MI Momentum Investment Funds

Transcription

1 MI Momentum Investment Funds Interim Reort 31 December 2017

2 MI Momentum Investment Funds Contents Page Directory Basis of Accounting Certification of the Interim Reorts by the Authorised Cororate Director MI Momentum Investments Funds - Focus 3 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 Table MI Momentum Investments Funds - Focus 4 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 Table MI Momentum Investments Funds - Focus 5 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 Table General Information

3 MI Momentum Investment Funds 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 R. Ackermann J. Clark (aointed 21 December 2017) P.J. Foley-Brickley S. Georgala D. Jones G. Kok (aointed 30 November 2017) R.W. Leedham (retired 19 December 2017) Investment Manager Momentum Global Investment Management Limited The Rex Building, 62 Queen Street, London EC4R 1EB (Authorised and regulated by the Financial Conduct Authority) 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 PricewaterhouseCooers LLP Chartered Accountants and Statutory Auditors 7 More London Riverside, London SE1 2RT MI Momentum Investment Funds 1

4 MI Momentum Investment Funds Basis of Accounting The interim financial statements have been reared under the historical cost basis, as modified by the 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 30 June 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. Ackermann D. Jones Directors Maitland Institutional Services Ltd 26 February MI Momentum Investment Funds

5 MI Momentum Investment Funds - MI Momentum Focus 3 Investment Objective The Sub-fund aims to achieve medium to long-term caital growth. Investment Policy The Sub-fund may gain exosure to a broad range of asset classes, including global equities, UK equities, cororate and government bonds, money market instruments, cash and near cash by investing redominantly in a globally diverse mix of collective investment schemes. In doing so, the Sub-fund will target a risk rating factor 3 as determined by an indeendent risk rating body. The risk rofile of the Sub-fund is defensive with between 0% and 35% exosure to equities. Performance is measured over an entire market cycle (the market cycle is a eriod of time from which the market moves from a eriod of increasing rices and strong erformance, to a eriod of weak erformance and falling rices, and then back again), rather than at any one oint in time. Where ossible and where not inconsistent with the Sub-fund s risk rofile, it will aim, after fees and exenses of the Subfund have been deducted, for a return which is 3% in excess of the consumer rice index over the same market cycle. There is no guarantee that this return will be achieved. The Sub-fund may also invest in other transferable securities, cash, near cash, deosits, money market instruments and money market funds. The Sub-fund may use derivatives or forward transactions only for the urose of efficient ortfolio management. Investment Manager s Reort for the eriod ended 31 December 2017 The Momentum Focus Funds combine long term inflation lus objectives with third arty risk rofiling rovided by Distribution Technology. Through the Managed Portfolios we aim to manage the exected volatility of investors ortfolios, while at the same time achieving long term real returns consistent with their financial objectives. Our goals based ortfolio construction is focused on delivering robust outcomes by diversifying across asset classes and strategies, different investment hilosohies and investment managers. Momentum Focus 3 has been risk rated by Distribution Technology as risk rofile 3. In the six months ending December 2017, global equities osted strong returns with every major equity market advancing, and several indices reaching all-time highs, suorted by a favourable economic backdro. During the eriod the MSCI World index returned 6.4% in Sterling terms, taking returns in 2017 to 10.5%. UK equities outerformed during the eriod, osting a 6.8% return and ending 2017 u 12.0%. In commodities, Brent crude oil rallied during the eriod, rising 39.5% in US Dollar terms to USD 66.9/bbl. In fixed income, Treasury yields rose and the yield curve flattened, artly in light of exected inflation rises, with two-year yields rising from 1.38% to 1.89%. Amidst domestic uncertainty, UK 10 year gilt yields fell from 1.26% to 1.19%. Political events continued to have a mixed imact on asset class returns; of articular focus were US tax reforms, which eventually assed the House and the Senate at the end of December, roviding a boost to equities in Q4. Euroe entered a brief sell of olitical turbulence after German Chancellor Angela Merkel failed to secure a majority government, leading to coalition negotiations which eventually broke down. In the UK, Brexit negotiations achieved a major breakthrough after the first hase of negotiations, discussing withdrawal terms, led to an agreement. Lastly, major central banks continued their transition to monetary olicy normalisation with the Federal Reserve and the Bank of England increasing the base rate by 25 basis oints, while the Euroean Central Bank announced lans to hase out quantitative easing. Against this backdro, the Momentum Focus 3 Fund returned 1.2% net of fees over the 6 month eriod to 31 December During the six months, develoed market equities made the largest contribution to erformance, in articular during the final quarter of Allocations to investment grade bonds and alternatives were also notable contributors. In terms of relative erformance, allocations to fixed income were a drag on erformance, mainly driven by an underweight allocation to Index Linked Bonds. Although we do not exect a reeat of the strong returns in 2017, we believe that equity markets will make further rogress this year. While valuations in many cases are stretched, the underlying fundamentals are strong and the monetary olicy tightening ahead is likely to be extremely gradual. However, there are risks ahead and from these levels longer term returns are likely to be relatively modest. However this cycle is articularly long and we do not see evidence of overheating and a remature downturn. Oortunities for returns outweigh the risks and inevitable eriodic bouts of weakness in equity markets will resent buying oortunities. MI Momentum Investment Funds - MI Momentum Focus 3 3

6 MI Momentum Investment Funds - MI Momentum Focus 3 Investment Manager s Reort continued Significant Portfolio Changes for the eriod from 1 July 2017 to 31 December 2017 To 10 urchases since 1 July 2017 Cost US Treasury 0.25% Index Linked ,395 Male-Brown Abbott Global Infrastructure Fund Institutional Sterling 446,993 ishares Core Cororate Bond UCITS ETF GBP Distribution 415,518 Muzinich Emerging Markets Short Duration - Hedged GBP Accumulation S 397,662 Serviced Platform - Multi Asset Risk Premia - M1 C (GBP Hedged) 2xs Leverage 393,060 Neuberger Berman Uncorrelated Strategies - GBP I2 Accumulation* 390,000 Allianz Structured Return - P (H2-GBP)* 195,478 ishares J.P. Morgan $ Emerging Markets Bond UCITS ETF USD Distribution 132,649 US Treasury 0.75% Index Linked ,129 F&C Global Equity Market Neutral - 3 Accumulation GBP 91,833 3,123,347 To 10 Sales since 1 July 2017 Proceeds ishares Core Cororate Bond UCITS ETF GBP Distribution 1,307,013 Axa US Short Duration High Yield Fund ZI (Gross) Accumulation GBP 619,422 Goldman Sachs Global Strategic Macro Bond Portfolio I GBP- Hedged Accumulation 394,421 ishares Cororate Bond 0-5yr UCITS ETF GBP Distribution 286,869 RWC Asia Convertibles - B GBP Accumulation 259,099 Schroder Recovery - Z Accumulation GBP 123,183 Westwood Strategic Global Convertibles - F GBP Accumulation Hedged 81,453 S&P 500 Index ,304 3,073,764 Significant urchases and sales are defined as the 10 largest urchases and sales of investments, urchases of new securities of fully disosed cash transactions of existing securities excluding cororate actions. 4 MI Momentum Investment Funds - MI Momentum Focus 3

7 MI Momentum Investment Funds - MI Momentum Focus 3 Portfolio Statement as at 31 December 2017 Market % of total value net assets Holding Security 2017 Commodities 3.74% (3.78%) 15,139 ishares Gold Producers UCITS ETF USD Accumulation 108, ,199 ishares Physical Gold ETC 626, , Emerging Markets Convertibles 1.96% (3.17%) 2,928 RWC Asia Convertibles - B GBP Accumulation* 384, Emerging Markets Equities 1.48% (1.40%) 3,974 JPM Emerging Markets Dividend - A (Distribution) GBP* 290, Emerging Markets Fixed Interest 3.51% (4.92%) 8,140 ishares J.P. Morgan $ Emerging Markets Bond UCITS ETF USD Distribution 690, Euroean Equities 1.53% (1.53%) 70,912 Juiter Euroean Secial Situations Accumulation* 300, Global Equities 13.37% (8.52%) 754,261 F&C Global Equity Market Neutral - 3 Accumulation GBP* 472, ,940 Hetagon Koernik Global All-Ca Equity - C USD Accumulation* 176, ,126 Male-Brown Abbott Global Infrastructure Fund Institutional Sterling* 576, ,690 Neuberger Berman Uncorrelated Strategies - GBP I2 Accumulation* 397, ,990 RWC Income Oortunities - B GBP Accumulation* 615, ,912 Serviced Platform - Multi Asset Risk Premia - M1 C (GBP Hedged) 2xs Leverage* 390, ,629, Global Fixed Interest 28.26% (30.96%) 2,775 Ferox Chinook Global Convertible Bond - R Accumulation GBP* 294, ,240 Goldman Sachs Global Strategic Macro Bond Portfolio I GBP- Hedged Accumulation* 343, ,534 ishares Core Cororate Bond UCITS ETF GBP Distribution 2,277, ,464 ishares Cororate Bond 0-5yr UCITS ETF GBP Distribution 1,648, ,134 Muzinich Emerging Markets Short Duration - Hedged GBP Accumulation S* 783, Westwood Strategic Global Convertibles - F GBP Accumulation Hedged* 210, ,556, Jaanese Equities 1.46% (1.37%) 2,545 Amundi ETF JPX-NIKKEI 400 UCITS ETF - JPY 288, Real Estate Investment Trusts 5.42% (5.21%) 675,926 Ediston Proerty Investment 740, ,759 Schroder Real Estate Investment Trust 325, ,065, UK Equities 11.43% (11.55%) 120,565 CF Lindsell Train UK Equity - Accumulation* 475, ,896 Schroder Recovery - Z Accumulation GBP* 913, ,053 TB Evenlode Income - C Accumulation GBP* 857, ,246, MI Momentum Investment Funds - MI Momentum Focus 3 5

8 MI Momentum Investment Funds - MI Momentum Focus 3 Portfolio Statement continued Market % of total value net assets Holding Security 2017 US Fixed Interest 3.49% (5.69%) 189 Allianz Structured Return - P (H2-GBP)* 197, ,476 Axa US Short Duration High Yield Fund ZI (Gross) Accumulation GBP* 489, Axa World Funds US High Yield Bond - I Hedged Caitalisation GBP* , US Government Bonds 12.52% (8.99%) $1,186,600 US Treasury 0.25% Index Linked , $298,200 US Treasury 0.75% Index Linked , $720,000 US Treasury 1.375% , $450,000 US Treasury 1.375% Index Linked , $325,000 US Treasury 2.25% , $180,000 US Treasury 3.75% , Derivatives 0.24% (0.26%) 2,462, Forward currency contracts 0.18% (0.17%)^ Sold US$4,107,000 Bought 3,068,741 ( ) 35, Otions 0.06% (0.09%)^^ 1 S&P 500 Index S&P 500 Index , S&P 500 Index , S&P 500 Index , S&P 500 Index , , Investment assets 17,384, Net other assets 2,279, Net assets 19,663, 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 * Collective Investment Schemes ermitted under COLL, not listed on any exchange. ^ At the balance sheet date, all forward currency contracts were executed with one counterarty, JP Morgan for the urose of EPM. Collateral obligations on losses or gains for each transaction would be met using cash held by the custodian. ^^ At the balance sheet date, otions were executed with one counterarty, JP Morgan. Total urchases for the eriod 3,434,261 Total sales for the eriod 3,073,764 6 MI Momentum Investment Funds - MI Momentum Focus 3

9 MI Momentum Investment Funds - MI Momentum Focus 3 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^ Distributions Retained distributions on accumulation shares Closing net asset value er share ^After direct transaction costs of Performance Return after charges 1.28% 7.32% 5.92% 0.84% Other information Closing net asset value 19,287,518 18,721,889 13,920,139 13,962,617 Closing number of shares 15,038,373 14,783,748 11,797,027 12,532,217 Oerating charges 1.38% 1.33% 1.49% 1.49% Ongoing oerating charges* 1.38% 1.37% Direct transaction costs 0.00% 0.00% 0.00% 0.00% Prices Highest share rice Lowest share rice From 06 February 2015, the Investment Manager started rebating the Sub-fund s oerating charges in order for them not to exceed 1.49% of the average net asset value of the Sub-fund. B Accumulation Oening net asset value er share Return before oerating charges^ Oerating charges Return after oerating charges^ Distributions Retained distributions on accumulation shares Closing net asset value er share ^After direct transaction costs of Performance Return after charges 0.77% 6.33% 5.87% 0.24% Other information Closing net asset value 375, , , ,575 Closing number of shares 292, , , ,347 Oerating charges 2.38% 2.33% 1.49% 1.49% Ongoing oerating charges* 2.38% 2.37% Direct transaction costs 0.00% 0.00% 0.00% 0.00% Prices Highest share rice Lowest share rice The Investment Manager rebated the Sub-fund s oerating charges in order for them not to exceed 1.49% of the average net asset value of the Sub-fund for these accounting years. *The ACD believes that this ongoing oerating charge is reresentative of charges going forward. 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 by annualising the exenses incurred against the average Net Asset Value for the accounting eriod. MI Momentum Investment Funds - MI Momentum Focus 3 7

10 MI Momentum Investment Funds - MI Momentum Focus 3 Comarative Tables continued The return after charges is calculated as the closing net asset value er share lus the distributions on income shares minus the oening net asset value er share as a % of the oening net asset value er share. The Sub-fund invests in collective investment schemes, the exenses incurred by these schemes in relation to the Sub-fund (synthetic ongoing charge) are included within the oerating charges. 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, Tyically higher rewards, lower risk higher risk The Sub-fund is ranked 3 because funds of this tye have exerienced low to medium 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: Investing in other funds may exose investors to increased risk due to less strict regulations and the use of derivatives. The other funds can themselves invest in assets such as bonds, comany shares, cash and currencies. The objectives and risk rofiles of these underlying funds may not be fully in line with those of this Sub-fund. Where the Sub-fund invests in bonds, there is a risk that bond issuers fail to meet reayments. This is usually a greater risk for bonds that roduce a higher level of income. Changes in interest rates, inflation and the creditworthiness of the bond issuers may also affect the bonds market value. Investing overseas can bring additional returns and sread 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. The Sub-fund will target a risk rating factor 3 as determined by an indeendent agency, Distribution Technology, that rovides such ratings. This rating is on a scale of 1-10, and takes account of risk targets and other factors as well as ast data. It is not related to the risk ranking that aears on the 1-7 scale above, which is based solely on ast data. 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. 8 MI Momentum Investment Funds - MI Momentum Focus 3

11 MI Momentum Investment Funds - MI Momentum Focus 3 Statement of Total Return for the eriod ended 31 December Income Net caital gains 180, ,778 Revenue 168, ,332 Exenses (94,728) (74,956) Interest ayable and similar charges (95) (1) Net revenue before taxation 73,856 78,375 Taxation (7,493) (8,178) Net revenue after taxation 66,363 70,197 Total return before distributions 246, ,975 Distributions (105,873) (107,199) Change in net assets attributable to Shareholders from investment activities 141, ,776 Statement of Change in Net Assets Attributable to Shareholders for the eriod ended 31 December Oening net assets attributable to Shareholders 19,378,666 14,547,649 Amounts receivable on issue of shares 1,990,321 2,513,483 Less: Amounts ayable on cancellation of shares (1,953,086) (526,858) 37,235 1,986,625 Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) 141, ,776 Retained distribution on accumulation shares 106, ,772 Closing net assets attributable to Shareholders 19,663,410 17,308,822 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 Momentum Investment Funds - MI Momentum Focus 3 9

12 MI Momentum Investment Funds - MI Momentum Focus 3 Balance Sheet as at 31 December 2017 ASSETS Fixed assets Investments 17,384,319 16,927,545 Current assets Debtors 17,030 80,811 Cash and bank balances 2,319,896 2,429,661 Total current assets 2,336,926 2,510,472 Total assets 19,721,245 19,438,017 LIABILITIES Investment liabilities Creditors Bank overdrafts (4,944) Other creditors (52,891) (59,351) Total creditors (57,835) (59,351) Total liabilities (57,835) (59,351) Net assets attributable to Shareholders 19,663,410 19,378, MI Momentum Investment Funds - MI Momentum Focus 3

13 MI Momentum Investment Funds - MI Momentum Focus 3 Distribution Table for the eriod ended 31 December 2017 Accumulation Share Distribution Share Distribution Shares Net Equalisation Amount Amount class revenue reinvested reinvested A Interim Grou Grou B Interim^ Grou Grou ^ No grou 2 Accumulation shares held in B Accumulation as at 31 December 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 Momentum Investment Funds - MI Momentum Focus 3 11

14 MI Momentum Investment Funds - MI Momentum Focus 4 Investment Objective The Sub-fund aims to achieve medium to long-term caital growth. Investment Policy The Sub-fund may gain exosure to a broad range of asset classes, including global equities, UK equities, cororate and government bonds, money market instruments, cash and near cash by investing redominantly in a globally diverse mix of collective investment schemes. In doing so, the Sub-fund will target a risk rating factor 4 as determined by an indeendent risk rating body. The risk rofile of the Sub-fund is broadly balanced with between 40% and 60% exosure to equities. Performance is measured over an entire market cycle (the market cycle is a eriod of time from which the market moves from a eriod of increasing rices and strong erformance, to a eriod of weak erformance and falling rices, and then back again), rather than at any one oint in time. Where ossible and where not inconsistent with the Sub-fund s risk rofile, it will aim for a return which is 4% in excess of the consumer rice index over the relevant market cycle. There is no guarantee that this return will be achieved. The Sub-fund may also invest in other transferable securities, cash, near cash, deosits, money market instruments and money market funds. The Sub-fund may use derivatives or forward transactions only for the urose of efficient ortfolio management. Investment Manager s Reort for the eriod ended 31 December 2017 The Momentum Focus Funds combine long term inflation lus objectives with third arty risk rofiling rovided by Distribution Technology. Through the Managed Portfolios we aim to manage the exected volatility of investors ortfolios, while at the same time achieving long term real returns consistent with their financial objectives. Our goals based ortfolio construction is focused on delivering robust outcomes by diversifying across asset classes and strategies, different investment hilosohies and investment managers. Momentum Focus 4 has been risk rated by Distribution Technology as risk rofile 4. In the six months ending December 2017, global equities osted strong returns with every major equity market advancing, and several indices reaching all-time highs, suorted by a favourable economic backdro. During the eriod the MSCI World index returned 6.4% in Sterling terms, taking returns in 2017 to 10.5%. UK equities outerformed during the eriod, osting a 6.8% return and ending 2017 u 12.0%. In commodities, Brent crude oil rallied during the eriod, rising 39.5% in US Dollar terms to USD 66.9/bbl. In fixed income, Treasury yields rose and the yield curve flattened, artly in light of exected inflation rises, with two-year yields rising from 1.38% to 1.89%. Amidst domestic uncertainty, UK 10 year gilt yields fell from 1.26% to 1.19%. Political events continued to have a mixed imact on asset class returns; of articular focus were US tax reforms, which eventually assed the House and the Senate at the end of December, roviding a boost to equities in Q4. Euroe entered a brief sell of olitical turbulence after German Chancellor Angela Merkel failed to secure a majority government, leading to coalition negotiations which eventually broke down. In the UK, Brexit negotiations achieved a major breakthrough after the first hase of negotiations, discussing withdrawal terms, led to an agreement. Lastly, major central banks continued their transition to monetary olicy normalisation with the Federal Reserve and the Bank of England increasing the base rate by 25 basis oints, while the Euroean Central Bank announced lans to hase out quantitative easing. Against this backdro, the Momentum Focus 4 Fund returned 2.0% net of fees over the 6 month eriod to 31 December During the six months, develoed market equities made the largest contribution to erformance, in articular during the final quarter of In terms of relative erformance, allocations to fixed income were a drag on erformance, mainly driven by an underweight allocation to Index Linked Bonds. In addition, manager stock selection within UK equities detracted from erformance. Although we do not exect a reeat of the strong returns in 2017, we believe that equity markets will make further rogress this year. While valuations in many cases are stretched, the underlying fundamentals are strong and the monetary olicy tightening ahead is likely to be extremely gradual. However, there are risks ahead and from these levels longer term returns are likely to be relatively modest. However this cycle is articularly long and we do not see evidence of overheating and a remature downturn. Oortunities for returns outweigh the risks and inevitable eriodic bouts of weakness in equity markets will resent buying oortunities. 12 MI Momentum Investment Funds - MI Momentum Focus 4

15 MI Momentum Investment Funds - MI Momentum Focus 4 Investment Manager s Reort continued Significant Portfolio Changes for the eriod from 1 July 2017 to 31 December 2017 To 10 urchases since 1 July 2017 Cost ishares Core Cororate Bond UCITS ETF GBP Distribution 1,011,176 Male-Brown Abbot Global Infrastructure Fund Institutional Sterling 685,856 US Treasury 0.25% Index Linked ,479 Services Platform - Multi Asset Risk Premia - M1 C (GBP Hedged) 2 xs Leverage 507,162 Neuberger Berman Uncorrelated Strategies - GBP I2 Accumulation 494,000 Muzinich Emerging Markets Short Duration - Hedged GBP Accumulation S 355,525 Allianz Structured Return - P (H2_GBP) 237,288 Ferox Chinook Global Convertible Bond - R GBP Accumulation 219,724 IShares Physical Gold ETC 163,066 US Treasury 0.75% Index Linked ,663 4,494,939 To 10 Sales since 1 July 2017 Proceeds Axa US Short Duration High Yield Bond Z1 (Gross) Accumulation GBP 1,636,372 ishares Core Cororate Bond UCITS ETF GBP Distribution 1,153,669 Westwood Strategic Global Convertible - F GBP Accumulation Hedged 506,248 ishares Cororate Bond 0-5yr UCITS ETF GBP Distribution 467,358 Goldman Sachs EFI Long Short Risk Premia Portfolio Class Z GBP Hedged 437,132 Male-Brown Abbot Global Infrastructure Fund Institutional Sterling 278,822 Hetagon Koernik Global All-Ca Equity - C USD Accumulation 235,456 S&P 500 Index ,609 4,719,667 Significant urchases and sales are defined as the 10 largest urchases and sales of investments, urchases of new securities of fully disosed cash transactions of existing securities excluding cororate actions. MI Momentum Investment Funds - MI Momentum Focus 4 13

16 MI Momentum Investment Funds - MI Momentum Focus 4 Portfolio Statement as at 31 December 2017 Market % of total value net assets Holding Security 2017 Commodities 3.77% (3.36%) 13,874 ishares Gold Producers UCITS ETF USD Accumulation 99, ,032 ishares Physical Gold ETC 1,019, ,119, Emerging Markets Convertibles 3.48% (3.40%) 7,847 RWC Asia Convertibles - B GBP Accumulation* 1,031, Emerging Markets Equities 4.18% (4.01%) 20,850 Dimensional Emerging Markets Value Fund - Accumulation USD* 337, ,498 JPM Emerging Markets Dividend - A (Distribution) GBP* 401, ,272 Sands Caital Emerging Market Growth -A USD Accumulation* 498, ,238, Emerging Markets Fixed Interest 5.70% (4.72%) 9,559 ishares J.P. Morgan $ Emerging Markets Bond UCITS ETF USD Distribution 810, ,000 Muzinich Emerging Markets Short Duration - Hedged GBP Accumulation S* 878, ,688, Euroean Equities 1.52% (1.56%) 106,239 Juiter Euroean Secial Situations Accumulation* 450, Global Equities 16.36% (14.08%) 917,726 F&C Global Equity Market Neutral - 3 Accumulation GBP* 574, ,459 Hetagon Koernik Global All-Ca Equity - C USD Accumulation* 314, ,218 Male-Brown Abbot Global Infrastructure Fund Institutional Sterling* 872, Morgan Stanley - Global Brands A USD * 1, ,008 Neuberger Berman Uncorrelated Strategies - GBP I2 Accumulation* 503, ,485 RWC Income Oortunities - B GBP Accumulation* 2,081, ,047 Serviced Platform - Multi Asset Risk Premia - M1 C (GBP Hedged) 2xs Leverage* 504, ,851, Global Fixed Interest 11.09% (14.64%) 8,956 Ferox Chinook Global Convertible Bond - R GBP Accumulation* 950, ,968 Goldman Sachs Global Strategic Macro Bond Portfolio I GBP - Hedged Accumulation* 420, ,030 ishares Core Cororate Bond UCITS ETF GBP Distribution 1,323, ,961 ishares Cororate Bond 0-5yr UCITS ETF GBP Distribution 528, Westwood Strategic Global Convertibles - F GBP Accumulation Hedged* 66, ,289, Jaanese Equities 1.60% (1.53%) 4,177 Amundi ETF JPX-Nikkei 400 UCITS ETF - JPY 473, Real Estate Investment Trusts 5.03% (3.99%) 917,672 Ediston Proerty Investment 1,004, ,786 Schroder Real Estate Investment Trust 486, ,491, MI Momentum Investment Funds - MI Momentum Focus 4

17 MI Momentum Investment Funds - MI Momentum Focus 4 Portfolio Statement continued Market % of total value net assets Holding Security 2017 UK Equities 27.83% (27.32%) 410,091 CF Lindsell Train UK Equity - Accumulation* 1,616, ,863 ishares Core FTSE 100 UCITS ETF GBP (Distribution) 1,826, ,427,953 Schroder Recovery -Z Accumulation GBP* 2,712, ,983 TB Evenlode Income - C Accumulation* 2,097, ,251, US Fixed Interest 2.78% (7.76%) 229 Allianz Structured Return - P (H2-GBP)* 239, ,204 Axa US Short Duration High Yield Bond ZI (Gross) Accumulation GBP* 586, Axa World Funds US High Yield Bond - I Hedged Caitalisation GBP* , US Government Bonds 9.40% (6.83%) $1,329,600 US Treasury 0.25% Index Linked ,014, $332,500 US Treasury 0.75% Index Linked , $511,900 US Treasury 1.375% Index Linked , $815,000 US Treasury 1.375% , $370,000 US Treasury 2.25% , $215,000 US Treasury 3.75% , Derivatives 0.24% (0.26%) 2,786, Forward Currency contracts 0.16% (0.14%)^ Sold US$4,881,000 Bought 3,653,091 ( ) 47, Otions 0.08% (0.12%)^^ 2 S&P 500 Index S&P 500 Index , S&P 500 Index , S&P 500 Index , S&P 500 Index , , Investment assets 27,571, Net other assets 2,080, Net assets 29,651, 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 * Collective Investment Schemes ermitted under COLL, not listed on any exchange. ^ At the balance sheet date, all forward currency contracts were executed with one counterarty, JP Morgan for the urose of Effective Portfolio Management. ^^ At the balance sheet date, otions were executed with one counterarty, JP Morgan. Total urchases for the eriod: 5,203,595 Total sales for the eriod: 4,719,667 MI Momentum Investment Funds - MI Momentum Focus 4 15

18 MI Momentum Investment Funds - MI Momentum Focus 4 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^ Distributions Retained distributions on accumulation shares Closing net asset value er share ^After direct transaction costs of Performance Return after charges 2.42% 10.19% 5.93% 3.89% Other information Closing net asset value 29,651,840 28,494,946 15,943,552 12,694,222 Closing number of shares 21,240,358 20,906,380 12,888,721 10,871,432 Oerating charges 1.44% 1.39% 1.49% 1.49% Ongoing oerating charges* 1.44% 1.40% Direct transaction costs 0.00% 0.00% 0.00% 0.00% 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^ Distributions Retained distributions on accumulation shares Closing net asset value er share ^After direct transaction costs of Performance Return after charges % 3.96% Other information Closing net asset value 35,580 Closing number of shares 34,225 Oerating charges 0.00% 1.49% Ongoing oerating charges* 0.00% 1.49% Direct transaction costs 0.00% 0.00% Prices Highest share rice Lowest share rice Launch rice at 15 August ^^ On 22 January 2016, as art of the Retail Distribution Review the B Accumulation share class was transferred to the A Accumulation share class. Return after charges at date of transfer was -5.39%. The Investment Manager rebated the Sub-fund s oerating charges in order for them not to exceed 1.49% of the average net asset value of the Sub-fund for these accounting years. *The ACD believes that this ongoing oerating charge is reresentative of charges going forward. 16 MI Momentum Investment Funds - MI Momentum Focus 4

19 MI Momentum Investment Funds - MI Momentum Focus 4 Comarative Tables 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 by annualising the exenses incurred 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 oening net asset value er share as a % of the oening net asset value er share. The Sub-fund invests in collective investment schemes, the exenses incurred by these schemes in relation to the Sub-fund (synthetic ongoing charge) are included within the oerating charges. 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, Tyically higher rewards, lower risk higher risk The Sub-fund is ranked 4 because funds of this tye have exerienced average 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: Investing in other funds may exose investors to increased risk due to less strict regulations and the use of derivatives. The other funds can themselves invest in assets such as bonds, comany shares, cash and currencies. The objectives and risk rofiles of these underlying funds may not be fully in line with those of this Sub-fund. Where this Sub-fund invests in bonds, there is a risk that bond issuers fail to meet reayments. This is usually a greater risk for bonds that roduce a higher level of income. Changes in interest rates, inflation and the creditworthiness of the bond issuers may also affect the bonds market value. Investing overseas can bring additional returns and sread 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. The Sub-fund will target a risk rating factor 4 as determined by an indeendent agency, Distribution Technology, that rovides such ratings. This rating is on a scale of 1-10, and takes account of risk targets and other factors as well as ast data. It is not related to the risk ranking that aears on the 1-7 scale above, which is based solely on ast data. 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 Momentum Investment Funds - MI Momentum Focus 4 17

20 MI Momentum Investment Funds - MI Momentum Focus 4 Statement of Total Return for the eriod ended 31 December Income Net caital gains 562, ,420 Revenue 257, ,695 Exenses (119,933) (74,917) Interest ayable and similar charges (50) (2) Net revenue before taxation 137,423 82,776 Taxation (69) (1,898) Net revenue after taxation 137,354 80,878 Total return before distributions 699,420 1,075,298 Distributions (188,426) (117,939) Change in net assets attributable to Shareholders from investment activities 510, ,359 Statement of Change in Net Assets Attributable to Shareholders for the eriod ended 31 December Oening net assets attributable to Shareholders 28,494,946 15,943,552 Amounts receivable on issue of shares 3,067,010 4,231,672 Less: Amounts ayable on cancellation of shares (2,610,701) (908,125) 456,309 3,323,547 Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) 510, ,359 Retained distribution on accumulation shares 189, ,282 Closing net assets attributable to Shareholders 29,651,840 20,360,740 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. 18 MI Momentum Investment Funds - MI Momentum Focus 4

21 MI Momentum Investment Funds - MI Momentum Focus 4 Balance Sheet as at 31 December 2017 ASSETS Fixed assets Investments 27,571,621 26,630,957 Current assets Debtors 24, ,596 Cash and bank balances 2,095,085 1,810,248 Total current assets 2,119,613 1,914,844 Total assets 29,691,234 28,545,801 LIABILITIES Investment liabilities Creditors Bank overdrafts (1) Other creditors (39,393) (50,855) Total creditors (39,394) (50,855) Total liabilities (39,394) (50,855) Net assets attributable to Shareholders 29,651,840 28,494,946 MI Momentum Investment Funds - MI Momentum Focus 4 19

22 MI Momentum Investment Funds - MI Momentum Focus 4 Distribution Table for the eriod ended 31 December 2017 Accumulation Share Distribution Share Distribution Shares Net Equalisation Amount Amount class revenue reinvested reinvested A Interim Grou Grou 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. 20 MI Momentum Investment Funds - MI Momentum Focus 4

23 MI Momentum Investment Funds - MI Momentum Focus 5 Investment Objective The Sub-fund aims to achieve medium to long term caital growth. Investment Policy The Sub-fund may gain exosure to a broad range of asset classes, including global equities, UK equities, cororate and government bonds, money market instruments, cash and near cash by investing redominantly in a globally diverse mix of collective investment schemes. In doing so, the Sub-fund will target a risk rating factor 5 as determined by an indeendent risk rating body. The risk rofile of the Sub-fund is moderately aggressive with between 50% and 80% exosure to equities. Performance is measured over an entire market cycle (the market cycle is a eriod of time from which the market moves from a eriod of increasing rices and strong erformance, to a eriod of weak erformance and falling rices, and then back again), rather than at any one oint in time. Where ossible and where not inconsistent with the Sub-fund s risk rofile, it will aim, after fees and exenses of the Subfund have been deducted, for a return which is 5% in excess of the consumer rice index over the relevant market cycle. There is no guarantee that this return will be achieved. The Sub-fund may also invest in other transferable securities, cash, near cash, deosits, money market instruments and money market funds. The Sub-fund may use derivatives or forward transactions only for the urose of efficient ortfolio management. Investment Manager s Reort for the eriod ended 31 December 2017 The Momentum Focus Funds combine long term inflation lus objectives with third arty risk rofiling rovided by Distribution Technology. Through the Managed Portfolios we aim to manage the exected volatility of investors ortfolios, while at the same time achieving long term real returns consistent with their financial objectives. Our goals based ortfolio construction is focused on delivering robust outcomes by diversifying across asset classes and strategies, different investment hilosohies and investment managers. Momentum Focus 5 has been risk rated by Distribution Technology as risk rofile 5. In the six months ending December 2017, global equities osted strong returns with every major equity market advancing, and several indices reaching all-time highs, suorted by a favourable economic backdro. During the eriod the MSCI World index returned 6.4% in Sterling terms, taking returns in 2017 to 10.5%. UK equities outerformed during the eriod, osting a 6.8% return and ending 2017 u 12.0%. In commodities, Brent crude oil rallied during the eriod, rising 39.5% in US Dollar terms to USD 66.9/bbl. In fixed income, Treasury yields rose and the yield curve flattened, artly in light of exected inflation rises, with two-year yields rising from 1.38% to 1.89%. Amidst domestic uncertainty, UK 10 year gilt yields fell from 1.26% to 1.19%. Political events continued to have a mixed imact on asset class returns; of articular focus were US tax reforms, which eventually assed the House and the Senate at the end of December, roviding a boost to equities in Q4. Euroe entered a brief sell of olitical turbulence after German Chancellor Angela Merkel failed to secure a majority government, leading to coalition negotiations which eventually broke down. In the UK, Brexit negotiations achieved a major breakthrough after the first hase of negotiations, discussing withdrawal terms, led to an agreement. Lastly, major central banks continued their transition to monetary olicy normalisation with the Federal Reserve and the Bank of England increasing the base rate by 25 basis oints, while the Euroean Central Bank announced lans to hase out quantitative easing. Against this backdro, the Momentum Focus 5 Fund returned 2.8% net of fees over the 6 month eriod to 31 December During the six months, develoed market equities made the largest contribution to erformance, in articular during the final quarter of In terms of relative erformance, allocations to fixed income were a drag on erformance, mainly driven by an underweight allocation to Index Linked Bonds. In addition, manager stock selection within UK equities detracted from erformance. Although we do not exect a reeat of the strong returns in 2017, we believe that equity markets will make further rogress this year. While valuations in many cases are stretched, the underlying fundamentals are strong and the monetary olicy tightening ahead is likely to be extremely gradual. However, there are risks ahead and from these levels longer term returns are likely to be relatively modest. However this cycle is articularly long and we do not see evidence of overheating and a remature downturn. Oortunities for returns outweigh the risks and inevitable eriodic bouts of weakness in equity markets will resent buying oortunities. MI Momentum Investment Funds - MI Momentum Focus 5 21