Waverton European Capital Growth Fund

The investment objective is to generate capital growth by investing in a concentrated portfolio of equities selected from European markets, not including the UK. Overwhelmingly, but not exclusively, the managers invest in companies that are at the larger end of the capitalisation scale.

The investment philosophy is based on the belief that markets are inefficient, and that by investing in wealth creating companies at attractive valuations using a disciplined, bottom-up investment process it will be possible to continue long term capital growth in all market environments.

The managers believe in:

• Identifying wealth creating companies that the market has overlooked

• Using numerous company visits and a disciplined approach to identify stock opportunities

• Utilising deep experience and continuous debate to avoid pitfalls

• Building portfolios around high conviction ideas (max 40)

All stock ideas are tested against the five key attributes that the managers deem as vital to qualify as a wealth creating company:

1. Interests Aligned – management working for the benefit of all shareholders

2. Earnings Visibility – predictable and with a reasonable degree of confidence

3. Pricing Power – sustainable competitive advantages

4. Cash Generative – paying down debt, funding future growth, paying dividends and buying back shares

5. Return on Capital – high or rising