GLOBAL EMERGING MARKETS UNIT TRUST

Transcription

1 GLOBAL EMERGING MARKETS UNIT TRUST FOR THE PERIOD ENDED 30 SEPTEMBER 2018

2 Manager St. James's Place Unit Trust Group Limited PO Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: (Authorised and regulated by the Financial Conduct Authority) Directors of the Manager A. M. Croft I. S. Gascoigne C. G. Gentle D. J. Lamb Investment Adviser Henderson Global Investors Limited 201 Bishopsgate London, EC2M 3AE United Kingdom (Authorised and regulated by the Financial Conduct Authority) Trustee National Westminster Bank Plc 250 Bishopsgate London, EC2M 4AA United Kingdom As part of an internal reorganisation, trustee and depositary services provided to the St. James s Place range of authorised unit trusts by National Westminster Bank plc will be transferred to the newly established NatWest Trustee and Depositary Services Limited. The change is scheduled to be completed by the end of December (Authorised and regulated by the Financial Conduct Authority) Registrar DST Financial Services Europe Limited DST House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Conduct Authority) Independent Auditors PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh, EH3 8EX United Kingdom Prospectus and Manager's Reports Copies of the up to date Prospectus (Scheme Particulars) and latest Manager's Report and Financial Statements for the range of St. James's Place Unit Trusts can be requested from a member of the St. James's Place Partnership or, at any time during normal business hours, from the Administration Centre at PO Box 9034, Chelmsford CM99 2XA. Freephone:

3 Report of the Manager The Report of the Manager consists of The Trust, Investment Objectives & Policy, The Trust's Performance, Risk and Reward Profile, Investment Adviser's Comments and Portfolio Statement. The Trust is an authorised Unit Trust scheme under section 243 of the Financial Services and Markets Act (2000) and is constituted by a Trust Deed dated 22 March The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective Investment Scheme Sourcebook and is classified as a UCITS Scheme. Investment Objectives & Policy The investment objective of the Scheme is to achieve long-term capital appreciation. The Scheme aims to achieve this objective by principally investing worldwide in equities in emerging economies, including those of companies listed on developed market exchanges whose activities predominantly take place in emerging market countries. The Scheme is also permitted to invest in other types of transferable securities, units and/or shares in collective investment schemes, money market instruments, cash and near cash, and deposits. The Scheme is permitted to invest in derivatives and forward transactions for the purposes of efficient portfolio management (including hedging). It is the Manager's intention that the assets of the Unit Trust will be invested so that the Unit Trust will be eligible for inclusion in an ISA. The Trust's Performance The performance of the Trust since its launch in April 2010, over the five year period since September 2013 and over the period under review is shown below. L Income units (offer to offer) L Accumulation units (offer to offer) H Accumulation units (offer to offer)* Y Accumulation units (offer to offer)* Source: Lipper for Fund returns 06/04/10 to 30/09/13 to 31/03/18 to 30/09/18 30/09/18 30/09/18 % change % change % change * Class H Accumulation and Y Accumulation units were made available on 1 December 2016 and the performance shown is from that date. REMEMBER THAT THE PRICE OF UNITS AND REVENUE FROM THEM MAY GO DOWN AS WELL AS UP. PLEASE BE AWARE THAT PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Risk and Reward Profile The synthetic risk and reward indicator for the St. James's Place Global Emerging Markets Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 5. It was calculated using performance data up to 5 February The risk category is recalculated weekly and during the year under review, the risk category did not change. 2

4 Report of the Manager (continued) Investment Adviser's Comments Following a period of optimism and rising valuations, appetite for the emerging market asset class waned over the period. This was driven partly by fears of an escalating trade war between China and America, concerns of a sovereign default in Argentina and political uncertainty in Brazil. The strategy produced a negative return but outperformed wider emerging market equities. The outperformance during this recent period was related in part to the portfolio s lack of exposure to the IT sector. We continue to have limited exposure to Chinese equities and find ourselves to be interested observers watching from the sidelines at this time. We note with interest that Jack Ma, the founder of Alibaba, has decided to move aside and retire as Alibaba s chairman next year. Tiger Brands, the South African-listed food manufacturing and consumer goods company was a significant negative contributor to returns during the period. It had suffered an adverse event in its meat processing business during the early part of this year and the impact has continued to linger. The business accounts for less than 3% of profits but its involvement in a listeria crisis has led to a class action law suit. We believe the business has the financial strength and management team to cushion this blow and, on a long-term view, we think the franchise, its returns and the stock multiple can recover from what are now low levels. We added to the stock and it remains one of the portfolio s largest holdings. Tata Consulting Services (TCS), the Indian information technology company, was the strongest positive contributor to returns. Demand for digital services, such as cloud computing and analytics by enterprise customers, is driving revenue growth and the business continues to demonstrate strong execution in this area. It does appear that there are several fault lines opening up across the emerging markets asset class; these should remind investors of the value of those businesses that have allocated capital and managed their balance sheets sensibly. We are mindful of the need to stick to our determination not to compromise on quality, to maintain a long-term approach and to apply a strict valuation discipline. With a long-term perspective, we remain positive about the opportunities for equity investors created by the structural trend of rising living standards in some parts of the developing world. Henderson Global Investors Limited 12 October

5 Comparative Table as at 30 September 2018 (unaudited) Net Asset Value and Ongoing Charges Figure 30/09/18 31/03/18 31/03/17 L Income Closing net asset value ( 000) 4,898 5,045 4,758 Closing number of units 3,161,553 3,127,719 3,036,196 Closing net asset value per unit (p) Operating charges* 1.92% 1.92% 1.85% 30/09/18 31/03/18 31/03/17 L Accumulation Closing net asset value ( 000) 840, , ,364 Closing number of units 530,255, ,982, ,590,859 Closing net asset value per unit (p) Operating charges* 1.92% 1.92% 1.86% 30/09/18 31/03/18 31/03/17 H Accumulation Closing net asset value ( 000) Closing number of units 10,859 10,859 6,192 Closing net asset value per unit (p) Operating charges* 2.42% 2.42% 2.37% 30/09/18 31/03/18 31/03/17 Y Accumulation Closing net asset value ( 000) 1, Closing number of units 937, ,268 12,553 Closing net asset value per unit (p) Operating charges* 1.23% 1.23% 1.17% H Accumulation and Y Accumulation units were made available on 1 December *Operating charges are prepared using the same methodology as the ongoing charges appearing in the KIID, based on the information in this report. 4

6 Portfolio Statement as at 30 September 2018 (unaudited) Security Holdings Market Value 000 % of Net Assets AUSTRALIA (2.50%) 19, Newcrest Mining 1,842,027 19, BERMUDA (2.28%) 13, China Resources Gas 1,724,000 5, Yue Yuen Industrial 3,755,500 7, BRAZIL (11.78%) 42, Banco Bradesco 3,288,712 16, Duratex 9,249,046 16, Engie Brasil Energia 1,507,447 10, Natura Cosmeticos 43, CAYMAN ISLANDS (0.99%) 9, Greatview Aseptic Packaging 20,257,000 9, CHILE (7.08%) 55, Aguas Andinas 60,650,955 25, Cia Cervecerias Unidas ADR 1,426,136 30, CHINA (0.60%) 4, Fuyao Glass Industry 1,691,200 4, CZECH REPUBLIC (1.62%) 9, Komercni banka 291,793 9, EGYPT (1.68%) 20, Commercial International Bank Egypt GDR 5,821,475 20, HONG KONG (0.00%) 16, China Resources Beer 5,268,000 16, INDIA (12.91%) 150, Aditya Birla Capital 12,553,651 15, Cipla 3,317,686 22, Grasim Industries 2,302,446 24, Housing Development Finance 796,353 14, Infosys 3,965,332 30, Tata Consultancy Services 1,845,550 42, IRELAND (6.60%) 37, Deutsche Global Liquidity Series 37,666,740 37, MEXICO (2.56%) 47, Fomento Economico Mexicano ADR 638,711 47, NETHERLANDS (2.87%) 15, Heineken 215,260 15, NIGERIA (1.26%) 13, Nestle Nigeria 4,462,382 13, PHILIPPINES (1.13%) 17, Universal Robina 8,575,190 17, SOUTH AFRICA (12.81%) 109, AVI 1,297,937 7, Remgro 2,681,916 28, Shoprite 1,606,448 16, Standard Bank 1,335,605 12, Tiger Brands 3,139,007 44,

7 Portfolio Statement as at 30 September 2018 (unaudited) Security Holdings Market Value 000 (continued) % of Net Assets SOUTH KOREA (7.05%) 61, LG 855,455 42, LG Household & Health Care 10,375 9, Samsung Fire & Marine Insurance 50,446 9, SWITZERLAND (2.03%) 14, Coca-Cola HBC 548,539 14, TAIWAN (12.28%) 111, Asustek Computer 4,564,000 30, Giant Manufacturing 4,506,000 14, Uni-President Enterprises 33,500,000 66, THAILAND (2.40%) 14, Kasikornbank 'A' Shares 2,763,100 14, UNITED KINGDOM (4.66%) 30, Cairn Energy 3,588,210 8, Unilever 526,674 22, UNITED STATES (0.86%) 6, Cognizant Technology Solutions 107,105 6, Investment Assets 822, Total other assets (net) 24, Net assets 847, Comparative figures shown in brackets relate to 31 March All investments held are listed, unless otherwise stated. Stocks shown as ADRs and GDRs represent American Depositary Receipts and Global Depositary Receipts. 6

8 Material Portfolio Changes Cost Purchases 000 Deutsche Global Liquidity Series 61,059 Cipla 23,420 Fomento Economico Mexicano ADR 21,178 Remgro 20,829 China Resources Beer 16,477 Shoprite 13,409 Aditya Birla Capital 12,050 LG 11,082 Infosys 10,837 Tiger Brands 10,363 Proceeds Sales 000 Deutsche Global Liquidity Series 77,698 Natura Cosmeticos 13,459 Tata Consultancy Services 11,718 Banco Bradesco 10,459 Empresa Nacional de Telecomunicaciones 8,651 Kasikornbank 'A' Shares 8,340 Heineken 7,805 WEG 7,434 Housing Development Finance 7,411 Delta Electronics 7,277 Stocks shown as ADRs represent American Depositary Receipts. 7

9 Statement of Total Return for the period 01 April 2018 to 30 September 2018 (unaudited) Income Net capital losses Revenue Expenses Interest payable and similar charges Net revenue before taxation Taxation Net revenue after taxation Total return before equalisation Equalisation Change in net assets attributable to unitholders from investment activities 01/04/18 to 30/09/18 01/04/17 to 30/09/ (40,006) (4,623) 16,110 11,916 (8,103) (7,575) - - 8,007 4,341 (2,111) (1,450) 5,896 2,891 (34,110) (1,732) 187 (9) (33,923) (1,741) Statement of Change in Net Assets Attributable to Unitholders for the period 01 April 2018 to 30 September 2018 (unaudited) 01/04/18 to 30/09/18 01/04/17 to 30/09/ Opening net assets attributable to unitholders 822, ,152 Movement due to creation and cancellation of units: Amounts receivable on creation of units 58,730 16,198 Amounts payable on cancellation of units (561) (26,918) 58,169 (10,720) Change in net assets attributable to unitholders from investment activities (see above) (33,923) (1,741) Closing net assets attributable to unitholders 847, ,691 Comparative information is provided for the Statement of Change in Net Assets Attributable to Unitholders. Since this information is for the prior interim period, the net assets at the end of that period do not correspond to the net assets at the start of the current period. 8

10 Balance Sheet as at 30 September 2018 (unaudited) Assets Investments Current assets Debtors Cash and bank balances Total assets Liabilities Creditors Bank overdrafts Distribution payable Other creditors Total liabilities Net assets attributable to unitholders 30/09/18 31/03/ , ,916 11,483 2,633 16,108 18, , ,690 - (150) - (6) (3,186) (3,726) (3,186) (3,882) 847, ,808 Accounting and Distribution policies for the period 01 April 2018 to 30 September 2018 (unaudited) Basis of accounting The Financial Statements have been prepared under the historical cost basis, as modified by the revaluation of investments, in compliance with the Financial Conduct Authority's Collective Investment Schemes Sourcebook. They have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland FRS 102) and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the Investment Management Association May 2014 (IMA SORP 2014). The financial statements are prepared on the going concern basis. Directors of the Managers' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. C. G. Gentle D. J. Lamb London 29 November

11 General Information Unit Dealings Dealings on the Trust take place on a daily basis. Purchase or sale instructions can be made by telephone or in writing to St. James's Place Unit Trust Group Limited, PO Box 9034, Chelmsford, CM99 2XA, United Kingdom, freephone: The Manager adopts a policy of forward pricing, i.e. the order will be transacted on the dealing day following receipt of the client's instructions, or if received before noon, on that dealing day. In the case of telephone purchases of units from the Manager, settlement must be by return of post after receipt of the contract note. In the case of telephone redemptions, the proceeds will not become payable until the receipt at the Administration Centre of a written request. A contract note confirming the subscription or redemption price and the number of units involved will be forwarded, together with a cancellation notice, where appropriate, on the next business day. The most recent issue and redemption prices for Class H and Class L Units will be published on the Manager s website: Prices for all Units are available by calling the Administration Centre on Minimum Investment Class H and Class L - The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment is 150 and the minimum monthly increment is 50. The minimum annual investment is 1,500 and the minimum annual increment is 500. After any withdrawal the minimum holding value is 500. Class Y The minimum lump sum investment is 10,000,000 thereafter the minimum additional investment is 10,000. After any withdrawal the minimum holding value is 1,000,000. Please note further investment restrictions also apply to Class H and Class Y Units as detailed in the Prospectus. Management Charges The Trust Deed permits the following management charges which are receivable by the Manager: (a) A Preliminary Charge of 5 per cent which is included in the offer price of the Units. For Class Y units the Preliminary Charge is 0 per cent. (b) An Annual Management Charge at a rate of 1.37 per cent for Class L Income and Accumulation Units; 1.87 per cent for Class H Accumulation Units; 0.68 per cent for Class Y Accumulation Units of the value of the Trust. Income Distributions Income distributions are made annually on or before the 31 May. Accumulation Distributions Revenue due to accumulation unitholders is reflected in the price of their units. Tax Certificates Income unitholders that receive income distributions by direct credit and accumulation unitholders (where the distribution income is reinvested) receive an annual consolidated tax voucher in May with all the relevant payment and tax information required to complete a tax return. Tax certificates will be enclosed if income unitholders receive payment by cheque. Capital Gains Tax The Trust is not liable to tax on capital gains and any individual holding units will not be liable to capital gains tax unless the total chargeable gains for the tax year 2018/2019 exceed 11,700 (2017/ ,300). To calculate capital gains on accumulation units, the total amount of reinvested net revenue (shown on the annual tax credit vouchers) should be added to the base cost of the units purchased. Unitholders should consult their professional advisers for any advice regarding their tax position. 10

12 St. James s Place Unit Trust Group Ltd is authorised and regulated by the Financial Conduct Authority. St. James s Place Unit Trust Group Ltd Registered Office: St. James s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number Perivan Financial Print Global Emerging Markets (11/18)