Investment Manager:

Piraeus Bank (Cyprus) Ltd.

(April 2012)

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

We monitor our performance relative to peers from Bloomberg. Our performance for 2011 as a whole was below the average performance of our peers. But over the last three months (from December 2011-February 2012) performance has been better than the average among our peers. Overall there has been a significant positive contribution to our performance from Africa, South East Asia and from our investment in the WSF Reliance Global Shariah Growth Fund.

How does the management and investment process for a fund of funds differ from that for other types of funds?

At asset allocation level, volatility is the main driver of our decisions on how much to invest in equities and bond funds and how much to keep in cash. In choosing which of the underlying funds to invest in and how much to invest in each of the funds, we like to test the robustness of their investment process by analyzing performance “behaviour” over negative and positive periods. We do that by segmenting and analyzing the statistical distribution of returns for each of the underlying funds. This approach is very different from a conventional equity fund where the analysis is mostly concentrated on company level according to a given mandate.

What does a fund of funds offer investors which other types of funds do not?

The two most important advantages that a fund of funds offers to a retail investor are access to local knowledge and manager diversification. Many retail investors do not have access to the local fund managers which operate in many of emerging market regions. Funds of funds give retail investors the opportunity to invest in these funds. In addition, funds of funds offer manager diversification to the investor, thus minimizing the overall risk undertaken.

The Fund’s management strategy places a strong emphasis on utilising the knowledge of managers of underlying funds within the portfolio. Could you explain in more detail how this helps the Fund’s investments?

Local knowledge is vital when investing in regions where outsiders’ access to knowledge is limited. This is particularly true with most of the emerging markets as opposed to developed markets where knowledge is readily available to everyone. This is why we believe that local fund managers with a robust investment process and access to local knowledge would outperform “outside” fund managers over the medium to long-term.

The Fund aims to achieve a set level of volatility within a certain range – what does this offer investors and what mechanisms do you use to ensure that volatility levels stay within the range set for the Fund?

By applying a volatility constraint on our fund we are aiming to attract investors that do not like the experience of the “psychological roller-coaster” offered by equity markets as a result of the high volatility. This is achieved by managing volatility on two levels, a) at underlying funds level and b) at asset allocation level. At the first level we analyze the distribution of each underlying fund and a higher allocation is assigned to funds with a relative low volatility. If volatility is still higher than our pre-determined upper limit then volatility is managed at the second level where allocation to equity funds is decreased and a higher allocation is assigned to bonds and cash.

The Fund invests predominantly into emerging markets (EMs) and so far this year many EMs have performed very well. Do you think their performance will be better in 2012 than 2011 and if so, why?

Yes, we expect emerging equity markets to perform better in 2012 than they did in 2011. The risk from the Eurozone debt crisis is now lower because the uncertainty element has been reduced. Countries and financial institutions are starting to quantify the effect of a possible Greek default and are taking any necessary and possible steps to contain the effects. This by itself reduces the probability of default. But a major potential risk is the increase in the price of oil that could severely suppress growth in major economies.

Among emerging markets, are there any specific regions or countries which you think should do exceptionally well this year?

We expect Africa to be among the best performing regions for 2012. Also, we would not be surprised to see Russia do exceptionally well following Vladimir Putin’s return to the presidency and because of his plans to revive the Russian economy.

Last year also saw bonds outperform equities. Do you think that is likely to happen in 2012 as well and how will that affect the performance of the Fund?

We expect equities to outperform bonds in 2012. At the moment around 10% of the Fund is invested in bonds. Our bond position contributes added value to the Fund because of its low contribution to volatility and because it further reduces in overall risk by increasing diversification. These benefits outweigh the possibility of underperformance of the bond market for 2012.

The Eurozone debt crisis was a dominant driver on markets last year. Is that to be the case again this year or do you expect something else to move markets significantly, either up or down, in 2012?

As I mentioned earlier, the risk arising from the Eurozone debt crisis is now lower as the uncertainty element has been reduced to a great extent. For 2012 we expect the main source of risk to be a possible conflict in the Middle East and in particular involving the US, Israel and Iran. This could drive oil prices very high, thus significantly affecting growth worldwide.

Some investment experts have said that stocks in some EMs were oversold last year as investors acted on global market sentiment rather than looking at company fundamentals. Do you think market performance so far this year has been focused more on corporate and economic fundamentals?

Market performance so far this year has been a combination of market sentiment and corporate and economic fundamentals. The fundamentals were mostly in place in 2011 but market sentiment was negative due to the uncertainty connected with the Eurozone debt crisis. Now that much of this uncertainty has been reduced we can see market sentiment turning positive and markets starting to reflect fundamentals.

At the moment the threat of conflict between Iran and the US has driven oil prices up. What effect would extremely high oil prices have on the world economy and global markets?

High oil prices could severely suppress global growth and thus push equity markets into decline. But we should not forget that this could potentially create opportunities for certain individual countries to expand and grow.


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 20th December 2002 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.