MI Chelverton UK Equity Fund. (Formerly PFS Chelverton UK Equity Fund)

Transcription

1 MI Chelverton UK Equity Fund (Formerly PFS Chelverton UK Equity Fund) Interim Reort 30 June 2016

2 MI Chelverton UK Equity Fund Contents Page Directory Basis of Accounting Certification of Interim Reort by the Authorised Cororate Director MI Chelverton UK Equity Income Fund (formerly PFS Chelverton UK Equity Income Fund) Investment Objective and Policy Investment Manager's Reort Portfolio Statement Comarative Tables Statement of Total Return Statement of Change in Net Assets Attributable to Shareholders Balance Sheet Distribution Tables MI Chelverton UK Equity Growth Fund (formerly PFS Chelverton UK Equity Growth Fund) Investment Objective and Policy Investment Manager's Reort Portfolio Statement Comarative Tables Statement of Total Return Statement of Change in Net Assets Attributable to Shareholders Balance Sheet General Information

3 MI Chelverton UK Equity Fund Directory Authorised Cororate Director (ACD) & Registrar Maitland Institutional Services Ltd Sringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telehone: Fax: Website: (Authorised and regulated by the Financial Conduct Authority) Customer Service Centre Sringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telehone: Fax: (Authorised and regulated by the Financial Conduct Authority) Directors of the Authorised Cororate Director P.J. Foley-Brickley S. Georgala D. Jones R.W. Leedham D.W. Munting Investment Manager Chelverton Asset Management Limited 12b George Street, Bath, BA1 2EH (Authorised and regulated by the Financial Conduct Authority) Fund Managers James Baker David Horner David Taylor Deositary National Westminster Bank Plc Trustee & Deositary Services 135 Bishosgate, London EC2M 3UR (Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority) Indeendent Auditor KPMG LLP Chartered Accountants & Registered Auditors 15 Canada Square, Canary Wharf, London E14 5GL MI Chelverton UK Equity Fund 1

4 MI Chelverton UK Equity Fund Basis of Accounting The interim financial statements have been reared under the historical cost basis, as modified by revaluation of investments and in accordance with FRS102 and the Statement of Recommended Practice (SORP) for the Financial Statements of Authorised Funds issued by the Investment Association (IA) in May The interim financial statements have been reared on the same basis as the audited financial statements for the year ended 31 December The financial statements have been reared on the going concern basis. Certification of the Interim Reort by the Authorised Cororate Director This reort has been reared in accordance with the requirements of the Financial Conduct Authority s Collective Investment Schemes sourcebook ( the COLL sourcebook ) and the Statement of Recommended Practice issued by the Investment Association. R.W. Leedham D. Jones Directors Maitland Institutional Services Ltd 22 August MI Chelverton UK Equity Fund

5 MI Chelverton UK Equity Income Fund Investment Objective and Policy The objective of the Sub-fund is to rovide a rogressive income stream and achieve long-term caital growth by investing rimarily in a ortfolio of fully listed and AIM traded UK equities. The Sub-fund will invest rimarily in UK comanies which aim to rovide a high initial dividend; rogressive dividend ayments, and long-term caital areciation. The asset classes in which the Sub-fund is ermitted to invest includes transferable securities, money market instruments, cash and near cash and deosits as ermitted for UCITS schemes under COLL and in accordance with the Subfund s investment owers as summarised in the Prosectus. Investment Manager s Reort for the eriod ended 30 June 2016 In the last six months the Sub-fund roduced a total return of % comared to an average of -2.86% for the IA UK Equity Income sector as a whole. (Source: Lier, NAV to NAV, B Shares Accumulation). The key driver of the relative undererformance over the ast six months was the Brexit vote and the ramifications for both the economic and olitical landscae as a result of the leave majority. As managers we have traded through times of great change before, and although Brexit is by definition a one off, our resonse has remained consistent with those at other times of heightened market uncertainty. In the first instance we raised our cash osition, selling Premier Farnell, Wireless Grou, both after bids, and Kcom to take our cash weighting from three er cent to just over five to cover any immediate fund outflows. With severe downward ressure on the rices of domestic earners and a massive tailwind behind foreign earners short term rice moves were exaggerated and we waited for a eriod of relative calm, evidenced by cash flow yields finally suorting the rices of some of the fallers. This was heled greatly by a quicker end to the olitical vacuum than had been anticiated. We are now in the third hase of our ost Brexit rocess where we are looking to sell down some of our stocks that we believe have held u relatively too well and are reinvesting in some of the fallers and new ideas. Significantly for us whilst this will robably give us a small yield ick u we are rimarily looking to rebuild caital, whilst remaining within the arameters of our investment rocess. In terms of ortfolio ositioning we did not try to call the outcome but we went into the vote with a relatively balanced ortfolio. This meant that as a UK small and mid-ca fund we were inevitably UK centric with resect to the underlying turnover of our investee comanies, and it was the most domestic of these that were sold off most heavily after the vote. Housebuilders such as Galliford Try and Bovis, estate agents such as Foxtons, recruitment stocks such as Matchtech, and retailers such as DFS all fell dramatically as they were easy targets for the short side of Brexit basket trades. In addition there was a rofit warning from Brammer which highlighted a slowdown in the domestic economy. We do exect this to be a theme for a coule of months as UK economic activity had definitely slowed ahead of the vote and this will have continued. Earlier in the year we had sold a number of our lower yielding holdings including WH Smith, Majestic Wines, Micro Focus and RPC. Funds raised were used to urchase, amongst others, Northgate, Restaurant Grou and an IPO, Watkin Jones. MI Chelverton UK Equity Income Fund 3

6 MI Chelverton UK Equity Income Fund Investment Manager s Reort continued Commentators are currently busy doing their sums with resect to the outlook for GDP growth but we believe that there are just too many unknowns for us to be able to get a real handle on this for some time, although it is wholly reasonable that exectations have been revised down. With the fall in sterling roviding resite to the market overall the question for us is how attractive currently are small and midca relative valuations. Ultimately, as an investor looking for an entry oint you cannot argue with cash flow yields and there now aear to be a number of oversold oortunities that we can take advantage of. 4 MI Chelverton UK Equity Income Fund

7 MI Chelverton UK Equity Income Fund Portfolio Statement as at 30 June 2016 Market % of total value net assets Holding Security 2016 OIL & GAS 1.61% (1.51%) Oil & Gas Producers 0.54% (0.47%) 1,500,000 Soco International 2,133, Oil Equiment & Services 1.07% (1.04%) 2,200,000 Cae 4,218, BASIC MATERIALS 1.34% (0.00%) Chemicals 1.34% (0.00%) 350,000 Victrex 5,274, INDUSTRIALS 28.58% (30.11%) Construction & Materials 3.98% (4.32%) 626,000 Alumasc 751, ,500,000 Ewin* 3,745, ,000 Kier 4,471, ,000,000 Low & Bonar 4,480, ,167 Morgan Sindall 2,223, ,670, Aerosace & Defence 1.56% (1.28%) 3,900,000 Cobham 6,134, General Industrials 1.37% (2.26%) 1,400,000 Smith (DS) 5,408, Electronic & Electrical Equiment 2.11% (1.64%) 2,990,577 TT Electronics 3,857, ,732 XP Power 4,445, ,303, Industrial Engineering 3.69% (3.12%) 2,775,000 Fenner 4,356, ,000 Hill & Smith 5,319, ,000 IMI 4,832, ,508, MI Chelverton UK Equity Income Fund 5

8 MI Chelverton UK Equity Income Fund Portfolio Statement continued Market % of total value net assets Holding Security 2016 Industrial Transortation 2.38% (2.74%) 1,000,000 Braemar Shiing Services 4,100, ,700,000 Clier Logistics 4,339, ,775,000 DX* 938, ,377, Suort Services 13.49% (14.75%) 1,427,634 Acal 3,233, ,000 Atkins (WS) 5,300, ,380,766 Brammer 1,428, ,000,000 Connect 5,880, ,800,000 Electrocomonents 4,683, ,200,000 Harvey Nash 2,352, ,184,453 Hogg Robinson 3,719, ,050,000 Interserve 2,732, ,000,000 Matchtech* 2,787, ,400,000 Northgate 4,550, ,350,000 RPS 4,089, ,870,000 RWS* 6,400, ,250,000 St. Ives 2,673, ,324,625 Sthree 3,295, ,124, CONSUMER GOODS 9.85% (10.47%) Food Producers 3.09% (3.04%) 1,250,000 Dairy Crest 6,693, ,000,000 Hilton Food 5,470, ,163, Household Goods & Home Construction 5.60% (6.14%) 550,000 Bovis Homes 4,009, ,000 Crest Nicholson 3,204, ,000 Galliford Try 5,700, ,100,000 Headlam 4,675, ,350,000 Watkin Jones* 4,469, ,058, MI Chelverton UK Equity Income Fund

9 MI Chelverton UK Equity Income Fund Portfolio Statement continued Market % of total value net assets Holding Security 2016 Leisure Goods 1.16% (1.29%) 1,015,000 Games Worksho 4,577, CONSUMER SERVICES 21.55% (22.48%) Food & Drug Retailers 0.94% (0.71%) 2,850,000 McColl's Retail 3,705, General Retailers 5.88% (8.16%) 2,500,000 Brown (N) 4,355, ,750,000 Debenhams 3,179, ,816,054 DFS Furniture 3,799, ,500,000 Halfords 4,821, ,435,000 Moss Bros 3,125, ,159,750 Shoe Zone* 3,887, ,168, Media 6.92% (6.40%) 2,725,000 Bloomsbury Publishing 4,366, ,000,000 Centaur Media 2,400, ,650,000 Tarsus 4,120, ,000 UBM 5,120, ,250,000 Wilmington 3,150, ,610,000 Wireless Grou 8,091, ,248, Travel & Leisure 7.81% (7.21%) 235,000 Go-Ahead 4,594, ,000 Greene King 5,070, ,500 GVC 3,622, ,015,360 Hostelworld 2,609, ,000,000 Marston s 5,388, ,700,000 National Exress 5,016, ,550,000 Restaurant Grou 4,457, ,759, MI Chelverton UK Equity Income Fund 7

10 MI Chelverton UK Equity Income Fund Portfolio Statement continued Market % of total value net assets Holding Security 2016 TELECOMMUNICATIONS 1.72% (2.00%) Fixed Line Telecommunications 1.72% (2.00%) 3,500,000 Kcom 3,683, ,400,000 TalkTalk Telecom 3,068, ,752, UTILITIES 1.97% (1.78%) Gas, Water & Multiutilities 1.97% (1.78%) 134,500 Dee Valley 1,600, ,000 Pennon 6,142, ,743, FINANCIALS 23.19% (23.25%) Non-Life Insurance 4.07% (4.07%) 1,520,000 Beazley 5,531, ,000 Lancashire 2,641, ,000 Novae 3,714, ,000 Personal* 4,122, ,010, Life Insurance 3.58% (3.40%) 1,610,000 Chesnara 4,427, ,800,000 Hansard Global 1,872, ,000 Phoenix 7,809, ,109, Real Estate Investment & Services 1.48% (1.75%) 900,000 Countrywide 2,210, ,250,000 Foxtons 3,607, ,817, Real Estate Investment Trusts 3.36% (3.21%) 810,000 Mucklow (A&J) 3,134, ,500,000 Regional REIT 4,477, ,350,000 Segro 5,594, ,206, MI Chelverton UK Equity Income Fund

11 MI Chelverton UK Equity Income Fund Portfolio Statement continued Market % of total value net assets Holding Security 2016 Financial Services 10.41% (10.55%) 3,250,000 Ashmore 9,652, ,101,989 Brewin Dolhin 5,042, ,960,800 Charlemagne Caital* 904, ,000 Close Brothers 4,532, ,000 Intermediate Caital 4,535, ,000,000 Juiter Fund Management 3,656, ,600,000 Mortgage Advice Bureau* 4,000, ,425,000 Numis* 2,821, ,050,000 Polar Caital* 3,234, ,450,000 River & Mercantile 2,610, ,988, Equity Investment Instruments 0.29% (0.27%) 4,800,000 GLI Finance* 1,152, TECHNOLOGY 4.01% (5.30%) Software & Comuter Services 4.01% (5.30%) 517,076 Comutacenter 3,813, ,020,000 FDM 4,539, ,000 Fidessa 5,103, ,996,500 RM 2,315, ,772, Investment assets 369,388, Net other assets 24,317, Net assets 393,705, All investments are ordinary shares or stock units on a regulated securities market unless otherwise stated. The ercentages in brackets show the equivalent % holdings as at * Quoted on the Alternative Investment Market. Total urchases for the eriod: 59,360,356. Total sales for the eriod: 57,831,920. MI Chelverton UK Equity Income Fund 9

12 MI Chelverton UK Equity Income Fund Comarative Tables Change in net assets er share A Income Oening net asset value er share Return before oerating charges^ Oerating Charges Return after oerating charges^ Distributions on income shares Closing net asset value er share ^After direct transaction costs of Performance Return after charges % 15.52% 0.22% 40.80% Other Information Closing net asset value 95,597 19,907,508 19,298,656 30,735,897 Closing number of shares 107,567 19,014,220 20,348,720 30,946,552 Oerating Charges 1.67% 1.67% 1.73% 1.81% Direct transaction costs 0.12% 0.23% 0.38% 0.85% Prices Highest share rice Lowest share rice A Accumulation Oening net asset value er share Return before oerating charges^ Oerating Charges Return after oerating charges^ Closing net asset value er share Retained distributions on accumulation shares ^After direct transaction costs of Performance Return after charges % 15.66% 0.18% 41.37% Other Information Closing net asset value 18,256 9,097,347 10,072,267 17,769,122 Closing number of shares 12,611 5,283,121 6,765,451 11,957,184 Oerating Charges 1.67% 1.67% 1.73% 1.81% Direct transaction costs 0.12% 0.23% 0.38% 0.85% Prices Highest share rice Lowest share rice MI Chelverton UK Equity Income Fund

13 MI Chelverton UK Equity Income Fund Comarative Tables continued Change in net assets er share (continued) B Income Oening net asset value er share Return before oerating charges^ Oerating Charges Return after oerating charges^ Distributions on income shares Closing net asset value er share ^After direct transaction costs of Performance Return after charges % 16.38% 0.94% 41.71% Other Information Closing net asset value 291,923, ,079, ,225, ,032,401 Closing number of shares 305,402, ,559, ,738, ,755,450 Oerating Charges 0.92% 0.92% 0.98% 1.06% Direct transaction costs 0.12% 0.23% 0.38% 0.85% Prices Highest share rice Lowest share rice B Accumulation Oening net asset value er share Return before oerating charges^ Oerating Charges Return after oerating charges^ Closing net asset value er share Retained distributions on accumulation shares ^After direct transaction costs of Performance Return after charges % 16.53% 0.91% 42.30% Other Information Closing net asset value 101,668, ,188,971 73,994,458 24,556,825 Closing number of shares 61,160,827 54,429,501 45,925,033 15,380,114 Oerating Charges 0.92% 0.92% 0.98% 1.06% Direct transaction costs 0.12% 0.23% 0.38% 0.85% Prices Highest share rice Lowest share rice MI Chelverton UK Equity Income Fund 11

14 MI Chelverton UK Equity Income Fund Comarative Tables continued Change in net assets er share (continued) Oerating charges include indirect costs incurred in the maintenance and running of the Sub-fund, as disclosed (but not limited to) the detailed exenses within the Statement of Total Return. The figures used within this table have been calculated against the average Net Asset Value for the accounting eriod. The return after charges is calculated as the closing net asset value er share lus the distributions on income shares minus the oen net asset value er share as a % of the oening net asset value er share. Direct transaction costs include fees, commissions, transfer taxes and duties in the urchasing and selling of investments, which are offset (where alicable) against any dilution levies charged within the accounting eriod. The figures used within the table have been calculated against the average Net Asset Value for the accounting eriod. Risk and reward rofile The risk and reward indicator table demonstrates where the Sub-fund ranks in terms of its otential risk and reward. The higher the rank the greater the otential reward but the greater the risk of losing money. It is based on ast data, may change over time and may not be a reliable indication of the future risk rofile of the Sub-fund. The shaded area in the table below shows the Sub-fund s ranking on the risk and reward indicator. Tyically lower rewards, lower risk Tyically higher rewards, higher risk The Sub-fund is ranked 5 because funds of this tye have exerienced medium to high rises and falls in value in the ast. Please note that even the lowest risk class can lose you money and that extreme market circumstances can mean you suffer severe losses in all cases. The indicator does not take into account the following risks of investing in this Sub-fund: Smaller comany shares can be more difficult to buy and sell as they may trade infrequently, in small volumes and their share rice may fluctuate more than that of a larger comany. In difficult market conditions, the value of some investments may be less redictable than normal and the Sub-fund may not be able to buy and sell these investments at the best time or at a fair rice. This could affect the Sub-fund s erformance, otentially reducing your returns. The level of targeted income is not guaranteed and may not be achieved. For further risk information lease see the rosectus. Risk warning An investment in an Oen Ended Investment Comany should be regarded as a medium to long-term investment. Investors should be aware that the rice of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past erformance is not a guide to future erformance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. 12 MI Chelverton UK Equity Income Fund

15 MI Chelverton UK Equity Income Fund Statement of Total Return for the eriod ended 30 June Income Net caital (losses)/gains (60,722,208) 35,957,238 Revenue 10,843,222 8,941,267 Exenses (1,956,103) (1,790,707) Interest ayable and similar charges Net revenue before taxation 8,887,119 7,150,560 Taxation (8,443) Net revenue after taxation 8,878,676 7,150,560 Total return before distributions (51,843,532) 43,107,798 Distributions (6,947,310) (6,344,141) Change in net assets attributable to Shareholders from investment activities (58,790,842) 36,763,657 Statement of Change in Net Assets Attributable to Shareholders for the eriod ended 30 June Oening net assets attributable to Shareholders 442,273, ,590,694 Amounts receivable on issue of shares 71,798,738 86,929,085 Less: Amounts ayable on cancellation of shares (62,754,833) (68,096,274) 9,043,905 18,832,811 Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) (58,790,842) 36,763,657 Retained distribution on accumulation shares 1,179,154 1,627,793 Closing net assets attributable to Shareholders 393,705, ,814,955 The oening net assets attributable to shareholders for the current eriod do not equal the closing net assets attributable to shareholders for the comarative eriod as they are not consecutive eriods. MI Chelverton UK Equity Income Fund 13

16 MI Chelverton UK Equity Income Fund Balance Sheet as at 30 June 2016 ASSETS Fixed Assets Investments 369,388, ,580,240 Current Assets Debtors 5,319,258 2,745,225 Cash and bank balances 25,572,864 17,661,197 Total current assets 30,892,122 20,406,422 Total assets 400,280, ,986,662 LIABILITIES Investment liabilities Creditors Distribution ayable (3,666,124) (6,203,806) Other creditors (2,908,486) (509,440) Total creditors (6,574,610) (6,713,246) Total liabilities (6,574,610) (6,713,246) Net assets attributable to Shareholders 393,705, ,273, MI Chelverton UK Equity Income Fund

17 MI Chelverton UK Equity Income Fund Distribution Tables for the eriod ended 30 June 2016 Income Share Distributions Share Distribution Shares Net Equalisation Distribution Distribution class revenue Payable Paid A First interim Grou Grou Second interim Grou Grou B First interim Grou Grou Second interim Grou Grou Accumulation Share Distributions Share Distribution Shares Net Equalisation Amount Amount class revenue reinvested reinvested A First interim^ Grou Grou Second interim^ Grou Grou B First interim Grou Grou Second interim Grou Grou ^ No Grou 2 Accumulation shares held in A Accumulation at 31 March 2016 & 30 June First interim eriod: Second interim eriod: Grou 1: Grou 2: Shares urchased rior to a distribution eriod Shares urchased during a distribution eriod Equalisation Equalisation alies only to shares urchased during the distribution eriod (Grou 2 shares). It reresents accrued revenue included in the urchase rice of the shares. After averaging, it is returned with the distribution as a caital reayment. It is not liable to income tax but must be deducted from the cost of the shares for caital gains tax uroses. MI Chelverton UK Equity Income Fund 15

18 MI Chelverton UK Equity Growth Fund Investment Objective and Policy The objective of the Sub-fund is to achieve long-term caital growth by investing rimarily in a ortfolio of fully listed and AIM traded UK small and medium sized market caitalised comanies equities. The asset classes in which the Sub-fund is ermitted to invest includes transferable securities, money market instruments, warrants, convertibles, cash and near cash and deosits as ermitted for UCITS schemes under COLL and in accordance with the Sub-fund s investment owers as summarised in the Prosectus. Investment Manager s Reort for the eriod ended 30 June 2016 In the last six months the Sub-fund roduced a negative total return of -5.46% comared to an average for the IA UK All Comanies sector of -2.87%. (Source: Lier, NAV to NAV, B Shares Accumulation). The key driver to our undererformance in the first six months was the BREXIT vote right at the end of the eriod, rior to which the Sub-fund had been achieving to quartile erformance. The Leave vote and ensuing olitical turmoil in both the main olitical arties wrong-footed the market leading to a shar devaluation of Sterling and immediate equity market sell-off. As the ramifications of the weaker currency sank in, the large ca index, which contains a high roortion of overseas earners, rallied. Domestic earners,which dominate the small and mid ca segment of the market where the Sub-fund invests, undererformed. In terms of ortfolio ositioning we did not try to anticiate the outcome of the referendum as the olls were too close to call, but went into the vote with a well-balanced ortfolio of structural growth stocks, some consumer defensives and a mix of international and UK cyclicals, the latter element reresenting around a fifth of the ortfolio. In the immediate aftermath of the vote we took some limited action to reduce our UK cyclical exosure and increase our cash balances to coe with any outflows, but then stood back as the sell-off in these stocks accelerated. Most of the Sub-fund s worst erforming stocks over the eriod were UK consumer cyclicals like Tos Tiles and DFS in retail, UK building materials businesses such as Polyie, Severfield and Volution, housing market related businesses like Foxtons and Mortgage Advice Bureau, Centaur Media the UK centric media business and Matchtech the emloyment agency, with the bulk of the damage being done in the last week of the reorted eriod with these shares selling off heavily after the BREXIT vote. Our structural growth stocks and overseas earners for the most art held u relatively well. The long-term economic consequences of BREXIT are not yet clear. The seedy resolution of the Tory arty leadershi issue has heled calm market nerves. However economic activity had already started to slow ahead of the referendum as investment decisions were ut on hold, and whilst we feel some of this ent u investment may start to come through, inward investment into the UK is likely to remain on hold until our future relationshi with Euroean Union becomes clearer. Whilst our exort sector will benefit from a more cometitive currency the consequent imorted inflation will squeeze disosable income and consumer sending. On balance we would exect UK growth to slow somewhat. With growth harder to come by in the UK we will gradually tilt the ortfolio more towards structural growth stocks, which should be less affected by any domestic slowdown, and overseas earners, reducing our exosure to UK cyclicals as and when their valuations normalise from currently over-sold levels. 16 MI Chelverton UK Equity Growth Fund

19 MI Chelverton UK Equity Growth Fund Portfolio Statement as at 30 June 2016 Market % of total value net assets Holding Security 2016 BASIC MATERIALS 2.55% (1.76%) Chemicals 2.55% (1.76%) 50,000 Synthomer 161, ,000 Victrex 527, , INDUSTRIALS 23.32% (26.05%) Construction & Materials 5.15% (4.45%) 170,000 Polyie 442, ,000 Tyman 561, ,000 Volution 385, ,389, Aerosace & Defence 2.24% (4.24%) Avon Rubber 297, Senior 307, , Electronic & Electrical Equiment 5.34% (2.86) 100,000 e2v 200, ,000 Solid State* 319, ,000 Sectris 455, ,000 XP Power 466, ,441, Industrial Engineering 6.12% (9.24%) 414,315 Hayward Tyler* 310, ,000 Hill & Smith 177, ,000 Porvair 209, ,000 Severfield 268, ,000 Somero Enterrises* 310, ,000 Trifast 376, ,652, MI Chelverton UK Equity Growth Fund 17

20 MI Chelverton UK Equity Growth Fund Portfolio Statement continued Market % of total value net assets Holding Security 2016 Industrial Transortation 0.00% (1.13%) Suort Services 4.47% (4.13%) 35,000 Atkins (WS) 463, ,902 Matchtech* 281, ,000 RWS* 167, ,000 WYG* 294, ,206, CONSUMER GOODS 7.28% (5.76%) Food Producers 1.79% (2.71%) 90,000 Dairy Crest 481, Household Goods & Home Construction 2.18% (2.15%) 200,000 Cairn Homes 159, ,500 Watkin Jones* 428, , Leisure Goods 3.31% (0.90%) 85,000 Games Worksho 383, ,000 Photo-Me 510, , HEALTH CARE 9.39% (6.35%) Health Care Equiment & Services 0.00% (0.59%) Pharmaceuticals & Biotechnology 9.39% (5.76%) 875,000 Alliance Pharma* 382, ,597 Angle* 224, ,000 Anario* 239, ,000 Clinigen* 756, ,000 Eco Animal Health* 243, ,650,000 Source Bioscience 284, ,000 Vectura 402, ,534, CONSUMER SERVICES 18.03% (13.67%) General Retailers 4.41% (4.57%) 175,000 DFS 366, ,000 Halfords 241, MI Chelverton UK Equity Growth Fund

21 MI Chelverton UK Equity Growth Fund Portfolio Statement continued Market % of total value net assets Holding Security 2016 General Retailers (continued) 160,000 Safestyle UK* 355, ,203 Tos Tiles 229, ,191, Media 10.30% (7.85%) 125,000 Ascential 310, ,000 Centaur Media 350, ,000 Ebiquity* 260, ,000 Tarsus 187, ,555 UBM 227, ,000 ULS Technology* 190, ,000 Wilmington 352, ,192 Wireless Grou 902, ,781, Travel & Leisure 3.32% (1.25%) 200,000 Rank 428, ,000 Revolution Bars 467, , TELECOMMUNICATIONS 1.28% (0.28%) Mobile Telecommunications 1.28% (0.28%) 90,000 Gamma Communications* 344, FINANCIALS 9.32% (11.37%) Non-Life Insurance 0.00% (0.99%) Real Estate Investment & Services 1.52% (3.29%) 150,000 Foxtons 166, ,000 LSL Proerty Services 244, , Financial Services 7.80% (7.09%) 28,903 Brooks MacDonald* 454, ,000 Curtis Banks* 246, ,000 Liontrust Asset Management 482, ,000 Mortgage Advice Bureau* 375, ,000 Orchard Funding* 257, ,000 Park* 289, ,105, MI Chelverton UK Equity Growth Fund 19

22 MI Chelverton UK Equity Growth Fund Portfolio Statement continued Market % of total value net assets Holding Security 2016 TECHNOLOGY 21.83% (23.40%) Software & Comuter Services 19.56% (21.02%) 160,000 Blancco* 288, ,000 Blue Prism* 172, ,000 Craneware* 269, ,000,000 dotdigital* 400, ,000 Eckoh* 371, ,000 EMIS* 92, ,868 GBG* 340, ,000 IMImobile* 504, ,000 Iomart* 461, ,422 NCC 410, ,000,000 OMG* 420, ,000 Proactis* 414, ,000 Sanderson* 165, ,000 SQS Software Quality Systems* 440, ,000 StatPro* 324, ,000 Tracsis* 209, ,280, Technology Hardware & Equiment 2.27% (2.38%) 2,250,000 IQE* 382, ,000 Quixant* 231, , Investment assets 25,105, Net other assets 1,889, Net assets 26,995, All investments are ordinary shares or stock units on a regulated securities market unless otherwise stated. The ercentages in brackets show the equivalent % holdings as at * Quoted on the Alternative Investment Market. Total urchases for the eriod: 19,006,208 Total sales for the eriod: 6,195, MI Chelverton UK Equity Growth Fund

23 MI Chelverton UK Equity Growth Fund Comarative Tables Change in net assets er share A Accumulation Oening net asset value er share * Return before oerating charges^ Oerating Charges Return after oerating charges^ Closing net asset value er share ^ After direct transaction costs of Performance Return after charges -4.02% Other Information Closing net asset value 960 Closing number of shares 1,000 Oerating Charges 1.75% Direct transaction costs 0.48% Prices Highest share rice Lowest share rice * Launch rice at 14 June 2016 The Investment Manager currently rebates the Sub-fund's oerating charges in excess of 1.75% of the average net asset value of the Sub-fund. B Income Oening net asset value er share Return before oerating charges^ Oerating Charges Return after oerating charges^ Distributions on income shares Closing net asset value er share ^ After direct transaction costs of Performance Return after charges -3.52% 25.46% 4.49% Other Information Closing net asset value 4,812,356 3,500, ,185 Closing number of shares 3,841,124 2,695, ,023 Oerating Charges 1.00% 1.00% 1.00% Direct transaction costs 0.48% 1.44% -0.55% Prices Highest share rice Lowest share rice MI Chelverton UK Equity Growth Fund 21

24 MI Chelverton UK Equity Growth Fund Comarative Tables continued B Accumulation Oening net asset value er share Return before oerating charges^ Oerating Charges Return after oerating charges^ Closing net asset value er share Retained distributions on accumulation shares ^ After direct transaction costs of Performance Return after charges -3.54% 25.46% 4.49% Other Information Closing net asset value 22,181,804 11,852,545 1,183,709 Closing number of shares 17,541,603 9,041,498 1,144,575 Oerating Charges 1.00% 1.00% 1.00% Direct transaction costs 0.48% 1.44% -0.55% Prices Highest share rice Lowest share rice Launch rice 20 October 2014 The Investment Manager currently rebates the Sub-fund's oerating charges in excess of 1% of the average net asset value of the Sub-fund. Oerating charges include indirect costs incurred in the maintenance and running of the Sub-fund, as disclosed (but not limited to) the detailed exenses within the Statement of Total Return. The figures used within this table have been calculated against the average Net Asset Value for the accounting eriod. The return after charges is calculated as the closing net asset value er share lus the distributions on income shares minus the oen net asset value er share as a % of the oening net asset value er share. Direct transaction costs include fees, commissions, transfer taxes and duties in the urchasing and selling of investments, which are offset (where alicable) against any dilution levies charged within the accounting eriod. The figures used within the table have been calculated against the average Net Asset Value for the accounting eriod. 22 MI Chelverton UK Equity Growth Fund

25 MI Chelverton UK Equity Growth Fund Comarative Tables continued Risk and reward rofile The risk and reward indicator table demonstrates where the Sub-fund ranks in terms of its otential risk and reward. The higher the rank the greater the otential reward but the greater the risk of losing money. It is based on ast data, may change over time and may not be a reliable indication of the future risk rofile of the Sub-fund. The shaded area in the table below shows the Sub-fund s ranking on the risk and reward indicator. Tyically lower rewards, lower risk Tyically higher rewards, higher risk The Sub-fund is ranked 5 because funds of this tye have exerienced medium to high rises and falls in value in the ast. Please note that even the lowest risk class can lose you money and that extreme market circumstances can mean you suffer severe losses in all cases. The indicator does not take into account the following risks of investing in this Sub-fund: Smaller comany shares can be more difficult to buy and sell as they may trade infrequently, in small volumes and their share rice may fluctuate more than that of a larger comany. In difficult market conditions, the value of some investments may be less redictable than normal and the Sub-fund may not be able to buy and sell these investments at the best time or at a fair rice. This could affect the Sub-fund s erformance, otentially reducing your returns. For further risk information lease see the rosectus. Risk warning An investment in an Oen Ended Investment Comany should be regarded as a medium to long-term investment. Investors should be aware that the rice of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past erformance is not a guide to future erformance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. MI Chelverton UK Equity Growth Fund 23

26 MI Chelverton UK Equity Growth Fund Statement of Total Return for the eriod ended 30 June Income Net caital (losses)/gains (1,316,250) 303,057 Revenue 301,211 33,960 Exenses (131,261) (14,255) Interest ayable and similar charges Net revenue before taxation 169,950 19,705 Taxation (3,519) (107) Net revenue after taxation 166,431 19,598 Total return before distributions (1,149,819) 322,655 Distributions 18,486 5,830 Change in net assets attributable to Shareholders from investment activities (1,131,333) 328,485 Statement of Change in Net Assets Attributable to Shareholders for the eriod ended 30 June Oening net assets attributable to Shareholders 15,352,685 2,155,894 Amounts receivable on issue of shares 20,271,291 2,211,090 Less: Amounts ayable on cancellation of shares (7,497,523) (453,762) 12,773,768 1,757,328 Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) (1,131,333) 328,485 Closing net assets attributable to Shareholders 26,995,120 4,241,707 The oening net assets attributable to shareholders for the current eriod do not equal the closing net assets attributable to shareholders for the comarative eriod as they are not consecutive eriods. 24 MI Chelverton UK Equity Growth Fund

27 MI Chelverton UK Equity Growth Fund Balance Sheet as at 30 June 2016 ASSETS Fixed Assets Investments 25,105,752 13,608,145 Current Assets Debtors 292, ,549 Cash and bank balances 2,155,869 2,677,087 Total current assets 2,447,883 3,248,636 Total assets 27,553,635 16,856,781 LIABILITIES Investment liabilities Creditors Distribution ayable (33,098) Other creditors (558,515) (1,470,998) Total creditors (558,515) (1,504,096) Total liabilities (558,515) (1,504,096) Net assets attributable to Shareholders 26,995,120 15,352,685 MI Chelverton UK Equity Growth Fund 25

28 MI Chelverton UK Equity Fund General Information Authorised status and structure of the Comany MI Chelverton UK Equity Fund (the Comany ) is structured as an Investment Comany with Variable Caital (''ICVC''), under regulation 12 (Authorisation) of the OEIC Regulations (Oen-Ended Investment Comanies Regulations 2001 (SI 2001/1228)). The Comany does not intend to have an interest in immovable roerty. The Comany is authorised and regulated in the UK by the Financial Conduct Authority (''FCA'') as a UCITS Retail Scheme under the COLL Sourcebook. The Comany was incororated in England and Wales on 4 Aril 2006 under registration number IC The Shareholders are not liable for the debts of the Comany. The Comany currently has 2 Sub-funds, which are detailed below: MI Chelverton UK Equity Income Fund MI Chelverton UK Equity Growth Fund Head Office Sringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Address for Service The Head Office is the address in the United Kingdom for service on the Comany of notices or other documents required or authorised to be served on it. Base Currency The base currency of the Comany is Pounds Sterling. Share Caital The minimum share caital of the Comany is 1 and the maximum is 100,000,000,000. Shares in the Comany have no ar value. The share caital of the Comany at all times equals the sum of the net asset value of the Sub-fund. Classes of Shares The Instrument of Incororation allows each Fund to issue different classes of shares in resect of any Sub-fund. The Sub-fund currently has the following classes of shares available for investment: Share Class A B Sub-funds Inc Acc Inc Acc MI Chelverton UK Equity Income Fund MI Chelverton UK Equity Growth Fund MI Chelverton UK Equity Fund

29 MI Chelverton UK Equity Fund General Information continued Classes of Shares (continued) On 22 January 2016, as art of the Retail Distribution Review the following transfers were made: MI Chelverton UK Equity Income Fund A Income to B Income share class A Accumulation to B Accumulation share class The Comany may issue both Income and Accumulation Shares. Holders of Income shares are entitled to be aid the revenue attributable to such shares in resect of each annual accounting eriod in the currency of the relevant share class. Holders of Accumulation shares are not entitled to be aid the revenue attributable to such shares, but that revenue is retained and accumulated for the benefit of shareholders and is reflected in the rice of shares. Valuation Point The scheme roerty of the Comany and each Sub-Fund will normally be valued at 12:00 on each dealing day for the urose of calculating the rice at which shares in the Comany may be issued, sold, reurchased or redeemed. For the urose of the ricing of shares, a business day is defined as a day on which the dealing office of the ACD is oen for the buying and selling of shares. The ACD may at any time during a business day carry out an additional valuation of the roerty of the Fund if the ACD considers it desirable to do so, with the Deositary's aroval Buying and Selling of Shares The ACD will accet orders for the urchase and sale of shares on normal business days between 08:30 and 16:30. Instructions to buy or sell shares may either be in writing to: Sringfield Lodge, Chelmsford, Essex CM2 5PW Or by telehone to: The ACD has the right to establish facilities for recording telehone calls made or received on this telehone line. A contract note giving details of the shares urchased will be issued no later than the next business day after the business day on which an alication to urchase shares is received and instrumented by the ACD. Certificates will not be issued in resect of shares. Ownershi of shares will be evidenced by an entry on the register of shareholders. MI Chelverton UK Equity Fund 27

30 MI Chelverton UK Equity Fund General Information continued Pricing Basis There is a single rice for buying, selling and switching shares in a Sub-fund which reresents the Net Asset Value of the Sub-fund concerned. The share rice is calculated on a forward ricing basis, that is at the next Valuation Point after the urchase or redemtion is deemed to be acceted by the ACD. The rices of shares are ublished daily on the ACD's website at Neither the ACD nor the Comany can be held resonsible for any errors in the ublication of the rices. The shares in the Comany will be issued and redeemed on a forward ricing basis which means that the rice will not necessarily be the same as the ublished rice. Other Information The Instrument of Incororation, Prosectus, Key Investor Information Document and the most recent interim and annual reorts may be insected at the office of the ACD which is also the Head Office of the Comany, of which coies may be obtained free of charge uon alication. They are also available from the website of the ACD, the details given in the directory of this reort. Shareholders who have comlaints about the oeration of the Comany should in the first instance contact the ACD, or, following that, may make their comlaint direct to the Financial Ombudsman Service, Exchange Tower, London E14 9SR. Significant Information On 1 June 2015 the Authorised Cororate Director, Phoenix Fund Services (UK) Ltd ( PFS ), became a subsidiary of Maitland International Holdings lc. On 4 Aril 2016 PFS was subsequently renamed Maitland Institutional Services Limited to reflect the change in ownershi. As a result of this, the names of the Scheme and sub-fund(s) changed, such that the refix of PFS has been relaced with MI. Risk Warning An investment in an Oen Ended Investment Comany should be regarded as a medium to long term investment. Investors should be aware that the rice of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past erformance is not a guide to future erformance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. 28 MI Chelverton UK Equity Fund

31 Registered in England No Authorised and regulated by the Financial Conduct Authority.