ANNUAL REPORT Unit A FR December 2017 SEXTANT GRAND LARGE. Performances

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1 ANNUAL REPORT Unit A FR December 2017 SEXTANT GRAND LARGE Sextant Grand Large is a flexible, diversified fund that invests mainly in equities with a view to capital preservation. Management policy is based on three principles: 1) Net exposure to equities varies from 0% to 100%, depending on market valuations; 2) The stocks acquired for the portfolio are the team s most defensive ideas; 3) The fund invests opportunistically in other asset classes, notably bonds, when valuations offer a sufficient security margin. Sextant Grand Large rose 3.9% in 2017 versus +5.6% for the benchmark index. This performance is respectable when one considers that average net exposure to equities was just 30% in 2017, versus 50% for the index. Logically, the fund s one-year volatility was also much lower, at 2.7% versus 5.1% for the index. Asset allocation Net exposure to equities varies with cyclically-adjusted market valuations. The more expensive equities become, the less the fund invests, irrespective of any macroeconomic scenario. In 2017, the fund s exposure was 30% on average and 26.9% at the year-end. This cautious stance stems from high market valuations around the world, as well as rising euphoria among both professional and retail investors due to an outbreak of amnesia concerning financial risks, as illustrated by the current cryptocurrency mania. It is impossible to say when this enthusiasm will end, but it could well lead to a full-blown stock-market bubble. Sextant Grand Large s objective is to remain disciplined in such circumstances and to sell down its equity holdings as prices rise. Net exposure breaks down into gross exposure (36.5% of funds) and hedging (9.6%) which never exceeds 20%. The rest of the fund is in bonds (12.5%) and broadly-defined cash (51%). Equities For Sextant Grand Large, we select our most defensive long-term ideas on a fundamental basis. We prefer stocks whose valuation is low given the balance sheet (net cash, WCR etc.) and which operate in fairly predictable markets. We also appreciate good diversification in terms of geography, size and sectors. In 2017, the portfolio of stocks performed well, similar to the pre-cost performance of funds that are 100% invested in equities. Many stocks made a significant contribution to this performance, in all regions and all sectors: EasyJet, Shiseido, Exel, Bonduelle, Baidu, Motor Oil etc. Sextant Grand Large (A) 50% CAC 40 NR + 50% EONIA 1 month -0,1% -0,5% 3 months 0,5% -0,1% 6 months 0,8% 2,0% 1 year 3,9% 5,6% 3 years 31,2% 16,6% 5 years 77,5% 30,3% 10 years 91,1% 24,2% Performances Like in 2016 with Bolloré, our defensive filter let one major error slip through: Criteo was the victim of an unexpected decision by Apple to ban all retargeting on its Safari navigator. Overall, sales should be flat in 2018 versus our initial forecast for growth to exceed 20%. We made the mistake of weighting the stock very heavily, even though we were aware of the risk associated with dependence on the Apple and Google ecosystems. That lowered the fund s performance by 0.5 points. Fortunately, the rest of the business is still in very good shape and the company is well managed. There are still some risks, notably regulatory, but we are optimistic about the future of the company whose competitive edge and value added to clients remains very high. Criteo should return to growth in 2019, so we have preferred not to sell our position at current levels. Let s hope that the stock makes a positive contribution to the fund s performance this year, as was the case with Bolloré in 2017 when the stock made up the lost ground. In terms of exposure, internationalization of the portfolio continued at the expense of France (42% of the equity portfolio in late 2016 versus 35% today) and to the benefit of Japan (17% versus 10% previously) and South Korea (11% versus 7%). These two countries still harbour numerous highquality stocks that are undervalued and we have intensified our research efforts. Liquidity has also improved sharply with the gradual sale of European small caps which are now fully priced. In one year, the share of capitalisations under 500m has fallen from 15% to 4% of the fund. Bonds and other asset classes When investing in bonds, we continue to avoid the interest-rate risk as much as possible. The current bond portfolio offers a yield (net of forex hedging) of 3.2% for sensitivity of 2%, which seems satisfactory to us in the current environment. The situation in western bond markets remains extreme, as much in «risk-free» sovereign debt as in credit margins. Following a good year in 2016, the portfolio contributed less in 2017, with a notable blunder in Banco Popular which defaulted on the subordinated debt that we held. In an environment of negative short rates, part of our cash is invested in the money market to finance sound companies issuing treasury bills that allow us to achieve a slightly negative yield at a level of risk that we consider acceptable. Part of our cash is also in bank accounts, which enables us to avoid negative rates on this limited part. We also carry out occasional arbitrage deals which usually make a good contribution to the performance, with the exception this year of Zodiac for which the bid by Safran was lowered Sextant Grand Large (A) 16,2% -49,2% 61,7% 24,1% -8,4% 15,2% 21,0% 11,7% 13,6% 11,2% 50% CAC 40 NR + 50% EONIA 4,4% -19,6% 14,3% 0,7% -6,1% 9,7% 10,4% 1,2% 5,9% 4,2% ,9% 5,6% Amiral Gestion rue de Grenelle Paris - T. +33 (0) F. +33 (0) Asset management company authorised by the Financial Markets Authority under the number GP / Insurance broker company registered with ORIAS under the number / Simplified joint-stock company with capital of RCS Paris VAT: FR

2 ANNUAL REPORT SEXTANT GRAND LARGE Exposure Distribution of holdings by sector Geographical distribution of holdings 3-years volatility Risk Profile NAV / Net assets 451,68 / 2 092,37 M Average / median cap. of M / M equities Share category ISIN code Unit A all subscribers FR Bloomberg code AMSEGLA FP AMF classification N/A Index 50% CAC 40 NR + 50% EONIA Net Asset Value Daily based on prices at market close Custodian CACEIS Bank Main holdings Name Sector Country Net asset % Contribution to quarterly performance Toyota Industries Corp Industry Japan 2,0% 21 bps Bolloré Transport France 1,8% 11 bps Rocket Internet Media / Internet Germany 1,6% -5 bps Easyjet Transport United Kingdom 1,6% 27 bps Hyundai Mobis Automotive South Korea 1,6% 24 bps Index Fund 4,3% Index 8,5% Number of lines 91 Transfert agent Main characteristics Name LG H & H Easyjet Hyundai Mobis Shiseido Toyota Industries Corp Main contributions to performance Contrib. 33 bps 27 bps 24 bps 23 bps 21 bps Name Criteo Clear media Groupe Crit Danieli & C. Officine Baidu Contrib. -52 bps -13 bps -10 bps -10 bps -7 bps Launch date Fund 11/07/2003 Unit Recommended investment Over 5 years duration Tax provisions - - Entry charge 2,00% including tax maximum Exit charge 1,00% including tax maximum Fixed management fee 1,70% including taxes Performance fee 15% including taxes of the performance exceeding 5% per calendar year Source : Amiral Gestion at 29/12/2017 Notice This commercial document aims to present the characteristics of the fund on a simplified basis. For further information, you may refer to the key information document for investors and to the prospectus, which are legal documents available on the management company's internet site or by request to the management company. The performances shown are not a reliable guide to future performance. Performance may vary over time. Amiral Gestion rue de Grenelle Paris - T. +33 (0) F. +33 (0) Asset management company authorised by the Financial Markets Authority under the number GP / Insurance broker company registered with ORIAS under the number / Simplified joint-stock company with capital of RCS Paris VAT: FR

3 ANNUAL REPORT December 2017 SEXTANT GRAND LARGE Main changes made during the financial year, or forthcoming Additional information Since 21 July 2017: - It is no longer possible to acquire registered shares in the fund - The settlement/delivery date has been changed, so that settlement of subscriptions and redemptions will take place two (and not three) working days after valuation of shares. On 29 December 2017, creation of a new category known as N shares (clean share) available to all subscribers, but mainly for: Marketing networks that have received the prior consent of the fund management company Distributors and/or intermediaries who have received the prior consent of the fund management company and providing the following services: - Independent advice as defined by the MIF2 regulation - Individual management under mandate Change to the prospectus and/or KIID Precision regarding the possible use of futures such as forex futures or swaps. Suppression of the «Diversified» category Cash holdings at end of financial year: 9.04% Percentage of the portfolio divestible in more than 30 days: less than 30% - Liquidity is controlled by the Density Technologies portfolio tracking tool. Frequency of transactions (rotation rate): NA diversified fund Possible steps taken by the custodian to exonerate himself from responsibility: NA Policy for selecting intermediaries: As a fund management company, Amiral Gestion selects service providers whose execution policy makes it possible to obtain the best possible result when orders are placed for its UCITs or clients. The company also users service providers that help with investment decisions and execution of orders. The policy is available on the Amiral Gestion website: Commission: Information about commission is available on the Amiral Gestion website: Policy of use of voting rights In accordance with article of the AMF s General Regulation, Amiral Gestion has drawn up a policy for the exercise of voting rights attached to the shares held by mutual funds that it manages. This policy is available on the Amiral Gestion website: A report on voting right is available on request from the fund management company. Criteria concerning the Environment, Social issues and Governance quality (ESG): Amiral Gestion does not simultaneously consider social, environmental and governance quality (ESG) criteria when deciding to buy or divest securities. However, Amiral Gestion does take account of extra-financial criteria in its investment policy. A quality rating is attributed to each investment based on qualitative criteria such as governance quality (respect for minorities, training, employee profit-sharing, quality of relations with suppliers etc) and respect for social and environmental objectives, even if this is not specifically a SRI policy. The policy describing the criteria for respect of social, environmental and governance quality issues is available on the Amiral Gestion website: Method for calculating global risk: The method for assessing the global risk for SEXTANT GRAND LARGE is the commitment calculation method.

4 Remuneration policy: Amiral Gestion implements a remuneration policy that respects the requirements of the AIFM and UCITS V directives and the ESMA guidelines. This remuneration policy is coherent and promotes sound and efficient risk management and does not encourage risk-taking that would be incompatible with the risk profiles, the regulations and the constitution documents of the mutual funds that it manages. This policy is also tailored to the interests of the mutual funds and their investors. Amiral Gestion employees are remunerated on a fixed and a variable basis. However, the variable part remains marginal relative to the overall remuneration paid to persons who have been identified as risk-takers or equivalent, as defined by the regulations. All employees benefit from profit-sharing and an incentive scheme. All employees are also Amiral Gestion shareholders. Their shareholdings rise gradually and depend on each person s contribution to the company. As a result, the interests of Amiral Gestion investors and employees are aligned: the objective being to achieve the best possible long-term performance and to sustain the company. All company employees have a direct interest in the success of its funds and the company results, in order to discourage any dangerous risk-taking. Breakdown of remuneration paid in 2017 Type of remuneration Category of employee Managers and others who have a direct impact on the risk profile or an equivalent remuneration Compliance, Managers (non-fund) and department heads No. of employees 16 3 Fixed remuneration Total variable remuneration per category Maximum 100,000* - Incentive scheme - Dividends - 266K in bonuses Maximum 100,000 - Incentive scheme - Dividends - 50K 35,000 to 100,000 - Incentive scheme Other employees and non-risk takers 10 - Dividends - 138K * Except for one employee, in whose case a regularisation was necessary Full details of Amiral Gestion s remuneration policy are available on request, by simply writing to your manager at AMIRAL GESTION, 103 rue de Grenelle, Paris Energy transition law for green growth (Article 173 of the law ) Amiral Gestion provides investors with information on how its investment policy takes into account the environmental, social and governance aspects in the report "Notre démarche en matière de LTE", available on the website Transparence of transactions involving securities and re-use of financial instruments SFTR regulation in the currency of the mutual fund (EUR): During the financial year, the fund made no transactions that were subject to SFTR regulations. Amount of leverage available to the fund: Nil Full details of Amiral Gestion s remuneration policy, as well as total remunerations paid during the financial year, broken down according to the regulatory criteria, are available on request by simply writing to your manager at AMIRAL GESTION, 103 rue de Grenelle, Paris

5 Warning For more information, please refer to the Key Investor Information Document (KIID), the prospectus, and the relevant legal, Documents which are available on the company website or on request to the fund management company. Past performances are not a guide to future performances and are not constant over time. Amiral Gestion rue de Grenelle Paris - T. +33 (0) F (0) A portfolio management company approved by the AMF under the number GP / An insurance brokerage company registered with the ORIAS under the number / A simplified joint stock company with share capital of 629,983 Paris Company Registry: VAT: FR

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