What do clients want? - Its all about outcomes! 3 What do clients want? - Its all about outcomes! Protect their capital. Growth to reach their goals. Security of income. Longevity of capital.

Diversification is important to delivering these… 4 Diversification is important to delivering these… Source: Smartim, Lipper 31st December 1985 to 31st December 2013. All figures are total return in sterling.

…but it does not always work - 2008 5 …but it does not always work - 2008 Source: Smartim, Lipper 31st December 2007 to the 31st December 2013. All figures are total return in sterling.

Source: Smartim, Lipper. 6 Look at the experience of balanced multi asset funds Example Balanced Fund Performance Peak to Trough Drawdowns -13% -33% -14% -16% Source: Smartim, Lipper.

Source: Smartim, Lipper 7 So where are we today? Bonds are not the safe haven they once were The impact of an increased expectation of a rate increase on German Bund Yields in July 2015! Warning of what we might expect when Central banks exit QE. Source: Smartim, Lipper

Equity market volatility and correlation are elevated 8 Equity market volatility and correlation are elevated Equity Market Correlations Equity Market Volatillities 6m Correlation 6m Volatility Equity market volatility has moved back above its long term average Global equity market correlations have climbed towards their 25 year high Source: Bloomberg. Note Equity correlation is the average of pairwise correlation of five regional equity indices (US, Europe, Japan, UK and EM). Equity volatility is the calculated from the daily returns of the MSCI World index. Past performance is not necessarily indicative of future results.

Time for alternative strategy? Introducing Smartfund 80% Protected 9 Time for alternative strategy? Introducing Smartfund 80% Protected Smartfund Protected Growth Strategy Growth Portfolio 80% Protected Growth Fund Balanced Portfolio 80% Protected Balanced Fund Performance 7.4% 6.9% 6.4% Volatility 15.7% 8.6% 9.9% 6.5% Max peak to trough drawdown -54.5% -20.00% -40.2% -18.9% Smartfund Protected Balanced Strategy Source: Smartim. All returns are in sterling and include reinvestment of dividends. The table shows historical simulation of the 80% Protected portfolio vs the respective unprotected version over 10 years to 31 July 2015. These performance figures reflect what a client might have expected to have received gross which is before the deduction of any fund management charges or adviser fees. The annual management charge of the fund is 1.95%. These figures include the impact of the monthly performance cap and cost of protection. Past performance is not an indicator of future results.

What outcomes can this strategy deliver for your clients? 10 What outcomes can this strategy deliver for your clients? 01 Smoother investment journey. 02 Peace of mind in volatile markets. 03 Daily traded providing access to capital. 04 Certainty of income when in drawdown. 05 Security of Capital Protection in UCITSIV structure.

What outcomes can this strategy deliver for you? 11 What outcomes can this strategy deliver for you? 01 Create long-term client relationships. 02 Offer leading-edge protection from Morgan Stanley, one of the world's largest investment banks. 03 Deliver a solution for legacy clients in portfolio bonds and regular savings products – protect your clients’ assets and and your income. 04 Use as a core holding along side satellite investments. 05 A innovative strategy for the at- and post- retirement market.

How does Smartfund 80% Protected work? 12 How does Smartfund 80% Protected work? Performance engine is a multi-asset investment portfolio actively managed by Smartim. Investment Portfolio Put option linked to the investment portfolio ensures a minimum protection level of 80% of the max NAV. Delivered by Morgan Stanley. Protection Component Protected Fund NAV

Actively managed investment portfolio 13 A multi-faceted investment approach 01 02 03 04 Actively managed investment portfolio A volatility control mechanism Performance cost management Protection contract

Actively managed investment engine 14 Actively managed investment engine Smartfund 80% Protected Balanced Smartfund 80% Protected Growth Equity Fixed Income Absolute Return Property Cash

Active control of exposure to market volatility 15 Active control of exposure to market volatility The fund uses an active risk on/risk off strategy based on prevailing market volatility vs a target, or expected level exploit the long term trends between volatility and return maintain the fund’s volatility close to the specified target level (helping to manage the risk of suitability drift) minimise the costs of purchasing protection (and their variability) 12% 8% 150% Growth Volatility Target 125% Balanced 150% Asset Exposure 50% Asset Exposure 100% Asset Exposure Maximum Exposure 50% Cash Exposure -50% Cash Exposure Illustrative composition of 12% risk budget with 150% maximum exposure in different market volatility regimes

For illustration purposes only. 16 Managing the cost of protection To offset the cost of protection the fund ‘sells away’ performance above a monthly cap level - the fund receives a premium which it uses to offset the cost of holding protection. Similar to the premium yield generated by call overwriting. The result - a ‘collared’ investment strategy similar to that used in the institutional market: For illustration purposes only.

For illustration purposes only. 17 How does the protection component work? 1 Year Fund Launch: Fund NAV equal to the value of two assets: the investment strategy and protection component. Investment strategy Protection component Max NAV 2 Year Market Crash: Losses in the investment strategy are cushioned by the increasing value of the protection component (the ‘airbag’). Protection 3 Year Market Recovering: As the market recovers, the gains in the investment strategy cause the NAV to rise above the Protection level (no persistent ‘cash-lock’ experienced). 4 Year New Maximum NAV: Continued gains in the investment strategy lead to a new max NAV for the 80% Protected Fund; investors benefit from the increased protection level as a result. For illustration purposes only.

For illustration purposes only. 18 How will the Fund perform in different market cycles? Exp: 99% Period 1 Period 2 Period 3 Period 4 Period 5 120 (20%) 80 (-33%) 120 (50%) 159 (33%) 100 Exp: 96% Exp: 98% Exp: 14% Exp: 98% 96 126 80 Investment portfolio 80% Protected Fund NAV Protection level For illustration purposes only.

Who is involved in the fund? 19 Who is involved in the fund? Praemium (distributor) Fundlogic SAS (investment manager) Smartim (sub investment manager) Morgan Stanley (protection provider) ASX-listed provider of international fintech and investment solutions Subsidiary of Morgan Stanley UCITS IV platform FCA-authorised subsidiary of Praemium One of the largest financial institutions A+ credit rating US$62.5bn US$11.5bn AUM US$360m AUM US$2tr AUM

Packaging the strategy for retail investors - Smartfund 80% Protected 20 Packaging the strategy for retail investors - Smartfund 80% Protected Description Type of fund UCITS IV Investment manager Fundlogic SAS, a member of the Morgan Stanley group Sub-investment manager Smart Investment Management Protection provider Morgan Stanley & Co. International plc, London Protection level 80% of the highest NAV reached Calculation and protection of the highest value Daily Share class currencies USD, EUR, GBP Dealing frequency Annual management charge 1.95%/0.50%

21 Performance of Smartfund 80% Protected Growth Fund (4th Sept 2015 – 31st Mar 2017) Year to Date Return Volatility Peak/Trough Drawdown Protected Growth Fund 2.72% 9.57% -3.27% MSCI World 6.53% 5.71% -1.13% Since Launch Return Volatility Peak/Trough Drawdown Protection Level Protected Growth Fund 18.70% 10.22% -5.88% 96.33% MSCI World 20.88% 11.93% -13.97% - Source: Smart Investment management Limited, Bloomberg. All figures are total return in sterling. This information has been prepared solely for information purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. No representation is made that any results/returns indicated would be achieved or that all assumptions in achieving these returns have been considered or stated. Additional information is available on request. Past performance is not necessarily indicative of future results. Price and availability are subject to change without notice. Unless stated otherwise, the material contained herein has not been based on a consideration of any individual client circumstances and as such should not be considered to be a personal recommendation. These performance figures reflect what a client might have expected to receive net, which is after the deduction of any fund management charges or adviser fees. The annual management charge of the fund is 1.95%. These figures also reflect the impact of the monthly performance cap and the cost of the protection.

22 Performance of Smartfund 80% Protected Balanced Fund (2nd Sept 2015 – 31st Mar 2017) Year to Date Return Volatility Peak/Trough Drawdown Protected Balanced Fund 1.49% 6.04% -2.00% MSCI World 6.53% 5.71% -1.13% Since Launch Return Volatility Peak/Trough Drawdown Protection Level Protected Balanced Fund 11.14% 7.22% -4.47% 89.80% MSCI World 19.40% 11.99% -13.97% - Source: Smart Investment management Limited, Bloomberg. All figures are total return in sterling. This information has been prepared solely for information purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. No representation is made that any results/returns indicated would be achieved or that all assumptions in achieving these returns have been considered or stated. Additional information is available on request. Past performance is not necessarily indicative of future results. Price and availability are subject to change without notice. Unless stated otherwise, the material contained herein has not been based on a consideration of any individual client circumstances and as such should not be considered to be a personal recommendation. These performance figures reflect what a client might have expected to receive net, which is after the deduction of any fund management charges or adviser fees. The annual management charge of the fund is 1.95%. These figures also reflect the impact of the monthly performance cap and the cost of the protection.

Important information 23 Important information This document is a marketing document for the Smartfund 80% Protected range of funds and is solely intended for the use of the IFA. Please note that this document should not to be forwarded to potential investors. Potential investors cannot have reliance upon the content of this material and should not treat the contents of this document as advice relating to legal, taxation, investment or any other matters. This information is provided for education purposes only and is not intended to provide legal or investment advice. The Smartfund 80% Protected Fund range will be sub funds of Fundlogic Alternatives plc, a UCITS fund which is based in Republic of Ireland. For use by professional financial advisers only. No other person should rely on, or act on any information in this document when making an investment decision. This document has not been approved for use with investors or other clients.