EXAMPLE was a weaker year for real estate. Full-year returns are unlikely to match the double figures achieved in 2017.

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1 This summary provides market commentary from our investment experts, and details any changes made to Portfolio 5 during the fourth quarter of The commentary is intended to give you a general overview of the market, and does not constitute advice. In brief: Global equity markets endured a bruising end to 2018, posting their worst quarter for several years. Europe again came under pressure from lacklustre economic data and political discord. Government bond markets performed well, as investors sought shelter in safe-haven assets. Environment Global equity markets endured a bruising end to 2018, posting their worst quarter for several years. This erased the previous nine months gains. Worries about rising interest rates, slowing global growth and escalating political risks combined to unnerve investors. In particular, many questioned the US Federal Reserve s December rate hike, given that global growth showed signs of faltering. Elsewhere, Europe again came under pressure from lacklustre economic data and political discord. Meanwhile, the UK remained mired in Brexit-related uncertainty. It was also a tough period for corporate bonds. Concerns grew around the global economy and the longevity of the corporate earnings cycle. This was against the backdrop of tightening global liquidity and elevated levels of non-financial corporate debt. Commentary Fourth Quarter was a weaker year for real estate. Full-year returns are unlikely to match the double figures achieved in Beyond this, the escalating US-China trade war, Brexit uncertainty and Italy s budget drama depressed investor sentiment. In this environment, government bond markets performed well, as investors sought shelter in safe-haven assets. Total returns continued to slow amid a difficult period for the UK commercial property market. As expected, 2018 was a weaker year for real estate. Full-year returns are unlikely to match the double figures achieved in Ongoing uncertainty surrounding the Brexit withdrawal agreement caused investors to be more cautious. Over the last nine years, real estate has delivered returns of more than 10% per year. However, the market is at a late stage in the cycle. Valuations appear expensive relative to their longterm worth. 01

2 Activity We review the Strategic Asset Allocation (SAA) for each of the 1825 Portfolios every quarter with the aim of ensuring that we continue to meet investors long-term interests. At the most recent review, we made modest changes, which we believe will improve the prospects for long-term, risk-adjusted returns. We increased our allocation to UK equities, while making a smaller increase to Japanese equities. Meanwhile, we reduced exposure to both US and European equities. During the fourth quarter of 2018, we made the following Tactical Asset Allocation (TAA) changes: We increased the overweight exposure to Global Real Estate Investment Trusts (REITs) We added to our holding in UK equities, becoming neutral versus the SAA We reduced the Emerging Market Debt position back to neutral versus the SAA We reduced US, Japanese and Emerging Markets equities positions (leaving US neutral with Japan and Emerging Markets the only remaining equity overweight versus the SAA) We increased our position in Sterling Hedged High Yield Credit to become a moderate overweight We increased our position in Sterling Hedged REITs to become the largest overweight in the portfolios In terms of the underlying funds, we purchased Artemis Global Emerging Markets, Aberdeen European Enhanced Index and Lazard European Smaller Companies. We sold Invesco Perpetual Emerging Countries, BlackRock Continental European Tracker, Invesco Perpetual European Equity Income and SLI European Equity Income. 02

3 Outlook Performance Given that economic data and earnings estimates remain solid, it is possible that global equity markets will bounce back from the recent sell-off. However, numerous headwinds remain, from the US-China trade dispute to worries around Italy s budget. The resolution of any of these would provide a boost to sentiment. Brexit, meanwhile, has entered the final, critical stages. Investors will watch the outcome closely. Against this backdrop, we believe earnings rather than valuations will be the primary driver of share prices. Investment grade corporate bonds now look to be fairly valued. However, volatility may persist, given the combination of trade tensions and continuing political uncertainty around Brexit. Meanwhile, the path and speed of interest rate changes will continue to determine the short-term outlook for government bond markets. For UK commercial real estate, uncertainty around Brexit and the expectation that the government faces defeat in parliament s meaningful vote on the EU Withdrawal Agreement is biting into sentiment. There is also growing evidence that it is impairing liquidity. We expect values to fall further during the first quarter of 2019, after turning negative in November. Even with the base case scenario of an eventual agreement passing and a smooth transition period for the UK, our forecast returns are weak for the next three years. It was a bruising end to 2018 for global equity markets as they endured their worst quarter for several years. Market gains of the previous nine months were wiped out. Fears over global economic growth, elevated global trade tensions, geopolitics and concerns over US interest rate rises all contributed to the downturn. The portfolio delivered a negative return over the quarter, attributable to our SAA, with allocations to UK, US and Japanese equities being the main driver behind this. From a TAA perspective, contribution to performance was negative. Our overweight in EM Debt was not enough to offset the negative performance from our underweight to Sterling Corporates. Fund manager selection detracted from performance with disappointing returns from our Multi Asset Absolute Returns and UK equities managers in particular. The tables below show the performance of the 1825 Portfolio 5 over individual 12-month periods (year-onyear performance), and cumulative growth. Year-on-year performance 30/12/14 30/12/15 30/12/16 30/12/17 30/12/18 N/A N/A % % -6.77% Cumulative growth 6 months 1 year 2 years 3 years Since launch (1/07/15) -7.28% -6.77% +4.58% % % Performance figures shown are based on representative model portfolios. They are provided by Bloomberg and are calculated net of all fund costs, but do not include product or specific adviser charges. Values are subject to change. Actual returns may differ slightly, for example, as a result of cash inflows or withdrawals. The figures above refer to the past. Past performance is not a guide to the future. As with any investment, the value of your portfolio can fall as well as rise - you may get back less than you pay in. 03

4 Fund selection: Fund selection as at end December 2018 as at end September 2018 Change +/ Vanguard FTSE UK All Share Index 14.50% 12.08% 2.42% Vanguard US Equity Index 9.15% 13.48% -4.33% SLI Global Absolute Return Strategies (GARS) 7.76% 7.76% 0.00% Majedie UK Equity 7.25% 6.04% 1.21% Aberdeen European Equity Enhanced Index 6.97% 0.00% 6.97% TM Fulcrum Diversified Absolute Return 6.79% 6.79% 0.00% L&G Japan Index 5.25% 4.74% 0.51% Invesco Perpetual Global Targeted Returns 4.85% 4.85% 0.00% Merian North American Equity 4.58% 0.00% 4.58% Fidelity Index US 4.57% 6.12% -1.55% SLI UK Equity Income Unconstrained 4.35% 3.61% 0.74% CF Morant Wright Nippon Yield 3.50% 3.16% 0.34% Artemis Global Emerging Markets 3.15% 0.00% 3.15% Vanguard Emerging Markets Stock Index 3.15% 3.15% 0.00% Fidelity UK Smaller Companies 2.90% 2.42% 0.48% Hermes Asia Ex Japan Equity Fund 2.90% 2.90% 0.00% Mirae Asset Asia Sector Leader Equity 2.90% 2.90% 0.00% L&G Emerging Markets Local Government Bond Index 2.00% 0.75% 1.25% Lazard European Smaller Companies 1.23% 0.00% 1.23% Cash ( ) 1.00% 1.00% 0.00% Nomura US High Yield Bond 0.75% 0.00% 0.75% First State Global REITS 0.50% 0.00% 0.50% BlackRock Continental European Equity Tracker 0.00% 5.10% -5.10% Invesco Perpetual Emerging Countries 0.00% 3.15% -3.15% Invesco Perpetual European Equity Income 0.00% 3.06% -3.06% Old Mutual North American Equity 0.00% 4.90% -4.90% SLI European Equity Income 0.00% 2.04% -2.04% % % 04

5 Aberdeen Standard Capital Limited, registered in Scotland (SC317950) at 1 George Street, Edinburgh EH2 2LL. Aberdeen Standard Capital is authorised and regulated by the Financial Conduct Authority is the brand for Standard Life group s UK financial planning and advice business is a trading name used by 1825 Financial Planning and Advice Limited, which is part of the Standard Life Aberdeen group (Standard Life Aberdeen plc and its subsidiaries) Financial Planning and Advice Limited is registered in England ( ) at 14th Floor 30 St. Mary Axe, London, England, EC3A 8BF and is authorised and regulated by the Financial Conduct Authority is a trading name used by Baigrie Davies & Company Limited, which is part of Standard Life Aberdeen group (Standard Life Aberdeen plc and its subsidiaries). Baigrie Davies & Company Limited ( ) is registered in England at 14th Floor, 30 St Mary Axe, London EC3A 8BF and is authorised and regulated by the Financial Conduct Authority is a trading name used by The Munro Partnership Limited, which is part of Standard Life Aberdeen group (Standard Life Aberdeen plc and its subsidiaries). The Munro Partnership Limited (SC219557) is registered in Scotland at Citadel House, 6 Citadel Place, Ayr, KA7 1JN and is authorised and regulated by the Financial Conduct Authority is a trading name used by Jones Sheridan Financial Consulting Limited, which is part of Standard Life Aberdeen group (Standard Life Aberdeen plc and its subsidiaries). Jones Sheridan Financial Consulting Limited ( ) is registered in England at Datum House, Electra Way, Crewe, Cheshire, CW1 6ZF and is authorised and regulated by the Financial Conduct Authority is a trading name used by Standard Life Client Management Limited, which is part of Standard Life Aberdeen Group (Standard Life Aberdeen plc and its subsidiaries). Standard Life Client Management Limited is registered in Scotland (SC193444) at 1 George Street, Edinburgh, EH2 2LL and is authorised and regulated by the Financial Conduct Authority. ETF15_WEB_P Standard Life Aberdeen, reproduced under licence. All rights reserved. 05