Disclaimer

The website is directed only at Professional Clients in the UK. The website is issued by Asset Value Investors Limited (“AVI”), in respect of British Empire Trust plc (“British Empire”). AVI is authorised and regulated by the UK Financial Conduct Authority (“FCA”). British Empire is a public company listed and traded on the London Stock Exchange.

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The price of the Shares will be determined by supply and demand in the market as well as NAV per Share. The market price of the Shares is therefore likely to fluctuate and may represent either a premium or discount to NAV per Share.

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January

The ECB formally adopted its version of QE during the month. This drove the Euro even lower and boosted stock markets across Europe. For the first time in a long while, the MSCI World ex US Index outperformed the broader MSCI World Index, reflecting the relative underperformance of US markets against the rest of the world. This is a phenomenon which ought to benefit us, as we have no direct exposure to the US. We continue to find good value opportunities on wide discounts in Europe and the weaker currency, as well as ECB monetary policy, could provide a further boost to these markets. This would likely lead to a narrowing of discounts within our universe and would be beneficial to our strategy.

Two of our closed-end fund holdings were strong contributors to performance over the month, with NB Private Equity Partners (NBPE) and Harbourvest Global Private Equity (HVPE) recording solid gains. Both discounts contracted materially, and the positions were also buoyed by the strong US dollar.

Euro weakness was not enough to hold back our holding in TUI, whose share price climbed +8.8% in sterling terms over the month (+13.1% in Euros) as the market digested the transformative nature of the holding company’s merger with its TUI Travel subsidiary.

British Empire Securities and General Trust p.l.c is referred to as ‘British Empire’ throughout the website. British Empire’s investment managers, Asset Value Investors are referred to as ‘AVI’

British Empire currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers (“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an authorised investment trust. © British Empire Trust plc. 2014 Registered in England No: 00028203. An investment company under Section 833 of the Companies Act 2006. Registered Office: Beaufort House, 51 New North Road, Exeter, EX4 4EP. Managed by Asset Value Investors Ltd. which is authorised and regulated by the Financial Conduct Authority. Past performance should not be seen as an indication of future performance. The price of investments and the income may fall as well as rise and investors may not get back the full amount invested. British Empire uses gearing techniques (leverage) which will exaggerate market movements both down and up which could mean sudden and large falls in market value. Please refer to the Key Features Document for further details of the risks affecting your investment. Performance figures are cumulative and based on Price total return and do not include Plan charges. For more information, please call 03458 500181. Tax treatment depends on the individual circumstances and may be subject to change in the future. Asset Value Investors Ltd do not offer Innovative Finance ISAs.