MI Barika UCITS Funds - MI Temple Relative Return Fund

Transcription

1 MI Barika UCITS Funds - MI Temple Relative Return Fund Interim Report 28 February 2017

2 Contents Page Directory Investment Objective and Policy Investment Manager's report Portfolio Statement Comparative Tables Statement of Total Return Statement of Change in Net Assets Attributable to Shareholders Balance Sheet Certification of Interim Report by the Authorised Corporate Director General Information

3 Directory Authorised Corporate Director (ACD) & Registrar Maitland Institutional Services Ltd Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telephone: Fax: Website: (Authorised and regulated by the Financial Conduct Authority) Customer Service Centre Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telephone: Fax: (Authorised and regulated by the Financial Conduct Authority) Directors of the Authorised Corporate Director R.A. Ackermann (appointed 30 December 2016) P.J. Foley-Brickley S. Georgala D. Jones R.W. Leedham D.W. Munting (retired 14 October 2016) Investment Manager Stoneware Capital LLP 9 Althorp Road, London SW17 7ED (Authorised and regulated by the Financial Conduct Authority) Depositary The Northern Trust Global Services Limited 50 Bank Street, Canary Wharf, London E14 5NT (Authorised by the Prudential Regulation. Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority) Independent Auditor KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square, Canary Wharf, London E14 5GL MI Barika UCITS Funds - MI Temple Relative Return Fund 1

4 Investment Objective and Policy Investment objective The Fund aims to outperform the FTSE All-Share Total Return Index over a 12 month period. Capital is at risk and there is no guarantee that a greater return than the benchmark index will be delivered over any one or a number of 12 month periods. Investment policy The Fund will seek to achieve its investment objective by primarily investing in, or taking exposure to, a concentrated portfolio of positions in equities or equity related derivative instruments of companies listed on exchange based in the UK or carrying out a predominant part of their economic activity in the UK or whose securities are listed on an exchange in the UK. The Fund may also acquire positions in international companies listed on exchange. The Fund may invest in any, or all, of the following: exchange traded equities and equity related securities, derivatives including equity and index options and contracts for difference, ETFs, closed ended funds, collective investment schemes, forward foreign exchange contracts, currencies and cash and cash equivalents. The Fund aims to pursue a long/short equity strategy. The long exposure will be achieved through direct investment in securities and via financial derivatives instruments. The short exposure shall only be achieved through the use of financial derivative instruments. Such derivative instruments shall include, but may not be limited to, swaps, CFDs, futures and options on indices or on single stocks. The Fund's long positions will at all times be sufficiently liquid to cover any obligations arising from its short positions. The Fund may utilise derivatives for the purposes of efficient portfolio management and for investment purposes. The use of derivatives involves a variety of material risks, reflecting the often extremely high degree of leverage embedded in such instruments, and will therefore affect the risk profile of the Fund. The proportion of the property of the Fund which may be held in the asset classes set out above, including cash or near cash, will vary from time to time according to the Investment Manager s view of market conditions. 2 MI Barika UCITS Funds - MI Temple Relative Return Fund

5 Investment Manager's Report for the period ended 28 February 2017 Since the fund was launched on 12 July 2016, there have been significant market movements and uncertainty. The fund launched shortly after Brexit and has also had to contend with the surprise election result in the US, a depreciation of the pound by about 7% and the continued uncertainty that the fall out of Brexit would bring throughout the period. Over the period from inception to 28 February 2017 the benchmark of the FTSE All Share Total Return returned 11.9% compared to the Class A Net Income Shares of the fund returning 7.5%. The FTSE All Share has been driven upwards by the fact that some of its major constituents benefit from a weak sterling currency because their revenues are offshore in stronger currencies such as the US dollar. On the other hand, the fund s Illuminator model excludes Oil & Gas and Mining from its selection criteria and therefore hasn t benefited as much as the benchmark from the export effect. For example, over the same period since the fund s inception, the FTSE 350 Mining* sector (excluding dividends) has risen by 42.7%. Mining stocks, as at 28th February represented over 6% of the FTSE 350* by weighting and the Oil & Gas sector represented 13% of the FTSE 350* by weighting. Taking the above into consideration it is perhaps not surprising that the fund has underperformed the benchmark over the period. The Illuminator model is designed to identify value over the medium to long term and, given that the fund has only been running for just over six months, we are pleased to report that the fund has made a return of 7.5% in the period since inception. 12 Monthly Performance FTSE All Share Tot. Ret MI Temple Rel Ret. Percentage Return /07/ /07/ /08/ /09/ /10/ /10/ /11/ /12/ /01/ /02/2017 *Data Sources: Thomson Reuters, FTSE Russell. MI Barika UCITS Funds - MI Temple Relative Return Fund 3

6 Investment Manager's Report continued Material Portfolio Changes for the period ended 28 February 2017 Costs Top 5 Purchases Regus 14,647 Greencore 14,363 Domino s Pizza 14,275 ASOS 14, Holdings 14,148 71,637 Proceeds Top 5 Sales Ocado 5,217 Greencore 5,017 ASOS 4,994 JD Sports Fashion 4,769 Inchcape 4,291 24,288 4 MI Barika UCITS Funds - MI Temple Relative Return Fund

7 Portfolio Statement as at 28 February 2017 Market % of total value net assets Holding Security 2017 INDUSTRIALS 26.25% Construction & Materials 1.06% 3,456 Breedon* 2, Support Services 25.19% 290 Ashtead 4, Atkins (WS) 4, ,867 Hays 7, ,703 Howden Joinery 11, ,181 IWG 11, ,265 Paysafe 5, ,452 Rentokil Initial 8, ,814 RWS * 5, , CONSUMER GOODS 6.51% Food Producers 3.49% 3,197 Greencore 8, Leisure Goods 3.02% 4,437 Photo-me International 7, HEALTHCARE 0.78% Pharmaceuticals & Biotechnology 0.78% 38 Shire 1, CONSUMER SERVICES 56.32% Food & Drug Retailers 2.15% 2,572 Booker 5, General Retailers 17.06% 203 ASOS* 11, CVS* 9, Dunelm 1, ,201 JD Sports Fashion 11, WH Smith 6, , MI Barika UCITS Funds - MI Temple Relative Return Fund 5

8 Portfolio Statement continued Market % of total value net assets Holding Security 2017 Media 13.73% 5,145 ITV 10, ,556 Moneysupermarket.com 11, Rightmove 10, , Travel & Leisure 23.38% 5,909 32Red* 11, , Holdings 11, Compass 2, ,871 Domino's Pizza 11, Go-Ahead 5, GVC 1, Paddy Power Betfair 7, ,941 Thomas Cook 4, , FINANCIALS 7.85% Nonlife Insurance 3.19% 738 Jardine Lloyd Thompson 7, Real Estate Investment & Services 2.18% 608 Savills 5, Financial Services 2.48% 443 Hargreaves Lansdown 5, Investment assets 232, Net other assets 5, Net assets 238, All investments are ordinary shares or stock units on a regulated securities market unless otherwise stated. * Quoted on the Alternative Investment Market. Total purchases for the period: 329,211 Total sales for the period: 115,801 6 MI Barika UCITS Funds - MI Temple Relative Return Fund

9 Comparative Tables Change in net assets per share A Income A Accumulation ^ p ^^ p Opening net asset value per share Return before operating charges^ Operating charges Return after operating charges^ Distributions Retained distributions on accumulation shares n/a 0.00 Closing net asset value per share ^After direct transaction costs of Performance Return after charges 6.57% 8.05% Other Information Closing net asset value 52, ,510 Closing number of shares 49, ,682 Operating charges 3.25% 3.25% Direct transaction costs 2.11% 2.11% Performance Highest share price Lowest share price ^ Class A Income shares were launched 12 July ^^ Class A Accumulation shares were launched 26 July Operating charges include indirect costs incurred in the maintenance and running of the Fund, as disclosed (but not limited to) the detailed expenses within the Statement of Total Return. The figures used within this table have been calculated against the average Net Asset Value for the accounting period. The return after charges is calculated as the closing net asset value per share plus the distributions on income shares minus the open net asset value per share as a % of the opening net asset value per share. Direct transaction costs include fees, commissions, transfer taxes and duties in the purchasing and selling of investments, which are offset (where applicable) against any dilution levies charged within the accounting period. The figures used within the table have been calculated against the average Net Asset Value for the accounting period. MI Barika UCITS Funds - MI Temple Relative Return Fund 7

10 Comparative tables continued Risk and reward profile The risk and reward indicator table demonstrates where the Fund ranks in terms of its potential risk and reward. The higher the rank the greater the potential reward but the greater the risk of losing money. It is based on past data, may change over time and may not be a reliable indication of the future risk profile of the Fund. The shaded area in the table below shows the Fund s ranking on the risk and reward indicator. Typically lower rewards, Typically higher rewards, lower risk higher risk The Fund is ranked 5 because funds of this type have experienced medium to high rises and falls in value in the past. 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 Fund: This Fund can use derivatives in order to meet its investment objectives. This may result in losses or gains that are greater than the original amount invested. The use of derivatives involves additional risks: (a) derivatives may be highly sensitive to price movements of the underlying assets, (b) a counterparty to a derivative may fail to meet its obligations, and (c) the use of derivatives may create leverage. The Fund may hold a limited number of investments, which may increase the volatility of the Fund. Should one or more of these investments fall in value, it may have a greater effect on a Fund s value than if a larger number of investments were held. Where this Fund invests in bonds, there is a risk that bond issuers fail to meet repayments. This is usually a greater risk for bonds that produce a higher level of income. Changes in interest rates, inflation and the credit worthiness of the bond issuers may also affect the bond market value. Investing overseas can bring additional returns and spread risk to different markets. There are risks, however, that changes in currency exchange rates may cause the value of your investment to decrease and increase. Investment in emerging markets carries greater risk than investment in more developed markets, which may result in large falls in the Fund's value over short periods of time. For further risk information please see the Risk Factors section of the prospectus. Risk warning An investment in an Open Ended Investment Company should be regarded as a medium to long-term investment. Investors should be aware that the price of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. 8 MI Barika UCITS Funds - MI Temple Relative Return Fund

11 Statement of Total Return for the period ended 28 February to Income Net capital gains 18,367 Revenue 1,278 Expenses (2,331) Interest payable and similar charges (5) Net expense before taxation (1,058) Taxation (12) Net expense after taxation (1,070) Total return before distributions 17,297 Distributions Change in net assets attributable to Shareholders from investment activities 17,297 Statement of Change in Net Assets Attributable to Shareholders for the period ended 28 February to Opening net assets attributable to Shareholders Amounts receivable on issue of shares 295,700 Less: Amounts payable on cancellation of shares (74,948) 220,752 Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) 17,297 Closing net assets attributable to Shareholders 238,049 MI Barika UCITS Funds - MI Temple Relative Return Fund 9

12 Balance Sheet as at 28 February 2017 ASSETS Fixed Assets Investments 232,609 Current Assets Debtors 12,622 Cash and bank balances 13,342 Total current assets 25,964 Total assets 258,573 LIABILITIES Investment liabilities Creditors Other creditors (20,524) Total creditors (20,524) Total liabilities (20,524) Net assets attributable to Shareholders 238,049 The interim financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments and in accordance with FRS 102 and the Statement of Recommended Practice (SORP) for Financial Statements of UK Authorised Funds issued by the Investment Association (IA) in May The financial statements have been prepared on the going concern basis. Certification of Interim Report by the Authorised Corporate Director This report has been prepared 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 20 April MI Barika UCITS Funds - MI Temple Relative Return Fund

13 General Information Authorised Status MI Barika UCITS Funds - MI Temple Relative Return Fund (the Company ) is structured as an Investment Company with Variable Capital ( ICVC ), under regulation 12 (Authorisation) of the OEIC Regulations (Open-Ended Investment Companies Regulations 2001 (SI 2001/1228)). The Company does not intend to have an interest in immovable property. The Company is authorised and regulated in the UK by the Financial Conduct Authority ( FCA ) as a UCITS Retail Scheme and Umbrella Company under the COLL Sourcebook. The Company currently has 1 Sub-fund, which is detailed below: MI Barika UCITS Funds - MI Temple Relative Return Fund (launched ) Head Office Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Address for Service The Head Office is the address in the United Kingdom for service on the Company of notices or other documents required or authorised to be served on it. Base Currency The base currency of the Company is Pounds Sterling. Share Capital The minimum share capital of the Company is 1 and the maximum is 100,000,000,000. Shares in the Company have no par value. The share capital of the Company at all times equals the sum of the net asset value of the Fund. Classes of Shares The Instrument of Incorporation allows each Fund to issue different classes of shares in respect of any Fund. The Fund currently has the following classes of shares available for investment: Share class A Income Share class A Accumulation The Company may issue both Income and Accumulation Shares. Holders of Income shares are entitled to be paid the revenue attributable to such shares in respect of each annual accounting period in the currency of the relevant share class. Holders of Accumulation shares are not entitled to be paid the revenue attributable to such shares, but that revenue is retained and accumulated for the benefit of shareholders and is reflected in the price of shares. MI Barika UCITS Funds - MI Temple Relative Return Fund 11

14 General Information continued Valuation Point The scheme property of the Company and each Sub-Fund will normally be valued at 16:30 on each dealing day for the purpose of calculating the price at which shares in the Company may be issued, sold, repurchased or redeemed. For the purpose of the pricing of units, a business day is defined as a day on which the dealing office of the ACD is open for the buying and selling of shares. The ACD may at any time during a business day carry out an additional valuation of the property of the Fund if the ACD considers it desirable to do so, with the Depositary's approval. Buying, Redeeming and Switching of Shares The Authorised Corporate Director will accept orders for the purchase, sale and switching of shares on normal business days between 08:30 and 16:30. Instructions to buy or sell shares may either be in writing to: Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Or by telephone on: The Authorised Corporate Director has the right to establish facilities for recording telephone calls made or received on this telephone line. A contract note giving details of the shares purchased will be issued no later than the next business day after the business day on which an application to purchase shares is received and instrumented by the Authorised Corporate Director. Certificates will not be issued in respect of shares. Ownership of shares will be evidenced by an entry on the register of shareholders. Pricing Basis There is a single price for buying, selling and switching shares in a Fund which represents the Net Asset Value of the Fund concerned. The share price is calculated on a forward pricing basis, that is at the next Valuation Point after the purchase or redemption is deemed to be accepted by the Authorised Corporate Director. The prices of shares are published daily on Neither the ACD nor the Company can be held responsible for any errors in the publication of the prices. The shares in the Company will be issued and redeemed on a forward pricing basis which means that the price will not necessarily be the same as the published price. Other Information The Instrument of Incorporation, Prospectus, Key Investor Information Document and the most recent interim and annual reports may be inspected at the office of the ACD which is also the Head Office of the Company. Copies may be obtained free of charge upon application. They are also available from the website of the ACD, the details of which are given in the directory of this report. Shareholders who have complaints about the operation of the Company should in the first instance contact the ACD, or, following that, may make their complaint direct to the Financial Ombudsman Service, Exchange Tower, London E14 9SR. 12 MI Barika UCITS Funds - MI Temple Relative Return Fund

15 General Information continued Risk Warning An investment in an Investment Company should be regarded as a medium to long-term investment. Investors should be aware that the price of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. MI Barika UCITS Funds - MI Temple Relative Return Fund 13

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