Artemis High Income Fund I Inc GB00B2PLJN71

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1 Morningstar Global Fund Report Print Date: 2 November, 218 GBB2PLJN71 Page 1 of 9 26 Jun 218 1:, UTC- 5 Morningstar Category GBP Category Index Morningstar UK Total Assets 1, Current Yield % 6.45 Inception Date 7/3/8 Domicile/ Currency GBR/GBP Morningstar Rating QQQQQ Equity Style Map Giant Large Mid Small K 2K 15K 1K Performance 31/1/18 Growth of 1, Annualized Value GBP Ret % Fund 18, Category 14, Index Full Manager Change Partial Manager Change Deep Value People Value Blend Growth High Growth Micro Alex Ralph 2/14 Chris Ellis 3/14 Total Named Managers 2 Morningstar Pillars Process p. 2-3 Performance p. 4 People p. 5 Parent p. 6 Price p. 7 ) & & ( & & * & * & * 5K Morningstar Rating QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQQQQQQQQQQQQQQQQQ QQQQQQQQ QQ Quartile Rank in Category Percentile Rank in Category % Total Return (GBP) /- Category +/- Index Process Fixed Income Style Box Asset Stock Bond Cash Other Equity Supersectors % x Defensive % w Sensitive % m Cyclical % Price TER/OGC Analyst View Ashis Dash, Associate Director We retain our conviction here despite some changes to the fund s equity portion. The conduct of Morningstar's analysts is governed by Morningstar's Code of Ethics, Securities Trading and Disclosure Policy, and Morningstar Manager Research Integrity Policy. For informaton regarding conflicts of interest, please click Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ Á The for Funds is a forward-looking analysis of a fund. Morningstar has identified five key areas crucial to predicting the future success of a fund: People, Parent, Process, Performance, and Price. The pillars are used in determining the for a fund. s are assigned on a five-tier scale running from Gold to Negative. The top three ratings, Gold, Silver, and Bronze, all indicate that our analysts think highly of a fund; the difference between them corresponds to differences in the level of analyst conviction in a fund s ability to outperform its benchmark and peers through time, within the context of the level of risk taken over the long term (defined as a full market cycle or at least five years). Neutral represents funds in which our analysts don t have a strong positive or negative conviction over the long term (defined as a full market cycle or at least five years) and Negative represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance over the long term (defined as a full market cycle or at least five years). Past performance of a security may or may not be sustained in future and is no indication of future performance. For detailed information about the Morningstar Analyst Rating for Funds, please visit 26 Jun, 218 Alex Ralph took over as lead manager here in July 215 having been named a comanager in March 214 in light of her increasing involvement with the strategy since joining Artemis in 25. She is responsible for the fixedincome investments and, since May 218, is supported by Ed Leggett and Paul Casson on the fund s equity allocation. The duo replaced Artemis Income team, led by experienced UK equity investor Adrian Frost, which had been involved here since 22. The change was driven by Ralph s intention to diversify the equity sleeve to a more balanced combination of all-cap, growth, and income names across the UK and Europe, whereas the Income team had a UK large-cap, income focus. We are comforted by Leggett and Casson s longer-term results on funds they respectively managed at previous firms. More importantly, the fixed-income team, responsible for the fund s 8%-plus exposure to bonds, remains intact. We are also reassured by Ralph s experience in the space, having successfully comanaged Artemis Strategic Bond (with a Morningstar Analyst Rating of Silver) since its launch in June 25. The fund is managed primarily to sustain an enhanced running yield. The managers employ a largely bottom-up approach looking for issuers offering high yields but with a high probability of meeting their coupon/principal/dividend payments as well. Within fixed income, this leads to a bias towards high yield and subordinated bonds, especially within financials. The equity allocation is driven primarily by the relative attractiveness of cash flow yields offered by equities against the bond portfolio. The fund s long-term performance has been remarkable. Its absolute and risk-adjusted returns ranked in its category s top quintile for the trailing three, five, and 1 years as at May 218. But its bias towards higher-yielding assets also entails higher risk, reflected in the fund s aboveaverage volatility and maximum drawdown. Although the team is small compared with some peers, the combination of experienced managers, an approach apt for the fund s income objective, and below-median fees drive our faith in the fund s long-term outperformance potential. It retains its Silver rating. 218 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and

2 Morningstar Global Fund Report Print Date: 2 November, 218 GBB2PLJN71 Page 2 of 9 26 Jun 218 1:, UTC- 5 Process: Approach GBP Morningstar UK A primarily bottom-up process focused on delivering a high level of income. Process Pillar 26 Jun, 218 The managers invest a minimum of 8% in bonds and may have up to 2% in equities while aiming to construct a portfolio with a higher-than-average yield (currently aimed at generating a higher yield than Artemis Income). As with Artemis other income funds, manager Alex Ralph employs a largely bottom-up approach. She Equity Style 3/9/218 Holdings-Based Style Map Deep Value Value Blend Growth High Growth Equity Style Box Factors Giant Large Mid Small Micro Fund Centroid: Weighted average of equity holdings Zone: 75% of fund equity holdings Category Average Market Cap Fund 3-Yr Avg Category Giant/Large Mid Small/Micro Avg Market Cap Bil GBP Value Measures Fund 3-Yr Avg Category Price/Prospect. Earnings Price/Book Price/Sales Price/Cash Flow Dividend Yield Growth Measures Fund 3-Yr Avg Category Long-Term Earnings % Historical Earnings % Sales % Cash Flow % Book-Value % looks for companies offering generous yields but with a high likelihood of meeting their obligations as well. The process thus lays heavy emphasis on future cash flow analysis. The effective implementation of this process through the years drives our positive view here. On the fixed-income side, Ralph looks to harvest as high a yield as possible but limit issuers to ones she believes would meet the coupon and principal payments on their bonds. In doing so, she typically looks for bonds with above 5% yield--this leads to a bias towards high-yield Fixed Income Style 3/9/18 Fixed Income Style Box Ltd Mod Ext Interest Rate Sensitivity Credit Quality High Med Low Selected Fixed Income Style Box Factors History Style Bonds % Bonds % is based on portfolio data. Fund 3-Yr Avg Category Average Credit Quality B B BB Avg Effective Duration Equity Region Exposure 3/9/218 Market Type Equity % Fund 3-Yr Avg Category Developed Emerging Top 5 Countries Equity % Fund 3-Yr Avg Category United Kingdom Germany Spain France Switzerland Income 31/1/18 Fund 3-Yr Avg Category Current Yield Month Yield 5.9 Average Coupon Average Coupon surveyed 3/9/18 debt and subordinated securities. On the equity side, new managers Ed Leggett and Paul Casson aim for a balanced combination of all-cap, growth, and income names across the UK and Europe compared with the earlier UK large-cap, income focused portfolio under Artemis Income team. The number of equity holdings is also likely to go up modestly to around 2 from about 15. While Ralph expects these changes to complement the fixed-income part of the portfolio better, she doesn t expect the income levels to change much. Asset 3/9/18 Current 3-Year Average Net Assets % Fund 3-Yr Avg Category Equity Fixed Income Cash Other Sectors 3/9/218 Top 5 Equity Sectors Fund 3-Yr Avg Category tconsumer Cyclical sconsumer Defensive oenergy pindustrials icommunication Serv Fixed Income Super Sectors Assets % Fund Category Govt. Corp. Secur. Muni. Cash & Equiv. Other Top 5 Fixed Income Sectors Fund 3-Yr Avg Category Corporate Financial Services Corporate Consumer Cyclical Convertible Financial Services Corporate Utilities Treasury Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and

3 Morningstar Global Fund Report Print Date: 2 November, 218 GBB2PLJN71 Page 3 of 9 26 Jun 218 1:, UTC- 5 Process: Portfolio GBP Morningstar UK Retains its bias towards high-yield credit and financials. Process Pillar 26 Jun, 218 The fund invests across high-yield and investment-grade credit, government bonds, and equities. The managers usually limit issuers to 5% with high-yield bonds capped at 3%, but in practice the portfolio is more diversified. The fund s higher income objective, however, leads to an inherent skew towards high-yield bonds. They Credit Quality Surveyed 31/8/18 Bonds % Fund Category accounted for 56.8% of the fund as at May 218, with Alex Ralph preferring exposure to bonds in the US over Europe, based on her belief that ECB withdrawing its supportive policies could lead to considerable outflows from the latter. Meanwhile, investment-grade and government bonds accounted for 18.7% and 4.5% of the fund, respectively; equity exposure stood at 15.5%, up from 12% in November 216 (its lowest since 29) and within its typical 15%-2% range since mid-29. Amongst sectors, the fund has historically exhibited a bias to financials, in particular to Bond Maturity 3/9/18 Assets % Fund Category bonds lower down in the capital structure. Ralph retained this bias with 41% of the fund in financials as at May 218, with a preference towards UK and European names. The biggest change however was the increase in oil & gas exposure to 8.3% from 3.6% in May 217 as Ralph added US-dollar-denominated bonds. Lastly, about one third of the fund was in short-dated corporate bonds along with a small short in gilt futures (first used in 217), to reduce duration stemming from some of its long-dated holdings, bringing total duration down to 3.3 years. Coupon Range 3/9/18 Assets % Fund Category AAA AA A BBB BB B <B NR % to PIK Portfolio Holdings 31/7/18 Previous Portfolio Date Equity Holdings Bond Holdings Other Holdings Assets in Top 1 Holdings Turnover Ratio (Reported) 3/6/ % Top 1 Equity Holdings Country Assets % Assets % 31/7/18 3/6/18 T Bayerische Motoren Werke AG DEU /18 <1 Narrow t Consumer Cyclical R Sanofi SA FRA 1.4 7/18 <1 Wide d Healthcare 1.81 Enagas SA ESP /18 <1 f Utilities 1.78 Royal Dutch Shell PLC Class A GBR /18 <1 Narrow o Energy Deutsche Telekom AG DEU /18 <1 No i Communication Serv T Danone SA FRA /18 <1 Narrow s Consumer Defensive -7.7 T Smith (DS) PLC GBR /18 <1 t Consumer Cyclical Imperial Brands PLC GBR /16 <1 Wide s Consumer Defensive BP PLC GBR /17 <1 Narrow o Energy 17.7 Glencore PLC GBR /18 <1 No r Basic Materials -8.2 Change since previous portfolio: T Increase Y Decrease R New First Bought Days Trading Economic Moat Sector 1-Yr Total Top 5 Fixed Income Holdings Country Currency Assets % Super Sector Primary Sector Secondary Sector United Kingdom of Great Britain and Northern Ireland GBR GBP 3.72 Government Government Treasury.75% Euro BUND Future Sept18 DEU EUR Government Government Related Treasury Future PGH Capital PLC 6.62% DEU GBP 1.39 Corporate Corporate Bond Financial Services RBS Capital Trust II 6.42% USA USD 1.29 Corporate Corporate Bond Financial Services America Movil S.A.B. de C.V. 6.38% MEX GBP 1.9 Corporate Corporate Bond Communication Services 218 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and

4 Morningstar Global Fund Report Print Date: 2 November, 218 GBB2PLJN71 Page 4 of 9 26 Jun 218 1:, UTC- 5 Performance GBP Morningstar UK Impressive long-term performance despite a period of weakness in 28. Performance Pillar 26 Jun, 218 The fund s long-term track record is impressive. Despite its above-average volatility, the fund s absolute and risk-adjusted returns rank in its category s top quintile for the trailing three, five, and 1 years as at May 218. Unsurprisingly, given its high-yield bias and its steady 15%-2% allocation to equities, the fund exhibits a relatively high correlation with high-yield markets. This also means the fund s performance pattern can be fairly volatile. For example, it underperformed its category in 27-8 and again in 211, largely driven by its bias towards high-yield bonds and financials, in particular subordinated bonds; its equity exposure also weighed on absolute returns. However, the continued preference to these higher-yielding assets, as they recovered, resulted in strong returns (both absolute and relative) in 29-1 and , with the fund finishing in the top decile on both occasions. In 215, while some energy-related bonds (Enquest, Afren) detracted, positive security selection within financials (RBS, L&G) and high yield (Boparan, Odeon) more than offset these. The bias to high-yield and financials detracted early on in 216 before turning around. Good security selection within these areas (RBS, L&G, Vodafone) drove the fund s outperformance in 217. While the fund s energy and financials exposure (across bonds and equities) helped, broad weakness in the high-yield markets has held back returns to date in 218. Morningstar Rating and Risk 31/1/18 Period Morningstar Ret vs Cat Morningstar Risk vs Cat Morningstar Rating 3 Years Above Avg Above Avg QQQQ 5 Years High Avg QQQQQ 1 Years High High QQQQQ Overall Rating Risk Analysis 31/1/18 3-Year Return and Risk Analysis Total Return % QQQQQ Fund Category Index ) & & ( & & * & * & * History 31/1/18 12-Month Rolling Return % Fund Full Manager Change Partial Manager Change Quartile Rank in Cat Percentile Rank in Cat % Total Return GBP /- Category +/- Index Income Return Standard Deviation 3-Year Risk Measures Fund Category Index Standard Deviation Sharpe Ratio 1.12 R-Squared Beta.7.32 Alpha Maximum Drawdown Fund Category Index Max Drawdown (%) Peak Date Valley Date Max Drawdown (Months) Upside/Downside Fund Category Index Upside Capture Ratio Downside Capture Ratio Returns 31/1/18 Trailing Returns Total Investor Rank in Cat Cat Index 1 Year Years Years Years Tenure 2/ Inception 3/ Rolling-Returns Summary 94% 6 36-Month Rolling Periods 78 Observations, 6 Years The shading and percentages correspond to how often the fund returns landed in each category quartile. Income and Capital Returns Return % Income Return Capital Return Year /18 Income Income % Rank in Cat Capital Capital % Rank in Cat / Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and

5 Morningstar Global Fund Report Print Date: 2 November, 218 GBB2PLJN71 Page 5 of 9 26 Jun 218 1:, UTC- 5 People GBP Morningstar UK A small but experienced team that has seen some changes on the equity side recently. People Pillar 26 Jun, 218 Alex Ralph became lead manager of the fund in July 215 having served as a comanager since March 214, though her involvement dates back to 25. She has 15-plus years experience, initially as a credit analyst, before moving to fund management specialising in highyield and later expanding to investment-grade Management Team credit. She joined Artemis in April 25 from F&C and has successfully managed Silver-rated Artemis Strategic Bond with James Foster since its launch in June 25. She draws upon Foster for his investment-grade and financials expertise and is supported on the high-yield side by Chris Ellis, who joined the team as an analyst in late 214. The fund was previously managed by Artemis Income team, headed by Adrian Frost, since September 22. Frost stepped down in July 215 but remained involved through the Income team s recommendations for equities within the fund. More recently, Ralph wanted to diversify the fund s equity exposure away from UK equities and to a more balanced combination of growth and income. Ed Leggett and Paul Casson were thus appointed to manage the equity portion from May 218. They joined Artemis in 215 and 213, respectively, and have good long-term results on funds they ran at previous firms. More importantly, the fixed-income team responsible for over 8% of the portfolio remains intact. We appreciate that Ralph is personally invested in the fund. We maintain our Positive view here. Experience and Asset Load Total AUM Bil GBP in Funds Managed 2+ Number of Managers Longest Tenure Years Manager Retention Rate 5-Year % Average Manager Tenure 4.71 Years 15 1 Advisor Subadvisor Artemis Investment Management LLP Tenure Years Alex Ralph 2/14 to Present Years on Managed Funds Years on Fund 17 4 Fund AUM Current Funds Managed 2, Largest Funds Managed Tenure Dates Role Fund Size Bil GBP Investment Tenure Index Artemis Strategic Bond Fund 6/5 to Present 1 of Artemis High Income Fund 2/14 to Present 1 of Utmost Artemis Strategic Bond 8/8 to Present 1 of OMI IM GBP Artemis High Income 5/2 to Present 1 of CLI Artemis Strategic Bond 4/6 to Present 1 of Chris Ellis 3/14 to Present Years on Managed Funds Years on Fund 4 4 Fund AUM Current Funds Managed 1, Largest Funds Managed Tenure Dates Role Fund Size Investment Tenure Index Bil GBP Artemis High Income Fund 3/14 to Present 1 of Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and

6 Morningstar Global Fund Report Print Date: 2 November, 218 GBB2PLJN71 Page 6 of 9 26 Jun 218 1:, UTC- 5 Parent GBP Morningstar UK A solid steward. Parent Pillar 4 Apr, 218 Artemis benefits from a solid investment culture, supported by a stable ownership structure. Since 21, it has been jointly owned by active employees, including several portfolio managers, and the US-based Affiliated Managers Group. Despite being majority-owned by AMG, Artemis has maintained its cultural and Assets By Region, By Domicile Bil GBP investment autonomy. Its manager ranks are deep, with significant levels of investment experience, and they are all invested in their funds, some heavily. The firm offers investors a strong range of funds across equity, fixed income, and multi-asset. While the bulk of the assets under management continue to sit in equity, we are pleased to see a greater diversification within this segment than historically, with a number of prominent franchises. As a result, the group is no longer at the mercy of the UK Income strategy, which had dominated for several years. It is also Fund Family Details Europe (*) Breakdown broadening its client base to include European investors through a series of Luxembourg SICAV launches for a handful of existing UK products where there is client demand. Lately, Artemis has made the process to launch new strategies more rigorous and has taken steps to put in place manager transition plans for key offerings--both positive changes in our view. Its approach to capacity is generally sensible and funds are competitively priced overall, though there is still room for improvement. In all, the firm earns a Positive Parent rating. Morningstar Rating Breakdown Americas. Europe & Africa 24.5 Asia & Australia. Rating Assets % Œ ˇ Ø Not Rated 25.6 Rating Assets % QQQQQ 22.3 QQQQ 42.7 QQQ 22.6 QQ 3.5 Q 2.9 Not Rated 6.1 Asset Class Breakdown Europe (ex Money Mkt) Assets Bil GBP Asset Class Assets Bil GBP Assets % Equity Fixed Income Convertibles Property Alternative Commodities Fund Family Details Europe Top Performing Funds Category Name Fund Size Return % 3-Year Rank in Cat 3-Year Artemis US Extended Alpha Fund I Acc GBP US Large-Cap Blend Equity 1, Artemis Global Emerging Markets Fund I Acc Global Emerging Markets Equity GBP Artemis Monthly Distribution Fund I Acc GBP Moderate Largest Funds Category Name Fund Size Return % 3-Year Rank in Cat 3-Year Artemis Income Fund R Inc UK Equity Income 6, Artemis Global Income Fund I Acc Global Equity Income 4, Artemis US Extended Alpha Fund I Acc GBP US Large-Cap Blend Equity 1, Recent Fund Launches Category Name Fund Size Return % Inception Inception Date Artemis Global Equity Income Fund I Acc GBP Global Equity Income /6/15 Artemis Global Emerging Markets Fund I Acc Global Emerging Markets Equity /4/15 GBP Artemis US Absolute Return Fund I Acc USD Alt - Long/Short Equity - US /1/14 (*) All data is based on Branding name and refers to funds domiciled in Europe. 218 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and

7 Morningstar Global Fund Report Print Date: 2 November, 218 GBB2PLJN71 Page 7 of 9 26 Jun 218 1:, UTC- 5 Price GBP Morningstar UK Attractively priced TER/OGC 1..8 Expense History TER/OGC Price Pillar 26 Jun, 218 The fund s ongoing charge of.69% (as of January 218) for its I share class is below the median for similar clean share classes within its Morningstar Category. It thus earns a Positive Price rating TER/OGC Net Assets Bil GBP Net Flows Expense Breakdown Ongoing charge Ongoing charge 19/1/18.69 Fee Level Fee Level Peer Group Selected Components Max Management Fee.63 Performance Fee Fee Level Breakpoints High >. Above Average.-. Average.-. Below Average.-. Low <. Fund.69 Peer Median Share Class Information Share Class Identifier Morningstar Category TER/OGC Max Mgmt Fee Performance Fee Maximum Inital Charge Artemis High Income I Inc GBB2PLJN71 GBP ,.9 Artemis High Income R Inc GB GBP ,.26 Artemis High Income I Monthly Inc GBBJTKR4 GBP ,.15 Minimum Initial Inv Assets Bil GBP 218 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and

8 Morningstar Global Fund Report Print Date: 2 November, 218 Morningstar Global Fund Report Disclosure The Morningstar Global Fund Report ( Report ) is for informational purposes, intended for financial professionals and/or qualified investors ( Users ) and should not be the sole piece of information used by such Users or their clients in making an investment decision. The analysis within this report is prepared by the person(s) noted in their capacity as an analyst for Morningstar. The opinions expressed within the Report are given in good faith, are as of the date of the Report and are subject to change without notice. Neither the analyst nor Morningstar commits themselves in advance to whether and in which intervals updates to the Report are expected to be made. The written analysis and within this Report are statements of opinions; they are not statements of fact. 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9 Morningstar Global Fund Report Print Date: 2 November, 218 s s are assigned on a five-tier scale running from Gold to Negative. The top three ratings, Gold, Silver, and Bronze, all indicate that our analysts think highly of a fund; the difference between them corresponds to differences in the level of analyst conviction in a fund s ability to outperform its benchmark and peers through time, within the context of the level of risk taken. Gold Represents funds that our analyst has the highest-conviction in for that given investment mandate. By giving a fund a Gold rating, we are expressing an expectation that it will outperform its relevant performance benchmark and/or peer group within the context of the level of risk taken over the long term (defined as a full market cycle or at least five years). To earn a Gold rating, a fund must distinguish itself across the five pillars that are the basis for our analysis. Silver Represents funds our analyst has high-conviction in, but not in all of the five pillars. With those fundamental strengths, we expect these funds will outperform their relevant performance benchmark and/or peer group within the context of the level of risk taken over the long term (defined as a full market cycle or at least five years). Bronze Represents funds that have advantages that clearly outweigh any disadvantages across the pillars, giving analyst the conviction to award them a positive rating. We expect these funds to beat their relevant performance benchmark and/ or peer group within the context of the level of risk taken over a full market cycle (or at least five years). Neutral Represents funds in which our analysts don t have a strong positive or negative conviction. In our judgment, these funds are not likely to deliver standout returns, but they aren t likely to seriously underperform their relevant performance benchmark and/or peer group either. Limited. Morningstar Investment Adviser India Private Limited is registered with the Securities and Exchange Board of India (Registration number INA1357) and provides investment advice and research. Morningstar Investment Adviser India Private Limited has not been the subject of any disciplinary action by SEBI or any other legal/regulatory body. Morningstar Investment Adviser India Private Limited is a wholly owned subsidiary of Morningstar Investment Management LLC. In India, Morningstar Investment Adviser India Private Limited has one associate, Morningstar India Private Limited, which provides data related services, financial data analysis and software development. The Research Analyst has not served as an officer, director or employee of the fund company within the last 12 months, nor has it or its associates engaged in market making activity for the fund company. Page 9 of 9 *The Conflicts of Interest disclosure above also applies to relatives and associates of Manager Research Analysts in India #The Conflicts of Interest disclosure above also applies to associates of Manager Research Analysts in IndiaThe terms and conditions on which Morningstar Investment Adviser India Private Limited offers Investment Research to clients, varies from client to client, and are detailed in the respective client agreement. For recipients in Japan: The Report is distributed by Ibbotson Associates Japan, Inc., which is regulated by Financial Services Agency. Neither Ibbotson Associates Japan, Inc., nor its representatives, are acting or will be deemed to be acting as an investment advisor to any recipients of this information. For recipients in Singapore: This Report is distributed by Morningstar Investment Adviser Singapore Pte Limited, which is licensed by the Monetary Authority of Singapore to provide financial advisory services in Singapore. Investors should consult a financial adviser regarding the suitability of any investment product, taking into account their specific investment objectives, financial situation or particular needs, before making any investment decisions. Negative Represents funds that possess at least one flaw that our analysts believe is likely to significantly hamper future performance, such as high fees or an unstable management team. Because of these faults, we believe these funds are inferior to most competitors and will likely underperform their relevant performance benchmark and/or peer group, within the context of the level of risk taken, over a full market cycle. Morningstar may also use two other designations in place of a rating: Under Review This designation means that a change that occurred with the fund or at the fund company requires further review to determine the impact on the rating. Not Ratable This designation is used only where we are providing a report on a new strategy or on a strategy where there are no relevant comparators, but where investors require information as to suitability. For more information about our Analyst Rating methodology please go to Morningstar Star Rating The Morningstar Star Rating is a proprietary data point that is quantitatively driven. Funds are rated from one to five stars based on how well the fund performed (after adjusting for risk and accounting for sales charges) in comparison to similar funds. Within each Morningstar Category, the top 1% of funds receive five-stars and the bottom 1% receives one-star. Funds are rated for up to three time periods three-, five-, and ten-years and these ratings are combined to produce an overall star rating, which is noted within the Report. Funds with less than three years of history are not rated. Morningstar Star Ratings are based entirely on a mathematical evaluation of past performance. Morningstar Star Ratings are in no way to be considered a buy or sell signal nor should be viewed as a statement of fact. Equity-Related Data Points The Report lists the fund s top ten holdings as of the dated noted. For each underlying holding, a series of data points is provided including, where applicable, that security s Economic Moat as of the date noted. Economic Moat The concept of an economic moat plays a vital role in our equity analyst s qualitative assessment of a firm s long-term investment potential, but also in the actual calculation of its fair value estimate. An economic moat is a structural feature that allows a firm to sustain excess profits over a long period of time. We define economic profits as returns on invested capital (or ROIC) over and above our estimate of a firm s cost of capital, or weighted average cost of capital (or WACC). Without a moat, profits are more susceptible to competition. We have identified five sources of economic moats: intangible assets, switching costs, network effect, cost advantage, and efficient scale. Companies with a narrow moat are those we believe are more likely than not to achieve normalized excess returns for at least the next 1 years. Wide-moat companies are those in which we have very high confidence that excess returns will remain for 1 years, with excess returns more likely than not to remain for at least 2 years. The longer a firm generates economic profits, the higher its intrinsic value. We believe low-quality, no-moat companies will see their normalized returns gravitate toward the firm s cost of capital more quickly than companies with moats. For more information about methodology in analysing stocks, please go to For Recipients in Australia: This Report has been issued and distributed in Australia by Morningstar Australasia Pty Ltd (ABN: ; ASFL: 24892). Morningstar Australasia Pty Ltd is the provider of the general advice ( the Service ) and takes responsibility for the production of this report. The Service is provided through the research of investment products. To the extent the Report contains general advice it has been prepared without reference to an investor s objectives, financial situation or needs. Investors should consider the advice in light of these matters and, if applicable, the relevant Product Disclosure Statement before making any decision to invest. Refer to our Financial Services Guide (FSG) for more information at For Recipients in Hong Kong: The Report is distributed by Morningstar Investment Management Asia Limited, which is regulated by the Hong Kong Securities and Futures Commission to provide services to professional investors only. Neither Morningstar Investment Management Asia Limited, nor its representatives, are acting or will be deemed to be acting as an investment advisor to any recipients of this information unless expressly agreed to by Morningstar Investment Management Asia Limited. For enquiries regarding this research, please contact a Morningstar Investment Management Asia Limited Licensed Representative at For Recipients in India: This Investment Research is issued by Morningstar Investment Adviser India Private 218 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. The information, data, analyses and