Investment Seminar 17th May 2018

Housekeeping No emergencies planned for this evening! Tonight’s agenda Sentinel Portfolio and Investment Committee update Investing for growth – Artemis Investment Management LLP Sir Christopher Meyer Questions

Portfolio Update Volatility returns Triggers The Sentinel Portfolios Time in the market not timing the market Risk, reward…how we use it Investment Committee update

The Fear Index

Why the fear? Good news / bad news !

Portfolio returns – Nov 17

Portfolio Update – 1 Year

Portfolio Update – 2 Year

Time not timing £10,000 invested in the S&P500 since 1/1/97 Today’s value £43,933 (7.7% annual return) Miss the best 10 days £21,925 (4% annual return) Miss the best 60 days £3,050 (-5.7% annual return)

Risk & Reward A measure we use to test returns against risk This ensures clients’ achieve the best return for the risk they are happy with Standard Deviation from the mean against returns….. Sounds complex but is very simple!

Risk & Reward – 2 Year

Risk & Reward - Response Review blends Review manager returns Managers on review Manager change

Risk & Reward – 1 Year

Investment Committee Managers under review Mandate changes Likely outcome

Sentinel Growth Portfolio Investing for growth Simon Edelsten Artemis Investment Management LLP For investors in the Sentinel Growth Portfolio

Sentinel Growth: What we are looking for … What we aim to achieve: Keep up in bull markets Build in capital protection ahead of bear markets Persistent returns + low volatility = growth in real wealth The portfolio: Focus on growth gives the fund a thematic style Typically 50-70 high quality equity holdings Additional diversified fixed income for managing risk and efficient portfolio management Diversified by stock, theme, sector and region Unconstrained, but macro aware. Very different from any index

Meeting our clients’ objectives – generating healthy real returns Outperformance in rising markets: 53%† Outperformance in falling markets: 74%† 6 months % 1 year % 3 years % Since Artemis appt. % p.a. Since Artemis appt.* % 5 years % Since inception % p.a. Artemis Global Select Fund (Fund Price)* 2.6 6.0 36.5 - 74.9 12.4 MSCI AC World Index* 0.2 2.4 33.8 12.5 58.7 68.1 11.1 Global Select quartile ranking* 1  - Managing lower risk portfolio Standard deviation 8.95 Tracking error 2.96 Index standard deviation 10.03 Active share 89.8% Portfolio beta 0.85 Downside capture since inception 85.0% Source: Artemis as at 31 March 2018. *Source: Lipper Limited as at 31 March 2018, Artemis Global Select I Acc, Inception Date 16 June 2011. †Source: Artemis as at 31 March 2018, defined as the number of months outperforming the index/number of positive market returns and the number of months outperforming the index/number of negative market returns.

Why long term investors own equities Stocks have consistently earned more than bonds over the long term Investors can seek inventive companies whose internal returns are well ahead of what one can personally achieve and enjoy the compounding of those returns Volatility – the price paid for accessing these returns – can be mitigated by giving up some of the upside to spend on capital protection Protecting capital in a bear market leaves you with plenty of exposure for the next bull market Annual global rates of return (1870-2015, %) Chart source: The Economist, 6 January 2018.

Investing in predictable growth Ageing Automation CAGR of 65-79yr olds between 2015-2020 Singapore 6.6% China 5.5% Mexico 4.8% Thailand 4.5% Brazil 4.3% India 4.2% US 3.8% South Korea 3.4% France 2.6% UK 1.2% Italy 0.6% Japan Wages and operating costs adjusted for price and perf ($/hr) 2015 10 20 30 40 2018 Electric welder avg. wage/hour 2020 2025 2030 Robot welder cost/hour Tourism Growth in international tourist arrivals (m) CAGR 1990-2016 = 4.1% Source: left: UN population data; top right: BBG perspectives 2015; bottom right: UNWTO Tourism Highlights, 2017 Edition.

Current investment themes Stock examples Automation 14.7% assets 1y +2.5% Online Services 8.2% assets 1y +3.0% Emerging Market Consumer 13.9% assets 1Y +1.4% Tourism 13.6% assets Stock examples Retiree Spending Power 6.8% assets 1Y -0.2% Healthcare Costs 13.6% assets 1Y +0.7% Scientific Equipment 9.2% assets 1Y +1.5% High Quality Assets 1Y -1.3% Source: Artemis as at 31 March 2018. Image source: brandsoftheworld.com

Investment process Think like a businessman Secular growth Stock selection Valuation Portfolio balance Portfolio Focus on growth opportunities Industry roadmaps Proven business models ValueModel Equity diversification & Fixed income component Real return mentality Longer term thinking Focused research Disciplined process Conviction and diversification Industry risk Stock risk Portfolio risk

Important notice Sentinel Growth Fund For Professional Investors and their advisers only. Issued by Artemis Investment Management LLP which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (www.fca.org.uk), 25 The North Colonnade, Canary Wharf, London, E14 5HS. This document is intended solely for professional investors and their advisers and should not be passed, either in whole or in part, to retail investors who would be unable to place any reliance on the information provided. Third parties (including FTSE and Morningstar) whose data may be included in this document do not accept any liability for errors or omissions. For information, visit artemisfunds.com/third-party-data. This document is issued for information purposes only and is not to be construed as an advertisement or a public offering of any investment. Nothing in this document constitutes investment, legal, tax or other advice. Any research or analysis contained in this document has been procured by Artemis for its own use and may be acted on in that connection. You must ensure you understand the risks associated with any investment you consider. Past performance is no guarantee of future returns. The value of investments may fall as well as rise and is not guaranteed. 18-0467

Sir Christopher Meyer

Questions

Have a safe journey home