How Do ETFs Fit into investment portfolios? ETFs IN CLIENT PORTFOLIOS How Do ETFs Fit into investment portfolios? wisdomtree FOR INSTITUTIONAL INVESTOR USE ONLY

FOR INSTITUTIONAL INVESTOR USE ONLY Disclaimer This document is issued by WisdomTree Europe Ltd is an appointed representative of Mirabella Financial Services LLP which is authorised and regulated by the Financial Conduct Authority. The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. An investment in ETPs is dependent on the performance of the underlying index, less costs, but it is not expected to match that performance precisely. ETPs involve numerous risks including among others, general market risks relating to the relevant underlying index, credit risks on the provider of index swaps utilised in the ETP, exchange rate risks, interest rate risks, inflationary risks, liquidity risks and legal and regulatory risks. ETPs offering daily leveraged or daily short exposures (“Leveraged ETPs”) are products which feature specific risks that prospective investors should understand before investing in them. Higher volatility of the underlying indices and holding periods longer than a day may have an adverse impact on the performance of Leveraged ETPs. As such, Leveraged ETPs are intended for financially sophisticated investors who wish to take a short term view on the underlying indices. Investors should refer to the section entitled "Risk Factors" and “Economic Overview of the ETP Securities” in the Prospectus for further details of these and other risks associated with an investment in Leveraged ETPs and consult their financial advisors as needed. Within the United Kingdom, this document is only made available to professional clients and eligible counterparties as defined by the FCA. Under no circumstances should this document be forwarded to anyone in the United Kingdom who is not a professional client or eligible counterparty as defined by the FCA. This marketing information is intended for professional clients & sophisticated investors (as defined in the glossary of the FCA Handbook) only. This marketing information is derived from information generally available to the public from sources believed to be reliable although WisdomTree Europe Ltd does not warrant the accuracy or completeness of such information. All registered trademarks referred to herein have been licensed for use. None of the products discussed above are sponsored, endorsed, sold or promoted by any registered trademark owner and such owners make no representation or warranty regarding the advisability on dealing in any of the ETPs. FOR INSTITUTIONAL INVESTOR USE ONLY

Why consider ETFs in portfolios Lower Costs Diversification Asset Allocation Access same strategies as mutual funds Transparency Sources: WisdomTree Europe, Morningstar. Data as at 31 May 2016. Past performance is not indicative of future returns. FOR INSTITUTIONAL INVESTOR USE ONLY

Average Costs comparison www.etf-forum.co.uk Average Costs comparison The average active fund charges at least twice as much in annual management fees as passive funds. Average Annual Management Fee Comparison (%) Exposure Passive (Lowest) Active UK Large-Cap Equity 0.27 (0.07) 0.82 UK Mid-Cap Equity 0.38 (0.10) 0.80 UK Small-Cap Equity 0.58 (0.58) 0.99 US Large-Cap Equity 0.32 (0.05) 1.05 Europe Large-Cap Equity 0.35 (0.05) 1.16 Global Emerging Markets Equity 0.61 (0.20) 1.26 Sources: WisdomTree Europe, Morningstar. FOR INSTITUTIONAL INVESTOR USE ONLY

Importance of minimising costs www.etf-forum.co.uk Importance of minimising costs High expenses can erode investment returns and depress portfolio growth over time. Average Active (High Expense) Portfolio (0.90% Annual TER, 7% Annualised Return) Average Passive (Low Expense) Portfolio (0.25% Annual TER, 7% Annualised Return) Sources: WisdomTree. Returns are hypothetical and do not represent actual investment returns. Returns above assume a 7% constant rate of return. Past performance is not indicative of future returns. FOR INSTITUTIONAL INVESTOR USE ONLY

ETF portfolios in practice www.etf-forum.co.uk ETF portfolios in practice Performance Overview Time Period Portfolio Annual Return (%) Standard Deviation (%) Sharpe Ratio 1 Year Passive 21.3 8.4 2.56 Active 19.5 7.7 2.65 3 Year 11.9 7.4 1.01 11.1 7.1 0.93 5 Year 10.1 6.7 1.03 9.4 6.5 0.94 10 Years 7.3 8.7 0.13 6.6 8.5 0.06 Sources: WisdomTree, Morningstar. Data from 30 April 2007 to 30 April 2017. Past performance is not indicative of future returns. Returns are hypothetical and do not represent actual returns on investments. FOR INSTITUTIONAL INVESTOR USE ONLY

Diversification Active Exposure www.etf-forum.co.uk ETFs offer cost-effective exposure to meeting diversification/asset allocation requirements. A fully diversified portfolio can involve using ETFs as part of a core or satellite approach. US Equity ETF Active Exposure Emerging markets equity ETF Broad Commodity ETF US Equity ETF Europe Equity ETF Emerging Markets Equity ETF FOR INSTITUTIONAL INVESTOR USE ONLY

The evolving world of passives www.etf-forum.co.uk The evolving world of passives BETA ALPHA SMART BETA STRATEGIES Rules-Based Market Cap Weighted Representative Of Asset Class Measures Average Return of All Stocks Captures Beta Rules-Based Non Market-Cap Weighted Quantitative Seeks to Capture Return Premia Through Selection/Weighting & Rebalancing Seeks to Create Passive Alpha Active Stock Picking Stock Selection Risk Human Judgment Seeks to Create Alpha Passive ETFs Active Mutual Funds FOR INSTITUTIONAL INVESTOR USE ONLY

SMART BETA STRATEGIES in practice www.etf-forum.co.uk SMART BETA STRATEGIES in practice Smart beta strategies: Exposure to an equity market seeking to generate higher returns, lower risk or both by weighting by measures other than market capitalisation Smart beta strategies may emphasise (or de-emphasise) exposures to certain factors – like sensitivity to the market, small cap vs. large cap companies, value vs. growth styles or momentum - that have the potential to lead to differentiated returns Types of smart beta strategies: Equal-weighting Fundamentally-weighted: dividends, earnings, revenue, multi-factor “Risk Premium”- based: Access Return Premia of Beta, Size, Value, Momentum, Quality FOR INSTITUTIONAL INVESTOR USE ONLY

ETF Portfolios in action Accessing Income www.etf-forum.co.uk ETF Portfolios in action Accessing Income Global Equity Income Portfolio Exposure Portfolio Weight (%) TER (%) Dividend Yield Europe Equity Income ETF 30 0.29 3.4 US Equity Income ETF 2.8 EM Equity Income ETF 10 0.46 3.0 Europe Small Cap Dividend ETF 0.38 2.6 Japan Dividend Equity ETF 0.45 1.6 US Small Cap Dividend ETF 2.4 100 0.34 Sources: WisdomTree, Morningstar. Data as of 30 April 2017. FOR INSTITUTIONAL INVESTOR USE ONLY

ETF Portfolios in Action: Accessing income www.etf-forum.co.uk ETF Portfolios in Action: Accessing income Performance Overview Time Period Portfolio Annual Return (%) Standard Deviation (%) Sharpe Ratio 1 Year Passive 27.9 10.2 2.2 Active 24.4 9.8 2.0 3 Year 13.1 9.6 0.74 11.8 9.3 0.67 5 Year 14.7 9.9 0.99 11.9 9.4 0.82 Common Inception 10.8 15.1 0.31 9.1 0.22 Sources: WisdomTree Europe, Bloomberg. Data from 30 June 2008 to 30 April 2017. Past performance is not indicative of future returns. Returns are hypothetical and do not represent returns of actual investments. FOR INSTITUTIONAL INVESTOR USE ONLY

Combining passives with actives www.etf-forum.co.uk Combining passives with actives ETFs Low cost Market risk Market returns Combined Active/Passive Portfolio Best of both Active Mutual Fund Higher cost Stock selection risk Potential for above-market returns FOR INSTITUTIONAL INVESTOR USE ONLY

Combined Portfolios in action: Accessing Quality www.etf-forum.co.uk Combined Portfolios in action: Accessing Quality Blend Portfolio: Active and Passive Exposures Passive Portfolio: Market Cap ETFs Only Exposure Portfolio Weight (%) TER (%) US Quality ETF 40 0.29 Eurozone Quality ETF 30 UK Active Fund 20 0.82 Japan Active Fund 10 1.25 100 0.51 Exposure Portfolio Weight (%) TER (%) US market-cap ETF 40 0.07 Eurozone market-cap ETF 30 0.33 UK market-cap ETF 20 Japan market-cap ETF 10 0.59 100 0.20 Sources: WisdomTree, Morningstar. Data as of 30 April 2017. FOR INSTITUTIONAL INVESTOR USE ONLY

Combined Portfolios in Action: Accessing Quality www.etf-forum.co.uk Combined Portfolios in Action: Accessing Quality Performance Overview Time Period Portfolio Annual Return (%) Standard Deviation (%) Sharpe Ratio 1 Year Blend 31.0 8.1 3.2 Market 29.2 8.9 2.6 Active 27.8 7.9 3 Year 16.8 9.7 1.1 14.3 0.9 13.5 9.3 0.8 5 Year 16.2 1.2 14.8 9.8 1.0 10 Years 10.3 13.6 0.3 7.3 14.5 0.1 14.4 Sources: WisdomTree Europe, Bloomberg. Data from 30 April 2007 to 30 April 2017. Past performance is not indicative of future returns. Returns are hypothetical and do not represent returns of actual investments. FOR INSTITUTIONAL INVESTOR USE ONLY

FOR INSTITUTIONAL INVESTOR USE ONLY www.etf-forum.co.uk Summary The average active fund charges at least twice as much in annual management fees as ETFs ETFs can be used construct diversified portfolios or meet asset allocation needs ETFs can complement existing active exposure as part of a core or satellite approach FOR INSTITUTIONAL INVESTOR USE ONLY

FOR INSTITUTIONAL INVESTOR USE ONLY Disclaimer This document is issued by WisdomTree Europe Ltd is an appointed representative of Mirabella Financial Services LLP which is authorised and regulated by the Financial Conduct Authority. The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. An investment in ETPs is dependent on the performance of the underlying index, less costs, but it is not expected to match that performance precisely. ETPs involve numerous risks including among others, general market risks relating to the relevant underlying index, credit risks on the provider of index swaps utilised in the ETP, exchange rate risks, interest rate risks, inflationary risks, liquidity risks and legal and regulatory risks. ETPs offering daily leveraged or daily short exposures (“Leveraged ETPs”) are products which feature specific risks that prospective investors should understand before investing in them. Higher volatility of the underlying indices and holding periods longer than a day may have an adverse impact on the performance of Leveraged ETPs. As such, Leveraged ETPs are intended for financially sophisticated investors who wish to take a short term view on the underlying indices. Investors should refer to the section entitled "Risk Factors" and “Economic Overview of the ETP Securities” in the Prospectus for further details of these and other risks associated with an investment in Leveraged ETPs and consult their financial advisors as needed. Within the United Kingdom, this document is only made available to professional clients and eligible counterparties as defined by the FCA. Under no circumstances should this document be forwarded to anyone in the United Kingdom who is not a professional client or eligible counterparty as defined by the FCA. This marketing information is intended for professional clients & sophisticated investors (as defined in the glossary of the FCA Handbook) only. This marketing information is derived from information generally available to the public from sources believed to be reliable although WisdomTree Europe Ltd does not warrant the accuracy or completeness of such information. All registered trademarks referred to herein have been licensed for use. None of the products discussed above are sponsored, endorsed, sold or promoted by any registered trademark owner and such owners make no representation or warranty regarding the advisability on dealing in any of the ETPs. FOR INSTITUTIONAL INVESTOR USE ONLY