PHOENIX UNIT TRUST MANAGERS MANAGER S INTERIM REPORT PUTM NORTH AMERICAN UNIT TRUST. For the half year: 1 October 2015 to 31 March 2016

Transcription

1 PHOENIX UNIT TRUST MANAGERS MANAGER S INTERIM REPORT For the half year: 1 October 2015 to 31 March 2016 PUTM NORTH AMERICAN UNIT TRUST

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3 Contents Investment review 2-3 Portfolio of investments 4-6 Top ten purchases and sales 7 Statistical information 8-10 Statements of total return & change in unitholders funds 11 Balance sheet 12 Distribution table 13 Corporate information 14 1

4 Investment review Dear Investor Welcome to the PUTM North American Unit Trust interim report for the six months to 31 March Performance Review Over the review period the PUTM North American Unit Trust returned 9.7% compared to a return of 13.7% from its sector average. (Source: Lipper, bid to bid, net income reinvested for six months to 31/03/16). In the table below, you can see how the Fund performed against its sector average over the last five discrete one year periods. Standardised Past Performance Mar Mar Mar Mar Mar % growth % growth % growth % growth % growth PUTM North American Unit Trust Sector Average Source: Lipper, bid to bid, net income reinvested to end March for each year. Past performance is not a guide to future performance. The value of units and the income from them can go down as well as up and is not guaranteed. You may not get back the full amount invested. Please note that all past performance figures are calculated without taking the initial charge into account. 2

5 Investment review Portfolio and Market Review It was a highly volatile period. Weakening global macroeconomic data, recession fears and falling oil prices drove a vicious sell-off in the early part of 2016, and at low point in mid-february the S&P 500 was down more than 10%. However, positive US economic data, a more dovish Fed and a rebound in oil prices allowed the market to recover these losses into the end of the period. Market Outlook and Fund Strategy Bottom-up stock selection will remain the major focus and monitoring and managing of thematic risk will be increasingly important in the current market conditions. However, the investment emphasis will remain on investing in our best investment ideas. Individual stocks that underperformed included Alliance Data Systems as rising levels of debt owed to the company have caused investors to grow concerned about its credit quality. The move by the Federal Reserve to lower interest rate expectations proved detrimental for financial holdings; notably, Charles Schwab. Biotech company Celgene was another underperformer. The biotech sector itself was weak while the company s guidance for 2017 raised questions. However, there were positive contributions to returns from a number of stocks. Martin Marietta, the building materials company, benefited from the strong outlook for aggregates. TJX, the discount retailer, displayed strong comparable sales and market share gains. We made a number of purchases during the period. We added General Dynamics, the aerospace and defence company, as we believe it is attractively valued given the outlook for the industry. We also purchased McDonald s on our positive view for same-store sales. Finally, we reduced our underweight position in Microsoft as we envisage expense control and progress on its cloud capabilities progressing. Sales included Bank of America; there is limited valuation support for the share price, especially at a time of rising credit losses. The company s higher sensitivity to interest rates is also not in its favour at present. 3

6 Portfolio of investments Investments held at 31 March 2016 Market Percentage of value total net assets Holding Investment % United States (30/09/15: 91.36%) Basic Materials (30/09/15: 2.09%) 1.55 Chemicals 2,992 Ashland 229, ,706 W.R. Grace & Co 184, Consumer Goods (30/09/15: 27.71%) Automobiles & Parts 4,624 Visteon 258, Beverages 6,723 PepsiCo 479, Food Producers 8,695 Kraft Heinz Co 476, ,577 Mondelez International 353, Household Goods 12,670 Newell Rubbermaid 390, Leisure Goods 11,475 Activision Blizzard 271, ,497 Electronic Arts 391, Personal Goods 23,095 Hanesbrands 456, ,095 Kimberly-Clark 385, Tobacco 12,970 Altria Group 563, Food & Drug Retailers 8,221 CVS Health 593, General Retailers 2,043 Advance Auto Parts 232, ,020 Amazon.com 423, ,883 Dollar Tree Stores 224, ,858 Home Depot 635, ,630 TJX Companies 471, Media 8,391 Comcast A 354, Travel & Leisure 7,919 Delta Airlines 271, ,199 McDonald s 366, Financials (30/09/15: 14.99%) Banks 11,802 Citigroup 343, ,282 First Republic Bank 524, ,720 Wells Fargo & Co 294,

7 Portfolio of investments Investments held at 31 March 2016 Market Percentage of value total net assets Holding Investment % Non-Life Insurance 12,240 AIG 463, ,109 Hartford Financial Services 324, Financial Services 4,886 Blackhawk Network Holdings 115, ,957 Charles Schwab 312, ,709 Evercore Partners A 207, ,810 OneMain Holdings 106, Real Estate Investment Trusts 8,319 American Tower 590, ,911 Equinix Real Estate Investment Trust 435, Healthcare (30/09/15: 15.49%) Healthcare Equipment & Services 3,233 Aetna 256, ,870 Boston Scientific 482, ,443 UnitedHealth Group 400, Pharmaceuticals & Biotechnology 9,937 Abbvie 393, ,301 Amgen 342, ,833 Bristol-Myers Squibb 433, ,927 Celgene 543, ,348 Eli Lilly & Co 366, ,136 Gilead Sciences 391, ,117 Pfizer 503, ,084 Vertex Pharmaceuticals 113, Industrials (30/09/15: 9.00%) Construction & Materials 13,347 Fortune Brands Home & Security 517, ,130 Martin Marietta Materials 336, ,619 Vulcan Materials 118, Aerospace & Defence 3,402 General Dynamics 311, ,159 Rockwell Automation 267, Industrial Engineering 13,341 Allison Transmission Holding 248, Industrial Transportation 3,644 Kansas City Southern 217, Support Services 2,249 Alliance Data Systems 337, ,720 FleetCor Technologies 381,

8 Portfolio of investments 6 Investments held at 31 March 2016 Market Percentage of value total net assets Holding Investment % Energy (30/09/15: 6.11%) 5.78 Oil & Gas Producers 2,938 Concho Resources 207, ,512 EOG Resources 281, ,376 Exxon Mobil 256, ,393 Hess 155, Oil Equipment & Services 10,534 Halliburton 263, Electricity 12,940 CMS Energy 379, Technology (30/09/15: 15.97%) Software & Computer Services 638 Alphabet Inc 340, ,311 Alphabet Inc C 683, ,997 Cognizant Technology Solutions 259, ,494 Facebook 756, ,389 First Data 193, ,727 Hewlett Packard 232, ,608 Microsoft 405, ,714 Palo Alto Networks 192, ,726 Salesforce.com 398, Technology Hardware & Equipment 11,008 Apple 837, ,599 Cavium 240, Bermuda (30/09/15: 1.49%) 0.87 Financial Services 8,324 Lazard 230, Ireland (30/09/15: 2.22%) 2.66 Electronic & Electrical Equipment 8,513 Allegion 377, Industrial Engineering 7,682 Ingersoll-Rand 331, Netherlands (30/09/15: 1.19%) 0.00 Singapore (30/09/15: 1.79%) 2.39 Technology Hardware & Equipment 5,841 Broadcom 636, Portfolio of investments 26,352, Net other assets 283, Net assets 26,635, All investments are listed on recognised stock exchanges and are approved securities within the meaning of the FCA rules unless otherwise stated.

9 Top ten purchases and sales For the half year ended 31 March 2016 Purchases Cost Pfizer 525,797 American International Group 503,367 Microsoft 385,025 Kimberly-Clark 359,243 McDonalds 346,875 Comcast 333,872 General Dynamics 315,392 Hartford Financial Services Group 293,577 Rockwell Collins 254,611 Cognizant Technology Solutions 244,245 Sales Proceeds Time Warner 531,143 Goldman Sachs 466,642 Mastercard 372,020 Bank of America 349,636 Fedex 343,755 Merck & Co 336,817 Intuit 286,239 Cardinal Health 274,302 McKesson HBOC 252,327 Anadarko Petroleum 229,632 Total purchases 5,933,283 Total sales 6,746,617 7

10 Statistical information Performance record Income* Accumulation Lowest Highest Lowest Highest redemption issue redemption issue price price price price Year to 31 December pence pence pence pence , , , , , , , , , , January to 31 March 2016 n/a n/a 1, , *The income share class was closed on 31/10/2015 Distribution record Net distribution pence per unit** Year to 31 December Income Accumulation January to 31 March 2016 n/a ** paid during the period Accounting period statistics Total Net asset net asset Units in value per As at 30 September value ( ) issue unit in pence 2013 Income Accumulation 25,345,575 2,310,357 1, Income Accumulation 26,530,386 2,108,739 1, Income 22,364 2,000 1, Accumulation 25,007,646 1,919,633 1, ** Income Accumulation 26,635,797 1,822,307 1, ** As at 31 March

11 Statistical information Investment objective The objective of the Fund is to maximise the long term return, mainly through capital growth, by investment in a portfolio of securities in North America. Investment policy The Fund will mainly invest in equity shares of companies quoted in the United States and Canada. The Fund may hold cash and near cash assets where reasonably necessary to fund redemption of units, or for the efficient management of the Fund, or for purposes ancillary to the objectives of the Fund. It may borrow providing such borrowing is on a temporary basis, and does not exceed the limits applicable to the Fund. Revenue distribution and pricing Units of the Fund are available as Accumulation units (where revenue is reinvested to enhance the unit price). There will be two potential distributions in each accounting year: an interim distribution as at 31 March and a final distribution as at 30 September. At each distribution the net revenue after deduction of expenses, arising in the preceding six months, from the investments of the Fund is apportioned amongst the unitholders. Unitholders receive a tax voucher giving details of the distribution and the Manager s Report no later than two months after these dates. Ongoing charges figure The Ongoing Charges Figure (OCF) shows the operating expenses, annualised, of each unit class as a percentage of average net assets of that class for the period. Income Accumulation % % As at 31 March 2016 n/a 1.15 As at 31 March

12 Statistical information 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. fi Typically lower rewards, Typically higher rewards, lower risk higher risk fi This Fund is ranked at 5 because funds of this type have experienced medium to high rises and falls in value in the past. Although this is a high risk ranking it is not the highest. The above figure applies to the following unit class: Accumulation 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. Please note the Fund s risk category may change in the future. The indicator does not take into account the following risks of investing in this Fund: Investing overseas can bring additional returns and spread risk to different markets. There are risks, however, that changes in currency rates will reduce the value of your investment. The Fund may use derivatives to reduce risk or cost or to generate additional capital or income at low risk, or to meet its investment objective. For more information on the Risk and Reward profiles of our Funds, please refer to the most up to date relevant fund and Unit Class Key Investor Information Documents (KIIDs). These are available online at Directors statement This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued and amended by the Financial Conduct Authority. 18 May 2016 Director Director 10

13 Interim financial statements (unaudited) For the half year ended 31 March 2016 Statement of total return 31/03/16 31/03/15 Income Net capital gains 2,976,980 4,160,161 Revenue 212, ,889 Expenses (145,716) (147,008) Interest payable and similar charges (24) (2) Net revenue before taxation 66,671 50,879 Taxation (30,095) (24,186) Net revenue after taxation 36,576 26,693 Total return before distributions 3,013,556 4,186,854 Distributions (39,763) (26,697) Change in unitholders funds 2,973,793 4,160,157 Statement of change in unitholders funds 31/03/16 31/03/15* Opening net assets 25,030,010 26,530,386 Amounts receivable on issue of units 44,785 24,369 Amounts payable on cancellation of units (1,451,519) (759,659) (1,406,734) (735,290) Change in unitholders funds 2,973,793 4,160,157 Retained distributions on accumulation units 38,728 26,495 Closing net assets 26,635,797 29,981,748 *Please note that the comparative figures are for the comparative interim period. The brought forward net assets for the current period do not, therefore equal the carried forward figure in the comparative. 11

14 Interim financial statements (unaudited) As at 31 March 2016 Balance sheet 31/03/16 30/09/15 Assets Fixed assets: Investments 26,352,402 24,541,964 Current assets: Debtors 148,905 22,680 Cash and bank balances 180, ,156 Total current assets 329, ,836 Total assets 26,682,236 25,092,800 Liabilities: Creditors: Other creditors (46,439) (62,776) Distribution payable on income units (14) Total liabilities (46,439) (62,790) Net assets 26,635,797 25,030,010 Unitholders funds 26,635,797 25,030,010 Notes to the interim financial statements Accounting policies The interim financial statements have been prepared in accordance with the Statement of Recommended Practice for Authorised Funds issued by The Investment Association (formerly the Investment Management Association) in May Previously the requirements for the Statement of Recommended Practice (SORP) issued by the Investment Management Association in October 2010 had been applied. The impact is minimal for an interim reporting period and limited to some presentational amendments to the Statement of Total Return, Statement of Change in Unitholders Funds and the Balance Sheet. The presentational amendments had no impact on the total return or net assets in either the current or preceding year. The full disclosures under the new SORP will first be presented for the annual financial statements prepared for the year to 30 September Unless otherwise stated all other accounting policies applied are consistent with those of the Annual Report for the year ended 30 September 2015 and are described in those financial statements. Post balance sheet event Please note the Manager of the Scottish Mutual Funds has changed from Scottish Mutual Investment Managers Limited to Phoenix Unit Trust Managers Limited (PUTM) with effect from 2 November As a result the Fund was re-named PUTM North American Fund. 12

15 Distribution tables For the half year ended 31 March 2016 Interim distribution in pence per unit Group 1: units purchased prior to 1 October 2015 Group 2: units purchased 1 October 2015 to 31 March pence pence per unit per unit payable paid Income Equalisation 31 May 31 May Income* Group Group *The income share class was closed on 31/10/15 Accumulation Group Group Equalisation This applies only to units purchased during the distribution period (Group 2 units). It is the average amount of revenue included in the purchase price of all Group 2 units and is refunded to the holders of these units as a return of capital. Being capital it is not liable to income tax but must be deducted from the cost of the units for capital gains tax purposes. 13

16 Corporate information The information in this report is designed to enable unitholders to make an informed judgement on the activities of the Fund during the period it covers and the results of those activities at the end of the period. Phoenix Unit Trust Mangers Limited is part of the Phoenix Group. Ignis Investment Services Limited are part of the Standard Life Investments group (Standard Life Investments (Holdings) Limited) and its subsidiaries. Unit prices appear daily on our website Manager (resigned 2 November 2015) Scottish Mutual Investments Managers Limited 50 Bothwell Street, Glasgow G2 6HR Tel: Registered in Scotland No.SC Member of The Investment Association Authorised and regulated by the Financial Conduct Authority Manager (appointed 2 November 2015) Phoenix Unit Trust Managers Limited (PUTM) 1 Wythall Green Way, Wythall, Birmingham, B47 6WG Tel: Registered in England No Authorised and regulated by the Financial Conduct Authority Directors * Appointed with effect 2 November 2015 Andrew Moss* PUTM Director, Chief Executive Phoenix Life; Shamira Mohammed* PUTM Director, Finance Director Phoenix Life; Craig Baker* PUTM Director, Head of Investment Management Phoenix Life; Mike Urmston* Non Executive Director of PUTM Resigned with effect 2 November 2015 C Walklin C Clark J Aird Registrar and correspondence address Phoenix Unit Trust Managers Limited PO Box Chelmsford CM99 2EN Authorised and regulated by the Financial Conduct Authority Investment Adviser Ignis Investment Services Limited 50 Bothwell Street Glasgow G2 6HR Registered in Scotland No.SC Authorised and regulated by the Financial Conduct Authority Trustee National Westminster Bank Younger Building, 1st Floor 3 Redheughs Avenue Edinburgh EH12 9RH Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority Independent Auditor to the Fund Ernst & Young LLP Ten George Street Edinburgh EH2 2DZ Authorised status This Fund is an Authorised Unit Trust scheme under section 243 of the Financial Services & Markets Act 2000 and is categorised under the Collective Investment Schemes Sourcebook as a UCITS fund. Risks The price of units and the revenue from them can go down as well as up and investors may not get back the amount they invested, particularly in the case of early withdrawal. Tax levels and reliefs are those currently applicable and may change. The value of any tax relief depends on personal circumstances. Depending on the fund, the value of your investment may change with currency movements. 14

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20 Contact: Client Services Call: Correspondence Address: PO Box Chelmsford CM99 2EN Visit: phoenixunittrust.co.uk Telephone calls may be monitored and/or recorded for the purposes of security, internal training, accurate account operation, internal customer monitoring and to improve the quality of service. Please note the Key Investor Information Document (KIID), the supplementary Information Document (SID) and the full prospectus are available free of charge. These are available by contacting Client Services on Phoenix Unit Trust Managers Limited does not accept liability for any claims or losses of any nature arising directly or indirectly from use of the data or material in this report. The information supplied is not intended to constitute investment, tax, legal or other advice. Phoenix Unit Trust Managers Limited* is a Phoenix Group Company. Registered in England No Registered office: 1 Wythall Green Way, Wythall, Birmingham B47 6WG. Authorised and regulated by the Financial Conduct Authority. Phoenix Unit Trust Managers Limited and its subsidiaries are part of the Phoenix Group (Phoenix Group plc and its subsidiaries). B