inc 0.92Air Products & Chemicals Inc 0.91United States Treasury Bonds 2.25% 0.68United Kingdom of Great Britain and Northern Ireland 4.5% 0.60Sky Limited 0.48CRH Finance Plc 4.12% 0.48McDonald's Corporation 0.47U.S. Treasury Security Stripped Interest Security 0.32Tesco Personal Finance plc 5% 0.29Enel - Societa per Azioni 5.75% 0.29Verizon Communications Inc. 3.38% 0.28Ziggo Bond Company B.V. 3.38% 0.27Top 20 Weighting 15.35%# of holdings 1,007

Risk Grade 3

Cautious – Assets

Fund Allocation









Cash 2.00%

Total 100.00%


Risk Grade 4

Cautious – Top 20 Holdings

Top 20 Underlying Holdings Of A Risk Grade 4 Portfolio %Microsoft Corp 2.01Apple Inc 1.53Broadridge Financial Solutions Inc 1.45Watsco Inc 1.41WR Berkley Corp 1.20Sherwin-Williams Co 1.17Crown Castle International Corp 1.14Mastercard Inc A 1.10Equinix Inc 1.08Air Products & Chemicals Inc 1.07United States Treasury Bonds 2.25% 0.54United Kingdom of Great Britain and Northern Ireland 4.5% 0.48Sky Limited 0.35CRH Finance Plc 4.12% 0.35McDonald's Corporation 0.34Sesa SpA 0.32Amazon.com Inc 0.28Ziggo Bond Company B.V. 3.38% 0.27U.S. Treasury Security Stripped Interest Security 0.25Tencent Holdings Ltd 0.24Top 20 Weighting 16.59%# of holdings 1,007

Risk Grade 4

Cautious/Balanced – Assets

Fund Allocation









Marlborough International UK Multi Cap Growth Cell 2.45%

Cash 2.00%

Total 100.00%


Risk Grade 5

Cautious/Balanced – Top 20 Holdings

Top 20 Underlying Holdings of a Risk Grade 5 Portfolio %Microsoft Corp 2.15Apple Inc 1.65Broadridge Financial Solutions Inc 1.59Watsco Inc 1.56WR Berkley Corp 1.32Sherwin-Williams Co 1.28Crown Castle International Corp 1.25Mastercard Inc A 1.20Equinix Inc 1.19Air Products & Chemicals Inc 1.17Sesa SpA 0.64Harvia PLC Ordinary Shares 0.45Enea AB 0.38Tencent Holdings Ltd 0.34United States Treasury Bonds 2.25% 0.34Samsung Electronics Co Ltd Participating Preferred 0.33Taiwan Semiconductor Manufacturing Co Ltd 0.32Alibaba Group Holding Ltd Ordinary Shares 0.31H+H International A/S B 0.30United Kingdom of Great Britain and Northern Ireland 4.5% 0.30Top 20 Weighting 18.08%# of holdings 1,050

Risk Grade 5

Balanced – Assets

Fund Allocation






Marlborough International UK Multi Cap Growth Cell 4.90%




Cash 2.00%

Total 100.00%


Risk Grade 6

Balanced – Top 20 Holdings

Top 20 Underlying Holdings of a Risk Grade 6 Portfolio %Microsoft Corp 2.30Apple Inc 1.78Broadridge Financial Solutions Inc 1.74Watsco Inc 1.70WR Berkley Corp 1.44Sherwin-Williams Co 1.40Crown Castle International Corp 1.35Mastercard Inc A 1.30Equinix Inc 1.30Air Products & Chemicals Inc 1.28Sesa SpA 0.96Harvia PLC Ordinary Shares 0.68Enea AB 0.56H+H International A/S B 0.45Tencent Holdings Ltd 0.45Samsung Electronics Co Ltd Participating Preferred 0.45Microwave Vision 0.43Alibaba Group Holding Ltd Ordinary Shares 0.41Taiwan Semiconductor Manufacturing Co Ltd 0.41Pennon Group PLC 0.36Top 20 Weighting 20.73%# of holdings 1,050

Risk Grade 6

Balanced/Adventurous – Assets

Fund Allocation





Marlborough International UK Micro-Cap Cell 4.90%


Marlborough UK Multi Cap Growth 7.35%




Cash 2.00%

Total 100.00%


Risk Grade 7

Balanced/Adventurous – Top 20 Holdings

Top 20 Underlying Holdings of a Risk Grade 7 Portfolio %Microsoft Corp 2.51Apple Inc 1.93Broadridge Financial Solutions Inc 1.88Watsco Inc 1.84WR Berkley Corp 1.56Sherwin-Williams Co 1.52Crown Castle International Corp 1.47Mastercard Inc A 1.41Equinix Inc 1.40Air Products & Chemicals Inc 1.38Sesa SpA 0.96Harvia PLC Ordinary Shares 0.68Samsung Electronics Co Ltd Participating Preferred 0.67Tencent Holdings Ltd 0.67Alibaba Group Holding Ltd Ordinary Shares 0.62Taiwan Semiconductor Manufacturing Co Ltd 0.60Enea AB 0.56Escorts Ltd 0.47H+H International A/S B 0.45Alibaba Group Holding Ltd ADR 0.44Top 20 Weighting 23.01%# of holdings 1,233

Risk Grade 7

Adventurous – Assets

Fund Allocation





Marlborough International UK Micro-Cap Cell 9.80%

Marlborough International UK Multi-Cap Growth Cell 9.80%

Cash 2.00%

Total 100.00%


Risk Grade 8

Adventurous – Top 20 Holdings Risk Grade 8

Top 20 Underlying Holdings of a Risk Grade 8 Portfolio %Microsoft Corp 2.71Apple Inc 2.09Broadridge Financial Solutions Inc 2.02Watsco Inc 1.98WR Berkley Corp 1.68Sherwin-Williams Co 1.63Crown Castle International Corp 1.58Mastercard Inc A 1.53Equinix Inc 1.51Air Products & Chemicals Inc 1.49Sesa SpA 0.96Samsung Electronics Co Ltd Participating Preferred 0.89Tencent Holdings Ltd 0.89Alibaba Group Holding Ltd Ordinary Shares 0.82Taiwan Semiconductor Manufacturing Co Ltd 0.79Harvia PLC Ordinary Shares 0.68Future PLC 0.65Escorts Ltd 0.62Alibaba Group Holding Ltd ADR 0.58Xinyi Glass Holdings Ltd 0.58Top 20 Weighting 25.69%# of holdings 408

Risk Description Risk Grade Return(Annualised)

Risk (Standard Deviation)

Defensive 2 3.80% 9.84%

Defensive/Cautious 3 4.39% 10.66%

Cautious 4 4.94% 11.60%

Cautious/Balanced 5 5.51% 12.86%

Balanced 6 6.03% 14.19%

Balanced/Adventurous 7 6.75% 15.16%

Adventurous 8 7.43% 16.19%

Using data from 01/01/2003.

Risk/Reward Data

Risk/Reward Scatter Chart

All Investment Grades - One Year Chart

All Investment Grades - Three Year Chart

All Investment Grades - Five Year Chart

All Investment Grades - Ten Year Chart

All Investment Grades - Twenty Year Chart

Proposition Summary

• MIM has made available a point of sale risk analysis tool which is used to ensure that each client is directed towards the most suitable portfolio relative to their assessed attitude to risk and capacity for loss

• Portfolios will be re-based quarterly to ensure that the appropriate risk attitude is maintained

• MIM will charge 0.25% plus Vat per annum for its services.• Portfolio TERs at January 2018 (inclusive of all charges, including MIM’s charge and

Trail Commission)Model Name TER %Defensive 1.56%Defensive/Cautious 1.66%Cautious 1.77%Cautious/Balanced 1.78%Balanced 1.79%Balanced/Adventurous 1.84%Adventurous 1.89%

Contact details

Rod GuestInternational Sales Manager+44 (0)7540 [email protected]

Linda JohnstoneHead of Business Development+44 (0) 7986 972844 [email protected]

mailto:[email protected]

mailto:[email protected]

Important Information and Disclosures

Target Market: The investment policy and process of the Service associated with this will:

• Be suitable for investors who are willing to take a level of investment risk that conflates with one (or part of one) of the seven risk/reward outcomes;

• Not be suitable for investors who are unwilling to take any investment risk at all and only partly suitable for investors whose attitude to risk is greater than that represented by risk profile 8.

Information Provided: This material is not necessarily a complete summary and is not intended, for example, as a complete analysis. The information and data in this material has been prepared from sources believed reliable but is not guaranteed in any way by Marlborough Investment Management Limited nor any affiliate. No representation is made that the information or data is correct as of any time subsequent to its date.

Standard deviation: “which we are employing as representative of risk” is a statistical measure of the volatility of a portfolio’s returns and has been calculated using Monthly data.

Back tested Performance: The performance information presented in certain charts or tables represents back tested performance based on combined simulated data and sector average data. Back tested performance is hypothetical (it does not reflect trading in actual accounts) and is provided for information purposes only to indicate historical performancehad the portfolios been available over the relevant time period. The portfolios launched in June 2016 meaning that performance shown prior to then has been simulated.

Sector Averages: Sector definitions are mostly based on assets, such as equities and fixed income, and may also have a geographic focus. Sectors are used to compare funds and to look at performance and fund charges. The sectors divide up the funds into smaller groups, to allow like-for-like comparisons between funds in one or more sectors.

Risk Warning for Professional Clients

• Before you take the decision to invest some of your clients’ money you should read and consider the Risk Warning on this and the following slide.

• The past performance of an investment is not necessarily a guide to future performance. The value of investments and the income derived from them can fall as well as rise and on redemption the investor may not get back the amount originally invested. The 7 risk graded model portfolios are constructed to create a hierarchy of risk but greater risk does not necessarily guarantee greater performance and the investor may experience a loss of capital and/or income in a low risk portfolio.

• If the underlying funds hold securities denominated in different currencies changes in exchange rates may affect the value of your clients’ investments. Where charges are taken wholly or partly out of an underlying fund's capital, distributable income will be increased at the expense of capital which will either be eroded or future growth constrained.

• Underlying funds which invest in the securities of smaller and unquoted companies can involve greater risk than is customarily associated with investments in larger, more established companies. The market for securities in smaller companies is often less liquid than that for securities in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such securities. Proper information for determining their value or the risks to which they are exposed may also not be available.

• It is not anticipated that the use of derivatives will have any significant effect on the risk profile of the portfolios.

• Forward looking statements are based on Marlborough’s current opinions and opinions expressed are subject to change without notice.

• Before making an investment on behalf of your clients you should read this Managed Portfolio Service document and the other documents on the site thoroughly, as they contain the information you will need about the 7 risk graded model portfolios.

• Documents relating to Marlborough’s Managed Portfolio Service are provided for information purposes only and should not be interpreted as investment advice. All documents are available free of charge and can be obtained on the site.

• Please note that all documents are communications to professional advisers only and should not be disclosed by such advisers to their customers or other non-professional individuals without Marlborough’s permission. None of the material on this website has been approved by Marlborough Investment Management Limited for use as a Financial Promotion.

• This presentation may contain FTSE data. Source: FTSE International Limited (“FTSE”) © FTSE 2020. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Risk Warning for Professional Clients