Benefits of investing in the Fulcrum Diversified Investments Fund

• Access to investment opportunities and overseas markets. Investment in the Fund provides exposure to an absolute return strategy that is highly diversified across asset classes, strategies and time horizons.

• Professional management. The investment team at Fulcrum adopt a repeatable and dynamic investment process that aims to add value incrementally. The highly experienced team manages the underlying strategy using a disciplined investment approach aimed at delivering consistent long-term returns. With over two decades of experience, Fulcrum seek to be at the frontier of knowledge in areas that impact their investment strategy macroeconomics, portfolio construction and investor psychology.

• Effective risk management. Fulcrum's multi-dimensional approach to risk management has historically provided strong downside protection.

Risk level

Medium to High

Investor suitability

Suited to long term investors seeking absolute returns in excess of inflation with lower risk than equity markets over at least a 5-year period.

About the Fund

The Fulcrum Diversified Investments Fund's objective is to achieve long-term absolute returns in all market conditions over a rolling five-year period, with lower volatility than equity markets and in excess of inflation.

Fulcrum Asset Management employs a top-down investment process which combines fundamental and behavioural research to identify a handful of core macro themes and satellite ideas to construct a highly diversified and liquid portfolio with low directional exposure. The Fulcrum strategy invests globally, with exposure to equities, fixed income, commodities, alternatives and cash.

Why Invest?

• A highly experienced and stable team of technically-skilled investors that strive to be at the frontier of knowledge in areas that impact the strategy.

• A dynamic investment process that is highly diversified across asset classes, strategies and time horizons, with a multi-dimensional approach to risk management.

• Offers a lowly correlated, diversified return stream with an attractive drawdown profile relative to global equity markets.

• A robust, long-term track record that has historically delivered consistent attractive risk-adjusted returns and strong downside protection during difficult market periods.

Fulcrum Asset Management LLP (Fulcrum')

Fulcrum has been appointed as the investment manager of the Underlying Fund.

Fulcrum is an established asset manager founded in 2004 by Gavyn Davies and Andrew Stevens, the firm's sole focus is fund management. As at 30 September 2020, the team manages approximately $6.4 billion in absolute and relative return strategies for a wide range of institutional clients. The firm is headquartered in London with an additional office in New York.

Top down asset allocation and disciplined risk management are central to each of our investment funds. The Fulcrum Investment Committee has ultimate responsibility for the Underlying Fund.

How we invest your money

The Fund operates as a fund-of-fund(s)' and currently gains its investment exposure predominantly through its investment in the Underlying Fund but may also invest in other managed funds managed by the Investment Manager. In seeking to achieve its aim of long-term absolute returns, the Underlying Fund will hold a diversified por tfolio, typically consisting of exposures to equities, fixed income, commodities, alternatives and cash. In order to maximise risk-adjusted returns the Underlying Fund relies on four primary sources of return: (1) asset class timing, (2) relative value opportunities, (3) alternatives, and (4) hedging, with the relative weightings actively managed by the Fulcrum Investment Committee.

A disciplined investment process aims to ensure that, over the long term, the strategy can benefit from positive expected returns across a variety of traditional and alternative asset classes. Each asset class is chosen specifically to generate attractive capital growth, regular income or because it improves risk-adjusted returns over the long term.

The table below illustrates the typical ranges of exposure in each asset class for the Underlying Fund:

• Global equities: 10-60%

Equity market exposure is obtained either directly through investment in collective investment schemes (including ETFs) or via derivatives based on a number of broad indices.

• Global fixed income: 0-80%

Fixed income market exposure is obtained through investment in cash settled bonds, derivatives or collective investment schemes (including ETFs).

• Alternatives: 0-40%

Alternative market exposure is obtained through investments in absolute return collective investment schemes.

• Commodities: 0-20%

Commodity market exposure is obtained through investments in collective investment schemes (including ETFs) and derivatives.

Expected cash-equivalent holdings such as government bills and short-term and money-market funds are not included in the above table.

Investments in the Underlying Fund may also be made through collective investment schemes (including index funds such as ETFs and actively managed funds managed by the Investment Manager).

The Underlying Fund may use derivatives for investment purposes and for efficient portfolio management. The Underlying Fund will use hedging strategies to reduce risk over the short term without materially altering its risk profile.

The Underlying Fund is managed with a forward looking volatility cap of 12%.

The Underlying Fund is managed without reference to a benchmark.