True-Insight-Issue-3-2016

True Potential Portfolios | Summer 2016
Navigating the
Maze Post BREXIT
An in-depth feature about diversification,
and why it was important for investors
facing uncertainty during and after Brexit.
PAGE 08

REVIEW OF THE MARKETS
A quick overview of the markets and their
behaviour over the last three months.
INVESTMENT OUTLOOK
We share the views of our investment
partners on the future of the markets.
NAVIGATING THE MAZE POST BREXIT
An in-depth feature about diversification,
and why it was important for investors
facing uncertainty during and after Brexit.
INCOME PORTFOLIOS
In an age of low interest rates on cash
deposits, we look at an alternative source
of income for investors.
BENEFITING FROM MOMENTUM
What is the Investment Strategy
‘Momentum’ and why is it being studied
so extensively by academics.
THE SCIENCE BEHIND
OUR PORTFOLIOS
How we optimise our Portfolios.
SERIES SPOTLIGHT
An overview of Portfolio allocation.
CONTENTS
06
04
22
16
30
08
32
06
08
05
22

he financial media, as it does time and again, is
focusing on the negatives. The vote to leave the
EU is a perfect example because it provides easy
pickings for anyone whose ‘glass is half empty rather
than half full’.
Despite predictions of doom and gloom, investment
markets recovered from kneejerk reactions on the day
the decision was announced, and as of the end of June
all of our funds have been in positive territory over 1,
3 and 6 months. These funds represent the bedrock
of our new True Potential Portfolios, described in
detail throughout.
Further good news is that, despite concerns expressed
across the media ahead of and after Brexit, our clients
have been buying, not selling, thus the message about
investing long-term is being listened to.
We told you in our Spring Edition that we were excited
that our True Potential Portfolio proposition had grown
rapidly to over a half of a billion pounds. That figure has
now accelerated and is on track to exceed one billion by
the end of the summer. The Portfolios are part of the
£1.9bn of client money invested in True Potential’s own
funds which means we are strongly positioned to
continue to use our scale to engage with some of the
best managers in the world.
Our positive story is in stark contrast to what has
happened recently to retail investors trapped inside
illiquid property funds. We are dismayed that investors
searching for a better income, and attracted by high
property yields, did not understand that property is
also a very illiquid asset.
One of the primary reasons we pursue multi-asset
investing is that it contains multiple layers of
diversification across deep and highly liquid markets,
and this wide diversification facilitates flexible access
to savings when needed. For our income investors,
we offer two Income Porfolios built on our multi-
manager, multi-asset model foundations.
As you read through True Insight you will find our own
investment views alongside the views of the managers
with whom we partner. Our partners have operations
spanning the globe; cumulatively they manage assets
in excess of £4.5 trillion, so what they have to say is
worth paying attention to.
They each have different investment styles and on this
occasion we highlight a style of investing based on
momentum. In a special feature article, we look at how,
and just as importantly why, momentum works well. Our
feature article includes a contribution from David Hollis
of Allianz Global Investors who is an expert in this field.
It is our mantra to be unique
and by blending different styles
of investing in our Portfolios
we are extending the benefits
of diversification beyond
geographic boundaries and
beyond asset classes like
bonds and equities.
In this new world of low interest rates, saving for
the future is of highest importance. If savers cannot
generate an income from their investments, it is
increasingly necessary to spend capital accumulated
over time.
Of course we cannot know what conditions will be
uppermost in minds in 5, 10 or 20 years, but diligently
saving, paying attention to costs and seeking adequate
diversification will, in our opinion, provide investors
with greater flexibility in the choices that they will
be able to make later in life.
Colin Beveridge, Chief Investment Officer.
T
A WORD FROM OUR
CHIEF INVESTMENT OFFICER
TRUE INSIGHT | SUMMER 2016 3
Welcome

4 TRUE INSIGHT | SUMMER 2016
owards the end of the second quarter
of 2016 we saw a pivotal event unfold
- the UK public voted to leave the European
Union. In the run up to the result, countless
observers expressed their opinions with
predictions mostly in favour of a remain vote.
As this proved to be incorrect, the immediate
reaction by markets was generally negative in
the aftermath.
During Q2 2016, despite
the initial negative Brexit
reaction, markets
ultimately performed well
for UK domestic investors.
Some lower risk asset categories, such as
Global Bonds (not listed in our table below
but included in the funds) produced double
digit returns in Sterling terms.
Equity returns were also positive in Sterling,
with US Equities being particularly strong
as the value of the pound fell heavily against
the US Dollar. In essence, UK-based investors
investing in international assets derived
significant paper profits from Brexit.
Although it is difficult to conceive of
anything more significant than Brexit for
world markets, there were some other
important developments already underway.
In the months prior to Brexit, markets were
behaving negatively and providing mixed
returns.
We saw a rebound in the oil price and
supportive monetary policy once again
emerging from Central Banks in response
to ongoing concerns about lack of growth,
most noticeably from China.
There is no doubt over the quarter, market
conditions were eventful. We have witnessed
heightened volatility levels creating a
challenging environment for investors.
We also had weaker economic data in the
US, particularly in relation to job creation,
and this started to turn the tide of opinion
away from interest rate rises which hitherto,
had looked imminent.
Therefore, even in the run up to Brexit,
investors were becoming worried about
a greater malaise surrounding growth in
the world’s most important economy
and beyond. Thankfully, lower risk assets
produced strong returns as investors went
in search of additional protection to
suppress their short-term fears.
This is commonly referred to as a 'flight to
safety'. Corporate, Sovereign and High
Yield Bonds all provided healthy returns over
the period, with investors seeking a mixture
of very safe fixed income instruments, like
UK Gilts.
They also sought to invest more into fixed
income instruments like High Yield Bonds
that contain a much greater risk of default
than a government bond but are still
considered safer than equities; the added
advantage being a higher income.
The current market environment continues
to be one that is very challenging for market
participants. Investors will likely continue
to focus on the short-term negatives,
but our managers will latch onto any
opportunities that will undoubtedly arise.
REVIEW OF THE MARKETS Q2
T

Category Local Currency % Change (3mth) GBP % Change (3mth)
UK Equities 5.3% 5.3%
US Equities 1.9% 10.5%
European Equities -2.7% 2.7%
Japanese Equities -7.5% 9.4%
Asia Pacific (Ex Japan) Equities -0.7% 7.8%
Emerging Markets Equities -0.3% 8.1%
UK Bond Index (10 years) 5.6% 5.6%
Oil Price 19.1% 29.2%
CRB Commodities 12.9% 22.5%
Market Review
Table 1: Market Movement, Q2 2016.
Source: Bloomberg, 30 June 2016

• Our fund manager partners are currently reassessing
the economic outlook. In general, they see more
reasonable market conditions and the potential for
economic growth led by the US economy, but have
expressed near term concerns about uncertainty in
Europe and Japan. However, they have also started
talking about prospects of coordinated fiscal
expansion plans as an antidote to austerity.
• Property has been in the news over the last few weeks
with many Property funds closing to redemptions
and have been writing down asset values. Overall,
our managers have little exposure to direct property
compared to the wider market. Where we have
exposure it is more globally orientated. None of
our fund manager partners believe there will be
contagion from the commercial UK property
market into global markets.
• The outlook for equity investing in the UK has
featured heavily in our monthly calls with our fund
manager partners, with many increasing their
allocations to this area. They are concentrating on
the FTSE 100, large capitalisation companies with
an International bias, but there is a sense that this
area has started to factor in too much of a positive
outlook too quickly.
• The US stock market is an area that is drawing mixed
reactions from our fund manager partners with some
managers feeling that a number of companies have
very high valuation. Other managers feel that this
premium rating is justified with US economic
fundamentals being so much stronger compared to
other areas, and the one area that they do agree on
is that they still see potential for more growth across
the US economy.
• Japan has come back very much in focus with our
managers having mixed views on whether to invest or
not. The potential for a new, higher level of economic
stimulus has attracted some of our managers to
invest. However, other managers feel that Japan’s
economy is structurally flawed and will struggle even
with a new level of fiscal stimulus to aid the monetary
stimulus that has thus far had limited effect.
• Investment into Europe has divided opinion. On
the one hand valuations are attractive, but at the
macroeconomic level there is a growing sense that
Europe will suffer more than the UK in the aftermath
of Brexit. A lot depends on how Germany decides
to act in the months ahead. There is pressure on
them to sacrifice running a net surplus versus their
EU partners.
• Government bonds continue to be a large feature
of many of our fund manager’s portfolios mainly
being held as a form of portfolio insurance or as a
proxy for cash, rather than being held for their yield.
There is little doubt that our managers are asking
themselves if overpaying for safety is a sensible
course of action so they are looking outside of
government bonds to corporate credit and actively
managing duration risk. Meantime, inflation remains
very muted which helps underpin the low yields
currently in existence.
n our latest round of discussions with our
fund manager partners there were some
interesting opinions expressed about the markets.
We have listed the key insights below:
INVESTMENT
OUTLOOK
I

After consolidating the information gathered from
our manager interviews, we assess what this means
for our True Potential Portfolios. Ideally, we reflect
as many of these ideas as possible through the fund
allocations in each Portfolio. Alongside this, we remain
focused on our four optimisation factors (risk, cost,
expected return and risk-adjusted return) – as they help
ensure an objective and systematic approach right
across our Portfolio range.
To illustrate the allocations, we provide a monthly
factsheet for each Portfolio. This is where we document
changes to the Portfolio’s composition and explain the
reasons behind our actions. On the next few pages,
we feature a number of key market, technical and
fundamental indicators.
Outlook

hen writing the Spring edition of True Insight,
voting on Brexit was underway. Expectations
favoured a vote to remain, however, we pondered
the possibility of a vote to leave.
Ahead of the outcome, we
suggested that a multi-asset
approach would be the best
way to navigate through
the maze.
This opinion was based on our belief that
diversification is important for investors facing
uncertainty.
Looking back at the period after Brexit, we now
know that our faith in multi-asset investing was
warranted. Since Brexit, markets have rallied and
many investors have been significantly rewarded.
Now the die is cast and leaving the EU has been
mandated by the people, we have to consider
what happens next.
Of course, to suggest that we have a crystal ball
giving us all the answers is absurd, so we asked
ourselves what can we say that is reasonable and
not based on emotion?
Where to begin?
When investors feel uncertain, financial
commentators peddle bad news. Currently, there
is wide-spread speculation that the fall in the value
of the pound, will push up the price of imported
goods and that this will negatively affect
household budgets.
In a similarly negative vein, there are worries
that residential house prices will fall and that the
recent decline in commercial property prices is an
example of what is to come.
When examining the outlook, we put a little more
faith in human ingenuity and believe that hard facts
provide a better way of assessing what the future
holds in store. We start with a perceived threat to
jobs because this is probably the greatest worry
faced by savers and families. One of the best ways
of ensuring future prosperity is creating the right
environment for employment conditions to thrive.
Giving people jobs and paying them decent
wages is a fundamental requirement for a
successful economy. Employment facilitates
an ability to save and savings in a competitive
economy, with a well-functioning financial system,
equates to investment.
At True Potential we have doubled our workforce,
continuously investing in technology and funding
research in to the saving and spending habits of the
nation in our ‘Tackling the Savings Gap’ campaign.
An anecdote of our circumstances is not the whole
story, but when we look at the wider picture on
jobs (UK vs the Eurozone), shown in Chart 1
the picture on unemployment is much better for
us here in the UK because the UK Government
embarked on a programme of economic recovery
following the credit crisis in 2008.
W
NAVIGATING THE MAZE
POST BREXIT

Special Feature

In the current economic
cycle commencing after
the 2008 credit crisis, UK
unemployment peaked at
8.4%. As of 31 March 2016
this was 5.1%.
While the unemployment rate may be too high for
some, the contrast with the rest of the Eurozone is very
telling. Unemployment in the Eurozone (10.3%) is more
than double the rate here in the UK and the disparity
gives a strong hint that the EU experiment is not
working for many countries. This in turn can create
a sense of injustice amongst citizens in the countries
that are worst affected.
Ironically, the lowest unemployment rates can be found
in countries like Norway (2.9%) and Switzerland (3.3%),
both not member states of the EU.
Within the EU member states, Denmark has bucked
the trend with an unemployment rate of 3.5% but the
other major economies all exhibit stubbornly high
unemployment – France (10.2%), Germany (6.1%),
Italy (11.6%) and Spain (21%).
The positive differential between unemployment levels
in the UK versus the Eurozone started way back in the
early 1990s. It is perhaps coincidental, but those with
long memories will recall that in September 1992 the
UK was forced by markets to exit the Exchange Rate
Mechanism (ERM): After a period shadowing the Euro
with a fixed exchange rate, interest rates were hiked
ever higher, eventually reaching double figures to
support the pound. Inevitably the ‘currency peg’ against
the Euro was abandoned and the pound collapsed.
In the early 1990's, we had dire predictions of doom
and gloom with massive job losses forecast across the
financial sector. While the economy did suffer for a
period, and unemployment rose, the UK economy
went on to recover strongly.
Chart 1: UK vs Eurozone Unemployment from 1990 Onwards
Source: Bloomberg and Office for National Statistics, 31 March 2016
10%
11%
13%
12%
9%
8%
7%
6%
5%
4%
09/1990
06/1991
03/1992
12/1992
09/1993
06/1994
03/1995
12/1995
09/1996
06/1997
03/1998
12/1998
09/1999
06/2000
03/2001
12/2001
09/2002
06/2003
03/2004
12/2004
09/2005
06/2006
03/2007
12/2007
09/2008
06/2009
03/2010
12/2010
09/2011
06/2012
03/2013
12/2013
09/2014
06/2015
03/2016
Eurozone Unemployment RateUK Unemployment Rate
NAVIGATING THE MAZE
POST BREXIT

Moreover, against all conventional wisdom and expert
predictions at the time, the financial sector went on
to create more jobs than it lost and rose to a position
of dominance globally.
Of course, the doomsters say the situation in the 1990's
is very different to Brexit today, but will the experts be
wrong again?
In the UK there is talk of cuts in Corporation Tax and
an end to austerity measures as the requirement swings
back to growth and away from deficit reduction.
Introducing stimulatory fiscal measures as well as
the monetary measures promoted by The Bank of
England should help facilitate job creation. Hopefully
this will assuage fears going forward. Perhaps the
most significant manifestation of raised anxiety is
what has happened before and after Brexit to the
value of the pound.
In chart 2, we can see that it has fallen sharply against
both the Euro and the US dollar.
Chart 2: Exchange Rate – Pound vs USD and the Euro
Source: Bloomberg and Office for National Statistics, 31 March 2016
2%
4%
6%
0%
-2%
-4%
-6%
-8%
-10%
12/4/2016
18/4/2016
24/4/2016
30/4/2016
6/5/2016
12/5/2016
18/5/2016
24/5/2016
30/5/2016
6/6/2016
11/6/2016
17/6/2016
23/6/2016
29/6/2016
5/7/2016
11/7/2016
GBP / EURGBP / USD
Special Feature

Chart 3: Sterling and Dollar Exchange Rate
Source: Bloomberg, 07 July 2016
2.2
2.4
2.6
2
1.8
1.6
1.4
1.2
1
07/1980
07/1982
07/1984
07/1986
07/1988
07/1990
07/1992
07/1994
07/1996
07/1998
07/2000
07/2002
07/2004
07/2006
07/2008
07/2010
07/2012
07/2014
07/2016
GBP/USD: Level at as 07/07/2016 00:00GBP/USD Exchange Rate
Clearly, a long-term strategy that relies on protracted
currency weakness is not a great strategy, but a sudden
devaluation can have a stabilising effect in the short-
term by helping to offset trade tariffs that might be
levied if we have a ‘hard Brexit’ event, ‘soft Brexit’
event or something in the middle.
The reality is that the UK has shed much of its historic
reliance on manufacturing relative to its role in the
world, and the pound has lost much of its purchasing
power versus its major competitors over the long-term.
Yet for most ordinary citizens during the period of
decline depicted in Chart 3 below, standards of living
have not collapsed and in fact for many they have
improved immeasurably.
So where are we today in relation to future trade
negotiations?
Economists are lining up to say that the recent
devaluation of the pound will a) cause inflation to
rise to 2.2% in 2017 and 2.4% in 2018 and b) export
businesses benefiting from a cheaper currency will not
benefit from increased trade because of uncertainty
about the terms of trade with all 27 EU member states.
However, when you look at Table 2 you can see that
as of 2015, imports from all 27 EU countries was over
£218 billion whereas exports accounted for a much
lower sum of £133 billion, leaving a deficit of over
£85 billion. Interestingly, the top 5 block countries that
the UK sells goods and services to accounts for 70.3%
of its total EU exports and 67.9% of total EU Imports.
This suggests that bi-lateral agreements on a most
favoured nation basis will be in the interests of all
parties in the forthcoming negotiations.

The Eurozone economy has now started to recover
but many EU countries are weighed down by lack of job
creation and banking systems toiling under the weight
of poor loans.
Although UK growth rates are converging with the
rest of Europe, as shown in Chart 4, the fact is, the EU
is having to accelerate its use of unconventional
monetary measures.
Looking ahead, the latest set of forecasts probably
carry the least amount of certainty. Shown in Chart
5 on page 14, they are now predicting that the UK’s
rate of growth will slow until 2017 but it is interesting
to note that they are forecasting a recovery by 2018
which is something you probably haven’t read in
the newspapers.
Country Exports Imports Trade Balance
Germany £30,352 £60,679 -£30,327
France £17,830 £23,999 -£6,169
Netherlands £17,338 £30,890 -£13,552
Republic of Ireland £16,665 £12,509 £4,156
Belgium £11,576 £20,4070 -£8,894
All 27 EU £133,365 £218,667 -£85,302
Source: HMRC, Overseas Trade Statistics 2015
Table 2: 2015 Annual UK Trade with EU (£m)
Chart 4: UK vs EU Real GDP Growth
Source: Bloomberg and Office for National Statistics, 2016
1
2
3
4
0
-1%
-2%
-3%
-4%
-5%
2009 2011 2013 20152010 2012 2014
Special Feature
EUUK
What about future growth prospects?

When looking ahead, we all have
different ways of formulating our
own judgements. For many people
worried about Brexit they will most
likely focus on day to day matters
such as worrying about costs of
living – will food bills rise, what will
happen to fuel costs, etc?
People that travel will worry about
constraints on travel across the EU
and citizens that have shifted their
domicile from the UK to the EU will
worry about what changes to the
rules will mean to their ability to
live and work in the country they
have chosen.
Britain also has some very pressing
constitutional matters internally
to resolve, such as Scotland voting
to remain, along with London,
Northern Ireland and Gibraltar.
As mentioned previously, citizens
will worry about the value of their
homes and immediate job
prospects. However, what matters
most are the special attributes
possessed by the UK. There is a
long history of democracy and
adherence to the rule of law.
These factors may be less obvious,
but they provide solid foundations.
Yes, Brexit has shaken up the
political establishment and political
recriminations have been the order
of the day, but this is the natural
order of change.
In our opinion, the UK retains a
very important stake in its trading
relationships with the rest of the
world and this will continue, but not
as before. In some instances it will
be for the better and in others for
the worse.
As long as the UK Government
invests in education and deploys
capital intelligently into enterprise,
the UK economy will be well
positioned to grow and prosper.
In our final chart (Chart 6), we
show just how much exports have
fluctuated historically. We are
certain that fluctuations will
continue, and remain hopeful that
the direction of travel will be upward
as we continue to look outward!
Chart 5: UK GDP Growth (2016-2018 Forecasts)
Source: Bloomberg, Contributor Composite, 30 June 2016
1
2
3
4
0
-1%
-2%
-3%
-4%
-5%
2009 2011 2013 20162015 20182010 2012 2014 2017
ProjectedCurrent

Special Feature
The current post-Brexit situation is confusing for the
ordinary investor. We suggest leaving the figuring out
to professional fund managers to decide the best way
forward. They have successfully managed through the
Brexit period, acting sensibly and taking quick action
when needed. The reality, always, is that in the months
and years ahead some professional managers will be
more successful than others.
This is why we partner with more than one fund
manager, partnering with eight industry leading names
in our Portfolios to ensure we smooth out manager
variations in performance.
Moreover, our distribution capability reaches out to
savers using cutting edge technology helping to enable
greater flexibility, lowering the costs of investing and
bringing new investment opportunities for you to
consider.
Short-term market fluctuations shouldn't be off putting
to investors. Instead, looking to the long-term and
managing risk with a highly diversified investment
strategy could give greater potential for growing
your own financial wealth. Investing is not a one off
decision, but a series of decisions tailored to your
circumstances over time.
Source: Bloomberg and Eurostat, 31 March 2016
30
20
10
0
-10
-20
1980
1981
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1984
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Chart 6: UK Exports (Year on Year Percentage Growth)
Conclusions for Investors

Source: Bloomberg, 06 July 2016
Chart 7: UK Interest Rate vs UK Index Yield
7%
8%
6%
5%
4%
3%
2%
1%
0%
11/2001
07/2002
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07/2016
INCOME PORTFOLIOS
UK interest rateUK index Yield
As the saying goes ‘life is too short’. For example,
we do not check the tyre pressure before every car
journey because it takes too much effort and we
retain faith in the robustness of the tyre.
For savers reliant on cash in the bank to generate an
income, it has become all too clear, in recent years,
that savings decisions should not be left to chance.
Interest rates are at an all-time low and even the
Regulator is becoming frustrated, pointing out that
some banks are trapping investors in accounts paying
virtually no interest, at all.
The difficult situation today, for savers, stems from
the financial crisis, whereby central banks world-wide,
and here in the UK, turned to extraordinary measures
to lower interest rates as a way of stimulating
economic growth.
The flip side is that investors looking for income are
being encouraged to take more risk due to the low
rates from cash savings.
We can see why this is from Chart 7, showing interest
rates on cash deposits (UK Base Rate) versus, the
dividend yield on UK Equities. Historically, savers in
the UK became accustomed to getting mid-single digit
rates of interest on bank deposits as a way of providing
a regular and safe source of income.
This is most apparent, when we look at interest rates
between the years 2001 and 2008, shown in Chart 8.
Over this period, interest rates ranged between 3.50%
and 5.75%, providing a healthy return on cash invested
in a bank deposit.

Income Portfolios
Higher rates allow depositors to
benefit from compound interest.
For example, after 17 years and 9
months a cash deposit earning 4%
per year would allow someone to
double their savings.
A mid single digit rate of return is
normally attractive as a way of
protecting against inflation.
However, the FCA have revealed
that some savers are getting
rates of 0.1% and for them,
compounding will be of no help
at all.
Even worse, it will leave savers with
no protection against inflation
currently at 0.5%.
For the very fortunate receiving
1% you now only have to wait 70
years to double your money!
It is not surprising to us, therefore,
that investors have been seeking
other ways to not only safeguard
their savings, but provide an
adequate solution that maintains
spending power later on in life.
Unfortunately, many alternative
solutions go hand-in-hand with
an increased exposure to risk.
For example, recently, those who
have invested directly into property
funds, expecting good prospects
of capital appreciation, alongside
yields of 4%, may have found
themselves exposed to the
illiquidity of this asset.
This is obvious now, but even
without the recent news on
property funds, anyone
contemplating selling their house,
compared to selling shares,
would understand that timing
associated with each transaction
is very different.
When selling shares, you get your
money back after 3 days, typically.
However, if you wanted to sell your
house quickly, to get access to
funds, what price do you think you
would obtain if you were a forced
seller? 10% less? 20% less? For a
quick sale, the outcome could be
much worse.
Chart 8: UK Interest Rate ( 2001 - 2008)
6%
5.5%
5%
4.5%
4%
3.5%
3%
07/2001 07/200507/2003 07/200707/2002 07/200607/2004 07/2008

So, where should investors needing income turn
their attention?
One possibility is Government Bonds. Unfortunately,
yields have dropped to low levels. UK Government
Bonds offer a form of insurance against risk, safety of
capital if held for their full term, and are highly liquid.
In Chart 9, we can see that yields on Government
Bonds have fallen from over 5% to a shade under 1%.
In fact, the current yield of 0.94% is the return investors
will obtain each year for the next ten years, if held to
maturity. In the eyes of many, this is an unattractive
return.
For investors prepared to accept higher risk and
looking for income, Equities are a natural choice,
with good levels of liquidity. Many investors have
been tempted in to buying equities through passive
investments called trackers. They track the yield on
the FTSE 100 which contains larger companies that
tend to pay bigger dividends.
However it is worth bearing in mind that more than
50% of the income comes from just ten companies
which is what we call risk of concentration.
If one or two of these companies stop paying dividends,
it would have a big effect on income and would most
likely have a poor effect on the capital value of
these shares.
One of the solutions True Potential Investments
offer to clients is access to funds managed by our
income managers, Threadneedle, Goldman Sachs,
Close Brothers and Schroders, each with a distinctive
approach to managing income. They manage income
actively and spread their net very wide to include
infrastructure assets, corporate debt, overseas
investments and incorporate different investment
techniques.
Without doubt, we are in a challenging phase for
those seeking income. However, we have created two
Income Portfolios that offer a solution for investors with
a cautious and balanced attitude to risk.
Our Income Portfolios combine all our income funds
to add further diversification. Investment via these
Portfolios is spread over 19,000 holdings.
6%
5%
4%
3%
2%
1%
0%
Chart 9: UK Government 10 Year Bond Yields (% trailing)
06/2006
10/2006
02/2007
06/2007
10/2007
02/2008
06/2008
10/2008
02/2009
06/2009
10/2009
02/2010
06/2010
10/2010
02/2011
06/2011
10/2011
02/2012
06/2012
10/2012
02/2013
06/2013
10/2013
02/2014
06/2014
10/2014
02/2015
06/2015
10/2015
02/2016
06/2016
With investing, your capital is at risk. Investments can fluctuate in value and you may
get back less than you invest. Past performance is not a guide to future performance.

Income Portfolios
Past performance and simulated past performance are not a guide to future performance.
Fund Yield Performance*
True Potential Cautious Income 3.93% 7.78%
True Potential Balanced Income 4.07% 7.97%
Source: SEI, Custodian, 31 July 2016
Table 3: True Potential Income Portfolios Performance
In addition to increased diversification, we also actively
manage portfolio costs - currently, 0.78% for Cautious
Income Portfolios and 0.83% for Balanced Income with
no additional management fee. By keeping costs low,
we help optimise the amount of income delivered to
our clients, and we even combine the Portfolios so that
the income is distributed in a regular pattern.
As you can see the yields on each model are attractive
and the performance of the models (which includes
income) is attractive.
*Performance figures are made up of 10 months actual
performance from 1st October 2015 to 31st July 2016
and 2 months simulated performance from end of July
2015 to end of September 2015, prior to the launch of
the Portfolios.
The simulated past performance has been calculated
using the actual past performance of investments which
are the same as those contained in the portfolios at
launch. The simulated past performance assumes no
change in asset or fund allocation.
We are looking forward to sharing twelve months of
actual performance data with you in the autumn edition
of True Insight.
You are able to view up-to-the-minute performance of
your Portfolio 24/7 by logging in to your client site using
your desktop, smartphone, tablet or smartwatch. This
gives you a real-time snapshot of how your investments
are performing, anytime, anywhere.
NB:Launched on 1st October 2015

Chart 11: Wealth Over Time (For Illustrative Purposes Only)
Source: Goldman Sachs Asset Management, 2016
TotalInvestmentReturn
Wealth Over Time
Capital AppreciationSustainable Income
We have some additional thoughts to share with
you on income.
First, we have been in discussion with our managers
about their approach to seeking out attractive sources
of income. We know they understand that reaching
up for higher and higher yields reduces the likelihood
of income sustainability. Secondly, the True Potential
Portfolios, aim to deliver capital appreciation,
alongside sustainable income, over the long-term.
We want to protect and grow your wealth and, at the
same time, pay an income that will recur year after year.
Chart 11 illustrates how an investor can potentially
receive both a growing income and capital appreciation
from a sustainable income strategy.

Income Portfolios
The Goldman Sachs Income Builder
Fund offers access to the Goldman
Sachs World Class investment
proposition as well as a dividend
yield of 4.3%*. They invest in a
broad range of Global Equities and
Bonds and offer sustainable income
and capital appreciation.
The True Potential Threadneedle
Monthly Income Fund offers a
monthly paying dividend yield of
4.1%*, by investing in a portfolio
of UK Equities and Bonds.
Threadneedle are excellent stock
pickers offering capital growth
as well as income.
The True Potential Schroders
Cautious Income Fund offers
management from an award-
winning team offering a stable
income stream with a dividend
yield of 3.6%*, paid quarterly.
They feel that no one fund manager
can excel in every aspect of
investing and therefore access
the best fund and investment
products from around the world.
The True Potential Close Brothers
Income Fund invests directly into
company shares, fixed interest
investments and alternative
investments. They offer a dividend
yield of 3.3%* which is paid
quarterly. Close Brothers specialise
in picking stocks, looking globally to
locate opportunities.
OUR INCOME MANAGERS
* At the time of writing.

s a potentially profitable investment strategy,
‘momentum’ has been studied extensively by
academics. The host web site for academic publications
SSRN (Social Science Research Network), lists 751 studies
with momentum in the title.
The underlying premise for momentum investing is that
patterns are studied in the belief that following them will
lead to a better than average investment outcome. In
investment parlance, momentum strategies are said to
deliver an excess return not fully explained by risk.
As human beings we are predisposed to look for patterns.
This is because we like to predict outcomes and strive for
certainty in an uncertain world. By predicting outcomes
correctly in advance, we can save a life or become rich.
For momentum to be judged successful, studies do have
to take account of risk and size of the company because
it is possible that momentum is something that works by
association i.e. investors are getting paid more for holding
small cap stocks or they are simply taking more risk to get
a better return. However, even after these adjustments are
made, the studies seem to show a positive effect not
readily explained by known factors.
BENEFITING FROM MOMENTUM
A WORLD OF UNCERTAINTY
A

Momentum
The potential benefits from
momentum are time-period
sensitive, they vary according
to regimes contributing to
markets rising and falling.
Kent Daniel, who studied momentum crashes, points out
that the effects are most extreme when markets rebound
following a crash.
The precise point of danger for momentum investors is
when markets have fallen and market participants expect
the seriousness to escalate, but then the opposite happens.
For example, between March 2009 and May 2009 when
the market rose by 29%, after a very steep decline, the
subsequent winners minus losers gained by 149%; winners
rising by 156% and losers rising by 6.5%. Momentum
investors must be aware of regime changes from extreme
to normal and vice versa if they are to make profits.
A further study by Jagadeesh and Titman (2001) showed
stocks that perform the best (worst) over a 3 to 12-month
period tend to continue to perform best (worst) over the
subsequent 3 to 12 months. The best performers appear
to be no riskier than the worst performers and investors
benefited from this strategy serially.
There are also a multitude of studies looking at company
earnings (profits), studying the rate at which company
profits change. The evidence shows that momentum
across corporate earnings is pervasive.

Apart from how it works, one of the key questions
surrounding momentum is why it works?
From an efficient market perspective, profiting from
an historic pattern of price movements and corporate
profit changes seems a bizarre idea because efficient
market proponents argue that if ‘anomalies’ are spotted,
and can continuously be exploited, investors will surely
flock to these opportunities and compete away any
gains to be had.
However, in real terms this seems not to happen,
but why?
Lacking precise reasons, academics resort to
explanations that latch onto human behaviours.
Despite greater understanding of behavioural bias,
investors seemingly continue to display bias allowing
patterns to persist with a lead-lag effect.
Delong et al (1990) were the first economists to
formulate the idea that irrational strategies could
affect asset prices.
Other studies of cognitive behaviours include:
1. Conservative bias: Barberis et al (1998) and Edwards
(1968) talk about conservatism bias. This is where
investors underweight new information so prices
slowly adjust.
2. Confirmatory bias: Barberis et al and Kanhneman
(1974) talk about representative heuristics. The
representative heuristic (in simple terms) is that
individuals tend to extrapolate incorrectly and use
confirmatory bias (look for information that suits
their point of view).
3. Over confidence: Daniel et al (1998) and Hong and
Stein (1999) discuss overconfidence brought about
by cognitive bias amongst informed traders. They
attribute picking winning stocks to skill and picking
losers is associated with bad luck.
Based on the various studies that have taken place, it
is not surprising to us that many of our fund manager
partners incorporate momentum into the management
of their funds. Some use it more extensively than others
with Allianz adopting it to the greatest extent. For this
reason, we feature David Holllis’ more detailed views
on the subject.

Momentum
Momentum, as noted, is one of
the few trading strategies still
employed by many fund managers
today, either subconsciously
through behavioural bias, or in the
case of our multi-asset strategies,
consciously.
Within the True Potential funds
where Allianz act as the Master
Manager, momentum is the
foundation of our investment
process; as a result, we actively
tilt the portfolios to the best
performing asset classes through
time. However, we recognise,
as does much of the academic
research, a pure momentum
strategy results in returns that are
highly negatively skewed as they
experience infrequent, substantial,
and sustained, negative returns.
To overcome these shortcomings,
we include several additional
elements to the investment process
that are designed to hedge
against such “momentum crashes”
described above. Our calculation
of momentum, whilst aimed at
capturing the medium term trend
in prices, is biased to the most
recent observations.
This enables the allocation to react
more quickly to sharp drawdowns
in markets, particularly where
momentum has been strong for
a sustained period. Additionally,
where asset class valuations have
become excessively expensive,
we reduce momentum driven
overweight positions, where
valuations are excessively low we
re-enter the market by reducing
underweight positions.
When measuring valuation, we do
not utilise the symmetrical normal
distribution, but prefer so-called
“fat tails” distributions.
David Hollis, Vice President and
Multi-asset Portfolio Manager.
Allianz Global Investment.
Fund June 2012-2013 June 2013-2014 June 2014-2015 June 2015-2016
True Potential Allianz Cautious 8.35%* 4.82%* 2.33%* 8.33%*
True Potential Allianz Balanced 10.10%* 6.43%* 3.21%* 8.33%*
True Potential Allianz Growth 11.28%* 6.67%* 4.63%* 9.57%*
Source: Bloomberg, 30 June 2016. Simulated performance*
Table 4: True Potential Allianz Fund Performance and Simulated Performance
David Hollis:
*Performance figures are made up of actual past performance from 1 January 2016 to 30 June 2016 and
simulated performance from end of 1 June 2012 to 31 December 2015.
The simulated performance is based on the actual past performance of the Allianz RiskMaster Conservative
(Cautious), Allianz RiskMaster Moderate Fund (Balanced) and Allianz RiskMaster Growth (Growth) funds which
underlie the investments concerned. Past performance and simulated past performance are not a guide to
future performance.

Source: Allianz Global Investor, 30 June 2016
Charts: 12-13 Momentum Strategy
PriceActiveWeight
ActiveWeightPrice
TimeTime
Normal
Take Gains Market re-entry
NormalNormal NormalExcessive Excessive
Downward Cycle:Upward Cycle:

Momentum
This process results in over, or under, valuation being
identified more often, and is one of the reasons why
multi-asset funds utilising this process outperformed
during 2008.
The Great Financial Crisis defined in normal distribution
terms was only a 4 standard deviation event, but
utilising a “fat tails” distribution, the probability of such
an extreme scenario was much greater and, therefore,
portfolios were gradually de-risked throughout 2008.
The inclusion of such anti-cyclicality in the momentum
process allows us to skew the risk-return distribution
positively, avoiding the negative skew of a pure
momentum approach.
To better pick turning points in momentum,
as well as using quantitative signals, we incorporate
a fundamental overlay into the investment process.
This enables us to react far more quickly than via the
quantitative approach.
Academic papers cite the 1987 crash as one such
example of a momentum crash, in such a circumstance
there is a need for an immediate or even pre-emptive
reaction. This can only really be implemented
fundamentally, as any quantitative approach would
take time to react and is unlikely to be forward looking.
We leverage the experience and knowledge of
the multi-asset portfolio managers and economic
strategists to produce a fundamental view on all asset
classes, which is reviewed on a weekly basis and
debated, internally via a forum, on a monthly basis.
This enables portfolio managers to incorporate
fundamental views within the momentum process,
and events such as Brexit, are a perfect example of why
this is a necessary component of the overall RiskMaster
strategy.
Judicious combination of momentum with anti-cyclical
signals and fundamental positioning has resulted in a
proven positive risk-return skew for funds employing
this strategy.
Chart 14: MSCI World – Relative Performance of High vs Low Momentum Stocks
1.30
Source: SEI Asset Management and FACTSET, 30 June 2016
06/2013
10/2013
08/2013
02/2014
12/2013
06/2014
04/2014
10/2014
08/2014
02/2015
12/2014
06/2015
04/2015
10/2015
08/2015
02/2016
12/2015
06/2016
04/2016
HightoLowPerformanceRatio
1.25
1.20
1.15
1.10
1.05
1.00
0.95
0.90

Close Brothers use momentum as
part of a risk monitoring discipline
(for exit strategy i.e. selling) and
as part of timing determination
(for entry strategy i.e. buying) for
investing in equities. For them,
momentum is subordinate to
fundamental valuation as well as
qualitative company and industry
assessments.
SEI use momentum in their equity
allocation, both in their allocation
to momentum managers as an
alpha source, and as an input in
their tactical allocation between
managers. It is not a formal input
in their allocation to fixed income,
but both SEI and their underlying
managers take advantage of market
trends (i.e. momentum) and may
choose to exploit them or avoid
them (in a contrarian manner) at
any time. Momentum is also used
as an input alongside valuations,
sentiment, fundamentals and
macro-economics.
Goldman Sachs have momentum
signals that incorporate both short-
term and medium-term price data
to measure trends in equity, fixed
income and currency markets.
Their Dynamic fund uses Strategic
Market Indicators to adjust weights
to trend (momentum) over time.
Comments about how
other managers use Momentum:
Source: True Potential Fund Manager Partners, 30 June 2016
Chart 15: Percentage of Momentum Used by True Potential Fund Manager Partners
0% 10%
Total % Used in a Balanced Multi-Asset Portfolio
FundManager
SEI
Goldman Sachs
Close Brothers
Schroders
7IM
Allianz
Threadneedle
20% 30% 40% 50% 60% 70% 80%

Momentum
Conclusion:
The idea that past price
returns can predict future
returns needs careful
consideration and is best
deployed in the hands of
professional fund managers.
For example, a number of studies are based on
zero-cost whereas transaction costs are borne by the
investor. Momentum is also highly skewed, subject to
crashes which can wipe out previous gains in an instant,
and these events are hard to predict.
Charlatans who rely on investor’s predilection for
believing in patterns use different techniques to
deceive investors.
A common trick is to show stocks with one particular
set of pattern-related characteristics, email the results
to a set of clients and then pick stocks with the exact
opposite characteristics and send to another group
of clients half will be spectacularly right and half will
be horribly wrong.
Being aware of the pitfalls, as well as the benefits,
is essential to exploiting momentum profitably.
Our strategy managers use momentum as an aid
to decision taking. It can aid diversification because
it can be deployed in both falling and rising markets
and they can do so quickly and efficiently.

ow we optimise the Portfolios
Optimisation of our Portfolios is conducted against equally-weighted
portfolios mapped to five Morningstar risk categories.
For example, we offer seven funds within the Balanced category, therefore
if no preference was given to one fund over another, an equally-weighted
allocation to each fund is 14.3%.
When we build our True Potential Portfolios, we tactically allocate away
from the equally-weighted portfolios aiming for lower volatility, lower cost,
higher expected return and a better risk-adjusted return than could be
expected from choosing an equal allocation.
Defen-
sive
Risk (Volatility)
Risk (Mapped)
Cost
Long-Term
Expected Return
Risk-Adjusted Return
Income
Defensive
Cautious
Balanced
Growth
Aggressive
Cautious+
Balanced+
Growth+
CautiousIncome
BalancedIncome
THE SCIENCE BEHIND
OUR PORTFOLIOS
H

Risk (Portfolios)
Risk is estimated using the asset
composition of each Portfolio.
The higher the measure of standard
deviation, the more volatile the
Portfolio will be. We construct
separate Portfolios for each of the
five risk categories containing all
of the funds mapped to that risk
category. When we optimise these
Portfolios, we make sure they are
lower risk than the equally-weighted
Portfolios containing the same funds.
Cost
This is an important factor as costs
negatively impact future returns.
This is why we build our Portfolios
with the objective of being lower
cost than an equally-weighted
Portfolio. However, it should be
noted that at times the choice
may lie between lower cost and
higher risk. The impact from risk is
disproportionate to the impact from
cost. It is worth remembering that
our funds are already amongst the
lowest cost in the market.
Expected Return
An estimate of future expected
risk is based on the future expected
returns for each asset class. When
our Fund Managers change the
underlying assets in our funds,
the Portfolio compositions change.
The expected returns for each of
our Portfolios will change with the
composition of the underlying
assets in each fund.
Risk-adjusted return is based on
future expected returns for each
Portfolio, minus the risk-free rate
of return, divided by the level of
expected volatility calculated for
each Portfolio. Our objective over
time is to manage toward a better
risk-adjusted outcome.
Risk (+ Portfolios)
Our three + Portfolios use funds
outside the Portfolio’s own risk
category. For example, the +
Balanced Portfolio does not include
any Balanced funds. When we
optimise for the + Portfolios, we
make sure that each Portfolio’s
measure of risk does not stray
outside the risk band set for
each risk category.
Risk (Income Portfolios)
Our two Income Portfolios use
all available income funds from
the Cautious, Balanced and Growth
risk categories. We then allocate
accordingly to create one Portfolio
mapped to the Cautious risk
category and one mapped to
the Balanced risk category.
Portfolio Science

Each True Potential Portfolio
contains all of the funds available
within its risk category.
The Portfolios in the True Potential
Portfolios have the greatest degree
of diversification, meaning they
are less prone to highs and lows
relative to our + Portfolios. We
optimise the Portfolios with the
objective of being lower risk than
an equally-weighted Portfolio.
In addition, the True Potential
Portfolios do not have an income
focus, which makes them very
different to our Income Portfolios.
However, when investing in a
True Potential Portfolio, some
clients are happy to take income
by selling units. Below are the
optimisation results for the True
Potential Portfolios.
We always aim to optimise across
all factors where possible, however,
sometimes we may place more
emphasis on one factor over
another.
Defensive Cautious Balanced Growth Aggressive
Risk (Volatility)
Cost
Long-Term Expected Return
Below shows a cost comparison to see how each of the True Potential Portfolios are positioned, compared to their
equally-weighted portfolio equivalent.
Defensive
Defensive
equally-
weighted
Cautious
Cautious
equally-
weighted
Balanced
Balanced
equally-
weighted
Cost 0.82% 0.81% 0.89% 0.91% 0.92% 0.94%
Growth
Growth
equally-
weighted
Aggressive
Aggressive
equally-
weighted
Cost 0.86% 0.86% 0.85% 0.86%
SERIES SPOTLIGHT:
TRUE POTENTIAL PORTFOLIOS

Performance
Asset Allocation
Asset Class Defensive Cautious Balanced Growth Aggressive
UK Equities 6.6% 14.4% 18.6% 23.1% 26.2%
North American Equities 8.4% 15.0% 19.5% 23.6% 23.8%
European Equities 7.0% 8.4% 10.0% 10.7% 17.7%
Japanese Equities 1.2% 2.7% 4.5% 4.0% 5.3%
Asia Pacific Equities 0.4% 1.0% 1.6% 1.4% 1.5%
Emerging Market Equities 1.0% 1.5% 5.7% 11.4% 17.9%
Global Bonds 16.8% 9.0% 4.6% 1.9% 0.0%
Global Inflation Linked Bonds 2.4% 2.1% 1.7% 1.9% 0.0%
Emerging Market Bonds 0.7% 2.7% 3.4% 3.8% 0.0%
Global High Yield Bonds 8.8% 6.5% 6.9% 5.3% 1.3%
UK Gilts 8.2% 9.9% 5.8% 3.5% 0.0%
UK Credit 3.6% 10.2% 6.2% 3.2% 0.0%
Property 0.7% 2.4% 2.3% 3.1% 2.5%
Commodities 1.5% 1.3% 1.2% 1.0% 1.5%
Cash 32.7% 12.9% 8.0% 2.1% 2.3%
Asset Class Defensive Cautious Balanced Growth Aggressive
Equities 24.6% 43.0% 59.9% 74.2% 92.4%
Bonds 40.5% 40.4% 28.6% 19.6% 1.3%
Alternatives 2.2% 3.7% 3.5% 4.1% 4.0%
Cash 32.7% 12.9% 8.0% 2.1% 2.3%
Source: Smith & Williamson, 30th June 2016

Manager of Managers - SEI
Actively Passive - 7IM
65.0%
35.0%
Defensive
Directly Invested - Close Brothers
Risk-Based - Allianz
Fund of Funds - Schroders
25.0%
23.0%
20.0%
19.0%
13.0%
Cautious
Dynamic - Goldman Sachs
Income Builder - Goldman Sachs
24.5%
17.0%
16.5%
23.0%
12.0%
3.5%
3.5%
Balanced
STYLE ALLOCATIONS:

Performance
48.0%
52.0%
Aggressive
24.0%
27.0%
21.0%
28.0%
Growth

Cautious + Balanced + Growth +
Risk (Volatility)
Cost
Volatility is likely to remain for sometime, as our fund managers are targeting value rather than growth.
Those exposed to Emerging Markets have benefited over the past quarter, however conviction in this
area remains low, especially in commodity areas. The table below shows a cost comparison between our
+ Portfolios and their equally-weighted equivalents.
Cautious +
Cautious
equally-
weighted
Balanced +
Balanced
equally-
weighted
Growth +
Growth
equally-
weighted
Cost 0.87% 0.91% 0.87% 0.94% 0.85% 0.86%
The + Portfolios are constructed
using funds from right across the risk
spectrum, while staying within the
risk band for their risk category.
The + Portfolios do not include funds
from the same risk category to which
the Portfolio is mapped.
In other words, the Balanced+
Portfolio does not select funds
mapped to the Balanced risk
category. Optimising the Portfolios
in the + category, we select from all
of the funds outside of the Portfolio's
respective risk category, which
makes the task of optimising,
across all factors, more attainable.
We always aim to optimise across
all factors where possible, however,
sometimes we may place more
emphasis on one factor over another.
Each Portfolio in the + group of Portfolios is more concentrated in its fund selection containing larger fund positions
compared to its risk category equivalent in the True Potential Portfolios.
SERIES SPOTLIGHT:
+ PORTFOLIOS

Performance
Asset Allocation
Asset Class Cautious + Balanced + Growth +
UK Equities 11.6% 18.9% 22.8%
North American Equities 14.4% 22.0% 29.0%
European Equities 10.4% 10.3% 14.2%
Japanese Equities 4.0% 3.8% 5.5%
Asia Pacific Equities 0.8% 1.0% 0.9%
Emerging Market Equities 4.3% 7.0% 10.4%
Global Bonds 9.3% 6.3% 0.4%
Global Inflation Linked Bonds 1.7% 2.2% 0.1%
Emerging Market Bonds 1.0% 2.4% 0.0%
Global High Yield Bonds 6.0% 6.5% 0.7%
UK Gilts 7.0% 7.0% 9.2%
UK Credit 4.1% 3.6% 2.6%
Property 1.2% 1.8% 1.6%
Commodities 1.0% 0.6% 0.9%
Cash 23.2% 6.6% 1.7%
Asset Class Cautious + Balanced + Growth +
Equities 45.5% 63.0% 63.0%
Bonds 29.1% 28.0% 28.0%
Alternatives 2.2% 2.4% 2.4%
Cash 23.2% 6.6% 6.6%

47.0%
14.0%
13.0%
17.5%
8.5%
Cautious +
40.0%
31.0%
29.0%
Growth +
49.0%
21.0%
20.0%
10.0%
Balanced +
STYLE ALLOCATIONS:

Performance
Cautious Income Balanced Income
Risk (Volatility)
Cost
Income (Income funds only)
Given that investors in the Income
Portfolios are seeking income
above capital growth, the income
optimisation factor is our primary
consideration.
Despite not being able to fully
optimise both Portfolios, we are
comfortable given we have
optimised what we believe are the
most important factors of risk and
cost for both Portfolios.
During June, we altered the fund
allocation within the True Potential
Cautious Income Portfolio.
We increased exposure to the
Goldman Sachs Income Builder
Fund and we have reduced
exposure to the True Potential Close
Brothers Cautious Income Fund,
primarily driven by the higher
income level on offer from the
Goldman Sachs Fund.
The Cautious Income Portfolio is
currently yielding 3.88% and the
Balanced Income Portfolio 4.16%
with the equally-weighted Portfolio
yielding 3.76%.
Source: Bloomberg, 31 March 2016
Each Income Portfolio in the True Potential Portfolios is focused on yield and income sustainability, therefore we
have income as an additional optimisation factor.
SERIES SPOTLIGHT:
INCOME PORTFOLIOS
Cautious Income
Cautious
equally-weighted
Balanced Income
Balanced
equally-weighted
Cost 0.78% 0.91% 0.83% 0.94%

SERIES SPOTLIGHT:
INCOME PORTFOLIOS
Asset Allocation
Asset Class Cautious Income Balanced Income
UK Equities 25.5% 35.0%
North American Equities 10.6% 12.1%
European Equities 6.5% 6.7%
Japanese Equities 1.3% 1.2%
Asia Pacific Equities 0.7% 0.6%
Emerging Market Equities 0.4% 0.4%
Global Bonds 11.1% 12.2%
Global Inflation Linked Bonds 0.6% 0.1%
Emerging Market Bonds 0.4% 0.6%
Global High Yield Bonds 11.4% 14.1%
UK Gilts 1.6% 0.6%
UK Credit 20.4% 10.0%
Property 2.4% 0.9%
Commodities 2.1% 0.4%
Cash 5.0% 5.1%
Asset Class Cautious Income Balanced Income
Equities 45.0% 56.0%
Bonds 45.5% 37.6%
Alternatives 4.5% 1.3%
Cash 5.0% 5.1%

Performance
Cautious Income
Income Strategies - Threadneedle
35.0%
5.0%
40.0%
20.0%
Balanced Income
Income Strategies - Threadneedle
5.0%
5.0%
50.0%
40.0%
STYLE ALLOCATIONS:

It’s your money so we think you should be the first
to know how it’s performing. You can view your
account from anywhere in the world 24/7, online
or through our market-leading apps.
Log in to your personal client site at tpllp.com/login
or search ‘True Potential’ in the app store.
YOUR PORTFOLIO ON DEMAND

For more information on our
True Potential Portfolios, contact us at
investmentmanagement@tpllp.com.
True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority, FRN 527444.
Registered in England and Wales as a Limited Liability Partnership No. OC356027.
Registered Head Office: Newburn House, Gateway West, Newburn Riverside, Newcastle upon Tyne, NE15 8NX
London Office: 42-44 Grosvenor Gardens, Belgravia, London, SW1W 0EB
Summer 2016
www.tpllp.com

True-Insight-Issue-3-2016

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