Mr Joe Smith 50 Harbour Road Southampton SO15 2AB

ACCOUNT NUMBER: 123456789 24 July 2020 Dear Mr Smith, I have pleasure in enclosing your WealthSelect Managed Portfolio Service quarterly report. This report includes the following information: • A current valuation of your accounts fully invested in the Managed Portfolio Service

• Commentary from the Portfolio Manager that manages your investments

• The performance of your portfolio, with a detailed review

• A summary of any changes made to your portfolio and the funds held in your portfolio

• A review of recent market news and a look forward into next quarter If you have any queries or concerns please get in contact with me. Yours sincerely, Mr A B Adviser 15 Finance Street London W1 1FA

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WEALTHSELECT MANAGED PORTFOLIO SERVICE QUARTERLY REPORT TO 30 JUNE 2020

WEALTHSELECT MANAGED PORTFOLIO SERVICE QUARTERLY REPORT TO 30 JUNE 2020

Total Portfolio Valuation as at 30 June 2020

£125,426.80

Total Portfolio Valuation as at 31 March 2020 was

£113,110.20

Account Number 123456789 Current Valuation [Previous valuation as at 31 March 2020

£125,426.80

£113,110.20

INDIVIDUAL SAVINGS ACCOUNT

Please note:

• For full details of contributions, subscriptions, withdrawals, fees and charges please

refer to your Quarterly Statement.

• If any transactions, such as fund switches, are processed at the time this report was

produced, there might be some differences between the Current Valuations above

and the Total Portfolio Holdings in the ‘DETAILED VALUATION OF FUNDS’ section

in this report.

• The investment firm managing your portfolio is Old Mutual Wealth Ltd for Collective

Investment Accounts and ISAs, and Old Mutual Wealth Life and Pensions Ltd for

Collective Investment Bonds and Collective Retirement Accounts.

GLOBAL MARKETS COME ROARING BACK IN SECONDQUARTER

Despite the backdrop of a global pandemic that, by the end of June, had claimed more thanhalf a million lives, global markets rallied consistently throughout the quarter, recovering muchof the ground lost during the panic that characterised the first quarter.

Global equities gained some 19.3%, after declining 15.4% in the previous quarter, whileUS equities jumped 20.6%, paring losses to just over 3.4% for the year.

The rally was initially spurred in late March when US lawmakers agreed a $2trn supportpackage – the biggest in history – to protect jobs and households. Optimism that suchmeasures would continue fuelled the ongoing rally as did the news, late in the period, thatthe US, UK and Europe were beginning to ease their lockdown restrictions.

Despite a brief rally during the quarter, ‘value’ stocks significantly underperformed their growthpeers as the lockdown completely reshaped the landscape for dividend investors.

Late in the period, the rally in ‘risk assets’ of all kinds appeared to be losing momentum asinvestors began to question where the next leg of stimulus might come from amid news of asecond wave of virus outbreaks in China, Japan and Germany, its continued spread inemerging markets such as Russia, Brazil and India, and the realisation that the US was stillin the early throes of its outbreak – despite many states having already eased their lockdownmeasures.

Last quarter, we elected to make an ad hoc rebalance on 20 March, following a sharpmarket decline. It was followed by one of the greatest ‘risk-on’ rallies of modern times.

Your portfolio benefitted greatly from this and from the prudence we showed when we reducedrisk again at the June rebalance. Our ability to ‘reset’ our portfolios whenever the need arisesenabled us to book profits for investors at every risk level during a period when it was clearlybetter to travel, than to arrive.

Regards,

STUART CLARKPORTFOLIO MANAGER

(All figures quoted in sterling terms)

A NOTE FROM YOURPORTFOLIO MANAGER

PORTFOLIO SUMMARY INDIVIDUAL SAVINGS ACCOUNT THE FOLLOWING PAGES PROVIDE A BREAKDOWN OF THE STRATEGY OF YOUR PORTFOLIO

PORTFOLIO DETAILS

ACCOUNT DETAILS PORTFOLIO MANAGER VOLATILITY TARGET PORTFOLIO NAME AND STYLE

123456789 Stuart Clark 9.75% - 11.58% Active Managed Portfolio 5

DISCRETE QUARTERLY STRATEGY PERFORMANCE

TO 30 JUNE 2020 TO 31 MARCH 2020 TO 31 DECEMBER 2019 TO 30 SEPTEMBER 2019

11.11% -10.86% 1.24% 1.99%

CUMULATIVE STRATEGY PERFORMANCE TO 31 MARCH 2020

OVER 6 MONTHS OVER 1 YEAR OVER 3 YEARS OVER 5 YEARS

-0.72% 2.49% 11.09% 26.83%

PORTFOLIO FUND CHANGES DURING THE LAST QUARTER Your portfolio is constantly monitored and reviewed by our team of investment specialists. And, as part of our active management service, we will make changes where we believe it's in your best interests. Any new investments into the suspended Janus Henderson UK Property PAIF fund during the quarter were allocated to the BlackRock Cash fund. These amounts have now been invested into other funds in the portfolio. The pie chart overleaf reflects this change as well as any other changes made to the asset allocation during the quarter. IN

None OUT

BlackRock Cash - U2

WHAT ARE VOLATILITY TARGETS? PORTFOLIO STYLE One of the main measures of investment risk is volatility, which is a measure of the amount an investment rises and falls over time. Your portfolio is risk-targeted and has 3 year volatility targets rather than targets for a particular level of growth. By targeting risk and volatility the portfolios should behave more as you expect over time.

Different funds have different investment styles and we can mix these within your portfolio. Active funds aim to beat a particular market or index and you pay a premium for this. Passive funds aim to just track the performance of a market or index and are cheaper accordingly. The mix within your portfolio can determine its cost and potential performance.

UNDERSTANDING YOUR INVESTMENTS With all investments past performance is not a guide to future performance and you may not get back what you invested, but having an understanding of your investments, and the way they behave, can help you feel more comfortable with any ups and downs along the way. All investments carry risks and knowing what they are can help you manage them. You’ll find information about some of them within this report but for a better understanding of investment risk view our ‘website at www.oldmutualwealth.co.uk/risk

* The past performance shown above represents the performance of a single lump sum investment into a managed portfolio held within a Collective Retirement Account (CRA). The performance of managed portfolios held within other products will be similar, but not necessarily identical

DETAILED VALUATION OF FUNDS HELD IN YOUR PORTFOLIO

ASSET ALLOCATION (30 JUNE 2020)

CASH/MONEY MARKETS

FIXED INTEREST

ALTERNATIVES

UK EQUITY

DEVELOPED MARKETS EQUITY

EMERGING MARKETS EQUITY

PERCENTAGE QUARTERLY CHANGE

10.22%

19.69%

17.43%

16.00%

31.04%

5.62%

1.55%

0.27%

0.71%

1.58%

0.25%

TOTAL PORTFOLIO HOLDINGS - £125,426.80 ACCOUNT NUMBER 123456789

FUND VALUE (£) UNITS/SHARES PRICE (P)

CASH/MONEY MARKETS 1,238.87

FIXED INTEREST 2,410.97

ALTERNATIVES 2,417.64

UK EQUITY 1,902.58

FUND VALUE (£) UNITS/SHARES PRICE (P)

BlackRock Cash 123.4567 123.45 1,234.56

Quilter Investors Sterling Corporate Bond (Fidelity) 123.4567 123.45 1,234.56

Quilter Investors Diversified Bond (Merian) 123.4567 123.45 1,234.56

Quilter Investors Sterling Diversified Bond (Fidelity) 123.4567 123.45 1,234.56

Quilter Investors Corporate Bond (Merian) 123.4567 123.45 1,234.56

Quilter Investors Emerging Markets Bond (Merian) 123.4567 123.45 1,234.56

Quilter Investors Investment Grade Corporate Bond (Invesco)

123.4567 123.45 1,234.56

Quilter Investors Gilt Index (BlackRock) 123.4567 123.45 1,234.56

Janus Henderson UK Property 123.4567 123.45 1,234.56

Quilter Inv Absolute Return Bond (Janus Henderson) 123.4567 123.45 1,234.56

PIMCO Dynamic Bond 123.4567 123.45 1,234.56

Quilter Investors Global Equity Absolute Return (Merian)

123.4567 123.45 1,234.56

Quilter Investors UK Equity Growth (Newton) 123.4567 123.45 1,234.56

Quilter Investors UK Equity Income (Merian) 123.4567 123.45 1,234.56

Quilter Investors UK Equity (Merian) 123.4567 123.45 1,234.56

Quilter Investors UK Equity Opportunities (Artemis) 123.4567 123.45 1,234.56

Quilter Investors UK Equity Large-Cap Income (Artemis) 123.4567 123.45 1,234.56

4.36%

DETAILED VALUATION OF FUNDS HELD IN YOUR PORTFOLIO CONTINUED

3,860.43 712.22 DEVELOPED MARKETS EQUITY EMERGING MARKETS EQUITY

FUND VALUE (£) UNITS/SHARES PRICE (P) FUND VALUE (£) UNITS/SHARES PRICE (P)

Quilter Investors Asia Pacific (ex Japan) Large-Cap Equity (Invesco)

123.4567 123.45 1,234.56

Quilter Investors Precious Metals Equity (BlackRock) 123.4567 123.45 1,234.56

Quilter Investors Europe (ex UK) Equity Income (Schroders)

123.4567 123.45 1,234.56

Quilter Investors Asia Pacific (ex Japan) Equity (Fidelity)

123.4567 123.45 1,234.56

Quilter Investors Japanese Equity (Schroders) 123.4567 123.45 1,234.56

Quilter Investors Europe (ex UK) Equity (Janus Henderson)

123.4567 123.45 1,234.56

Quilter Investors US Equity Small/Mid-Cap (Schroders) 123.4567 123.45 1,234.56

Quilter Investors Europe (ex UK) Small/Mid Cap Equity (Merian)

123.4567 123.45 1,234.56

Quilter Investors Europe (ex UK) Equity Growth (Allianz) 123.4567 123.45 1,234.56

Quilter Investors US Equity Growth (JP Morgan) 123.4567 123.45 1,234.56

Quilter Investors Asia Pacific (Merian) 123.4567 123.45 1,234.56

Quilter Investors US Equity Income (BNY Mellon) 123.4567 123.45 1,234.56

Quilter Investors Global Equity Value (BNY Mellon) 123.4567 123.45 1,234.56

Quilter Investors Natural Resources Equity (Janus Henderson)

123.4567 123.45 1,234.56

Quilter Investors North American Equity (Merian) 123.4567 123.45 1,234.56

Quilter Investors Emerging Markets Equity Growth (JP Morgan)

123.4567 123.45 1,234.56

Quilter Investors Emerging Markets Equity Income (Wells Fargo)

123.4567 123.45 1,234.56

Quilter Investors Emerging Markets Equity (Merian) 123.4567 123.45 1,234.56

Quilter Investors China Equity (Janus Henderson) 123.4567 123.45 1,234.56

Global equity markets rallied in the second quarter as many countries gradually eased their lockdown measures, even as the number ofcoronavirus cases worldwide topped 10 million.

A period that started with the UK’s first full month of lockdown, ended with an easing of restrictions in a bid to kickstart the economy, whichcontracted 20.4% in April – the largest monthly contraction on record.

UK equities rallied 14.2% higher during a period when talks between the UK and EU restarted in a bid to define their future trading relationshipand the UK confirmed it wouldn’t request an extension to the 31 December transition deadline.

The European Central Bank (ECB) revised down its growth forecast, warning of an 8.7% contraction in the region this year. Meanwhile,German industrial output fell a record 17.9% in April, although the country began easing its lockdown restrictions in April, much earlier thanSpain, France and Italy.

However, poor economic data didn’t dampen Europe’s equity markets as they posted a return of 20.8%.

In the US, equities climbed 20.7% over the quarter, led by its array of major technology companies. Even so, the coronavirus death tollcontinued to mount; it had reached 130,000 by the end of June with President Trump’s fumbling of the crisis coming under ever greaterscrutiny.

He also found himself amid a nationwide reckoning on racial equality as well as heightened tensions with China after he sought to lay theblame for the coronavirus outbreak at its door.

Late in the period, the Chinese authorities passed a new national security law for Hong Kong, which provoked international concern. Evenso, Chinese equities returned 20.2% during the quarter.

Meanwhile, in the commodities space, US oil prices rebounded during the quarter, with the price of West Texas Intermediate recovering toaround $38 a barrel. Gold also saw further gains moving from $1596/oz to $1800/oz.

Ongoing stimulus from global central banks provided huge support to credit and sovereign bond markets during the quarter. With investorsclamouring for more risk, corporate bonds, namely bonds issued by companies, significantly outperformed government bonds with UK giltsgaining just 2.7% over the period compared to 7.4% for corporate bonds.

(All performance figures in sterling terms and rounded to one decimal place unless otherwise stated. The performance of each sector isrepresented by the equivalent IA sector average.)

PORTFOLIO CHANGESThe quarter included one formal rebalance on 6 June where we:● Reduced UK equity exposure after the market enjoyed a significant rebound on the back of a record bounce in UK purchasing managers

index (PMI) and other improving economic data. The news also helped the pound to jump after the low caused by April’s dire economicnumbers and the ongoing trauma of Brexit. Within the UK portfolio, we trimmed the position in the Quilter Investors UK Equity IncomeFund and rotated into the Quilter Investors UK Equity Fund.

● Took profits from our gold equity exposure following strong gains. This reduced your holding in the Quilter Investors Precious MetalsEquity Fund to the same levels as at the beginning of the quarter.

● Reinvested the proceeds into traditional fixed-income funds such as the Quilter Investors Sterling Diversified Bond Fund and added toalternative strategies such as the PIMCO Dynamic Bond and the Quilter Investors Absolute Return Bond funds and into cash. Thesechanges slightly reduced risk across all portfolios.

● Top-sliced our ‘growth’ strategy exposure and rotated into ‘value’ strategies that had underperformed. In the US, we took profit fromthe holding in the Quilter Investors US Equity Growth Fund and moved the proceeds into the Quilter Investors US Equity Income Fund.Similarly, we added to the Quilter Investors Emerging Markets Equity Income Fund.

● Allowed the European equity weighting to drift up while still remaining underweight relative to our peers and maintained our overallexposure to emerging markets with a small increase in the Quilter Investors Emerging Markets Equity Growth Fund.

● Elsewhere, we appointed Allianz to manage the Quilter Investors Europe ex UK Growth Fund.

DETAILEDPERFORMANCE REVIEW

Some fixed-income markets saw double-digit returns with corporates bonds – namely those issued by companies – significantlyoutperforming government bonds.

The Quilter Investors Emerging Markets Bond Fund, managed by Merian, was a standout performer with a return in excess of 13%.However, its relatively small portfolio weighting meant that the Quilter Investors Diversified Bond and the Quilter Investors CorporateBond funds (both run by Merian) and the Quilter Investors Sterling Diversified Bond fund, managed by Fidelity, all delivered muchlarger contributions to overall performance.

Your emerging market equities holdings also outperformed their benchmark return of 18.5%. The Quilter Investors Emerging MarketsEquity Growth Fund, managed by JP Morgan’s Leon Eidelman, was a key contributor. It outperformed its benchmarks by more than6% thanks to strong communications stock picks.

The Quilter Investors Emerging Markets Equity Fund, managed by Nick Payne at Merian, was also soundly ahead of the benchmarkthanks to its positioning in financial and industrial sector names.

The Quilter Investors China Equity Fund, managed by May Ling Wee at Janus Henderson, also outperformed its benchmark by somemargin. Such outperformance was more than sufficient to counter the relative underperformance of the Quilter Investors EmergingMarkets Equity Income Fund, which is managed by Wells Fargo.

The strong performance of the PIMCO Dynamic Bond Fund, which gained just shy of 6%, and the Quilter Investors Absolute ReturnBond Fund, managed by Janus Henderson, was dulled slightly by small losses elsewhere in the alternatives portfolio.

Indeed, the only two holdings in the portfolio to record a loss were the Quilter Investors Global Equity Absolute Return (GEAR) Fundand the Janus Henderson UK Property Fund, both of which declined in the region of 1% over the period.

The UK equity allocation also substantially outperformed its benchmark. With the exception of the Quilter Investors UK Equity LargeCap Income Fund, managed by Adrian Frost and Nick Shenton at Artemis, which was only slightly off the pace, all of our underlyingUK managers outperformed their benchmark index.

Returns were especially strong from the Quilter Investors UK Equity Opportunities Fund, another Artemis mandate, this time run by DerekStuart and Andy Gray, as names in the portfolio which had been adversely impacted at the end of the first quarter recovered fromtheir lows. The Quilter Investors UK Equity Growth Fund, run by BNY Mellon (Newton), continued its recent run of performance withgood sector positioning, an underweight to energy companies and strong stock selection among financial stocks.

Pleasingly,ŁtheŁdevelopedŁmarketŁequitiesŁpartŁofŁyourŁportfolioŁoutperformedŁitsŁbenchmark,ŁevenŁthoughŁtheŁlatterŁnotchedŁupŁaŁreturnŁofŁ20.4%ŁduringŁtheŁquarter.ŁInŁmostŁcases,ŁourŁunderlyingŁmanagersŁoutperformedŁtheirŁrespectiveŁbenchmarks,ŁboostingŁrelativeŁperformance.

However,ŁtheŁbiggestŁcontributorŁtoŁreturnsŁwasŁyourŁpositionŁinŁgold.ŁTheŁQuilterŁInvestorsŁPreciousŁMetalsŁFund,ŁmanagedŁbyŁTomŁHollŁandŁEvyŁHambroŁatŁBlackRock,ŁreturnedŁanŁastonishingŁ51%.ŁThisŁwasŁespeciallyŁbeneficialŁasŁweŁhadŁincreasedŁourŁweightingŁtoŁtheŁfundŁshortlyŁbeforeŁtheŁstartŁofŁtheŁquarter.

DespiteŁsufferingŁaŁdipŁinŁMay,ŁAsianŁequityŁmarketsŁgainedŁalmostŁ19%ŁinŁtheŁsecondŁquarter.ŁTheŁQuilterŁInvestorsŁAsiaŁPacificŁ(exŁJapan)ŁEquityŁFund,ŁmanagedŁbyŁAnthonyŁSromŁatŁFidelity,ŁandŁtheŁQuilterŁInvestorsŁAsiaŁPacificŁ(exŁJapan)ŁLargeŁCapŁEquityŁFund,ŁrunŁbyŁWilliamŁLamŁatŁInvesco,ŁwereŁbothŁcomfortablyŁaheadŁofŁtheirŁbenchmark.

WhileŁtheŁformerŁbenefittedŁfromŁstrongŁstockŁselectionŁinŁtheŁconsumerŁstaplesŁandŁmaterialsŁsectors,ŁtheŁlatterŁoutperformedŁthanksŁtoŁheavyŁpositionsŁinŁtechnologyŁandŁconsumerŁdiscretionaryŁstocks.

YourŁEuropeanŁequityŁholdingsŁwereŁalsoŁallŁaheadŁofŁtheirŁbenchmark,ŁwhichŁitselfŁreturnedŁoverŁ18%.ŁTheŁQuilterŁInvestorsŁEuropeŁ(exŁUK)ŁSmall/MidŁCapŁFundŁwasŁtheŁstandoutŁperformer.ŁTheŁfund,ŁwhichŁisŁrunŁbyŁMerian,ŁprosperedŁthanksŁtoŁaŁsurgeŁinŁsmallerŁcompaniesŁrelativeŁtoŁtheirŁlargerŁpeersŁandŁtheŁmanager’sŁfaithŁinŁfinancialŁsectorŁstocks.

WithŁtheŁexceptionŁofŁtheŁQuilterŁInvestorsŁUSŁEquityŁGrowthŁFundŁmanagedŁbyŁJPŁMorgan’sŁTimothyŁParton,ŁwhichŁracedŁawayŁtoŁdeliverŁnorthŁofŁ29%,ŁourŁUSŁequityŁexposuresŁlaggedŁtheirŁrespectiveŁbenchmarksŁtoŁvaryingŁdegrees.ŁEvenŁso,ŁabsoluteŁreturnsŁfromŁourŁUSŁportfolioŁwereŁextremelyŁstrong.

TheŁQuilterŁInvestorsŁUSŁEquityŁGrowthŁFundŁbenefitedŁfromŁitsŁbroadŁexposureŁtoŁtechnology,ŁhealthcareŁandŁconsumerŁdiscretionaryŁsectorsŁbutŁalsoŁfromŁgoodŁstockŁselection.ŁTheŁbiggestŁdriverŁofŁperformanceŁwasŁaŁsignificantŁoverweightŁtoŁTesla.ŁTheŁmanagerŁhasŁhistoricallyŁtradedŁthisŁnameŁwellŁaddingŁtoŁtheŁpositionŁthroughŁperiodsŁofŁweaknessŁandŁtrimmingŁafterŁstrongŁgains.

TheŁQuilterŁInvestorsŁGlobalŁEquityŁValueŁFund,ŁwhichŁisŁnowŁrunŁbyŁIlgaŁHaubeltŁandŁteamŁatŁBNYŁMellonŁ(Newton)ŁfollowingŁtheŁrecentŁdepartureŁofŁNickŁClay,ŁwasŁsomethingŁofŁaŁsoftŁspot.ŁItŁwasŁsomeŁwayŁbehindŁitsŁbenchmarkŁ(whichŁgainedŁ20%)ŁdueŁtoŁanŁunderweightŁtoŁtheŁUSŁandŁtheŁabsenceŁofŁtechŁgiantsŁsuchŁasŁAppleŁandŁAmazonŁfromŁtheŁportfolio.

DETAILEDPERFORMANCE REVIEWCONTINUED

AsŁaŁresultŁofŁtheŁmanagerŁchange,ŁratherŁthanŁthisŁshort-termŁunderperformance,ŁweŁhaveŁplacedŁtheŁholdingŁunderŁreviewŁwhileŁweŁassessŁtheŁnewŁteam.

AsŁaŁresultŁofŁtheŁmanagerŁchange,ŁratherŁthanŁthisŁshort-termŁunderperformance,ŁweŁhaveŁplacedŁtheŁholdingŁunderŁreviewŁwhileŁweŁassessŁtheŁnewŁteam.

LAST QUARTER'S REVIEW

● China's Hong Kong gambit...● US oil prices turn negative in April● UK bounces back in June● Travel sector struggles back to its feet

AND LOOKING FORWARD

● Equities● Fixed income● Alternatives

MARKET VIEWS IN BRIEFA MARKET VIEW FROM YOUR PORTFOLIO MANAGERFOR THE LAST AND NEXT QUARTERS

CHINA’S HONG KONG GAMBIT…

Chinese policymakers seized on the disruption of the covid-19 outbreak to approve new national security laws for Hong Kong,tempting further censure from the US and a return of the bitter public protests that rocked the city state a year ago.

The new law, which bans ‘sedition, secession and subversion against Beijing’, bypassed the city’s legislature, effectively endingthe notion of ‘one country, two systems’. Following the news, President Trump threatened the revocation of Hong Kong’s specialtrading status – something which until now has shielded it from US trade tariffs.

The situation quickly escalated with the US issuing investment bans, human rights legislation and mounting trade restrictionswhile renewing its war with China’s technology flag carrier, Huawei.

US OIL PRICES TURN NEGATIVE IN APRIL

An oversupply of oil combined with a sharp fall in demand as a result of the coronavirus pandemic saw the price of WestTexas Intermediate (WTI) US oil contracts for May fall to -$37.63 a barrel on 20 April.

The historic move into negative territory – effectively meaning producers had to pay people to take barrels of oil off their hands– was driven by the sharp fall in demand resulting from the global shutdown and limited storage for physical oil as productioncontinued almost unfettered, despite planned supply cuts in May.

UK BOUNCES BACK IN JUNE

After suffering a record fall of 5.8% in March, when the UK lockdown was first announced, UK GDP growth fell by 20.4% inApril when the lockdown was in full effect.

The decline was of a different magnitude to anything previously experienced by the UK economy and put it on course to meetthe Bank of England’s forecast of a 25% fall in UK GDP in the second quarter, triggering the deepest recession for more than300 years.

However, the UK economy bounced back in June when purchasing managers’ index (PMI) data for the month showed thebiggest positive gains since records began. The Markit composite PMI numbers (released 23 June) showed a reading of 47.6for the month – a four-month high and a record jump from May’s reading of 30.

Importantly, any PMI reading below 50 shows economic contraction, but the massive leap, which reflected shops and businessesre-opening, illustrated that the rate of decline had stabilised.

TRAVEL SECTOR STRUGGLES BACK TO ITS FEET

By early April, the share prices of many companies in the booking, entertainment, airlines, cruises and hotel sectors – theso-called ‘BEACH’ stocks – had fallen to just a quarter of what they had been when equity markets hit a high on 19 February.

However, in late May shares of European travel and leisure companies bounced sharply in expectation of the easing oflockdown restrictions across the region.

Germany subsequently announced plans to end travel restrictions to 31 European countries, including the UK, from 15 June.Spain committed to reopen its borders to tourists from July, while Greece had already allowed travel to the Greek Islands toresume.

In the UK, Prime Minister Boris Johnson announced plans to allow non-essential retail businesses to reopen from 15 June, witha further loosening of the lockdown scheduled for 4 July.

The news came too late for the likes of the UK’s easyJet and Carnival (cruise lines), which both subsequently lost their placesin the UK’s FTSE 100 index.

ECONOMICREVIEW

By booking profits and reducing risk in the portfolios back to where it was at the start of March, we’ve adopted a ‘holdingpattern’; just like the position back then, we currently see too many potential downsides to justify committing ourselves to asignificant ‘risk on’ stance in the portfolio.

For now, we think most of the good news we’ve seen in economic data has been ‘priced in’ with markets increasingly relianton investors’ fear of missing out (‘FOMO’ as it’s known), further stimulus efforts from governments and central banks or thesuccessful development of a vaccine to put the virus to bed, in order to sustain the rally.

Balanced against this is the growing realisation that we’re witnessing a new wave of (post-lockdown) covid-19 outbreaks inkey locations like China, Japan, Germany and South Korea, the unrestrained spread of the disease in emerging markets suchas Brazil, Mexico, India and Russia and the ongoing failure of the US to deal with what’s clearly still the initial stage of anoutbreak for which there still remains no vaccine. This is not to mention the risks around ‘deal/no deal’ negotiations for Brexitand an ever-closer US election that could further divide that nation.

Consequently, this is no time to be taking significantly more or less risk than a neutral position. For now, we remain welldiversified and happy to sit slightly underweight the middle of our target volatility band for the remainder of the summer. Unlessthings change materially in the meantime, we’ll be saving any major changes to our risk exposure until our September rebalance.

EQUITIES

By the end of the quarter, the difference in valuations – namely the ‘spread’ – between the US technology companies listed onthe NASDAQ index and those listed on the S&P 500 had reached its highest since the ‘dot.com boom’. This underlines theoutperformance enjoyed by the US tech elite even amid a spectacular ‘growth’ rally.

At some point, as we come out of recession, we can expect to see a rotation into more value- oriented companies andvalue-leaning markets like the UK, which will also continue to struggle with the burden of Brexit this year.

However, until we see the economic picture improving and central banks beginning to raise interest rates again to counterinflation, it’s likely to be quality ‘growth’ names that continue to dominate the running in equity markets.

FIXED INCOME

Our current view on fixed-income markets is a function of our view on equity markets. For some years, we’ve told our investorsthat, because of the historically low yields on offer, we would avoid significant weightings to government bonds. However,the world has changed.

For the first time in more than three centuries, members of the Monetary Policy Committee have openly discussed negativeinterest rates for the UK. Meanwhile in the US, the Federal Reserve (Fed) is contemplating employing its virtually limitless firepowerto ‘manage the yield curve’ by buying as many company-issued bonds as it needs to in order to dictate interest rates rightacross the risk spectrum.

This is clearly a time for portfolio managers to heed the age-old adage ‘don’t fight the Fed’; the tectonic shift in central bankstrategies means that yields can always push lower providing useful diversification and the prospects of better returns than cash,especially in the hands of seasoned managers.

ALTERNATIVES

With sharp spells of market volatility lying ahead, alternative strategies offer an excellent source of potential performance thatisn’t necessarily correlated to the direction of mainstream equity and bond markets.

We showed our faith in such strategies at the June rebalance adding to funds such as the Quilter Investors Absolute Return Bondand the PIMCO Dynamic Bond funds while maintaining our holding in the Global Equity Absolute Return (GEAR) Fund.

Such strategies will go a long way in the months ahead to help us reduce the impact of market directionality and to generateconsistent, lower-risk returns during what could be a period of great upheaval for financial markets.

ECONOMICOUTLOOK

WHY QUILTER INVESTORS USEQUITY SMALL/MID-CAP(SCHRODERS)?

WHY SCHRODERS?SCHRODERS

Schroders are a global business,managed locally. Their internationalpresence supports them inunderstanding the needs of their clientsand delivering them the right expertisefrom across the business.

As an active investment manager theybelieve that they have an important roleto play in driving better outcomes fortheir clients and society as a whole.They bring together people and datato identify the trends that will shape theprosperity of individuals, businesses,and future generations.

As a global asset and wealth manager,Schroders delivers a broad range ofinvestments designed to meet the diverseneeds of institutions, intermediaries andhigh net worth individuals.

For over 200 years they have builtprincipled partnerships with their clients,putting them at the centre of everythingthey do. They trust them to deliversustainable returns through times ofeconomic prosperity and of uncertainty.

The strategy aims to deliver a total returncomprised of income and capitalgrowth. The Fund aims to outperformthe Russell 2500 Index, net of charges,over rolling five year periods.

Stock selection is driven by fundamentalanalysis by Bob Kaynor and his teamof sector specialists. To diversify theportfolio, the team has three sources ofstock returns. 'Steady eddies' or lesscyclically-sensitive stocks act as ballastin the portfolio. 'Mispriced growth' arestocks where Bob feels the market hasnot fully understood the company'searnings potential. The last, andsmallest bucket, is ‘recovery-type’situations. A strict sell discipline is inplace, with the setting of price targets.

WHY QUILTER INVESTORSEUROPE (EX UK) EQUITYGROWTH (ALLIANZ)?

WHY ALLIANZ?ALLIANZ

While delivering alpha remains a coreobjective, Allianz believe that creatingvalue goes beyond pure investmentreturns.

Allianz believe in solving, not selling,and in adding value beyond pureeconomic gain.

They invest for the long term, employingtheir innovative investment expertise andglobal resources.

Their goal is to ensure a superiorexperience for our clients, wherever theyare based and whatever theirinvestment needs.

Allianz Global Investors is one of theworld’s leading active investmentmanagers.

They employ more than 2,700 peopleacross 25 locations and manage over510 billion euros in assets forindividuals, families and institutionsaround the world (as at 31 March2020).

With over 780 investment professionals,they have established expertise inequities, fixed-income, multi-asset, andalternative investments.

Allianz offers access to an alternativeand experienced team with a robustprocess within European Growth space.The portfolio comprises mid andlarge-cap companies with strong andsustainable growth.

Thorsten Winklemann, the manager ofthe strategy, is very experienced and issupported by a team of dedicatedEuropean equity analysts. The in-depthresearch conducted by the team issupported by the wider Allianz analystpool and a proprietary research systemcalled Grassroots which aims to identifytrends within companies and theindustry.

FUND MANAGERSIN FOCUS

WHY QUILTER INVESTORSASIA PACIFIC (EX JAPAN)EQUITY (FIDELITY)?

WHY FIDELITY?FIDELITY

Fidelity look to partner with clients forthe long-term. Present in over 40countries, they seek to understand localneeds, listening and consulting clientsto deliver the optimal solution.

Their core business is investmentmanagement.

Since it was founded in 1969,institutions, individuals and advisershave increasingly looked to FidelityInternational for world class investmentsolutions that help to build better futuresfor themselves and generations to come.Today, they are trusted to manage clientassets of £385.4 billion on behalf of2.4 million investors in the UK,Continental Europe, the Middle East,Asia Pacific and South America.

The strategy adopts a fundamental,bottom-up approach to build a highconviction portfolio where each holdingcan meaningfully contribute to overallfund performance. However, havingfewer holdings does not translate intohigher risk.

Anthony Srom, the manager of thestrategy, mitigates risk by building adiversified portfolio, where stockcorrelations play a significant role inportfolio construction. Anthony has abroadly style neutral approach, but newpositions in the portfolio can exhibit acontrarian/value bias. Stock selectionis driven by a combination of investorsentiment, valuation and fundamentalresearch. He is a patient investor withan average holding period of more thantwo years.

FUND MANAGERSIN FOCUSCONTINUED

ACTIVE MANAGEMENT

A traditional investment approach where fund managers actively build and change a portfolioof assets (eg stocks and shares) in order to take advantage of stock market opportunities.

BONDS/GILTS/INVESTMENT GRADE

Bonds are debt investments whereby the investor is effectively lending money to a business,or even a government (known as Gilts), for a fixed period of time at a fixed interest rate.Bonds provided by the largest most secure companies are known as investment grade.

LONG AND SHORT INVESTING

Having a “long” position in a Stock or Bond means that you own it. Investors maintain “long”positions in the expectation that the stock will rise in value in the future. The opposite of a“long” position is a “short” position. A "short" position is generally the sale of a stock you donot own. Investors who sell short believe the price of the stock will decrease in value. If theprice drops, you can buy the stock at the lower price and make a profit.

OVERWEIGHT/UNDERWEIGHT

Having a greater or lesser exposure to a particular sector or stock in an investment portfoliocompared with a neutral or benchmark position.

PASSIVE MANAGEMENT

An investment approach which aims to mirror or ‘track’ the performance of a financial index.This is normally done by either investing in the exact constituents of an index or by taking arepresentative ‘sample’ of that index. The managers of such funds have lower expenses thanactive fund managers, and the charges to investors are therefore lower.

PORTFOLIO

The collection of investment holdings of a particular investor usually with reference to itscomposition ie the mix of different classes of securities, such as bonds, property, shares andcash, or if in a single asset class, the mix of different sectors and stocks.

PORTFOLIO MANAGER

A person or organisation engaged to manage investment portfolios and make investmentdecisions on behalf of others. Also known as an investment manager.

SMALL/MID/LARGE/MEGA CAPS

Referencing the market value of selection of companies based on their size. For example,large-caps would be the type of companies that make up the FTSE 100 index, with mega-capsbeing those at the very top of this index.

VOLATILITY

Volatility frequently refers to the Standard Deviation of the change in value of a financialinstrument with a specific time horizon. It is used to quantify the risk of the instrument over thattime period. Volatility is typically expressed in annualised terms, and as a percentage.

YIELD

A measure of the income received from an investment compared to the price paid for theinvestment. Normally expressed as a percentage.

GLOSSARY

This report has been produced using tools supplied by Old Mutual Wealth. This means that the contentof the report, and any future recommendations based on the report will come via discussion with yourfinancial adviser. This report is in addition to your Old Mutual Wealth quarterly statement generatedat 5 January, 5 April, 5 July and 5 October. Please note that due to the different generation dates thefigures will differ between this report and your statements.Data source: Factset. © 2020 Morningstar. All rights reserved. Figures are on a bid to bid price basiswith net income reinvested in Sterling terms. The Morningstar sourced information is provided to youby Old Mutual Wealth and is used at your own risk. Morningstar take care to ensure that the informationprovided is correct. Neither Morningstar or Old Mutual Wealth warrants, represents nor guaranteesthe contents of the information, nor do they accept any responsibility for error, inaccuracies, omissionsor any inconsistencies herein.www.oldmutualwealth.co.ukPlease be aware that calls and electronic communications may be recorded for monitoring, regulatoryand training purposes and records are available for at least five years.Old Mutual Wealth is the trading name of Old Mutual Wealth Limited which provides an IndividualSavings Account (ISA) and Collective Investment Account (CIA) and Old Mutual Wealth Life & PensionsLimited which provides a Collective Retirement Account (CRA) and Collective Investment Bond (CIB).The WealthSelect Managed Portfolio Service is provided by Old Mutual Wealth Limited and OldMutual Wealth Life & Pensions Limited.Old Mutual Wealth Limited and Old Mutual Wealth Life & Pensions Limited are registered in Englandand Wales under numbers 1680071 and 4163431 respectively. Registered Office at Old MutualHouse, Portland Terrace, Southampton SO14 7EJ, United Kingdom. Old Mutual Wealth Limited isauthorised and regulated by the Financial Conduct Authority. Old Mutual Wealth Life & Pensions Limitedis authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authorityand the Prudential Regulation Authority. Their Financial Services register numbers are 165359 and207977 respectively.VAT number 386 1301 59.