Appian Monthly Monitor August 2016

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Superior Free Cash Flow Yields Produce Superior Risk Adjusted Returns

The equity market environment today poses many challenges, the main ones being headline valuations that appear fairly valued and economic growth across the world which remains lacklustre. This combination of factors has created a market environment which can be quite volatile as was seen recently around “Brexit”.

Appian strives to navigate through this environment by investing in high quality companies that are generating high amounts of cash at attractive valuations. This results in Appian Funds having Free Cash Flow Yields superior to the Market*.

Research has shown that Free Cash Flow yield is the single most important factor driving Risk Adjusted Returns.

Equities in Appian Funds today have Free Cash Flow Yields* which are at a 40%+ premium to the market. These strong free cash flow yields allow our companies to pay sustainable dividends as well as re-invest in their businesses for long-term growth.

Source: Canaccord Genuity - Quest

Source: Canaccord Genuity - Quest

Equity markets may remain volatile but we remain well positioned to produce superior risk adjusted returns by maintaining our discipline of investing in quality companies with strong free cash flow characteristics.

*Calculation based on median of free cash flow yields of equity constituents of portfolio. Market is as measured by Canaccord Genuity - Quest.

Forward

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This material has been prepared and issued by Appian Asset Management Limited on the basis of publicly available information, internally developed data and other sources believed to be reliable. While all reasonable care has been given to the preparation of the information, no warranties or representation, express or implied are given or liability accepted by Appian Asset Management Limited or its affiliates or any directors or employees in relation to the accuracy, fairness or completeness of the information contained herein. Any opinion expressed (including estimates and forecasts) may be subject to change without notice.

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