SHEPPARD DAVIES
ASSET MANAGEMENT

SHEPPARD DAVIES RISK WARNINGS

Potential investors should be aware that the funds we recommend may invest in equities, bonds, property and hedge funds on a global basis. Please be aware that there is no guarantee that investments in funds will go up. The funds will also invest in currencies such as the US Dollar, Euro and Sterling and, as a result, the value of investments may be adversely affected by fluctuating exchange rates.

Past performance is no guide to future performance. The value of units may fall as well as rise and you might not get back the original amount invested.

IMPORTANT INFORMATION IN RELATION TO IHT PORTFOLIO

Any Smaller Company Tax Relief Portfolio should be regarded as a higher risk longer-term investment. We recommend IHT portfolios only for clients who maintain significant alternative financial assets and who understand and accept the risks of investing in smaller companies. The value of investment in your portfolio may be subject to significant volatility and consequently clients may incur a loss on realisation.

Sheppard Davies cannot guarantee unreservedly that the investments made will qualify for the tax relief or continue to qualify for tax relief.

Smaller Company and AlM listed securities are typically less liquid than their larger brethren. There are fewer market makers and generally a lower percentage free float of shares. Also OFEX listed and unquoted shares (including preference shares) will typically trade only on a matched bargain basis. Therefore, liquidity on any particular day may be limited which may result in difficulties in buying or selling large numbers of shares at quoted prices.

It should be noted however that we focus on the larger and more liquid businesses on the AlM market. In addition, in our experience, liquidity is also governed by two other major factors:-

1) The success of the business, i.e. profitable businesses which are trading well tend to be rather more liquid than others.

2) The size of your investment, i.e. if you have a diversified portfolio, individual securities will be of a limited size and therefore may be more liquid.