31 AUGUST 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 700% PORTFOLIO MANAGER 600% Daniel Hanbury 500% PORTFOLIO & RISK 400% CHARACTERISTICS 300% Number of holdings 75 200% Fund Volatility 16.0% 100% Benchmark Volatility 16.7% 0% Beta 0.92 -100% Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Nov Active Money 81.8% 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) 5.5 8.6 54.0 59.6 120.0 519.2 594.4 Total fund size £670.5m Benchmark 4.4 4.2 47.6 33.1 71.9 183.3 189.4 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 31/08/2017 31/08/2018 31/08/2019 31/08/2020 31/08/2021 Bloomberg RMUKSEA Accumulation B share class (Acc) 28.5% 7.3% -9.7% 14.7% 54.0% Distribution type Benchmark 23.7% 4.5% -9.6% -0.3% 47.6% 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 Dealing frequency Daily Smart Metering Systems Communications (+) MaxCyte Dealing cut-off time 12pm (UK) JTC (+) Strix Valuation point 12pm (UK) (+) Gamma Communications Settlement T+4 Future (+) Future Minimum investment £1000 Gamma Communications (+) (-) MaxCyte ( +) Group SYNTHETIC RISK & REWARD Venture Life (+) PageGroup INDICATOR (SRRI) Team17 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 2.8 Materials 4.8 Smart Metering Systems 3.0 Industrials 23.5 MaxCyte 2.8 Consumer Disc 14.2 Consumer Staples 0.4 Strix 2.6 Health Care 9.8 Gamma Communications 2.2 Financials 10.5 Future 2.2 Info Technology 11.0 Comms Svcs Supermarket Income REIT 2.2 10.6 Utilities 1.1 2.1 Real Estate 4.0 2.0 0 5 10 15 20 25 1.9 Weight (%) EMIS 1.9 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 39.8%

Mega Cap £20bn + 0.0% 0.0% 0.0% Quality 45.0% Large Cap £4bn - £20bn 2.2% 0.0% 2.2% Recovery 10.9% Mid Cap £2bn - £4bn 7.0% 4.2% 2.8%

Small Cap £100m - £2bn 81.6% 89.6% -8.1% Asset-backed 4.4% Micro Cap £0m - £100m 2.2% 6.1% -4.0% 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.

3.9 4.2

2.4 2.0 1.8 1.3 1.5 0.9 0.8 0.4 0.5 0.4

-0.8 -1.1 -1.0 -1.8 -1.7 -1.6 -2.2

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 Outlook The UK equity market continued to rise in August (MSCI UK IMI Share prices have moved a long way from the lows of just over returned 2.5%), leaving it up +14.7% year to date (YTD). UK small 12 months ago and high valuations in the context of history for caps outperformed, continuing their strong run (Numis Smaller many (but certainly not all) assets suggest we should continue to Companies ex. IT inc. AIM benchmark returned 4.4% in August be prepared for volatility as markets try to price the baton change and 22.8% YTD). Global equity markets recorded their seventh from early-cycle reflationary conditions to what comes next. consecutive positive month in August (MSCI ACWI +2.5% total However, consensus data shows us that our benchmark has the return in USD). Bond yields bottomed early in the month, with lowest forecast EPS (earnings per share) growth of all the major the US 10-year yield rising from 1.2% to 1.3%. Commodity prices UK indices for the current year, despite declines in 2020 that generally fell from near multi-year highs – Brent oil -4%, copper were broadly the same. This is an interesting set-up going into the -3% and the Commodity Research Bureau (CRB)’s raw material September reporting season which should provide some clarity index -0.3%. Iron ore fell more sharply (-14% in August and now over the demand, supply and support dynamics that are a key -40% from May’s high) as Chinese authorities seek to enforce steel feature of current growth rates and profitability. production limits more strictly to reduce emissions. The US dollar rose slightly (DXY +0.5%). Federal Reserve Chair Powell’s speech at In this context, we think the UK market remains relatively cheap the Jackson Hole symposium largely turned out to be a non-event, despite the most recent rally. Valuation dispersion gaps, while with modest moves in rates, FX and equities post the event. closing, remain higher than in other regions on our preferred composite measure. This provides an attractive environment to Strategy update blend our Growth, Quality, Recovery and Asset-backed categories. We are buying undervalued small cap stocks, where we believe Performance growth and returns will be stronger and more sustainable than the The fund had a strong month returning 5.5%, ahead of the market believes. benchmark up which returned 4.4%. YTD the fund is up 29.4%, outperforming the benchmark return of 22.8%. Future was again Thank you for your interest and support. a significant contributor after the positive trading update from their e-commerce driven consumer publishing growth engine and the announced acquisition of Dennis (consumer publisher). Sustainability industrials winners Genuit, Strix and Volution performed well. Spirent and Gamma Comms delivered from our Dan Hanbury portfolio of communication tech companies, and healthcare market Portfolio Manager exposed and Allergy Therapeutics, which responded to September 2021 a positive update on their early stage short course peanut allergy vaccine which is one of a several exciting R&D projects that the company are progressing, also performed well. On the downside, growth winners Maxcyte and Team 17 gave back some recent outperformance on concerns over current year growth rates following exceptional prior year performance. Modest position Venture Life profit warned with two business opportunities tracking behind expectations. Whilst this is disappointing, expectations have been re-based and the company now trades on a depressed multiple and should be able to continue to execute its buy and build strategy.

Activity There were no new significant purchases in the month. We received the cash for the Sigma Capital bid and continued to re-invest positive fund flows into our portfolio of diversified high conviction PVT stocks. 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.

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.

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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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