Capital International Group | PRISM | Chartbook

CapitalInternational Group

PRISMR E D E F I N I N G I N V E S T M E N T

Chartbook

MARCH 2016


CELEBRATING

Y E A R S I N B U S I N E S S

CapitalInternational

Innovation Integrity Excellence

PRISM delivers Defined Return Profiles within a discretionary investment managed service - a competitive alternative to other discretionary services, passive investment offerings and structured products.

PRISMChartbookPerformance Data

The seeming disconnect between financial markets and global economic reality was supremely demonstrated in the opening quarter of 2016, as sharp equity falls left many major indices in ‘correction’ territory. In late February and into March we have witnessed a major rally which has erased many of the losses. The lack of inflation and further Central Bank stimulus has seen a fall in bond yields. The spread of negative interest rates has proved to be a major drag on the global Financial sector. ECB stimulus has had limited impact on boosting economic growth, quite possibly because the region is in the middle of a deleveraging cycle. The Brexit vote is leading to a lack of spending decisions in an economy which is otherwise in good shape, with strong employment and positive consumer sentiment. Many strategists now feel that the US recovery has peaked and the chances of a mild economic recession have been raised.

36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

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-06

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-07

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Ret

urns

95%70%40%H1

Probability Bands

PR

ISM

Hor

izon

1 S

trate

gy -

V1.

01-0

4.16

† Annualised return since inception

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash

Over Full Time Horizon

0% 0.5% 1.0% 1.5% 2.0% 2.5%

95% 70% 50% 30% MeanConfidence Bands

Over One Year95% 70% 50% 30% Mean

Confidence Bands

0% 0.5% 1.0% 1.5% 2.0% 2.5%

36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

Strategy Overview Defined Return Profile

Telephone:Facsimile:E-mail:

+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]

Defined Mean Returns:Defined Volatility:

Capital Protections

PRISM is a defined return profile, discretionary managed investment service. PRISM offers a wide range of defined return profiles with different risk and return characteristics so that investors and Financial Advisers can match specific requirements with precision.Each profile has a defined mean return and a defined volatility which, together with the performance of the Master Investment Strategy, are used to mathematically calculate the return in each period. The Master Investment Strategy is a highly diversified investment portfolio which aims to optimise returns per unit of risk.Some profiles enjoy an element of capital protection over their stated investment time horizon, giving greater peace of mind to investors with less risk appetite.

Investment Time Horizon:Over Full Time Horizon:

Key Information

Currency SterlingMinimum Initial Investment £15,000Dealing Frequency WeeklyDealing Cut-Off Tuesday at 12:30pmInitial Charge NilExit Charge NilMaster Investment Strategy Management Charge 0.25%*Issuer/Counterparty Capital Financial Markets LimitedInvestment Manager & Promoter Capital International LimitedCustodian Capital International Limited

Master Strategy Allocations

Performance

Investment CommentaryExpected Return Distributions

PRISM Horizon 1 Strategy

1.25%0.50%

1 year100%

3 Months 6 Months 1 Year 3 Years 5 Years 10 Years Annualised

The PRISM Horizon 1+ Strategy aims to provide a compelling and complete investment with the following characteristics:

■ A simple defined return investment ■ The investment objective is to achieve an optimal balance between risk and return that maximises expected returns and minimises the downside risk over the stated time horizon

■ Investment time horizon is a rolling 1 year period ■ Low fees are required ■ High levels of diversification of underlying investment exposure and risk


31 March 2016

Capital International Limited is a member of the London Stock ExchangeCapital International Limited | Registered Address: Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG

The information contained herein is believed to be correct, but its accuracy cannot be guaranteed. PRISM Strategies were launched in June 2014. Historical performance is calculated by reference to the actual investment performance of Fusion Alpha modelled into the PRISM product structure. Any reference to past performance is not necessarily a guide to the future. Opinions constitute our judgment as of this date and are subject to change. The information contained in this document is provided for information purposes only, it does not constitute an invitation to purchase any investment. The value of any investment may go down as well as up. *PRISM reserves the right to levy a performance fee on the Master Investment Strategy on performance in excess of the defined return profiles. Full details of PRISM are contained in the Brochure, Terms of Business and associated literature which is available upon request. The regulated activities in relation to PRISM are provided by Capital International Limited and Capital Financial Markets Limited who are Members of the Capital International Group of Companies and are licensed by the Isle of Man Financial Services Authority.


Returns 0.40% 0.73% 0.59% 2.75% 5.36% 11.44% 1.23%

Volatility - - 0.55% 0.49% 0.47% 0.49% 0.49%

†


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

PR

ISM

Hor

izon

1+

Stra

tegy

- V

1.01

-04.

16


0% 1% 2% 3% 4% 5% 6%


Over One Year

-1% 0% 1% 2% 3% 4% 5%


Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Jun-

04

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-04

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-05

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13

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-13

Jun-

14

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-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H1+

Probability Bands



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016




2.00%1.10%

1.5 years100%




■ Investment time horizon is a rolling 18 month period ■ Low fees are required ■ High levels of diversification of underlying investment exposure and risk

PRISM Horizon 1+ Strategy


Returns 0.69% 1.22% 0.52% 3.79% 8.04% 17.69% 1.95%

Volatility - - 1.21% 1.07% 1.03% 1.05% 1.05%

†


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%


0% 2% 6% 8% 10% 14%


Over One Year

-2% 0% 2% 4% 6% 8%


4% 12%

PR

ISM

Hor

izon

2 S

trate

gy -

V1.

01-0

4.16

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash-10%

0%

10%

20%

30%

40%

50%

60%

Jun-

04

Dec

-04

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05

Dec

-05

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-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H2

Probability Bands



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016




3.00%2.10%

2 years99%


The PRISM Horizon 2 Strategy aims to provide a compelling and complete investment with the following characteristics:





Returns 1.08% 1.91% 0.14% 4.73% 11.21% 25.56% 2.90%

Volatility - - 2.31% 2.04% 1.96% 2.05% 2.04%

†


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

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-12

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-13

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14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H2+

Probability Bands

PR

ISM

Hor

izon

2+

Stra

tegy

- V

1.01

-04.

16

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016



-4% -2% 2% 6% 10% 12%0% 4% 8%

0% 5% 10% 15% 25%20%


4.00%3.25%

2.5 years97%




■ Investment time horizon is a rolling 2.5 year period ■ Low fees are required ■ High levels of diversification of underlying investment exposure and risk



Returns 1.50% 2.63% -0.47% 5.28% 14.01% 33.02% 3.82%

Volatility - - 3.58% 3.17% 3.04% 3.25% 3.23%

†

Over Full Time Horizon95% 70% 50% 30% Mean

Confidence Bands


Confidence Bands


Confidence Bands


Confidence Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

PR

ISM

Hor

izon

3 S

trate

gy -

V1.

01-0

4.16

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

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-08

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-09

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-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H3

Probability Bands



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016



0% 5% 10% 20% 30% 40%

-5% 15%

15% 35%25%

0% 5% 10%

3 Months 6 Months 1 Year 3 Years 5 Years 10 Years Annualised3 Months 6 Months 1 Year 3 Years 5 Years 10 Years Annualised

Returns 1.93% 3.37% -1.38% 5.33% 16.26% 39.62% 4.71%Volatility - - 5.06% 4.48% 4.30% 4.60% 4.57%


5.00%4.60%

3 years95%





†


Confidence Bands


Confidence Bands


Confidence Bands


Confidence Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

PR

ISM

Hor

izon

3+

Stra

tegy

- V

1.01

-04.

16

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016





0% 10% 30% 60%

-10% 20%

20% 50%40%

0% 5% 10% 15%-5%


Confidence Bands


Confidence Bands


Confidence Bands


Confidence Bands


6.00%6.00%

3.5 years90%



■ Investment time horizon is a rolling 3.5 year period ■ Low fees are required ■ High levels of diversification of underlying investment exposure and risk


†

-20%

0%

20%

40%

60%

80%

100%

120%

140%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

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06

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07

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13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H3+

Probability Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

PR

ISM

Hor

izon

4 S

trate

gy -

V1.

01-0

4.16

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

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Dec

-12

Jun-

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Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H4

Probability Bands



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016





0% 10% 30% 80%

-10% 25%

20% 50%40%

0% 5% 10% 15%-5%

60% 70%

20%


7.00%7.50%

4 years85%





†


Confidence Bands


Confidence Bands


Confidence Bands


Confidence Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

PR

ISM

Hor

izon

5 S

trate

gy -

V1.

01-0

4.16

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016



80%0% 40% 120%

-10% 30%

20% 60%

0% 5% 10% 15%-5%

100%

20% 25%



8.00%9.00%

5 years80%






Confidence Bands


Confidence Bands


Confidence Bands


Confidence Bands



†

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

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Dec

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11

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-11

Jun-

12

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13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H5

Probability Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

140%

-20% 40%0% 10% 20%-10% 30% PR

ISM

Hor

izon

6 S

trate

gy -

V1.

01-0

4.16


0% 40% 160%



Confidence Bands

20% 60%


Confidence Bands


Confidence Bands

80% 100% 120%

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016





9.00%10.60%

6 yearsn/a







†

-25%

0%

25%

50%

75%

100%

125%

150%

175%

200%

225%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

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08

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13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H6

Probability Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

0% 50% 300%150% 200% 250%100%

PR

ISM

Hor

izon

8 S

trate

gy -

V1.

01-0

4.16


Confidence Bands

Over One Year

-20% 40%



Confidence Bands


Confidence Bands

0% 10% 20%-10% 30%

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016





10.00%12.50%

8 yearsn/a







†

-25%

0%

25%

50%

75%

100%

125%

150%

175%

200%

225%

250%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

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-07

Jun-

08

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-08

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-10

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11

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-11

Jun-

12

Dec

-12

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13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H8

Probability Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

PR

ISM

Hor

izon

10

Stra

tegy

- V

1.01

-04.

16

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016



-30% 50%0% 10% 20%-20% 30%-10% 40%

0% 200% 600%100% 400% 500%300%



12.00%16.00%

10 yearsn/a






Returns 4.96% 8.46% -11.08% -1.46% 22.45% 65.84% 9.94%Volatility - - 17.61% 15.63% 14.98% 16.01% 15.91%

†


Confidence Bands


Confidence Bands


Confidence Bands


Confidence Bands

-25%

0%

25%

50%

75%

100%

125%

150%

175%

200%

225%

250%

275%

300%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%H10

Probability Bands


36.2%

19.0%2.0%

12.9%

6.2%

10.6%

13.1%

-30% 60%0% 10% 20%-20% 30%-10% 40% 50% PR

ISM

Enh

ance

d G

row

th S

trate

gy -

V1.

01-0

4.16

0% 400% 1400%200% 800% 1000% 1200%600%


Confidence Bands


Confidence Bands


Confidence Bands


Confidence Bands

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash



+44 (0) 1624 654200+44 (0) 1624 654201

[email protected]


Capital Protections



Key Information



Performance



31 March 2016



-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

Jun-

04

Dec

-04

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

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09

Dec

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-10

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11

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-11

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12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Dec

-15

Ret

urns

95.00%70.00%40.00%Enh

Probability Bands



14.00%20.00%

12+ yearsn/a

The PRISM Enhanced Growth Strategy aims to provide a compelling and complete investment with the following characteristics:


■ Investment time horizon that is in excess of 12 years ■ Low fees are required ■ High levels of diversification of underlying investment exposure and risk

PRISM Enhanced Growth


Returns 5.80% 9.80% -15.02% -6.05% 19.95% 62.35% 10.93%Volatility - - 21.99% 19.54% 18.73% 20.01% 19.89%

†

Strategy Overview

PRISM is a defined return profile, discretionary managed investment service. PRISM offers a wide range of defined return profiles with different risk and return characteristics so that investors and Financial Advisers can match specific requirements with precision.Each profile has a defined mean return and a defined volatility which, together with the performance of the Master Investment Strategy, are used to mathematically calculate the return in each period. The Master Investment Strategy is a highly diversified investment portfolio which aims to optimise returns per unit of risk.The underlying assets of the Master Investment Strategy are carefully selected across a wide and diversified range of different asset classes including equities, corporate and government debt, property, commodities and selected alternative strategies. Actual investments will be drawn largely from individual securities, although investment trusts, exchange traded funds, actively managed funds and other investments may also be used.

PRISM Horizon Key Data

Currency SterlingMinimum Initial Investment £15,000Dealing Dealing Cut-Off Weekly Tuesday at 12:30pmMaster Investment Strategy Price

Initial Charge Exit Charge Nil NilMaster Investment Strategy Management Charge 0.25%*Issuer/Counterparty Capital Financial Markets LimitedInvestment Manager & Promoter Capital International LimitedCustodian Capital International Limited


Performance

Investment Commentary

Top Ten Holdings


Expected Return Profile

Expected Returns:Expected Volatility:Investment Time Horizon:The expected return and volatility of the Master Investment Strategy may fluctuate over time in response to changing market conditions and outlook.

Equities

Bonds

High Yield

Property

Commodities

Alternatives

Cash

PRISM Master Investment Strategy

Performance Data

31 March 2016


The information contained herein is believed to be correct, but its accuracy cannot be guaranteed. PRISM Strategies were launched in June 2014. Historical performance is calculated by reference to the actual investment performance of Fusion Alpha modelled into the PRISM product structure. Any reference to past performance is not necessarily a guide to the future. Opinions constitute our judgment as of this date and are subject to change. The information contained in this document is provided for information purposes only, it does not constitute an invitation to purchase any investment. The value of any investment may go down as well as up. * PRISM reserves the right to levy a performance fee on the Master Investment Strategy on performance in excess of the defined return profiles. Full details of PRISM are contained in the Brochure, Terms of Business and associated literature which is available upon request. The regulated activities in relation to PRISM are provided by Capital International Limited and Capital Financial Markets Limited who are Members of the Capital International Group of Companies and are licensed by the Isle of Man Financial Services Authority.

†

PRISM Master Investment Strategy

Returns Volatility

3 Months 2.94% -

6 Months 5.13% -

1 Year -2.78% 8.18%

3 Years 7.50% 7.41%

5 Years 25.38% 7.10%

10 Years 67.41% 7.63%

Annualised 7.63% 7.61%

PR

ISM

Mas

ter I

nves

tmen

t Stra

tegy

- V

1.01

-04.

16

7.62%7.40%

5 years

Fixed Income Holding Equities Holding Funds HoldingKoninklijke KPN 5.75% 17/09/2029 1.80% Centrica Ord GBP 0.74% CF Eclectica Absolute Macro Fund 2.59%

Textron Inc 6.625% 07/04/2020 1.66% Glaxosmithkline Plc 0.73% Absolute Insight Fund of Funds II 2.19%

UK Treasury 2.75% 07/09/2024 1.65% Tate & Lyle Plc Ord GBP 0.68% JP Morgan Glbl Merger Arbitrage C 2.11%

Swiss RE AG 6.3024% FR Sub Perp 1.52% 3I Group Plc 0.67% Sarasin Real Estate Equity Global 1.86%

UK Treasury 4.25% 07/06/2032 1.32% Pearson Plc 0.65% Real Estate Credit Investments 1.79%

Atlanta SpA 6.25% 09/06/2022 1.27% Smiths Group Plc 0.64% Ediston Property Invesment Trust 1.78%

Statoil Hydro 6.125% 27/11/2028 1.17% Man Group Plc Ord 0.62% TR Property Inv Tst Ord GBP0.25 1.76%

London Stock Exchange 4.75% 01/05/2021 1.14% Marks & Spencer Group Plc 0.60% Salar Fund Plc Class A1 GBP Acc 1.66%

Johnson & Johnson 5.5% 06/11/2024 0.95% PZ Cussons Ord 0.58% MedicX Fund Ltd Ord NPV 1.61%

Reseau Ferre de France 5.5% 01/12/2021 0.89% Tullow Oil 0.58% F&C Commercial Property Trust 1.54%

279.4044 (as at 31 March 2016)

36.2%

2.0%

12.9%

6.2%

10.6%

13.1%



-25%0%

25%50%75%

100%125%150%175%200%225%250%275%300%325%

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Ret

urns

MIS H1 H1+ H2 H2+ H3 H3+ H4 H5 H6 H8 H10 Enh

19.0%

Can I use PRISM on an ‘execution only’ basis?Clients who wish to make their own investment decision can buy PRISM Limited Liability Contracts directly on an ‘Execution only’ basis, which can be ideal for Financial Advisers, Asset Managers and Experienced Investors who prefer to make their investment decisions. It should be noted that by undertaking activities on an ‘execution only’ basis we will prescribe you as a non-retail client, and as a consequence this will reduce the level of investor protection offered to you.

Who is Capital Financial Markets Limited?Capital Financial Markets is a wholly owned subsidiary of Capital International that is separately licenced to issue principal contracts and is ring-fenced from the rest of the Group. Capital Financial Markets is the issuer of the Limited Liability Contracts that deliver the PRISM profile returns.Capital Financial Markets has appointed Capital International’s Investment Team to manage the Master Investment Strategy and to deliver the underlying investment performance.

Are returns guaranteed?All investments carry risk, including cash and gilts. No investment can offer a genuine guaranteed return. After all, who guarantees the guarantor?PRISM returns should not be confused with fixed or other so called guaranteed return investments, such as structured deposits or fixed interest securities.PRISM provides a range of defined return profiles. The return achieved in any period is mathematically calculated based on the defined average return and defined volatility of each profile respectively, together with the performance of the Master Investment Strategy.The range of likely returns over time from each PRISM profile can therefore be stated with a high degree of precision, giving investor’s confidence to select the balance of risk and return that is suitable for them.The range of likely returns are stated with 97.5% confidence.

What is capital protection?Each profile from Horizon 1 to 5 incorporates a self stabilisation mechanism such that the profile value will not fall below a specified percentage of its initial value over the profile’s rolling time horizon. Nonetheless, each client’s profile valuation may fall below this level during the rolling time horizon.

How does the capital protection operate?The capital protection is provided by the Master Investment Strategy prior to the allocation of returns and is similarly recovered by the Master Investment Strategy in periods of subsequent growth.Capital protections apply over a profile’s full time horizon. For example the price of the Horizon 1 strategy after a full year should be no lower than the initial price. Whereas the price of the Horizon 3 strategy should be no lower than 95% of its initial price after a full three year period. It is entirely possible that the price may fall below the protected level in the interim period.

When can clients invest into the PRISM Service?Applications can be made at any time as access is open-ended. Any new investments are then transacted into the relevant profile on a weekly basis at the next weekly dealing date.

What is the risk of the PRISM Service?Each Profile has a defined average return and a defined volatility which, together with the performance of the Master Investment Strategy, are used to determine the return in each period.The risk therefore depends on the profile selected. Clients and their advisers can select as low a risk or as a high a risk profile as they are comfortable with to meet their investment requirements.The underlying Master Investment Strategy is invested across a wide range of asset classes and high quality investments, within an overall risk budget that is strictly controlled.Additional risk factors are set out in the operating memorandum of each PRISM profile; which are available on request.

How likely is it that a client will receive the defined return within the Profile they select?The returns in any period are calculated mathematically based on the defined average return and volatility of each profile. There is a high probability that returns will be within the ranges specified for each profile, which are stated with 97.5% confidence.

What are the charges?The PRISM defined return profiles are delivered without deduction of any client charges.The underlying Master Investment Strategy has a low annual charge of 0.25% per annum. To compensate for these very low charges, in periods where investment performance exceeds the defined return profiles, Capital International reserves the right to levy a performance fee on the underlying Master Investment Strategy.Your adviser may also levy charges or remuneration in addition, but they must agree this with you first. A Suitability Charge of up to 1.0% may apply where Capital International assesses suitability.There are no exit penalties or lock in periods. Clients can exit or switch at any weekly dealing point and the underlying Master Investment Strategy invests predominantly in securities with high levels of liquidity.

Who will I be contracting with?PRISM clients will enter into a contract with Capital International for discretionary investment management. Retail clients will need to obtain investment advice and this will normally be provided by your Financial Adviser. Capital International can provide a suitability assessment as to the appropriate PRISM Horizon strategy based on your investment and risk requirements.Once a discretionary account has been established, the Investment Team will buy the PRISM profile which is appropriate for you, based on your investment and risk requirements. The Investment Team will acquire a PRISM Limited Liability Contract from Capital Financial Markets. Your investment is held on your behalf by Capital International (Nominees) Limited, a subsidiary of Capital International.Capital International have been appointed as the Investment Manager of the Master Investment Strategy portfolio, which is owned by Capital Financial Markets.Capital International and Capital Financial Markets are regulated by the Isle of Man Financial Services Authority. Both companies are members of the Capital International Group.

PRISMFrequently Asked Questions

Innovation Integrity Excellence

CapitalInternational

What if a bank, which is allocated cash deposits from the Master Investment Strategy, defaults?Similarly, the loss will be incurred by the Master Investment Strategy, reducing its performance and the subsequent performance of each PRISM profile according to its defined return and defined volatility parameters. (See above for more detail on how the capital protection feature operates)

What is a Limited Liability Contract?A Limited Liability Contract (LLC) is a principal financial contract that legally binds the issuer, Capital Financial Markets Limited, to deliver the financial performance specified by the contract.The terms of each LLC are set out in their respective SRI operating memorandums which are available on request.An LLC is not a margined transaction and is not leveraged. The liability of the owner is explicitly limited to the amount paid for the LLC.PRISM specifies a range of defined return profile LLCs including many that incorporate an element of capital protection, providing significantly enhanced protection in addition to the limited liability nature of the contract itself.

Is PRISM a fund?PRISM is not a fund or collective investment scheme. PRISM uses principal financial contracts to deliver the defined return profiles.

Are there any limitations on investments that can be made?In order to maintain the integrity of the service at all times, PRISM reserves the right to restrict access or limit the maximum size of investment into one or more PRISM profiles. This may occur if there is excessive demand for one or more PRISM profile(s). Similarly, PRISM reserves the right to close part or all of an existing position in the event that the integrity of the PRISM service cannot be adequately maintained.

Can a client’s IFA be paid from PRISM?An IFA can be paid initial and/or ongoing servicing remuneration with regards to their client’s PRISM account.

How can a client track investment performance?Monthly factsheets on each profile will be published. In addition, all clients will receive a quarterly valuation and investment report. Finally, if clients want more frequent access they can log-in to our website to get up to date valuation information at any time.

Can a client change Profiles if required?A client can request to switch Profile at any time. The switch will be transacted on the next available dealing date.

When and how can a client withdraw their investment?A client can request to withdraw part or all of their investment at any time. The withdrawal will be transacted on the next available dealing date.

Are the capital protections guaranteed?The capital protections provided are highly robust; nevertheless, it is again impossible to provide an absolute guarantee. In circumstances where a ‘catastrophic’ or ‘force majeure’ market event occurs it is conceivable that the capital protections may fail to an extent.There are no examples in recent history of such a catastrophic event occurring. Historical testing indicates that neither the dot.com crash of 2000-2003 nor the financial crashes of 2008 and 2012 presented any material threat to the capital protections provided within the PRISM structure.

Will actual returns always exactly match the defined returns?The periodic nature of returns means that when viewed in hindsight there are always likely to be periods when returns are above or below each profile’s average expected return. This can be seen in the historic performance shown in the respective fact sheet of each profile.However, PRISM returns are mathematically calculated by reference to the defined return and volatility of each profile and over time the actual returns are therefore likely to converge toward the defined return profiles specified.

Will the Defined Return Profiles change?The PRISM profiles are designed to be truly compelling when compared to traditional investments and investment strategies. This means that the profiles will need to be updated over time to reflect the ever changing economic and investment environment.For example, should interest rates and inflation rise, it is unlikely that the current defined returns profiles would remain sufficiently attractive in comparison to other investments, and vice versa. In response, the expected return and risk of each profile will be adjusted over time to remain compelling.The latest defined return profiles are available on the Capital International Group’s website.

What are the underlying assets of the Master Investment Strategy?The underlying assets of the Master Investment Strategy will be carefully selected by our experienced team of investment professionals across a wide and diversified range of different asset classes including equities, corporate and government debt, property, commodities and selected alternative strategies. Actual investments will be drawn largely from individual securities, although investment trusts, exchange traded funds, actively managed funds and other investments may also be used.

What happens if an underlying asset within the Master Investment Strategy defaults?The Master Investment Strategy will remain highly diversified at all times and the default of any one asset is unlikely to have a significant impact on the overall strategy. Nevertheless, any loss would be absorbed by the Master Investment Strategy, reducing its performance and the subsequent performance of each PRISM profile according to its defined return and defined volatility parameters. (See above for more detail on how the capital protection feature operates)

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This document has been prepared for information purposes only and does not constitute an offer or an invitation, by or on behalf of any company within the Capital International Group of companies or any associated company, to buy or sell any security. Nor does it form a constituent part of any contract that may be entered into between us.

Opinions constitute our judgement as of this date and are subject to change. The information contained herein is believed to be correct, but its accuracy cannot be guaranteed.

Any reference to past performance is not necessarily a guide to the future. The price of a security may go down as well as up and its value may be adversely affected by currency fluctuations.

The company, its clients and officers may have a position in, or engage in transactions in any of the securities mentioned.

Regulated activities are carried out on behalf of the Capital International Group by its licensed member companiesCapital International Limited and Capital Financial Markets Limited are both licensed by the Isle of Man Financial Services AuthorityCapital International Limited is a member of the London Stock ExchangeRegistered Address: Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG

Isle of Man | Head OfficeCapital International GroupCapital HouseCircular RoadDouglasIsle of ManIM1 1AG

www.capital-iom.com

T : +44 (0) 1624 654200 F: +44 (0) 1624 654201 E: [email protected]

South Africa OfficeCapital International SAOffice NG101AGreat Westerford240 Main RoadRondebosch 7700South Africa

www.capital-sa.com

T : +27 (0) 21 201 1070 E: [email protected]


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