Onside Issue 6 - 28

The art and science of Multi-Asset Value investing

Consistent income with capital growth
Initial investment of £100,000 in the CF Seneca Diversified Income Fund "B" shares

£28,315.40

Cumulative income
£15,247.65

£5,048.00

Capital growth

1 Year

3 Years

5 Years

7.51%

8.33%

17.28%

Source: Bloomberg, income declared up to 31.08.2017
Past performance is not a guide to future returns. The value of investments and any income may
fluctuate and investors may not get back the full amount invested.

How does the investment team
operate?

How do you set about constructing
a portfolio?

Our five investment professionals have two
responsibilities - one relating to portfolio oversight,
the other to research.
The research responsibilities, which are the more
important of the two, are assigned according to
the areas in which we are seeking to add value
within our Multi-Asset funds - asset allocation,
UK equities, overseas equities, fixed income and
specialist assets (e.g. property, infrastructure,
asset leasing and similar).

The starting point for all our funds is the asset
allocation. For the LF Seneca Diversified Income
fund, for example, we have been able to construct
a strategic asset allocation we believe should
generate a long-term real return of circa 5% per
annum over a typical market cycle given fairly
conservative estimates of asset class long-term
real returns. We define a typical market cycle as
one which spans 5-10 years, and in which returns
from various asset classes are generally in line
with their very long term averages.

It is the job of the research specialists to provide
research leadership to the team in their respective
areas, however each important decision has to be
approved by the team before being implemented.
Thus we genuinely work as a team - every team
member is responsible in some way for the
performance of each of our funds.

As examples, we think UK equities and gilts will
respectively return 5% and 2% in real terms over
the very long-term. We then seek to add value
from active management and we believe this
should not only allow the fund to pay a circa 5%
yield per annum on a monthly basis - but also to
preserve real capital over the long-term.



Table of Contents for the Digital Edition of Onside Issue 6

Contents
Onside Issue 6 - Cover1
Onside Issue 6 - Cover2
Onside Issue 6 - Contents
Onside Issue 6 - 4
Onside Issue 6 - 5
Onside Issue 6 - 6
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Onside Issue 6 - Cover3
Onside Issue 6 - Cover4
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