TB Wise Multi-Asset Income 2017 AGM 1 Investment Team Profiles - - PowerPoint PPT Presentation

2017 AGM

TB Wise Multi-Asset Income

For Professional Investors Only

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Investment Team Profiles

22 years average fund management experience

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Team Picture Philip Matthews

• Joined Wise Funds in 2018
• Previously managing UK equities funds at Schroders and Jupiter Asset Management
• 20 years of fund management experience

Tony Yarrow

• Founded Wise Funds (formerly Wise Investment) in 1992
• Previously a financial adviser
• 31 years of fund management experience

Vincent Ropers

• Joined Wise Funds in 2017
• Previously managing multi-asset strategies at Standard Life Investments and Fidelity

Intl.

• 15 years of fund management experience

Wise Funds Org Chart

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Portfolio Managers Tony Yarrow

Co-portfolio Manager

Philip Matthews

Co-portfolio Manager

Vincent Ropers

CEO & Co-portfolio Manager

Nicole Harrington

Compliance Manager

John Newton

Business Development Manager

Joanna Scavuzzo-Blake

Office Manager

Rick Ashworth

Analyst

• We aim to provide investors access to the best-in-class third party investment managers
• We also invest directly in attractive individual UK stocks
• We are fully flexible, allowing us to invest only into asset classes we consider most

attractive

Wise Multi-Asset Income is a Unique Solution for Investors’ Income Needs

We aim to provide a sustainable, growing level of income whilst delivering long term capital growth

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Investment Philosophy

• We invest primarily in people: we only entrust our investors’ money with managers who take their

fiduciary duties with the greatest of care

• We invest directly in UK equities and in funds for specialist sectors and overseas
• We believe strongly that these differing areas of investment focus complement each other
• We seek to diversify the portfolio across value themes globally
• Valuations are critical: overpaying for assets, no matter how good they are, is a recipe for disaster
• We have been committed ethical investors for many years, and do not invest in unacceptable

sectors including gambling and tobacco

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The Value Clock

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12 9 3 6

WATCH BUY HOLD SELL

Buying Low, Selling High – It’s much harder than you think!

The investable universe providing income for Multi-Asset funds has become increasingly diverse

How Do We Choose Which Asset Class To Invest In?

21st Century Multi-Asset Income Fund

Clean Energy Cash

Alternatives UK & Overseas Commercial Property

Private Equity UK & Overseas Equities UK & Overseas Gov Bonds EMD UK & Overseas Corporate Bond Infrastructure Investment Trusts 7

21st Century Multi-Asset Income Fund

1 2 9 3 6

WATCH BUY HOLD SELL

We Consider Each Asset Class in Relation to the Value Cycle

The tools we use to assess the current positions in the cycle:

• In-house macro analysis
• Conversations with third-party fund

managers

• Conversations with companies
• Valuation screening

Source: Wise Funds Investment View– 31st December 2019.

US Equities Eurozone Equities Japan Equities China Equities UK Equities Emerging Markets Equities 8

Where Do We See the Other Asset Classes in the Value Cycle?

1 2 9 3 6

WATCH BUY HOLD SELL

Source: Wise Funds Investment View– 31st December 2019.

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Clean Energy Cash Infrastructure

UK & Overseas Commercial Property

UK & Overseas Bonds Emerging Market Debt Private Equity

Source: Factset - 31st December 2019; world yields are a weighted blended average

We Currently Have a High Exposure to Equities

Current Equity Yields Appear More Attractive Than Those Available From Bonds

1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

World Dividend Yield World Gov Bond Yield

2.5% 1.4% 10

Valuation Dispersion Within Equities is at Extreme Levels

Global Value at 20 Year Lows vs Growth

Source: Peel Hunt –31st December 2019.

Increased Selectivity Necessary When Considering Equity Allocation

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10 10 Year ar Gov

• vernment

yield lds 12 Turkey 10.30% Nigeria 10.81% S.A. 8.98% Brazil 6.96% India 6.59% Peru 4.40% Colombia 5.98%

Source: Factset 31st January 2020, worldgovernmentbonds.com; (1) Factset 31st December 2019, by number of countries (sample size of 53 major countries)

Positive EM Real Yields But With Higher Historic Defaults

60% of Global 10 Year Government Real Yields are Negative1

Developed Market Bond Yields Either Negative

• r Below Inflation

Lower Yields & Higher Duration are Increasingly Putting Your Income at Risk

Source: Factset - 31st January 2020

Duration is now c. 4.6x the yield – i.e. 4.6 years of lost income for a 100bp shift in yields in the Multiverse Index

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How Do We Choose Which Stocks To Invest In?

Systematic valuation screen of the market, targeting undervalued companies Reasons companies can be out of favour:

• Cyclical weakness
• Market weakness
• Structural headwinds
• Unappreciated quality

The stocks selected are thoroughly researched and compared against our investment criteria Our key criteria are: ✓ Sustainable Business ✓ Cyclicality Understood ✓ Strong Management Team ✓ Robust Balance Sheet  Value Trap

We try to identify Value whilst avoiding Value Traps

Attractive stocks that fit our criteria are selected and considered for inclusion to the portfolio

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How We Invest in Value: Questions We Ask

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Fair Value Stock Price

Our Price Rebound Return

Has the company grown in the past? Do we believe it can sustainably grow? Do we understand the reasons for the share price weakness? Can we quantify the upside to Fair Value? Do we believe it’s a good quality business? Do we trust the management?

XP Power – High Quality Growth Cyclical

XP Power engage in the manufacture and provision

• f power supply solutions through Europe, North

America and Asia Has the company grown in the past? Do we believe it can sustainably grow? Do we understand the reasons for the share price weakness? Can we quantify the upside to Fair Value? Do we believe it’s a good quality business? Do we trust the management?

£5 £10 £15 £20 £25 £30 £35 £40 Dec-2012 Dec-2013 Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Dec-2019 BOUGHT BOUGHT SOLD BOUGHT

Bought on Cyclical Fears Around Semiconductors

REDUCED

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Source: Factset - 31st December 2019.

11.85 12.45 13.1 15.1 15.55 15.95 16.4 16.85 17.35 17.88 18.4 18.94 19.49 20.07 20.67 7.43

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Interim 2019 Chesnara Dividend History (pence per share)

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Source: FactSet; Chesnara – 2019 Half Year Results presentation; Chesnara measures Value based on Embedded Value principles up until 2015, thereafter it is based on Economic Value; Economic Value is derived from Solvency II Own Funds and recognises the impact of future profit expectations from existing business.

Chesnara – Long Term Dividend Compounder

Interim 2019

Bought on Share Price Deviation from Economic Value

Chesnara Share Price vs Economic Value (ex. Dividend)

Recent Stock Additions

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Performance

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£5,838 £6,286 £6,044 £6,177 £6,636 £6,829 £7,011 £8,002 £8,207 £8,485 £90,000 £100,000 £110,000 £120,000 £130,000 £140,000 £150,000 £160,000 £170,000 £2,000 £3,000 £4,000 £5,000 £6,000 £7,000 £8,000 £9,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Capital Growth Income Received

Paid Lump sum Performance Source: Wise Funds - 31st December 2019. TB Wise Multi-Asset Income 10 year Income earned & lump sum performance.

Initial invest​ment of £100,000 has grown over 10 years to £154,164

Whilst delivering cumulative dividends of £69,515​ over that time

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Source: JP Morgan Asset Management – 31st December 2019.

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%

Asset Yield Comparison

Average UK Inflation 1.9% Equity Fixed Income Alternatives

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The Yield on the Fund Looks Attractive Compared to Other Global Asset Classes

Source: FE 31st December 2019, total return. 5 year data from 1 Jan 2015 to 31 December 2019

Performance

2015 2016 2017 2018 2019 Cumulative 5 Year Return TB Wise Multi-Asset Income 2.5% 23.46% 15.77%

• 12.03%

21.44% 56.55% IA Flexible Sector 2.01% 12.84% 9.88%

• 6.14%

15.83% 36.52% CBOE UK All Companies 0.86% 16.49% 14.01%

• 9.83%

19.28% 44.07% Consumer Price Index 0.20% 1.60% 2.94% 2.10% 1.31% 8.39% Quartile Rank 1 1 1 4 1 1 Annual Yield 5.48% 6.00% 5.00% 5.90% 5.10% 5.40%

Active Share OCF Yield

92% 0.88% 5.10%

Strong Risk-Adjusted Returns Delivered Over 5 Years

Source: FE - 31st January 2020.

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Current Positioning

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Source: Wise Funds, Factset - 31st January 2020.

47 16 13 10 6 5 20 40 60 UK International Europe Asia Pacific ex Japan America Europe ex UK

Geographical allocation

72 13 13 2 20 40 60 80 Equities Alternatives Property Cash

Asset allocation

Top 20 Holdings - 31st January 2020

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Legal & General Group Plc 6.03%

2

Princess Private Eqty Ltd 5.51%

3

Rio Tinto Plc 4.72%

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Blackrock Wrld Mining Plc 4.58%

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Middlefield Canadian Pref 3.86%

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Aberdeen Asian Inc. Ltd. 3.84%

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Ediston Property Plc 3.08%

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PALACE CAPITAL PLC 2.85%

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Newriver Reit Plc 2.76%

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Ecofin Gbl Utils&Inf Ord 2.73%

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Provident Financial Plc 2.73%

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Murray Intl Tr. Plc 2.54%

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Aviva Plc 2.46%

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U And I Group Plc 2.43%

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Chesnara Plc 2.42%

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Shoe Zone Plc 2.24%

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BT Group Plc 2.21%

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Boot (Henry) Plc 2.11%

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Unilever Plc 2.07%

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Alliance Pharma Plc 2.06%

Fund Summary

Fund Name TB Wise Multi-Asset Income Fund Legal Structure OEIC (UCITS) Domicile United Kingdom Inception Date 3rd October 2005 Comparative Index CboeUK All Companies Sector IA Flexible Objective Provide a yield in excess of the Cboe UK All Companies Index with the potential to provide income growth and capital growth over the medium to long term in line with, or better than, the rate of UK inflation (based on the Bank of England’s preferred measure of UK inflation, which is currently the Consumer Prices Index (CPI). Base Currency GBP Currencies available GBP Asset Manager Wise Funds Limited Co-Portfolio Managers Philip Matthews, Tony Yarrow & Vincent Ropers Authorised Corporate Director (ACD)

• T. Bailey

25 Share Class A Share Class B Share Class W Share class launch date 3rd October 2005 3rd October 2005 3rd October 2005 SEDOL Acc: B0LHXD3 Inc: B0LHRT7 Acc: B0LJ1M4 Inc: B0LJ016 Acc: BD386V4 Inc: BD386W5 ISIN Acc: GB00B0LHXD36 Inc: GB00B0LHRT77 Acc: GB00B0LJ1M47 Inc: GB00B0LJ0160 Acc: GB00BD386V42 Inc: GB00BD386W58 AMC 1.40% 0.75% 0.50% Minimum investment £1,000 £1,000 £100,000,000 Registered for sale in GB GB GB

Disclaimer

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Full details of the TB Wise Funds, including risk warnings, are published in the TB Wise Funds Prospectus, the TB Wise Supplementary Information Document (SID) and the TB Wise Key Investor Information Documents (KIIDs) which are available on request and at www.wiseinvestment.co.uk. The TB Wise Funds are subject to normal stock market fluctuations and other risks inherent in such investments. The value of your investment and the income derived from it can go down as well as up, and you may not get back the money you invested. Capital appreciation in the early years will be adversely affected by the impact of initial charges and you should therefore regard your investment as medium- to-long term. Every effort is taken to ensure the accuracy of the data used in this document but no warranties are

• given. Wise Funds Limited is authorised and regulated by the Financial Conduct Authority, No. 768269. T. Bailey Fund

Services Limited is authorised and regulated by the Financial Conduct Authority, No. 190293.

Appendix

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Source: Wise Funds and Factset - 31st December 2019.

10 20 30 40 50 60 70 80 90 100 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19

ASIA PACIFIC EX-JAPAN EUROPE EUROPE EX-UK INTERNATIONAL NORTH AMERICA UK [Cash]

10 20 30 40 50 60 70 80 90 100 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19

Investment Trusts Open-Ended Funds [Cash]

Investment type Geographical Allocation

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Source: FE - 31st December 2019 .

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Rolling 3-year performance versus the IA Flexible Sector

Track Record

• utperforming its peers

Investment and Risk Characteristics

Source: Wise Funds and Factset - 31st January 2020.

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