MI Downing Diversified Global Managers. (Formally MFM SGWM Managed Fund)

(Formally MFM SGWM Managed Fund) Short Report 31 May 2016

Directory Authorised Corporate Director (ACD) & Registrar Authorised Corporate Director (ACD) & Registrar to 31 January 2016: Malbrough Fund Managers Ltd Authorised Corporate Director (ACD) & Registrar from 1 February 2016: Maitland Institutional Services Ltd Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telephone: 01245 398950 Fax: 01245 398951 Website: www.maitlandgroup.com (Authorised and regulated by the Financial Conduct Authority) Customer Service Centre Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telephone: 0345 305 4215 Fax: 0845 280 0087 E-mail: downing@phoenixfundservices.com (Authorised and regulated by the Financial Conduct Authority) Directors of the ACD P.J. Foley-Brickley S. Georgala (appointed 24 August 2015) D. Jones R.W. Leedham D.W. Munting Investment Manager Investment Manager to 31 January 2016: S G Wealth Management Ltd Investment Manager from 1 February 2016: Downing LLP Ergon House, Horseferry Road, London, SW1P 2AL (Authorised and regulated by the Financial Conduct Authority) Depositary Depositary to 31 January 2016: HSBC Bank Plc Depositary from 1 February 2016: National Westminster Bank Plc 135 Bishopsgate, London, EC2M 3UR (Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority) Auditor Auditor to 31 January 2016: Barlow Andrews LLP Auditor from 1 February 2016: KPMG LLP Chartered Accountants & Registered Auditors 15 Canada Square, Canary Wharf, London E14 5GL MI Downing Diversified Global Managers 1

Investment Objective and Policy The investment objective of the Fund is to provide medium to long term capital growth on a medium risk basis. It is intended that this objective will be achieved by the Fund investing primarily in a diversified portfolio of shares of collective investment schemes, (including, but not restricted to, Exchange Traded Funds, unregulated funds such as hedge funds, collective investment schemes which themselves invest in property and/or the shares of property companies, and index-linked collective investment schemes), and transferable securities (including, but not restricted to, shares in investment companies including investment trusts which themselves invest in equities, property and/or the shares of property investment companies and equity linked transferable securities and fixed interest securities) on a global basis. The Fund is also permitted to invest in money market instruments, government and public securities, cash and near cash, warrants and deposits as permitted for Non-UCITS Retail Schemes in accordance with COLL. It is intended that the assets of the Fund will be managed so that it is eligible for quotation within the Investment Association's Flexible Investment sector. Further details may be found via the IA's website at www.theinvestmentassociation.org. The Fund may only invest in derivatives and forward transactions for the purposes of hedging. Investment Manager's Report for the year ended 31 May 2016 Downing LLP assumed the Investment Management contract of the Fund on 1 February 2016, when it was renamed the MI Downing Diversified Global Managers. The objective of the Fund has not changed. The new name better reflects both the change in Authorised Corporate Director (ACD) and highlights the investment style. The Investment Manager believes the Fund offers a well-researched, focused and best of breed multi-manager approach. The Fund was initially launched in September 2007 and was previously named the SGWM Managed Fund. One of the attractions of moving the Investment Manager mandate to Downing LLP, was to enhance the progress of the Fund by adding resources and capability to allow the co-managers, Neil Shillito and Alyx Wood (newly appointed), to identify lesser-known but high quality investment managers. Since the Investment Manager assumed management of the Fund, the detailed in-house research has found a number of interesting niche funds not on mainstream third party databases, which are often relied upon by the Fund s smaller competitors. Additionally, these specialised funds tend to be too small in size for the majority of the Fund s larger competitors, whose own funds are far too big to be able to invest in the relatively small amounts required (as their minimum investment amount often exceeds the size of these specialised funds entirely). Indeed, if they were able to allocate their minimum investment amount, this would hamper the strategy of the specialised fund concerned. As a consequence, the Investment Manager believes that the Fund offers a distinctive, competitive edge, by being able to conduct its own due diligence and invest in the exciting opportunities offered by these well-run, specialised (and potentially better performing) Funds. 2 MI Downing Diversified Global Managers

Investment Manager's Report continued At the start of the current accounting year, markets generally were relatively stable. This all changed abruptly in early August when fears about the performance of the Chinese economy and as well as the potential for a devaluation of the Renminbi, gripped investors and equity markets experienced precipitous short-term falls. This extreme volatility was repeated in the first two weeks of 2016 due to weaker confidence in the strength of the world economy. That said, commodities have rallied strongly and emerging markets have started to recover, but at the time of writing the major concern is the volatility caused by concerns over Brexit. In the Year to 31 May 2016, the Fund was down 5.14% against the index, which has declined 4.65%. Major contributors to performance in the period were Schroder Tokyo adding 2.66%, JPM US Equity Income which added 1.40% and Jupiter European which added 1.17%. Major detractors from performance were EEA Life Settlement by 5.32%, Royal London UK Equity Income by 3.82% and Lazard Emerging Markets by 1.59%. A challenge within the inherited portfolio was the EEA Life Settlement (which was a 1.67% holding as at 31 May 2016 following a post balance sheet adjusting event to the eventual sales value). This holding had been marked down to reflect its illiquidity and observable exchange prices in the secondary market. This had a negative effect on the Fund s performance equating to a 3.27% decline since Downing LLP was appointed. Excluding EEA Life Settlement, the Fund generated 3.66% over the four months since Downing was appointed. This is ahead of the long run average of the Fund. It is the intention of the Investment Manager to sell the entire EEA Life Settlement holding post period end on the secondary market. Over the 12 month period, the Fund sold JPM US Equity Income (which had mediocre performance against the S&P 500), NGAM Investment Funds UK ICVC MultiReturns (which had extreme short term volatility not in line with the strategy), Rathbone Income (which had signs of style drift and being too closely correlated to another similar holding), Newton Asian Income (the manager left the company) and Lazard Emerging Markets (which had under-performed both in the market and its peer group for some time). The Fund bought into Alquity Asia (which was paired with an existing holding), Fidelity Emerging Markets (to give the Fund emerging markets exposure through an experienced manager), Vanguard US Equity Index (this is a temporary tracker for the time being until the Investment Manager completes its diligence on the North American universe of funds). Given that this is the first Investment Manager s Report since the appointment of Downing LLP, the Investment Manager would like to take this opportunity to explain the investment philosophy of the Fund. The Fund aims to provide medium to long term capital growth on a medium risk basis by building a global portfolio. The Investment Manager uses its in-house research capabilities and robust process to identify the most attractive investment opportunities. The investment strategy allocation determines where the Investment Manager looks for the best of breed money managers. This in turn drives the asset, geography and sector allocations. The Investment Manager then applies a macro overlay focused towards risk avoidance. MI Downing Diversified Global Managers 3

Investment Manager's Report continued The investment strategy allocation comes first in this process is because in a world of uncertainty the Investment Manager believes it allows it to strive for balance. The Investment Manager splits strategies into two categories, Traditional and Alternative. The former contains Value and Growth, whereas the latter is made up of Carry, Arbitrage and Trend. These market strategies perform and struggle at different times. The Investment Manager strives not to predict which will do best in any one time period. Instead the Investment Manager aims to combine them to capture superior diversification. The result is a portfolio that relies more on the selected money manger s alpha ability over the long run, this is what drives outperformance in any asset class. Therefore, the Investment Manager is investing in selected money managers on the basis of the characteristics of the assets that are within their control. This negates the need for macro bets, which in the Investment Managers view, are incredibly hard to do successfully with any rational repeatability. This allows the Investment Manager to focus on areas where it can add most value. Important notice: This Report is a summary of how the Fund has performed during the accounting period. It is for information only and does not form part of an offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. Opinions expressed in this report represent the views of the Investment Manager at the time of publication, are subject to change, and should not be interpreted as investment advice and no reliance should be placed on it. Past performance is not an indication or guarantee of future performance and no representation or warranty, express or implied, is made by the Investment Manager with respect to future performance. The value of any investment or income from any securities or related financial instruments is subject to volatility and can fall as well as rise. Investors may not get back the full amount they originally invested. 4 MI Downing Diversified Global Managers

Comparative Tables Accounting and distribution dates Accounting Distribution/Pay date Final 31 May 31 July Interim 30 November Change in net assets per share A Income 31.05.16 p 31.05.15 p 31.05.14 p Opening net asset value per share 127.11 118.48 114.04 Return before operating charges^ -4.73 11.78 6.96 Operating Charges -1.79-2.48-2.33 Return after operating charges^ -6.52 9.30 4.63 Distributions on income shares -0.64-0.67-0.19 Closing net asset value per share 119.95 127.11 118.48 ^After direct transaction costs of 0.00 0.00 0.00 Performance Return after charges -5.13% 7.85% 4.06% Other Information Closing net asset value 3,379,099 4,157,675 5,151,582 Closing number of shares 2,817,181 3,270,958 4,348,139 Operating Charges 1.47% 2.04% 2.03% Direct transaction costs 0.00% 0.00% 0.00% Prices Highest share price 127.48 130.45 118.81 Lowest share price 111.27 112.65 109.03 A Accumulation 31.05.16 p 31.05.15 p 31.05.14 p Opening net asset value per share 129.67 120.23 115.49 Return before operating charges^ -4.84 11.95 7.09 Operating Charges -1.82-2.51-2.35 Return after operating charges^ -6.66 9.44 4.74 Closing net asset value per share 123.01 129.67 120.23 Retained distributions on accumulation share 0.65 0.68 0.19 ^After direct transaction costs of 0.00 0.00 0.00 Performance Return after charges -5.14% 7.85% 4.10% Other Information Closing net asset value 14,205,653 16,413,436 16,829,901 Closing number of share 11,548,533 12,657,971 13,998,341 Operating Charges 1.47% 2.04% 2.03% Direct transaction costs 0.00% 0.00% 0.00% Prices Highest share price 130.05 132.37 120.37 Lowest share price 113.51 114.31 108.71 MI Downing Diversified Global Managers 5

Comparative Tables continued Change in net assets per share (continued) Operating charges include indirect costs incurred in the maintenance and running of the Fund, as disclosed (but not limited to) the detailed expenses within the Statement of Total Return. The figures used within this table have been calculated against the average Net Asset Value for the accounting period. The return after charges is calculated as the closing net asset value per share plus the distributions on income shares minus the open net asset value per share as a % of the opening net asset value per share. The Sub-fund invests in Collective Investment Schemes, the expenses incurred by these schemes in relation to the Fund (synthetic ongoing charge) are included within the operating charges. Direct transaction costs include fees, commissions, transfer taxes and duties in the purchasing and selling of investments, which are offset (where applicable) against any dilution levies charged within the accounting period. The figures used within the table have been calculated against the average Net Asset Value for the accounting period. Risk and reward profile The risk and reward indicator table demonstrates where the Fund ranks in terms of its potential risk and reward. The higher the rank the greater the potential reward but the greater the risk of losing money. It is based on past data, may change over time and may not be a reliable indication of the future risk profile of the Fund. The shaded area in the table below shows the Fund s ranking on the risk and reward indicator. Typically lower rewards, lower risk Typically higher rewards, higher risk 1 2 3 4 5 6 7 The Fund is ranked 4 because funds of this type have experienced average rises and falls in value in the past. Please note that even the lowest risk class can lose you money and that extreme market circumstances can mean you suffer severe losses in all cases. The indicator does not take into account the following risks of investing in this Fund: The Fund invests into other funds which themselves invest in assets such as bonds, company shares, cash and currencies. The objectives and risk profiles of these underlying funds may not be fully in line with those of this Fund. Investing in other funds may expose investors to increased risk due to restrictions on withdrawals, less strict regulations and the use of derivatives. The Fund may invest in bond funds which will be impacted by change in interest rates, inflation and any decline in creditworthiness of the underlying bond issuers. The Fund may invest in property funds and unregulated schemes which can be less liquid than other asset classes. Investing overseas can bring additional returns and spread risk to different markets. There are risks, however, that changes in currency exchange rates may cause the value of your investment to decrease and increase. 6 MI Downing Diversified Global Managers

Comparative Tables continued Risk and reward profile (continued) Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. This means your money is at greater risk. Smaller company shares can be riskier as they may be more difficult to buy and sell and their share price may fluctuate more than that of larger companies. For further risk information please see the prospectus. Risk warning An investment in a non-ucits retail scheme Open-Ended Investment Company should be regarded as a medium to long-term investment. Investors should be aware that the price of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. MI Downing Diversified Global Managers 7

Sector spread of investments All sectors in percentage order are shown below Sector % of Fund as at 31.05.16 United Kingdom 33.21 Asia Pacific 13.25 Global 12.17 Europe 11.13 Japan 10.65 North America 10.17 Emerging Markets 5.62 Specialist 1.67 Net other assets 2.13 Sector % of Fund as at 31.05.15 United Kingdom 43.75 Asia Pacific 12.24 Global 9.70 Europe 8.36 Emerging Markets 6.52 Japan 6.47 North America 6.23 Specialist 6.09 Net other assets 0.64 8 MI Downing Diversified Global Managers

Major holdings The top ten holdings at the end of each year are shown below Holding % of Fund as at 31.05.16 Royal London UK Equity Income M Accumulation 14.57 Fundsmith Equity I Accumulation 12.17 Jupiter European Income 11.13 Schroder Tokyo Z Accumulation 10.65 Vanguard US Equity Index Accumulation 10.17 Liontrust Special Situations I Income 9.46 MI Downing Active Micro-Cap Growth B Accumulation 9.18 First State Asia Pacific Leaders B Accumulation 7.32 Alquity Asia Y Accumulation 5.93 Fidelity Emerging Markets W Accumulation 5.62 Holding % of Fund as at 31.05.15 Royal London UK Equity Income M Accumulation 16.28 Rathbone Income I Accumulation 11.36 Fundsmith Equity I Accumulation 9.70 Jupiter European Income 8.36 Liontrust Special Situations I Income 8.24 MI Downing Active Micro-Cap Growth B Accumulation 7.87 Lazard Emerging Markets I Accumulation 6.52 Schroder Tokyo Z Accumulation 6.47 JPM US Equity Income C Accumulation 6.23 First State Asia Pacific Leaders B Accumulation 6.20 MI Downing Diversified Global Managers 9

General Information Authorised Status MI Downing Diversified Global Manangers (the Company ) is structured as an Investment Company with Variable Capital (''ICVC''), under regulation 12 (Authorisation) of the OEIC Regulations (Open- Ended Investment Companies Regulations 2001 (SI 2001/1228)). The Company does not intend to have an interest in immovable property. The Company is authorised and regulated in the UK by the Financial Conduct Authority (''FCA'') as a non-ucits Retail Scheme under the COLL Sourcebook. The Company was incorporated in England and Wales on 30 July 2007 under registration number IC000553. The Shareholders are not liable for the debts of the Company. Buying and Selling of Shares The ACD will accept orders for the purchase and sale of shares on normal business days between 08:30 and 16:30. Instructions to buy or sell shares may either be in writing to: Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Or by telephone to: 0345 305 4215 The ACD has the right to establish facilities for recording telephone calls made or received on this telephone line. A contract note will be issued by close of business on the next business day after the dealing date to confirm the transaction. Report and Accounts This document is a short report of MI Downing Diversified Global Managers for the year ended 31 May 2016. The full Report and Accounts for the Company is available free of charge upon written request to Maitland Institutional Services Ltd, Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Other Information The information in this report is designed to enable you to make an informed judgement on the activities of the Fund during the year it covers and the results of those activities at the end of the year. 10 MI Downing Diversified Global Managers

General Information continued Significant Information The following significant changes to MI Downing Diversified Global Managers (formally MFM SGWM Managed Fund) took place on 31January 2016: Change to the name of the Company Registered office and head office Registration fees Expenses payable from the Company Change of Depositary Change of Custodian Change of dealing arrangements Change of Registrar Change of Investment Manager Publication of share prices Change of Auditor On 1 June 2015 the Authorised Corporate Director, Phoenix Fund Services (UK) Ltd ( PFS ), became a subsidiary of Maitland International Holdings plc. On 4 April 2016 PFS was subsequently renamed Maitland Institutional Services Ltd to reflect the change in ownership. As a result of this, the names of the Scheme and sub-fund(s) changed, such that the prefix of PFS has been replaced with MI. Details of these changes can be found in the prospectus which is published on the website of the ACD as set out in the Directory. Risk Warning An investment in a non-ucits retail scheme Open Ended Investment Company should be regarded as a medium to long-term investment. Investors should be aware that the price of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. MI Downing Diversified Global Managers 11

Registered in England No 6252939. Authorised and regulated by the Financial Conduct Authority.