30 JUNE 2021 ES River and Mercantile UK EQUITY SMALLER COMPANIES FUND CLASS B GBP (Accumulation)

PAST PERFORMANCE INVESTMENT OBJECTIVE The chart and tables below show the performance of the fund’s GBP B (Acc) share class To grow the value of your investment since the launch of the share class on 30 November 2006. (known as "capital growth") in excess of the Source: River and Mercantile Asset Management LLP. Fund performance is calculated using midday published Numis Smaller Companies + AIM (excluding prices. Benchmark performance is calculated using close of business mid-market prices. Investment Companies) Index net total Past performance is not a reliable guide to future results. return (the "Benchmark") over a rolling 5- year period, after the deduction of fees. PERFORMANCE SINCE INCEPTION 600% PORTFOLIO MANAGER Daniel Hanbury 500% 400% PORTFOLIO & RISK 300% CHARACTERISTICS 200% Number of holdings 75 100% Fund Volatility 16.0% Benchmark Volatility 17.0% 0% Beta 0.90 -100% Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Active Money 82.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 KEY FACTS ES R&M UK Equity Smaller Companies Fund B share class (Acc) Numis Smaller Cos + AIM ex ICs Fund launch date 30/11/2006 CUMULATIVE PERFORMANCE Share class launch date 30/11/2006 1 month 3 months 1 year 3 years 5 years 10 years Since Benchmark Numis Smaller Companies + AIM (ex ICs) Index % % % % % % inception % IA sector UK Smaller Companies B share class (Acc) -0.4 9.5 53.7 47.1 133.1 406.1 537.1 Total fund size £577.0m Benchmark -1.1 6.0 52.3 26.1 80.9 141.3 174.6 Domicile UK Fund type UK UCITS DISCRETE 12 MONTH PERFORMANCE SEDOL B1DSZS0 12 months to 12 months to 12 months to 12 months to 12 months to ISIN GB00B1DSZS09 30/06/2017 30/06/2018 30/06/2019 30/06/2020 30/06/2021 Bloomberg RMUKSEA Accumulation B share class (Acc) 38.0% 14.8% -9.6% 5.9% 53.7% Distribution type Benchmark 31.8% 8.8% -7.2% -10.7% 52.3% FEES & CHARGES TOP 5 PERFORMANCE TOP 5 OVERWEIGHTS & Initial charge Up to 5.25% CONTRIBUTORS & DETRACTORS UNDERWEIGHTS AMC 0.75% Ongoing charge (including AMC) 0.89% The best and worst contributors to the The securities in which the portfolio portfolio’s performance relative to the weight differs most from that of the DEALING INFORMATION benchmark benchmark Smart Metering Systems Dealing frequency Daily Sigma Cap ital Group (+) MaxCyte Dealing cut-off time 12pm (UK) Liontrust Asset Mgmt. (+) Valuation point 12pm (UK) Future (+) Gamma Communications T+4 Reach (+) Strix Settlement Halfords (+) Future Minimum investment £1000 (+) Pan African Resources (+) PageGroup SYNTHETIC RISK & REWARD Ted Baker (+) INDICATOR (SRRI) Clinigen (+) Group On the Beach Group (+)

-1.0% 0.0% 1.0% -2 0 2 4 Contribution + Overweight - Underweight Active Weight (%) Source: River and Mercantile Asset Management LLP Source: River and Mercantile Asset Management LLP

CONTACT DETAILS SECTOR WEIGHTS TOP 10 HOLDINGS Telephone 0345 603 3618 Portfolio weightings within specific The ten largest positions by weight held in Email [email protected] industrial sectors. the portfolio. Weight (%) Energy 2.6 Materials 4.0 Smart Metering Systems 3.3 Industrials 22.1 MaxCyte 2.7 Consumer Disc 14.5 Consumer Staples 0.7 Strix 2.5 Health Care 9.6 Gamma Communications 2.3 Financials 10.5 Future 2.0 Info Technology 10.2 Comms Svcs Supermarket Income REIT 2.0 11.1 Utilities 1.1 OSB Group 1.9 Real Estate 5.3 1.9 0 5 10 15 20 25 EMIS 1.8 Weight (%) Halfords 1.8 Source: River and Mercantile Asset Management LLP Source: River and Mercantile Asset Management LLP MARKET CAPITALISATION CATEGORIES OF POTENTIAL Comparison of portfolio and benchmark weightings across a range The weighting of the portfolio across the four categories of potential, of sizes based on company value. related to stages of a company’s life cycle.

Fund Benchmark Active Growth 40.6%

Mega Cap £20bn + 0.0% 0.0% 0.0% Quality 42.5% Large Cap £4bn - £20bn 0.0% 0.0% 0.0% Recovery 12.1% Mid Cap £2bn - £4bn 5.8% 1.7% 4.1%

Small Cap £100m - £2bn 85.5% 91.7% -6.2% Asset-backed 4.7% Micro Cap £0m - £100m 0.5% 6.7% -6.2% Source: River and Mercantile Asset Management LLP 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Source: River and Mercantile Asset Management LLP, excludes cash.

PORTFOLIO STYLE SKYLINE This chart shows the Style Tilts of the portfolio against the benchmark as calculated by StyleAnalytics. 3.3 3.6 2.5 1.9 1.4 1.1 1.1 0.9 0.9 0.7 0.4 0.7 0.0

-0.5 -1.6 -1.4 -1.4 -2.2 -2.0

Source: StyleAnalytics

FUND RATINGS OTHER INFORMATION Authorised Corporate Equity Trustees Fund Services Limited Director Investment manager River and Mercantile Asset Management LLP Depositary The Bank of New York Mellon (International) Limited MANAGER’S REVIEW Investment background portfolio into our best ideas. We sold a small position in bathrooms supplier Norcros after a strong return since the previous pandemic The UK equity market was broadly flat in June after a positive lows. period through the second quarter and year-to-date. UK small caps fell a little after their strong run (Numis Smaller Companies Outlook ex IT inc AIM benchmark was down 1% in June but up 6% for the second quarter). Some cyclical segments of the market gave back Share prices have moved a long way from the lows of 12 months some of their year-to-date outperformance and higher quality ago and high valuations in the context of history for many (but growth stocks returned to market leadership. Oil prices generally certainly not all) assets suggest we should be prepared for moved higher (Brent oil +3%) but a number of other commodities volatility as markets try to price the baton change from early-cycle fell, in particular the volatile lumber price which has halved from reflationary conditions to what comes next. In the short-term, this includes understanding the impact from a reducing level of the highs of the ‘inflation is taking off’ days of a couple of months 1 ago. IPO activity remained strong and while animal spirits remained stimulus in China (the credit impulse went negative last month). elevated in certain pockets of global equity markets, economic We have mentioned before that globally fiscal policy has a loose recovery was viewed with a more cautious optimism and stocks tone, quite different to the desire to ‘balance the books’ of public that would benefit from reduced Covid-19 related restrictions finances coming out of the Global Financial Crisis. In the US, the underperformed. Biden administration has made it clear that it sees higher nominal economic growth as a tool for societal ‘levelling up’ and have made Strategy update large commitments to fiscal spending towards this goal. In this context, we still think the UK market remains relatively Performance cheap despite the most recent rally. Valuation dispersion gaps, The fund returned -0.4% through the month, ahead of the while closing, remain higher than in other regions on our preferred benchmark which was down 1.2%. This capped a strong quarter composite measure. This provides an attractive environment to with the fund delivering 9.5% versus 6% for the benchmark. Year- blend our Growth, Quality, Recovery and Asset-backed categories. to-date the fund is up 18.8%, ahead of the benchmark return We are buying high quality undervalued stocks, where we believe (Numis Smaller Companies ex IT inc AIM +16.5% total return in growth will be stronger and more sustainable than the market GBP). Future was a significant positive contributor after another believes. We continue to execute on a sell discipline that enables positive trading update from their content and technology led us to recycle capital into new exceptional small cap equity e-commerce and digital media business. Another undervalued investments. This in turn means we are not aggressively skewed to digital media company, Reach, rebounded strongly after some any macroeconomic outcome, but instead should see our returns recent underperformance on no news flow, but the largest predominantly driven by bottom-up stock selection. contribution came from a bid for specialist asset management Thank you for your interest and support. company Sigma Capital, a pioneer of the private rented sector asset class. Two of our consumer discretionary stocks, Moonpig and On The Beach gave back some recent outperformance as the pandemic fears undermined consumer confidence expectations once again. Dan Hanbury Activity Portfolio Manager July 2021 There were no material new purchases as we continue to focus the

1The credit impulse is the change in new credit issued (the flow of credit) as a percentage of GDP.

This document has been prepared and issued by River and Mercantile Asset Management LLP (“R&M”), registered in and Wales under Company No. OC317647, with its registered office at 30 Coleman Street, EC2R 5AL. R&M is authorised and regulated by the UK Financial Conduct Authority (FRN 45308) and 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 is the Authorised Corporate Director (the “ACD”) of the ES River and Mercantile Funds ICVC and of its sub-funds, including this fund. The ACD is authorised in the and regulated by the Financial Conduct Authority (FRN 227807) and has its registered office at Pountney Hill House, 4th floor, 6 Laurence Pountney Hill, London EC4R 0BL.

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