Active versus Passive Investing

1. Active versus Passive Investing

2. Background The debate is ongoing over which investment approach has the potential to generate the greater amount of return over the longer term • Actively managed funds attempt to outperform the relevant benchmark or index and believe that inefficiencies and irregularities in the market can be exploited to generate potentially higher returns • Passive funds attempt to correlate the holdings of an index with the same securities and in the same proportions for investors unwilling to take the risk of attempting to beat the market

3. Active Management – advantages & disadvantages • Advantages: • experienced and highly qualified investment teams following markets closely and making informed decisions based on extensive research and market trends • potential for returns generated in excess of those by the relevant index • ability to take precautionary action when market is going into downturn Disadvantages: • higher operating expenses feeding into fees • effectiveness of Manager strategy / style may be variable in different market climates • potential for poor decision making when acting unilaterally rather than in accordance with an index

4. Passive Management – advantages & disadvantages • Advantages: • minimal decision making with actions purely based on the movement of holdings in the relevant index • Low operating expenses leading to cheaper fees Disadvantages: • lack of control and ability to take defensive measures with all actions dictated by the movements of the index • Investors must be satisfied with market returns with no out-performance possible

5. Not all indices are created equal • Variation in sector and market cap weights across UK indices Marked concentration in top 10 stocks and certain industries prevents diversification * Data source: Factset Data as of August 2008

6. Financial markets do not perform consistently… Performance of sectors varies considerably through time and highlights the need for the diversification of portfolios and the spreading of exposure in the pursuit of consistent returns with controlled risk. Best performing Worst performing Based on annual returns of indices between 01/01/1997 & 31/12/2007. Sources SEI Investments (Europe) Ltd, Indices; SEI sources data directly from the following vendors: Morgan Stanley Capital International (MSCI), Russell, TOPIX, Lehman Brothers and Merrill Lynch in base currencies and converts to the relevant currency using WM Reuters 4pm Spot rates. *JPM EMD Global Diversified Index used from 01/01/06 – 31/12/07

7. Performance within markets can also vary according to style Performance within markets can fluctuate according to trends in the market based on style. Portfolios diversified across style, asset type and region allow for consistency of returns at potentially lower risk levels. Growth Managers outperform Small Cap Value Managers outperform Source: S&P/Citigroup Indices

8. From Style Diversified Portfolios to Alpha Diversified Portfolios Alpha Alpha - - Based Perspective Based Perspective Style Style - - Based Perspective Based Perspective Forward Insight Forward Insight Forward Insight Large Cap Growth Large Cap Growth Large Cap Growth Large Cap Value Large Cap Value Large Cap Value Behavioural Behavioural Behavioural Value Value Value Momentum Momentum Momentum Small Cap Value Small Cap Value Small Cap Value Small Cap Growth Small Cap Growth Small Cap Growth Statistical Statistical Statistical SEI’s actively managed Manager-of Manager funds are diversified across both investment styles as well as potential alpha sources with specialist Managers identified and incorporated into portfolios. • In an effort to build more efficient portfolios SEI’s Manager-Of-Managers investment philosophy looks beyond traditional approaches to investment management • The line between traditional and alternative asset management is blurring and many investment managers are increasingly using techniques currently available to add incremental value.

9. Portfolios optimised to maximise chances of meeting objectives Manager 1 Behavioural Universe • Select most effective alpha source and manager exposures from available universe • Weight Managers to build an optimally diversified portfolio • The result is a robust portfolio with multiple sources of alpha that is generally less dependent on the market’s direction • The number of managers in the Portfolio is a function of the breadth and depth of the market and of the differentiation within the universe Manager 2 Value Premium Manager 4 Momentum Premium Manager 3 Forward Insight SEI Portfolio * For Illustration purposes only

10. Important Information • This document and its contents are directed only at persons who have been classified by SEI Investments (Europe) Limited as a Professional Client, or an Eligible Counterparty, for the purposes of the FSA New Conduct of Business Sourcebook. • This information is issued by SEI Investments (Europe) Limited, 4th Floor, Time & Life Building 1 Bruton Street, London W1J 6TL which is authorised and regulated by the Financial Services Authority. • No offer of any security is made hereby. Recipients of this information who intend to apply for shares in any SEI Fund are reminded that any such application may be made solely on the basis of the information contained in the Prospectus. • This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts. • The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested. If the investment is withdrawn in the early years, it may not return the full amount invested. • In addition to the normal risks associated with equity investing, international investments may involve risk of capital loss from unfavourable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Narrowly focused investments and smaller companies typically exhibit higher volatility. Products of companies in which technology funds invest may be subject to severe competition and rapid obsolescence. • Whilst considerable care has been taken to ensure the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information. • Past performance is not a guarantee of future performance.   • Investment in the range of SEI’s Funds is intended as a long-term investment.