Investment Adviser:

NFD Aureus Invest d.d.

(June 2013)

How has the Fund performed recently compared to its peers and are there any particular stocks or areas where it is performing well?

In the last couple of months the Fund has outperformed its comparative index primarily due to our lowering of market exposure. This was done because at the beginning of the year we prepared for a prevalence of uncertainty and higher volatility on the market, especially in the first half of this year. It seems now that this move was a good one, and that the Fund’s current outperformance is down to good asset allocation than any particular stock or sector.

You took over the investment adviser role at the end of last year. What changes have you made to the Fund portfolio and its investment strategy since then and why?

After taking over the investment adviser role we adjusted the portfolio to our custom made portfolio optimization model and to our strategic expectations of the Fund’s focus markets. This involved the replacement of some high beta names to lower the portfolio’s overall volatility in line with our previously-mentioned expectations in 2013.

The Fund’s portfolio is also constructed using samples of benchmark constituents based on a covariance matrix and conditional value of risk metrics with the index enhanced for an expected fund total expense ratio. In addition, based on macro and fundamental research, active stock selection is employed so that the share of different active positions is defined by a marginal positive information ratio. The balance between passive and active portfolio is changed according to the capacity of the fund manager to exploit the non-benchmark constituents of the investment universe at some point in time. Cash is adjusted according to expected market momentum but does not influence equity construction.

Could you explain a bit about your investment and stock selection process? Is there anything unique in your approach that sets you apart from other asset management companies?

Our asset management company developed a custom made portfolio optimization model. The investment philosophy in general is enhanced indexing with a value bias and added value in management comes from in-house development of valuation tools. The fund’s general performance objective is to outperform stated benchmarks, with a targeted annual information ratio of around 0.5.

The investment process is based on the Treynor-Black model, with active stock selection based on fundamental undervaluation and return estimates, conditional on a normalized maximum 10% annualised tracking error. Tracking error is adjusted accordingly using a quarterly macro view, while customised investment and risk tools are also developed in-house.

The portfolio is heavily overweight in Russia. What is your thinking behind this?

The Russian RTS index accounts for 60% of the Fund’s benchmark index. As previously stated, the Fund’s portfolio is constructed through the sampling of benchmark constituents so for the portfolio to be overweight in Russia is no surprise and is unlikely to change in the future.

Financial authorities in Russia recently introduced some reforms of the country’s financial infrastructure, including introducing a central depository, to try and boost stock valuations. Have these reforms had any success yet?

Any reforms aimed at opening the market to investors and making the procedure of buying and selling stocks on local markets easier are good news and positive for the overall investment climate in the country. In this particular case it is still too early to draw a clear conclusion but I would say that in the long-term these reforms are positive.

Russian authorities are moving to re-align the economy and decrease the country's over-reliance on oil and gas. How long is this process likely to take and what will this mean for investments in its energy sector?

In 2011, Russia became the world's leading oil producer, surpassing Saudi Arabia, and is the second largest production of natural-gas. Its reliance on exports of these commodities makes it very vulnerable to volatile swings in global prices. In the last couple of years the Russian government has introduced measures aimed at reducing the economy’s dependency on the oil and gas sector by boosting the technology sector. But so far these reforms have not produced any major shifts in the country’s reliance on this sector. Perhaps a better question would be: will Russia ever manage to decrease its over-reliance on oil and gas? Russia’s natural resources are the country’s main advantage over its peers and our opinion is that the energy sector will play a key role in Russia for many years to come but with authorities placing a larger focus on hedging against global price volatility.

There has been a lot of news in recent months about serious problems facing the Ukrainian economy and threats of devaluation among others. What do these threats mean for the performance of Ukrainian stocks and do you have a strategy to deal with them if and when they arise?

The biggest problem when talking about the Ukrainian economy in recent months is the lack of clarity over policy. Confusing policy targets were set out by the government recently which have fuelled uncertainty and political instability. This has provided a clear signal for investors to take a bearish stance toward Ukraine’s stock market and the UX index has dropped more than 10% this year. Currently the Fund is underweight in Ukraine compared to its benchmark so these developments will only have a limited impact on Fund performance.

Despite macroeconomic and political stability, growth potential, strong relations with major trade partners, vast natural resources and its position as a potential major world energy power, Kazakhstan is often overlooked by investors. Is this an opportunity for the Fund and how do you plan to exploit it?

Just as in the Russia, authorities in Kazakhstan realize that despite solid macroeconomic indicators, the economy suffers from an overreliance on oil and the extraction industry and the government is putting more and more focus on developing other sectors like transport, food processing, telecoms, pharmaceuticals and petrochemicals. This is where we see an opportunity for the Fund to gain extra returns for its investors. The Fund’s current exposure to Kazakhstan is around 10% and we are closely watching macroeconomic developments as that will be the key trigger for adjusting exposure to this country.

If you had to give a potential investor one reason why they should invest in Russia and the CIS, what would it be?

It is one of the leading emerging markets of the world, rich in natural resources and with improving financial infrastructure.

IMPORTANT NOTE: This report has been prepared for information only, and it does not represent an offer to purchase or subscribe to shares. World Investment Opportunities Funds (“WIOF”) is registered on the official list of collective investment undertakings pursuant to part I of the Luxembourg law of 17th December 2010 on collective investment undertakings as an open-ended investment company. WIOF believes that the information is correct at the date of production while obtained from carefully selected sources considered to be reliable. No warranty or representation is given to this effect and no liability can be assumed for the correctness or accuracy of the given information which may be subject to change at any time, without notice. Past performance provides neither a guarantee, nor an indication of future performance. Value of the shares and return they generate can fall as well as rise. Currency fluctuations, either up or down, may also affect value of the investment. Due to continuing market volatility and exchange rate fluctuations, the performance may be subject to significant changes over a short-term period. Investors should be aware that shares in the financial instruments entail investment risks, including the possible loss of the invested capital. Performance is usually calculated on the basis of the relevant NAV unless stated otherwise. Performance shown does not take account of any fees and costs associated with subscribing or redeeming shares. It is assumed that all dividends were reinvested. WIOF prospectus is available and may be obtained through www.1cornhill.com. Before investing in any WIOF Sub-fund(s) investors should contact their financial adviser / legal adviser / tax adviser and refer to all relevant documents relating to the WIOF and its particular Sub-fund(s), such as the latest annual report and prospectus that specify the particular risks associated with the Sub-fund, together with any specific restrictions applying, and the basis of dealing. In the event investors choose not to seek advice from a financial adviser / legal adviser / tax adviser, they should consider whether the WIOF is a suitable investment for them.