Question

HAVE YOU EVER REVIEWED AN INVESTMENT PROSPECTUS? WHAT DATA ARE KEY?

CONTRAST AN INDEX FUND WITH AN ACTIVELY MANAGED MUTUAL FUND OR ETF.

Answer 1

HAVE YOU EVER REVIEWED AN INVESTMENT PROSPECTUS? WHAT DATA ARE KEY?

INVESTMENT PROSPECTUS

This document provides information reagarding key investor and Managed Trading Account “MTA” investment product. It is not marketing material. This information is required by law to help you understand the nature and risks of investing in this product. You are advised to read it so you can make an informed decision about whether to invest.

OBJECTIVES AND INVESTMENT POLICY

The objective of the Managed Trading Account “MTA” is to generate consistent absolute returns in each calendar year through capital growth. The MTA aims to achieve its objective primarily using innovative technology, an analytics engine that transforms Big Data streams into actionable trading signals providing one of the earliest warning systems for market-sensitive information, noteworthy events and emerging trends. Using this information the Firm invests in derivatives of listed shares issued by companies on European and US stock exchanges and corresponding equity indices taking both long and short positions. The level of exposure may vary significantly due to the balance of long and short positions held and the investment opportunities identified by the Investment Manager. Depending on the level of investment in shares and indices the MTA may hold significant cash balances, such cash may be invested in short term government debt securities.

RISK AND REWARD PROFILE

Lower risk / typically lower returns Higher risk/typically higher returns

The risk category above is based on the rate at which the MTA’s value has risen and fallen in the past and therefore how much the MTA’s returns could vary in future. It is not a measure of capital gains or losses. The lowest category does not mean a risk-free investment. This indicator is based on historical data and may not be a reliable indication for the future. The risk category shown is not guaranteed and may shift over time. The MTA is in category 5 as its price has experienced above average gains and losses over the past due to the price of investments held by the MTA which may both rise and fall.

OTHER MATERIAL RISKS

The following risks are material in addition to the risks captured by the indicator above:

Investment Risk – the MTA may not achieve its investment objective. An investment in the MTA involves investment risks including the possible loss of amount invested.

Liquidity Risk – the MTA may invests in shares issues by smaller companies which may be difficult to sell quickly.

Counterparty Risk – the MTA enters into derivative contracts with counter-parties. If the counter-party goes into liquidation or defaults on its obligations the MTA may lose the full value of these contracts together with any collateral provided to the counter-party.

FEES AND CHARGES

The fees you pay are used to pay the costs of running the MTA, including the cost of marketing and distributing it as well as rewarding the Investment Manager for his performance. There are no one-off charges taken before or after you invest.

Administration Fee – we charge you an annual administration fee equal to 2% of the value of your MTA paid monthly pro-rata.

Performance Fee – we charge you an annual performance fee equal to 20% of the MTA’s gross trading profits paid monthly pro-rata and subject to a high water mark.

REPORTING

You will receive account statements on a monthly basis via email showing the value of your account, the profit or loss and fees charged over the period.

ELIGIBILITY

In order to apply for a Managed Trading Account you must be either (a) a sophisticated person; (b) a high net worth person; or (c) a company, partnership or trust (whether or not regulated as a mutual fund) of which the shareholders, unit holders or limited partners are one or more persons falling within (a) or (b).

Sophisticated persons are defined as a person regulated by the Cayman Islands Monetary Authority, a person regulated by a recognised overseas regulatory authority, a person whose securities are listed on a recognised securities exchange or a person who by virtue of knowledge and experience in financial and business matters is capable of evaluating the merits of a proposed transaction and participates in a transaction with monetary amounts of at least CI$80,000 (US$97,600) in the case of each single transaction.

High net worth persons are defined as an individual whose net worth is at least CI$800,000 (US$975,610), or any person that has total assets of not less than CI$4,000,000 (US$4,878,100).

PARTICULARS

Minimum investment of £100,000 GBP

Maximum investment of £10,000,000 GBP

Capital can be withdrawn end of month after a 30 day notice period with no fee

Accounts are denominated in GBP

Monthly account performance statements issued by email

CONTRAST AN INDEX FUND WITH AN ACTIVELY MANAGED MUTUAL FUND OR ETF.

Goals :

Index Fund: Try to track the performance of a particular market benchmark—or "index"—as closely as possible.

MF/ETF: Try to outperform their benchmarks and peer group average.

Strategy:
Index Fund : Buy all (or a representative sample) of the securities in the benchmark.
MF/ETF: Combine research, market forecasting, and the experience and expertise of a portfolio manager or management team

Expenses

Index Fund: Index funds tend to be more tax-efficient and have lower expense ratios than actively managed funds because they generally trade less frequently.

MF/ETF:Though they attempt to beat the market, these funds can also miss their goals, resulting in losses for the fund—and its investors.

Other Differences:

What really sets index funds apart from actively managed mutual funds is that with index funds, you always know what you're getting. An index fund that tracks the S&P 500 will provide a return equal to that of the S&P 500, less any expenses that the fund incurs.

Index funds typically have low costs, with the cheapest choices charging less than 0.1% per year in expenses.

By contrast, actively managed mutual funds have a broad mandate to invest in stocks that meet certain criteria. You can find out what a fund holds when it releases its portfolio holdings in its SEC-required reports, but those holdings are out of date by the time they're printed, and funds are not required to update investors on their latest holdings. Indeed, the semi-secret nature of an actively managed fund's proprietary picks is what gives it a chance to outperform its index-tracking counterparts. However, actively managed funds are almost always more costly, and annual fees of 1% or more are fairly common.