Premier Multi-Asset Absolute Return Fund

Fund update - first quarter 2016

Premier Multi-Asset

Absolute Return Fund

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The performance information for Premier Multi-Asset Absolute Return Fund in this document is based on the C share class, which has the lowest charging structure of the share classes available. To help with comparisons between the thousands of funds, UK authorised funds are categorised into different groups (known as sectors) by the UK investment management trade association, known as the Investment Association (IA). The IA sector will include funds with different share classes and different charges and is provided for illustrative purposes only. Performance returns will vary between share classes due to the different charges.

Premier Multi-Asset Absolute Return Fund

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Please refer to our ‘Glossary of terms’ on page 12 for an explanation of terminology.

Need to know

The Fund’s four essential characteristics:

Targeting returns of cash +2% per year over rolling three year periods. Emphasis on low volatility and capital preservation.

Typically, returns in the form of capital growth rather than income generation.

Not overly reliant on rising stock markets to produce a positive return.

Contents

3. Performance summary 4. Volatility summary 5. Market performance

6. Performance drivers - asset allocation 7. Performance drivers - holdings 8. Activity - asset allocation 9. Activity - holdings 10. The complete portfolio

11. Investment risk controls and parameters 12. Glossary of terms

13. General risks

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Performance summary

„ After markets initially responded well to the actions of the US Federal Reserve to begin their process of ‘normalisation’, the uncertainty and unsynchronised nature of this policy shift manifested into greater uncertainty for investors. At the start of the quarter this saw perceived “risk” assets falling whilst the perceived “havens” of gilts and gold prospered. We continue to struggle with the markets’ perception of these havens, especially gilts. Whilst they may protect capital in the event of a deflation bust, their c.1.5% return for 10 years offers little compensation or comfort – especially given recent performance that has provided 3 years of return in 3 months.

„ The Fund continues to have no direct exposure to either long-dated government bonds or equities, so has failed to participate in the recent gilt rally. However, we were largely immune to the equity falls experienced and performed better than most absolute equity funds that dominate absolute return selections, although after fees the Fund is down marginally.

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Chart source: FE Analytics, bid to bid, total return, UK sterling basis. Data based on C Accumulation shares. Other data source, Bloomberg. The Fund was launched on 06.10.2008. All performance data returns to 31.03.2016. Past performance is not an indication of future returns.

Total returns 1 year Since launch

Fund 0.1% 55.6%

LIBOR GBP 3m +2% 2.6% 23.7%

Quarter ending 31.03.2016

„ Premier Multi-Asset Absolute Return Fund „ LIBOR GBP 3m +2% -0.2 0 0.2 0.4 0.6 0.8 To ta l R et ur n (%)

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Returns versus volatility since launch

(6.10.2008 - 31.03.2016)

„ Premier Multi-Asset Absolute Return Fund

„ UK Equities

„ UK Gilts

Chart source: FE Analytics, bid to bid, weekly, total return, UK sterling basis. Data based on C Accumulation shares. The Fund was launched on 06.10.2008. Indices: FTSE All Share (UK equities), FTSE UK Conventional Gilt All Stocks (Gilts). All performance data returns to 31.03.2016. Past performance is not an indication of future returns.

Since launch* Annualised _returns Annualised _volatility

Fund 6.1% 4.7% UK Equities 9.0% 18.2% UK Gilts 6.1% 6.6% 0 10 20 30 40 50 60 70 80 90 100 0 2 4 6 8 10 12 14 16 18 20 To ta l R et ur n (%) Volatility (annualised %)

Volatility summary

„ The volatility of the Fund remains significantly below that of the UK stock market over both shorter and longer term periods.

„ At its low point in mid- February the FTSE All-Share index had fallen 11.4% while the Fund’s drawdown was less than a quarter of this.

„ Gilts were far less volatile than the corresponding period last year although the Fund continues to produce far superior risk adjusted returns than UK government bonds over the longer term.

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Market performance

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Source: FE Analytics, bid to bid, total return, UK sterling basis. Indices: FTSE All Share (UK equities), The BofA ML Sterling Non-Gilts (UK corporate bonds), FE UK Property Proxy (UK commercial property), LBMA Gold Bullion LBMA Sterling/Troy Ounce(Gold), FTSE World (Global equities), FTSE UK Conventional Gilt All Stocks (Gilts), LIBOR GBP 3m (Cash). Past performance is not an indication of future returns.

„ For equities, the new year launched straight into a sell-off. This ran until mid-February: the worst-ever start to a year for some markets. However, prices then rebounded dramatically. By the quarter end, global equities had registered a positive return for sterling holders.

„ UK equities underperformed. Concern over the result of the EU referendum is the most likely culprit, with investors put off by the associated uncertainty. This also contributed to a very weak quarter for sterling, which had the effect of boosting returns from overseas equity markets.

„ Japanese equities also struggled. The Bank of Japan introduced negative interest rates, which, counterintuitively, caused the yen to strengthen. This weighs on many Japanese companies’ prospects.

„ Some of last year’s most hated assets were the biggest winners for the quarter. Oil rebounded emphatically from its low point, while

gold also enjoyed a very strong rally. Equities and bonds in emerging markets also fared well, particularly in Latin America.

„ Gilts and other government bonds were strong, as investors continued to fret over the possibility of deflation. Corporate bonds

ended the quarter well, having struggled early on.

Total returns for quarter ending 31.03.2016

UK equities -0.4% Cash 0.2% UK commercial property 0.8% Global equities 3.0% UK corporate bonds 3.0% Gilts 4.9% Gold 19.7% -5% 0% 5% 10% 15% 20% 25% „ Equities „ UK commercial property „ Bonds „ Alternative assets „ Cash

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Performance drivers - asset allocation

Relative to peer group

Helped

„ Low sensitivity to equities

„ Stability from Zero Dividend Preference Shares

„ Reasonable cash weighting Hurt

„ Lack of direct long duration gilt exposure

„ No holdings of gold

„ Limited weighting in UK commercial property

„ High sterling exposure

„ Long/short equity funds that struggled in the period

Please note that the Fund breakdown may be above or below 100% due to rounding. .*See note on page 8.

Fund breakdown at end of last quarter (31.12.2015)*

„ Conservative equities 43.3% „ Specialist bonds 5.5%

„ Alternative assets 42.6%

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Performance drivers - holdings

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Notable contributors

„ GS 4yr Commodity Basket Call Spread

With commodities showing some small improvement over the quarter, this holding moved closer to the capital protected limit.

„ Inland Homes ZDP

With encouraging results, improved asset cover and reasonably short duration, this holding continued to ratchet higher.

„ Jupiter Absolute Return

Good contributions from single stock shorts and recognition of taking profits saw this holding continue to generate positive gains.

„ SG FT100 8.25% Defensive Autocall

Opportunely bought near the market lows, the subsequent recovery and improvement in bank credit spreads saw an early useful gain.

Notable detractors

„ Artemis US Absolute Return Hedged

A disappointing start for this holding which was down over the quarter. Not helped by being fully hedged to sterling.

„ BlackRock European Absolute Alpha

After a tremendous performance last year, this holding eased back a little as the environment moved against its winning positions.

„ Ferox Convertible SCARF

With convertibles cheapening against equity falls, this holding experienced some weakness which strengthens the return outlook.

„ Foresight Solar Fund

Despite proving resilient against both regulatory change and energy price weakness, investors continue to shy away from the robust delivery of solar infrastructure funds.

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Activity - asset allocation

„ Conservative Equities were a little lower period despite small increases to our convertibles and structured investments into the market weakness that presented itself. We were fortunate in both finding and timing the entry into a previously issued structured investment that offered a compelling investment return with good defensive characteristics embedded within it.

„ We took advantage of an increase in M&A appetite to add to our merger arbitrage holding. Having introduced an additionallong/short equityholding into the mix, our Alternatives allocation moved lower as we trimmed some of our market neutral exposure.

„ There was an addition to our Specialist Bonds holdings as we sought to take advantage of high quality bonds that suffered from technical pressures and spread widening. Alongside this we also purchased a global inflation linked bond fund as a cheap inflation hedge.

Please note that the data may be above or below 100% due to rounding. As at 31.12.2015 31.12.2015*As at 31.03.2016 ChangeAs at Conservative equity 59.5% 43.3% 43.1% -0.2% Specialist bonds 5.5% 5.5% 9.0% +3.5% Alternative assets 26.4% 42.6% 41.9% -0.7% Cash 8.6% 8.6% 6.0% -2.6%

Click here to read our latest views in full *The long/short equity component has been moved from Conservative

equity to Alternative assets classification.

After some consideration, we now classify the absolute equity funds held as “Alternatives” as a result of their performance delivery. All four of our positions have and continue to show a lack of correlation to equity markets. This is derived from the investment process of each fund that has provided them with a genuinely “absolute return” approach. We have reflected this change in the above table alongside the adjusted historical asset allocation as at end of December 2015 to provide a better sense of comparison for our investors.

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Purchases

„ Artemis US Absolute Return „ AXA Global Inflation Bond Fund „ SG FT100 8.25% Defensive Autocall „ Shenkman Global Convertible Bond „ TwentyFour Monument Bond

Activity - holdings

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Disposals

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The complete portfolio

Alternative assets

Kames UK Absolute Return Equity (3.7%) Ferox Convertible Absolute (3.5%) Melchior European Absolute (3.4%) Jupiter Absolute Return (3.3%) Artemis US Absolute Return (3.3%) BNY Mellon Absolute Return Equity (3.3%) Blackrock European Absolute Alpha (3.3%) GS 4yr Commodity Basket Call Certificates (3.3%) GS Equity Risk Premia L/S (3.0%)

Allianz Merger Arbitrage (2.9%) F&C Reels (2.4%)

Foresight Solar Fund (1.7%) Absolute Progression 2 (1.6%) Altin AG (1.5%)

VPC Speciality Lending (1.0%) Dexion Absolute (0.8%)

Specialist Bonds

Kames Absolute Return Bond (3.4%) Twentyfour Monument Bond (2.6%) AXA Global Inflation Bonds (2.4%) GCP Project Finance (0.7%)

Conservative Equity Polar Global Convertibles(4.3%) Oaktree Non-US Convertible(4.0%) HSBC 8% DJ Estoxx Def Autocall(3.7%) Westwood Global Convertibles(3.5%) JP Morgan 7.7% FT100 Def Autocall(3.1%) SG Collateralised FT100 7.4% Def Autocall(2.7%) Shenkman Global Convertible Bond (2.6%) CS 7.02% FTSE 100 Def Autocall(2.6%) Conygar 2019 ZDP(2.0%) CS Eurostoxx 2017 Dividends(1.9%) Utilico 2016 ZDP(1.9%) Acorn Income ZDP(1.4%) Aberforth Geared Income ZDP(1.3%) JP Morgan 8.75% Eurostoxx Def(1.3%) Santander 9.65% DJ Eurostoxx Defensive Autocall(1.3%) Inland Homes ZDP(1.1%) SG FT100 8.25% Defensive Autocall (1.0%) Electra Private Equity ZDP(1.3%) Ecofin Water + Power Opportunities ZDP(0.9%) Picton 2016 ZDP(0.8%) Premier Energy & Water 2020ZDP(0.4%) Damille 2(0.2%)

 = New Holding. Data as at 31.03.2016.

Please note that the asset allocation may be above or below 100% due to rounding. Each holding has been categorised to help you identify the types of asset that the Premier Multi-Asset Absolute Return Fund is invested in. The pie chart shows the asset allocation of the Fund through analysis of the

underlying securities in each holding.

Conservative Equity 43.1% Specialist Bonds 9.0% Alternative Assets 41.9% Cash 6.0%

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Investment risk controls and parameters

Investment parameters

Risk controls

Currency exposure: Min. 90% sterling

Individual holding: Max. 5%

Fund Management Group: Max. 15%

Investment parameters and risk controls are indicative figures. The fund is typically expected to be managed within these parameters and risk controls and these limits are subject to change. Individual holding and fund management group limits exclude investments in passive funds.

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Glossary of terms

Non traditional investments which could include hedge funds and commodities for example and which are designed to help diversify a portfolio as they tend not to move in the same direction as the stockmarket.

Autocall

An autocall structured product has the potential to mature before the end of the product’s life, if certain predetermined market conditions are reached. The investor will usually receive a pre-defined return.

Bonds

These are like loans to governments/companies in return for a fixed rate of interest.

Capital growth

The increase in value of your original investment. Caps

Refers to a company’s market capitalisation, normally small, mid and large. Equities

Another name for company shares. Fixed income/interest

Another term used for corporate and government bonds. Floating rate debt

These are bonds which do not have a fixed rate of interest. Gilts

A bond issued by the UK government. Hedge fund

A fund that is not normally permitted to be offered to the public as its borrowing, structure or investments, do not comply with relevant requirements.

High yield bonds/corporate bonds

A bond that provides a higher income, (or yield) but is rated below investment grade bonds as it has a higher risk of default.

Investment grade bond

A bond which is considered relatively safe and unlikely to default on its debt repayment obligations and has been assigned a high credit rating.

Sharpe Ratio

Calculates the level of a fund’s return over and above the return of a notional risk-free investment, such as cash or Government bonds. The difference in returns is then divided by the fund’s standard deviation - its volatility, or risk measurement. The resulting ratio is an indication of the amount of excess return generated per unit of risk. The higher the Sharpe ratio, the better the portfolio’s risk adjusted performance.

Structured products/structured investments

A type of product designed to combine the upside in market performance whilst limiting falls and are usually linked to the performance of an index or other underlying asset.

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General risks

There is the potential for loss of your original investment. The degree of investment risk will depend on the fund’s risk profile. We would typically expect investments that are perceived as lower risk to offer less potential for loss but with potentially lower returns, whereas we would expect higher risk investments to generate higher returns albeit with the extra risk of potential loss. However, there are no guarantees as to how a type of asset, sector or region will perform in the future.

Inflation could erode the value of returns from your investment.

There is a risk that the entire market of an asset will fall, affecting the value of assets and the return on your investment. There is no guarantee that the investment objective of the fund will be achieved.

Past performance is not a guide to future returns. The price of shares and any income from them can go down as well as up and there is the possibility of a loss to your original investment.

The levels of taxation and of relief from taxation will depend upon individual circumstances.

There may be a variation in the performance between funds with similar objectives due to the different assets selected.

Performance of a fund will be affected by the fund manager’s investment decisions. If you withdraw part of your investment, or take an income greater than the natural income from, or growth of, your investment, there is a risk that you could get back less than you originally invested.

The fund may invest directly into, or be exposed to via its underlying investments, a variety of assets, sectors or regions, all of which carry specific risks which could impact returns. The main risks are summarised on this document, with further detail available in the fund’s prospectus.

Collective investment schemes

This fund may be directly invested in, or have exposure to units in collective investment schemes and can also invest in other collective investment schemes, such as commodity funds, hedge funds and property funds, which could expose the fund to increased levels of risk.

Counterparty

Some investments are reliant on a specific entity, usually a large bank, to honour its repayment obligations; failure to do so could impact returns.

Credit

If the issuer of a security held within the fund is unable to make income payments or repay its debt.

Currency

Where investments are denominated in currencies other than sterling, changes in exchange rates may cause their value to rise or fall.

Derivatives

This is a financial contract whose value is related to the value of an underlying asset or index, often used with the aim to manage risk or enhance returns, and whilst their use is not necessarily expected to increase risk within a fund, they could expose the fund to higher levels of volatility from time to time.

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General risks continued

Some overseas markets typically carry higher risk than more established and developed overseas and domestic markets.

Equities

As an asset class, equities can experience higher levels of fluctuation than bonds or money market securities.

Fixed interest securities

This type of asset, which includes bonds and gilts, is particularly affected by movements in interest rates. If interest rates rise, their price may fall, and vice versa.

Inflation

Fixed interest securities, such as bonds, are particularly affected by trends in interest rates and inflation.

Interest rate

Where the fund has exposure to fixed interest securities such as bonds, these are particularly affected by trends in interest rates and inflation. If interest rates go up, the value of capital may fall, and vice versa.

Legal/Tax

Arising from a change in legal/tax regulations or the application of them. Liquidity

During difficult market conditions, some securities or larger holdings may become more difficult to sell quickly at a desired price.

Market

The risk of a fall in price of a particular asset type. Multi-Asset Funds

As a multi-asset fund, this fund will have exposure to a wide range of different assets, investment types and geographic regions, which could include equities, bonds, alternative assets and property, all of which carry specific risks that could impact on returns.

Operational

Occasionally processes fail. This is more likely to happen with more complex products or investments in overseas markets, such as emerging market countries, which may not have the same level of safekeeping, infrastructure or controls as more developed markets.

Structured investments

These are investments which are usually linked to the performance of one or more underlying instruments or assets such as market prices, rates, indices, currencies and commodities and other financial instruments that may introduce significant risk that might affect returns.

Zero dividend preference shares

Although, historically these have proved to be a lower risk investment than more traditional shares, serious falls in stockmarket levels can alter their structure and adversly impact on their performance.

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Contact us

Fund information

Fund administration

Literature requests

For more information

0333 456 9033

www.premierfunds.co.uk/multiasset

Important information

Risk of investments

Past performance is not a guide to the future. The price of shares and any income from them may go down as well as up and you may get back less than you invested. Movements in exchange rates may also affect the value of your investment. Please remember that these investments are typically intended as either medium or long term investments.

Disclaimer

Whilst every effort has been made to ensure the accuracy of the information contained within this document, we regret that we cannot accept responsibility for any omissions or errors. The information given and opinions expressed are subject to change and should not be interpreted as investment advice. Reference to any particular stock does not constitute a recommendation to buy or sell the stock. All data is sourced to Premier Asset management unless otherwise stated. Persons who do not have professional experience in matters relating to investments should not rely on the content of this document. Should you need advice, or if you would like to know more about this Fund, please contact your financial adviser in the first instance.

A free, English language copy of the Fund’s full prospectus, the Key Investor Information Document and Supplementary Information Document, which include all the important information you need to consider before making an investment decision, are available on the Premier website, www.premierfunds.co.uk or you can request copies by calling us on 01483 306090. For your protection, calls may be monitored and recorded for training and quality assurance purposes.

The methodology and calculations used by the companies or organisations that provide the fund or fund manager awards and ratings are not verified by Premier Asset Management and we therefore are unable to accept responsibility for their accuracy. Ratings and awards should not be relied upon for making an investment decision, nor are they an indication, promise or guarantee of future performance of a fund or fund manager.

Source: FTSE International Limited (“FTSE”) © FTSE 2016 “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Issued by Premier Asset Management. ‘Premier Asset Management’ and ‘Premier’ are the marketing names used to describe the group of companies which includes Premier Fund Managers Limited and Premier Portfolio Managers Limited, which are authorised and regulated by the Financial Conduct Authority of 25 the North Colonnade, Canary Wharf, London E14 5HS. The registered address of both companies is Eastgate Court, High Street, Guildford, GU1 3DE. Premier Portfolio Managers Ltd is registered in England No. 1235867. Premier Fund Managers Ltd is registered in England No. 2274227. 200471611239