Marlborough North American Fund Benchmark Benchmark November 2014 Aims GIF OS US Large-Cap Blend Equity Identification Codes Sedol code 0134868 Mex code A0C ISIN code GB0000432210 The objective of the Fund is to achieve long-term capital growth through a professionally managed portfolio of investments mainly in United States equity issuers. Performance Fund Overview Price Bid £28.307 (29/10/2014) Fund size £10.9m Number of holdings 54 Charges Initial charge 5.50% Annual Management Charge 1.95% Cumulative Performance (%) 1 year 3 years 5 years 1.8% 42.8% 97.8% 14.5% 60.5% 92.5% Fund Benchmark Fund Background Valuation point Weekly Wednesday 17:00 Fund type OEIC Launch date 10/06/1997 Fund currency Pound Sterling Fund domicile Guernsey Discrete Performance (%) - to last month end 10/13 to 10/14 10/12 to 10/13 10/11 to 10/12 10/10 to 10/11 10/09 to 10/10 1.8% 29.1% 8.7% 7.4% 29.0% Fund Fund Managers Dealing Minimum investment £5,000 Minimum top up £2,500 Minimum regular savings N/A Settlement period : buy 4 days Settlement period : sell 4 days Group Details Marlborough International Management Limited Second Floor, St Peter’s House Le Bordage St Peter Port Guernsey GY1 1BR T: +44 (0) 1481 735507 F: +44 (0) 1481 724116 Name Paul Tryon John D. (Jack) Lemery Manager for 5 yrs, 6 mths 5 yrs, 6 mths Investment Advisor Emerson Investment Management 30 Federal Street Boston MA 02110 Administrator Louvre Fund Services Limited First Floor, St Peter’s House Le Bordage St Peter Port Guernsey GY1 1BR T: +44 (0) 1481 748955 F: +44 (0) 1481 748956 For professional investors only. The past is not necessarily a guide to future performance. Investments and the income derived from them can fall as well as r ise and the investor may not get back the amount originally invested. Marlborough North American Fund November 2014 Top 10 Holdings Name % Weight 1 UnitedHealth Group Inc 3.5 2 JPMorgan Chase & Co 3.5 3 ConocoPhillips 3.3 4 Abbott Laboratories 3.3 5 Microsoft Corp 3.3 6 Navient Corp 3.1 7 Target Corp 3.0 8 Kraft Foods Group Inc 3.0 9 HollyFrontier Corp 2.9 10 The Procter & Gamble Co 2.8 The S&P 500 finished up +2.4% in October despite a heavy mid-month sell off. A number of factors weighed on the market to start the month including profit disappointments, distressed selling from hedge funds, reduced global growth estimates, currency and credit market dislocation, falling energy prices, miscommunication from the Fed and panic over the spread of the Ebola virus. The market found better footing later in the month as central banks offered supportive growth measures and the U.S. mid-term election gave Congress a fiscal and tax-focused majority. Utilities and healthcare were the top performing sectors in the month. These companies should benefit from the election results due to reduced regulation and taxes. Industrial companies rebounded, which might suggest that global growth estimates are firming up. Energy and materials stocks faced the most pressure during the selloff and also lagged in the recovery. Commodity prices have declined with a stronger U.S. dollar, lower emerging market demand and steady supply. Recent price declines are likely to be more cyclical than long term in nature, so many energy company shares – including those with steady and rising dividends- are undervalued. The fund had strong performance from its healthcare and technology companies, while those investments in consumer discretionary trailed the index.  Healthcare investments Bristol-Myers and UnitedHealth Group rose +15% and +10% respectively in the month. Overall survival rates for BMY’s melanoma drug were much better than expected and caused investors to rethink the competitive pressures facing the company. UnitedHealth Group, the largest healthcare insurance provider in the US, has effectively navigated the changing regulatory environment. The company is now poised to grow its EPS and should see multiple expansion as a result. Smaller companies outperformed large caps in technology and the fund’s investments in Broadridge Financial Solutions increased +5% compared to the index up+2%.  The fund’s consumer discretionary shares pulled back after a strong few months. Kohl’s shares declined after it announced that comp sales and profits would be lower than expected, however the outlook for consumer demand has improved and makes management’s new guidance conservative. The market’s swift recovery from the mid-October correction has again created a disconnect between the underlying market fundamentals and valuations. Low interest rates and moderate profit growth can support reasonable valuations, however at 17x P/E (a nearly five year high) the market is subject to higher volatility and gains are less sustainable. The fund is concentrated in companies with high income and dividend growth, which have the potential to offset high volatility and make gains more sustainable. Paul Tryon - 11/11/2014 For professional investors only. Investment may only be made on the basis of the current Prospectus. The following is a summary only of some key items in the Prospectus. Investors in Participating Shares of the Company must have the financial expertise and willingness to accept the risks inherent in this investment. These risks include inter alia, the fact that neither the past performance nor operating history of the Company is a guarantee of future performance. It should be appreciated that the value of Participating Shares is not guaranteed and may go down as well as up and that investors may not receive, on redemption of their Participating Shares, the amount that they originally invested. Investors should consult their professional advisers about the consequences to them, and inform themselves of the legal requirements for, acquiring, holding, exchanging redeeming or disposing of Participating Shares under the relevant laws of the jurisdictions to which they are subject, including any tax consequences, exchange control requirements, requisite governmental or other consents and any other formalities. If you are in any doubt about the action you should take, you should consult a suitably qualified and licensed or authorised professional adviser who specialises in advising on the acquisition of shares and other securities. Investment in the Company should only be undertaken as part of a diversified investment portfolio. The Company’s assets will be invested primarily in securities denominated in US Dollars and any income received by the Company from these investments will be received in US Dollars. The Company will compute its net asset value and make any distributions in Sterling; there is therefore a currency exchange risk that may affect the value of the Participating Shares. The Company will not hedge that currency exchange risk. Currency fluctuations may result in a loss being sustained by the Company. The Company is vulnerable to movements in the exchange rate of the US Dollar against other currencies and is also vulnerable to general economic recession within the United States of America. Trading in futures and options contracts, which are also referred to as contracts for differences, carry a high degree of risk. Transactions in futures involve the obligation to make, or to take, delivery of the underlying asset of the contract at a future date, or in some cases to settle the position with cash. The inherent gearing or leverage in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small movement can lead to a proportionately much larger movement in the value of an investment. Futures transactions have a contingent liability and are generally traded on margin. This means that there is an obligation to make further payments in certain circumstances over and above the amount paid when the contract was entered into. An adverse market movement can lead to substantial additional margin requirements at short notice to maintain the position. Writing of options involves considerably more risk than buying options. The purchase of a call option on a futures contract will mean exposure to the same risks and margining requirements as set out above in respect of futures. Writing of options involves acceptance of a legal obligation to purchase or sell the underlying asset if the option is exercised, however far the market has moved away from the exercise price. Consequently the risk can be unlimited, although this can be reduced in the case of covered options. Investment in the Participating Shares should be viewed as a medium term investment. Participating Shares may not be redeemed otherwise than on any Dealing Day. The Participating Shares of the Company are not listed on any stock exchange and it is not anticipated that there will be any secondary market in the Participating Shares.