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11.05 rwc arc presentation

  1. 1. RWC Absolute Rate & Currency (ARC) Funds May 2011
  2. 2. Introduction to RWC Partners• RWC Partners is an independent investment firm • Focus is exclusively on high-alpha asset management to institutions, professional investors and intermediaries • Business is built around highly-talented portfolio managers, an intense focus on performance and a strong risk management culture• Majority of equity in RWC Partners is owned by RWC personnel – the balance is owned by Schroders• 7 investment teams • UK Equity John Innes • European Equity Ajay Gambhir • US Equity Mike Corcell • Global Convertible Bond Davide Basile • Global Growth Equity Priya Kodeeswaran • Equity Income and Value Nick Purves & Ian Lance • Absolute Return Bond & Currency Peter Allwright & Stuart Frost• 66 personnel of which nearly half are investment professionals• Product focus: UCITS III & non-UCITS high alpha & absolute return funds2
  3. 3. RWC ARC Team & Investment Strategies RWC Enhanced ARC 6% Target: Cash +6% Structure: UCITS III Target Return over LIBOR RWC Cautious ARC 3% Target: Cash +3% Structure: UCITS III 0% 0% 5% 10% Expected Maximum VaR3
  4. 4. RWC Absolute Rate & Currency Funds• RWC ARC (Absolute Rate and Currency) Funds • A macro-orientated thought process, investing in liquid interest rate and currency markets • Core, high grade, fixed income portfolio supported by additional “alpha” strategies• Strategies aim to achieve a net return* of cash +3% and cash +6%, annualised, over the market cycle • Highly liquid securities ensure exposure can be de-risked efficiently to reduce “drawdowns” • Physical High Grade Bond investments provide a stable yield and exposure to duration • Directional and tactical “strategies” provide the majority of excess returns • Overlay adds pure alpha • Predominantly derivative overlay Alpha Portfolio • Liquid rates and currency • Exchange traded rates and forward and OTC FX • No illiquid derivative structures • Short term high grade physical bond portfolio High Grade • Provides a cash return on investments Bond Portfolio • Some alpha component from duration management • Highly liquid and provider of collateral if needed • Short maturities *Net of the institutional share class fee4
  5. 5. Example of High Grade Bond Portfolio • Provides beta element of portfolio Rating % of Fund AAA 67.01% • Limited alpha opportunities Alpha Portfolio AA 17.58% • Emphasis on liquidity and quality A 4.42% • Residual interest rate and or/ credit risk can BBB 0.00% be hedged if necessary BB and below 0.00% High Grade Bond Portfolio Unrated 0.00% Total 89.01% Country Issuer Coupon Maturity Rating Holding (%) Sector % of Fund HSH Nordbank (German Guarantee) 2 3/4 20/01/2012 Aaa/AAA 13.54% Sovereign/Agency/Supra 54.35% RBS (UK Guarantee) 3 3/4 14/11/2011 Aaa/AAA 10.97% Secured/Collateralised 0.00% OBLI 2 1/4 15/04/2011 Aaa/AAA 6.07% Financial 26.74% HBOS (UK Guarantee) 3 3/8 05/12/2011 Aaa/AAA 5.46% Corporate 7.92% IKB (German Guarantee) 2 5/8 13/03/2012 Aaa/AAA 5.39% Total 89.01% European Investment Bank 2 1/2 15/04/2012 Aaa/AAA 5.39% Lloyds (UK Guarantee) 3 3/4 17/11/2011 Aaa/AAA 4.11% Analytics % of Fund Neder Waterschapsbank 3 3/4 16/01/2012 Aaa/AAA 4.10% Duration 0.46 years Westpac Banking 4 1/4 25/01/2012 Aa1/AA 3.84% Current Yield 1.65% Shell International 3 3/8 09/02/2012 Aa1/AA 3.80% Average rating AAA Source: RWC Partners 29/04/20115
  6. 6. Alpha Portfolio• Managed as overlay to add return to high grade bond portfolio• Focused, highest conviction investment strategies: Alpha Portfolio • Rates – bond markets – short term interest rate futures • FX – Global and emerging market currencies • Cross asset class strategies – Bunds vs. Gilts – iTraxx crossover High Grade• Strategies can be directional or market neutral Bond Portfolio • Typically a small number of strategies deployed at any point in time • One strategy may be implemented in a number of different ways• Liquid securities ensure overlay can be collapsed or de-risked efficiently and quickly • Exchange traded futures and options • FX funds and OTCs • Physical cash • Interest rate swaps and CDS (iTraxx, sovereign CDS)6
  7. 7. Price, Flow & Macro Analysis – produces the P.F.M. Scorecard Price Analysis • Aim: To establish current and future state of play in any given market, i.e. trend or range • Analyse: Charts of bonds, FX and indices • Action: Identification of trading opportunities and attractive entry and exit points Flow Analysis PFM Macro Analysis •Aim: Identify supply/demand • Aim: To anticipate economic dynamics and trends in growth and permanent positioning inflation •Analyse: Monitoring actions of • Analyse: Key economic major market variables; qualitative participants analysis of economic •Action: Directional investments fundamentals • Action: Fundamental input for trading ideas7
  8. 8. Investment Process & P.F.M. Analysis• Investment process looks at opportunities from three critical perspectives: • Price Analysis • Market psychology – price performance relative to economic releases • Study of price trends, patterns of a continuation or reversal nature Price • Long term charts looking for target areas on trends or ranges Flow Macro • Inflection points on overbought or oversold markets • What market are we in? Trend / Range / Reversal • Flow Analysis Price • Auction scheduling/QE buybacks • Exchange Controls Policy Flow Macro • CB/SWF currency diversification policy • Pension solvency regulation • Macro Analysis Price • GDP relative to trend • Inflation expectations Flow Macro • Taylor rule analysis• The Price, Flow, Macro analysis is quantified through the PFM “Scorecard” • Each of the macro, flow, and price chart-based input factors is scored on a scale of -3 to +3 • Aggregate scores give a representation of the attractiveness of various points on the yield curve, currencies and bonds • Ratings move frequently as P.F.M. inputs change – formally recreated every week• Scorecard output is used to help assess and select strategies • It is an idea generator and is not followed mechanically• A high conviction strategy developed from any of the P.F.M. processes will be tested against the other two analytical processes8
  9. 9. PFM Scorecard – highlighting the investment opportunities Please note, this is a historical example and not the current scorecard and will therefore not reflect current positions9
  10. 10. Implementing the Investment Strategies Expression of Investment View • Market • Currency • Long or short • Proxy or security specific Choice of Security Type Entry and Exit Points • Cash securities • Price targets • Futures • Call level • Options • Rolling stop profits • Forwards • Time Limits • Swaps Sizing & Risk Management • Risk budget • Liquidity • Volatility • Transparency • Simplicity10
  11. 11. Sizing and Risk Management • Pragmatic, market dependant approach to risk taking • PFM Scorecard highlights trade possibilities • Size of risk allocation dependant on market condition ie. liquidity/volatility, e.g. holidays, auctions or economic release • Risk assessed on a top down ‘whole portfolio’ view as well as an individual trade by trade basis • VaR measure (Monte Carlo) only a backward looking indicator: Cautious ARC 20 day 99% confidence, 500 bps limit Enhanced ARC 20 day 99% confidence, 1000bps limit • Correlations move to extremes in times of stress • Market neutral (i.e. curve, cross market) strategies may have significant implicit directional bias • DV01/bp risk used to size and set stop profit/loss levels relative to expectations of realised market volatility • Third party risk company AB Funds in Luxembourg using Kinetic Software • Funds managed through Beauchamps (hedge fund accounting system) and thinkFolio, a simple, intuitive and sophisticated portfolio modelling and trade management system designed specifically for bonds and currency management (not a VaR system) Example: 5s/10s curve trade 1 bp per bp of fund P+L Expression of Investment Gilts/Bunds ½ bp per bp of fund P+L • View Market • Currency Outright long/short ¼ bp per bp of fund P+L • • Long or short Proxy or security specific FXs percentage exposure relative to Entry and Exit Points • Price targets Choice of Security Type • Cash securities underlying liquidity/volatility • • Call level Rolling stop profits • • • Futures Options Forwards • Time Limits • Swaps eg. USD ZAR ½% of NAV Sizing & Risk Management • Risk budget eg. NOK SEK 2% of NAV • • Liquidity Volatility • Transparency • Simplicity• Option strategies may be used to take exposure, hedge risk or book profit where it is economic and efficient to do so11
  12. 12. RWC Cautious ARC (Absolute Rate & Currency) Fund – Term Sheet• Launch Date 29th December 2006• Liquidity Daily subscriptions & redemptions / daily NAV• Fees A Share Class: Retail 1.35% AMC / 10% performance fee Fees B Share Class: Institutional 0.70% AMC / 10% performance fee• Performance Fee HWM Yes – highest previous calendar year end• Performance Fee hurdle Yes – HWM + LIBOR or equivalent• Fund structure Luxembourg SICAV (UCITS III) Sub-fund of the “RWC Funds” SICAV• Currency EUR base currency – USD, GBP, CHF hedged share class• UCITS III status Sophisticated Fund• Administrator Banque Privée Edmond de Rothschild Europe• Local Registrations Luxembourg / UK / Germany / Switzerland / Italy• Tax Registered for Reporting Status for 201012
  13. 13. RWC Enhanced ARC (Absolute Rate & Currency) Fund – Term Sheet• Launch Date 14th February 2011• Liquidity Daily subscriptions & redemptions / daily NAV• Fees A Share Class: Retail 1.5% AMC / 15% performance fee Fees B Share Class: Institutional 0.8% AMC / 15% performance fee• Performance Fee HWM Paid quarterly. Share class level high water mark• Performance Fee hurdle Yes – HWM + LIBOR or equivalent• Fund structure Luxembourg SICAV (UCITS III) Sub-fund of the “RWC Funds” SICAV• Currency EUR base currency – GBP, USD hedged share classes• UCITS III designation Sophisticated Fund• Administrator Banque Privée Edmond de Rothschild Europe• Local Registrations TBC - Luxembourg, Germany, UK, Switzerland, Italy• Tax UK Reporting Status Application will be submitted Daily reporting available for Germany Tax Transparency13
  14. 14. Appendix14
  15. 15. Absolute Return Bond & Currency: portfolio management teamPeter Allwright – Portfolio Manager• Joined RWC Partners in September 2010 with Stuart Frost as co-head of the Absolute Return Bond & Currency Team• Threadneedle Asset Management – 2005-2010 • Co-manager on all Absolute Return Bond and Macro Funds from inception • $3bn AUM in absolute return and high alpha strategies • Absolute Return Bond Fund – AA rated by S&P / A rated by OBSR • Awarded 2 Gold Medals by Sauren in 2009 for Absolute Return funds and 2 for the Macro fund • Additional responsibilities included management of core Global and European Bond funds• Gartmore – Senior Portfolio Manager – 2004-2005• Royal London Asset Management – 2001-2004 • Manager of the award winning Overseas Bond Fund • Professional Pensions best performing Global Bond Fund 2002, 2003 and 2004• 1993 – 2001 Nomura, Nikko and Svenska Handelsbanken • Proprietary trader and market maker in government bond and credit markets• MA (Hons) from the University of Cambridge in Engineering and Management Studies; CFA Charterholder15
  16. 16. Absolute Return Bond & Currency: portfolio management teamStuart Frost – Portfolio Manager• Joined RWC Partners in September 2010 with Peter Allwright as co-head of the Absolute Return Bond & Currency Team• Threadneedle Asset Management – 2007-2010 • Co-manager on all Absolute Return Bond and Macro Funds from inception • $3bn AUM in absolute return and high alpha strategies • Absolute Return Bond Fund – AA rated by S&P / A rated by OBSR• Lloyds TSB Markets – Head of Global Charting - 2006• Gartmore – Senior Portfolio Manager – 2004-2005 • FX Hedge Fund• NatWest Markets – 1980-2000 • 1992-2000 Established and managed the NatWest Treasury FX chart and fundamental research team in London • 1980-1990 Forward FX dealer, Futures trader and Prop Trader in New York • A regular top 3 winner in the Euro money FX and Greenwich markets survey polls • Responsibilities for client coverage within research – Europe, UK and Asia • Qualifications from New York Institute of Finance in Technical Analysis and Bond Markets • 1994-1997 Guest lecturer in Charting at City University Business School16
  17. 17. Absolute Return Bond & Currency: portfolio management teamAlice Leedale – Market Strategist• Joined RWC Partners in March 2011 as a Market Strategist in the Absolute Return Bond & Currency Team• Goldman Sachs International – 2006-2009 • Financial analyst in the UK Mergers and Acquisitions Advisory Group • Extensive experience in financial modelling, company valuation and capital structure analysis• University of Cambridge – MPhil Economics – 2009-2010 • Specialist subjects: Asset Pricing, International Finance, Monetary Policy • Dissertation: ‘Asset Prices and Monetary Policy: Evidence from the UK’• University of Oxford – First Class BA (Hons) Economics and Management – 2002-2006Larry Furness – Market Strategist• Joined RWC Partners in August 2010 as a graduate recruit • Joined the Absolute Return Bond & Currency Team in February 2011• Permal Investment Management – Investment Analyst (Internship) – 2010 • Involved with manager research which included attending Cap Intro events as an Analyst• Government Economic Service – Assistant Economist (Internship) – 2008• Graduated in 2009 with an honours bachelor’s degree in Economics from The University of Nottingham17
  18. 18. Performance of Strategy (Net of Fees) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Threadneedle Absolute2005 - - - - - - - - - - 0.20% 0.66% 0.86% Return Bond Fund Threadneedle Absolute2006 0.42% 0.39% 0.47% 0.33% 0.47% 0.17% 0.08% -0.50% 0.76% 0.42% 0.46% 0.02% 3.55% Return Bond Fund Threadneedle Absolute2007 -0.21% 1.34% -0.19% -0.34% -0.68% -0.69% 2.76% 1.50% 1.96% 0.89% 0.85% 0.27% 7.64% Return Bond Fund Threadneedle Absolute2008 2.33% 1.63% 2.63% -2.03% -1.24% -0.34% 0.67% 2.01% 0.89% 1.72% 2.72% 2.59% 14.30% Return Bond Fund Threadneedle Absolute2009 -0.12% 0.30% 0.31% 0.77% 1.08% 0.55% -0.23% 0.82% 0.11% 0.41% -0.07% -0.10% 3.86% Return Bond Fund Threadneedle Absolute2010 0.03% 0.03% 0.27% -0.37% -0.43% 0.20%* - - - - - - -0.26% Return Bond Fund % of up- % of down- Annualised Total Return Annualised Vol Sharpe Ratio months months Return Strategy 73% 27% 33.09% 6.32% 3.39% 0.74 40% 35% 30% 25% 20% 15% 10% 5% 0% Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 Threadneedle Absolute Return Bond Fund - Institutional Share Class - GBP Source: RWC Partners / Bloomberg. NAV to NAV net income reinvested. Net of fees18 Past performance is not a guide to the future. The price of investments and the income from them may fall as well as rise and investors may not get back the full amount invested *Note. June performance data refers to 1st June 2010 until 29th June 2010
  19. 19. Performance of Threadneedle Macro Trading Fund Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Threadneedle Macro2008 - - - - - - - - - 0.96% 3.65% 2.11% 6.85% Trading Fund Threadneedle Macro2009 0.09% 0.31% 1.82% 1.35% 2.07% 0.37% 0.17% 1.43% 0.31% 1.23% 0.66% 0.04% 10.28% Trading Fund Threadneedle Macro2010 0.65% -0.19% 0.60% -1.20% -1.72% -0.29% - - - - - - -2.16% Trading Fund % of up- % of down- Annualised Total Return Annualised Vol Sharpe Ratio months months Return Strategy 81% 19% 15.29% 8.47% 4.09% 1.79 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 08 08 08 08 09 09 09 09 09 09 09 09 09 09 09 09 10 10 10 10 10 10 Threadneedle Macro Trading Crescendo Fund - Class A USD Source: RWC Partners / Bloomberg. NAV to NAV net income reinvested. Net of fees19 Past performance is not a guide to the future. The price of investments and the income from them may fall as well as rise and investors may not get back the full amount invested
  20. 20. www.thinkfolio.com20
  21. 21. Linedata Beauchamp (www.linedata.com)21
  22. 22. US Inflation Accelerating Over the Last Few Months 7.0% 6.1% 6.0% 5.0% 4.0% 3.0% 2.0% 2.0% 1.0% 0.0% -1.0% -2.0% Mar-2009 Jun-2009 Sep-2009 Dec-2009 Mar-2010 Jun-2010 Sep-2010 Dec-2010 Mar-2011 CPI Last 3 Months SAAR Core CPI Last 3 Months SAAR Source: US Bureau of Labor Statistics22 SAAR – Seasonally Adjusted Annualised Rate
  23. 23. UK CPI to Fall Rapidly in 2012 as VAT Effect Drops Out 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 CPI Actual CPI Forecast (Analyst Average) Source: ONS, Research Analysts (Goldman Sachs, Morgan Stanley, RBS Markets, UBS)23
  24. 24. Short Sterling Option Condor Spread(underlying: Jun-2012 90 Day Sterling LIBOR) £35,000 £30,000 Valuation Dates 05-May-11 £25,000 25-May-11 04-Jun-11 £20,000 13-Jun-11 Total Payoff 14-Jun-11 £15,000 15-Jun-11 £10,000 £5,000 £0 Option Strike Price -£5,000 -£10,000 98 98.125 98.25 98.375 98.5 98.625 98.75 98.875 99 99.125 99.25 99.375 99.5 99 98.5 L M2 Comdty Price 98 97.5 97 96.5 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 L M2 Comdty Source: Option valuation calculated using the Black-Scholes option pricing model and implied volatility data from Bloomberg24
  25. 25. Gilts vs Bunds: 10 year yield spread Source: Bloomberg25
  26. 26. Gilts vs Bunds: 2 year yield spread Source: Bloomberg26
  27. 27. EURSEK 2001 to date Source: Bloomberg27
  28. 28. AUDUSD 2001 to date Source: Bloomberg28
  29. 29. Spot Gold 1981 to date Source: Bloomberg29
  30. 30. Spot Silver 1981 to date Source: Bloomberg30
  31. 31. WTI OIC 2001 to date Source: Bloomberg31
  32. 32. Cotton 1981 to date Source: Bloomberg32
  33. 33. German BOBL 5 year 1991 to date Source: Bloomberg33
  34. 34. Gilts 10 year yield 2001 to date Source: Bloomberg34
  35. 35. US 30 year yield 2001 to date Source: Bloomberg35
  36. 36. EUR/GBP 2001 to date Source: Bloomberg36
  37. 37. Dow Jones 1981 to date Source: Bloomberg37
  38. 38. US 2y/10y 1981 to date Source: Bloomberg38
  39. 39. Europe 2y vs. 10y 1991 to date Source: Bloomberg39
  40. 40. US 2y vs. 30y 2001 to date Source: Bloomberg40
  41. 41. Contact UsPlease contact us if you have any general questions or would like to discuss any of our strategies RWC Partners Ltd 60 Petty France London SW1H 9EU Tel: +44 20 7227 6000 Fax: +44 20 7227 6003 Email: invest@rwcpartners.com41
  42. 42. Risk Warnings & DisclaimersThis document contains information relating to RWC Partners Limited and RWC Asset Management LLP (collectively, “RWC Partners”), each of which is authorised and regulated in the United Kingdom bythe Financial Services Authority (“FSA”), and services provided by them and may also contain information relating to certain products managed or advised by RWC Partners (“RWC Funds”).RWC Partners may act as investment manager or adviser, or otherwise provide services, to more than one product pursuing a similar investment strategy or focus to the product detailed in this document.RWC Partners seeks to minimise any conflicts of interest, and endeavours to act at all times in accordance with its legal and regulatory obligations as well as its own policies and codes of conduct.The services provided by RWC Partners are available only for and this document is directed only at, persons that qualify as Professional Clients or Eligible Counterparties under rules of the FSA. It is notintended for distribution to and should not be relied on by any person who would qualify as a Retail Client.In addition, although certain sub-funds of RWC Funds SICAV are recognised schemes for the purposes of Section 264 of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”), allother RWC Funds are unregulated collective investment schemes for the purposes the FSMA, the promotion of which either in or from the United Kingdom is restricted by law. Accordingly, this document isissued and approved by RWC Partners Limited for communication by RWC Partners only to, and is directed only at, persons reasonably believed by it to be of a kind to whom it may communicate financialpromotions relating to unregulated collective investment schemes by virtue of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001, asamended (the “Order”), or the Conduct of Business Rules of the FSA. Such persons include: (i) persons outside the United Kingdom; (ii) persons having professional experience of participating inunregulated collective investment schemes; and (iii) high net worth bodies corporate, partnerships, unincorporated associations, trusts, etc. falling within Article 22 of the Order. Any unregulated collectiveinvestment schemes described herein are available only to such persons, and persons of any other description may not rely on the information in this document.Where this document is received outside the United Kingdom, it is the responsibility of every person reading this document to satisfy himself as to the full observance of the laws of any relevant country,including obtaining any government or other consent which may be required or observing any other formality which needs to be observed in that country. Nothing in this document constitutes an offer orsolicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Interests in RWC Funds are available only injurisdictions where their promotion and sale are permitted.No person receiving this document may further distribute it, or copies of it, to any other person or publish any of its contents, in whole or in part, for any purpose.This document is provided for informational purposes only. The information contained in it is subject to updating, completion, modification and amendment. RWC Partners does not accept any liability(whether direct or indirect) arising from the reliance on or other use of the information contained in it. The information set out in this document is to the reasonable belief of RWC Partners, reliable andaccurate at the date hereof, but is subject to change without notice. In producing this document, RWC Partners may have relied on information obtained from third parties and no representation or guaranteeis made hereby with respect to the accuracy or completeness of such information. Performance figures and data analysis within this document are shown and calculated net of fees and expenses andrepresent the reinvestment of dividends and income. Market index information shown within this document is included to show relative market performance for the periods indicated and not as standards ofcomparison. Such broadly based indices are unmanaged and differ in numerous respects from the portfolio composition of RWC Funds.This document does not constitute offer or solicitation to anyone in any jurisdiction of or to acquire interests in any RWC Fund. Investment in any RWC Fund should be considered high risk. Pastperformance is not a reliable indicator of future results and may not be repeated. The value of investments in RWC Funds and the income from them may fall as well as rise and may be subject to suddenand substantial falls. Changes in rates of exchange may cause the value of such investments to fluctuate. An investor may not be able to get back the amount invested and the loss on realisation may bevery high and could result in a substantial or complete loss of the investment. In addition, an investor who realises their investment in RWC Funds after a short period may not realise the amount originallyinvested as a result of charges made on the issue and/or redemption of such investment. The value of such interests for the purposes of purchases may differ from their value for the purpose ofredemptions. No representations or warranties of any kind are intended or should be inferred with respect to the economic return from, or the tax consequences of, an investment in RWC Funds. Current taxlevels and reliefs may change. Depending on individual circumstances, this may affect investment returns. There is no guarantee that the securities referred to in this document will be held by RWC Funds inthe future. Nothing in this document constitutes advice on the merits of buying or selling a particular investment. This document does not constitute investment, legal or tax advice.This document expresses no views as to the suitability or appropriateness of the RWC Funds or any other investments described herein to the individual circumstances of any recipient. Potential investors inthe RWC Funds should refer to the latest relevant Full Prospectus, Simplified Prospectus and latest Annual and Interim Reports for more information.A United Kingdom investor may not have the right (otherwise provided under the FSA Handbook of Rules and Guidance) to cancel any agreement constituted by acceptance by or on behalf of an RWCFund of an application for interests in an RWC Fund. In addition, most if not all of the protections provided by the United Kingdom regulatory structure will not apply to investments in an RWC Fund.Shareholders in an RWC Fund will not receive compensation under the Financial Services Compensation Scheme in the United Kingdom in the event that the fund is unable or likely to be unable to satisfyclaims against it.This document is issued by RWC Partners Limited, a company registered in England and Wales (No. 03517613) with its registered address at 60 Petty France, London SW1H 9EU.42