Standard Life Investments

October 2013

This presentation is intended for investment professionals and must not be relied on by anyone else

UK Equity Income Unconstrained Fund Thomas Moore

Unconstrained approach to UK Equity Income

3 Total return focus

Dividend yield At least 110% of FTSE All Share Yield

Dividend growth Fund income pay-out outstripping market

Capital growth Capital return benefit of Unconstrained approach

TO

TA

L R

ET

UR

N

4

Thomas Moore – Background

Title

Investment Director

Professional Qualifications

BA (First Class) in Economics and Politics, Exeter University

Associate of the CFA Society of the UK

Brief Job Description

Thomas Moore is an Investment Analyst and Manager in our UK Equities team. He is responsible for managing the UK Equity

Income Unconstrained Fund and the Standard Life Equity Income Trust, managing two institutional funds (combined value of over

£400m) and analysing the Banks and Financial Services sectors.

2013 Income Unconstrained Fund breaks through £200m

2012 Income Unconstrained Fund breaks through £100m and achieves its 3rd top decile year (out of 4 under manager tenure)

2011 Assumed responsibility for Standard Life Equity Income Trust

2010 Voted no.1 Pan European buy side Speciality & Other Finance analyst in the 2010 Thomson Extel Survey (voted for by companies and sell side analysts)

2009 Assumed responsibility for the Income Unconstrained Fund. The Fund is top decile during manage tenure

2008 Voted no.1 Pan European buy side Speciality & Other Finance analyst in the 2008 Thomson Extel Survey (voted for by companies and sell side analysts)

2008 Assumed responsibility for managing a segregated institutional pension fund

2007 Assumed responsibility for two UK institutional funds, Stock Exchange Asset Fund and International Asset Fund

2006 Joined UK Equities team

2005 Appointed Investment Director

2003 Joined Emerging Markets Equity team, managing EMEA portfolios with a focus on the South African market

2002 Joined Standard Life Investments in September 2002 as Investment Analyst

1998 Joined Schroder Investment Management as Assistant Fund Manager, UK Equities. Subsequently appointed Investment Analyst, Emerging Markets

1998 Graduated with a BA in Economics and Politics from Exeter University.

5

Average years experience Average years at

Standard Life Investments

14 UK Large Company Specialists 14 11

5 UK Small Company Specialists 20 11

2 Quantitative analysts 15 12

8 Governance & Stewardship and SRI 20 9

UK Equity resource

Key Attributes

Optimum team size Coverage, co-ordination, communication, rapid

investment response

Clear incentivisation and

accountability

Rewarded on delivering client and business performance

objectives

Structured global input Active communication structure

Source: Standard Life Investments, 30 September 2013

6

Increased diversification

• Conviction-based position sizes

• Avoids heavy concentration of mega caps

Potential for superior total return

• Focus on dividend growth, not just dividend yield

• Dividend growth driving capital growth

Selective exposure to best total return opportunities

Key Benefits of Unconstrained approach

Unconstrained approach potential to diversify income and enhance return

Agenda – 2 key benefits of Unconstrained approach

Diversification Total

Return

Full coverage of FTSE 350

and benefit from expertise of

UK Smaller Companies team

Portfolio construction

Process driving repeatability

Focus on Change

idea generation

Matrix Quant Model

Income Monitoring

Risk Diversification

Stock screening

Conviction-based position sizes

increase diversification vs.

benchmark-led approach

Focus on EPS / dividend

momentum and scrutiny of

dividend policy

Stock selection

Heavy representation of

Winners List stocks in portfolio

Weekly screen of holdings and

portfolio style analysis

Iterative risk model identifies

risk clusters

Portfolio income forecasting

Best ideas

7

8

Unconstrained approach reduces concentration risk

Conviction-based approach increases portfolio diversification

Sources: Standard Life Investments & Lipper, July 2013

Diversification Total

Return

Stock number by order of position size

% p

os

itio

n s

ize

0

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7 8 9 10

UK Equity Income Sector

UK Equity Income Unconstrained

Top 10 holdings = 41.3%

Top 10 holdings = 26.5%

9

Where is the average UK Equity Income Fund invested?

Rank Asset Name

Average weight

in UK Equity

Income Funds %

UK Equity Income

Unconstrained Fund

%

% of Funds in

sector holding

stock

1 GlaxoSmithKline 7.7 0.0 88.6

2 AstraZeneca 6.3 0.0 67.1

3 BT 4.8 4.2 72.9

4 British American Tobacco 4.2 0.0 70.0

5 BAE Systems 3.8 0.0 57.1

6 Imperial Tobacco 3.2 0.0 61.4

7 Centrica 3.1 1.0 75.7

8 Reckitt Benckiser 2.9 0.0 32.9

9 Royal Dutch Shell 2.8 0.0 67.1

10 HSBC 2.5 2.0 74.3

Challenge consensus

Source: Lipper UK Equity Portfolio Analysis, 30 June 2013

Diversification Total

Return

10

Dividend growth driving share price performance

Sources: Oriel Securities, July 2013

10 year dividend growth and performance (CAGR)

-5%

0%

5%

10%

15%

20%

25%

Down Up to 5% Between 5% and 10% Between 10% and 20% More than 20%

Dividend growth (average)

Ave

rag

e p

erf

orm

an

ce

(%

pe

r a

nn

um

)

Diversification Total

Return

Income portfolios

heavily

concentrated in

bond proxies

Income portfolios have

few stocks with gearing

to growth

Flexibility to invest in the large dividend payers of tomorrow

Unconstrained income growth outstripping market income growth

11 Focus on income growth, not just yield

* Dividend paid bi annually; ex dividend dates: 30 April, 31 October, payment dates: 30 June, 28 (29) February

** Based on investment in institutional income units between October 2009 and April 2013

Source: Lipper Investment Manager, 31 August 2013

Oct 2009

Oct 2010

Oct 2011

Oct 2012

Oct 2013

Apr

2010

Apr

2011

Apr

2012

Apr

2013

Total return profile under tenure

Apr Oct

Capital return

Dividend growth

Dividend payments*

0

20

40

60

80

100

120

140

160

+5% +28% +9%

+10%

0

20

40

60

80

100

120

140

160

Datastream UK Market income growth Apr Oct

Datastream UK Market income index

Dividend growth

Dividend payments*

Diversification Total

Return

3 Years to Oct 2012 Market income growth +16%

Fund income growth +46%

Reb

as

ed

to

10

0 o

n 3

1 O

cto

ber

20

09

3½ Years to April 2013 Market income growth +22%

Fund income growth +53%

More rapid dividend growth a key benefit of unconstrained approach

12

Source: Datastream, September 2013

Increased focus on dividend growth, rather than dividend yield

70

90

110

130

150

170

190

210

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013

Div

ide

nd

per

sh

are

(re

ba

se

d t

o 1

00

in

Q3

20

11

)

easyJet

L&G

Inchcape

Imperial Tobacco

RD Shell

AstraZeneca

Winners List holdings

Mega-cap stocks not held

Diversification Total

Return

100

BUY EXAMPLE

Date of purchase 26/01/12

Purchase price 432p

Yield at point of

purchase 2.4%

Book cost yield 5.0%

2012 special

dividend 8.1%

Capital return +141.2%

Total Return +152.4%

Source: Datastream, all yields based on purchase price and returns since purchase date, 09 October 2013

Cumulative dividend yield of 15.5% on original purchase

Focus on dividend growth potential

13

easyJet

Relative share price

Consensus Dividend Forecast Year 1 (R.H Scale)

Consensus Dividend Forecast Year 2 (R.H Scale)

Diversification Total

Return

14

Mid Cap dividends more robust than Large Cap

Source: Datastream, 08 October 2013

UK dividend indices

Potential benefit from income opportunities from across the market

27 years to September 2013

Compound average annual dividend growth

FTSE 100 4.7%

FTSE 250 6.9%

Index

(as at 08 October 2013)

Index

%

Fund

%

FTSE 100 83.0 39.3

FTSE 250 14.3 47.3

FTSE Small Cap 2.7 5.8

Not in index 0.0 7.7

Diversification Total

Return

50

150

250

350

450

550

650

750

Jan

19

86

Jan

19

87

Jan

19

88

Jan

19

89

Jan

19

90

Jan

19

91

Jan

19

92

Jan

19

93

Jan

19

94

Jan

19

95

Jan

19

96

Jan

19

97

Jan

19

98

Jan

19

99

Jan

20

00

Jan

20

01

Jan

20

02

Jan

20

03

Jan

20

04

Jan

20

05

Jan

20

06

Jan

20

07

Jan

20

08

Jan

20

09

Jan

20

10

Jan

20

11

Jan

20

12

Jan

20

13

FTSE 100 FTSE 250

15

UK Equity Income Unconstrained

Oil & Gas Producers

Pharmaceuticals & Biotech

Banks

Mining

Media

Support Services

Nonlife Insuranca

Travel & Leisure

Financial Services

-15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0%

Overweight / Underweight Sectors*

Stock selection is key – conviction-based portfolio construction

* Sector Bet relative to FTSE All Share index

Source: Standard Life Investments, 08 October 2013

Top 10

Holdings %

BT 3.6

DS Smith 3.1

Legal & General 3.0

easyJet 2.5

Staffline 2.4

Rio Tinto 2.4

HSBC 2.4

Close Brothers 2.2

Tyman 2.1

Beazley 2.0

Mobile Telecommunications

Diversification Total

Return

16

Overall markets

Outperformed

peer group

39 months

out of a possible 56

Rising markets Falling markets

Outperformed

peer group

26 months

out of a possible 34

Outperformed

peer group

13 months

out of a possible 22

Outperformance is not dependent on market direction

Source: Lipper Investment Manager, 01 January 2009 to 31 August 2013

Thomas Moore appointed manager on 01 January 2009

Outperformed through changing market conditions

70% 76% 59%

17

Outlook – baton passing from valuation to earnings

• Baton set to pass from valuation re-rating to earnings momentum

• Supportive environment of accelerating economic growth and corporate earnings recovery

• Valuation re-rating has not been broad-based, creating opportunities, e.g. EM stocks, REITs and defensives

• Focus on highest-conviction ideas allows the Fund to avoid any vulnerable parts of the market

Unconstrained approach driven by stock selection, not market direction

18

Increased diversification

• Conviction-based position sizes

• Avoids heavy concentration of mega caps

Potential for superior total return

• Focus on dividend growth, not just dividend yield

• Dividend growth driving capital growth

Selective exposure to best total return opportunities

Unconstrained approach to UK Equity Income

Unconstrained approach potential to diversify income and enhance return

Agenda – 2 key benefits of Unconstrained approach

Diversification Total

Return

Appendices

20

Risk characteristics

* Standard Life Investments (Northfield) 30 September 2013

Source: Capture numbers sourced from Factset, 31 August 2013

Biggest contributors to relative risk

Overweight Underweight

Tyman Royal Dutch Shell

Staffline Group BP

DS Smith GlaxoSmithKline

International Personal Finance Vodafone

Howden Joinery AstraZeneca

UK Equity Income Unconstrained* FTSE All Share*

Predicted Beta 1.03 -

Predicted Tracking Error 4.76 -

Predicted Volatility 15.63 14.42

Unconstrained does not necessarily mean high risk

UK Equity Income Unconstrained Fund 01/01/2009 – 31/08/2013 (%)

Upside Capture 141.85

Downside Capture 92.20

Diversification Total

Return

21

Top decile performance 3 years out of 4 + YTD

Source: Morningstar, 09 October 2013

Thomas Moore appointed manager on 01 January 2009

Standard Life Investments claims compliance with the Global Investment Performance Standards (GIPS®). The fund specific data presented above is supplementary

information to the Mutual Funds UK Equity Income Unconstrained GIPS® composite report, which is enclosed in the Appendix for your reference

Top decile in IMA sector under current manager tenure

Performance against peer group and market during manager tenure

UK Equity Income Unconstrained Fund

Diversification Total

Return

263.2%

182.3%

163.4%

70

100

130

160

190

220

250

280

310

Standard Life UK Equity Income Unconstrained Inst Acc

Mstar (IMA) UK Equity Income (NX) GBP

FTSE 350 High Yield TR GBP (NX) GBP

UK Equity Income Unconstrained

Stock selection the primary driver of performance 22

* 01 January 2013 to 30 June 2013

** Since 01 January 2009

Source: Factset, gross performance, 30 June 2013

Performance attribution relative to FTSE All Share

-10.00

-5.00

--

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2009 2010 2011 2012 YTD* Tenure**

%

Stock Selection Market Cap Allocation

23

Unconstrained income growth outstripping market income growth

Focus on income growth, not just yield Diversification

Total

Return

* Dividend paid bi annually; ex dividend dates: 30 April, 31 October, payment dates: 30 June, 28 (29) February

** Based on investment in institutional income units between October 2009 and April 2013

Source: Lipper Investment Manager & Datastream, 31 August 2013

80

90

100

110

120

130

140

150

160

Oct 09 Apr 10 Oct 10 Apr 11 Oct 11 Apr 12 Oct 12 Apr 13

Fund income distribution UK equity market income

Rebased to 1

00 o

n 3

1 O

cto

ber

2009

Portfolio construction

Example of process: Inchcape (purchase July 2012)

Focus on Change

idea generation

Matrix Quant Model

Income Monitoring

Risk Diversification

Stock selection

Best ideas

Weighting in portfolio reflects

conviction levels + avoids

opportunity cost of large holdings

in low growth mega-caps

Dividend outlook underpinned by

EPS upgrades and balance

sheet + management confident

Stock screened well on Matrix, in

particular EPS revisions and

balance sheet strength

BUY-rated stock. Encouraging

management meeting in March

2012, following which stock sold

off sharply on macro concerns

Stock promoted to Winners List in

October 2012 following team

discussion

Weekly screen highlights very

high Matrix score (22) including

maximum score (4) for EPS

revisions ratio

Significant contributor to portfolio

income: +42% final DPS followed

by +42% interim DPS (declared

August 2013)

Awareness of stock’s correlation to

other stocks in the portfolio – overall

portfolio highly diversified

24

Stock example – Inchcape

Inchcape/FTSE 350 Inchcape – DPS1MN (RH Scale) Inchcape – DPS2MN (RH Scale)

Purchased, July 2012

Eurozone crisis

D

Source: Datastream, 30 September 2013

D

E

D D

E

25

Heightened risk for funds exposed to bond proxies

Income funds heavily exposed to bond-like equities – need for diversification

Source: Bloomberg & Standard Life Investments, August 2013

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.51600

1800

2000

2200

2400

2600

2800

Aug 09 Mar 10 Oct 10 May 11 Dec 11 Jul 12 Feb 13

Imperial Tobacco (LHS)

10 Year UK Government Bond Yield (RHS)

1500

1700

1900

2100

2300

2500

2700

1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50

R² = 0.72

Imperial T

obacco (

p/s

hare

)

10 Year UK Government Bond Yield

26

27

Mega cap income suffering downgrades

Source: Thomson Datastream, 08 October 2013

• Need to be selective among perceived "defensive" sectors

• Dividend downgrades reflect underlying concerns over company fundamentals

• Dividend cover becoming more stretched

Consensual view + waning earnings momentum = dangerous combination

AstraZeneca

Relative share price

Consensus Earnings Forecast Year 1 (R.H Scale) Consensus Earnings Forecast Year 2 (R.H Scale)

Relative share price

Consensus Dividend Forecast Year 1 (R.H Scale)

Consensus Dividend Forecast Year 2 (R.H Scale)

Earnings forecasts Dividend forecasts

Defensive sectors have generally performed well...

Total return, 12 months to June 2013

Source: Datastream & Oriel, 30 June 2013

Sector performance not typical of a rising market

0

5

10

15

20

25

30

35

FoodProducers

Beverages Telecoms Pharmaceuticals FoodRetailers

Utilities Tobacco

28

29

…..but have disappointed on earnings

Revisions to 2013 earnings estimates, 12 months to June 2013

Source: Datastrea & Oriel, 30 June 2013

• Deteriorating fundamentals

affecting profitability in

sectors perceived to be

defensive

• Positive FX only partially

mitigating against

fundamental headwinds

• Highlights need to be

selective and invest only

where we have conviction

Earnings downgrades provide a ceiling to share prices among defensives

-12%

-10%

-8%

-6%

-4%

-2%

0%

Beverages FoodProducers

Utilities Tobacco Telecoms FoodRetailers

Pharmaceuticals

30

Matrix Factor Performance Chart Since 1997

Source: Standard Life Investments, 07 October 2013

Equally Weighted Performance vs Equally Weighted FTSE350 Index (Ex Inv Trusts) –

Since Jan 1997

-100

-50

0

50

100

150

200

250

1m Chg in 6m MAV 1m Chg in 9m MAV Price / Sales Ratio Dividend Yield FY1

Fwd 12m PE Rolling 12m EPS Growth Revisions Ratio (EPS FY1) 3m EPS Revisions

31

David Cumming Oil & Gas Producers (Royal Dutch Shell, BP & BG), Mining (ex Diamonds & Precious Metals), Industrial Metals

Euan Stirling Aerospace & Defence, Life Insurance, Private Equity, Equity Investment Instruments

John Wilson Pharmaceuticals & Biotechnology, Oil & Gas (exc.Royal Dutch Shell, BP & BG) Services & Distribution, Oil

Equipment

Karen Robertson Gas, Water & Multiutilities, Electricity, Beverages, Tobacco

Lesley Duncan Support Services (ex Business Support Services), Household Goods (ex Reckitt), Construction & Materials

Edward Legget Industrial Transport, Industrial Engineering (inc. GKN), Electronics & Electrical Equipment, Automobile & Parts

Thomas Moore General Financials (ex Private Equity), Banks

Kiki MacDonald General Retailers (inc. Burberry), Food & Drug Retailers

Elena Fernandez Media, Technology Hardware & Equipment, Software & Computer Services

Andrew Millington Support Services (Business Support Services), Telecoms (Fixed line & Mobile)

Ian Runacres Non Life Insurance, Travel & Leisure

Henry Flockhart Chemicals, Real Estate

Abby Glennie Food Producers, Health Equipment & Services, Personal Goods, Diamonds & Precious Metals

UK Equity Team

Source: Standard Life Investments, 30 June 2013

Sector coverage (FTSE350)

32

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Investment focused learning relevant to this product:

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* See Appendix for list of launch content

Mutual Funds UK Equity Income Unconstrained

Composite Name Mutual Funds UK Equity Income Unconstrained

Creation Date 01-03-2007

Firm Standard Life Investments

Currency GBP

Report End Date 31-12-2012

Composite Group Mutual Funds

Benchmark Morningstar UT - UK Equity Income

Firm Disclosures

A complete list and description of all of the firm's composites are available from Standard Life Investments. There are no minimum asset levels set below which portfolios are not included in a composite. All performance

calculations and returns have been calculated gross of management fees. All returns are presented on an all-inclusive basis and as such all capital gains interest income and withholding taxes have been taken into account in

market valuations and returns. All indices are on a gross of tax basis apart from FTSE UK indices which are net of Withholding Tax. There are no Non-Fee-Paying portfolios included in any composite. The Daily True Time

Weighted Rate of Return methodology has been used from 2001 apart from unitised Cash Property GARS and Myfolio products where NAV performance is used. Prior to this NAV performance was used for all products.

Additional information regarding policies for calculating and reporting returns is available upon request. Dispersion is calculated using high/low difference. Standard Life Investments 'The Firm' consists of all fee-paying funds

managed by Standard Life Investments and its Subsidiaries which include Standard Life Investments (Mutual Funds) Limited SLTM Limited Standard Life Investments (Corporate Funds) Limited Standard Life Investments

(USA) Limited and Standard Life Investments (Asia) Limited. Past performance results from Standard Life Investments Limited UK Firm and Standard Life Investments Limited Irish Firm have been linked to form the

performance record of the new firm Standard Life Investments. The new firm was created on 01/01/2008. Standard Life Investments claims compliance with the Global Investment Performance Standards (GIPS®) and has

prepared and presented this report in compliance with the GIPS standards. Standard Life Investments has been independently verified by Pricewaterhouse Coopers for the periods 1996 to 2012. The verification report is

available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are

designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation

Composite Disclosures

Derivatives may be used for efficient portfolio management purposes

Includes part period return for 2007 from 01/03

The composite includes funds that invest in UK high yielding equities or equity type investments with no restrictions regarding index weightings, sector constraints or company size. The benchmark is Morningstar UT Equity

Income.

The standard annual fee applicable to this composite is 0.80%, but individual fees are negotiated on an account basis

Anlzd Return

(Composite)

Anlzd Return

(Benchmark)

3 Year Anzld StdDev

(Composite)

3 Year Anzld StdDev

(Benchmark) Dispersion Market Value Total Firm Assets

% of Firm

Assets

Number of

Portfolios

Dec 2003 NA NA NA NA NA NA NA NA NA

Dec 2004 NA NA NA NA NA NA NA NA NA

Dec 2005 NA NA NA NA NA NA NA NA NA

Dec 2006 NA NA NA NA NA NA NA NA NA

Dec 2007 -11.52 -2.20 NA NA NA 38,694,783 137,224,600,000 0.03 1

Dec 2008 -43.27 -29.77 NA NA NA 13,092,899 117,976,300,000 0.01 1

Dec 2009 44.16 23.41 NA NA NA 19,599,658 127,011,600,000 0.02 1

Dec 2010 25.83 13.94 26.63 19.10 NA 26,094,543 131,730,800,000 0.02 1

Dec 2011 -9.44 -3.04 19.49 14.92 NA 71,829,227 123,331,600,000 0.06 1

Dec 2012 25.10 14.15 15.54 11.89 NA 105,171,530 133,922,900,000 0.08 1

33

34

The information shown relates to the past. Past performance is not a guide to the future. The value of investment can go down as well as up.

For full details of the fund's objective, policy, investment and borrowing powers and details of the risks investors need to be aware of please refer to the full prospectus

which can be found on www.standardlifeinvestments.com

Any data contained herein which is attributed to a third party ("Third Party Data") is the property of (a) third party supplier(s) (the “Owner”) and is licensed for use by

Standard Life**. Third Party Data may not be copied or distributed. Third Party Data is provided “as is” and is not warranted to be accurate, complete or timely. To the extent

permitted by applicable law, none of the Owner, Standard Life** or any other third party (including any third party involved in providing and/or compiling Third Party Data)

shall have any liability for Third Party Data or for any use made of Third Party Data. Past performance is no guarantee of future results. Neither the Owner nor any other third

party sponsors, endorses or promotes the fund or product to which Third Party Data relates.

**Standard Life means the relevant member of the Standard Life group, being Standard Life plc together with its subsidiaries, subsidiary undertakings and associated

companies (whether direct or indirect) from time to time."

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