Chartwell Wealth Management

Our Investment Philosophy

& Principles of Portfolio Management

Chartwell Financial Services is a firm of

‘fee based’ independent financial

advisers based in Altrincham, Cheshire.

We have been providing bespoke

financial solutions to both personal and

corporate clients since 1992

As part of the Private Clients business

Chartwell Wealth Management offers

holistic financial planning advice on a fee

charging basis. We manage a series of risk

based investment portfolios on our own

wrap which also permits our clients to hold

legacy investments and deposits under

pension and personal portfolio strategies

Chartwell Wealth Management -

What is our Investment Philosophy?

Managing the level of risk you are

prepared to take

Active fund management

Reducing risk by asset diversification

Selecting funds with low investment

volatility

Cost reduction for your portfolio

Regular strategic & tactical fund

manager reviews

Regular client reviews to reassess risk

& investment needs

How easy is it to pick a winner?

Should I invest in shares?

1503 company shares registered in the UK 1

Should I invest in a retail fund and let the

experts manage my money?

6172 funds offered for sale in the UK 2

A Simple Decision for a UK Investor?

Source as at end of June 2011:

1 - Bloomberg 630 for FTSE All-Share and 873 for AIM All Share 2 - Lipper All Mutual Funds

Which asset class will be the winner this year?

Source: Datastream and Morningstar (total return in Sterling) as at 06 January 2011.

You cannot predict the future?

Rank/%

Annual

return 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1 Commodities

61.6%

Property

7.1%

Commodities

19.4%

Emg Mkts

40.5%

HY Bonds

21.2%

Emg Mkts

50.5%

Europe ex UK

20.1%

Emg Mkts

37.4%

Gilts

12.8%

Emg Mkts

56.1%

Emg Mkts

22.9%

2 Property

10.5%

Corp Bonds

6.6%

Property

10.5%

HY Bonds

39.5%

Property

18.9%

Japan

41.0%

Property

18.1%

Pacific ex

Japan

34.2%

Cash

5.7%

Pacific ex

Japan

52.0%

Pacific ex

Japan

22.8%

3 Corp Bonds

10.2%

Cash

5.1%

Corp Bonds

9.8%

Pacific ex

Japan

32.7%

Emg Mkts

17.4%

Commodities

40.4%

UK

16.8%

Commodities

30.4%

Japan

1.2%

H Y Bonds

46.4%

Japan

19.2%

4 Gilts

8.8%

Gilts

3.1%

Gilt

9.3%

Europe ex UK

29.7%

Pacific ex

Japan

14.9%

Pacific ex

Japan

34.3%

Emg Mkts

16.3%

Europe ex UK

15.7%

Corp Bonds

-3.6%

UK

30.1%

US

17.9%

5 Cash

6.0%

Hedge

2.8%

Cash

3.9%

Japan

23.9%

Europe ex UK

13.8%

World ex UK

24.9%

Pacific ex

Japan

16.1%

Hedge

10.3%

US

-13.2%

Commodities

20.03%

Commodities

17.68%

6 Hedge

4.1%

Pacific ex

Japan

1.6%

Hedge

1.0%

UK

20.9%

UK

12.8%

Europe ex UK

24.1%

HY Bonds

11.8%

World ex UK

9.7%

World ex UK

-17.1%

Europe ex UK

19.3%

UK

17.2%

7 Europe ex UK

1.7%

Emg Mkts

0.2%

HY Bonds

-11.%

World ex UK

20.7%

Commodities

9.4%

UK

22.0%

Hedge

10.3%

Cash

6.2%

Property

-18.2%

World ex UK

18.65%

World ex UK

15.8%

8 HY Bonds

-1.9%

HY Bonds

-1.6%

Pacific ex

Japan

-14.6%

US

15.3%

Japan

8.6%

Property

18.8%

World ex UK

5.7%

UK

5.3%

Hedge

-23.0%

US

18.6%

Property

13.4%

9 US

-2.2%

US

-9.8%

Emg Mkts

-15.0%

Hedge

11.6%

World ex UK

7.8%

US

16.9%

Cash

4.8%

Gilts

5.3%

Europe ex UK

-24.0%

Property

14.4%

HY Bonds

12.4%

10 World ex UK

-4.1%

UK

-13.3%

Japan

-18.8%

Property

11.2%

Corp Bonds

6.9%

Corp Bonds

8.7%

US

1.2%

US

3.4%

HY Bonds

-25.0%

Hedge

13.4%

Hedge

8.92%%

11 UK

-5.9%

World ex UK

-14.0%

UK

-22.7%

Commodities

8.6%

Hedge

6.8%

HY Bonds

5.3%

Corp Bonds

0.8%

Corp Bonds

1.9%

Commodities

-25.9%

Corp Bonds

12.7%

Europe ex UK

8.4%

12 Emg Mkts

-25.1%

Europe ex UK

20.1%

Europe ex UK

-27.0%

Corp Bonds

5.9%

Gilts

6.6%

Gilts

7.9%

Gilts

0.7%

HY Bonds

-0.9%

UK

-29.9%

Cash

0.8%

Corp Bonds

7.3%

13 Pacific ex

Japan

-25.3%

Commodities

-30.1%

World ex UK

-27.4%

Cash

3.6%

Cash

4.5%

Hedge

7.4%

Japan

-10.5%

Property

-5.5%

Pacific ex

Japan

-33.5%

Gilts

-1.9%

Gilts

6.5%

14 Japan

-29.6%

Japan

-31.6%

US

-29.9%

Gilts

2.1%

US

3.1%

Cash

4.7%

Commodities

-25.5%

Japan

-6.8%

Emg Mkts

-35.2%

Japan

-3.6%

Cash

0.7%

£14,313

£16,586£16,062

£16,636

£11,720

£7,411

£5,020

£6,507

£4,974

£6,571

£0

£2,000

£4,000

£6,000

£8,000

£10,000

£12,000

£14,000

£16,000

£18,000

Picking the Wrong Fund

Can Seriously Damage Your Wealth

Sectors: Bond GBP, Equity Global, Equity UK, Money Market GBP, Real Estate UK. Source: Lipper (UK Funds), 5 years to 30th September 2012. All amounts are net of fees. This material is presented for illustrative purposes only

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Eq

uit

y

UK

Eq

uit

y

Pro

pe

rty

Cas

h

Bo

nd

s

The Difference Between the Best and Worst Fund Choice

With a £10,000 Investment Over a 5 Year Period

Investor Psychology

9 1

V908

-400

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Cash

flo

w (

GB

Pm

)

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

FT

SE

100 I

nd

ex (

GB

P)

Monthly net retail cash flow to equity products in the UK (GBPm) FTSE 100 Index (GBP)

Greed and fear: why clients need help

Net retail investments in equity funds by UK investors vs. FTSE 100 Index 1992 - 2008

Source: IMA, MSCI. Monthly cash flow data shown reflects 6-month moving average. Past performance is not a guide to future performance.

Buying High and Selling Low?

Market Timing - would that work?

11

Annualised returns of the FTSE All Share

average over 15 Years

£10,000

invested

Fully Invested 8.68% £34,869

Best 10 days missed 5.70% £22,961

Best 20 days missed 3.42% £16,559

Best 30 days missed 1.44% £12,394

Best 40 days missed -0.36% £9,468

Source: Datastream as at 02/04/10, Basis: total return in GBP, FTSE All Share annualised returns 01/04/95 to 01/04/10

It is time in the market not ‘timing’ the market that is key to investing

Missing the best days can harm performance

Long Term Investing between 1950 – 2010

Investment of £100 in 1950: Value 2010

UK Building Society Index - £1,560 (Income Reinvested)

Retail Prices Index - £2,680

Barclays Gilt Index - £6,146 (Income Reinvested)

Barclays Equity Index - £117,500 (Dividends Reinvested)

Source – Scottish Widows – UK Financial History 1950-2010 - SW55063

03/11

How do Chartwell achieve stability

for your investment portfolio?

Principles of Portfolio Management

A well constructed multi-manager mix is

superior to single strategies

Well constructed multi-asset strategy mixes

diverse drivers of return

Seek returns where the opportunity for

active management is greatest

Portfolio risk management must be an

active process

Portfolio Managers should be proactively

involved in the manager research process

Careful implementation pays off

What happens next?

We analyze the risk you are prepared to take

with your money

We operate 5 risk graded actively managed

portfolios on behalf of our clients

Risk Graded Portfolios % holding

Secure 2

Conservative 3

Balanced 4

Adventurous 5

Aggressive 6

UK Growth Assets 3 7 11 16 19

International Growth

Assets 6 18 30 41 54.5

Real Assets 5 8 11 14 17

Defensive Assets 86 67 48 29 9.5

Source: Morningstar as at 30 September 2012 – returns % (GBP) Based on C class share returns. Inception date – 31st January 2010

Balanced Portfolio construction

Fund Portfolio Weight

UK Growth Assets 11.0%

International Growth Assets 30.0%

Real Assets 11.0%

Defensive Assets 48.0%

Asset Class Portfolio Weight

Equity 41.0%

Bonds 22.5%

Property 2.9%

Commodity & Infrastructure 6.1%

Absolute Return & Cash Plus 18.2%

Cash 9.4%

How well have the Chartwell

investment portfolios performed?

Portfolio & Risk Grade

1mnth 3mnth 6mnth YTD 1 year 2 years Since Inception

Secure 2 0.5 2.7 2.7 4.9 6.6 5.4 11.7

Conservative 3 0.8 3.3 2.2 6.1 9.1 6.9 14.5

Balanced 4 1.0 3.8 1.6 7.3 11.7 8.2 17.0

Adventurous 5 1.2 4.4 1.1 8.4 14.2 9.5 19.4

Aggressive 6 1.5 5.0 0.4 9.6 16.9 10.6 21.5

Source: Morningstar as at 30 September 2012 – returns % (GBP) Based on C class share returns. Inception date – 31st January 2010

Chartwell Wealth Management -

Regular Review Process

Chartwell Investment Management

Committee

Quarterly strategic review meetings

External compliance consultants attend

5 risk graded actively managed portfolios

All fund managers are reviewed

Asset allocation & standard deviation

reviews

Cost reduction for your portfolio

Strategic & tactical fund manager reviews

Our Contact Details

Chartwell Professionals and Chartwell Wealth

Management are trading styles of Chartwell

Financial Services Limited who is Authorised &

Regulated by the Financial Services Authority.

Registered in England 02578206 . Last Update December 2012

Chartwell Wealth Management Lindley Court

Scott Drive

Altrincham

Cheshire

WA15 8AB

T 0161 929 3500

F 0161 929 3501

E info@chartwellfs.com

W www.chartwellfs.com

We look forward to

hearing from you.

Smarter solutions. Endless possibilities.