RUSSELL INVESTMENTS Investment Update Multi Asset Growth I February 209 This report is designed for use by the financial advisor to assist in making a personal recommendation or managing investments for the underlying client.
Contents The cycle of market emotions Over the lifetime of an investment you will experience a range of different emotions. Investment success over the long term depends on you working with your adviser to ensure this emotional journey does not lead to decisions that could derail your investment journey. This section illustrates that cycle in terms of historical periods. Market outlook This section looks at the current economic environment and what factors are driving markets. We also describe how we have recently adapted our multi-asset portfolios to adapt to this environment. Fund fact sheet This section describes the und you are invested in, the makeup of the Fund in terms of multimanager investments, and the performance of the portfolio over time. Fund range performance A look at cumulative returns across the five fund range allows you to see the relationship between increasing risk and the resultant returns in rising markets as well as more challenging times. 2
The cycle of market emotions Greed and fear throughout the economic cycle For Illustrative Purposes Only OPTIMISM THRILL EUPHORIA COMPLACENCY DENIAL HOPE PANIC CAPITULATION DESPONDENCY SCEPTICISM CAUTION WORRY NOV 97-DEC 972 JAN 97-JAN 974 FEB 974-NOV 974 DEC 974-JUN 975 Inflationary pressures. OPEC Oil crisis crude oil Global recession Share market recovery Productivity prices tripled. Inflation Extended bear market despite recession Market Cycle 0% improvements Rapid corporate earnings -5% Credit squeeze Property company failures -24% 9% growth Introduction of paperless technology AUG 984-AUG 987 SEP 987 OCT 987-NOV 987 DEC 987-DEC 989 Credit Boom Irrational shareholder 987 Global stock market Stock market recovery as Market Cycle 2 6% Strong world economic growth -2% sentiment. Peak of overinflated stock -28% crash. 64% value hunters sought to buy quality stocks cheaply. values vs historical PEs. APR 997-SEP 2000 OCT 2000-SEP 200 MAR 2002-FEB200 MAR 200-MAY 2005 Tech boom. Investor Tech bubble burst Reduced global economic Geopolitical uncertainty Market Cycle 99% exuberance Emergence of new economy sectors -28% September terrorist attacks -22% growth forecasts. Extended bear market. Corporate accounting 52% Refocus on world economic fundamentals Boom in resources in scandals. response to industrialization of China JUN 2005-JUL 2007 AUG 2007-SEP 2008 OCT 2008-FEB 2009 MAR 2009-DEC 20 House prices hit highs Credit crunch. Sub-prime Global financial crisis Global share market Market Cycle 4 28% Credit boom Higher interest rates -7% mortgage crisis. Collateralised debt obligation (CDO) failures -7% European and US recessions. Negative real GDP reported for major 87% recovery Deleveraging, slow economic growth Lehman Brothers declares bankruptcy developed countries in Q4 2008. Percentage returns refer to the increase/decrease in the S&P 500 index in USD over their period shown
Market Outlook Market Review February Equities climbed on investor hopes of a positive resolution to US-China trade talks. Both US President Trump and China President Xi suggested progress had been made in discussions ahead of the impending March st deadline. Data released this month revealed Germany narrowly avoided entering recession in the fourth quarter, while the Japanese economy partially rebounded from a negative third quarter. In the UK, Prime Minister Theresa May suffered another symbolic Parliamentary defeat on Brexit. Parliament failed to reiterate its support for the approach to leaving the European Union, as some members believed the motion effectively ruled-out the possibility of a no-deal Brexit. Domestically, fourth quarter UK GDP growth was below expectations at 0.2% QoQ (.% YoY), slowing from 0.6% QoQ (.5% YoY) in the previous quarter. Strategist s Outlook Global Equities: Equity sentiment has worsened as momentum improvement is overwhelmed by fading oversold signals. In our model portfolio, we have downgraded the value scores to US, Japan eurozone and EM equities. Fixed Income: We remain short to duration in our model portfolio. We maintain an underweight to government bonds. We currently have a neutral stance on high yield bonds. We have reduced our preference towards emerging market debt following good performance. Currencies: We currently have a long position to the Japanese yen which is our highest conviction view. Macro forecasts: 209 US GDP forecast: 2.% vs consensus 2.5% (vs 2.2%/2.6% last month). Non-farm payrolls: Analysts expect 90k for the next 2 months. However, our strategy team view is 00k in the next 2 months. 4
Oct-5 Nov-5 Dec-5 Jan-6 Feb-6 Mar-6 Apr-6 May-6 Jun-6 Jul-6 Aug-6 Sep-6 Oct-6 Nov-6 Dec-6 Jan-7 Feb-7 Mar-7 Apr-7 May-7 Jun-7 Jul-7 Aug-7 Sep-7 Oct-7 Nov-7 Dec-7 Jan-8 Feb-8 Mar-8 Apr-8 May-8 Jun-8 Jul-8 Aug-8 Sep-8 Oct-8 Nov-8 Dec-8 Jan-9 Feb-9 28 February 209 Multi Asset Growth I The Fund aims to preserve the value of capital in line with inflation (Consumer Price Index) over the long term by combining a range of investments such as equities, bonds and commodities which we actively manage in response to our market insights. The fund may invest up to 40% in riskier assets that may provide potential for more aggressive growth, such as equity securities. The Multi Asset Growth Funds Range Portfolio Manager David Vickers Russell Investment s Multi-Asset Strategies Team comprises over 50 experienced professionals, including portfolio managers, researchers, portfolio analysts, and strategists in Russell Investments offices around the globe. This team focuses on total client outcomes, including all major asset classes in their solutions. They identify areas of the market offering attractive valuations and growth potential with a reasonable level of risk and research strategies and managers to exploit these pockets of value. Fund facts Inception Date 2rd November 205 ISIN (SEDOL) GB00(BYXJKN4)7 Ongoing Charge 0.80% (04/09/208) Minimum Investment,000 initial, 500 subsequent Currency What happened this month The Fund continued its positive momentum through February. A more dovish US Federal Reserve (Fed), robust oil prices and lingering chances of a trade deal between the US and China, boosted global equity markets, corporate high yield and IG credit returns. Meanwhile, moderating eurozone economic data, upcoming elections in Spain and further political issues in Italy, served as European headwinds. However, the supportive European Central Bank and a potential Brexit delay helped tighten European corporate high yield and credit spreads. The more dovish stance of the Fed was also a tailwind for local currency emerging market debt overall, with spreads tightening over the period. Performance Review Fund Name 5% 0% 5% 0% -5% -0% Month 6 Year 2 Since Inception (PA) For illustration only /2/8- /2/7 /2/7- /2/6 Multi Asset Grow th I (C Acc) 0.6 -.0 0..0 0.7 2.6-5.0 4.2 IMA Mixed Investment 0-5% Shares 0.6 -.0 0. 2.0 2.2.4 -.4 4.7 The fund is priced at market open (7am) so Fund prices have been moved a day later with benchmarks which price at market close (7pm). 5 0 05 00 95 90 GBP Distribution Date 28 February Fund Quarterly Return Inflation (CPI) Fund Cumulative Return Source: Russell Investments. As at 28 February 209. Returns in GBP, net of C Class Fees. Past Performance is not a guide to future performance. 5
28 February 209 Multi Asset Growth I (continued) Current Fund Allocation Cash 5.% Cash 5.% Investment Grade.9% Government Bonds 2.0% High Yield 2.% Fixed Income 6.4% Convertible Debt.6% Alternative Credit 2.7% Real Estate 2.6% Infrastructure 0.0% Real Assets 5.7% Commodities.0% Global Equities 2.4% UK.2% Pan Europe ex UK.2% Equities 25.9% Emerging Equity.% Portfolio Statistics Source: Russell Investments. Data correct as at 28 February 209. Total may not add up to 00% due to rounding. Fund Volatility (Since Inception)*.7% Highest One-Year Return - Lowest One-Year Return - Positive One-Year Returns - Current Yield.4% Fund Size 6.8m Source: Russell Investments, as at 28 February 209. *Volatility describes the extent to which the funds return has fluctuated over time For more information on Russell Investments funds, please contact your financial adviser. Important Information Unless otherwise specified, Russell Investments is the source of all data. All information contained in this material is current at the time of issue and, to the best of our knowledge, accurate. Please note that the value of investment and the income derived from them may go down as well as up and an investor may not receive back the amount originally invested. Any past performance is not a guide to future performance. Potential investors in emerging Markets should be aware that investment in these markets can involve a higher degree of risk. FP Russell Investments ICVC (the "Company") is an investment company with variable capital incorporated in England and Wales under registered number IC000708 and authorised by the Financial Conduct Authority with effect from 22 October 2008. FundRock Partners Limited (formerly Fund Partners Limited) is the Authorised Corporate Director (the ACD ) of the FP Russell Investments ICVC and is authorised and regulated by the FCA. Registered office: 52-54 Gracechurch Street, London ECV 0EH Russell Investments Limited has been appointed as the investment manager and distributor in respect of the Company. Applications for shares in the Company are subject to the terms and conditions set out in the Prospectus, Key Investor Information Document (KIID), Supplementary Information Document (SID), instrument of incorporation and latest annual and half-yearly long reports of the Company. Investors and potential investors must read the KIID and are also advised to read the remaining documents (and in particular the risk warnings) before making an investment in the Company. Copies are available free of charge on request from the ACD and Russell Investments Limited. This document is issued by Russell Investments Limited, a company incorporated in England and Wales under registered number 0208620 and with its registered office at: Rex House, 0 Regent Street, London SWY 4PE. Telephone 44 (0)20 7024 6000. Authorised and regulated by the Financial Conduct Authority, 2 Endeavour Square, London E20 JN. 6
Multi Asset Growth Range Performance data as at 28 February 209 This table shows the performance of the Multi Asset Growth Funds for different periods. Fund Name Month 6 Year 2 Since launch* /2/8- /2/7 /2/7- /2/6 /2/6- /2/5 /2/5- /2/4 /2/4- /2/ Multi Asset Grow th I 0.6 2. -.0 0..0 0.7 2.6-5.0 4.2 7.2 -- -- Multi Asset Grow th II.0 2.2 -.8 0. 2.6 5..4-6.0 6. 8. -- -- Multi Asset Grow th III. 2.0-2.5-0. 4.6 8.5 4.8-6.9 8.9 8.2.0 6.5 Multi Asset Grow th IV.6.9 -. -0.6 5.0 2.7 4.2-8.0 0.4 7.7 -- -- Multi Asset Grow th V 2.0.6 -.8-0.6 5.5 24.9 5.0-8.8.5 9.5 -- -- This table shows the performance of some common asset classes for different periods. Cumulative Performance (%) PA (%) Discrete Performance (%) Common indices Month 6 Year 2 Since launch* /2/8- /2/7 /2/7- /2/6 /2/6- /2/5 /2/5- /2/4 /2/4- /2/ Cash Bank of England Base UK Gilts FTSE All Stocks Gilts UK equities FTSE All Share Global equities MSCI World Net GBP Hedged Property FTSE EPRA/NAREIT Global Commodities Bloomberg Commodity 0. 0.2 0.4 0.6.0. 0.5 0.6 0. 0.4 0.5 0.5-0.9 2.4 0.5 2.5. 7.4.5 0.5.8 0.2 0.6.8 2. 2.6 -.7.7 6.2 0.4 7.9-9.5. 6.8.0.2.2.5 -.9. 4.0 8.5 0.9-8.4 7.6 8.2.8 0.0 -.2 0. -0. 6.0 4.0 0.8 9.7 0.2 0.8 24. 5.0 22.2-0. -4.9 -.9-2. -0.4 6.4-5. -5.7-7.. -20. -.8 Source: Russell Investments as at 28/02/209. Any past performance figures are not necessarily a guide to future performance. 7
FOR MORE INFORMATION: Call Russell Investments at +44(0)207 024 660 or email ukadviser.support@russellinvestments.com IMPORTANT INFORMATION: FP Russell Investments ICVC (the Company ) is an investment company with variable capital incorporated in England and Wales under registered number IC000708 and authorised by the Financial Conduct Authority (the FCA ) with effect from 22 October 2008. FundRock Partners Limited (formerly Fund Partners Limited) is the Authorised Corporate Director (the ACD ) of the FP Russell Investments ICVC and is authorised and regulated by the FCA. Registered office: 52-54 Gracechurch Street, London ECV 0EH Russell Investments Limited has been appointed as the investment manager and distributor in respect of the Company. Applications for shares in the Company are subject to the terms and conditions set out in the Prospectus, Key Investor Information Document (KIID), Supplementary Information Document (SID), Instrument of Incorporation and latest annual and half-yearly long reports of the Company. Investors and potential investors must read the KIID and are also advised to read the remaining documents (and in particular the risk warnings) before making an investment in the Company. Copies are available free of charge on request from the ACD and Russell Investments Limited. Unless otherwise specified, Russell Investments is the source of all data and, to the best of Russell Investments knowledge, all information is accurate and current at the time of issue, however, this cannot be guaranteed. Please note that the value of investment and the income derived from them may go down as well as up and an investor may not receive back the amount originally invested. In the case of investments for which there is not a recognised market it may be difficult for investors to sell their investment or to obtain reliable information about its value or the extent of the risks to which it is exposed. Any past performance figures are not a guide to future performance. Any reference to returns linked to currencies may increase or decrease as a result of currency fluctuations. Issued by Russell Investments Limited, a company incorporated in England and Wales under registered number 0208620 and with its registered office at: Rex House, 0 Regent Street, London SWY 4PE. Telephone 020 7024 6000. Authorised and regulated by the Financial Conduct Authority, 2 Endeavour Square, London E20 JN. UKR-0068 8