ALL TERRAIN PORTFOLIO STRATEGY. All Terrain Investment Management INTELLIGENT PORTFOLIO DESIGN. Intelligent Portfolio Design 1

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1 Intelligent Portfolio Design 1 For professional investors and financial advisers only not for onward distribution. INTELLIGENT PORTFOLIO DESIGN ALL TERRAIN PORTFOLIO STRATEGY All Terrain Investment Management

2 WELCOME TO ARCAPMAN WE ARE A BOUTIQUE PRIVATE CLIENT INVESTMENT MANAGER, DEDICATED TO ACHIEVING CASH PLUS RETURNS FOR OUR CLIENTS. WE ARE AN ASSOCIATE OF REDMAYNE-BENTLEY, FOUNDED IN 1875, ONE OF THE LEADING INDEPENDENT PRIVATE CLIENT STOCKBROKERS IN THE UK. Contents Multi Asset Class Investing The Importance of Asset Allocation Absolute Vs Relative Return Investing Examples of Investments or Asset Classes ATP Might Employ Why ARIA Capital Management? Understanding How your All Terrain Portfolio Strategy is constructed Active Portfolio Management Diversification and Managing the Correlations within your Portfolio s Investments What is your Attitude to Risk? Risks associated with ATP

3 4 All Terrain Portfolio Strategy All Terrain Investment Management Intelligent Portfolio Design 5 MULTI ASSET CLASS INVESTING THE IMPORTANCE OF ASSET ALLOCATION We consider many assets classes, beyond simply those considered as more traditional, and then blend holdings to produce portfolios that should be capable of performing regardless of the economic environment. We call this multi asset class investing. What is Multi Asset Class Investing? Traditionally most investors have within their portfolios exposure to three or four asset classes; equities, fixed income, cash and property which we do not believe is sufficient to introduce the benefits of diversification. In that light, the All Terrain Portfolio strategy (ATP) seeks to move portfolios toward an approach which is considered more of a multi asset class style of investing. Multi asset class investing means considering every asset class available, beyond the most common, to include alternative investments such as precious metals and forestry. Then, having gained exposure to many uncorrelated asset classes, we seek to increase or reduce the exposures as the investment conditions fluctuate. However, most individuals are not able to actively invest in diversified multi asset class portfolios, including areas like private equity. The All Terrain Portfolio strategy allows you to do just that. When portfolios are constructed using traditional investments due to the relative return approach, their performance is driven by that of the stock market generally - which can be in either direction. All terrain portfolio strategies look to build investment portfolios which are not solely reliant on stock markets going up in order to generate positive returns. So whilst a portfolio may have many holdings, given that they are likely to all move in the same direction, the portfolio does not actually benefit from diversification in the manner in which we would like. We need holdings that are not driven by the same investment conditions, so that some perform at times when others do not. Unfortunately, it is not very easy to construct a portfolio with potential downside protection given the investments available in the private client market. Products or investments which have traditionally been available to private clients have been relatively straightforward, as regulators have restricted access to the more complex strategies that ultra high net worth investors, and institutions have at their disposal. The recent turmoil in financial markets has highlighted a need for private clients to have access to the same quality of investments that institutions and the ultra wealthy do. ARIA strives to bring access to institutional quality investments to clients. We are able to get access to certain investments that most private clients cannot. We have the resources to be able to select and build portfolios designed to weather the storm. We aim to build portfolios that do not rely heavily on the upward movement of stock markets to generate returns. Example Asset Allocation for a more Traditional Portfolio 2.51% 3.67% 22.56% 15.00% UK Equities (56.26%) Fixed Income (15.00%) Property (3.67%) Cash (2.51%) International Equities (22.56%) 56.26% What is Asset Allocation and it s Importance? Successful investment strategies demand a sensible approach towards asset allocation. Asset allocation simply describes the spread of your investments across different asset classes, such as equities, fixed interest, property & cash. Effective asset allocation goes beyond the principle of diversification. Just holding a number of diversified investments belonging to the same asset class will not necessarily reduce the volatility of returns from your portfolio. Investments within the same asset class are often more highly correlated to each other than might appear to be the case, particularly during periods of stock market distress, when correlations between seemingly unrelated investments can rise, both unexpectedly and rapidly, causing significant loss. By analysing the historic risk and return profiles of a number of different asset classes and then determining optimal combinations, we are able to build portfolios to minimise volatility and maximise returns depending on your attitude to risk. Absolute Return Funds Absolute return funds typically have the investment objective of generating positive returns in all market environments. They achieve this by having more flexible investment guidelines that allow for selling short securities to profit when markets decline and using derivatives to minimise market risk. Having investments which profit when markets decline mean that absolute return strategies strive to provide protection in adverse market environments and may compensate for losses in traditional investments. Alternative Assets As a group these could include commercial property, forestry, precious metals and commodities. Moreover this could also include any non-traditional asset, including works of art, horses, antiques, classic cars and fine wines. Portfolios will typically not have exposure to these asset classes however we seek to consider the broadest possible range of asset classes whilst being aware of their impaired liquidity. Commodities Generally, it appears that commodities are in long term secular bull markets. Even the crushing collapses of did not completely de-rail the uptrend. A driving force behind commodities has been the dynamic growth in demand from China, and to a lesser extent, other emerging market economies. This has shown up most in industrial commodities, particularly Copper, which is the bellwether of industrial commodity demand. However, the commodity universe is broad, and soft or crop commodities should not be ignored. Increasing demand for food in a period of rising world populations, unpredictable weather patterns and increasingly erratic water access could also drive prices of these agricultural commodities higher.

4 6 All Terrain Portfolio Strategy All Terrain Investment Management ABSOLUTE Vs RELATIVE RETURN INVESTING Absolute Return Benchmarks Vs Relative Return Benchmarks We believe that investors may have become disillusioned with the investment management industry which focuses on measuring investment performance relative to a stock market index. Our view is those who have or have made money, should be concentrating on holding onto it. Measuring our performance against stock markets is not our approach. We are absolute return and active fund managers. This means that the portfolios we manage are not constrained by any requirement to match or mimic stock market indices and we will not buy a particular investment or other holding because it is a prominent constituent of an index. Each investment is made on the basis of merit alone: we must genuinely believe that it s value is likely to increase and be comfortable that the potential reward justifies any exposure to risk. Importantly, as well, an investment needs to fit with the rest of the portfolio. We simply do not have any conviction in the idea that a buy and hold relative return approach is the pinnacle of investment wisdom. Our aim is to protect and grow the wealth of all our clients by generating a return that is attractive in absolute terms. Relative Return Approach Absolute Return Approach Return objective Risk management Investment strategy Relative to benchmark. Performance dependent on that of the stockmarket. Relative to benchmark (tracking risk). The risk of underperforming the benchmark. Relative to benchmark (tracking risk). Investments held in fund because they belong to the benchmark they are measured against. Absolute, positive return. Performance dependent on exploiting investment opportunities in any asset class. Total risk. Risk of losing money/preserve capital. Complete flexibility. Investments chosen on their own merit. Free to move into asset classes with most favourable investment potential.

5 8 All Terrain Portfolio Strategy All Terrain Investment Management Intelligent Portfolio Design 9 EXAMPLES OF INVESTMENTS OR ASSET CLASSES ATP MIGHT EMPLOY WHY ARIA? The All Terrain Portfolio strategy provides an opportunity to gain exposure to investments, which individually and combined, should produce attractive returns by incorporating a diverse range of alternative investment strategies in a wide variety of market conditions. The investment objective of our portfolio strategies are to achieve either a total real positive return or an absolute return over entire market cycles. A market cycle can be defined as the period between the two latest highs or lows in a stock market, showing net performance of a portfolio through both an up and down market. However, this is not guaranteed in any way. Investors should note that while managers use derivatives to reduce downside volatility, their use could increase risk. We have developed a robust risk management process to oversee and manage derivative exposure within the funds and use derivatives with the intention of reducing return volatility. However, we cannot guarantee this outcome and using derivatives may at times lead to increased price volatility. Therefore, investors should be prepared to accept the risks associated with these investments and be aware that their capital is not guaranteed. * The following asset allocation is indicative for the balanced profile portfolio: Holding Balanced CF AR CAUTIOUS MULTI ASSET 27.5% CF RICHMOND CORE 15.0% EFA AR MULTI ASSET INCOME 27.5% EFA AR DIVERSITY STRATEGY 25.0% MONEY MARKET FUND 5.0% *Indicative Asset Class Exposures for the Balanced profile. 2.75% 4.375% 24.75% 4.0% 5.375% 4.75% 2.125% 1.875% 5.0% 6.25% 5.5% 3.75% 3.75% 14.75% 2.75% 5.5% 2.75% Money Market (5%) Government Bonds (5.5%) Corporate Bonds (14.75%) Convertibles (2.75%) Emerging Market Debt (5.5%) Inflation Linked Bonds (2.75%) Market Neutral (3.75%) Equity Long/Short (3.75%) Global High Income (6.25%) Real Estate Investment Trusts (1.875%) Domestic Equity (4.75%) International Equity (24.75%) Emerging Market Equities (4.375%) Listed Fund of Hedge Funds (2.75%) Precious Metals (4%) Commodities (5.375%) Currencies (2.125%) We target absolute returns. Very simply, our approach is based on common sense principles: All Terrain Investment Management capital preservation when investment climates are less favourable is key to long-term outperformance. Common Sense Investing our approach is to measure our performance relative to cash deposits. Peace of mind in turbulent times by diversifying across the widest possible range of asset classes, we seek to smooth out investment returns through multi asset class investing. Active Management, dynamic asset allocation and keeping costs low Academic studies demonstrate how asset allocation is the primary determinant of a portfolio s return. Moreover, today s financial climate is characterised by volatility, and therefore we need to be able to act quickly in changing asset allocations, perhaps to preserve capital or take profits. We construct portfolios in such a way so that we can do that within our building block investments. This allows us to adopt a more active approach by changing exposures inside the fund with lower transaction costs than those which would be incurred at portfolio level. Thematic Investing - Our approach is not just limited to drawing on more asset classes and dynamically managing the asset allocation. We try to go the extra mile. By using a thematic approach, we hope to further improve returns by selecting investments which benefit from broader, enduring themes which impact our everyday lives. Alternative Investments our portfolios incorporate alternative investments which are generally uncorrelated to stockmarkets, improving the quality of the diversification profile. We are also able to access investments which are typically only available to institutional investors. Disciplined risk management by investing in a broadly diversified portfolio across all asset classes we improve the risk return profile of the portfolio. ATP - Our absolute return portfolio strategy potentially gives you more ways to benefit, whichever way the wind is blowing Investing climates are as changeable as the weather. Our clients want peace of mind, and a portfolio that demonstrates consistent returns without the worry of sharp losses. That s why we target cash plus returns; we aim to deliver steady performance rather than exposing our clients to anxiety causing declines, for that matter or chasing steep market advances. Total 100.0% * Please note that these building blocks funds and asset class exposure may change at our discretion as other building blocks funds become available, or as other fund s and asset classes are deemed to be more suitable are included in asset allocations. This data is provided for information purposes only.

6 10 All Terrain Portfolio Strategy All Terrain Investment Management Intelligent Portfolio Design 11 UNDERSTANDING HOW YOUR ALL TERRAIN PORTFOLIO STRATEGY IS CONSTRUCTED Determining your investment profile The first step in the process is for you and your financial adviser to determine your investment profile using the ARIA Suitability Assesment tool. This ensures that your money is invested with a portfolio construction designed to meet your investment objectives, but most importantly taking into account your appetite for investment risk. Your financial adviser will assess your attitude to risk and establish your objectives and investment time horizon. This will allow them to determine your investment profile. BENCHMARK RETURN*: TARGET VOLATILITY ARIA s BUILDING BLOCK FUNDS TYPICAL ASSET CLASS EXPOSURES Tactical Asset Allocation Changes within the Funds Cash ARIA then works with your adviser to ensure the way that they have assessed your investment profile is accurately matched to our understanding of the risk profiles for your portfolio. Our commitment to the highest client service standards is underpinned by regular communication and providing as much transparency, in how we manage your investments, as possible. Therefore, the following pages set out how your portfolio is constructed using the building block funds we have selected in a combination tailored to meet your investment objectives. The diagram below seeks to summarise the four key stages in the portfolio construction. INTERMEDIARY CLIENT ASSESSMENT INVESTMENT OBJECTIVES AND RISK PROFILING ALL TERRAIN DISCRETIONARY PORTFOLIO STRATEGY Base Rates Liquid Assets Money Market ETF Government Bonds STRATEGIC ASSET ALLOCATION Defensive Assets 2% 6% EFA AR Multi Asset Income Government Bonds Corporate Bonds Convertibles Emerging Market Debt Inflation Linked Bonds Absolute Return Investments 2% 8% EFA AR Diversity Portfolio Strategy newcits: Market Neutral newcits: Equity Long/Short Global Bonds High Income Real Estate Investment Trusts Traditional Assets 3% 10% CF AR Cautious Multi Asset Fund THEMATIC EQUITY: Defensives Listed Fund of Hedge Funds Listed Property Precious Metals Growth Strategies 4% 12% CF Richmond Core International Equity Commodities Currency Building Investment Portfolios The All Terrain Portfolio Strategy invests in a range of building block funds, combined in different proportions to match your investment profile. Each fund targets cash plus returns, meaning overall the investment portfolio strategy has an absolute return benchmark and objective. Each building block fund brings exposure to different asset classes and strategies meaning overall your portfolio is invested in the widest range of investments to improve the diversification profile and smooth out investment returns. Given that the portfolio strategy targets cash plus returns over a full market cycle, many of the investments are independent of stock markets and their returns are not driven by the same investment conditions. Strategic Versus Tactical Asset Allocation The building block funds are combined in such a way to reflect your portfolio s strategic asset allocation. Strategic asset allocation considers the correct portfolio strategy in order to fulfill the long term goals of the portfolio (in terms of return and risk). Your portfolio s strategic asset allocation then makes use of long-term capital market expectations (asset class expected returns and likely sizes of capital loss) to derive target asset weightings that should achieve the portfolio requirements over a longer time horizon. Tactical Asset Allocation refers to shorter- term trading positions that the funds may have as tilts to take advantage of shorter term opportunities. These look to exploit market inefficiencies should they occur around the longer-term strategic asset allocation. From time to time, we may invest in Exchange Traded Funds which provide exposure to that asset class or opportunity, which would then sit alongside the building block funds as illustrated in the diagram. Understanding The Building Block Funds, Portfolio Management and Tax Efficient Investing The building block asset allocation will invest in a number of funds, two of which, could be AR Cautious Multi Asset fund and EFA AR Multi Asset Income Fund. The AR Cautious Multi Asset Fund (CMA) aims to achieve annual returns through both capital appreciation and income receipts regardless of market conditions. The fund invests in a globally diversified portfolio that may include equities, bonds, money market instruments derivative instruments, forward transactions, collective investment schemes and other instruments. The EFA AR Multi Asset Income fund is a multi asset portfolio which invests in an actively managed range of assets to produce an attractive income with lower volatility than many equity income funds. The objective of the Fund is to achieve income and long term capital appreciation in the form of a positive absolute return for investors in all market conditions on a 12 month basis. Targeting a yield of 5-6.5% it can invest globally across the entire fixed income universe, including a yield enhancement strategy to support the income available to make quarterly distributions. This gives an indication of the initial diversity created within your portfolio we feel that the simplicity of structure means it would be difficult for your money to be invested in a way that gains more diversification. Furthermore, your investments benefit from two levels of investment management as we manage your strategic and tactical asset allocation at portfolio level, as well as the individual investment strategies of the building block funds. Risk management Such a portfolio construction allows us to employ a sophisticated risk management practices, which is fundamental when your portfolio is managed with an objective of targeting positive returns. Primarily, your portfolio manager looks to diversify your investments, when considered in light of asset class exposures and your investment profile, whilst respecting your investment limits. For balanced risk profiles we typically target volatility in line with a globally orientated corporate bond index. What that means is that we believe your investments should give you peace of mind, without enduring wild swings in value. By targeting a risk profile tied to a fixed volatility peg, this should mean your portfolio benefits from much lower volatility compared to stock markets. The building block approach allows us to monitor the correlations between your investments. Unfortunately, the correlation between asset classes does (the degree to which they move together in the same direction to the same degree) change depending on economic events or global market performance. So, as we describe in greater detail on page15, uncorrelated investments should remain just that. * BENCHMARK RETURNS ARE TARGETED RETURNS ABOVE THE BENCHMARK WHICH IS EITHER 1MTH LIBOR OR UK BASE RATES +. Please see individual perspectives for which is relevant. Please note the CF Richmond Core Fund does not has a specific cash benchmark. Benchmark Returns are targets only and not guaranteed.

7 12 All Terrain Portfolio Strategy All Terrain Investment Management ACTIVE PORTFOLIO MANAGEMENT Tax Efficient Wrappers We can build your portfolio across various tax wrappers such as an Individual Savings Account (ISA) or a Self Invested Personal Pension (SIPP), which makes your portfolio as tax efficient as possible. We can even set your portfolio up to automatically fill the ISA allocation each year, for you and your family members. Ongoing Portfolio Management As time goes on, it is important to ensure your investment portfolio continues to match your investment profile. The All Terrain Portfolio strategy provides active fund selection, ongoing portfolio management and rebalancing (buying and selling funds within the building block funds) to ensure that your portfolio s investment goals remain consistent. This means you can be confident that your portfolio should always match your investment profile. Asset Allocation Changes Because of the way the All Terrain Portfolio strategy is constructed using funds managed by ARIA, we can simply adjust the proportion of your investment held in each fund, to manipulate your asset allocation and investments, given the fluctuating financial and economic conditions. Furthermore we can also alter the positioning of your portfolio within the building block funds. This means changes can be made at institutional costs, for example ten basis points, whereas normal private client portfolio charges are typically between 1 and 1.5% per change. If you and your financial adviser feel that your investment profile has changed, it can be easily updated and your investment portfolio adapted accordingly.

8 Intelligent Portfolio Design 15 DIVERSIFICATION AND MANAGING THE CORRELATION WITH YOUR PORTFOLIO S INVESTMENTS Correlation of Asset Classes within the portfolio on page 10 in Understanding how your All Terrain Portfolio strategy is constructed, it is expected that the significant majority of your assets managed by us will be invested in funds which are either managed or sponsored by ARIA. These asset classes are chosen, as their returns have historically not been correlated to one another. What this means for example is that when equities make positive returns, it has been shown that gold has made neutral or negative returns. Asset classes with low correlation to each other are good choices for the diversified portfolio as each can perform independently of one another. In recent years, the performance of the metals, energy and soft commodities markets has shown them to be able to provide formidable returns, independently of the returns of existing asset classes in your portfolio. Wealth Warning Portfolio strategies may have some limited exposure to Unregulated Collective Investment Schemes (UCIS), either within building block funds or at portfolio level. Portfolios can also We can explain correlation by referring to have a bias towards alternative investments historical guidance of not putting all your and absolute return funds, which may be eggs in one basket. Conventional wisdom unregulated within the UK. Absolute return states that if you were to buy a variety of investments, then the failure of one would not Therefore, in accordance with your objectives funds or portfolio strategies can operate a flexible, unconstrained investment strategy, and risk profile we will invest into the cause your entire portfolio to collapse. building block funds as illustrated, and those which may include the use of gearing, derivatives and short selling. investment decisions will mean that the However, the reverse is also true, that the funds may provide us with trail commission stellar performance of any one investment Investors should note that where portfolios and/or a share of performance fees. Any would not reap wonderful returns as it is are invested in funds, whose managers use trail commission received will be retained diluted by more mundane performance of derivatives to reduce volatility, they could by us and details will be provided to you on another. The construction of a genuinely request. However, to manage such conflict of result in increased risk. Therefore, investors diversified, uncorrelated portfolio builds should be aware of the risks associated with interest arising, we maintain arrangements on the above notion, but on slightly more these investments and the fact that the initial technical grounds. Firstly, one should diversify for the management of conflicts of interest. investment is not guaranteed. The information amongst the different asset classes; investors A summary description of the Conflicts and estimates are given as at the date of the of Interest Policy which sets out the type commonly select equities, bonds, cash but document and are subject to change. The of actual or potential conflicts of interest then in addition we should go further and at information is not intended to predict actual least including alternative investments such as and which provides details of how they are results and no assurances are given with managed, is available on request or at our hedge funds, property, precious metals respect thereto. website or commodities. Active Management Not only do asset allocations need to be generally rebalanced and improved, to ensure portfolios behave better, (performance becomes less volatile), asset allocations need to be dynamically or actively managed. Conflicts of Interest When we provide the All Terrain Portfolio Strategy Service, we, an Associate or some other person or company connected with us may have a material interest or arrangement in connection with the transaction or investment concerned which may lead to a conflict of interest. As set out in the brochure The value of investments and the income paid on them can fall as well as rise. All investments involve risk and you may not get back the full amount of your investment and your investment may fail altogether, resulting in an entire loss. Past performance is not necessarily a guide to future performance. Partners, employees, associates and clients may have a position or engage in transactions in any of the securities mentioned. There is an extra risk of losing money when shares are bought in some smaller companies, including penny shares, as there can be a big difference between the buying and selling price. ARIA have taken every step to ensure the accuracy of the information and statistics in this literature. However, some information is obtained from or is based on trade and statistical services or other third party sources and we cannot accept any liability for errors or any direct or consequential loss arising from the use of such data or this document. Any data on past performance, modelling, scenario analysis or back testing contained in this document is no indication as to future performance. We provide no guarantees as to the reasonableness of the assumptions made or the accuracy and completeness of this data. Before taking any action you should consult your adviser as to the suitability to you of the investments mentioned.

9 16 All Terrain Portfolio Strategy All Terrain Investment Management WHAT IS YOUR ATTITUDE TO RISK? How do we Measure Risk? One of the most important considerations with any investment is to balance your attitude to risk with your desire for positive returns. Risk is difficult to define and will mean different things to different people. All types of investment, including our portfolio strategies, carry some risk of making a loss. The important thing is to be comfortable that your investments represent, as closely as possible, a level of risk acceptable to you, and continues to do so. That s why your financial adviser will want to determine your reasons for investing. The most common measure of risk is the extent to which the value of the assets in an investment moves up and down over a given period, relative to their longterm average value. This is often referred to as volatility. Investments with higher volatility are considered to be riskier than those with lower volatility. Although their potential for upward swings is greater, so is their equivalent potential for downward movement, and we set out target volatilities for each portfolio strategy, in order to assist in matching your comfort level for loss to a particular asset allocation. Furthermore, knowing your time horizon is extremely important when it comes to determining a suitable investment strategy. All things being equal, an investor can afford to be more aggressive with a longer time horizon. For example, most financial advisers would recommend that the asset allocation of a 30 year old be more heavily weighted in equities or riskier growth investments, than that of someone who is close to retirement. Your financial adviser will assess your attitude to risk and establish your objectives and investment time horizon. Another consideration is concentration risk. As the model portfolios move from lower risk to higher risk, on a look through basis, your portfolio is increasingly concentrated in higher risk assets such as international equities and commodities. Investment Objective The different building block funds bring exposure to different asset classes and strategies. Investment Strategy The All Terrain Portfolio Strategy invests into one of five risk profiled portfolio strategies, to provide a cost effective absolute return solution for sums which are for a minimum portfolio size of 25,000. Each portfolio strategy, invests a range of our in house building block funds. Each underlying fund has a cash plus benchmark, meaning overall the investment portfolio strategies target absolute returns, having combined the building blocks in different proportions to match your investment profile. Return and Volatility Profile* TARGET ANNUALISED RETURN 0% 12% 10% 8% 6% 4% 2% 0 TARGET ANNUALISED RISK 5% all terrain portfolio strategy KEY for Asset Allocation Pie Chart MONEY MARKET ETF GOVERNMENT BOND ETF CF AR CAUTIOUS MULTI ASSET 6% 8% 10% 12% Cautious Conservative INCREASING RISK * Please not these levels are target only and are not guaranteed. Balanced Progressive Adventurous (Source: ARIA Capital Management) CF RICHMOND CORE EFA AR MULTI ASSET INCOME EFA AR DIVERSITY PORTFOLIO STRATEGY Cautious Benchmark: 1M LIBOR + 1% Target Volatility: Global Corporate Bond Index less 2% Concentration Risk: Lower Suggested Minimum Investment Time Horizon: 5 years Conservative Balanced Benchmark: 1M LIBOR + 3% Target Volatility: Global Corporate Bond Index Concentration Risk: Medium Suggested Minimum Investment Time Horizon: 5 years Progressive Benchmark: 1M LIBOR + 3.5% Target Volatility: Global Corporate Bond Index plus 1% Concentration Risk: Medium - High Suggested Minimum Investment Time Horizon: 6 years Adventurous PORTFOLIO SUITABILITY EXAMPLE ASSET ALLOCATION Benchmark: 1M LIBOR + 2% Target Volatility: Global Corporate Bond Index less 1% Concentration Risk: Low - Medium Suggested Minimum Investment Time Horizon: 5 years Benchmark: 1M LIBOR + 4% Target Volatility: Global Corporate Bond Index plus 2% Concentration Risk: High Suggested Minimum Investment Time Horizon: 7 years RISK LEVEL LOWER HIGHER Suitable for investors who are cautious by nature or close to retirement and who seek steady growth but are willing to forego possible higher returns for steady performance and less volatility. Returns from this strategy should be slightly better than those available from a high street deposit account, although the value of the investment could fall as well as rise. Investors in this strategy would feel uncomfortable if their investments rose and fell in value rapidly. This strategy will maintain a broad spread of investments, including higher exposure to less volatile asset classes such as money market funds, government bonds and absolute return strategies to help guard against significant falls in equity markets. Suitable for investors who are conservative by nature or close to retirement and who seek steady growth but are willing to forego possible higher returns for steady performance and less volatility. Returns from this strategy should be better than those available from a high street deposit account, although the value of the investment could fall as well as rise. Investors in this strategy would feel uncomfortable if their investments fell significantly in value in any one year. This strategy will maintain a broad spread of investments, including higher exposure to less volatile asset classes such as fixed income and absolute return strategies to help guard against significant falls in equity markets. Suitable for investors who are seeking longer term growth potential with at least a medium term time horizon and who are prepared to accept a moderate level of volatility of returns as the price for potential growth. This strategy is designed to balance risk and reward and is appropriate for investors looking for higher returns than those available from a high street deposit account and willing to accept a certain amount of fluctuation in the value of their investments as a result. Investors in this strategy would feel uncomfortable if their investments were to fall significantly in value in any one year. This strategy will maintain a broad spread of assets, but with a greater emphasis on equities. Suitable for investors willing to accept a higher level of risk on their investments in return for potentially, higher returns in the longer run. Investors in this strategy are willing to accept greater variability of returns and quite substantial fluctuations in the value of their investments as a result. They would feel comfortable if their investments fell in value more than 3 months in any one year and would see this as a time to ride out the storm rather than a time to invest more. This strategy will maintain a higher exposure to more volatile investments, including equities and commodities. Suitable for investors willing to accept a much higher level of risk on their investments in return for potentially, higher returns in the longer run. Investors in this strategy are willing to accept what might be significant short term fluctuations in the value of their investments as a result. They would feel comfortable if their investments fell in value more than 3 months in any one year and might well see this as an ideal time to invest more. This strategy will maintain a higher exposure to more volatile investments, including equities and commodities % 15.00% 45.00% 25.00% 35.00% 25.00% 27.50% 22.50% 22.50% 12.50% 32.50% (Source: ARIA Capital Management) These asset allocations are indicative at time of going to press, and may change depending on circumstances, market views etc. No assumptions should be made that similar asset allocations will be profitable or suitable. Allocations and their percentages will vary depending on an individual investors needs. 7.50% 5.00% 7.50% 5.00% 2.50% 2.50% 17.50% 27.50% 15.00% 32.50% 20.00% 42.50% 12.50% 22.50% 5.00% 2.50%

10 18 All Terrain Portfolio Strategy All Terrain Investment Management RISKS ASSOCIATED WITH ATP Risk Profiled Portfolio Strategies The 5 risk profiled strategies are made up of a blend of four building blocks funds, ETF exposures plus a proportion held in cash. Each of the building block funds focusses on a set asset class which determines its individual risk/return level. For example, conventionally speaking, the fixed income asset class, including government bonds and corporate bonds, which EFA AR Multi Asset Income focusses on, is considered less risky than international equity exposure offered by CF Richmond Core, but it offers a lower potential return. This means that lower risk investment profiles will have a greater fixed income component compared to higher risk/return investment profiles, which will have a larger international equities component. ATP s risk profiled strategies, in combining the building block funds, bring a diversified blend of investments that match individual investment objectives. What is the profile of the typical investor the portfolios are designed for? These portfolios should be suitable for investors who are seeking a well diversified, actively managed investment exposure to the respective asset classes covered by the different building block funds. These investors are expected to have a good understanding of the investment risk and return parameters of the asset classes the portfolios invest into. Please note that investors who require extremely high levels of risk or alternatively do not want to put capital at risk, may not find the All Terrain Portfolio strategy suitable for all their needs. This should be discussed with your financial adviser. Market Fluctuations and Absolute Returns - As markets fluctuate we cannot guarantee the level of capital gains or income that your ATP risk profiled strategy will achieve. The value of investments and the income you derive from them may go down as well as up and you should be prepared that you may not get back the full amount that you invested. Whilst we are focussed on targeting absolute returns over a full market cycle, this does not mean that your capital is guaranteed, or that your portfolio will make positive returns regardless of market conditions. As your financial adviser will explain, when investing into one of the risk profiled ATP strategies, it should be considered a medium to long term investment, and suggested minimum holding periods are detailed along with each portfolio profile. Effect of the Initial Charge - The original amount you invest will be reduced by the initial charge levied by your financial adviser. As a result, if you withdrew your investment at that point you would not get back the amount you originally invested. However, investors do get a 14 day cooling off period following application. Diversification Risk - The building block funds will seek to achieve their objectives through investments in a range of collective investment schemes, money market deposits, transferable securities and derivative instruments. Subject to the restrictions set out in the prospectuses for each of the building block funds, the portfolio will typically remain fully invested in these funds. There will, however, be no restrictions on the underlying investments held, in terms of investment type, geographical or economic sector, other than those imposed by the Prospectuses, meaning that the Fund manager has the absolute discretion to weight the portfolio towards any investment type or sector, including cash, at any time. Unregulated collective investment schemes may be used to the extent permitted by the Prospectuses. The building block funds may hold exchange traded derivatives for investment purposes as well as for efficient portfolio management purposes (including hedging). It is not intended that the use of derivatives in this way will change the risk profiles of the Fund. Borrowing will be permitted up to the levels stated in the Prospectuses. Inflation risk Inflation will, over time, reduce the value of your investments in real terms. Exchange Traded Funds ( ETF ) - The risk profiled portfolio strategies (specifically the Cautious and Conservative profiles) may invest in Exchange Traded Funds, in particular into global government bonds and money market funds. Exchange Traded Funds represent a basket of securities that are traded on an exchange and may not necessarily trade at the net asset value of their underlying holdings. As a result, they may trade at a price that is above or below the value of the underlying portfolio. What risk factors affect the Building Block Funds? Specific risks relating to these Funds are as follows, (please note the following is not exhaustive, and for a full description of the risks of the building block funds please consult each funds Prospectus): Pricing and liquidity - Where a Fund has exposure to alternative asset classes there is a risk that the price at which an asset is valued may not be realisable in the event of sale. This could be due to a mis-estimation of the asset s value or due to a lack of liquidity in the relevant market. As a result, at times, the ACD may have to delay acting oninstructions to sell investments, and the proceeds on redemption may be materially less than the value implied by the Fund s price. Emerging Markets - Emerging markets tend to be more volatile than more established stock markets and therefore your money is at greater risk. Risk factors such as political and economic conditions, together with potential currency risk, should also be considered. The reliability of trading and settlement systems in some emerging markets may not be equal to that available in more developed markets, which may result in delays in realising investments within the funds. A counterparty may not pay or deliver on time or as expected. Lack of liquidity or efficiency in certain stock markets or foreign exchange markets in certain emerging markets may mean that from time to time the investment adviser may experience more difficulty in purchasing or selling holdings of securities than it would in a more developed market. Currency Exchange Rates - Funds investing in overseas securities are exposed to, and can hold, currencies other than pounds sterling (GBP). As a result, exchange rate movements may cause the value of investments to decrease or increase. Counterparty Risk Where a Fund enters into a derivative contract it will be exposed to the credit of the other party (usually referred to as counterparty ) and their ability to wholly or partly satisfy the terms of the contract. In the event of a bankruptcy or insolvency of a counterparty, a Fund could experience delays in liquidating the position and may incur significant losses. The ACD of the Funds may use one or more counterparties to undertake derivative transactions on behalf of a Fund and may be required to pledge a Fund s assets as collateral against these transactions. There may be a risk that a counterparty will be unable to meet its obligations with regards to the return of the collateral and may not meet other payments due to a Fund. Investing in other collective investment schemes - Each Fund may invest in other regulated collective investment schemes. As an investor of another collective investment scheme, a Fund will bear, along with the other investors, its portion of the expenses of the other collective investment scheme, including management, performance and/or other fees. These fees will be in addition to the management fees and other administrative expenses which a Fund bears directly with its own operations. Non-UCITS Retail Schemes (NURS) Both the EFA AR Diversity Portfolio Strategy and EFA AR Multi Asset Income Funds are Non-UCITS Retail Scheme. Such Funds can have wider investment and borrowing powers than UCITS schemes with higher investment limits in various areas. They can also invest to a greater extent in areas such as property and unregulated schemes and have the option to borrow on a permanent basis. Such additional powers can increase potential reward, but may also increase risk. Unregulated Collective Investment Schemes As NURS funds, EFA AR Diversity Portfolio Strategy and EFA AR Multi Asset Income may invest, in total no more than 20% of the scheme property, in unregulated collective investment schemes which are generally considered to be a higher risk than investment in regulated schemes. An unregulated collective investment scheme is unlikely to be subject to regulations which govern how they are managed. For example, they can utilise higher risk investment techniques, they may borrow to invest, they can suspend calculation of net asset value preventing redemption or otherwise limit redemption, they may not adhere to internationally recognised accounting standards and functions such as pricing and custody may not be subject to any rules. NURS may also invest in unregulated collective investment schemes which are valued less frequently than the NURS. As a result, there is a risk that any market movements will not be reflected in the daily price of the Funds. Derivatives and volatility - Derivative instruments may be used in the Funds for both investment purposes and the purposes of Efficient Portfolio Management (EPM). The use of derivatives for EPM should not lead to an increase in risk to the Funds. Where the funds invest in derivatives and forward transactions in the pursuit of the EFA AR Multi Asset Income Fund and EFA AR Diversity Portfolio Strategy Fund s objectives, it is the intention that these funds will not have volatility over and above the general market volatility of the markets. It is not the ACD s intention that the use of derivatives and forward transactions in the pursuit of the EFA AR Multi Asset Income objectives will cause its risk profile to change. Modern portfolio theory (MPT) describes how by combining a range of asset classes in one fund, the sharp ups and downs of each asset class can be smoothed out by the other asset classes and as a consequence, the portfolio s overall investment performance becomes steadier and smoother. As well as reducing volatility, MPT illustrates that higher returns can be achieved (on a comparable risk basis with other portfolio s) by combining non-correlated investments together in one portfolio. In other words, the smoothing effect of multi asset investing does not compromise a portfolio s ultimate performance potential.

11 About ARIA We are passionate about protecting and growing the wealth of our clients, taking care of all of their investing requirements. We believe in all terrain investment management, which means targeting positive returns in any market environment. We also believe in a fee structure that truly aligns itself with clients best interests, incentivising us to first maintain, then increase our clients wealth in real terms. Unfortunately, it appears to us that many managers within the investment management industry have sought to put their interests before those of its customers, by selling investment performance which compares favourably with certain stock market indices but not in absolute terms. This is little noticed when the wind is at their backs, i.e. when stock markets are rising, but is less satisfactory during periods of decline. We will readily concede that benchmarking as a notion has intuitive appeal, but for most clients (in real life) cash or bank deposit rates or, indeed, inflation, are more relevant-to-real life benchmarks. The relative return investing approach, favoured by much of the industry, justifies losing money by comparing itself to a stock market index, such as the FTSE 100. This is not our approach. We are active, absolute return fund managers. This means that the portfolios we manage are not constrained by any requirement to represent any stock market and we will not buy a particular stock or other holding because it is a prominent constituent of a potentially falling index. Each investment is made on the basis of merit alone: we must genuinely believe that its value is likely to increase and be comfortable that the potential reward justifies any exposure to risk. Importantly, as well, an investment needs to fit with the rest of the portfolio, but whether it is part of the FTSE 100 is, for the most part, irrelevant. ARIA s investment advisory council collectively possess many years of experience in the investment business, combining expertise across a wide spectrum of asset classes, including hedge funds, private equity, commodities, as well as more traditional asset classes. Our investment philosophy is simply all terrain investment management. Absolute Return Investment Advisers (ARIA) Limited is a Limited Company. Authorised and Regulated by the Financial Services Authority Registered in England and Wales No: Duke Street, Richmond, TW9 1HP Telephone: +44 (0) enquires@ariacm.com, For details visit ARIA, 011, 19/2011