ANNUAL SHORT REPORT. Henderson Institutional Japan Enhanced Equity Fund. For the year ended 31 October 2016

Transcription

1 ANNUAL SHORT REPORT For the year ended 31 October 2016 Henderson Institutional Japan Enhanced Equity Fund

2 Henderson Institutional Japan Enhanced Equity Fund Short Report For the year ended 31 October 2016 Investment Fund Manager Henderson Multi Strategy Equities Team Investment objective and policy The fund aims to provide consistent capital growth relative to the FTSE World Japan Index (or such other index as may from time to time replace it) through investing primarily in Japanese companies. There are no restrictions on the size of the companies in which the fund may invest. The fund aims to provide an annual return above that of the FTSE World Japan Index, whilst controlling risk. The fund will invest primarily in Japanese companies included within the FTSE World Japan Index. Additionally, the fund can invest in companies listed on other exchanges which are associated with FTSE World Japan Index listed shares or other Japanese companies. The fund will not attempt to replicate identically the share composition of the FTSE World Japan Index, and the Fund Manager will actively review the shares within the portfolio, and effect adjustments as necessary in order to achieve the investment objective. The fund may invest the property in transferable securities, money market instruments, derivatives and forward transactions, deposits and units in collective investment schemes. Risk and reward profile The fund currently has 5 types of share class in issue; A accumulation, C accumulation, I accumulation Y accumulation and Z accumulation. Each type of share class has the same risk and reward profile which is as follows: Typically Lower potential risk/reward Lower Risk Typically Higher potential risk/reward Higher Risk The Synthetic Risk and Reward Indicator (SRRI) is calculated based on historical volatility over a rolling 5 year period, it is reviewed monthly and updated if volatility has changed materially to cause a movement in the SRRI level. The SRRI is an indicator and may not accurately reflect future volatility and market conditions. The value of an investment in the fund can go up or down. When you sell your shares, they may be worth less than you paid for them. The risk/reward rating above is based on medium-term volatility. In the future, the fund s actual volatility could be higher or lower and its rated risk/reward level could change. The lowest category does not mean risk free. The fund s risk level reflects the following: The fund focuses on a single country As a category, shares are more volatile than either bonds or money market instruments The fund invests in a broad range of securities and countries and uses a broad range of strategies. Fluctuations in exchange rates may cause the value of your investment to rise or fall The rating does not reflect the possible effects of unusual market conditions or large unpredictable events. Under normal market conditions the following risks may apply: Counterparty risk The fund could lose money if a counterparty with which it transacts becomes unwilling or unable to meet its obligations to the fund. Derivatives risk Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative instrument. Liquidity risk In difficult market conditions certain securities could become hard to value or sell at a desired time and price. Management risk Investment management techniques that have worked well in normal market conditions could prove ineffective or detrimental at other times. There have been no changes to the risk rating in the year. 2 Henderson Institutional Japan Enhanced Equity Fund

3 The full list of the fund s risks are contained in the Risk Factors section of the fund s prospectus. The SRRI conforms to the European Securities and Markets Authority guidelines for the calculation of the SRRI. Investment review The FTSE All World Developed Japan Index rose by 31.1 in sterling terms over the year to 31 October However, a persistently strong yen meant that equities fell 9.6 in local currency terms. Japanese stocks made a strong start to the year, rising until the end of November thanks to a boost in investor sentiment from the supportive policies of the Bank of Japan (BoJ). However, disappointing economic data and the gaining strength of the yen fuelled fears about the health of Japan s export industry in early In January, BoJ policymakers surprised investors by announcing a negative benchmark interest rate for commercial bank deposits in order to stimulate growth and inflation. But by spring, inflation had fallen below zero for the first time since May 2013, and only fell further from there (ending the year at -0.5). Meanwhile, yields on 10-year Japanese government bonds fell (prices rose) to new lows during the first six months of the year. Japanese unemployment data was characteristically encouraging, dropping to 3.0 in July and again in September. Economic growth was lacklustre, increasing by 0.2 in the quarter ended in June, though this figure did exceed expectations. Late in the year, the central bank extended its stimulus package in the form of 2.7trn worth of exchange-traded fund purchases, though this disappointed investors, who had hoped for further rate cuts. August brought an additional $45bn stimulus package, and a sharper focus on controlling the yield curve was initiated in September Henderson Institutional Japan Enhanced Equity Fund 3

4 Performance summary 31 Oct Oct Oct Oct Oct Oct Oct Oct Oct Oct 12 Henderson Institutional Japan Enhanced Equity Fund* (0.1) 34.4 (3.3) FTSE Custom All World Dev. Japan Index** (3.3) Source: Henderson Global Investors & FTSE. * Fund returns calculated using close of business prices on a gross asset value basis in GBP, based on performance of class Z accumulation. ** Customised net dividends reinvested (Market Capitalisation weighted index of Australia, New Zealand, Hong Kong, Singapore, Taiwan and Korea). Figures in brackets are negative. Please remember that past performance is not a guide to future performance. The value of an investment and the revenue from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Fund facts Accounting dates Payment dates 30 April, 31 October 30 June, 31 December Ongoing charge figure Class A Class C Class I Class Y Class Z The annualised ongoing charge figure (OCF) of the fund is calculated as the ratio of the total ongoing charges to the average net asset value for twelve months. The calculation is in accordance with guidelines issued by the European Securities and Markets Authority (ESMA) The annual management charge reduced from 1.50 to 0.50 on 1 September The annual management charge reduceed from 0.75 to 0.30 on 1 September Henderson Institutional Japan Enhanced Equity Fund

5 Comparative tables Change in net assets per share Class A accumulation Class C accumulation Opening net asset value per share Return before operating charges* (0.26) (0.17) Operating charges (2.34) (2.41) (2.13) (1.00) (0.92) (0.81) Return after operating charges* (2.39) (0.98) Distributions on accumulation shares (0.86) - - (2.75) (1.69) (1.56) Retained distributions on accumulation shares Closing net asset value per share * after direct transaction costs of: Performance Return after charges (1.83) (0.67) Other information Closing net asset value ( 000s) 9,718 10,254 10,623 1,602 1,401 1,312 Closing number of shares 5,204,951 7,109,768 8,295, , , ,739 Operating charges Direct transaction costs Prices Highest share price ) Lowest share price ) Henderson Institutional Japan Enhanced Equity Fund 5

6 Comparative tables Change in net assets per share Class I accumulation Class Y accumulation Opening net asset value per share Return before operating charges* (0.14) (0.14) Operating charges (0.93) (0.95) (0.84) (1.04) (0.96) (0.84) Return after operating charges* (0.98) (0.98) Distributions on accumulation shares (1.89) (0.99) (0.93) (1.76) (1.00) (0.93) Retained distributions on accumulation shares Closing net asset value per share * after direct transaction costs of: Performance Return after charges (0.89) (0.89) Other information Closing net asset value ( 000s) 22,293 15,898 15,989 28,208 21,627 18,968 Closing number of shares 13,837,597 12,881,132 14,722,989 17,495,904 17,495,904 17,439,971 Operating charges Direct transaction costs Prices Highest share price ) Lowest share price ) Henderson Institutional Japan Enhanced Equity Fund

7 Comparative tables Change in net assets per share Class Z accumuation Opening net asset value per share Return before operating charges* (0.17) Operating charges (0.08) (0.07) (0.07) Return after operating charges* (0.24) Distributions on accumulation shares (3.95) (2.72) (2.44) Retained distributions on accumulation shares Closing net asset value per share * after direct transaction costs of: Performance Return after charges (0.16) Other information Closing net asset value ( 000s) 133, , ,492 Closing number of shares 57,547,271 63,860,225 76,112,177 Operating charges Direct transaction costs Prices Highest share price ) Lowest share price ) Performance values are at close of business and may differ from the performance summary. Operating charges Operating charges are expenses associated with the maintenance and administration of the fund on a day-to-day basis that are actually borne by the share class. Past performance is not a guide to future performance. Henderson Institutional Japan Enhanced Equity Fund 7

8 Major holdings Major holdings as at 2016 as at 2015 Toyota Motor 4.79 Toyota Motor 5.02 Mitsubishi UFJ Financial 2.12 Mitsubishi UFJ Financial 2.78 KDDI 1.70 Honda Motor 1.82 Softbank 1.68 Softbank 1.60 Honda Motor 1.61 Sumitomo Mitsui Financial 1.58 Sumitomo Mitsui Financial 1.41 Mizuho Financial 1.56 Japan Tobacco 1.37 KDDI 1.40 Mizuho Financial 1.28 Takeda Pharmaceutical 1.19 Sony 1.23 Japan Tobacco 1.14 Fanuc 1.12 East Japan Railway 1.13 Asset allocation Asset allocation as at 2016 as at 2015 Consumer Goods Consumer Goods Industrials Industrials Financials Financials Consumer Services Consumer Services Health Care 7.56 Health Care 7.02 Basic Materials 6.02 Basic Materials 5.62 Telecommunications 4.76 Telecommunications 4.48 Technology 4.68 Technology 4.36 Utilities 2.08 Utilities 2.60 Oil & Gas 0.82 Oil & Gas 0.82 Derivatives 0.07 Derivatives 0.03 Other net assets 1.08 Other net assets 1.89 Total net assets Total net assets Henderson Institutional Japan Enhanced Equity Fund

9 Report and accounts This document is a short report of the Henderson Institutional Japan Enhanced Equity Fund for the year ended 31 October Copies of the annual and half yearly long form report and financial statements of this fund are available on our website or contact client services on the telephone number provided. Other information The information in this report is designed to enable you to make an informed judgement on the activities of the fund during the year it covers and the results of those activities at the end of the year. Risk warning Please remember that past performance is not a guide to future performance. The value of an investment and the revenue from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Issued by: Henderson Investment Funds Limited Registered office: 201 Bishopsgate, London EC2M 3AE Member of the Investment Association and authorised and regulated by the Financial Conduct Authority. Registered in England No Depositary National Westminster Bank Plc 135 Bishopsgate London EC2M 3UR Auditor PricewaterhouseCoopers LLP 141 Bothwell Street Glasgow G2 7EQ Shareholder Administrator International Financial Data Services (UK) Limited IFDS House St Nicolas House Basildon Essex SS15 5FS Henderson Institutional Japan Enhanced Equity Fund 9

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12 Contact us Client Services Head Office address: Bishopsgate, London EC2M 3AE Changes of address - regulatory requirements FCA regulation requires us to send this report mailing to the address held on file on the accounting date of 31 October If you have confirmed a change of address with us since that date we will ensure all future correspondence will be sent to your new address. Online valuations You can value your Henderson Institutional Japan Enhanced Equity Fund at any time by logging on to Select Personal Investor and then access Valuations from the Tools Menu. Simply select the fund you hold and enter the appropriate number of shares. Any questions? Further information about the activities and performance of the fund for this and previous periods can be obtained from the Investment Manager. If you have any questions please call our Client Services Team on or support@henderson.com. Important Information Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no ), Henderson Fund Management Limited (reg. no ), Henderson Investment Funds Limited (reg. no ), Henderson Investment Management Limited (reg. no ), AlphaGen Capital Limited (reg. no ), Henderson Equity Partners Limited (reg. no ), Gartmore Investment Limited (reg. no ), (each incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and monitored. Ref: 34V Unless otherwise stated, all data is sourced by Henderson Global Investors. H025943/1116