We are living longer. Life expectancy (at birth) Europe Oceania Americas Global Average Asia. Africa

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1 For Professional Clients and, in Switzerland, for Qualified Investors only. Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA or the BNY Mellon funds. Any v iews and opinions are those of the investment manager, unless otherwise noted. Genomics Paul Flood

2 Life expectancy (at birth) We are living longer For illustrative purposes only. Source: Max Roser (2015), Life Expectancy, Europe Oceania Americas Global Average Asia Africa 1

3 Rate of death/100,000 And dying of different diseases Leading causes of death in the US by age Heart disease Cancer Alzheimer's Diabetes 0 1 year 10 years 20 years 30 years 40 years 50 years 60 years 70 years 80 years For illustrative purposes only. Source: Centre of Disease Control For illustrative purposes only. 2

4 Overweight/obese Smoking Alcohol (daily) What is special about centenarians? Centenarians lifestyles 11% 12% 24% Men over 100 Women over 100 Women under 75 26% 30% 60% 41% 44% 48% For illustrative purposes only. Source: Journal of the American Geriatics Society, Volume 59, issue 8, Aug

5 What do we know about ageing? Quahog Clam years Hydra - Biologically immortal Bowhead Whale years 4

6 Gene editing 5

7 Is personalised healthcare the next frontier? 6

8 Years Living life in better health Healthy life expectancy versus life expectancy in the UK ( ): 19.0 years not in good health 16.1 years not in good health For illustrative purposes only. Source: Office of National Statistics, November Males Life Expectancy Females Healthy Life Expectancy 7

9 We can die young at an old age 8

10 Income diversification has moved on Infrastructure REITs UK Equities 60% UK Equities TRADITIONAL DISTRIBUTION STRATEGY 40% UK Government Bonds Alternatives NEWTON MULTI-ASSET INCOME STRATEGY Overseas Equities UK Government Bonds EMD Corporate Bonds Overseas Government Bonds Source: Newton, March 2018 Evolving with the changing backdrop 9

11 Newton Multi-Asset Income Strategy A portfolio of Newton s best income ideas across asset classes Strong heritage of managing multi-asset portfolios Aiming to deliver sustainable and growing income Newton Multi-Asset Income Strategy Income 130% of 60% equities / 40% bonds reference A long-term focused process An experienced team committed to a rewarding relationship Seeking to deliver attractive income and total returns through: Stable and grow ing income Fundamental, active & flexible Harnessing the pow er of compounding Note: 1 Based on performance from inception to 31 March The 60% MSCI AC World, 40% hedged Bank of America Merrill Lynch Global Broad Market index is used as an income reference for this strategy. The strategy does not aim to replicate either the composition or the performance of the index. Sustainable income and attractive total returns 1 10

12 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Cumulative total return (%) Performance since inception to 31 March 2018 Newton Multi-Asset Income Representative Portfolio Current annual yield Newton Multi-Asset Income RP 4.1% Reference yield target 2.8% Stable and growing income Income received¹ Total return² 1Source: Newton, 31 March Total income received from holdings smoothed daily for illustrative purposes. 2 Source: Newton, 31 March The representative portfolio adheres to the same investment approach as Newton s Multi-Asset Income Strategy. Performance calculated as total return, income reinvested, gross of fees in GBP. Fees and charges apply and can have a material effect on the performance of your investment. Aiming to deliver robust and stable returns 11

13 Percentage of bond market with a negative yield (%) Financial repression $8.8trn of global fixed income with negative yields Bond ownership by central banks 44.3% 37.9% 35.8% $2.47 trn $338 bn 32.5% 31.2% 29.8% 27.8% 27.0% 23.4% $2.37 trn $3.92 trn Japan Germany Finland Ireland Austria Denmark France Nth'lands Belgium For illustrative purposes only. Source: Bank of America Merrill Lynch Global Fixed Income Markets Index and Bloomberg, 30 June For illustrative purposes only. All figures in USD. Source: Bank of England, European Central Bank, Bank of Japan, Research Division of the Federal Reserve Bank of St. Louis, 31 July Need to think differently, invest differently 12

14 Yield to w orst (%) Yield to w orst (%) Policy impacting corporate bond markets Yield to worst at all time lows Feb-08 Oct-09 Jun-11 Feb-13 Oct-14 Jun-16 Feb-18 HY yielding 3.1% for most levered part of corporates market Feb-08 Oct-09 Jun-11 Feb-13 Oct-14 Jun-16 Feb-18 Source: Bloomberg, 28 February BoA ML Euro Corporates Index BoA ML European Currency High Yield Constrained Index BoA ML US Corporate Index BoA ML US High Yield Index 0.9% 3.1% Opportunity cost of cash is at all time lows 13

15 (%) US consumer business sentiment strong Small business optimism Nov-10 Feb-12 Apr-13 Jul-14 Sep-15 Dec-16 Feb-18 Small Business Optimism Index Nominal wage growth of US individuals Nov-10 Feb-12 Apr-13 Jul-14 Sep-15 Dec-16 Feb-18 Atlanta Fed's Wage Growth Tracker Source: Bloomberg, 28 February Dislocation between economy and markets? 14

16 Alternatives demonstrate strong thematic attributes Stable and growing income RENEWABLES AVIATION PROPERTY INFRASTRUCTURE Diversifying portfolio income, returns and risk 15

17 Stock selection bringing the process to life Greencoat UK Wind FUNDAMENTALS Beneficiary of attractive secular trends Strong position in growing renewables market Strong management team with proven track record VALUATION 6% dividend yield (1.8x covered) Retail Price Index (RPI or inflation) linked growth Internal Rate of Return (IRR) 7 9% Dual income Electricity exported to grid ROCS (Renewable Obligation Certificate) P/E = Price/Earnings. For illustrative purposes only. Source: Newton, May Focused on the best risk/return opportunities 16

18 Risk and position sizing Positioned for different markets THEMES RISK APPETITE EXAMPLE ASSETS EXAMPLE HOLDINGS SAFE HAVENS (DEFINED INCOME PROFILES) Gov ernment bonds Inf rastructure assets Renewable energy assets New Zealand 4.5% Local Gov t Authority 2027 Greencoat UK Wind Stable and growing income CORE (STABLE INCOME / INCOME GROWERS) Equities with strong balance sheets Conv ertible bonds High div idend y ielders and div idend growers Detour Gold 5.5% conv ertible bond AIA Telef onica Deutschland OPPORTUNITIES (ATTRACTIVE RISK /RETURN ATTRIBUTES) Lower grade corporate bonds Equities with growth characteristics Higher lev ered businesses Inf ineon Sands China Ctrip conv ertible bonds Source: Newton, 31 December Controlling risk through three dynamic elements 17

19 Semiconductors Driving innovation globally Big Data / Cloud Semiconductors More and more things 70 GB/day 3 Smart car Artificial Intelligence 1 PB/day 2 Smart Factory Offshore W ind Farm ~$400 billion 1 market and expanding 50 PB/day 2 Public Safety For illustrative purposes only. 1 Source: Gartner, September Source: Cisco global Cloud Index White paper, Source: Intel Data is the New Oil, 8 July Source: (images) Shutterstock, TB/day 2 Connected Plane 18

20 Finding beneficiaries of structural trends AGEING POPULATIONS EMERGING CONSUMERS PORTFOLIO HOLDINGS WELL BEING Source: Newton, 28 February

21 Current positioning by industry, as at 31 March 2018 Newton Multi-Asset Income Representative Portfolio Property 6.2% Inf rastructure 7.0% Currency hedging 0.1% Cash 1.6% Deriv atives 0.0% Direct Lending 1.6% CLO Equity 1.8% Oil & Gas 1.7% Basic Materials 0.7% Industrials 7.8% Consumer Goods 8.9% Stable and growing income Renewables 9.0% Emerging Market Bonds 2.1% Sub Inv estment Grade Bonds 4.8% Gov ernment Bonds 7.9% Yield; 6.0% Weight;, Weight;, 1.9% 25.6% Weight;, 21.1% Yield; 4.5% Weight;, 51.4% Yield; 3.3% Health Care 2.1% Consumer Services 8.7% Telecommunication 2.6% Utilities 0.6% Financials 7.8% Source: Newton, 31 March The representative portfolio adheres to the same investment approach as Newton s Multi-Asset Income Strategy. Corporate Bonds 2.6% Conv ertible Bonds 1.5% Banks 4.7% Technology 6.0% Index Linked 2.1% Active, flexible and directly invested 20

22 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Portfolio bond duration (years) Portfolio bond duration vs bond weighting since inception 1 Newton Multi-Asset Income Representative Portfolio Bond w eighting (%) Stable and growing income Duration US 10 year treasury yield Bond Weight (RHS) Note: 1 5 February Source: Thinkfolio, Newton, 31 March The representative portfolio adheres to the same investment approach as Newton s Multi-Asset Income Strategy. Flexibility is key 21

23 Current positioning, as at 31 March 2018 Newton Multi-Asset Income Representative Portfolio Major holdings Major absolute sector positions Top 15 absolute holdings Portfolio (%) 12 month forecast yield (%) Govn. of the United States of America 2.0% 15-Feb GCP Infrastructure Greencoat UK Wind AIA Group Telefonica Deutschland John Laing Environmental Assets Govn. of the United States of America 2.375% 15-Jan BBGI SICAV Govn. of Mexico 8.0% 07-nov New Zealand Local Govn. Funding Agency Ltd. 4.5% 15-Apr BAE Systems Doric Nimrod Air Three VPC Specialty Lending Redwood Trust SKYCITY Entertainment Number of securities 126 Renewables Financials Consumer services Consumer goods Industrials Infrastructure Property Technology Banks Telecommunication Government bonds Health care CLO Equity Direct Lending Oil & gas Utilities Emerging market bonds Basic materials Cash Source: Newton, Bloomberg, 31 March The representative portfolio adheres to the same investment approach as Newton s Multi-Asset Income Strategy. 0% 2% 4% 6% 8% 10% 12% Equity Non equity % of RP Conviction in income 22

24 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Cumulative total return (%) Total return performance since launch 1 vs sector peers Newton Multi-Asset Income Representative Portfolio Stable and growing income Newton Multi-Asset Income RP IA Mixed Investment 40%-85% Shares IA Mixed Investment 20%-60% Shares IA Flexible Investment Note: 1 Inception date: 5 February Source: Lipper, 31 March The representative portfolio adheres to the same investment approach as Newton s Multi-Asset Income strategy. Performance calculated as total return, income reinvested, net of annual charges (including AMC of 0.63%), in GBP. Strong relative performance 23

25 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 Cumulative total return (%) Sustainable monthly income without consuming your capital A compelling proposition Current annual yield Newton Multi-Asset Income RP 4.1% Ref erence yield target 2.8% Income received¹ Total return² 1Source: Newton, 31 March Total income received from holdings smoothed daily for illustrative purposes. 2 Source: Newton, 31 March The representative portfolio adheres to the same investment approach as Newton s Multi-Asset Income Strategy. Performance calculated as total return, income reinvested, gross of fees in GBP. Fees and charges apply and can have a material effect on the performance of your investment. Paul Flood Lead manager STABLE AND GROWING INCOME Bhavin Shah M-A & alternativ es FUNDAMENTAL ACTIVE & FLEXIBLE Freeman Le Page Portf olio Specialist HARNESSING THE POWER OF COMPOUNDING Income stability accommodates capital volatility 24

26 Appendix

27 Risk statistics Newton Multi-Asset Income Representative Portfolio General (31 December 2017) 1 year (%) Since inception 1 (p.a. %) Total portfolio turnover Number of stocks (equities) 59 Beta (portfolio level) with MSCI World NDR Beta (equity portion) with MSCI World NDR Sharpe ratio Portfolio (Historical volatility) MSCI World NDR Index (historical volatility) Portfolio return % MSCI World NDR, 40% Bank of America Merrill Lynch Global Broad Market return Portfolio equity return MSCI World NDR return Inception date: 5 February Source: Newton, IBM Algorithmics, 31 December The representative portfolio adheres to the same investment approach as Newton s Multi- Asset Income Strategy. Performance calculated as total return, income reinvested, gross of fees in GBP. Fees and charges apply and can have a material effect on the performance of your investment. 26

28 27 IS DEATH OPTIONAL?

29 1957 TODAY TOMORROW 28

30 European HY S&P 500 BofAML US HY Corporate Index MSCI World EURO STOXX 600 MSCI Emerging Markets Topix BofAML US IG Corporate Index European IG German Bund 7-10Y Gold US Treasury 7-10Y Total Return Japan JGB 7-10Y US Nominal GDP EU Nominal GDP US Wages US CPI EU Employment Cost Index US House Prices European CPI EA House Prices Bloomberg Commodities Index (%) Inflation missing in action? Or hiding in plain sight? Total return performance in local currency since January FINANCIAL ASSET PRICES REAL ECONOMY PRICES For illustrative purposes only. Source: Bloomberg, June Wide dispersion between real economy & financial asset price inflation 29

31 Percentage change(%) Inflation around the world Consumer Price Index Bond 10 year yield US Treasury 2.5% UK Gilt 1.2% German Bund 0.4% Mar-11 May-12 Jun-13 Jul-14 Sep-15 Oct-16 Nov-17 For illustrative purposes only. Source: Bloomberg, 4 January US CPI UK CPI German CPI No protection against the ravages of inflation 30

32 10-year forw ard total real return, % p.a. What you pay influences future returns Aggregate valuations stretched Observations over 100 years S&P valuation level (cycle-adjusted) vs. 10-year average annual returns Financial and economic risks are high Probability of sharp drawdowns is elevated 8 4 Return decreases Valuation increases Dec x Cycle-adjusted P/E multiple, x Source: Prof Robert Shiller, Yale University, Newton, 31 December Chart depicts 100 years of monthly data points. Potential return for taking risk is very low 31

33 Central bank liquidity has been the key support for financial markets An attempt to reduce the size of central bank balance sheets Central bank net asset purchases 1 Note: 1 3 month moving average, ($bn), F. Source: Bloomberg, Newton, December For illustrative purposes only. Liquidity to be withdrawn 32

34 Newton Multi-Asset Income Representative Portfolio Performance as at 31 March year cumulative performance (%) % Mar-15 Mar-16 Mar-17 Mar-18 Performance summary (%) 3 months YTD 1 year 3 years 5 years 3 years ann. 5 years ann. Newton Multi-Asset Income RP Calendar year performance (%) Newton Multi-Asset Income RP Source: Lipper, 31 March The representative portfolio adheres to the same investment approach as Newton s Multi-Asset Income strategy. Performance calculated as total return, income reinvested, net of annual charges (including AMC of 0.63%), in GBP. 33

35 Risk disclosures Past performance is not a guide to future performance. The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed. Objective/Performance Risk: There is no guarantee that the Strategy will achieve its objectives. Currency Risk: This Strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the portfolio. Derivatives Risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the portfolio can lose significantly more than the amount it has invested in derivatives. Changes in Interest Rates & Inflation Risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the portfolio. Credit Ratings and Unrated Securities Risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the portfolio. Credit Risk: The issuer of a security held by the Strategy may not pay income or repay capital to the portfolio when due. Emerging Markets Risk: Emerging Markets have additional risks due to less-developed market practices. Counterparty Risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the portfolio to financial loss. 34

36 Important information For Professional Clients and, in Switzerland, for Qualified Investors only. This is a financial promotion and is not investment advice. Portf olio holdings are subject to change, for information only and are not investment recommendations. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and its subsidiaries. Newton Inv estment Management Limited (Newton) is authorised and regulated by the Financial Conduct Authority. Newton, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No BNY Mellon Investment Management EMEA Limited and any other BNY Mellon entity mentioned are all ultimately owned by The Bank of New York Mellon Corporation. Issued in the UK and Europe (excluding Switzerland) by BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No Authorised and regulated by the Financial Conduct Authority. Issued in Switzerland by BNY Mellon Investments Switzerland GmbH, Talacker 29, CH-8001 Zürich, Switzerland. Authorised and regulated by the FINMA. PRE Exp. 19 July

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