Multi-Manager Smooth Growth Fund Product features

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Multi-Manager Smooth Growth FundProduct features

• Underlying assets of the fund invested with
  asset-specific specialist managers
• Monthly bonuses are objectively determined by a
  smoothing formula
• Monthly bonuses contain a vesting and non-vesting
  component giving trustees greater clarity re
  bonuses earned to date
• Bonuses net of RFT and fees will be at least
  zero, providing real capital protection for
  benefit payments
• Operation of the fund falls under the ambit of
  the Governance Committee

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Multi-Manager Smooth Growth FundInvestment
philosophy

• Long term investment horizon (5 to 10 years)
• Target a bonus declaration of CPIX 4 over the
  investment horizon (net of tax and charges)
• Minimise negative performance in weak markets
  rather than seek significant out-performance in
  strong markets
• Maintain a long-term strategic asset allocation
  built on those asset classes likely to provide a
  real return over the long term

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Multi-Manager Smooth Growth FundJuly 2004 to
date (gross of fees and tax)
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Multi-Manager Smooth Growth FundBonus
projections MMSGF vs Market Linked Fund
Equities return 15
Equities return 0
Equities return 15
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Multi-Manager Smooth Growth FundAsset Allocation
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Financial SecurityCapital Adequacy Requirement
31/12/2004
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Summary

• Bonuses for year to 30 June 2005 ahead of stated
  long-term return objective
• Good performance from underlying asset managers
• Future bonus prospects are extremely positive due
  to favourable returns on underlying assets (ahead
  of internal benchmarks)
• Superior returns to be distributed to existing
  clients only