Optimum Investment Management Enterprise Fund

Transcription

1 Optimum Investment Management Enterprise Fund Annual Short Report For the year ended 30 November 2015

2 Optimum Investment management Enterprise Fund Short Report For the year ended 30 November 2015 Fund Manager Multi-Asset Team Other Information With effect from 2016, the annual accounting period ends each year on 10 June. As a result of the change in the year end, there is no longer a requirement to produce interim accounts as at 31 May The ACD intends to close the fund on 10 June Investment objective and policy The fund aims to achieve capital growth whilst maintaining a moderate to moderately low level of volatility (variation of returns) over the medium to long term. The fund aims to achieve its objective by investing in a broad range of collective investment schemes (which may include those schemes operated or advised by a Henderson group company), transferable securities (including investment trusts) and exchange traded funds (ETFs), which mainly provide exposure to UK and international equities and fixed income. The fund may also invest in other transferable securities, money market instruments, deposits, derivatives and forward transactions for the purposes of Efficient Portfolio Management (EPM). The fund may also gain exposure to hedge funds, property and commodities. This exposure will be indirect and achieved mainly through investment companies and collective investment schemes (which may include those schemes operated or advised by a Henderson group company). Investment will not be confined to any particular geographic or economic sector. The fund is managed so that it aims not to deviate from predetermined parameters of forecast volatility, as measured by an independent risk rating body, over a medium to long term rolling period of at least 5 years. However, during this period the fund s forecast volatility may be outside of such parameters if the portfolio manager believes it is expedient to do so in order to improve investment performance. Observing the forecast volatility parameters will be prioritised over the generation of capital growth. Risk profile The fund invests in assets (including cash) which are denominated in currencies other than the base currency (pounds sterling) then the currency exchange rate movements may cause the value of investments to fall as well as rise. The fund invests in bonds so there is a risk that interest rate fluctuations could affect the capital value of investments. Where long term interest rates rise, the capital value of shares is likely to fall, and vice versa. In addition to the interest rate risk, bond investments are also exposed to credit risk reflecting the ability of the borrower (i.e. bond issuer) to meet its obligations (i.e. pay the interest on a bond and return the capital on the redemption date). The risk of this happening is usually higher with bonds classified as sub-investment grade. These may produce a higher level of income but at a higher risk than investments in investment grade bonds. In turn, this may have an adverse impact on Funds that invest in such bonds. The fund is able to invest in shares issued by investment trust companies, including split capital investment trusts. The level of risk depends on both the share class and prevailing market conditions. Moreover, many split capital investment trusts use gearing which can lead to considerable volatility in their asset values and share prices. This can increase the level of risk compared with those that do not have a split capital structure and those that do not employ gearing. In certain market conditions some split capital investment trusts can lose their value. 2 Optimum Investment Management Enterprise Fund

3 The fund may invest in Exchange Traded Funds. Exchange Traded Funds represent a basket of securities that are traded on an exchange and may not necessarily trade at the net asset value of their underlying holdings. As a result, they may trade at a price that is above or below the value of the underlying portfolio. The fund may invest in unregulated collective investment schemes, which are generally considered to be higher risk than regulated schemes. An unregulated scheme is unlikely to be subject to regulations that govern how they are managed and may be valued less frequently than the fund. As a result, there is a risk that any market movements will not be reflected in the daily prices of the Fund and that investors may miss out on unrealised profits from underlying investments. Investment review The portfolio is constructed from positions in a range of bond, equity and property funds. Trading activity over the period was focused on managing cash flows to shape the portfolio. Cash was invested over the course of the year to maintain low interest rate duration (a measurement of sensitivity to interest rates) alongside holdings in alternative asset classes and equities. Cash and direct property funds were held in place of fixed income, although market volatility presented opportunities to allocate funds across a range of asset classes. Developed market equities were maintained as the preferred holdings within the portfolio. We rotated investments away from underperforming Asian and emerging markets over the course of the year. While the underlying holdings within developed markets were unchanged, assets were allocated towards European and Japanese equities given loose monetary policies in those regions. The BlackRock Continental European Income Fund was increased, as was the Man GLG Japan Core Alpha Fund. In contrast, the BlackRock Emerging Markets Equity Tracker Fund was completely sold, while the Asian Total Return Investment Company was reduced. Alternatives were maintained as an important allocation within the portfolio for their diversifying characteristics and ability to generate income. The BH Global Trust was switched into the BH Macro Trust to gain greater access to the interest rate strategy of Brevan Howard, while the Ignis Absolute Return Government Bond Fund was completely sold after a change in the management team. Elsewhere, the position in the Henderson UK Property OEIC was trimmed after a prolonged period of strong performance. Over the course of the year, and in order to reflect the more diversfied nature of the Enterprise portfolio, we directed capital into the diversified fixed income holdings. The Kames High Yield Bond Fund was reduced, while the Henderson Horizon Total Return Bond Fund and the Henderson Strategic Bond Fund were increased. The fund returned 0.9 over the year under review. Holdings that provided key positive contributions included the Vanguard S&P 500 exchange-traded fund (ETF), the Perpetual Income & Growth Trust, the BlackRock Continental European Income Fund and the Man GLG Japan Core Alpha Fund. Elsewhere, positions in the Veritas Global Equity Income Fund and the Morgan Stanley Diversified Alpha Plus Fund detracted from returns, as did the holding in the Genesis Emerging Markets Fund. The ETFS Physical Gold also detracted from returns, although we retained a position in the commodity, as it is useful as a hedging instrument. performance summary 30 Nov Nov Nov Nov 14 1 Jun 12*- 30 Nov 13 Optimum Investment Management Enterprise Fund Source: Morningstar, bid to bid and net of fees as at valuation point, based on performance of class R accumulation. *Inception date Please remember that past performance is not a guide to future performance. The value of an investment and the revenue from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Optimum Investment Management Enterprise Fund 3

4 Summary of fund performance Share class Net asset value* 2015 p Net asset value* 2014 p Net asset value change Class I accumulation Class I income (0.77) Class R accumulation Class R income (1.70) *The net asset value is calculated as at close of business on the last business day of the accounting period. The investments are valued at fair value which is generally deemed to be the bid market price. Net revenue distribution Share class 2015 p 2014 p Class I accumulation Class I income Class R accumulation Class R income Total dividend distributions for the year ended 30 November 2015, comparison is for the same period last year. Fund facts Accounting dates Payment dates 31 May, 30 November 31 July, 31 January Total expense ratio Class I Class R The TER of the fund is the ratio of the fund s operating costs to its average net assets for twelve months. The TER includes a synthetic element of 0.25 (2014: 0.26) to incorporate the TER of the underlying funds. The ACD made a contribution to limit the fund TER ratio. 4 Optimum Investment Management Enterprise Fund

5 Performance record Calendar year Net revenue (pence per share) Highest price (pence per share) Lowest price (pence per share) Class I accumulation * - - Class I income * - - Class R accumulation * - - Class R income * to 30 November * to 29 January 1 Class R and I launched 1 June 2012 Past performance is not a guide to future performance. Optimum Investment Management Enterprise Fund 5

6 Major holdings Major holdings as at 2015 as at 2014 Henderson UK Property OEIC Z Income Henderson UK Property Z Income Vanguard S&P 500 ETF 5.08 Henderson Horizon Total Return Bond Z Accumulation Henderson Strategic Bond Z Accumulation Veritas Global Equity Fund D Income 3.30 BlackRock Continental European Income Fund Henderson Horizon Total Return Bond Fund Henderson Credit Alpha Fund Z Accumulation+ Henderson Strategic Bond Z Accumulation+ BH Macro 3.40 Genesis Emerging Markets Fund 3.06 Genesis Emerging Markets Fund 3.34 Asian Total Return Investment Company 2.78 Henderson Credit Alpha Fund Z Accumulation Henderson Asian Dividend Income Unit Trust Income+ S&W Kennox Strategic Value Fund 2.91 BH Global GBP 2.57 Bluecrest Allblue 2.64 EFTS Physical Gold A related party to the fund Asset allocation Asset allocation as at 2015 as at 2014 Alternatives Alternatives Diversified Bonds 9.37 Property 7.85 Property 7.03 Global Equity 7.48 Global Equity 5.41 Diversified Bonds 7.37 North America Equity 5.08 Government Bonds 5.48 Europe ex UK Equity 4.80 Asia Ex Japan Equity 5.43 Government Bonds 3.40 Global Emerging Market Equity 4.06 Global Emerging Market Equity 3.34 Commodities 3.18 Asia Ex Japan Equity 3.25 Europe ex UK Equity 2.51 Specialist Equity 2.59 Japan Equity 2.14 Commodities 2.52 UK Equity 2.02 UK Equity 2.44 High Yield Bonds 2.00 High Yield Bonds 2.36 Specialist Equity 1.71 Japan Equity 1.24 Derivatives 0.56 Derivatives 0.68 Other net assets Other net assets Total net assets Total net assets Optimum Investment Management Enterprise Fund

7 Report and accounts This document is a short report of the Optimum Investment Management Enterprise Fund for the year ended 30 November Copies of the annual long form report of this fund are available on our website co.uk or contact client services on the telephone number provided. Risk warning Please remember that past performance is not a guide to future performance. The value of an investment and the revenue from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Other information The information in this report is designed to enable you to make an informed judgement on the activities of the fund during the year it covers and the results of those activities at the end of the year. Issued by: Optimum Investment Management Limited Registered office: 201 Bishopsgate, London EC2M 3AE Member of The Investment Association and authorised and regulated by the Financial Conduct Authority. Registered in England No Auditor PricewaterhouseCoopers LLP 141 Bothwell Street Glasgow G2 7EQ Depositary National Westminster Bank plc 135 Bishopsgate London EC2M 3UR Shareholder Administrator International Financial Data Services (UK) Limited IFDS House St Nicholas Lane Basildon Essex SS15 5FS Optimum Investment Management Enterprise Fund 7

8 Contact us Client Services Head Office address: Bishopsgate, London EC2M 3AE Changes of address - regulatory requirements FCA regulation requires us to send this report mailing to the address held on file on the accounting date of 30 November If you have confirmed a change of address with us since that date we will ensure all future correspondence will be sent to your new address. Online valuations You can value your Optimum Investment Management Enterprise Fund at any time by logging on to Select Personal Investor and then access Valuations from the Tools Menu. Simply select the fund you hold and enter the appropriate number of shares. Any questions? Further information about the activities and performance of the fund for this period can be obtained from the Investment Manager. If you have any questions please call our Client Services Team on or enquiries@optimum-im.co.uk. Important Information Issued in the UK by Optimum Investment Management Limited (reg. no , registered office at 201 Bishopsgate, London EC2M 3AE). Incorporated and registered in England and Wales and authorised and regulated by the Financial Conduct Authority to provide investment products and services. [Telephone calls may be recorded and monitored.] H020297/1215