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Cash v Global Absolute Return Fund (GARS)

Cash• Cash has always been seen as a means of

providing income in retirement

• Cash has always been seen as a safe long term investment

• Cash has always been seen as a risk free investment

Cash today• In April 1999 cash ISAs earned an average 6.32%,

in 2011 the average cash ISA earned just 0.84% - (source Telegraph and Market Oracle)

• 2008 onwards saw the collapse of Icesave and near collapse of RBS, Northern Rock et al

• In a low interest rate / high inflation world, there is no longer a risk free investment, inflation at 2.0% (January 2014) means cash investments are losing money in real terms

The challenges• People are living longer, investments have to work harder

and for longer

• Interest rates at 0.5% p.a. (likely to remain at least until 2015 and possible beyond)

• Inflation currently at 2% (January 2014) eroding real value of cash i.e. 0.84% return means is cash is losing 1.16% p.a. in real terms

• But volatile markets mean investors nervous of investing in the markets - the ‘holy grail’ would to achieve high returns (as per 1999) without the risk of losing money

Introducing the Standard Life GARS

FundTHE FUND

o Gives investors positive investment returns in all market conditions. It seeks to provide returns that have historically been achieved by conventional long-term equity investment, but with only a third of the volatility

o Aims to deliver an absolute return over rolling 12-month periods and has a target return of cash +5% per annum (gross of fees) over rolling 3-year periods. They expect this to be consistent with the long-term return available from equities and aim to achieve this target with around a half to a third of the volatility

• Unlike cash returns are NOT guaranteed and your capital will fluctuate, past performance is no guide to future performance and investments can fall as well as rise

Introducing the Standard Life GARS

Fund• Cash is based on the 6 Month LIBOR Rate (currently 0.61188%) –

over three years the target would be 5.61% p.a. gross of fees, the fund over three years has returned 6.31% p.a.

2008 2009 2010 2011 2012 2013 Since launch

-5.26% 18.67% 9.90% 2.19% 7.02% 6.28% 6.62%

Alternative to cashTo achieve higher returns without some volatility is unrealistic because it requires the deployment of risk, which by its very own nature means that to achieve returns may mean losing money over the short term.

However, there is an alternative to pure equity investments. Consider:

• In 2011 the sector covering all Global Funds was down 9.34%, this investment over the same period returned a positive 2.19%

• In 2011 the average ISA investment was just 0.84%, this investment has risen by 5.61% over the last 13 months

• Since launch in 2008 the investment has returned 6.62% p.a., in fact only in 2008 did it return a negative amount, over three years to the end of December 2013 it returned 6.31% p.a.

• Inflation is 2.0%, this investment is providing above inflation returns

Source: Morningstar for performance data on Standard Life GARS Fund

You should note that past performance is not a reliable indicator of future returns and the value of your investments can fall as well as rise.

PLEASE NOTE YOUR CAPITAL AND / OR RETURNS ARE NOT PROTECTED OR GUARANTEED

LWM Consultants Ltd is an appointed representative of Sense Network Limited, which is authorised and regulated by the Financial Services Authority. Registered in England and

Wales under Company Number 07408315. Registered Office: The Garden Suite, 23 Westfield Park, Redland, Bristol, BS6 6LT