Mattioli Woods Structured Products Fund

WEALTH MANAGEMENT & EMPLOYEE BENEFITS

Mattioli Woods Structured Products Fund

2 | STRUCTURED PRODUCTS FUND

SINCE 2005, THE STRUCTURED PRODUCTS WE HAVE DISTRIBUTED HAVE PROVIDED RETURNS WELL ABOVE THE EQUIVALENT BANK DEPOSIT RATE. THE AVERAGE ANNUAL RETURN ON OUR MATURED STRUCTURED PRODUCTS HAS BEEN 6.41%*

*Source: Mattioli Woods internal calculations. These calculations are net of plan manager fees and net of MW fees up to 2013. After 2013 the returns exclude a fee of 0.85% per annum.

STRUCTURED PRODUCTS FUND | 3

About Mattioli Woods plc

WE TAKE CARE OF OVER

£6 BILLION OF OUR CLIENTS’ ASSETS

WE EMPLOY OVER

500 STAFF

ON BEHALF OF OUR CLIENTS, OUR INVESTMENT IN STRUCTURED

PRODUCTS SINCE 2005 HAS BEEN OVER

£250 MILLIONPRODUCING AN AVERAGE

ANNUAL RETURN OF

6.41%


The Mattioli Woods Structured Products FundThe Mattioli Woods Structured Products Fund provides a unique way of benefiting from the returns of structured products as part of a diversified investment portfolio. The structured products fund complements our portfolio management service and Custodian Capital property proposition within our clients’ portfolio of investments.

What are structured products?Structured products allow investors to purchase investments with returns linked to an underlying asset class such as a basket of shares or an index over a period that matches their investment plans. The returns for all structured products have a preset formula so the investor knows the potential risks and returns from the outset of their investment.

Why structured products?Many of our clients will be familiar with structured products, and will have enjoyed the returns provided by our investment in structured product plans since 2005. Structured products can add the following to a portfolio:

What is the objective of the structured products fund?The Mattioli Woods Structured Products Fund will target an average annual return of cash* plus 6% over a rolling three-year period, with a volatility less than the leading benchmark equity indices. Volatility refers to the amount of variation of the net asset value of the fund.

The value of investments within the fund can fall as well as rise and is not guaranteed – you may get back less than you invest. The structured products fund makes extensive use of derivatives to meet its investment objective.

The annual management charge for this fund will be 0.75% per year. A charge of approximately 0.22% per year will be made to cover additional costs such as custodian, administration and audit fees. The fund’s total expense ratio (TER) is therefore estimated to be 0.97% per year.

A UNIQUE PROPOSITION IN THE MARKETPLACE*3m GBP Libor

STABLE AND SOLID RETURNS

Returns on a structured product can be significantly greater than investing directly in the stock market.

UNCORRELATED RETURNS

Structured products can provide a return when other assets in a portfolio, for example, equity markets, do not increase, or even fall.

MARKET ACCESS

Investing in structured products gives you access to a broad range of assets such as indices, equities, commodities, currencies and inflation.

1. 2. 3.


Proven track record and expertise at Mattioli WoodsSince 2005, structured products arranged by Mattioli Woods have enjoyed average returns well above the equivalent bank deposit rate* and have delivered these returns despite the banking crisis of 2007-8 and subsequent falls in global stock markets.

In 2016, Mattioli Woods took the decision to establish a structured products fund, to enable our clients to invest directly in structured products without the disadvantages associated with investing in structured product plans.

TARGET A RETURN OF CASH** PLUS 6% PER ANNUM OVER A ROLLING THREE-YEAR PERIOD

*Since 2005, the average annual return on our matured structured products has been 6.41%

** 3m GBP Libor


How does the structured products fund differ from traditional structured product plan investments?

1. REDUCED COUNTERPARTY RISK

The structured products fund will have reduced counterparty risk via collateralisation. Counterparty risk is reduced by 100% of the exposure being collateralised on a daily basis. Potential liabilities of the counterparty are collateralised (secured) by placing bonds issued by UK, French and German governments that are rated A or higher with the Fund’s custodian.

3. IMPROVED DIVERSIFICATION

Individual structured product plans are linked to a narrow predefined set of underlyings (for example: equity indices, baskets of stocks) and the return is linked to the performance of those underlying assets. The structured products fund will aim to achieve its target return by simultaneously giving investors access to a larger number of underlying assets.

2. INCREASED FLEXIBILITY AND LIQUIDITY

All structured product plans have a fixed start and end date; the structured products fund will be available continuously for investors who wish to buy or sell units in the fund.

4. SIMPLE INVESTMENT PROCESS

When creating this fund, we wanted to simplify the investment process, and eliminate much of the paperwork that usually comes with structured product plans. Investment in the structured products fund can be done via the same fund platforms we use for our portfolio management service. It’s that simple. When a structured product plan matures, the investor will automatically receive their money back. With the structured products fund, any maturing return will automatically be replaced by another return selected by the investment advisers.

EXPOSURE TO A BROADER SPECTRUM OF UNDERLYING ASSETS


AN INVESTOR-FRIENDLY STRUCTURE

Our investment processThe structured products fund will be driven by the following principles:

1. SimplicityWe will try to achieve our target return* by investing in easy-to-understand structured products that invest in well-known underlying assets. Each structured product will be described in detail on our website www.structuredproductsfund.com.

2. Consistent returnsWe aim to deliver a consistent positive return* in all market conditions. Structured products are bespoke and can pay a return when the traditional equity benchmark indices fall or remain static. Our investment advisers will use their substantial structured products experience to deliver potential returns regardless of the performance of the traditional benchmark indices.

3. AnalysisAs all structured products have predefined returns, the structured product investment advisers will be able to forecast how each new structured product will affect the performance of the fund. Each new structured product will be subject to extremely thorough analysis as to how the objectives of the fund will be impacted before a decision is made to invest.

*3m GBP Libor plus 6% per annum over a rolling three-year period with a volatility less than the leading benchmark equity indices


A SECURE INVESTMENT STRUCTURE

Who are the organisations involved in the structured products fund?

Investment adviserMattioli Woods plc has appointed two investment advisers and a Structured Products Fund Committee to determine the mix of assets from which the performance of the fund is derived. Please refer to pages 10 and 11 for more information.

DistributorMattioli Woods plc is responsible for the distribution of the structured products fund. Access to the fund is made through various routes, including online platforms.

Portfolio managerCommerzbank AG, the second largest bank in Germany, developed the Mattioli Woods Structured Products Fund in partnership with Mattioli Woods plc. Commerzbank AG, London Branch will be responsible for the portfolio management of the fund and ensuring the fund complies with the investment objectives as outlined in the prospectus. The portfolio manager will be responsible for ensuring best execution when executing each structured product selected by the investment advisers.


AuditorPWC is responsible for independently auditing the fund, including the annual report. PWC provided tax advice on the construction of the fund, and will also perform the UK tax reporting calculation on behalf of the fund on an annual basis.

Independent custodian & fund administratorThe fund’s custodian and administrator is BNP Paribas Securities Services SA Luxembourg, Europe’s leading securities services providers. They are responsible for holding the fund’s assets including collateral, independently calculating the net asset value of the fund and booking any transactions relating to the fund, including subscriptions and redemptions.

Management companyCommerz Funds Solutions S.A. (CFS) is the management company for the fund and will be responsible for the overall governance of the fund. CFS will be responsible for risk management and will have oversight over all delegated functions (custodian, administrator and investment manager). CFS in its role as risk manager will independently verify each structured product valuation and will be responsible for managing the collateral of the fund, i.e. ensuring the collateral received covers the credit exposure resulting from each structured product transaction.

Conflicts of interestWe have taken all reasonable steps to identify conflicts of interest: firstly when acting as advisers to the portfolio manager (Commerzbank); with our employees and any person linked directly or indirectly to us; and finally as investment advisor/manager to retail clients who may invest in the fund.

Accordingly we have a conflicts of interest policy to ensure that we do not gain any advantage from our position vis-à-vis your interests as investors. Full details of the policy will be available on our website www.structuredproductsfund.com.

We will regularly review the conflict policy to ensure it is, and remains, suitable and appropriate for our business.

Taxation of the structured products fund Prior to investment, you should contact your tax adviser to clarify the tax consequences relevant to your own particular tax status and position.

Pension & ISA investment If the fund is held in a SIPP (self-invested personal pension), SSAS (small self-administered scheme), ISA (individual savings account) or as part of a recognised pension scheme, returns from any holding in the fund should be subject to the usual tax rules for such investments, i.e. returns should be tax-free.

Direct investment by individualsThe fund intends to obtain UK reporting fund status and become a UK ‘reporting fund’, which is applicable to the taxation of relevant UK participants in the fund with the intention it will be a ‘reporting fund’ from inception.

Where a relevant UK investor holds an interest in a ‘reporting fund’ that has reporting fund status for all periods of account for which they hold their interest, any gain accruing upon sale or other disposal of the interest will be subject to tax as a capital gain; relief will be given for any accumulated or reinvested profits that have already been subject to United Kingdom income tax.

Participants in ‘reporting funds’ would ordinarily be taxed annually on distributions from a fund as well as any ‘excess UK reportable income’ as calculated under UK tax and accounting principles.

The fund has undertaken an exercise to confirm that, based on the current investment strategy, all derivatives and structured products should be considered to be held for capital gains purposes, therefore no separation of derivative income should be necessary when calculating ‘excess UK reportable income’.

The fund envisages that, based on current UK legislation, there should be no ‘excess UK reportable income’ annually. However, whilst the fund endeavours to achieve this, it cannot be guaranteed.

Financial Services Compensation Scheme (FSCS)Mattioli Woods plc and Commerz Fund Solutions ( CFS ) are covered by the Financial Services Compensation Scheme (FSCS). Therefore, you may be entitled to compensation from the FSCS in the event that either company is declared in default and you have suffered a loss as a result of its actions or negligence. In this event, the compensation limit is currently £50,000 per person. If the level of your claim against us is greater than £50,000 you would not be covered for the excess.

If you have any queries you may wish to contact the FSCS at 10th floor, Beaufort House, 15 St. Botolph Street, London EC3A 7QU.

Telephone 0800 678 1100 or 020 7741 4100.

The FSCS website suggests that calling the FSCS is the quickest way to have your query resolved.


The fund investment advisersThe investment advisers, Mark Fuller and Ben Wattam, will advise the portfolio manager on all investments made by the fund. Mark and Ben report to a Structured Products Fund Committee. The committee will be responsible for reviewing the risk and returns of the fund.

A DYNAMIC TEAM TO STEER THE FUND

Mark Fuller – Head of Structured ProductsMark has a degree in economics and has spent the majority of his 24-year career dealing with all aspects of structured products. Until 2008 he was a managing director of structured products sales at Bear Stearns, with responsibility for distribution of structured products to UK and Irish clients. In 2008 he moved to Lloyds Bank, as a director of wealth solutions where he structured and developed structured products to Lloyds Offshore Private Bank and all of Lloyds structured products distributors outside the UK. He joined Mattioli Woods in March 2015. He holds the Chartered Institute for Securities and Investment (CISI) Certificate in Private Client Investment Advice & Management.

Ben Wattam – Investment ManagerBen is an economics graduate and has obtained the Chartered Institute for Securities and Investment (CISI) Certificate in Private Client Investment Advice & Management. He joined Mattioli Woods in 2004, and has worked in investment management for the past eight years, and plays a key role in the investment and research division. Ben’s responsibilities include fund selection, the design of structured products, and economic data analysis. He also regularly presents at client seminars on a wide range of investment and economic topics. Ben has been part of Mattioli Woods’ structured products initiative since its inception in 2005.


The Structured Products Fund Committee

Chris BardinChris was the North West Regional Director at RSM Tenon for financial planning as well as Director of Wealth, running their discretionary management business. Chris joined Taylor Patterson as Director in April 2011 and is responsible for the company’s strategic and business planning and the day-to-day management of the financial planning business. Chris plays a key role on the Taylor Patterson Investment Committee, which formulates investment strategy and risk management for the Taylor Patterson investment management services. Chris is a qualified Chartered Accountant and also a Chartered Financial Planner, and is a member of the Institute of Chartered Accountants and the Chartered Financial Analyst Institute.

Adrian MeeAdrian Mee joined Mattioli Woods in 2001 after graduating from the University of Birmingham with an Honours degree in Economics. He initially worked as a client relationship manager, and then headed up the broking team of Mattioli Woods, and after completing specialist trust, tax, and pension qualifications, he moved into consultancy. Adrian regularly lectures on pension legislation at both internal and external seminar events, as well as being an editor for various tax journals on pension planning, and also advises clients on the construction and maintenance of investment portfolios. Alongside technical pension consultancy, Adrian frequently advises on the inclusion of discretionary fund management, commercial property, and structured products for pension, personal, trust, and corporate investment.

Simon MooreSimon joined Mattioli Woods in 2016 and is the chair of the Structured Products Fund Committee. He has worked as a consultant in structured products since 2005. Prior to this, he ran the US Structuring Desk for Commerzbank AG in New York, having moved into this position from being US Head of Financial Engineering. Simon has also run a global quantitative analysis team at ING Barings in New York and London. He has a BSc (Hons) in Mathematics and Computing from the University of Bath, and has been an Honorary Fellow of the University of Manchester Business School whilst teaching on the Masters in Quantitative Finance and Financial Engineering course.

Anne GuntherAnne was appointed to the Mattioli Woods’ board in June 2016. She has spent nearly 40 years in retail financial services in the UK, with executive experience across all sectors from lending, to wealth management and including IPO and merger/acquisition activity. Anne has a significant background in direct channel delivery, her team having launched Lloyds Internet Banking, and then as Chief Executive of both Standard Life Bank and Standard Life Healthcare. She was a founding Director of Standard Life Wealth. In addition to her Mattioli Woods role, Anne now sits on the MBNA board and chairs the Audit and Risk Committee for Masthaven Bank as well as being non-executive/lay member for finance and probity with the NHS Northern, Eastern and Western Devon Clinical Commissioning Group.

Authorised and regulated by the Financial Conduct Authority

WEALTH MANAGEMENT & EMPLOYEE BENEFITS

Aberdeen 8 Queen’s Terrace, Aberdeen, AB10 1XL Tel: 01224 652 100 ◆ Fax: 01224 652 101

Buckingham Investment House, 22-26 Celtic Court, Ballmoor, Buckingham, MK18 1RQ Tel: 01280 823 030 ◆ Fax: 01280 822 665

Glasgow 2nd Floor, 229 St Vincent Street, Glasgow, G2 5QY Tel: 0141 375 7120 ◆ Fax: 0141 243 2346

Leicester MW House, 1 Penman Way, Grove Park, Enderby, Leicester, LE19 1SY Tel: 0116 240 8700 ◆ Fax: 0116 240 8701

London 87-89 Baker Street, London, W1U 6RJ Tel: 020 7269 4729 ◆ Fax: 020 7269 4701

Manchester 13th Floor, City Tower, Piccadilly Plaza, Manchester, M1 4BT

Newmarket Cheveley House, Fordham Road, Newmarket, Suffolk, CB8 7XN Tel: 01638 564 230 ◆ Fax: 01638 666 328

Preston Lanson House, Winckley Gardens, Mount Street, Preston, PR1 8RY Tel: 01772 555 073 ◆ Fax: 01772 203 688

Solihull Units 2 & 3 Enterprise House, Meadow Drive, Hampton-in-Arden, West Midlands, B92 0BD Tel: 01675 444 600 ◆ Fax: 01675 444 601

www.mattioliwoods.com

www.structuredproductsfund.com

Aberdeen

Glasgow

Preston

Manchester

Leicester

London

NewmarketBuckingham

Solihull

Important risk factors

This brochure should be read in conjunction with the Prospectus and the Key Investor Information Document (KIID), which is available from your Mattioli Woods consultant.

An investment in the fund carries with it certain investment considerations and risk factors described in detail in the prospectus and KIID. These risks include risks of loss of capital, market risk, exit risks, risks relating to collateral arrangements, liquidity risk and particular risks relating to structured products. This is intended to be a brief summary and does not provide a comprehensive explanation of the risk factors applicable to the fund. Investors must carefully read and understand the prospectus and KIID, including the complete description of the risk factors therein, prior to making an investment decision.

The content of this brochure, which is for information purposes only, has been prepared by Mattioli Woods plc; while Mattioli Woods takes responsibility for the content, this should not be relied upon as being forecasts, research or investment advice. It does not constitute an offer, or solicitation of an offer, to sell or buy any securities or an endorsement with respect to any investment vehicle.

The aforementioned fund is a sub-fund of CBK SICAV, an investment company with variable capital, incorporated in Luxembourg, under Part I of the Luxembourg Law of 10 December 2010, UCITS V Fund. Registered office of CBK SICAV: 33, rue de Gasperich, L-5826 Hesperange, Grand Duchy of Luxembourg. Management company: Commerz Funds Solutions S.A., 25 rue Edward Steichen, L-2540 Luxembourg.

Mattioli Woods Structured Products Fund

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