[PPT] - Schroder GAIA Sirios US Equity January 2014 January 2014

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Schroder GAIA Sirios US Equity

January 2014

January 2014 | For professional investors or advisers only.

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Result: Considerable alpha generation through time

John Brennan Track Record

1

Source: Schroders and Sirios as at 31 December 2013. *MFS Special Value Trust Jan. 1990 – December 1991 and MFS Capital Opportunities January 1992 – Feb. 23, 1999; S&P 500 index performance for Feb. 24, 1999- June 28, 1999; Sirios US Equity Long Short Strategy from July 1, 1999 through 28 February 2013 and then Schroder GAIA Sirios US Equity from 1 March 2013

nwards. The charts are based on past performance and John Brennan may not replicate the same track record with Schroder GAIA Sirios US Equity.



28 years investment experience



Co-founded Sirios in 1999. Prior to Sirios John was Senior Vice President at MFS Investment Management where he managed the MFS Special Value Trust and MFS Capital Opportunities Fund

USD 1m invested with John Brennan USD 1m invested in S&P 500 26.0m 8.7m USD 1m invested with John Brennan USD 1m invested in S&P 500 3.9m 1.8m

John Brennan track record (MFS* +Sirios) John Brennan track record (Sirios)

50%

0% 50% 100% 150% 200% 250% 300% 1999 2001 2002 2003 2005 2006 2007 2009 2010 2011 2013 JB Sirios Cumulative Returns S&P 500 Cumulative Returns 0% 500% 1000% 1500% 2000% 2500% 3000% 1990 1992 1994 1996 1999 2001 2003 2005 2008 2010 2012 JB Cumulative Returns S&P 500 Cumulative Returns

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Schroder GAIA Sirios US Equity

Investment Aim The fund aims to outperform the S&P 500 by generating consistent returns over the long term with lower volatility through seeking to preserve capital in declining markets and capturing more than its fair share of performance in up markets.

2 Source: Schroders

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60%
50%
40%
30%
20%
10%

0% Sirios S&P 500 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Sirios S&P 500 0% 2% 4% 6% 8% 10% 12% Sirios S&P 500 0% 50% 100% 150% 200% 250% 300% Sirios S&P 500

Cumulative Return

Sirios US Equity Long/Short Strategy* vs. S&P 500**

Result: significant alpha since inception

3

Annualised Return Annualised Volatility Maximum Drawdown

Source: Sirios and Schroders as at 31 December 2013 *Sirios US equity long short strategy: Sirios offshore fund Jul.1999 - Feb. 2013 , Schroder GAIA Sirios US Equity A Acc USD Mar. 2013 onwards. **S&P 500: S&P 500 TR from Jul.1999 - Feb. 2013 , S&P 500 TR Net Mar. 2013 onwards. Past performance of the fund is not indicative of future or likely performance of the fund.

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Schroder GAIA Sirios US Equity

 Sirios Capital founded in 1999  Fund is based on an existing Sirios US equity long/short fund  Fundamental long/short equity fund, typically long-biased  Invests primarily in US mid/large-cap companies  US focussed firm with potential exposure across Asia and Europe  Ability to analyse and invest across the capital structure for best risk-adjusted returns  Current AUM $1.75bn* (employees represent a significant percentage of total firm assets)  Liquid strategy with a moderate use of leverage  Low correlation to equity markets¹ with proven downside participation²

4 Source: Schroders and Sirios, * Source: Sirios as at 31 December 2013. ¹ Since inception (July 1999 – December 2013) Sirios US Long/Short strategy's correlation to the S&P 500 TR Index has been 0.40 ² Since inception (July 1999 – December 2013) Sirios US Long/Short strategy's participated in only 12.5% of the S&P 500 Index’s cumulative down months.

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Portfolio Construction

5 Source: Sirios

 Longs 40–60 positions  Shorts 50–70 positions  Gross exposure 125%–150%

(200% max)

 Net is derived from idea

generation long and short (25% - 75% is typical)

 Core longs 3–5 years  Catalyst longs up to 1 year  Shorts typically less

than 1 year

 Growth oriented and valuation

sensitive

 Primarily US with material

exposure to Asia and Europe

 Opportunistic exposure

to fixed income for equity-like returns with lower risk

Number of positions Holding periods Mid/Large cap focus Gross and net exposure Global exposure Equity

riented

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Bull Bear Bear Bull Bear Bull Bull

100%
50%

0% 50% 100% 150% 200% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Equity (Long) Fixed Income (Long) Bank PFD (Long) Equity (Short) Fixed Income (Short) Bank PFD (Short) Fund Net Exposure Fund Gross Exposure

Investment process and risk management

Exposure management focuses on downside protection and upside capture

Source: Sirios & Schroders as at 29 November 2013 6

Gross/ Net exposure

Gross/ net exposure typically changes gradually through time depending on the prevailing market conditions. Fundamental security analysis

helps determine the outlook for corporates and guides overall exposure management.

As you can see below in periods of stress both gross and net exposure are reduced. Often good stock selection can be rewarded in bear

markets in particular on the short side as challenged companies / sectors are punished (eg 2000-2002 Tech Telecom and 2007-2008 Financials) Ability to invest across the capital structure of a company (up to 35% in Fixed Income):

Historically the portfolio has opportunistically invested in fixed income post periods of market stress to get equity type returns higher up the

capital structure.

As you can see above the fund has increased gross and net exposure through fixed income (eg corporate bonds, convertibles, bank

preferreds) as well as equities. As spreads narrow and bond prices move closer to par the fixed income positions are typically eliminated.

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Downside Protection

7

Oct-08 Sep-02 Feb-09 Feb-01 Sep-08 Jun-08 Jan-09 Sep-01 May-10 Nov-00 Cumulative S&P 500**

16.79%
10.87%
10.65%
9.12%
8.91%
8.43%
8.43%
8.08%
7.99%
7.88%
97.15%

Sirios*

5.41%

2.70%

2.59%

1.40%

4.82%

3.13% 6.34% 0.02%

4.15%
0.06%
3.44%

Net Exposure

8%

9% 20% 52% 33% 9% 44% 32% 49% 27% 27%

Result: Sirios returns in 10 worst months for S&P 500 since inception

20%
15%
10%
5%

0% 5% 10% Oct-08 Sep-02 Feb-09 Feb-01 Sep-08 Jun-08 Jan-09 Sep-01 May-10 Nov-00 S&P 500 Sirios

Source: Schroders & Sirios as at 31 December 2013 *Sirios US equity long short strategy: Sirios offshore fund Jul.1999 - Feb. 2013 , Schroder GAIA Sirios US Equity A Acc USD Mar. 2013 onwards. **S&P 500: S&P 500 TR from Jul.1999 - Feb. 2013 , S&P 500 TR Net Mar. 2013 onwards. Investment involves risk. Past performance of the fund is not indicative of future or likely performance of the fund.

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Historical Contribution (gross)*** Common Equity +391.6% Longs +414.3% Hedges (ETF, SPDR, Puts)

24.8%

Longs (net of hedges) +389.5% Single Name Equity Shorts +2.1% Fixed Income +80.3% Total +471.9% Downside Participation (net, cumulative) S&P 500**

267.7%

Sirios*

33.5%

Sirios Downside Participation 12.5% Upside Capture (net, cumulative) S&P 500** +341.9% Sirios* +177.8% Sirios Upside Capture 52.0% Net Exposure (average) Sirios Average Net Exposure 48.3% Combined Up/Down (net, compounded) S&P 500** +75.7% Sirios* +295.8%

Sirios US Equity Long/Short Strategy

Up and Down Market Capture

8 Source: Schroders as at 31 December 2013 *Sirios US equity long short strategy: Sirios offshore fund Jul.1999 - Feb. 2013 , Schroder GAIA Sirios US Equity A Acc USD Mar. 2013 onwards. **S&P 500: S&P 500 TR from Jul.1999 - Feb. 2013 , S&P 500 TR Net Mar. 2013 onwards. ***Source Sirios as at 31 October 2013 Gross contribution is shown for Sirios’ offshore fund. Investment involves risk. Past performance of the fund is not indicative of future or likely performance of the fund.

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Schroder GAIA Sirios US Equity

Snapshot of Exposures

9 Source: Schroders as at 31 December 2013 *Includes energy, basic materials, capital goods, transportation and utilities

20%

0% 20% 40% 60% 80% North America Europe Asia

Geographic Exposure Sector Exposure

20% -10%

0% 10% 20% 30% 40% Financials Consumer Tech / Telecom Energy/Industrials* Health care

Short Long

Exposure Analysis: Gross Long Equity 90.1% Gross Long FI & Bank Preferred 0.0% Fund Gross Long 90.1% Gross Short FI & Bank Preferred 0.0% Gross Short Equity

20.9%

Fund Gross Short

20.9%

Hedges (Index options (delta- adjusted) and ETFs)

2.3%

Total Gross Exposure 113.3% Total Net Exposure 66.9%

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Within UCITS US equity exposure is typically long only

10 Source: Lipper FMI FundFile as at November 2013

An new option is now available - US equity long/short funds With an astonishing 1/3rd of AUM invested in passive funds and ETFs

30% 1% 69%

Passively managed Actively manged - long/short equity Actively managed - long only

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2

2 4 6 8 10 12 5 7 9 11 13 15 17 19 21

Why do so many investors prefer ETFs?

Because most active long only managers have underperformed the S&P500

11

Sirios US Equity Long Short

2. Fidelity America
5. JPM US Select Equity
3. Pioneer US Research

US Flex Cap Large Cap Growth Large Cap Value Large Cap Blend Annualised Return Annualised Standard Deviation S&P 500

1. Vanguard US 500 Stock Index
4. L&G US Index

Source: Morningstar as at 31 December 2013. Performance is shown for Sirios US Long/Short strategy since inception July 1999 chain linked to the Schroder GAIA Sirios US Equity C Acc USD which launched on 27/02/2013. Long only managers since July 1999 with >$500m assets under management. Orange symbols represent Morningstar peer group averages.

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60%
50%
40%
30%
20%
10%

0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 S&P 500 Sirios

Sirios’* drawdown during the financial crisis was 19% vs. 51% for the S&P 500**

But clients need to bear potential drawdown risks

ETFs are good for full market exposure

12 Source: Schroders & Sirios as at 31 December 2013 *Sirios US equity long short strategy: Sirios offshore fund Jul.1999 - Feb. 2013 , Schroder GAIA Sirios US Equity A Acc USD Mar. 2013 onwards. **S&P 500: S&P 500 TR from Jul.1999 - Feb. 2013 , S&P 500 TR Net Mar. 2013 onwards. Investment involves risk. Past performance of the fund is not indicative of future or likely performance of the fund.

43%
51%

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The importance of downside protection

13

Compounding nature of drawdowns impacts long term returns

Size of Drawdown Recovery Required 10% 11% 20% 25% 30% 43% 40% 67% 50% 100% 60% 150%

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Competitor US long/short funds

Sirios has consistently been the best performing manager in the peer group

14 Source: Schroders & Sirios as at 31 December 2013. Performance shown for all funds is the chain linked track record of the offshore fund plus UCITS fund where applicable. For example performance is shown for Sirios’ offshore fund chain linked to Schroder GAIA Sirios US Equity A Acc USD which launched on 27 February 2013. S&P 500: S&P 500 TR from Jul.1999 - Feb. 2013 , S&P 500 TR Net Mar. 2013 onwards. *Schroder GAIA Sirios US Equity has weekly and month end dealing with 3 days notice. **Fees shown are for intermediary share class where applicable. ***Performance numbers begin for competitor funds when the fund completes its first full calendar year of performance. Investment involves risk. Past performance of the fund is not indicative of future or likely performance of the fund.

UCITS fund (chain linked to

ffshore fund)

AUM (USDm) UCITS Inception Fee** (Mgt/Perf) Liquidity 2013 Annualised (3yr) Annualised (5yr) Schroder GAIA Sirios 974 Feb-13 2.00%/20% Weekly* 26%

1st

12%

1st

12%

1st

GSI SEG Long Short 154 Dec-11 1.55%/20% Weekly 17% 7% 9% DB Platinum Omega 135 Dec-11 2.79%/20% Weekly 23% N/A N/A GLG North America 48 Jan-11 2.75%/20% Daily 2%

3%

6% RWC US Absolute Alpha 129 Sep-09 2.00%/20% Daily 13% 8% N/A AB Select Absolute Alpha 760 Mar-12 1.80%/20% Daily 15% N/A N/A S&P 500 32% 16% 18% Annual Returns*** 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sirios 26% 19% 4% 5% 9% 5% 11% 14% 12%

14%

17% 7%

2%

12% GLG North America 4% 9% 17% 18% 8%

4%
18%

29% 15%

10%
1%

GSI SEG Long Short 3% 15% 10% 16% 19%

22%

13% 11% 2% 3% RWC US Absolute Alpha

6%
3%

16% S&P 500 8%

9%
12%
22%

29% 11% 5% 16% 5%

37%

26% 15% 2% 16%

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Schroder GAIA Sirios US Equity

Source: Morningstar & Schroders as at 31 December 2013. Performance is shown for Sirios US Long/Short strategy since inception July 1999 chain linked to the Schroder GAIA Sirios US Equity which launched on 27/02/2013. Investment involves risk. Past performance of the fund is not indicative of future or likely performance of the fund. 15

75% S&P 500: 25% Sirios 100% S&P 500

Upside Capture Downside Capture

Historical analysis to illustrate results of blending Sirios with an S&P500 ETF

25% S&P 500: 75% Sirios 50% S&P 500: 50% Sirios

Ultimately it depends on the

clients risk tolerance and desired upside/ downside capture ratio

Incremental allocations to Sirios

maintain upside participation in the market

Sirios helps to considerably

reduce downside capture and drawdown

Maximum Drawdown

100% Sirios

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

60%
50%
40%
30%
20%
10%

0%

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%

0%

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Performance Summary

Sirios US Equity Long/Short Strategy*



Proven 14 year track record with inception to date net return of +295.8% through 30 November 2013 vs. S&P 500 return of +75.7%



History of low correlation, 0.40, low Beta, 0.24 to S&P 500 Index

16 Source: Sirios and Schroders as at 31 December 2013 *Sirios US equity long short strategy: Sirios offshore fund Jul.1999 - Feb. 2013 , Schroder GAIA Sirios US Equity A Acc USD Mar. 2013 onwards. **S&P 500: S&P 500 TR from Jul.1999 - Feb. 2013 , S&P 500 TR Net Mar. 2013 onwards. Investment involves risk. Past performance of the fund is not indicative of future or likely performance of the fund. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual S&P 500** 2013 3.7%

0.4%

4.8% 0.4% 5.5%

0.1%

1.4%

3.2%

3.3% 1.6% 2.7% 3.59 25.5% 28.5% 2012 0.3% 2.0% 3.5%

0.8%
1.8%
0.9%

0.3% 2.9%

0.2%

2.7% 1.9% 2.1% 12.3% 16.0% 2011

0.8%

0.9%

0.8%

1.3%

2.1%
1.4%
0.8%
4.9%
4.7%

8.3% 2.0% 1.8%

1.9%

2.1% 2010

1.5%

2.5% 3.8% 0.4%

4.2%
1.3%

1.0%

2.1%

4.0% 1.9% 0.6% 1.9% 6.9% 15.1% 2009 6.3%

2.6%
0.3%
6.5%

5.6% 2.4% 3.8%

0.5%

4.0%

1.7%

3.3% 2.7% 16.9% 26.4% 2008

10.9%

5.6%

2.3%

2.9% 3.1% 3.1%

5.2%
2.0%
4.8%
5.4%

5.3%

2.9%
14.0%
37.0%

2007 1.6%

0.1%

3.4% 3.4%

0.2%

0.2% 1.9%

0.4%

1.2% 3.6%

2.2%
0.6%

12.3% 5.5% 2006 1.1% 0.9% 0.6% 1.9%

2.0%
0.9%

1.4% 0.9% 1.4% 3.1% 1.5% 3.1% 13.6% 15.8% 2005 0.6% 0.6%

1.5%
1.1%

1.8% 2.9% 3.2% 1.4% 1.7%

1.6%

0.5% 1.9% 10.8% 4.9% 2004 2.0% 0.6%

1.6%
0.3%

0.9% 1.2%

2.5%

0.2% 0.7% 0.5% 1.0% 2.3% 5.1% 10.9% 2003 1.8% 0.7% 1.6%

1.0%

2.6% 1.1%

0.2%

0.4%

0.3%

2.0%

0.8%

1.3% 9.4% 28.7% 2002

4.2%

1.7% 1.1% 0.5% 1.4% 1.8%

1.4%

1.7% 2.7% 0.4%

0.5%

0.1% 5.2%

22.1%

2001 0.3% 1.4%

2.9%

0.5% 2.8% 0.6%

0.1%

0.3% 0.0% 0.6% 0.6% 0.2% 4.3%

11.9%

2000

3.2%

7.5% 2.7%

2.7%

0.3% 3.4%

0.2%

4.4% 0.3% 3.0%

0.1%

2.3% 18.6%

9.1%

1999 0.3%

0.1%

3.0% 6.0% 5.1% 9.1% 25.6% (6) 7.7% (6)

SLIDE 18

The information and opinions contained in this document have been obtained from sources Schroders considers to be reliable however these have not been checked or verified by Schroders. The information contained herein is provided as a guide only and any persons who may receive this document must make his

wn investigations and must satisfy himself as to the accuracy and completeness of information, and suitability of investments for his investment purposes, needs
r requirements. Schroders, their directors and employees may have positions in and may effect transactions in securities mentioned in this document.

This document and its contents are not intended to constitute an offer for sale, prospectus, invitation to subscribe for or purchase or otherwise acquire any of the instruments referred to herein. Please note that Units in the Fund which is recognized by Monetary Authority of Singapore (the “MAS”) for restricted offer in Singapore, which is the subject of this document, are not allowed to be offered to the retail public in Singapore. No document or material in connection with the offer or sale of the Units may be circulated or distributed, nor may the Units be offered or sold, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor defined under Section 304 of the Securities and Futures Act (“SFA”) in accordance with the conditions specified in that section, (ii) to a person who acquires the Units as principal at a consideration of not less than S$200,000 (or its equivalent in foreign currency) in accordance with Section 305 of the SFA; or (iii) to an accredited investor or a person within the meaning of “relevant person” defined under Section 305 of the SFA in accordance with the conditions specified in that section; or (iv) otherwise pursuant to, and in accordance with the conditions of any

ther applicable section of the SFA. Units subscribed to or purchased by any such permitted persons in Singapore shall not be transferred except as permitted by

Section 305A of the SFA. Neither Schroders nor any of its officers or employees have any authority to give any representations or warranty whatsoever and no responsibility is accepted by any of them in relation to the information in this document and accordingly Schroders shall not be liable for any loss or damages or expense of any kind whatsoever or howsoever arising from the person's use of the information contained in this document. This presentation is published for the information of distributors of the Fund only and does not have any regard to the specific investment objective, financial situation and the particular needs of any specific person who may receive this document. Investors may wish to seek advice from a financial advisor before purchasing units of the Fund. In the event that the investor chooses not to seek advice from a financial advisor, he should consider whether the Fund in question is suitable for him. Past performance of the Fund or its manager and any forecast are not necessarily indicative of the future or likely performance of the Fund or the manager. The value of units and the income from the fund may fall as well as rise. A copy of information memorandum is available. Potential investors should read the information memorandum which is available from Schroder Investment Management (Singapore) Ltd or its distributors. Schroder Investment Management (Singapore) Ltd 65 Chulia Street, #46-00, OCBC Centre Telephone: 1800 534 4288 Fax: +65 6536 6626 Registration No.: 199201080H

Important Information

17

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Any security(s) mentioned above is for illustrative purpose only, not a recommendation to invest or divest. This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended to provide, and should not be relied on for investment advice or recommendation. Opinions stated are matters of judgment, which may change. Information herein is believed to be reliable, but Schroder Investment Management (Hong Kong) Limited does not warrant its completeness or accuracy. Investment involves risks. Past performance and any forecasts are not necessarily a guide to future or likely performance. You should remember that the value

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risks associated with investment in securities in emerging and less developed markets, please refer to the relevant offering document. The information contained in this document is provided for information purpose only and does not constitute any solicitation and offering of investment products. Potential investors should be aware that such investments involve market risk and should be regarded as long-term investments. Derivatives carry a high degree of risk and should only be considered by sophisticated investors. This material including the website has not been reviewed by the SFC. Issued by Schroder Investment Management (Hong Kong) Limited. Schroder Investment Management (Hong Kong) Limited Level 33, Two Pacific Place, 88 Queensway, Hong Kong Telephone +852 2521 1633 Fax +852 2524 7225

Important Information

18