31 JANUARY 2021 ES River and Mercantile UK DYNAMIC EQUITY 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 21 November 2012. (known as "capital growth") in excess of the Source: River and Mercantile Asset Management LLP. Fund performance is calculated using midday published MSCI United Kingdom Investable Market prices. Benchmark performance is calculated using close of business mid-market prices. Index (IMI) net total return (the Past performance is not a reliable guide to future results. "Benchmark") over a rolling 5-year period, after the deduction of all fees. PERFORMANCE SINCE INCEPTION PORTFOLIO MANAGER 140% William Lough 120% PORTFOLIO & RISK 100% CHARACTERISTICS 80%

60% Number of Holdings 54 Fund Volatility 14.8% 40% Benchmark Volatility 13.9% 20% Beta 1.00 0% Active Money 77.6% Nov 2012 Nov 2013 Nov 2014 Nov 2015 Nov 2016 Nov 2017 Nov 2018 Nov 2019 Nov 2020 ES R&M UK Dynamic Equity Fund B share class MSCI UK IM Index KEY FACTS Fund launch date 22/03/2007 CUMULATIVE PERFORMANCE Share class launch date 21/11/2012 Benchmark MSCI UK Investable Since inception Markets Index 1 Month % 3 Months % 1 Year % 3 Years % 5 Years % % IA sector UK All Companies B share class (Acc) -2.3 15.7 -4.3 -3.9 38.1 97.8 Total fund size £75.3m MSCI UK IM Index -0.8 16.4 -9.5 -4.7 27.8 55.0 Domicile UK Fund type UCITS DISCRETE 12 MONTH PERFORMANCE SEDOL B7H1R58 12 months to 12 months to 12 months to 12 months to 12 months to ISIN GB00B7H1R583 31/01/2017 31/01/2018 31/01/2019 31/01/2020 31/01/2021 Bloomberg RIVMERB B share class (Acc) 22.2% 17.7% -9.7% 11.2% -4.3% Distribution type Accumulation MSCI UK IM index 20.5% 11.3% -4.1% 9.8% -9.5% FEES & CHARGES TOP 5 PERFORMANCE TOP 5 OVERWEIGHTS & Initial charge Up to 5.25% CONTRIBUTORS & DETRACTORS UNDERWEIGHTS AMC 0.75% Ongoing charge (including AMC) 0.93% 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 Dealing frequency Daily AVEVA Group (+) Dealing cut-off time 12pm (UK) IMI IMI (+) Valuation point 12pm (UK) 888 Holdings 888 Holdings (+) Settlement T+4 (+) Minimum investment £1000 Lloyds Bank (-) Vesuvius (+) British American Tobacco Whitbread (+) Rio Tinto SYNTHETIC RISK & REWARD BP (-) Diageo INDICATOR (SRRI) Natwest Group (+) HSBC Holdings (+) AstraZeneca -0.4% -0.2% 0.0% 0.2% 0.4% -10 -5 0 5 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 3.9 Materials 14.2 Unilever 4.1 Industrials 22.5 Tesco 3.1 Consumer Disc 9.6 Lancashire Holdings 2.9 Consumer Staples 8.3 Health Care 8.9 Anglo American 2.8 Financials 15.5 IMI 2.8 Info Technology 5.3 Electrocomponents 2.7 Comms Svcs 4.0 Utilities 1.3 Prudential 2.7 Real Estate 5.2 888 Holdings 2.6 0 10 20 30 Tyman 2.5 Weight (%) Mondi 2.5

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 of The weighting of the portfolio across the four categories of potential, sizes based on company value. related to stages of a company’s life cycle. Fund Benchmark Active Growth 19.1% Mega Cap £20bn + 30.1% 57.5% -27.4% Quality Large Cap £4bn - £20bn 21.6% 27.2% -5.7% 52.4%

Mid Cap £2bn - £4bn 7.8% 7.1% 0.6% Recovery 16.9% Small Cap £100m - £2bn 39.3% 8.1% 31.1% Asset-backed 11.7% Micro Cap £0m - £100m 0.0% 0.0% 0.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Source: River and Mercantile Asset Management LLP 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.

1.4 0.9 0.8 0.4 0.1

-0.1 -0.0 -0.1 -0.2 -0.1 -0.4 -0.4 -0.5 -0.6 -1.0 -1.7 -2.3 -2.8 -3.6

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 This fund was renamed on 1 January 2016 and was previously known as the R&M UK Equity Unconstrained Fund. MANAGER’S REVIEW

Investment Background Outlook Global equity markets came out of the blocks fast in the new Increasing retail investor participation, rising levels of margin year but ended January down (MSCI ACWI -0.4% total return), financing and plentiful liquidity are among the ticks in a growing as concerns around new strains of the coronavirus and the list indicating bubble risk. We would venture that this risk is most prospect of elongated lockdown periods potentially pushed out elevated where future growth is considered all but guaranteed, but normalisation of economic activity. This coincided with the headline visibility over when this growth might convert into free cash flow story of the last week – concerns of a retail investor driven bubble is low, such as electric vehicles, clean energy and some areas of accompanied by a hedge fund de-risking. This unwinding of software. Two historic triggers that have led to major drawdowns positions led what appeared to be a US phenomenon to spill over across equities are missing: a corporate earnings collapse and to other global markets, including the UK. Nonetheless, the shape a potential monetary tightening. There are clearly other risks of cross asset returns over the month as a whole broadly remained that need to be monitored, notably a fresh wave of COVID pro-risk and ‘reflationary’ in nature, with Asian, Emerging market hospitalisations and a messy unwind of hedge fund positions (EM) and global small cap equities (+4%, +3% and +2% respectively), forced to de-risk. and commodities (Brent oil +8%, copper +1%) leading global asset returns while sovereign and corporate bonds weakened, along with What remains curious, in an investment landscape with enough gold. highly priced assets to raise the prospect of bubbles in multiple asset classes, is how easy it is to find attractively valued equities Strategy update of companies capable of compounding value for shareholders (and broader stakeholders) over a multi-year horizon. The UK Performance stock market is possibly unparalleled from this perspective. Wide dispersion of valuations – that is, the gap between high-priced The fund returned -2.3%1 in January versus -0.8% by its comparator and low-priced shares – even within this attractively valued market benchmark, the MSCI United Kingdom IMI index2 continue to offer a rich hunting ground in which we can apply our disciplined investment process to find mispricings. The holding that contributed most positively was AVEVA (+0.2%), which rose 14% on the back of a strong trading statement that confirmed a catch-up in revenue growth and de-risked the outcome for the year relative to analyst estimates. Cairn Energy (-0.2%) was the largest detractor, despite a rising oil price. While its 2021 production outlook was a little softer than expected, the main factor behind the decline appears related to William Lough concerns over the ability to collect the $1.4bn awarded to them, Portfolio Manager in late December, from the Indian government. The award is more February 2021 than the entire current market value of the company today, so we think this risk is being mispriced. Companies sensitive to a longer lockdown period in the UK, such as NatWest Group and Whitbread (both -0.2% contribution) also fell more than the market. Activity We bought a single new position in Savills, which has leading positions across the globe in residential and commercial real estate, with a balance between more cyclical transactional (43% in 2019) and more resilient fee-based revenues. There is evidence that Savills has continued to gain market share through the 2020 downturn, though the key unknown is to what extent office activity will be structurally impacted. Savills is well positioned as one of the largest managers of logistics assets in Europe – a market with attractive long-term growth. We bought the shares at a ~10% yield to our estimate of through-cycle free cash flow and a ~40% discount to its close US peers. We noticed a ‘stale’ and conservative set of analyst expectations, which have been upgraded since a positive trading statement but still show scope to surprise positively. I exited the remaining position in low cost airline easyJet, using the capital to increase the portfolio’s weight in Whitbread. Our original investment case for easyJet – that its strong balance sheet could allow it to take share as weaker competitors went bust – was in place before the COVID crisis. While this may end up playing out, easyJet’s balance sheet and P&L structure are significantly more levered because of having to sell planes to raise liquidity. This alters the range of potential outcomes for equity value. Whitbread has retained the strong freehold backing to its balance sheet, which gives it strategic options. In addition, the shorter-term demand outlook is somewhat less murky due to lower reliance on cross- border travel.

1 B share class (GBP), mid-day to mid-day pricing. 2 Close-of-business to close-of-business pricing. This document has been prepared and issued by River and Mercantile Asset Management LLP (“R&M”), registered in England and Wales under Company No. OC317647, with its registered office at 30 Coleman Street, London 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 United Kingdom 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.

This document is intended for use by individuals who are familiar with investment terminology. Please contact your financial adviser if you need an explanation of the terms used. For further details of the specific risks and the overall risk profile of this fund; as well as the share classes within it, please refer to the Key Investor Information Documents and ES River and Mercantile Funds ICVC Prospectus which are available on our website www.riverandmercantile.com. 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 ICVC principal prospectus for further details of the financial commitments and risks involved in con- nection 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 mem- bers of the Investment Team personally for their own accounts. The interests of clients are protected by operation of a conflicts of interest policy and associat- ed systems and controls which prevent personal dealing in situations which would lead to any detriment to a client.

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