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  • DRAFT: This SICAV is awaiting approval form the CSSF
  • Transcript

    • 1. October 2011 Too big to fail? Inside the battle to save the income investor
    • 2. Introduction to RWC Partners Equity Income & Value Funds <ul><li>Nick Purves, Ian Lance and John Teahan launched in October 2010 </li></ul><ul><li>Current AUM for the team is approximately £1bn </li></ul><ul><li>2 Fund offerings </li></ul><ul><ul><li>RWC Enhanced Income – 7% yield UK Equity Income fund with call writing overlay </li></ul></ul><ul><ul><li>RWC Income Opportunities – UK centric equity income fund with added flexibility </li></ul></ul>
    • 3. Issues in the UK Equity Income Sector <ul><li>This creates a number of problems for investors </li></ul><ul><li>Size reduces investable universe </li></ul><ul><li>Yield restriction forces exposure to big dividend payers and creates commonality between the funds. These stocks are not always going to be under valued </li></ul><ul><li>This can lead to large position sizes in the big dividend payers which increases stock specific risk e.g. BP </li></ul><ul><li>Size also tends to lead to over diversification (80-100 stocks) </li></ul><ul><li>RWC Income funds specifically designed to mitigate these problems </li></ul><ul><li>Funds sizes will always reflect a prudent approach to capacity and risk management – i.e. they won’t grow too big </li></ul><ul><li>Overseas flexibility and covered calls allow income targets to be reached without taking additional risk </li></ul><ul><li>We have a flat holding structure of 3-4% position sizes – investment views not the index define position sizing </li></ul><ul><li>We have a focused fund of 25 stocks </li></ul><ul><li>These funds should absolutely be considered along side traditional UK equity income funds </li></ul><ul><li>Key Features of the Equity Income Sector </li></ul><ul><li>Large sector (£54bn) dominated by small number of large funds </li></ul><ul><ul><li>Over half of the sectors assets are managed by four firms </li></ul></ul><ul><li>FTSE is a restrictive Index </li></ul><ul><ul><li>Three sectors represent 50% </li></ul></ul><ul><ul><li>Seven stocks paying out over 50% of income available </li></ul></ul><ul><li>IMA Sector limitations </li></ul><ul><ul><li>80% in UK equities and </li></ul></ul><ul><ul><li>Yield 110% of FTSE All Share Index </li></ul></ul>
    • 4. Why Now is the Right Time to Consider this Approach
    • 5. Monetary Policy Designed to Boost Asset Prices.. <ul><li>Interest rates have been below average for the past decade and are now at emergency levels </li></ul><ul><li>At some point, they are likely to normalise </li></ul><ul><li>Cash is not attractive but low rates have driven up nearly all other asset classes </li></ul>“ Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending” Ben Bernanke, 4 th Nov 2010 Source: Bloomberg
    • 6. Equities at High Valuation Source: Robert Shiller, 2011 Historically adjusted price to earnings ratio of S&P 500 index
    • 7. Current Valuation implies Below Average Future Returns Source: Robert Shiller, Morgan Stanley 10 - 15 5 - 10 20 - 25 25 - 30 15 - 20 10-year annualised total returns by starting G&D PE
    • 8. Bonds Yields are at 220 Year Lows! <ul><li>Owning bonds now only makes sense if you believe in deflation </li></ul><ul><li>Examples of prolonged deflation are rare (US 1930’s, Japan 1990’s) especially after the ending of the gold standard </li></ul><ul><li>Of 24 largest economies, only Switzerland has averaged inflation below 3% since 1900 </li></ul><ul><li>Much more typical pattern is banking crisis  default  inflation (12 since 1977) </li></ul>
    • 9. Are Bonds Less Risky or Just Less Volatile than Equities? Source: Credit Suisse Global Investment Returns Yearbook 2011 <ul><li>Bonds are less ‘ volatile ’ than equities but produce lower returns in the long run </li></ul><ul><li>But ‘ risk ’ is a function of starting valuation </li></ul><ul><li>A combination of low starting yield and rising inflation is disastrous for bonds (but good for governments to inflate away their debt) </li></ul><ul><li>A buyer of UK bonds in 1946 lost 73% of value in real terms by 1974 and did not break even until 1993 </li></ul><ul><li>Is post WW2 Government induced financial repression repeating itself today? </li></ul>Standard Deviation of Returns 1900 – 2010 UK US Equities 20.0% 20.3% Bonds 13.7% 10.2%
    • 10. End of the Debt Super Cycle? <ul><li>For thirty years, consumers, corporates and governments lived beyond their means – the debt supercycle </li></ul><ul><li>This had profound implications for all asset prices (equity, bonds, houses etc) </li></ul><ul><li>The next decade is likely to be a period of deleveraging </li></ul><ul><li>This will likely mean lower growth, higher unemployment and greater volatility </li></ul><ul><li>In an environment of deleveraging and low growth, compounding income could once again be a superior strategy </li></ul>US Total Debt as % of GDP Source:, Federal Resrve 2010
    • 11. The Importance of Dividends Source: GMO, August 2010, RWC Estimates
    • 12. Valuation Matters: Quality is important but not at any price Source: Empirical Research Partners 1 Large cap stocks. 2 Std. Error of Net Operating Earnings Growth over five years 3 Large cap stocks (ex financials & utilities) annualised rates of return 1965 – August 2010 Relative Returns 1 for the One Year Holding Periods 1955 – May 2010 Quality factors within cheapest Price-to-Book Quintile Valuation still matters Buying ‘good’ companies that are fully priced does not add value <ul><li>Within the subset of cheap companies, differentiating by quality improves returns </li></ul>Factor Return Spread Best & Worst Quintile Price-to-Book Value 4.2% Net Debt-to-Capital 1.3% ROIC 0.4% Earnings Stability 2 0.0% Annualised Nominal Monthly Returns 3 Quality factor Quintile 1 – 4 Average Worst Quintile Difference ROIC 15.2% 8.2% 7.0% Net Debt-to-Capital 14.6% 11.3% 3.3% Earnings Stability 2 15.1% 9.6% 5.5%
    • 13. Source: Nomura Strategy research, Worldscope, FTSE , ExShare Large Cap High Quality Equities is One of the Few Areas to Become Cheaper Price to Book of European high ROE/ high FCF ROE stocks Price to Book of US high ROE/ high FCF ROE stocks <ul><li>Why? </li></ul><ul><li>De rating from over valuation in 2000 </li></ul><ul><li>Baby boomers retiring and selling equities </li></ul><ul><li>Assets shift from equities to private equity, alternatives, EMD and High Yield, commodities </li></ul><ul><li>Within equities, shift to small cap and emerging markets </li></ul>
    • 14. Johnson and Johnson <ul><li>Since 2000, Earnings per share +186%, Dividends per share +211%, Share price +13% </li></ul><ul><li>Price/earnings ratio at lowest level for 20 years </li></ul>Source: Bloomberg, company report and accounts
    • 15. Opportunity in Lowly Valued, High Quality, Income Paying Equities Source: Bloomberg, Consensus Estimates, August 2011. 10 year corporate bond yields where available. + = Company Free Cash Flow Yield Dividend Yield Potential Dividend Growth Corporate Bond Yield AstraZeneca 13% 5.3% 8% 2.8% GlaxoSmithKline 11% 5.0% 6% 3.5% Vodafone 10% 6.0% 4% 4.1% RSA Insurance 13% 8.0% 5% N/A Legal and General 11% 4.7% 6% N/A Next 11% 3.8% 7% 5.3% Deutsche Telekom 15% 7.2% 8% 4.5% K.P.N. 15% 8.5% 7% 4.4% Merck 10% 4.2% 6% 3.7% Pfizer 10% 3.8% 6% 3.8% Microsoft 11% 2.4% 9% 3.5% Johnson and Johnson 8% 3.4% 5% 3.5% 10 Year Gilt 2.3% US 10 Year Treasury 1.8%
    • 16. Bond Equity Conundrum <ul><li>In corporate debt, yield increases as credit quality reduces </li></ul><ul><li>In equities, highest quality companies currently have highest dividend yield </li></ul>Source: Deutsche Bank, Bloomberg
    • 17. Source: RWC Partners, 2010, company report and accounts Growth Rates for BAT 2001 to 2010 Cash Generation (not Sales Growth) Drives Value Creation 1% p.a. volume growth 17% p.a. increase in share price <ul><li>Strong cash generation, good use of cash and low starting valuation lead to attractive total returns for shareholders </li></ul><ul><li>This is now understood by investors and fully reflected in the share price </li></ul>
    • 18. Source: Morgan Stanley estimates at February 2011 Utility Companies Fail to Meet Our Criteria <ul><ul><li>Regulated to only make returns in line with cost of capital </li></ul></ul><ul><ul><li>Poor cash generation </li></ul></ul><ul><ul><li>Highly levered balance sheet </li></ul></ul><ul><ul><li>Dividends not covered by free cash flow </li></ul></ul><ul><ul><li>Example: National Grid </li></ul></ul>Year 2010 2011 2012 2013 2014 2015 Cash from operations 3246 3265 3225 3989 4203 4761 Capital expenditure -3007 -3714 -3991 -4427 -4641 -5047 Free cash flow 239 -449 -766 -438 -438 -286 Dividend paid -688 -1229 -1378 -1455 -1537 -1623 Change in net debt -449 -1678 -2144 -1893 -1975 -1909 Net debt (cash) 22139 23817 25961 27854 29829 31738
    • 19. But what’s the catalyst? Company (Market Cap) Previous Capital Returns Recent Asset Disposal Future Capital Return Deutsche Telekom (€48bn) Attempted sale of T Mobile USA to AT&T for $39bn $15bn debt reduction €5bn share re-purchase. Expected €3.7bn dividend and €400m share re-purchase on ongoing basis KPN (€16bn) In last 7 years, have paid €6.8bn in dividends and retired €9bn of equity i.e. nearly 100% of market cap Total share holder return to be €2.2bn p.a. (€1.2 dividend, €1bn share re-purchase) or 14% of market cap Vodafone (£86bn) Re-purchased £20bn of equity and paid out £20bn in dividends in last six years Sale of 44% stake in SFR to Vivendi for £6.8bn £4bn of SFR proceeds used for share re-purchase. Dividend of £4.8bn likely to rise to £7.6bn when Verizon Wireless starts paying a dividend Pfizer ($165bn) Sale of Capsugel to KKR for $2.4bn In excess of $5bn share re-purchase during 2011. Exploring sales of non-core businesses with revenues of $10bn AstraZeneca ($73bn) Have re-purchased $14bn of equity and paid $17bn in dividends in last 7 years Will return 50% of post-tax, pre R&D cash (approx $6bn p.a) in dividends and share re-purchases Next (£4bn) Has bought back £2.3bn of shares and paid £1.1bn dividends since 2000 In the next 5 years, Next are forecast to pay £800m in dividends and retire £1.2bn in equity (50% of market cap)
    • 20. Source: RWC, September,2011. Positions less than 2% excluded Current Portfolio Breakdown – RWC Income Opportunities Fund Swaptions Cash Telecoms Deutsche Telecom 4% KPN 4% Swisscom 3% Vodafone 5% Consumer Services Next 4% Wal-Mart 2% Pharmaceuticals Astra Zeneca 5% Eli Lilly 4% GlaxoSmithKline 5% Johnson and Johnson 3% Merck & Co 4% Pfizer 5% Energy BP 4% Insurance Legal and General 4% Old Mutual 3% RSA Insurance 4% Standard Life 4% Other Financials Technology Hewlett-Packard 3% Logica 3% Microsoft 4%
    • 21. RWC Equity Income and Value - summary <ul><li>Issues with UK Equity Income sector </li></ul><ul><ul><li>Large sector dominated by small number of firms </li></ul></ul><ul><ul><li>UK index now highly concentrated </li></ul></ul><ul><ul><li>IMA sector limitations </li></ul></ul><ul><li>RWC funds offer long term benefits of income investing but without the constraints </li></ul><ul><li>Monetary policy led to high valuations </li></ul><ul><li>Bond yields offer no protection from higher inflation </li></ul><ul><li>Significant opportunities for good absolute returns now exist in large cap, high quality equities </li></ul>
    • 22. Appendix
    • 23. Investment Process: businesses with a historically attractive ROE <ul><li>For high return businesses intrinsic value grows over time; low return businesses see intrinsic value decline </li></ul><ul><li>Returns tend to mean revert – but around different levels </li></ul><ul><li>We look for companies where profits mean revert to a high level but where this is not factored into share prices </li></ul>Source: CSFB Holt / Bloomberg CFROI – Cash Flow Return on Investment
    • 24. Investment Process: stocks with low valuations based on sustainable cash flows Microsoft AstraZeneca Source: CSFB Holt, September 2011 <ul><li>Healthcare businesses historically make mid-teens real cash returns </li></ul><ul><li>Investors worried about patent challenges and US healthcare reform are pricing for mid single digit returns </li></ul><ul><li>One of the strongest technology franchises in the world with amongst the highest returns in the sector </li></ul><ul><li>Now priced to make a return below cost of capital </li></ul>AstraZeneca – good business where market is sceptical about sustainability of returns Microsoft – share price assumes returns fade to below below cost of capital
    • 25. Rio Tinto British American Tobacco Source: CSFB Holt, November 2010 <ul><li>Tobacco returns have risen significantly in the last decade… </li></ul><ul><li>But are now priced to remain at the all time high level for 10 years </li></ul><ul><li>Commodity businesses such as mining typically make returns below cost of capital </li></ul><ul><li>Recent benefit from price rise of metals is being extrapolated into the future </li></ul>Investment Process: both price and quality matter BAT – a good business where future high profitability is reflected in the share price hence we have no exposure to the tobacco sector RIO – historically a poor business where the market is now willing to believe the future will be different from the past. We have no exposure to the mining sector
    • 26. Investment Performance (net of fees) Source: RWC Partners / Bloomberg. Data is shown for the period 29/12/2000 to 31/08/2011 net of fees. Equity index used is FTSE All share (TR). Note that Nick Purves has been responsible for the SJP Equity Income Fund since 29/12/2000 during that time he has been employed by both Schroders and RWC Partners 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 SJP Equity Income vs FTSE Allshare Data to end August 2011 6 months % 12 months % 3 years % 10 years % SJP Equity Income Fund % -11.95 -2.32 11.37 74.66 FTSE All Share Index % -9.14 7.16 7.52 49.59
    • 27. Investment Performance Source: Lipper Hindsight, bid to bid, net income reinvested, as at 31/03/2010 * November 2005 1 year % 3 years % 5 years % Schroder Income Fund +62.4 +10.4 +51.7 FTSE All Share +52.3 -0.7 +41.3 Sector average +45.9 -10.7 +24.5 Rank 7/83 1/73 1/63 Quartile 1 1 1 1 year % 3 years % Since Launch* % Schroder Income Maximiser Fund +54.3 +9.2 +32.1 FTSE All Share +52.3 -0.7 +25.3 Sector Average +45.9 -10.7 +14.5 Rank 14/83 3/73 6/63 Quartile 1 1 1
    • 28. Equity Income and Value: portfolio management team <ul><li>Nick Purves – portfolio manager </li></ul><ul><li>Joined RWC Partners in August 2010 to launch specialist value and income franchise </li></ul><ul><li>16 years at Schroders – senior portfolio manager </li></ul><ul><ul><li>Manager of Schroder Income Fund since 2003 and Schroder Income Maximiser Fund since launch in 2005 </li></ul></ul><ul><ul><li>Schroder Income Fund ranked 1 st (out of 57) in its sector during period under management </li></ul></ul><ul><ul><li>Schroder Income Fund: Morningstar five star rated, OBSR AA rated, Winner of Moneywise fund awards 2009 UK Equity Income and Equity Income and Growth </li></ul></ul><ul><ul><li>Schroder Income Maximiser: Morningstar five star rated, OBSR A rated, Winner of Lipper Fund Awards  2010 UK Equity Income, Winner of Trustnet 2009 UK Equity Income </li></ul></ul><ul><ul><li>Manager of St James’s Place Equity Income Fund since 2001 </li></ul></ul><ul><ul><li>UK Institutional Specialist Value Fund Manager </li></ul></ul><ul><ul><li>Total of £5bn under management </li></ul></ul><ul><li>Qualified as Chartered Accountant in 1993 with KPMG </li></ul><ul><li>Graduated from Bristol University in 1989 </li></ul>
    • 29. Equity Income and Value: portfolio management team <ul><li>Ian Lance – portfolio manager </li></ul><ul><li>Joined RWC Partners in August 2010 to launch specialist value and income franchise </li></ul><ul><li>22 years experience </li></ul><ul><li>Joined Schroders in 2007 </li></ul><ul><ul><li>Manager of Schroder Income Fund and Schroder Income Maximiser Fund </li></ul></ul><ul><ul><li>Schroder Income Fund ranked first in the sector during period managed </li></ul></ul><ul><ul><li>Schroder Income Fund: Morningstar five star rated, OBSR AA rated, Winner of Moneywise fund awards 2009 UK Equity Income and Equity Income and Growth </li></ul></ul><ul><ul><li>Schroder Income Maximiser: Morningstar five star rated, OBSR A rated, Winner of Lipper Fund Awards  2010 UK Equity Income, Winner of Trustnet 2009 UK Equity Income </li></ul></ul><ul><ul><li>UK Institutional Specialist Value Fund Manager </li></ul></ul><ul><ul><li>£5bn under management </li></ul></ul><ul><li>Previously Head of European Equities and Director of Research at Citigroup Asset Management and Head of Global Research at Gartmore </li></ul><ul><li>Graduated from Loughborough University in 1988 </li></ul>
    • 30. Equity Income and Value: portfolio management team <ul><li>John Teahan – portfolio manager </li></ul><ul><li>Joined RWC Partners in September 2010 </li></ul><ul><li>Joined Schroders in 2003 </li></ul><ul><ul><li>Employed as Fund Manager managing structured investment funds in the Multi Asset and Structured Investments department </li></ul></ul><ul><ul><li>Specialized in trading and managing derivative securities for a range of structured funds </li></ul></ul><ul><ul><li>Co-managed the Schroder Income Maximiser from launch in 2005 to May 2009 </li></ul></ul><ul><ul><li>Co-managed the Schroder European Dividend Maximiser and Schroder Global Dividend Maximiser funds </li></ul></ul><ul><li>Previously worked as a performance and risk analyst for Bank of Ireland Asset Management UK </li></ul><ul><li>Investment career commenced in 2000 </li></ul><ul><ul><li>Chartered Financial Analyst (CFA) Charterholder. Member of UK Society of Investment Professionals (UKSIP). </li></ul></ul><ul><li>Graduated from Trinity College Dublin with a BA (Hons.) Economics and Politics in 2000, attained MA from Trinity College in 2009 </li></ul>
    • 31. Equity Income and Value Funds RWC Income Opportunities RWC Enhanced Income Launch date 30 th September 2010 13 th October 2010 Currency GBP GBP Description A UK centric, diversified Equity Income portfolio A UK Equity Income portfolio with a covered call overlay aiming for a steady 7% p.a. yield Objectives To maximise total return whilst providing an attractive absolute dividend yield. To reduce volatility through increased flexibility to invest outside UK equities To provide a very attractive dividend yield and an element of capital appreciation over time Reference Index FTSE Allshare FTSE Allshare Target Yield At least 110% of the FTSE Allshare A stable 7% per annum Style Intrinsic Value Intrinsic Value Composition of Fund UK Equities Cash Overseas equities Other (corporate bonds) More than 50% 0% - 15% 20% - 45% 0% - 10% UK Equities Cash Overseas equities Other (corporate bonds) More than 80% 0% - 15% 0% - 20% 0% – 10% Covered Call Writing Rarely but opportunistically Usually >90% of Equity portfolio Distribution Frequency Quarterly Quarterly Typical number of stocks 25-50 25-50 Sector Exposure Maximum 30%, no minimum Maximum 30%, no minimum Stock Exposure Maximum 10% of fund in a single stock Maximum 10% of fund in a single stock Currency Exposure Non-GBP investments typically hedged back to GBP Non-GBP investments not typically hedged back to GBP
    • 32. <ul><li>This 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 by the 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”). </li></ul><ul><li>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. </li></ul><ul><li>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 not intended for distribution to and should not be relied on by any person who would qualify as a Retail Client. </li></ul><ul><li>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”), all other 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 is issued 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 financial promotions relating to unregulated collective investment schemes by virtue of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001, as amended (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 in unregulated collective investment schemes; and (iii) high net worth bodies corporate, partnerships, unincorporated associations, trusts, etc. falling within Article 22 of the Order. Any unregulated collective investment schemes described herein are available only to such persons, and persons of any other description may not rely on the information in this document. </li></ul><ul><li>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 or solicitation 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 in jurisdictions where their promotion and sale are permitted. </li></ul><ul><li>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. </li></ul><ul><li>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 and accurate 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 guarantee is 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 and represent 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 of comparison. Such broadly based indices are unmanaged and differ in numerous respects from the portfolio composition of RWC Funds. </li></ul><ul><li>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. Past performance 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 sudden and 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 be very 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 originally invested 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 of redemptions. 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 tax levels 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 in the 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. </li></ul><ul><li>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 in the RWC Funds should refer to the latest relevant Full Prospectus, Simplified Prospectus and latest Annual and Interim Reports for more information. </li></ul><ul><li>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 RWC Fund 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 satisfy claims against it. </li></ul><ul><li>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. </li></ul>

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