June 2016
Introducing iGuard
3
Introducing iGuard
A range of investment solutions designed to
meet your investment objectives and risk
requirements.
An experienced investment committee select
and review these investment solutions and
managers on your behalf.
Each solution provides you with active
management diversification across different
asset classes and markets.
We provide you with regular and relevant
communications about your investments.
You have access to the skills of carefully
selected investment managers.
We negotiate clear and competitive fees on your
behalf.
4
Why is diversification so important?
Diversification and the average investor
(US)
Portfolio
returns: Equities vs. equity and fixed income blend
$24,000
$20,000
$16,000
Nov. 2009
40/60 portfolio
recovers
Oct. 2007
S&P 500 peak
Oct 2010
60/40 portfolio
recovers
40/60 Portfolio
60/40 Portfolio
S&P 500
$12,000
$8,000
Mar. 2012
S&P 500
recovers
Mar. 2009
S&P 500 portfolio
Loses over $50,000
$4,000
12/2007
06/2008
12/2008
06/2009
12/2009
06/2010
12/2010
06/2011
12/2011
06/2012
12/2012
06/2013
12/2013
06/2014
12/2014
06/2015
12/2015
20-year annualised return by asset class (2007-2016)
14%
12%
10.8
10%
8.2
8%
7.0
6.3
6%
4.5
5.2
3.9
3.6
4%
2.5
2.5
2.2
Average Investor
Inflation
2%
0%
REITs
S&P 500 TR
60/40
40/60
Bonds
Gold
Oil
EAFE
Homes
5
Why is diversification so important?
Diversification and the average investor
(UK)
Portfolio
returns: Equities vs. equity and fixed income blend
£24,000
40/60 Portfolio
60/40 Portfolio
FTSE All-Share
£20,000
£16,000
£12,000
£8,000
Nov. 2009
40/60 portfolio
recovers
Mar. 2009
S&P 500 portfolio
Loses over $50,000
Oct 2010
60/40 portfolio
recovers
Mar. 2012
S&P 500
recovers
Oct. 2007
S&P 500 peak
£4,000
12/2007
06/2008
12/2008
06/2009
12/2009
06/2010
12/2010
06/2011
12/2011
06/2012
12/2012
06/2013
12/2013
06/2014
12/2014
06/2015
12/2015
20-year annualised return by asset class (1995-2005)
14%
12%
10.4
10%
8%
7.0
6.7
6.6
6%
6.0
5.5
5.1
3.8
2.5
4%
2.5
2.0
Average Investor
Inflation
2%
0%
REITs
Home
FTSE All-Share
60/40
40/60
Bonds
Gold
EAFE
Oil
6
Why is active management essential?
Markets are increasingly volatile
Number of 3% Daily Moves in S&P500 (by Decade)
101
25
27
1981-1990
1991-2000
18
4
1951-1960
7
1961-1970
1971-1980
Source: Lipper, Smartim. Annualised return from the IA sectors over 10 years to 31 March 2016. All figures are total return in sterling and are net of
fees including the GWM Investment Management fee of 1%
2001-210
7
Selecting the right managers makes a big difference
% Annualised Return Over 10 Years After All Charges
14.00
12.00
12.19
11.90
10.07
10.00
8.27
8.20
8.00
6.69
5.82
6.00
4.33
4.22
4.00
3.65
3.19
2.00
3.18
0.85
0.13
0.00
-0.42
-2.00
-1.50
-1.92
-3.33
-4.00
-6.00
UK
US
Europe ex UK
Top performing fund
Average fund
Japan
Asia ex Japan
Bottom performing fund
Source: Lipper, Smartim. Annualised return from the IA sectors over 10 years to 31 March 2016. All figures are total return in sterling and are net of
fees including the GWM Investment Management fee of 1%
Global Emerging Markets
8
We all make irrational decisions and that impacts returns
Equity
Fixed Income
18
16
Annualized Returns
14
12
10
8
6
4
2
0
-2
1 Year
3 Year
5 Year
10 Year
20 Year
1 Year
Average Investor
3 Year
5 Year
10 Year
Index
Index returns are for illustrative purposes only and do not represent actual fund performance. Index returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.
Source: Dalbar, March 2013. Returns calculated in USD with an end date of December 31, 2012. The equity index is represented by S&P 500 Index, the fixed income index by Barclays Aggregate Bond Index. Average U.S. equity investor and
average U.S. fixed income investor results are calculated using data supplied by the Investment Company Institute. Investor returns are represented by the change in total mutual fund assets after excluding sales, redemption, and exchanges.
This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses and any other costs.
Source: SEI, Smartim
20 Year
9
GWM build an investment approach that can meet your goals
Value-Add Delivered to Client
Evolution of Wealth Management
Goals-Based
Investing
Strategic Asset
Allocation
Concentrated
Stock
Portfolios
Efficient
Portfolio
Style
Diversified
Portfolios
INVESTORS ARE NOT
“RATIONAL” (KAHNEMAN,
TVERSKY)
MULTI-ASSET
( BRINSON, BEEBOWER,
SINGER)
THEORY OF PORTFOLIO
SELECTION (MARKOWITZ )
Concentrated
Stock Portfolios
STOCKS EVALUATED
INDEPENDENTLY
1900s - 1960s
1960s - 1980s
1980s - 1990s
Source: SEI, Smartim
Today
10
How is the GWM Investment approach different?
Traditional Wealth Management
GWM Approach
Objective
Seek performance in line with specific
markets
Seeks to invest according to financial
objectives and time horizons
Measure of
success
Investment success measured against
market benchmarks
Investment success measured
against progress towards goals
Goal attainment
Focus of client
conversation
Return / standard deviation
Explain recent market volatility
Provide meaningful advice on
progresstowards goals
Look beyond market volatility
Takes your emotions into account
Addresses your loss aversion
11
GWM Process
GWM Investment Committee
SELECT
REVIEW
MONITOR
REPORT
GWM Risk Assessment
DEFENSIVE
CAUTIOUS
CAUTIOUS+
BALANCED
BALANCED +
iGuard Investment Solutions
RISK MANAGED PORTFOLIOS
MULTI ASSET FUNDS
AGGRESSIVE GROWTH
AGGRESSIVE GROWTH
+
12
Our starting point – your attitude and capacity for risk
The iGuard Portfolios are all mapped to GWM’s client risk profiles
13
iGuard
Who is involved in managing and safeguarding your money?
GWM Investment Committee
SERVICE
iGUARD RISK-MGD PORTFOLIOS
SMARTFUNDS
Guardian Wealth Management
YOUR
ADVISER
THE
INVESTMENT
MANAGER
ADMINISTRATION
& CUSTODY
Praemium
Northern Trust
Northern Trust
14
The iGuard Range of Investment solutions
GWM Risk
Profile
Defensive
Cautious
Cautious +
Balanced
GWM Active
Portfolios




Smartfund
Smartfund
Protected

Balanced +
Aggressive
Growth
Aggressive
Growth +







The Smartfund 80% Protected range is mapped to a risk profile using its asset allocation.
The addition of the Protection Component serves to reduce volatility of the fund and the drawdowns that a client could expect to
see. This extra protection means that each Smartfund could be appropriate for clients with risk profiles of up to three categories
lower. Or alternatively you could select the blend of funds we have suggested in the risk map.
15
iGuard Investment Solutions
How do our costs compare?
Type of Investment
Solutions
Typical Multi
Asset Funds
iGuard risk
managed
portfolios
GWM Fee
1.00%
1.00%
0%
Investment Fee
n/a
0.25%
n/a
Underlying Investments
1.85%
0.80%*
1.95%
Platform Fee
0.00%
0.48%
0.00%
Total Investment cost
2.85%
2.53%
1.95%
Smartfunds
16
Who is involved in the iGuard Portfolios and funds?
Regulated in Switzerland, UAE, Hong Kong and UK.
YOUR ADVISER
We do not handle your money directly
Assets held by the custodian of selected platform, pension or investment bond
We select the most suitable investment managers; currently Smartim & Morgan Stanley FundLogic.
Smartim and Morgan Stanley FundLogic, regulated by the Financial Conduct Authority & Central Bank of Ireland respectively.
YOUR ADVISER
They manage your portfolios and select the most suitable investments under mandate agreed with GWM.
By using collectives and/or mutual funds your investment will be spread across different regulated investment funds from
different investment companies who ‘ring fence’ the assets of the fund protecting you if the company should fail.
Praemium International is regulated by the Jersey Financial Services Commission.
YOUR ADMINSTRATOR
& CUSTODIAN
(PRAEMIUM &
NORTHERN TRUST)
Praemium delegate custody to Northern Trust who are responsible for the safe keeping your assets, along with $6.2 trillion of
total assets under custody.
Northern trust are regulated by PRA and the FCA
Praemium client assets are segregated and ring fenced from other Northern Trust clients should Northern Trust fail.
17
Who are Praemium?
Praemium are responsible for administration of your portfolio and outsource the custody of your
portfolio to Northern Trust, who are responsible for custody of over $6.2 trillion of assets
One of the fastest growing discretionary platforms in the international market, Praemium supports over 700
corporate firms, managing and administering over 300,000 investor accounts and £40 billion of assets.
Founded in Australia in 2001 and listed on the ASX, Praemium operates internationally with offices
in Australia, UK, Jersey, Hong Kong, China and Armenia.
Praemium’s clients are firms like GWM that provide financial advice to investors.
18
About Smartim
Smartim are responsible for the fund selection and portfolio consultation
of the iGuard active portfolios and Smartfunds.
Smartim are the wholly owned investment management company of the Praemium Group.
The team are responsible for the management of over £250 million of assets in a wide range range of actively
managed risk-graded model portfolios and an innovative range of multi-asset funds.
19
Introducing the Smartim Investment Managers
Smartim is the wholly owned investment arm of Praemium responsible for managing over £250m in assets.
The investment team responsible for the day-to-day management of your portfolio has over 40 years of combined
experience in the investment management market and a proven track record in designing and managing discretionary
portfolios.
ARI TOWLI
Investment
Manager
Ari Towli has over 19 years of experience in the area of multi asset, multi manager investing.
He has worked at Singer & Friedlander, Quilter & Co., Rothschilds and most recently
Gartmore and North Investment Partners where he was responsible for fund selection and
the management of North’s multi asset portfolios and funds. Whilst at Gartmore, Ari
developed the risk tools that were critical to the construction and management of the
Gartmore multi manager funds and was instrumental in the design and development of
Gartmore’s Multi Manager Absolute Return Fund and North’s range of risk-graded multiasset portfolios.
Nick Stanhope has over 13 years of experience in the investment
management industry and specialises in the area of multi asset, multi
manager investing. Nick has worked for Abbey, Legal & General, Chiswell
Associates, Cazenove and most recently at North Investment Partners, where
he spent over six years at North as a senior fund manager responsible for
fund selection and the management of all North’s multi asset funds and their
range of risk-graded portfolios.
NICK
STANHOPE
Investment
Manager
20
iGuard risk managed portfolios – Investment Process
FUND SELECTION
TACTICAL ASSET ALLOCATION
STRATEGIC ASSET ALLOCATION
3
2
1
IDENTIFIES MANAGERS WHO CAN
OUTPERFORM A MARKET OR PEER GROUP
MAXIMISES SHORT TO MEDIUM TERM
OPPORTUNITES
CREATES LONG-TERM DIRECTION
21
The approach to portfolio construction
01
02
03
04
05
06
07
22
How we work with our clients
Advise
Invest
GWM Advises
We work with you to select or create a portfolios that is tailored to your goals and is
suitable given your personal situation and attitude and capacity for risk.
Our Managers Invest
Your client portfolios are invested in one or more portfolios using an appropriate
administration and custody platform
You can view portfolios 24/7 on-line
Service
GWM supports
Our investment committee will actively monitor the ongoing suitability of our
investment managers and portfolios
We will ensure the ongoing suitability of your investments against your goals
personal situation, and attitude and capacity for risk
We will provide regular updates and commentaries to keep you informed of changes
to your portfolios and information about the markets
More about the iGuard Risk Managed Portfolios
24
iGuard Active Portfolios – delivering better risk adjusted returns
6.5
6.5
6.9
5.9
5.0
Returns (%)
3.8
3.8
Volatility (%)
6.2
5.2
6.2
5.3
DEFENSIVE
CAUTIOUS
CAUTIOUS +
9.1
7.0
BALANCED
8.2
BALANCED +
Source: Smartim. Lipper. All figures are total return in Sterling.
AGGRESSIVE
10.6
AGGRESSIVE +
11.4
MSCI AC TR GBP
25
Changes to asset allocation during 2015
26
MSCI World TR GBP% Return 2015
June
Reduced US
Increased Europe & Asia
August
Reduce GEM
Increase Japan & Asia
April
Reduced US
Increased Asia & Japan
September
Increase Europe, Japan, Asia
Reduce Absolute Return, Cash
November
Reduce Japan, US, Asia
Increase Cash
More about the Smartfund Protected Funds
28
An strategy to deliver a smoother investment journey
Offers the returns of multi-asset risk-graded portfolios managed by Smartim, with the benefit of capital
protection of 80% of the highest ever fund value achieved, provided by Morgan Stanley.
Growth
Portfolio
80% Protected
Growth Fund
Balanced
Portfolio
80% Protected
Balanced Fund
Performance
7.4%
6.9%
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 Growth Strategy
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.
29
Who is involved in the fund?
Morgan Stanley
im
Smart
One of the largest
financial institutions
A+ credit rating
FCA-authorised
subsidiary of Praemium
US$2tr AUM
US$360m AUM
30
About Morgan Stanley
Founded in 1935, Morgan Stanley is one of the largest financial
institutions in the world. Morgan Stanley has earned a worldwide
reputation for excellence in financial advice and market
execution. With offices in more than 43 countries, the people of
Morgan Stanley are dedicated to providing clients the finest
thinking, products and services to help them achieve even their
most challenging goals.
Key Facts as of July 2015
Employees
Offices
Morgan Stanley is a global financial services firm that maintains
significant market positions in each of its business segments —
Institutional Securities, Wealth Management and Investment
Management. The Company, through its subsidiaries and
affiliates, provides its products and services to a large and
diversified group of clients and customers, including
corporations, governments, financial institutions and individuals.
Countries Present
2014 Net Revenues
55,802
Over 1,300
43
US$34.27 billion
31
How does Smartfund 80% Protected work?
Performance engine is a
multi-asset investment portfolio actively
managed by Smartim.
Investment
Portfolio
Protection
Component
Protected
Fund NAV
Protection contract linked to the
investment portfolio ensures a
minimum protection level of 80% of the
max fund price. Delivered by Morgan
Stanley.
32
What outcomes will this strategy deliver you?
01
Smoother
Peace of mind
03
Daily traded
Certainty of income
05
02
Security
04
33
How will the fund perform in different market cycles?
Exp: 99%
220
159 (33%)
200
180
Exp: 96%
Exp: 98%
Exp: 14%
160
120 (50%)
120 (20%)
157 (33%)
140
97 (-19%)
120 (20%)
119 (22%)
Exp: 98%
120
96
100
126
100
100
Protected Fund NAV
80
96
96
80
60
Investment Portfolio
0.00
Day 1
1.00
2.00
Day 2
80 (-33%)
Day 3
3.00
4.00
Day 4
For illustration purposes only.
5.00
Day 5
Protection Level
34
Smartfund 80% Protected Fund details
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
Daily
Annual management charge
1.95%
35
Performance of Smartfund 80% Protected Growth so far
(4th September 2015 – 31st March 2016)
Live to date
Since launch
Return
Volatility
Peak/Trough
Drawdown
Protected Growth
2.4%
8.7%
-5.9%
MSCI World
3.6%
15.7%
-14.5%
6 month
Return
Volatility
Peak/Trough
Drawdown
Protected Growth
0.6%
8.9%
-5.9%
MSCI World
0.9%
15.2%
-14.5%
3 month
Return
Volatility
Peak/Trough
Drawdown
Protected Growth
2.4%
8.3%
-2.1%
MSCI World
2.7%
17.2%
-8.8%
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.
36
Performance of Smartfund 80% Protected Balanced so far
(4th September 2015 – 31st March 2016)
Live to date
Since launch
Return
Volatility
Peak/Trough
Drawdown
Protected Balanced
1.9%
6.3%
-4.5%
MSCI World
2.3%
15.7%
-14.5%
6 month
Return
Volatility
Peak/Trough
Drawdown
Protected Balanced
1.1%
6.5%
-4.5%
MSCI World
0.9%
15.2%
-14.5%
3 month
Return
Volatility
Peak/Trough
Drawdown
Protected Balanced
1.7%
6.3%
-1.9%
MSCI World
2.7%
17.2%
-8.8%
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 does using iGuard mean for you?
38
iGuard FUM - £107m and rising fast!
Smartfund
Protected
£60,000,000
£56,422,290
£50,000,000
£40,000,000
£30,000,000
iGuard
Portfolios
Smartfund
£27,326,219
£23,373,814
£20,000,000
£10,000,000
£-
Source: SEI, Smartim
39
iGuard Top ten advisers by iGuard FUM
- £107m and rising fast!
£9,000,000
£8,262,740
£8,000,000
£7,000,000
£6,463,346
£6,000,000
£5,296,375
£4,782,907
£5,000,000
£4,771,213
£4,059,265
£3,941,809
£3,931,542
£3,861,198
£3,858,067
Peter Gollogly
Matthew Howard
Waine Paul
Warren Macal
John Storrie
£4,000,000
£3,000,000
£2,000,000
£1,000,000
£Neil Glaze
Hamzah Shalchi
Will Glyn
Simon Parfitt
Jonathan Lumb
Source: SEI, Smartim
40
The benefits of following the iGuard approach
Source: SEI, Smartim
41
Warren Macal - 2015
Source: SEI, Smartim
42
Ethan Parkhouse & Matt Howard - 2015
Source: SEI, Smartim
43
Neil Glaze - 2015
Source: SEI, Smartim
44
£10 million of legacy assets
Source: SEI, Smartim
45
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.