ES River and Mercantile Global Recovery Fund

Quarterly Report to 30 September 2020

Global Recovery For unitholders only 0 ES R&M Global Recovery Fund Quarter 3, 2020

Fund Objective

The investment objective of the Fund is to grow the value of your investment (known as “capital growth”) in excess of the MSCI All Country World Index (ACWI) Net Total Return (the “Benchmark”) over a rolling 5 year period, after the deduction of fees.

Performance (net of fees)

B share class Benchmark Difference 3 months 0.9% 3.3% -2.4% 1 year -8.5% 5.3% -13.8% 3 years (p.a.) -2.9% 8.5% -11.4% 5 years (p.a.) 8.1% 13.9% -5.8% Since inception (p.a.) 9.3% 10.7% -1.4%

15%

10%

-5%

-10% 3 Months 1 Year 3 Years 5 Years Since Inception (p.a.) (p.a.) (p.a.) ES R&M Global Recovery Fund B Shares MSCI All Country World Index

Performance (gross of fees)

Z share class Benchmark Difference 3 months 1.2% 3.3% -2.2% 1 year -7.6% 5.3% -12.9% 3 years (p.a.) -2.0% 8.5% -10.4% 5 years (p.a.) 9.1% 13.9% -4.7% Since inception (p.a.) 10.4% 10.7% -0.3% Source: River and Mercantile Asset Management LLP. Benchmark is the MSCI All Country World Index (ACWI), net GBP. Fund performance shown is of B share class (income units) which is net of an annual management charge of 1.00% per annum, and Z share class (accumulation units) which reflects the fund’s gross performance before any fees are deducted. Please note that the benchmark performance is calculated using close of business mid-market prices. Other share classes may be available. Past performance is not a reliable indicator of future results. Portfolio Summary & Key Risk Characteristics

Fund AUM £266m Price to book 1.13 Strategy capacity £1bn EV to sales 1.36 Inception date 4 March 2013 Portfolio beta 1.04 Number of stocks 404 Tracking error 4.57 % Largest holding Amazon.com 0.9 % Active money 83.43 %

The Synthetic Risk and Reward Indicator (SRRI) is based on how much the returns of the shares have varied over the last five years, or since launch (whichever is the shorter period). The higher the rank the greater the potential reward but also the greater the risk of losing money. For more details please refer to the Key Investor Information Document.

Global Recovery 1

Investment commentary The information contained in this report does not constitute as investment advice and should not be treated as a recommendation to invest in any security. The information is based on the historical performance of the ES R&M Global Recovery Fund and may no longer be current. Any references to securities are for illustrative purposes only and these securities may no longer be held. The information should not be used as the basis for any investment decision. Any opinions expressed are opinions of the relevant portfolio manager and are given in good faith as of the date of the report but should not be considered operative at any date thereafter.

Following positive feedback from our clients we continue with our more condensed quarterly reports which will be supplemented from time to time by deeper thought pieces and more specific areas of communication, such as our Sustainable PVT white paper that will be distributed shortly.

Executive Summary There remain numerous extraordinarily undervalued companies in a world where many assets are clearly very expensive. A yield of close to zero for government bonds versus an earnings yield of over 9%% for the Global Recovery portfolio and a price to book (PB) of just over 1 times, and exposure to a group of companies that have historically grown profits by no less than the overall market and should be able to do better than that from here as economies recover. Decent companies, on very low valuations should, at some point, equal very strong returns, especially at a time when return expectations for many other assets are low. It has remained painful being a value or contrarian investor for much of this year as other investors have continued to focus on what has already been successful (Growth, Quality, Momentum) and companies that have been beneficiaries of social distancing measures. Well known UK based value investors continue to withdraw from the market, most recently Tom Dobell who put in 10 consecutive years of outperformance during the last pro-value cycle whilst managing the original Recovery focused fund. The thing is everyone is positioned in the same way, so what happens when they decide that this is no longer quite the right way to be positioned? What we get is a charge into all those stocks that they have been happy to dismiss as un-investable; just imagine the huge amount of capital looking to purchase all those unloved value stocks, most of which are now quite small in market cap terms! Economies around the world have been recovering strongly from the lockdown induced low earlier in the year. However, a second wave of Covid-19 cases has hit most countries, stalling re-openings and leading to the recovery in some segments of economies being put on hold and market sentiment becoming more cautious. However, to date the increase in cases has not led to a significant absolute increase in rates of hospitalisation, suggesting that this wave is more manageable than the first. Healthcare infrastructure has been able to cope.

This graph shows hospital admissions in Spain, the country that has seen the most dramatic 2nd wave

Source: Bank of America

Global Recovery 2

Equity markets continued to rally early in the third quarter, but this faded later in the period, with September quite weak. This coincided with the economic uncertainty associated with the 2nd wave of the virus and increased focus on an uncertain US Presidential election. The latter is likely to be closer than polls, which put Biden ahead. A victory for the Democrats is likely to be more inflationary and supportive of value stocks. Our key investment factor, Value had another muted quarter. It is highly unusual for Value to underperform during economic recovery periods, so this remains a very significant anomaly that needs some explaining. Suffice to say that Growth and Quality have benefitted from falling interest rates, relatively strong corporate fundamentals through the Covid crisis and better positioning regarding sustainability and flows of liquidity. Value has not benefitted from these. However, Value will be back. As I just mentioned, Value nearly always does well in an economic recovery period, especially if that recovery happens at a time when Value is relatively attractively priced, which it most definitely is today. What is likely to happen at some point over the next few quarters is this: global economies will continue to recover through 2021, especially if there is confidence that we are finally through the worst of the virus, perhaps catalysed by a vaccine or just post 2nd wave maturation of the pandemic; the massive monetary and fiscal stimulus will continue to positively impact; deflation will turn to reflation; bond yields will bottom-out; Growth and Quality stocks’ relative fundamentals will peak as more cyclical Value stocks start to see profits recover and brought forward digital spending struggles to preserve the momentum embedded in many growth and quality stock share prices; and finally, liquidity and passive investing may change direction as momentum shifts from deflation to reflation beneficiaries. Indeed repeating my person from Mars test, if all you had was a deep set of data on factor returns and economic and profit cycles over the last 100 years (since proper equity markets began) and you ask yourself the ten key tests on whether now was the time to invest in Value, Recovery and Multi-Cap stocks, then the answer to all those questions would be very supportive. It remains, at least according to the data, the best time to invest in Value, Recovery and Multi-Cap that I have seen in my career. Previous economic recovery periods during my career (1992/3, 2002/3, 2009/10, 2012/13) saw my funds produce very strong absolute and relative returns. I believe that this is still to come in this cycle.

Market returns and performance Equity Markets were strong early in the quarter but gave some of this back in September. Technology (Nasdaq +11.2%) continued to lead the way and banks (DJStoxx 600 Banks -12.1%) remained the laggards. Emerging markets outperformed, supported by a weak USD. US equities remained robust, led by their growth stocks. European equities were lacklustre, perhaps held back by a strong Euro. Commodities continued to be quite strong, but not oil; the reflation trade seems to be benefitting the scarcer commodities in particular, led by precious metals. Government bonds produced a modest positive total return. The UK equity market was a notable laggard, with risk premiums moving up as the possibility of a hard Brexit increased and the UK Government continued to be lacklustre in its handling of the pandemic; in addition the UK is underweight large cap tech and overweight value sectors, such as banks and energy. However, going against the above sterling did manage to rally during the quarter though much of this was USD weakness. The MSCI UK IMI (GBP) returned -3.6%, the MSCI ACWI (GBP) +3.4%, the MSCI World (GBP) +3.2% and MSCI EM (GBP) +4.9%. The MSCI UK Enhanced Value Index returned -8.9% and the MSCI ACWI Enhanced Value Index (USD) only +0.1% compared to the MSCI World (USD) return of +7.9%.

Global Recovery 3

Total Return Performance of Major Global Financial Assets in Q3 (in local currency)

Source: Deutsche Bank, Bloomberg Finance LP, Mark-It Value Factors were weak, Momentum, Growth and Quality particularly strong:

ACWI Style Factors Relative Performance

Source: MSCI, Morgan Stanley Research

Our other key factors were also somewhat negative, with small cap in many regions lagging the tech heavyweights, notably in the US (MSCI US Small +5.6% vs. MSCI US +9.6%). Recovery stocks were mixed; some rallied pretty hard as they started to beat earnings expectations, while others, like interest rate sensitive stocks (Banks) and those negatively impacted by the extension of social distancing measures, were poor. Regional equity performance was more nuanced, led by the US but also well supported by some emerging markets. Despite many good stock picks, with the ongoing Value headwind, mega cap tech leadership (despite the short correction during the quarter) and smaller companies lagging we had a modest quarter for relative performance. The Global Recovery Fund returned 1.2% (gross, Z shares) and 0.9% (net, B shares), an under- performance of -2.2% During the relatively short-lived periods when value did well during the quarter, often when bond yields moved up a few basis points and other investors were prepared to look beyond the most reliable stocks, we performed very strongly indeed. Our medium-term returns have been negatively impacted by the post 2017 period, during which all our factors have struggled at the same time: namely value, recovery, multi-cap and regional diversification. This has been a difficult period of performance for which I remain very sorry. Our long term and since PVT inception returns are strong, especially versus value benchmarks and peers. My 25-year track record continues to annualise at almost 4% p.a. ahead of peers and the benchmark.

Global Recovery 4

Key performance contributors Positive: PVT stock picks, digital recovery stocks in particular (Shop Apotheke, AMS, SDL); some recovery stocks start to bounce (Fedex, Freeport McMoran), underweight oil majors; Germany and UK allocation and stock selection positive. Negative: US equity underweight and US mega-cap tech underweight (Apple, Tesla); Growth and Quality stocks continue to outperform Value (Amazon, Taiwan Semi); energy and financials weakness (CGG).

Activity and positioning

The portfolio continues to have a very clear value bias, with strong absolute valuation support including a 1x price to book valuation and double-digit normalised earnings and cashflow yields. Historic growth is not less than the market. There is a robust multi-cap bias, including an overweight position in undiscovered smaller growth stocks.

Style Skyline

Source: StyleAnalytics

Portfolio allocation to Value and Growth stocks by size and versus benchmark

Source: StyleAnalytics We combine stocks with traditional value characteristics (such as banks and specialist financials), with attractively valued and out-of-favour, at time of purchase, Quality and Growth franchises (such as Jardine Strategic, 3M, Alibaba, Walt Disney, Prosus, Bolsa de Valores de Colombia, Hong Kong Exchanges, Shop Apotheke, CTrip, Rakuten, Starbucks, Samsung Electronics and Intel), many high scoring MoneyPenny recovery stocks (Cargotec, Baidu, MakeMyTrip, Playtech, Hunting, Aixtron and Owens Corning), classic global cyclicals but with a focus on those with leading franchises (Johnson Controls, Fanuc, Infineon, Volvo, Valeo, CBRE, Avnet and Anglo American) and domestic stocks that are temporarily disliked (Ceconomy, Persimmon, Knight-Swift Transport and Resideo). Our activity over the last quarter has focused on adding to the above, with significant purchases of Alibaba, Cargotec, Aixtron, Ceconomy, Rakuten, Intel, Hunting, Starbucks, Owens Corning, MakeMyTrip, Infineon, Walt Disney, Avnet and Samsung Electronics.

Global Recovery 5

Sales have included taking profits where our PVT thesis has been delivered, including China New Higher Education and Industrias Romi, top-slicing into relative strength (Shop Apotheke, Freeport- McMoran, Facebook, Yandex) or re-focusing capital towards higher conviction ideas (Sina (a bid), Omnicon and Petrobras).

Are we following our PVT philosophy and process and a consistently articulated style and factor bias? Yes. The portfolio remains clearly skewed towards high scoring MoneyPenny stocks; it has a clear Value bias; it has exposure to all four of our categories of Potential but with a greater tilt to Recovery and Asset-backed due to the richer anomaly set in this part of the market; it is a multi-cap portfolio.

Team and investment philosophy updates In previous reports, we have mentioned continued investment in the PVT team despite the Value headwinds. This is now very much in place, with James Sym (we have now launched our European Equity Strategy to support our Global franchise), Alexander Stout (Global Analyst) and Laura Corbetta (Quantitative Analyst) all having started in June. As a team (led by Gary Dowsett), we have spent a considerable amount of time formalising our own core sustainability beliefs to act as a long-term foundation for this now key part of investing. The key pillars of our sustainability Philosophy are People, Innovation and Environment. Sustainable PVT, as we call it, is now fully incorporated into all our company research and investment decision making. Please do ask if more detail is required (we will be sending out a white paper detailing this approach later in the quarter).

Outlook Looking at equity markets from a PVT perspective: Potential: The profit cycle has now moved early cycle, with return on equity (shown below) around the world quite depressed. This provides a base for attractive levels of profits growth from here as returns normalise. Recovery stocks, in particular, should see strong profits growth.

Global Return on Equity

Source: Morgan Stanley Research

Global Recovery 6

UK Returns over time (ROA, ROE, ROI)

Source: Morgan Stanley Research Valuation: Equities remain attractively valued versus other assets, government bonds, in particular. Within equity markets there are quite a few that look attractively valued from an absolute, as well as relative perspective – this would clearly include the UK, and also much of Europe and Asia. US equities continue to look expensive in absolute terms, and trade at significant premium to other regions but are supported by low government bond yields. Global Price to Book

Source: MSCI, IBES, Morgan Stanley Research

Global Shiller PE

Source: MSCI, Haver, Morgan Stanley Research Timing: Positive Timing indicators would include very supportive monetary and fiscal policy, positive cycle indicators such as PMIs, the economic and profit cycles moving into a recovery phase, unemployment above mid-cycle levels and house prices picking up (positive animal spirits). Regarding a move from deflation to reflation some indicators have turned positive, such as breakeven inflation expectations (shown overleaf):

Global Recovery 7

Breakeven Inflation expectations (Europe and US)

Source: Bloomberg, Morgan Stanley Research Negative Timing indicators would focus on recovery being disrupted by the 2nd wave of Covid cases and geo- political uncertainties, notably the US Presidential election. The former is probably the key: the market needs a vaccine type event to provide the certainty that we can move to a post-Covid world.

In conclusion, this portfolio is very modestly valued and has a well-diversified exposure to companies that will be able to grow profits and cash flow robustly from this current low point. This should allow for attractive absolute and relative returns. Previous economic recovery periods during my career (1992/3, 2002/3, 2009/10, 2012/13) saw my funds produce very strong absolute and relative returns, particularly our recovery strategies. I believe that this is still to come in this cycle.

Thank you for your continued support and patience.

Hugh Sergeant Head of Value and Recovery Strategies, PVT Equities October 2020

Global Recovery 8 Fund holdings and portfolio weight

Holding Weight (%) Holding Weight (%)

Amazon.com 0.90 Aumann 0.37 Alibaba Group 0.87 Prudential 0.37 PayPal 0.84 Artisan Partners A.M. 0.37 Alphabet class A 0.82 Westrock 0.36 Facebook 0.77 CBRE Group 0.36 Cegedim 0.67 Charles Schwab 0.36 Baidu 0.66 Chinasoft International 0.36 Resideo Technologies 0.65 Exxon Mobil 0.36 ams 0.59 Playtech 0.35 Wiit 0.54 Lloyds Bank 0.35 Walt Disney Company 0.53 JPMorgan Chase 0.35 Apple 0.52 Wells Fargo & Co. 0.34 Somero Enterprises 0.51 Cisco Systems 0.34 Gresham House 0.51 Richemont 0.34 Booking Holdings 0.51 Tremor International 0.34 Zooplus 0.51 Persimmon 0.34 Samsung Electronics 0.50 Citizens Financial Group 0.34 Prosus 0.49 IMImobile 0.34 D R Horton 0.48 Siemens 0.33 Yahoo Japan 0.48 Anglo American 0.33 JD.com, Inc. Class A 0.48 Owens Corning 0.33 Freeport-McMoRan 0.48 Dropbox 0.33 Uber Technologies 0.46 Mail.ru 0.33 Digital Value 0.45 DeNA 0.33 Fedex Corp 0.45 Chemring 0.33 Blsa De Vals De Colombia 0.45 LG Chem 0.33 Intel 0.44 IBM 0.33 Rakuten 0.44 Sony Corp 0.32 Citigroup 0.44 Intesa 0.32 Shop Apotheke 0.44 Oracle 0.32 Tinexta 0.43 Avnet 0.32 MakeMyTrip 0.43 Mega Manunggal Prop. 0.32 Tencent 0.43 Mosaic 0.31 Cemex 0.42 UBS Group 0.31 State Street Corp 0.42 Qiwi 0.31 Prada 0.42 Mylan 0.31 Bank of America 0.42 Starbucks 0.31 SDL 0.40 Naver 0.31 Bank of Kyoto 0.40 Naspers 0.31 Nintendo 0.39 General Motors 0.31 Modern Times Group 0.39 FNAC Darty 0.31 Pfizer 0.39 Las Vegas Sands 0.31 MediaTek 0.39 NXP Semiconductor 0.31 BorgWarner 0.39 SBI Group 0.31 Eckoh 0.38 Applus Services 0.30 Johnson Controls 0.38 Spotify 0.30 3M 0.38 Royal Bank of Scotland 0.30 Metro 0.37 Baker Hughes 0.30

Source: River and Mercantile Asset Management LLP Global Recovery 9 Fund holdings and portfolio weight (continued)

Holding Weight (%) Holding Weight (%)

Parker-Hannifin 0.30 Viacomcbs 0.24 Van Lanschot 0.30 Fourlis Holdings 0.24 Harley Davidson 0.30 Samsonite 0.24 Yageo 0.29 Vicat 0.24 Take-Two Interactive 0.29 Veeco Instruments 0.24 Cars.com 0.29 Yoma Strategic Holdings 0.24 FinecoBank 0.29 Infineon 0.24 Sopra Steria Group 0.29 Hyundai Motor Company 0.24 Gruppo MutuiOnline 0.29 DXC Technology 0.24 Mediobanca 0.28 UniCredit Bank 0.24 Trip.Com Group 0.28 Nordic Entertainment Group 0.24 Accenture 0.28 Bank of Ireland 0.24 Criteo 0.28 HDFC Bank 0.24 Sumitomo Mitsui Financial 0.28 Cargotec 0.24 Cemex Latam Holdings 0.28 H&R Block 0.23 Toyota Industries 0.28 IG Holdings 0.23 Devon Energy 0.28 China Lesso Group 0.23 Micron Technology 0.28 General Electric Company 0.23 Rio Tinto 0.27 Hi Sun Technology 0.23 BNP Paribas 0.27 ABB Ltd 0.23 KION Group 0.27 Nippon Indosari Corpindo 0.23 Enerplus 0.27 Alma Media 0.23 Tsumura & Co 0.27 Fiserv 0.23 Sime Darby Property 0.27 FANUC 0.23 Societe Generale 0.26 Dai-ichi Life Insurance 0.23 Mercadolibre 0.26 Tune Protect 0.23 Hutchison Port Holdings 0.26 Capri Holdings 0.23 Softbank 0.26 eBay 0.23 Pearl Abyss 0.26 Continental AG 0.23 ING Group 0.26 Knight-Swift Transportation 0.22 Fukuda Denshi 0.26 Hyundai Glovis 0.22 Herige 0.26 Titan Cement International 0.22 Rohm 0.26 Raytheon Technologies 0.22 Novabase 0.25 WP Inwestor 0.22 Fresenius 0.25 Airbus 0.22 Valeo 0.25 Applied Materials 0.22 AP Moller Maersk 0.25 Heijmans 0.22 Nomura Holdings 0.25 Banco Santander 0.22 South32 0.25 Snap-On 0.22 Anima 0.25 Exor 0.22 Affiliated Mgers Grp 0.25 Haitong Securities 0.22 Sonae 0.25 Nvent Electric 0.22 Bristol-Myers Squibb 0.25 Shangri-La Asia 0.22 Knowit 0.25 SLM Corp 0.22 Yandex 0.25 Accor 0.22 Geely Automobile Holdings 0.25 Standard Chartered 0.22 Longyuan Power 0.25 Minwise 0.21 Bayer 0.25 Southwest Airlines 0.21

Source: River and Mercantile Asset Management LLP Global Recovery 10 Fund holdings and portfolio weight (continued)

Holding Weight (%) Holding Weight (%)

Taiheiyo Cement 0.21 Atos 0.20 Imax 0.21 Corp Financiera Alba 0.20 Genting Berhad 0.21 Samsung Life Insurance 0.20 Kendrion 0.21 Malaysia Airports Hldgs 0.19 Zynga 0.21 Filtronic 0.19 Bangkok Bank 0.21 DoubleUGames 0.19 Hong Kong Exchanges 0.21 Pax Global Technology 0.19 National Oilwell Varco 0.21 Mattel 0.19 KG Inicis 0.21 CIMB Group 0.19 Yunnan Baiyao Group 0.21 Cairn Homes 0.19 CK Hutchinson Holdings 0.21 Johnson & Johnson 0.19 China Resrc Phoenix Hlth 0.21 Seino Holdings 0.19 Sansei Technologies 0.21 Aena 0.19 Chanjet Info Technology 0.21 HollySys 0.19 Kraft Heinz Co 0.21 Greentown Service Group 0.19 Capita 0.21 Sime Darby 0.19 Veolia Environment 0.21 Leggett & Platt 0.19 Genting Singapore 0.21 Samsung C&T 0.19 Indira Sistemas 0.21 China Everbright International 0.19 NS Solutions 0.21 AGC 0.19 Amadeus IT Holdings 0.21 Nippon Parking Dev. 0.19 Extended Stay America 0.20 Tosei 0.19 Blue Apron 0.20 Trend Micro Japan 0.19 Nokia (AB) 0.20 Nichi-Iko Pharmaceutical 0.19 TraXion 0.20 Tsubakimoto Chain 0.19 Cosco Capital 0.20 JAPEX 0.19 Jefferies Financial Group 0.20 Manchester United 0.19 Northbridge 0.20 Toyo Tanso 0.19 China Yongda Auto 0.20 WW Grainger 0.19 Kitz Corp 0.20 Qualicorp 0.19 BASF 0.20 Value Partners 0.19 Multichoice Group 0.20 Sydney Airport 0.18 Wynn Macau 0.20 Ibersol 0.18 Nikon 0.20 MS&AD Insurance 0.18 Volkswagen 0.20 Datalogic 0.18 TKH Group 0.20 Eastman Chemical 0.18 GAM 0.20 Henkel 0.18 McKesson 0.20 Inversiones La Construcción 0.18 Cerved Info Solutions 0.20 Towers Bersama 0.18 Roche Holdings 0.20 iQIYI 0.18 Jumbo 0.20 Dowa 0.18 Western Union 0.20 Banca Farmafactoring 0.18 Vital KSK 0.20 Neinor Homes 0.18 Zions Bancorporation 0.20 CGG 0.18 Vienna Insurance Group 0.20 Coca-Cola West Company 0.18 GEA Group 0.20 SATS 0.18 Okamoto Industries 0.20 Ginko International 0.18 Mediaset 0.20 Prosiebensat.1 Media 0.18

Source: River and Mercantile Asset Management LLP Global Recovery 11 Fund holdings and portfolio weight (continued)

Holding Weight (%) Holding Weight (%)

Beijing Capital Intl Airport 0.18 China Merchants Bank 0.16 Kyocera Corp 0.18 Semen Indonesia 0.16 Intertrust Group 0.18 Raiffeisen Bank International 0.16 STMicroelectronics 0.18 American Express 0.15 Dormakaba Holding 0.18 Boeing 0.15 Ping an Insurance 0.18 EFG Eurobank Ergasias 0.15 B2W Companhia Digital 0.18 Jardine Strategic 0.15 Swire 0.18 Unipol 0.15 Hongkong Land Holdings 0.18 ABSA Group 0.15 Adecco 0.18 Bancolombia 0.15 Treasury Wine Estates 0.18 Carlsberg 0.15 CVS Health 0.18 Ping Identity Holding 0.15 Coca-Cola Icecek 0.18 Hyundai Mobis 0.15 Nitto Denko 0.18 Arcos Dorados Class A 0.15 Frankfurt Airport 0.18 Lojas Americanas 0.15 Tenaris 0.18 Momo 0.15 Dufry 0.18 Eni 0.15 CJ Group 0.17 Flutter Entertainment 0.14 China Sanjiang 0.17 Wing Tai 0.14 Eucatex 0.17 GVC Holdings 0.14 LVMH 0.17 Twitter 0.14 Unilever Indonesia 0.17 Danone 0.14 ASTM 0.17 Autohome Inc 0.14 Porsche Automobil 0.17 Piraeus Port Authority 0.14 Koninklijke Philips 0.17 Link Net 0.14 China Communications 0.17 Banco Bradesco 0.14 Takeda Pharmaceutical 0.17 Re/Max Holdings 0.14 Aixtron 0.17 Swatch Group 0.14 Hunting 0.17 SGX 0.14 LG Corp 0.17 Veon 0.13 Eurazeo 0.17 Consorcio ARA 0.13 21Vianet 0.17 Valid 0.13 Chow Sang Sang 0.17 Borussia Dortmund 0.13 Fraser and Neave 0.17 Tadano 0.13 Bankinter 0.17 Saipem 0.12 Grupo Sura 0.17 Corporacion America 0.12 TripAdvisor 0.17 DBS Holdings 0.12 Kangwon Land 0.17 Canada Goose Holdings 0.12 Nike 0.17 Madison Square Garden Co 0.12 Cielo 0.17 PPC 0.11 Profarma 0.16 Marisa Lojas 0.11 Dynatrace 0.16 WW International 0.11 IJM Corporation 0.16 Volvo 0.10 CNOOC Group 0.16 Ipsos 0.10 Darden Restaurants 0.16 Alkemy 0.09 CJ O Shopping 0.16 Dairy Farm 0.09 Genomma Lab 0.16 Mixi 0.09 Gilead Sciences 0.16 Basic-Fit 0.08

Source: River and Mercantile Asset Management LLP Global Recovery 12 Fund holdings and portfolio weight (continued)

Holding Weight (%) Holding Weight (%)

Maisons Du Monde 0.07 Rangers International FC 0.07 ASML Holding 0.06 Meitec Corp 0.06 Cosco Pacific 0.06 Saint-Gobain Group 0.06 Eiffage 0.06 Kingsoft Corp 0.05 Salvatore Ferragamo 0.05 Huifu Payment 0.05 Technos 0.04 Ralph Lauren 0.04 Siemens Energy 0.04 SMA Solar Technology 0.03 Solocal 0.02 Hutchison China Meditech 0.02 Cairo Mezz 0.00 Solocal Group 0.00 Solocal Group 0.00 Banco Espirito Santo 0.00 Cash 2.01 Total 100.00

Source: River and Mercantile Asset Management LLP Global Recovery 13 Top 10 country weights

This graph shows a the fund’s ten largest country weightings.

United States 29.7%

Japan 9.5%

Ch ina 7.7%

United Kingdom 6.6%

Italy 5.0%

Germany 4.9%

France 4.6%

South Korea 3.7%

Switzerland 2.5%

Hong Kong 2.5%

0% 5% 10% 15% 20% 25% 30% 35%

Portfolio Weight

Source: Factset

Industrial sector weights

This graph shows a comparison of fund and benchmark weightings across the industrial sectors classified by the Global Industry Classification Standard (GICS).

Energy 2.6 Materials 5.1 Industrials 16.8 Consumer Discretionary 19.4 Consumer Staples 2.7 Health Care 5.3 Financials 17.0 IT 16.2 Communication Services 10.7 Utilities 0.5 Real Estate 1.7

0 5 10 15 20 25

ES R&M Global Recovery Fund (%)

Source: Factset

Global Recovery 14 Portfolio Style Skyline

This graph shows the Style TiltsTM of the fund against the benchmark as calculated by StyleAnalytics, highlighting stylistic differences between the fund and its benchmark.

14.3 11.0 10.1 8.4 5.7 3.5 0.0

-0.2 -1.3 -0.8 -1.2 -2.0 -2.5 -5.2 -6.7 -6.1 -8.7 -8.4 -9.1

Source: StyleAnalytics Top 10 active positions vs the benchmark

This table highlights the securities in which the fund weight differs most from that of the benchmark, with the ‘overweights’ showing 10 securities with the greatest weight difference above the benchmark’s position, and the ‘underweights’ showing 10 securities with the greatest weight difference below the benchmark’s position. The difference is known as the ‘active weight’.

% Overweights Sector Fund Benchmark Active

Alibaba Group Consumer Discretionary 0.87 0.00 0.87 Cegedim Health Care 0.67 0.00 0.67 Resideo Technologies Industrials 0.65 0.00 0.65 Baidu Communication Services 0.66 0.07 0.59 ams Information Technology 0.59 0.00 0.59 Wiit Information Technology 0.54 0.00 0.54 Somero Enterprises Industrials 0.51 0.00 0.51 Gresham House Financials 0.51 0.00 0.51 Zooplus Consumer Discretionary 0.51 0.00 0.51 JD.com, Inc. Class A Consumer Discretionary 0.48 0.00 0.48

% Underweights Sector Fund Benchmark Active

Apple Information Technology 0.52 3.91 -3.39 Microsoft Information Technology 0.00 2.95 -2.95 Amazon.com Consumer Discretionary 0.90 2.60 -1.70 Alibaba Group Consumer Discretionary 0.00 1.08 -1.08 Alphabet class C Communication Services 0.00 0.87 -0.87 Taiwan Semi Mfng Information Technology 0.00 0.72 -0.72 Nestle Consumer Staples 0.00 0.69 -0.69 Procter & Gamble Consumer Staples 0.00 0.67 -0.67 VISA Information Technology 0.00 0.66 -0.66 Nvidia Corp Information Technology 0.00 0.65 -0.65

Source: FactSet Global Recovery 15 Stock level performance attribution

This table shows the best and worst contributors to the fund’s performance relative to the benchmark. The average active weight highlights whether the fund held a larger or smaller position in a stock than the benchmark did, on average over the period. As performance is relative to the benchmark, outperformance of the benchmark can come from the fund holding a larger position than the benchmark in a stock that performs well, or a lower position than the benchmark (or even a zero holding) in a stock that performs poorly. The contribution to active return is the return that the position has contributed relative to the benchmark.

Greatest Positive Average Contribution to Contribution Active Weight Active Return

Shop Apotheke 0.53% 0.17% Fedex Corp 0.32% 0.16% ams 0.36% 0.15% Wiit 0.48% 0.14% Microsoft -2.98% 0.13% Freeport-McMoRan 0.54% 0.13% Tinexta 0.44% 0.12% D R Horton 0.50% 0.12% SDL 0.36% 0.10% Alibaba Group 0.74% 0.10%

Greatest Negative Average Contribution to Contribution Active Weight Active Return

Apple -3.26% -0.52% Tesla Inc -0.51% -0.28% Taiwan Semi Mfng -0.67% -0.17% Enerplus 0.36% -0.17% Nvidia Corp -0.56% -0.16% Alibaba Group -0.92% -0.15% Blue Apron 0.26% -0.13% CGG 0.20% -0.11% Hunting 0.21% -0.11% Amazon.com -1.79% -0.10%

Source: FactSet

Global Recovery 16 Environmental, Social and Governance (ESG) factor analysis

This report is designed to give a broad overview of the portfolio from the perspective of Environmental, Social and Governance factors. Whilst the portfolio is not run to be optimised with these factors in mind, we may expect to take major risks into consideration when analysing stocks.

Portfolio comparison to the benchmark

This compares the portfolio and benchmark asset weightings by value with data from MSCI ESG Research.

Portfolio Benchmark Assets covered by MSCI ESG Research 76.2% 99.8% Assets scoring in the bottom decile 1.4% 1.0%

The chart below illustrates how the portfolio and its benchmark compare on average Environmental, Social and Governance scores. Scores are based on a 1 to 10 scale, where 1 is the lowest/worst and 10 is the highest/best.

0 Environmental Factors Social Factors Govern ance Fact ors

Portfolio Benchmark

10 highest rated ESG Industry Adjusted Portfolio Weight Benchmark Weight Company Rating companies held by fund Score

Johnson Controls 0.4% 0.1% AAA 10.00 3M 0.4% 0.2% AAA 10.00 Siemens 0.3% 0.2% AAA 10.00 Intesa 0.3% 0.1% AAA 10.00 Atos 0.2% 0.0% AAA 10.00 Carlsberg 0.1% 0.0% AAA 10.00 ASML Holding 0.1% 0.3% AAA 10.00 Sydney Airport 0.2% 0.0% AAA 9.80 Sony Corp 0.3% 0.2% AAA 9.60 Baker Hughes 0.3% 0.0% AAA 9.30

10 lowest rated ESG Industry Adjusted Portfolio Weight Benchmark Weight Company Rating companies held by fund Score

Volkswagen 0.2% 0.1% CCC 0.00 Porsche Automobil 0.2% 0.0% CCC 0.00 China Communications 0.2% 0.0% CCC 0.30 Hyundai Mobis 0.1% 0.0% CCC 0.40 General Motors 0.3% 0.1% CCC 0.60 Wells Fargo & Co. 0.3% 0.2% CCC 0.80 CNOOC Group 0.2% 0.0% CCC 1.40 Toyota Industries 0.3% 0.0% B 1.60 Beijing Capital Intl Airport 0.2% 0.0% B 1.60 Re/Max Holdings 0.1% 0.0% B 1.60

Global Recovery 17 Broker commissions analysis

Counterparty Total (£) Commission Paid (£)

Execution Only ABG SUNDAL COLLIER 595,279.01 357.22 ATLANTIC SECURITIES 6,111,920.11 3,667.15 BANCO ITAU 173,649.02 173.64 BARCAP 495,747.43 297.44 BERENBERG 267,672.48 160.62 BMO 2,559,576.09 1,535.76 BofA MERRILL LYNCH 82,357.84 65.89 BTG PACTUAL 1,544,613.84 1,544.62 CANACCORD ALGO 2,747,145.54 1,098.89 CANACCORD GENUITY 0.00 0.00 CENKOS 0.00 0.00 CITI PROG 38,515.70 15.41 CITIGROUP 944,607.14 588.60 CLSA 1,689,729.83 1,325.54 CREDIT SUISSE 1,502,766.81 973.31 EXANE 559,766.18 335.85 FINNCAP 203,265.46 162.63 GBM 336,618.57 336.62 GOODBODY 235,920.00 188.73 HSBC 1,368,302.90 1,029.37 ING 391,484.87 234.89 INSTINET 754,333.19 452.59 INVESTEC 154,306.76 123.44 ITG 454,519.18 272.72 ITG ALGO 603,830.86 241.53 ITG EURO 0.00 0.00 J&E DAVY 80,125.60 64.11 JANE STREET 0.00 0.00 JEFFERIES 3,529,541.31 3,116.59 JEFFERIES ALGO 492,271.39 196.89 JPMORGAN CHASE 829,490.23 568.38 KEPLER CHEUVREUX 664,491.21 398.72 LIBERUM 0.00 0.00 LIQUIDNET 2,639,203.86 1,637.72 MEDIOBANCA 527,066.77 316.25 MIZUHO 1,551,308.32 930.77 MORGAN STANLEY 1,766,646.39 1,078.93 NORTHERN TRUST CORP 0.00 0.00 NPLUS1 SINGER 137,682.00 110.15 NUMIS 59,376.00 47.50 PANMURE GORDON 0.00 0.00 PEEL HUNT 0.00 0.00 RAYMOND JAMES 2,071,162.12 1,242.71 RBC 387,879.42 285.45 RBC ALGO 596,385.15 238.55 REDBURN 125,288.84 75.17 SANFORD BERNSTEIN 411,202.92 246.72 SANTANDER 1,142,359.73 1,167.88 SHORE CAPITAL 0.00 0.00 SOCIETE GENERALE 0.00 0.00 STIFEL EUROPE 0.00 0.00 STIFEL NICOLAUS 245,947.53 147.57 SUSQUEHANNA INTERNATIONA 0.00 0.00 UBS 3,751,019.76 2,516.19 UBS PROG 62,712,017.30 27,047.45 WINTERFLOOD 208,014.06 166.41 FLOWTRADERS 0.00 0.00 CONFIRMED FUND PRICE 0.00 0.00 OPTIVER 0.00 0.00 BANK OF MONTREAL 0.00 0.00 BTIG 0.00 0.00 CITADEL INVESTMENT GROUP L 0.00 0.00 STIFEL FINANCIAL CORP 0.00 0.00 £ 107,744,408.72 £ 56,782.57

Firm Wide Comparators

All Equity Trading £ 951,308,993.71 £569,492.05 Trades: £ 107,744,408.72 £56,782.57 Average Firm-Wide Commission Rate (%) 0.06% : Average Commission Rate (%) 0.05%

Source: River and Mercantile Asset Management LLP Global Recovery 18 Fund Information

Launch date 4 March 2013 Fund manager: Hugh Sergeant IA sector: Global Benchmark: MSCI All Country World Tracking error range: N/A Strategy capacity: £1bn (pooled & segregated) XD dates: 1 April & 1 October Dividend/Accumulation payment date: 31 May and 30 Nov

Share class: B S Z

Launch price (shares): 250.00p 250.00p 500.00p

Share classification: Retail/Institutional Retail/Institutional Institutional

Type of shares: Income Income Accumulation

Fund charges:

Annual 1.00% 0.75% 0.00%*

Initial (up to) 5.25% 5.25% 5.25%

*AMC charged outside the Fund

Minimum investment

Initial £2.5 million £50 million £5 million

Subsequent £25,000 £50,000 £50,000

Sedol B9428D3 BG21HL2 B96FYM1

ISIN GB00B9428D30 GB00BG21HL25 GB00B96FYM16

Bloomberg RMEWREB LN RMEWRES LN RMEWRLB LN

Global Recovery 19 Important disclosures

The information in this document has been prepared and issued by River and Mercantile Asset Management LLP (trading as “River and Mercantile” and “River and Mercantile Asset Management”) registered in England and Wales under Company No. OC317647, with its registered office at 30 Coleman Street, London EC2R 5AL. River and Mercantile Asset Management LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 453087), is registered with the U.S. Securities and Exchange Commission as an Investment Adviser under the Investment Advisers Act of 1940.

River and Mercantile Asset Management LLP is a subsidiary of River and Mercantile Group Plc which is registered in England and Wales under Company No. 04035248, with its registered office at 30 Coleman Street, London EC2R 5AL.

Equity Trustees Fund Services Ltd (the ACD for ES River and Mercantile Funds ICVC) is authorised and regulated in the UK by the Financial Conduct Authority (Firm Reference Number 227807).

This document is directed at professional and retail clients. The information in this document should not be relied on or form the basis of any investment decision. Retail clients requiring any information should seek the advice/assistance of a Financial Advisor. The information contained in this document is strictly confidential and must not be reproduced or further distributed.

The value of investments and any income generated may go down as well as up and is not guaranteed. An investor may not get back the amount originally invested. Past performance is not a reliable guide to future results. Changes in exchange rates may have an adverse effect on the value, price or income of investments. Please refer to the ES River and Mercantile Funds ICVC principal prospectus for further details of the financial commitments and risks involved in connection with an investment in this Fund. The information and opinions contained in this document are subject to updating and verification and may be subject to amendment. The information and opinions do not purport to be full or complete. No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained in this document by R&M, its partners or employees. No liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained in this document.

Please note that individual securities named in this report may be held by the Portfolio Manager or persons closely associated with them and/or other members of the Investment Team personally for their own accounts. The interests of clients are protected by operation of a conflicts of interest policy and associated systems and controls which prevent personal dealing in situations which would lead to any detriment to a client.

The Global Industry Classification Standard ("GICS") was developed by and is the exclusive property and a service mark of MSCI Inc ("MSCI") and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") and is licensed for use by River and Mercantile Asset Management LLP. Neither MSCI, S&P nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

Although River and Mercantile’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein. None of the ESG Parties makes any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

River and Mercantile Asset Management LLP 30 Coleman Street, London EC2R 5AL www.riverandmercantile.com

Global Recovery 20