Executive Summary

››The spectre of trade wars loomed heavily on the horizon for most of Q2, ultimately causing the
quarter to finish on a weaker note. Investor sentiment was further rattled by arguments over
immigration policy and uncertainty over the impact of rising interest rates as well as a lack of
clarity on Brexit.

››For the Stability-Focused Strategic Portfolios, dedicated short duration allocations as well
as short duration positioning cushioned the impact of rising yields. Emerging market debt
allocations detracted at the strategy level. Global managed volatility equities once again
provided meaningful risk reduction, despite lagging in global equity markets in absolute terms.
A stronger US dollar over the period also provided a tailwind to unhedged, non-UK positions,
relevant because the SEI strategic portfolios structurally are global in nature.

››The Stability-Focused Strategic Portfolios (the Defensive, Conservative, and Moderate Funds,
collectively “the Funds”, Sterling Wealth A share class, in GBP, net of all fees) returns ranged
between -0.04% and 1.93% in Q2 2018, compared to the 0.06% return of BofA Merrill Lynch
Sterling Broad Market index over the same time period, which can be seen as a representation
of the UK fixed income market, while the Bloomberg Barclays Global Aggregate GBP-Hedged
index declined by -0.26% Crucially, with the exception of the ultra-conservative Defensive
fund, each of the funds continued to achieve their longer-term returns with a higher level of
risk-adjusted return than the above-mentioned benchmark, consistent with their unique asset
allocation design.

››Consistent with their Goals-based investment design, SEI manages the Stability-Focused
Strategic Portfolios to specific maximum drawdown targets which tend to result in an asset
allocation structure that seeks to deliver a smoother investment journey for investors.
Evidence of the success of this approach can be found in the 5 years to 30 June 2018 volatility
data of the Stability Focused Strategic Portfolios, with respective values of 1.61%, 2.77%, 3.99%
for the Defensive, Conservative and Moderate Funds, comparing favourably against the fixed
income only BofA Merrill Lynch Sterling Broad Market index volatility number of 6.33%.