September 2018
Aberdeen Standard
Investments
For professional investors and financial advisors only – not for use by retail investors
Aberdeen Standard Investments is a brand of the investment businesses of Aberdeen Asset Management and Standard Life Investments.
1
• One of the largest investment houses globally
• Combined assets under management of €648.5 billion
• Geographically diverse – 50 office locations globally with investment
management in 24 offices
• Highly diversified business – by revenue, asset class, client and geography
• Aberdeen Standard Investments will offer a comprehensive range of
developed and emerging market equities and fixed income, multi-asset, real
estate and alternatives solutions
• Asset management is our business
• Aberdeen Standard Investments is a brand of the investment businesses of
Aberdeen Asset Management and Standard Life Investments
About Aberdeen Standard Investments
Total AuM €648.5 billion
Figures may appear not to add due to rounding. An exchange rate of £1:€1.12654 as at 31
December 2017 has been used. Source: Aberdeen Standard Investments, 31 December 2017
Equities27%
Fixed Income25%Multi-Asset
16%
Private Markets and Alternatives
4%
Real Estate7%
Quantitative12%
Cash/Liquidity9%
Macro Overview
3
Global Markets Performance YTD
Source: Financial Express Analytics, from 31 December 2017 to 31 August 2018, in EUR
4
The House View
The prospect of a trade war remains at the forefront of investors, and policymakers, minds
Investors are also concerned about global economic moderation, tighter monetary conditions, and
volatile politics – emerging markets are a particular area of sensitivity
We expect further progress in global equity markets driven by strong corporate profits reviving
confidence
Portfolios are looking for growth and diversification opportunities alongside the need for income in a
world of low yields
Focus on change
5
Monetary policy is changing slowly
The Federal Reserve and ECB plan to ‘taper’ from 2018
Source: National sources, Datastream, Aberdeen Standard Investments (as of Q2 2018)
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
US $ (billions)
European Central Bank Bank of Japan Federal Reserve Bank of England Total
Rolling 12 month change in central bank balance sheets, US $ converted at PPP exchange rates:
6
US growth outlook still favourable, supportive for earnings
Source: Datastream, 06 August 2018
EPS Growth Estimate for 2018
Source: Bloomberg, 31 July 2018
US GDP revised higher
After a Q1, strength in Q2 will continue until year end
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3
Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18
%
US GDP Growth Forecast
0
5
10
15
20
25
Jun-17 Jun-18
%
S&P500 MSCI World
7
Investment Outlook
Global growth is supported
Overweight US, Europe, Japanese and Emerging Market equities
Underweight UK equities
Real assets with growth and yield suit this cycle
Attractive EM local currency sovereign bonds
Narrow corporate spreads – underweight investment grade debt
Short selected DM governments and looking at diversifiers
Underweight UK ILG, Core European and Japanese government debt
Overweight US TIPS & the Yen as diversifiers
Seeking benefits from corporate cash flow while monitoring spread volatility
8
Outlook favours diversification
Asset Class
Diversification
Enhanced
Diversification
Five year return and risk outlook
Source: Aberdeen Standard Investments, August 2018. Expected return is not an indication of future results. Returns are EUR hedged other than EM Debt Local.
Past performance is not a guide to future resultsAberdeen Standard Investments is a brand of the investment businesses of Aberdeen Asset Management and Standard Life Investments
Diversified Income
Fund
10
• The Standard Life Diversified Income Fund offers:
• Genuine diversification across a very broad range of asset
classes
• Managed by an experienced team drawing on a wealth of
resources across Aberdeen Standard Investments
• This gives several key benefits for investors:
• A targeted 4.5% yield
• …delivered with significantly lower volatility than equity
markets
• …from a range of tangible asset classes that investors can
understand, delivering income in a very transparent and
reliable way
Overview
Source: Aberdeen Standard Investments, 31 December 2017
11
Historically traditional asset classes have delivered…
Source: Aberdeen Standard Investments. Performance shown in USD terms. Equity represented by a blend of MSCI World Equity; Bonds by Citigroup WGBI USD Hedged; and the 50/50 portfolio a
50% equity, 50% bond blend monthly rebalanced. Data to 30 June 2018
Past performance is not a guide to future results
30 year total return index
0.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
7000.00
8000.00
9000.00
Equities (7.2%pa) Bonds (6.0%pa) 50/50 blend (6.9%pa)
12
…but face a challenging outlook
* As at February 2018 in EUR. Source: Aberdeen Standard Investments, June 2018
Expensive equity valuations and increasing risks
* As at February 2018 in EUR. Source: Aberdeen Standard Investments, June 2018
Structurally lower growth and bond yields
• Most developed economies are facing structurally lower growth due to
weakening demographics, substantial debt burdens and increasing
protectionism
• Given extremely low bond yields our 5-year expected return for
government bonds is 0.6% p.a.*
• Equity markets have had a strong run since the financial crisis but now
valuations are stretched. Our 5-year expected return is now 2.4% p.a.*
• Near-term risks include monetary tightening, trade wars and slowdown
in Chinese growth
Shiller CAPE (S&P 500 Price/10Y average earnings)
-2
0
2
4
6
8
10
12
14
France Germany Japan United Kingdom United States
0
5
10
15
20
25
30
35
40
45
50
18811889 18971906 1914 19221931 1939 19471956 19641972 1981 19891997 2006 2014
CAPE Current
13
• Our core philosophy:
• There are a number of asset classes with attractive return prospects but different return drivers
• Combining these in a diversified portfolio leads to that attractive return coming through in a more consistent fashion than any
one asset class in isolation
• The Diversified Income Fund provides this genuine asset class diversification in a daily dealt portfolio
• Key benefits of our approach:
• Attractive and reliable income stream
• Less susceptible to equity downturns
• Not excessively reliant on market timing or trading strategies
• Simple and transparent
So how can investors achieve reliable income in this more challenging environment?
Asset class
diversification
14
A rich opportunity set that can reduce reliance on equities and bonds
Capturing the breadth of opportunities
Source: Aberdeen Standard Investments
Gold
Government Bonds
Tail risk hedging
Investment Grade Credit
Absolute Return
Insurance Linked
Managed Futures
Alternative Risk Premia
High Yield and Loans
Emerging Market Debt
Asset Backed
Securities
Alternative Financing
Property
Infrastructure
Commodities
Developed Equity
Emerging Market Equity
Private Equity
Diversifying assets Low returnEquity driven
15
Leading global asset management company
• Insights from multiple offices across the world
Breadth of capability
• Expertise across a very broad range of asset classes
Diversified Assets strength
• A highly experienced team managing diversified portfolios
Harnessing the breadth and depth of resource
Providing a substantial advantage in managing genuinely diversified portfolios
Diversified
Assets
Equities
Fixed Income
Property
Quantitative
Strategies
Private Equity
Hedge Funds
Infrastructure
Real Assets
16
• Listed alternatives provide an ideal route to accessing illiquid
asset classes in a liquid form
• Similar to REITs but with a range of different underlying
alternative assets rather than just property
• The market has grown markedly over the past 10 years with
increasing focus on genuine diversifiers:
• £15bn in Infrastructure (Social, Renewables, Core)
• £10bn in specialist credit including Loans, ABS, Aircraft
Leasing, Marketplace Lending and Healthcare Royalties
• £4bn in other areas such as Litigation Finance and Insurance
Linked Securities
• Experience investing in the sector helps to influence key terms
of new offerings – fees, discount control management, etc.
Use of listed alternatives helps achieve fuller diversification
Source: Numis, June 2018
Past performance is not a guide to future results
-
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
Jan 07 Jan 09 Jan 11 Jan 13 Jan 15 Jan 17
Market Cap £m
Infrastructure Specialist Debt Property Private Equity Hedge
Growth of the listed alternative market
17
Investment overview
• Invests in operational solar and onshore wind farms
Return
• Target 7-9% return, including a yield of 5 - 6%
Risk
• Some exposure to power prices but dampened by stable revenues from
subsidies
• No construction risk or economic exposure
Investment route
• Held in the Aberdeen Diversified Growth Fund since inception in July 2013
• Held alongside other renewables funds such as John Laing Environmental and
Next Energy Solar
Infrastructure: The Renewables Infrastructure Group
Source: The Renewables Infrastructure Group
Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation.
Asset exposures – The Renewables Infrastructure Group
18
Investment overview
• UK social housing sector aims to provide cheaper rental housing to low
income groups
• A severe shortage of capital but reliable long-dated, inflation-linked,
government-sourced revenues makes this an attractive investment
opportunity
Returns
• Target returns in excess of 8% p.a., including a 5% yield growing with
inflation
Risk
• Defensive profile given inflation linkage and government support
Investment route
• Three listed investment companies have been established and are the
most natural holders of these long-term assets
• Social good of providing more affordable housing for the disabled, elderly
and lower income groups
Property: Social housing
Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation.
Source: Triple Point Social Housing REIT
19
Investment overview
• Diversified portfolio of bonds issued by over 15 emerging market
governments
Returns
• Attractive yield of 7.6% with wide spread over developed markets
Risk
• The asset class has delivered (and we believe will continue to deliver)
significantly lower volatility and downside risk than most investors think:
• Historic volatility of 7.3% (versus 12.8% for equities)
• Worst 12-month return -8.0% (versus -42.5% for equities)
Investment route
• Active portfolio managed by Aberdeen’s EM debt team comprising 37
investment professionals
Emerging Market Local Currency Bonds
Source: Aberdeen Standard Investments, Bloomberg, June 18. EM Local index is JPM GBI-EM Global Diversified. Returns on index are expressed relative to currency funding basket used within DMA
portfolios: equally weighted across AUD, NZD, CAD, NOK, SEK and GBP. Developed bond index is JPM GBI Global Index. The JPM GBI-EM Global Diversified index is constrained to a maximum weight of
10% to any one country and comprises 16 countries including Brazil, Colombia, Hungary, Indonesia, Malaysia, Mexico, Poland, Russia, South Africa, Thailand and Turkey
Emerging Market Bonds Exposure
Rolling 12-month returns for EM local and equities
Mexico, 3.5%
Brazil, 2.8%
Russia, 2.7%
Indonesia, 2.7%
South Africa, 2.6%
India, 2.1%
Colombia, 1.6%
Malaysia, 1.6%
Poland, 1.6%
Turkey, 1.5%
Other, 4.5%
20
Listed Equity17.9%
Property5.6%
Infrastructure16.2%
Loans1.0%
Asset-Backed Securities10.5%
Emerging Market Bonds27.1%
Absolute Return5.6%
Insurance Linked4.6%
Special Opportunities8.5%
Cash3.0%
A genuinely diversified portfolio
Source: Aberdeen Standard Investments, 30 June 2018. Figures may not add up due to rounding
Aberdeen Global Diversified Income Fund
Unconstrained flexible asset
allocationSimple and accessibleGenuine diversification
21
Income from diversified sources and comfortably in excess of target
Source: Aberdeen Standard Investments, 30 June 2018. Expected return is not an indication of future results.
Asset Class Fund Allocation (%) Prospective Yield^^ (%) Contribution (%)
Listed equity 17.9% 3.0% 0.5%
Property 5.6% 4.3% 0.2%
Infrastructure 16.2% 5.0% 0.8%
Loans 1.0% 4.6% 0.1%
Asset backed securities 10.5% 4.8% 0.5%
Emerging market bonds 27.1% 7.6% 2.1%
Absolute return 5.6% 4.8% 0.3%
Insurance linked 4.6% 6.0% 0.3%
Special opportunities 8.5% 5.7% 0.5%
Cash 3.0% 0.0% 0.0%
Total 100% 5.2% 5.2%
22
Flexible asset allocation reducing reliance on traditional asset classes
Historic data relates to the Diversified Growth Strategy (UK range)
Source: Aberdeen Standard Investments, 30 June 2018
Past performance is not a guide to future results
Asset Allocation – Aberdeen Diversified Growth Fund
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
De
c-2
011
Feb
-2012
Apr-
2012
Jun-2
012
Aug-2
012
Oct-
2012
De
c-2
012
Fe
b-2
013
Apr-
2013
Jun-2
013
Aug-2
013
Oct-
2013
De
c-2
013
Feb
-2014
Apr-
2014
Jun-2
014
Aug-2
014
Oct-
2014
De
c-2
014
Feb
-2015
Apr-
2015
Jun-2
015
Aug-2
015
Oct-
2015
De
c-2
015
Feb
-2016
Apr-
2016
Jun-2
016
Aug-2
016
Oct-
2016
De
c-2
016
Feb
-2017
Apr-
2017
Jun-2
017
Aug-2
017
Oct-
2017
De
c-2
017
Feb
-2018
Apr-
2018
Jun-2
018
Listed equity Private equity Property Infrastructure High yield and loans
Asset backed securities Emerging market bonds Absolute return Insurance linked Special opportunities
Investment grade Government bonds Cash (and put options) Gold
23
Generating attractive returns since inception…
Source: Aberdeen Standard Investments, 31 July 2018. Performance is converted EUR Z gross performance of £ Diversified Growth fund to 30 June 2016 and Aberdeen Global – Diversified Growth Fund Z
gross performance from 01 July 2016 to 31 July 2018. Performance is supplemental to the composite. Cash represented by 1 month Euribor. Euribor represented by 1 month Euribor. Inception: 1 Nov 11.
Performance is shown gross of fees and does not reflect investment management fees. Had such fees been deducted, returns would have been lower. Past performance is not a reliable guide to future
performance. This is for illustrative purposes only. This is not investment advice.
2011 2012 2013 2014 2015 2016 2017
DGF 1.4 6.3 1.6 8.1 2.7 6.4 9.8
Performance 1m 3m 6m YTD 1y 3yr p.a. 5yr p.a. Since inception p.a.
AG-DGF (Hdg to EUR) 2.3% 1.2% 1.1% 1.3% 3.4% 5.5% 5.1% 5.5%
Euribor 0.0% -0.1% -0.2% -0.2% -0.4% -0.3% -0.2% 0.0%
90
100
110
120
130
140
150
Oct-
11
Jan-1
2
Apr-
12
Jul-1
2
Oct-
12
Jan-1
3
Apr-
13
Jul-1
3
Oct-
13
Jan-1
4
Apr-
14
Jul-1
4
Oct-
14
Jan-1
5
Apr-
15
Jul-1
5
Oct-
15
Jan-1
6
Apr-
16
Jul-1
6
Oct-
16
Jan-1
7
Apr-
17
Jul-1
7
Oct-
17
Jan-1
8
Apr-
18
Jul-1
8
Diversified Growth Strategy (Hdg to EUR) Euribor
24
Equity downturns of more than 10%
-11.4%
-12.8%
-15.2%
-1.3%
-3.4%
-4.4%
-20%
-15%
-10%
-5%
0%
19 March 2012 - 4 June2012
20 July 2015 - 29September 2015
1 December 2015 - 11February 2016
Equity* Diversified Growth Strategy
…with relatively low volatility and resilience in equity market downturns
* Equity represented by MSCI World Equity (EUR hedged)
Source: Aberdeen Standard Investments, 31 July 2018. Aberdeen converted EUR performance of £ Diversified Growth (UK) fund to 30/6/2016. Aberdeen Global – Diversified Growth Fund portfolio
performance from 1/7/2016 to 31/3/2018. Performance is supplemental to the composite. Cash represented by 1 month Euribor
Past performance is not a guide to future results
Volatility (%pa)
4.4%
9.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
Since inception
AG-DGF (Hdg to EUR) Global Equities (Hdg to EUR)
25
Geographically diversified
* Non-geographic includes insurance-linked, absolute return, aircraft leasing, litigation finance and cash. ** Non-economic includes social/renewable infrastructure and social housing
Source: Aberdeen Standard Investments, 30 June 2018
Past performance is not a guide to future results
Emerging Market Bonds Exposure
Listed Equity Exposure
Listed Equity17.9%
Emerging Market Bonds27.1%
North America6.0%
UK8.1%
Europe (ex-UK)5.4%
Other1.0%
Non-economic18.1%
Non-geographic16.4%
North America8.1%
Japan2.8%
Asia Pacific (ex-Japan
2.0%
Europe (ex-UK)2.3%
UK1.6%
Emerging Markets1.1%
17.9%
Mexico, 3.5%
Brazil, 2.8%
Russia, 2.7%
Indonesia, 2.7%
South Africa, 2.6%
India, 2.1%
Colombia, 1.6%
Malaysia, 1.6%
Poland, 1.6%
Turkey, 1.5%
Other, 4.5%
27.1%
26
• The Standard Life Diversified Income Fund:
• Genuine diversification across a very broad range of asset
classes
• Managed by an experienced team drawing on a wealth of
resources across Aberdeen Standard Investments
• This allows us to:
• Deliver a targeted 4.5% yield
• …with significantly lower volatility than equity markets
• …from a range of tangible asset classes that investors can
understand, delivering income in a very transparent way
Conclusion
Source: Aberdeen Standard Investments, 31 December 2017
Appendices
28
• Global equities fell by 17.3% between April 2015 and February
2016, notably due to concerns over China
• The listed alternatives that we currently invest in returned 2.9%
on average over this time period
• Defensive areas such as social infrastructure delivered good
returns as did uncorrelated areas such as insurance linked and
litigation finance
• Renewable energy companies had small negative returns
reflecting lower power price expectations due to the lower oil
price. Given the oil price fell by more than 50% this highlights
that these companies have a relatively low sensitivity to global
energy prices.
Diversification benefits of listed alternatives: case study
Source: Aberdeen Standard Investments / Bloomberg. Performance shown from 28 April 2015 to 11 February
2016. Global equities represented by MSCI World (hedged to GBP); the listed alternatives shown represent all
held in Diversified Assets portfolios at the time of this analysis in December 2017 that existed for the whole of
this period, with the exception of private equity and CLO equity holdings (which are held purely for higher return
expectations than for diversification benefits). The average is a simple average of all of these returns. Period
chosen is the largest drawdown for equities over the past 5 years
Past performance is not a guide to future results
April 2015 to February 2016
-30
-20
-10
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10
20
30
40
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Global Equities (-17.3%) Listed Alt. Average (2.9%)
29
Investment overview
• Diversified global portfolio of social infrastructure projects with long-term,
government-backed, inflation-linked revenues
Returns
• Targets 7 - 8% p.a. return, yielding c4%
Risk
• Assets are predominately availability-based (i.e. do not rely on volume of
traffic or other level of usage)
• Defensive characteristics given government backing and inflation linkage
Investment route
• Held alongside other social infrastructure investment companies such as HICL
and International Public Partnerships
Infrastructure: BBGI
Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation.
Source: Bilfinger Berger Global Infrastructure
Portfolio geographical split
UK 39%
Cont. Europe 9%
Canada 28%
USA 5%
Australia 19%
Global portfolio with c.40 assets; all located in
AA to AAA rated countries. Examples below:
30
Asset-Backed Securities – Mezzanine
Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation
Source: Aberdeen Standard Investments, TwentyFour, Barclays, 29 March 2018
Past performance is not a guide to future results
CLO/Corporate spreads
0
100
200
300
400
500
600
700
800
AAA AA A BBB BB B
CLOs Corporate Bonds (USD)
>2% additional
spread
Investment overview
• ABS market is multi-trillion dollar primarily covering securitisations of
residential/commercial mortgages and corporate loans
Returns
• Various sections of the ABS market (e.g. CLOs) offer a material excess
return over corporate bonds for a similar level of credit risk
Risk
• Higher risk premium largely reflects perceived complexity, lingering ABS
negative sentiment from US sub-prime crisis and regulatory constraints
• Mark-to-market risk of technical selling
Investment route
• Selection of specialist managers including open-ended funds managed by
TwentyFour, Prytania and Fair Oaks
31
Insurance-linked: Catco
Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation
Past performance is not a guide to future results
Investment overview
• Invests in contracts providing cover against insurance losses due to
extreme natural catastrophes
Returns
• Expected net return of Libor +10%, yield in excess of 5%
Risk
• Diversified across perils to mitigate impact of any one extreme event
• Asset class has no economic exposure and hence is uncorrelated to
equities and other asset classes
Investment route
• Catco provide higher expected return than cat bonds
• Aberdeen multi-asset exposure since 2015
32
Aircraft leasing: Doric Nimrod Air Three
* As at 31 March 2018. Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation.
Source: Doric Nimrod Air Three
Past performance is not a guide to future results
Investment overview
• Portfolio comprises four Airbus A380 aircraft which are on long term leases
to Emirates Airline
• A mixture of equity and debt is used to purchase the aircraft
Returns
• Long-term return driven by leasing income as well as from the potential
sale of the aircraft at the end of the leases
• Current Dividend Yield of 8.1%*
Risk
• Emirates defaults and the manager can’t re-lease the planes
• Final re-sale value of planes may be lower (or higher) than expected
33
Litigation finance: Burford
Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation.
Source: Burford Capital, September 2017
Past performance is not a guide to future results
Investment overview
• Provides third-party financing for commercial litigation
Returns
• Highly attractive returns on offer given lack of competition from banks and
specialist expertise
• Delivered strong returns since inception in
October 2009
Risk
• Risk of individual case losses mitigated by having a diversified portfolio
• No economic exposure and hence no correlation to other asset classes
Investment route
• Burford is the leading provider of third-party financing for commercial
litigation
• Aberdeen multi-asset exposure since inception in 2009
34
Special opportunities: Funding Circle
©Funding Circle. Company selected for illustrative purposes only to demonstrate Aberdeen Standard Investments' investment management style and not as an investment recommendation or indication of
future performance. Source: Funding Circle website (www.fundingcircle.com/statistics)
Past performance is not a guide to future results
Cumulative Net Lending to UK Small Businesses
£ m
illi
on
s
-3,000-2,500
-2,000
-1,500
-1,000
-500
0
500
1,000
1,500
-2,429
1,097
Mar
14
Dec 1
3
Jun 1
4
Sep 1
4
Dec 1
4
Mar
15
Jun 1
5
Sep 1
5
Dec 1
5
Mar
17
Jun 1
6
Sep 1
6
Dec 1
6
Mar
16
UK Banks
Funding Circle
Scenario Assumptions Made Projected return p.a.
Base scenario
(no recession)
• Existing investor – all outstanding SME loans
(06/17)6.7%
PRA 2017
scenario (severe
recession)
• GDP growth decreases from 2.3% to -4.7%
• Unemployment increases from 4.8% to 9.5%
• CPI growth increases from 1.2% to 5.1%
• BOE interest rate increases from 0.25% to
4.0%
• 5 year gilt rate increases from 0.6% to 5.9%
5.0%
Stress test results
Investment overview
• Direct lending platform providing loans to small business in the UK, US and
continental Europe
• Positive social impact, supported by national and local government
development authorities
Returns
• Targeting 7 - 9% p.a return net of losses with a yield of c6%
Risk
• Credit risk mitigated by robust credit approval process
• Resilient to the Prudential Regulatory Authority’s stress test scenario, as
undertaken by all UK banks
Investment route
• Closed-end fund investing in Funding Circle platform with no investment
management fee
35
Healthcare Royalties: BioPharma Credit
Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or investment recommendation
Source: Aberdeen Standard Investments, BioPharma Credit, September 2017
Past performance is not a guide to future results
Investment overview
• Listed investment company providing exposure to a diversified portfolio of
debt backed by assets or royalties from biotechnology firms
Returns
• Targets 8-9% expected return and 7% yield
Risk
• Key risk is that royalty income is markedly lower than expected – mitigated
by expertise of fund manager
• Significant diversification benefits as risks are very different to others in the
portfolio
Investment route
• Managed by Pharmakon Advisors, an experienced healthcare royalties
investor
36
Equities: lower volatility income approach
* 31 July 2015 to 31 August 2015 and 31 December 2015 to 15 February 2016. Selected for illustrative purposes only to demonstrate management style and not as an indication of future performance or
investment recommendation. Source: Aberdeen Standard Investments, performance to 31 March 2018. Inception date May 2015. Returns are in USD. Composite performance shown net of fees
Past performance is not a guide to future results
Return drivers Investment overview
• Actively managed equity portfolio aimed at outperforming global equities
over the long-run with around 85% of the volatility
• Targets 140% of the dividend yield of the MSCI World index
Returns
• Stock selection reflects a series of investment themes exploiting market
inefficiencies
Risk
• At least 150 underlying securities to ensure diversification
• Smart implementation avoids possible crowded minimum volatility trade
Investment route
• Developed by Aberdeen’s Quantitative Equity team who manage £23bn in
active equity portfolios
• Tailoring a proven internal skillset to enhance the income generation within
the Fund
Income strategy – performance since inception
Value
Inexpensive
stocks
Quality
Financially
healthy firms
Momentum
Trending
stocks
Small size
Smaller
companies
Low volatility
Lower risk
stocks
9.5 9.2
-6.2 -5.0
3.5
8.610.8
-6.6-9.4
2.4
-15
-10
-5
0
5
10
15
20
Return (%) Volatility (%)
ELVIS MSCI AC World
Performance in equity
down-markets* (%)
37
Investment Organisation Structure
Source: Aberdeen Standard Investments
Guy
Stern
Multi-
Asset &
Macro
Devan
Kaloo
Equities
Craig
MacDonald
Fixed
income
Andrew
McCaffery
Strategic
Client
Investments
Brian
Fleming
Structured
Solutions
Sean Phayre
Quantitative
Investing
David
Paine
Real
Estate
Pertti
Vanhanen
Real
Estate
Peter
McKellar
Private &
Infrastructure
Equity
Mandy Pike
Investment
Execution
Archie
Struthers
Governance
& Oversight
Bambos
Hambi
Head of
Multi-
Manager
Strategies
Russell
Barlow
Global Head
of
Alternative
Investment
StrategiesMike Brooks
Head of
Diversified
Assets
Andrew
Lister
Head of
Closed
End Fund
Strategies
James
Hughes
Global
Head of
Strategic
Client
Solutions
Rod Paris
CIO
38
• Dedicated team managing a small number of genuinely diversified multi-asset portfolios
• Highly experienced in allocating across a broad range of traditional and alternative asset classes
• Harnessing the breadth and depth of ASI’s resources across a wide range of asset classes
Diversified Assets team
Source: Aberdeen Standard Investments, January 2018
Tony Foster
Portfolio manager
Mike Brooks
Head of Diversified
Assets
Alan Murray
Portfolio manager
Sean Flanagan
Portfolio manager
Emma Scott
Analyst
Kenneth McMillan
Analyst
Kevin Glover
Assistant Portfolio
manager
Appendices – Composite data
40
Aberdeen multi asset composite performance
Unless otherwise stated, performance is shown gross of fees and
does not reflect investment management fees. Had such fees been
deducted, returns would have been lower.
Source: Aberdeen Standard Investments, BNP Paribas and StatPro
Period returns to 31 December 2017
Year Composite
return gross
Number of portfolios
(*throughout period)
Dispersion Market value at
end of period
Rolling 3 months1.48% <5 n/a 379,650,501
Year to date8.86% <5 n/a 379,650,501
1 Year8.86% <5 n/a 379,650,501
2 Years p.a.8.54% <5 n/a 379,650,501
3 Years p.a.6.82% <5 n/a 379,650,501
4 Years p.a.7.36% <5 n/a 379,650,501
5 Years p.a.6.35% <5 n/a 379,650,501
Calendar year returns
Year Composite
return gross
Number of portfolios
(*throughout period)
Dispersion Market value at
end of period
Total firm assets
2017 8.86% <5 n/a 379,650,501 273,580,434,818
2016 8.23% <5 n/a 398,168,787 273,648,495,940
2015 3.45% <5 n/a 168,747,689 260,113,422,464
2014 8.99% <5 n/a 111,091,398 295,170,314,057
2013 2.41% <5 n/a 97,963,651 171,284,592,962
2012 7.05% <5 n/a 47,573,819 174,061,180,956
2011 (Dec) 0.68% <5 n/a 40,457,686 152,927,964,997
Performance statistics (net of institutional fees)
Beta to MSCI World Index Volatility^ Sharpe Ratio
Since Inception 0.3 4.2 1.3
Composite: Multi Asset: Diversified Growth (UK)
Composite inception: 01 December 2011
Base currency: GBP (Reported in GBP)
Past performance is not a guide to future results
41
Composite: Multi Asset: Diversified Growth (UK)
As of: 30-Nov-2017
Definition of the Firm
Aberdeen Asset Management plc ("Aberdeen" or "the Firm") is defined as all
portfolios managed globally by subsidiaries of Aberdeen Asset Management plc,
excluding Property, Private Equity, Private Client and Lloyds Syndicate portfolios.
Aberdeen is the global brand under which all products are now marketed. The
global Firm inception date is 1st December 2005; the Firm is compliant from 1st
January 1996; and includes divisions that either were, or were part of, legacy
compliant firms, some of which are compliant from earlier dates. The Firm
includes Artio Global Investors from 1st June 2013, Scottish Widows Investment
Partnership from 1st April 2014 and Arden Asset Management and Advance
Emerging Capital from 1st January 2016. Aberdeen Asset Management plc and
Standard Life plc merged as of 14th August 2017 and the two firms will be
working towards integration. The Firm AUM and this composite only includes
Aberdeen Asset Management plc legacy assets at this time. The Firm’s assets
are represented by the published AUM of Aberdeen Asset Management plc with
deductions for the excluded divisions disclosed above. The legacy track records
satisfy the GIPS portability criteria and have been linked with the track record of
the Aberdeen global Firm. Composite returns, start date and composite and firm
assets reported prior to acquisitions represent those of the legacy firm which
managed the product at the time. Changes in the firm organisation, investment
style or personnel have not caused alterations of historical composite
performance.
GIPS Compliance
Aberdeen claims compliance with the Global Investment Performance Standards (GIPS)
and has prepared and presented this report in compliance with the GIPS standards.
Aberdeen has been independently verified for the periods to 30th September 2016. 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. The effective date of compliance is
1st January 1996. The inception date of the composite is 1 Dec 11 and it was created on 6
Dec 11. A complete list of the Firm's composites, and policies for valuing portfolios,
calculating performance and preparing compliant presentations, is available on request.
Composite Description
The composite comprises all discretionary portfolio managed to Aberdeen Asset
Management's diversified growth strategy in relation to a Libor based benchmark.
Composite methodology
Returns are time-weighted total rates of return including cash and cash equivalents,
income and realised and unrealised gains and losses. Returns are shown net of non-
recoverable tax, whilst recoverable tax is included on a cash basis. Composites results
are weighted by individual portfolio size, using start of period market values. Portfolios
are valued at least monthly or on the date of any contribution/withdrawal greater than
8.49% within 1 month. Annual returns are calculated using geometric linking of monthly
returns. Exchange rates used are WMR 16:00 Closing Spot Rates. Composites may
contain portfolios of different base currencies, translated into a common currency for
composite returns using the exchange rates stated above. A fund becomes eligible for
inclusion the first full calendar month after funding. Inclusion may be deferred in cases
where it has not been possible to implement the investment strategy. Terminated funds
leave composites at the end of the calendar month before official notification of
termination is received. Results include all discretionary, fee paying accounts of the Firm.
Aberdeen multi asset composite
42
Composite: Multi Asset: Diversified Growth (UK)
As of: 30-Nov-2017
The dispersion of annual returns is measured by the standard deviation among
asset-weighted portfolio returns represented within the composite for the full year.
Dispersion is not calculated for composites with less than five accounts for the
whole period. Additional information on policies for calculating and reporting
returns is available on request.
Presentation of Results
Gross returns are presented before management, custodial and other fees but
after all trading expenses. Net returns are calculated after the deduction of a
representative management fee.
Derivative Instruments
Derivatives may be used for hedging and/or for investment purposes. Derivatives
will not be used for leverage
Past performance is not an indication of future results.
Aberdeen multi asset composite
43
Aberdeen Global Diversified Income Fund
Important Information
For professional investors only – not for public distribution
The following risk factors should be carefully considered before making an
investment decision:
• Bonds are affected by changes in interest rates, inflation and any decline in
creditworthiness of the bond issuer. Bonds that produce a higher level of
income usually also carry greater risk as such bond issuers may not be able to
pay the bond income as promised or could fail to repay the capital amount
used to purchase the bond. Where a bond market has a low number of buyers
and/or a high number of sellers, it may be harder to sell particular bonds at an
anticipated price and/or in a timely manner.
• The Sub-fund can use derivatives in order to meet its investment objectives or
to protect from price and currency movements. This may result in gains or
losses that are greater than the original amount invested.
• Emerging markets or less developed countries may face more political,
economic or structural challenges than developed countries. This may mean
your money is at greater risk. The Fund may also invest in Frontier Markets
which involves similar risks, but to a greater extent since they tend to be even
smaller, less developed, and less accessible than other Emerging Markets.•
• Contingent convertible bonds can automatically convert into shares or be
written down if the financial strength of the issuer falls in a certain way. This
may result in substantial or total losses of the bond value.
• Investments in REITs and companies engaged in the business of real estate
may be subject to increased liquidity risk and price volatility due to a variety of
factors, including local, regional and national economic and political
conditions, interest rates and tax considerations.
• A full list of risks applicable to this Fund can be found in the Prospectus, which
is available on request or at our website aberdeen-asset.com.
Disclaimer
44
Aberdeen Global Diversified Growth Fund
Important Information
For professional investors only – not for public distribution
The following risk factors should be carefully considered before making an
investment decision:
• The Fund can use derivatives in order to meet its investment objectives or to
protect from price and currency movements. This may result in gains or losses
that are greater than the original amount invested.
• Emerging markets or less developed countries may face more political,
economic or structural challenges than developed countries. This may mean
your money is at greater risk. The Fund may also invest in Frontier Markets
which involves similar risks, but to a greater extent since they tend to be even
smaller, less developed, and less accessible than other Emerging Markets.
• Bonds are affected by changes in interest rates, inflation and any decline in
creditworthiness of the bond issuer. The fund's portfolio may have significant
exposure to bonds that typically have lower ratings. Bonds that produce a
higher level of income usually also carry greater risk as such bond issuers
may not be able to pay the bond income as promised or could fail to repay the
capital amount used to purchase the bond. Where a bond market has a low
number of buyers and/or a high number of sellers, it may be harder to sell
particular bonds at an anticipated price and/or in a timely manner.
• Contingent convertible bonds can automatically convert into shares or be
written down if the financial strength of the issuer falls in a certain way. This
may result in substantial or total losses of the bond value.
• Performance may be strongly influenced by movements in currency rates. The
value of your investment will either rise or fall in response to changes in
foreign exchange rates between the base currency of the fund, and the
currencies of the securities held by the fund.
• Investments in REITs and companies engaged in the business of real estate
may be subject to increased liquidity risk and price volatility due to a variety of
factors, including local, regional and national economic and political
conditions, interest rates and tax considerations.
• A full list of risks applicable to this Fund can be found in the Prospectus, which
is available on request or at our website aberdeen-asset.com.
Disclaimer
45
For professional Investors only - Not for public distribution
Past performance is not a guide to future results. The value of investments, and the
income from them, can go down as well as up and your clients may get back less than the
amount invested.
The views expressed in this presentation should not be construed as advice on how to
construct a portfolio or whether to buy, retain or sell a particular investment. The
information contained in the presentation is for exclusive use by professional
customers/eligible counterparties (ECPs) and not the general public. The information is
being given only to those persons who have received this document directly from
Aberdeen Asset Management (AAM) and must not be acted or relied upon by persons
receiving a copy of this document other than directly from AAM. No part of this document
may be copied or duplicated in any form or by any means or redistributed without the
written consent of AAM.
The information contained herein including any expressions of opinion or forecast have
been obtained from or is based upon sources believed by us to be reliable but is not
guaranteed as to the accuracy or completeness.
The Fund is a Luxembourg-domiciled UCITS fund, incorporated as a Société Anonyme
and organised as a Société d’investissement à Capital Variable (a “SICAV”). The
information contained in this marketing document should not be considered as an offer, or
solicitation, to deal in the shares of any securities or financial instruments. It is not
intended for distribution or use by any person or entity who is a citizen or resident of or
located in any jurisdiction where such distribution, publication or use would be prohibited.
The Fund is not registered under the United States Securities Act of 1933, nor the United
States Investment Company Act of 1940 and therefore may not directly or indirectly be
offered or sold in the United States of America or any of its states, territories, possessions
or other areas subject to its jurisdiction or to or for the benefit of a United States Person.
FTSE International Limited (‘FTSE’) © FTSE 2018. ‘FTSE®’ is a trade mark of the London
Stock Exchange Group companies and is used by FTSE International Limited under
licence. RAFI® is a registered trademark of Research Affiliates, LLC. All rights in the
FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor
its licensors accept any liability for any errors or omissions in the FTSE indices and / or
FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without
FTSE’s express written consent.
The MSCI information may only be used for your internal use, may not be reproduced or
redisseminated in any form and may not be used as a basis for or a component of any
financial instruments or products or indices. None of the MSCI information is intended to
constitute investment advice or a recommendation to make (or refrain from making) any
kind of investment decision and may not be relied on as such. Historical data and
analysis, should not be taken as an indication or guarantee of any future performance
analysis forecast or prediction. The MSCI information is provided on an “as is” basis and
the user of this information assumes the entire risk of any use made of this information.
MSCI, each of its affiliates and each other person involved in or related to compiling,
computing or creating any MSCI information (collectively, the “MSCI” Parties) expressly
disclaims all warranties (including without limitation, any warranties of originality,
accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a
particular purpose) with respect to this information. Without limiting any of the foregoing,
in no event shall any MSCI Party have any liability for any direct, indirect, special,
incidental, punitive, consequential (including, without limitation, lost profits) or any other
damages (www.msci.com).
Disclaimer
46
Before investing, investors should consider carefully the investment objective, risks,
charges, and expenses of a fund. This and other important information is contained in the
prospectus, which can be obtained from a financial advisor and are also available on
www. aberdeen-asset.com. Prospective investors should read the prospectus carefully
before investing. Subscriptions for shares in the Fund may only be made on the basis of
the latest prospectus and relevant Key Investor Information Document (KIID) which
provides additional information as well as the risks of investing and may be obtained free
of charge from Aberdeen Asset Managers Limited, 10 Queens Terrace, Aberdeen, AB10
1YG, Scotland and are also available on www.aberdeen-asset.com.
Issued by Aberdeen Asset Managers Limited. Registered in Scotland
No.108419.Registered Office: 10 Queen’s Terrace, Aberdeen, AB10 1XL. Authorised and
regulated by the Financial Conduct Authority in the United Kingdom. Aberdeen Asset
Managers Limited reserves the right to make changes and corrections to any information
in this document at any time, without notice.
Subscriptions for investment in Aberdeen Global may only be made on the basis of the
relevant prospectus, relevant Key Investor Information Document (KIID) and most recent
annual financial statements, and semi-annual financial statements if published thereafter.
These documents and the articles of incorporation are available in English/
Italian/German/ French free of charge on www.aberdeen-asset.com. In Italy these
documents can be obtained from Aberdeen Asset Managers Limited, Italian Branch, Via
Dante 16, IT 20121, Milano, or from the Paying Agent, State Street Bank S.p.A, 10 Via
Ferrante Aporti, 20125 Milano and are also available on www.aberdeen-asset.it.In
Switzerland these documents along with the Fund’s articles of association can be
obtained from the Fund’s Representative and Paying Agent, BNP Paribas Securities
Services, Paris, succursale de Zurich, Selnaustrasse 16, CH 8002 Zürich, Switzerland
(Tel. 058 212 63).
Issued in Switzerland by Aberdeen Asset Managers Switzerland AG (“AAMS”). Registered
in Switzerland No. CHE-114.943.983. Registered
Office: Schweizergasse 14, 8001 Zurich. Authorised by the Swiss Financial Market
Supervisory Authority (FINMA) as distributor of collective
investment schemes.
DH ID: GB-270718-69362-3
Disclaimer
Subscriptions for investment in Aberdeen Global may only be made on the basis of the
relevant prospectus, relevant Key Investor Information Document (KIID) and most recent
annual financial statements, and semi-annual financial statements if published thereafter.
These documents and the articles of incorporation are available in English/
Italian/German/ French free of charge on www.aberdeen-asset.com. In Italy these
documents can be obtained from Aberdeen Asset Managers Limited, Italian Branch, Via
Dante 16, IT 20121, Milano, or from the Paying Agent, State Street Bank S.p.A, 10 Via
Ferrante Aporti, 20125 Milano and are also available on www.aberdeen-asset.it.In
Switzerland these documents along with the Fund’s articles of association can be
obtained from the Fund’s Representative and Paying Agent, BNP Paribas Securities
Services, Paris, succursale de Zurich, Selnaustrasse 16, CH 8002 Zürich, Switzerland
(Tel. 058 212 63).Issued in Switzerland by Aberdeen Asset Managers Switzerland AG
(“AAMS”). Registered in Switzerland No. CH-020.3.033.962-7. RegisteredOffice:
Schweizergasse 14, 8001 Zurich. Authorised by the Swiss Financial Market Supervisory
Authority (FINMA) as distributor of collectiveinvestment schemes.“
In Germany these documents can be obtained from Aberdeen Asset Managers Limited
Deutschland Branch, Bockenheimer Landstraße 25, D-60325 Frankfurt am Main or from
the Paying Agent Marcard, Stein & Co. AG, Ballindamm 36, D-20095 Hamburg, in Austria
from the Fund's Representative and Paying Agent Raiffeisen Zentralbank
ÖsterreichAktiengesellschaft, Am Stadtpark 9, A-1030 Wien.
Aberdeen Global have been registered with the Comisión Nacional del Mercado de
Valores under the number 107
Brokers Ireland
Why the Diversified Income Fund?
The diversification across a very broad range of asset classes gives three key benefits for
investors:
▪ Firstly, the fund accesses a far broader range of income-generating asset classes that
helps to generate the targeted 4.5%1 gross annual yield.
▪ Secondly, this diversification means that the attractive level of income is delivered with
significantly lower volatility than equity markets.
▪ Finally, the fund invests in a range of tangible asset classes that investors can
understand, delivering income in a very transparent way.
1 This is an internal performance target which the investment manager aims to achieve at the date of this document. This target is not based on past performance, may be subject to
change and cannot be guaranteed.
What's the target market?
▪ Post retirement
▪ The fund, with a target income of 4.5% gross p.a., is a natural fit for the post retirement market.
▪ Particularly the ARF market which has been one the fastest growth areas over the last 10 years or so.
▪ As part of a diversified portfolio, the fund can help investors generate investment returns to accommodate their income requirements, such as imputed distribution.
▪ Deposits
▪ Potential to generate greater returns than currently available on deposit.
▪ Although a higher risk investment, the volatility of the fund is much lower than an equity only investment and as such may be a suitable option for investors looking to re-enter investment markets.
MyFolio
MyFolio III Asset Mix – 1 Aug 2018
Growth Assets Active III Market III
Equities
UK equities 1.8% 3.5%
US equities 13.0% 14.4%
European equities 15.0% 18.8%
Japanese equities 5.2% 4.6%
Asia-Pacific equities 3.4% 3.6%
Emerging Markets equities 3.9% 3.6%
BondsEmerging Markets Local Currency bonds 2.5% 1.9%
Global High Yield bonds 3.3% 4.1%
PropertyUK Real Estate 2.6% 3.2%
Global REITs 5.1% 6.4%
Abs Ret Multi-Asset Absolute Return 12.8% ---
Total Growth Assets 68.6% 64.1%
Defensive Assets Active III Market III
BondsCorporate bonds 22.7% 34.9%
Absolute Return Bonds 7.2% ---
Cash Cash 1.5% 1.0%
Total Defensive Assets 31.4% 35.9%
Total 100.0% 100.0%
Risk Reward Consistency
* Inception and volatility for Market range refers to an inception date of 27/1/14 and for Active range 11/6/12. Euro currencySource: FE Analytics, 31 August 2018
Performance % VolatilityVolatility
as
12 Months
Return
3 Years
Annualised Return
5 Years
Annualised Return
Launch*
Annualised Return
3 Years
Std Dev
% of Global Equity
Volatility
MyFolio Active I -0.2 1.4 3.2 3.8 2.9 21.9%
MyFolio Active II 0.9 2.1 4.2 5.0 4.2 31.8%
MyFolio Active III 2.2 2.7 5.3 6.3 5.7 43.0%
MyFolio Active IV 3.5 3.3 6.5 7.7 7.2 54.4%
MyFolio Active V 4.6 4.1 7.4 8.7 8.8 66.0%
MyFolio Market I 0.7 2.1 3.3 3.3 24.7%
MyFolio Market II 2.8 3.6 4.9 5.2 38.9%
MyFolio Market III 5.2 4.9 6.4 7.2 54.0%
MyFolio Market IV 7.4 6.1 7.9 9.3 69.9%
MyFolio Market V 9.8 7.4 9.3 11.5 86.4%
Standard Life update
Pricing Flexibility
Special Offer to 31 December 2018
▪ Amounts > €50,000, 103% Allocation, 0.25% rebate
▪ MyFolio Market 0.70% AMC
▪ Diversified Income Fund 1.10% AMC
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Standard Life Assurance Limited is authorised by the Prudential Regulation Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. Standard Life Assurance Limited is registered in Dublin, Ireland (905495) at 90 St Stephen’s Green, Dublin 2 and Edinburgh, Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.