MANAGED PORTFOLIO SERVICEIDX INCOMEMARCH 2018

OBJECTIVE

The investment objective is to grow the capital value of the portfolio as well as togenerate some degree of income. The Quilter Cheviot IDX Income Strategy isdesigned for an investor with a time horizon of more than 5 years, and a mediumtolerance for risk that can accept moderate variation or disruption to capital value orcurrent income in order to achieve their longer-term objective.

The Quilter Cheviot IDX Income Strategy is a diversified portfolio comprisingpredominantly domestic and international equity index-tracking funds as well as someexposure to fixed interest index-tracking funds. There may also be exposure toexchange-traded products (ETPs) and funds investing into ‘‘alternatives’’ such ascommercial property, private equity, commodities and absolute return strategies.

STRATEGY PERFORMANCE(30 APRIL 2013 TO 28 FEBRUARY 2018)

Dec 2

013

Dec 2

014

Dec 2

015

Dec 2

016

Dec 2

017

-10

0

10

20

30

40

IDX Income

% G

RO

WT

H

Source: Quilter Cheviot, Financial Express (FE). Model performance is shown in GBP, gross ofmanagement fees with all income reinvested, actual returns may vary. Past performance is not aguarantee of future results.

ASSET CLASS / GEOGRAPHICAL LOCATION

As at 28 February 2018

Far East 2.0%Emerging 2.8%Property 3.0%Japan 3.7%Cont'l Europe 4.0%Cash 5.0%Hedge Funds 11.5%North America 13.7%Fixed Interest 24.0%UK 30.3%

PORTFOLIO HOLDINGS

UK Equity: 30.3%Vanguard FTSE UK All Share IndexHSBC FTSE All Share IndexHSBC FTSE 250 IndexVanguard FTSE UK Equity Income Index

Fixed Interest & Cash: 29.0%iShares UK Gilts All Stocks IndexCash (£)L&G Short Dated Sterling Corporate Bond IndexVanguard UK Investment Grade Bond IndexL&G All Stocks Gilt IndexL&G Global Inflation Linked Bond Index

International Equity: 26.2%iShares North American Equity IndexVanguard US Equity IndexL&G European IndexiShares Japan Equity IndexL&G Global Emerging MarketsL&G Pacific Index

Alternatives: 14.5%LFIS Vision UCITS - Premia M GBPOld Mutual Global Equity Absolute ReturnInvesco Perpetual Global Targeted ReturnsGAM Star Absolute Return BondAberdeen UK Property Feeder Unit TrustAspect Diversified TrendsiShares Global Property Securities Eq Index

Name YTD 1 Year 3 Year 5 Year Since Inception

IDX Income -2.1% 3.6% 18.6% N/A 33.4%

FTSE UK Private Investor Income TR -2.8% 3.0% 19.6% 39.7% 36.7%

IA Mixed Investment 20-60% Shares TR -1.4% 3.4% 14.3% 29.0% 26.3%

Cash 0.1% 0.3% 1.2% 2.2% 2.1%

Risk Statistics Estimated Realised (3 Year) Realised (Since Inception)

Annualised Volatility 8.0% 5.6% 6.1%

Drawdown -22.7% -6.2% -6.2%

Key Facts

Strategy Benchmark: FTSE UK Private Investor Income TR Strategy Launch Date: 30 April 2013

Historic Yield: 2.2%

Source: Quilter Cheviot, Financial Express (FE) 15 March. All figures to 28 February 2018

IMPORTANT INFORMATIONPast performance is not a reliable indicator of future returns. The value of investments and the income from them can go down as well as up. You may not recoverwhat you invest.

The historic yield data is calculated using the previous year's dividend information and the bid or mid price from the last dividend. Data provided by Financial Express (FE),Quilter Cheviot (28 February 2018). The level of yield actually achieved on your portfolio will be dependent on the tax treatment of the product you have invested in and yourpersonal tax circumstances.

Volatility is a measure of risk and measures the variability of price fluctuations of an investment, or a portfolio of investments. Realised (i.e. experienced) model volatility isexpressed as the annualised standard deviation of returns over the stated time period(s), calculated using monthly data. The realised drawdown is the peak to trough declineexperienced by the model over the stated time period(s), calculated using monthly data. Estimated annualised volatility and drawdown figures have been calculated basedupon an historic analysis of the model’s current strategic asset allocation, calculated using monthly data. IA Sector returns are net of the underlying manager fund chargeswhilst benchmarks will not include any charges.

The asset allocations shown are dynamic, based upon the price movements of the underlying investments. Clients investing in the strategy for the first time, either via newbusiness or a switch, will have their portfolio determined by the fund and asset allocations set at the last rebalance date.

MANAGED PORTFOLIO SERVICE - IDX INCOME

MARKET COMMENTARY

Global equities were shaken in early February by higher thanexpected inflation data and rising market interest rates.  After a largelystraight run for over a year, exceptionally low levels of volatilitysuggested markets had become too complacent and consolidationwas overdue. However, the speed and magnitude of the adjustmentcaught investors by surprise.

Major equity markets fell almost in unison, closing down at least 3.5%in local currency terms. Peak to trough this year, the US and UKdeclined 10% and 9% respectively before recovering towardsmonth-end. Lower starting valuations insulated other Asian andemerging markets, where losses were less than 1%. Elsewhere, bondyields have been rising steadily this year, but were unchanged on themonth.

Since the financial crisis, equity market corrections have usually beentriggered by global growth scares, but on this occasion the strongupturn in nominal GDP growth has led to tightening labour marketsand fears that the era of negative real interest rates is ending ascentral banks abandon quantitative easing and raise interest rates.The cyclical upturn in the Eurozone and Japan means their centralbanks are on the cusp of policy change and will follow a similar path tothe US and UK.

Global economic activity is as strong as it has been for a decade withGDP growth estimated to be 3.5% this year and next. The recentsharp upturn in US imports, strong consumer and business confidenceand approval of the US fiscal package pave the way for increasedcorporate investment. The momentum will inevitably slow in thecoming months, not least because of policy action in China.

Closer to home, UK companies are benefiting from strong exportgrowth and sterling weakness, which should help the economymaintain modest GDP growth of around 1.6% this year. The risk of achaotic Brexit in March 2019 and/or a general election remains low.

Trade pressures have been building for some time – largely as a resultof the US administration’s determination to make “America greatagain”. The timing of the recent trade frictions is unhelpful whenfinancial markets are becoming increasingly nervous about globalinflation. One trigger for last month’s equity falls was higher thanexpected US wage growth. This has not been inflationary so far and ifproductivity also improves, the pass through from wage rises may belimited but the strength of the economy gives the Federal Reserve anopportunity to continue normalising interest rates. Despite modestgrowth, the Bank of England may also be nudging rate expectationshigher with the Deputy Governor commenting recently that two risesthis year would not be a surprise.

As equity market drawdowns are a common occurrence, we are notoverly concerned by recent developments. With the economic andmonetary backdrop remaining favourable for corporate profitability,equities should produce better returns than bonds over theforeseeable future.  Meanwhile, robust dividends and increasedmerger and acquisition activity should provide a floor. At this stage inthe cycle when strong GDP growth, rising inflation and higher bondyields would normally see rotation from growth to value/cyclicals,sector performance has not been quite as expected. The threat oftrade tariffs has weighed on some cyclical sectors e.g. mining,although banks have benefited from their continuing rehabilitation andthe prospect of higher interest rates.

ABOUT QUILTER CHEVIOT'S MANAGED PORTFOLIO SERVICE

Quilter Cheviot has a heritage that can be traced back to 1771. We are one of the UK’s largest discretionary investment management firms,focusing on providing and managing bespoke investment portfolios for private clients, trusts, charities and pension funds.

Our Managed Portfolio Service (MPS) provides a range of discretionary investment portfolios which offer clients diversified exposure to globalfinancial markets. MPS was launched in 2001 and provides clients with a high level of diversification through investment in collective funds. With astrong track record, we offer a range of investment Strategies and the flexibility to switch seamlessly between them without charge should aninvestor’s circumstances or risk appetite change.

RECENT AWARDS QUILTER

INVESTMENT MANAGERS

Simon Doherty - Chartered FCSISimon joined Quilter Cheviot in 2007 and is leadportfolio manager of the Quilter Cheviot ManagedPortfolio Service (MPS) and chair of the firm’sInvestment Funds Committee. A graduate of TrinityCollege Dublin with a first class honours degree,Simon has completed the Investment ManagementCertificate (IMC), the CISI Masters in WealthManagement and has passed Level I of the CFAProgram.

Benjamin Mountain - CFABenjamin is Co-Director of Investments for theMulti-Asset Team. Benjamin joined Quilter & Co in1999 and is responsible for the Investment Division’sManaged Portfolio Services and the Fund Researchteam. Benjamin is a member of Quilter Cheviot’sInvestment Funds Committee and AlternativesCommittee. He is a Chartered Financial Analyst (CFA)Charterholder and a Member of the CharteredInstitute for Securities & Investment.

CONTACT DETAILS

Quilter Cheviot

MPS Team, One Kingsway,London WC2B 6ANt: +44 (0)20 7220 7103e: mpsteam@quiltercheviot.comw: www.quiltercheviot.com

Quilter Cheviot Limited is registered in England with number 01923571, registered office at OneKingsway, London WC2B 6AN. Quilter Cheviot Limited is a member of the London Stock Exchange andauthorised and regulated by the UK Financial Conduct Authority. This document is not a solicitation oran offer to buy or sell any security. The information on which the document is based is deemed to bereliable, but we have not independently verified such information and we do not guarantee its accuracyor completeness. Changes in exchange rates may have an adverse effect on the value, price or incomeof foreign currency denominated securities. Estimated gross yield is not a reliable indicator of futurereturns. The securities and investment services discussed in this factsheet may not be suitable for allrecipients. Quilter Cheviot Limited recommends that investors independently evaluate particularinvestments and strategies, and encourages investors to seek the advice of a financial advisor. Theappropriateness of a particular strategy will depend on an investor’s individual circumstances andobjectives.