The Global Focused Strategies (GFS) Fund Guide A smoother investment journey October 2016 Standard Life Investments has not considered the suitability of investment against your individual needs and risk tolerance. To help you understand this fund, please read the Key Investor Information Document or Prospectus, or seek assistance from your professional adviser. If you are in any doubt as to whether this fund is suitable for you, you should seek advice. An adviser is likely to charge for advice. We are unable to provide investment advice.
About GFS GFS is a multi-asset fund for investors seeking an attractive return on their investments without the extreme up-and-down swings that typically accompany investment markets. Specifically, we aim to generate a return, before fees, of cash 1 +7.5% per year over rolling three-year periods. This return target is substantially higher than the return you might expect from a long-term investment in global equities (which has been around cash +4% per year 2 ). Depending on market movements and the fund managers investment decisions, there will be years when we deliver more or less than this target, and we may even lose money. However, when viewed over a longer timeframe (our investment horizon is three years), we expect to deliver an average annual return of cash +7.5%. Please note that we cannot guarantee the fund will achieve this return - and as with any investment you may get back less than you invested. At the same time, our objective is to achieve this growth with as little risk to your money as possible commensurate with its return target. We expect GFS to be less volatile (a measure of how much prices rise and fall) than investing in equities. In fact, we expect GFS to show less than two-thirds of the volatilty of global equities. We are therefore seeking to provide more reliable and substantial capital growth with a smoother investment journey. 1 By cash, we mean the rate at which leading UK banks lend to one another. You can check the current rate at the Bank of England s website (www. bankofengland.co.uk: Annual average Sterling 6-month mean interbank lending rate IUAAVSMA). As at 31 December 2015, it is around 0.74%. 2 Source: Barclays Equity Gilt Study 2014.
Performance since launch The chart and table below show how GFS has performed since launch in December 2013. GFS Performance Chart 130 125 120 115 110 105 100 95 Mar 16 Feb 16 Jan 16 Dec 15 Nov 15 Oct 15 Sep 15 Aug 15 July 15 June 15 May 15 Apr 15 Mar 15 Feb 15 Jan 15 Dec 14 Nov 14 Oct 14 Sep 14 Aug 14 July 14 June 14 May 14 Apr 14 Mar 14 Feb 14 Jan 14 Dec 13 GFS * Cash ** Target *** MSCI AC World Index *Global Focused Strategies SICAV, gross returns. **Cash is defined as 6-month LIBOR, which is sourced from Thomson Datastream. ***Target is 6-month LIBOR +7.5% p.a. Source: Standard Life Investments, gross performance, based on GBP share class, from 11 December 2013 to 31 March 2016 GFS performance summary Gross returns Year to date end-mar 2016 (%) 1 Year to end-mar 2016 (%) 1 Year to end-mar 2015 (%) Average annual return since launch on 11/12/2013 (%) GFS -5.66-2.88 6.70 5.54 Cash 0.18 0.73 0.69 1.63 Volatility comparison since launch to end-march 2016 % GFS 5.5 Global equities (MSCI AC World) 9.4 The value of investments within GFS can fall as well as rise and is not guaranteed you may get back less than you pay in. Past performance is not a guide to the future. GFS makes extensive use of derivatives for the purpose of efficient portfolio management and to seek its investment objective. The value of assets held in GFS might rise and fall because of exchange rate movements. For a full list of risks, please refer to the prospectus.
What is different about GFS? A wider investment universe Alongside traditional investments in equities, bonds and property, we use advanced investments across many other markets, increasing our chances of finding good money-making ideas. For instance, we can use these advanced investments to seek a profit from our views on interest rate movements, currency exchange rates and inflation expectations. A greater spread of risk By investing across many different markets and types of investment, we are able to spread risk much further. We deliberately choose investments for GFS that are not all affected by the same things. In other words, GFS puts your eggs in many different baskets. Potential to make money in falling markets GFS managers can access a wide range of investment tools and techniques, to try and generate a positive return even if investment markets are falling. However, when markets behave very differently from the managers expectations, then GFS is unlikely to make money.
How GFS works To seek the cash +7.5% target, we use a wide range of investments from across global markets. This means there are multiple opportunities to generate returns while also spreading risk and allowing GFS to better withstand periods of market turbulence although it can also lose money, depending on the managers investment decisions. We make extensive use of financial instruments such as derivatives, financial instruments whose value is derived from one or more underlying assets, to help us meet return targets, and to allow us to invest in an efficient, cost-effective way. We divide the investments for GFS into four main types. Directional strategies Some market prices tend to revert back to similar levels over the long term, despite seeing significant movements over the short and medium term. For instance, in June 2013, 1 was worth around US$1.5, which is roughly the same as in 1993. However, between those dates, the two currencies moved up and down a lot. For example in 2007, 1 was worth around US$2. We seek to make money from these upwards and downwards movements of markets that over very long periods may be quite static. These markets include: currencies interest rates inflation volatility. Relative value strategies We can take advantage of differences between two markets or two groups of investments, which we believe are mispriced relative to one another. These discrepancies might arise across: geographies sectors company size asset classes. For example, in tough economic times the share prices of smaller companies tend to fall more than the share prices of larger and more diverse companies. We can therefore implement a position favouring larger companies over smaller companies. Importantly, the way we invest means that even if all share prices fall, we can still make money as long as the share prices of larger companies fall by less than those of smaller companies. Traditional investment methods We invest in shares, bonds and property across different countries and sectors, choosing what we believe to be the most attractive investment opportunities. We review our choices regularly and make changes where necessary, as we seek to ensure the investments we have chosen remain appropriate. An example is our investment in the European equity telecoms sector, which we expect to benefit from easing regulatory and competitive pressures, and improving growth opportunities. Security-specific Relative value strategies investments Sometimes the impact of broad economic or We political can take changes advantage can have of a particular impact differences on a specific between group two of companies. markets For or example, two groups increasing of investments. demand from For China for instance, meat has if been we benefiting expect German producers of beef, companies poultry and to pork do better in Brazil. than Therefore, French we bought companies, the corporate we can bonds invest of three to make strongly financed money Brazilian from this protein view. producers Importantly, whom we expect the way to gain we most invest from means this trend. that even if the share prices of both French and German companies fall, we can still make money, as long as the shares of German companies fall less than those of French companies.
The team behind GFS A team of over 50 skilled investment professionals with an average of 16 years industry experience manages GFS. The team is split into three groups, working closely together to choose the right investments for GFS: investment managers strategists investment risk experts. Investment managers Our investment managers search for opportunities they believe will make money given the big picture. They find their ideas from many different sources: for instance, from the findings of our strategists or from our equity, bond and commercial property experts. Our investment managers thoroughly analyse each idea before they consider it for GFS. We use our own tried and tested methods to help us find good investments. We also continually check the investments we already hold, to make sure each one is still suitable. Strategists The job of our strategists is to give advice on big picture world developments that might affect our investment decisions (for instance, how US employment figures might influence US interest rates). Investment risk experts The aim of our risk experts is to ensure that the investment managers thoroughly understand the risk implications of each opportunity. This helps the managers choose investments for GFS that give you as smooth a journey as possible. The team managing GFS Risk Experts Strategists Investment Managers The GFS team is split into three groups. These groups work closely together to choose the right investments for GFS.
About Standard Life Investments Strong and market-leading We are part of the Standard Life Group, which has been successfully managing money since 1825. As at 31 December 2015, we take care of over 250 billion for clients worldwide. Talented people At the heart of our success are 1,600 talented individuals working for us around the world. We spend a lot of time and energy recruiting and keeping the best people. Taking care of your money We thoroughly research and analyse each investment idea before adding it to any of our funds. Our aim is to constantly look ahead and anticipate change, so that we can deliver the best rewards for our investors. High standards We take seriously our responsibilities to those people who have trusted their money with us. We insist on the highest standards of honesty, integrity and fairness among all our staff. Experienced and competent You can see our success from our various industry awards and from the growing number of investors entrusting us with their money. Our UK awards include: Investment Life & Pensions Moneyfacts Awards 2015 Best Targeted Absolute Return Fund Provider Financial News 2014 Awards for Excellence Multi-Asset Manager of the Year Professional Pensions Awards 2014 Multi- Asset Manager of the Year. Global reach Our headquarters are in Edinburgh and we maintain a presence in locations across Europe, North America, Asia and Australia. We also have close links with leading investment companies in India and Japan. Our global operations Los Angeles Boston New York Paris Toronto Dublin Edinburgh Beijing London Seoul Brussels Frankfurt Stockholm Zurich Milan Sydney Hong Kong Mumbai Tokyo
This material is for informational purposes only. This should not be relied upon as a forecast, research or investment advice. It does not constitute an offer, or solicitation of an offer, to sell or buy any securities or an endorsement with respect to any investment vehicle. standardlifeinvestments.com Standard Life Investments Limited is registered in Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL. Standard Life Investments Limited is authorised and regulated in the UK by the Financial Conduct Authority. Standard Life Investments (Hong Kong) Limited is licensed with and regulated by the Securities and Futures Commission in Hong Kong and is a wholly-owned subsidiary of Standard Life Investments Limited. Standard Life Investments Limited (ABN 36 142 665 227) is incorporated in Scotland (No. SC123321) and is exempt from the requirement to hold an Australian financial services licence under paragraph 911A(2)(l) of the Corporations Act 2001 (Cth) (the Act ) in respect of the provision of financial services as defined in Schedule A of the relief instrument no.10/0264 dated 9 April 2010 issued to Standard Life Investments Limited by the Australian Securities and Investments Commission. These financial services are provided only to wholesale clients as defined in subsection 761G(7) of the Act. Standard Life Investments Limited is authorised and regulated in the United Kingdom by the Financial Conduct Authority under the laws of the United Kingdom, which differ from Australian laws. Standard Life Investments Limited, a company registered in Ireland (904256) 90 St Stephen s Green Dublin 2 and is authorised and regulated in the UK by the Financial Conduct Authority. Calls may be monitored and/or recorded to protect both you and us and help with our training. www.standardlifeinvestments.com 2016 Standard Life, images reproduced under licence INVBRO_15_1482_GFS_Sales_Aid_TCM 1016