Canaccord Genuity Investment Funds Plc

Transcription

1 Canaccord Genuity Investment Funds Plc AN INVESTMENT COMPANY WITH VARIABLE CAPITAL STRUCTURED AS AN UMBRELLA FUND WITH SEGREGATED LIABILITY BETWEEN SUB-FUNDS Annual Report and Audited Financial Statements for the year ended 31 December 2015 To us there are no foreign markets. TM

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3 CANACCORD GENUITY INVESTMENT FUNDS PLC (An Investment Company with variable capital structured as an umbrella fund with segregated liability between sub-funds) ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS CGWM TOTAL RETURN BOND FUND CGWM SELECT INCOME FUND CGWM SELECT DIVERSITY FUND CGWM SELECT AFFINITY FUND CGWM SELECT GLOBAL DIVERSITY FUND CGWM SELECT GLOBAL AFFINITY FUND CGWM SELECT OPPORTUNITY FUND CGWM SELECT GLOBAL OPPORTUNITY FUND CGWM GPS OPTIMIZED PORTFOLIO 4 FUND CGWM GPS OPTIMIZED PORTFOLIO 4(i) FUND CGWM GPS OPTIMIZED PORTFOLIO 5 FUND CGWM SELECT BOND FUND

4 CONTENTS 2 Introduction 4 Management and Administration 5 Directors Report 9 Investment Managers Reports 21 Annual Custodian Report to Shareholders 22 Independent Auditor s Report 23 Statement of Financial Position 29 Statement of Comprehensive Income 33 Statement of Changes in Net Assets Attributable to Holders of Redeemable Shares 37 Statement of Cash Flows 41 Notes to the Financial Statements 84 Investment Portfolios 111 Risk Item (Unaudited) 112 Significant Portfolio Movements (Unaudited) 124 Notice of Annual General Meeting 1

5 INTRODUCTION Canaccord Genuity Investment Funds plc (the Company ) is an umbrella fund with segregated liability between subfunds established as an open-ended investment company with variable capital under the laws of Ireland as a public limited company pursuant to the Companies Act 2014 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (the UCITS Regulations ) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the "Central Bank UCITS Regulations") and has been authorised by the Central Bank of Ireland (the Central Bank ) as an Undertaking for Collective Investment in Transferable Securities ( UCITS ). Different sub-funds ( Funds ) may be established from time to time by the Directors with the prior approval of the Central Bank. The Funds of the Company that have been established and were in existence during the financial year ended 31 December 2015 are outlined below: CGWM TOTAL RETURN BOND FUND The investment objective of the Fund is to generate income from a portfolio of investment grade bonds and money market instruments whilst seeking to increase and preserve capital value. The Fund will aim to deliver a net total return in excess of 2% per annum over 3 Month Sterling LIBOR, whilst paying a semi-annual dividend equivalent to the then current Sterling base rate. The Fund aims to achieve this objective by investing in a concentrated portfolio of investment grade bonds and money market investments denominated in a variety of currencies from the Group of Ten (G10) countries. The Fund terminated on 15 January CGWM SELECT INCOME FUND The Fund is primarily a fund of funds that pursues its investment objective by investing primarily in a portfolio of regulated collective investment schemes and fixed interest securities. The Fund is primarily a fund of funds that seeks to achieve its investment objective and policy by exposure to international equity markets equal to a maximum of 50% of its net assets by investing in the securities of regulated collective investment schemes; and by an exposure to international debt markets equal to a maximum of 40% of its net assets may be invested in direct assets, primarily in debt securities consisting of bonds (both corporate and sovereign, fixed and floating) and to a lesser extent in equities. CGWM SELECT DIVERSITY FUND The investment objective of the Fund is to seek to generate capital growth by investing in an internationally diversified portfolio of shares and units in collective investment schemes and individual high quality fixed interest instruments. The Fund is a fund of funds and aims to achieve its objective by indirect exposure to international equity markets equal to a maximum of 60% of its net assets by investing in the securities of regulated collective investment schemes. CGWM SELECT AFFINITY FUND The investment objective of the Fund is to seek to generate capital growth by investing in an internationally diversified portfolio of shares and units in collective investment schemes and individual high quality fixed interest instruments. The Fund is a fund of funds that aims to achieve its objective by indirect exposure to international equity markets equal to a maximum of 85% of its net assets by investing in the securities of regulated collective investment schemes. CGWM SELECT GLOBAL DIVERSITY FUND The investment objective of the Fund is to seek to generate capital growth by investing in an internationally diversified portfolio of shares and units in collective investment schemes and individual high quality fixed interest instruments. The Fund is a fund of funds that aims to achieve its objective by indirect exposure to international equity markets equal to a maximum of 60% of its net assets by investing in the securities of regulated collective investment schemes. The Base Currency of the Fund is US Dollars but investments may be denominated in other currencies. CGWM SELECT GLOBAL AFFINITY FUND The investment objective of the Fund is to seek to generate capital growth by investing primarily in an internationally diversified portfolio of shares and units in collective investment schemes and individual high quality fixed interest instruments. The Fund is a fund of funds that aims to achieve its objective by indirect exposure to international equity markets equal to a maximum of 85% of its net assets by investing in the securities of regulated collective investment schemes. The Base Currency of the Fund is US Dollars but investments may be denominated in other currencies. 2

6 INTRODUCTION (CONTINUED) CGWM SELECT OPPORTUNITY FUND The investment objective of the Fund is to seek to generate capital growth by investing in an internationally diversified portfolio of shares and units in collective investment schemes and individual high quality fixed interest instruments. The Fund is primarily a fund of funds that pursues its investment objective by investing primarily in a portfolio of regulated collective investment schemes and fixed interest securities. CGWM SELECT GLOBAL OPPORTUNITY FUND The investment objective of the Fund is to generate capital growth by investing in an internationally diversified portfolio of shares and units in collective investment schemes and individual high quality fixed interest instruments. The Fund is a fund of funds that pursues its investment objective by investing primarily in a portfolio of regulated collective investment schemes and fixed interest securities. The Base Currency of the Fund is US Dollars but investments may be denominated in other currencies. CGWM GPS OPTIMIZED PORTFOLIO 4 FUND (FORMERLY CGWM REMAP 4 FUND) The investment objective of the Fund is to generate capital growth over the long term whilst seeking to cap annualised volatility at 6%. The Fund is a fund of funds that pursues its investment objective by investing in regulated open-ended collective investment schemes, individual fixed interest securities and to a lesser extent direct equities. CGWM GPS OPTIMIZED PORTFOLIO 4(i) FUND (FORMERLY CGWM REMAP 4(i) FUND) (TERMINATED 18 DECEMBER 2015) The investment objective of the Fund is to generate income and capital growth over the long term whilst seeking to cap annualised volatility at 6%. The Fund is a fund of funds that pursues its investment objective by investing in regulated open-ended collective investment schemes, individual fixed interest securities and to a lesser extent direct equities. CGWM GPS OPTIMIZED PORTFOLIO 5 FUND (FORMERLY CGWM REMAP 5 FUND) The investment objective of the Fund is to generate capital growth over the long term whilst seeking to cap annualised volatility at 9%. The Fund is a fund of funds that pursues its investment objective by investing in regulated open-ended collective investment schemes, individual fixed interest securities and to a lesser extent direct equities. CGWM SELECT BOND FUND (FORMERLY CGWM BOND FUND) The investment objective of the Fund is to generate positive total returns from a diversified portfolio of bonds and other debt securities and collective investment schemes. The Fund aims to achieve this objective by investing into a portfolio of high quality bonds, collective investment schemes and money market instruments, with a bias towards Sterling denominated assets across all permitted asset classes. In normal circumstances, the Fund will aim to deliver income in excess of the average rate achievable through a one-year cash deposit. 3

7 MANAGEMENT AND ADMINISTRATION Directors: Brian McDermott (Irish) (Non-executive) John Renouf (British) (Independent, non-executive) Collette Wisener-Keating (Irish) (Non-executive) Bronwyn Wright (Irish) (Independent, non-executive) Roger Phillips (British) (Independent, non-executive) (Resigned on 9 February 2015) Registered Office*: North Wall Quay IFSC Dublin 1 Ireland Investment Managers: Canaccord Genuity Wealth (International) Limited 3rd Floor, West Wing Trafalgar Court, Admiral Park St Peter Port Guernsey GY1 2JA Channel Islands Canaccord Genuity Wealth Limited 41 Lothbury London EC2R 7AE England Administrator and Registrar: Northern Trust International Fund Administration Services (Ireland) Limited Georges Court Townsend Street Dublin 2 Ireland Custodian: Northern Trust Fiduciary Services (Ireland) Limited Georges Court Townsend Street Dublin 2 Ireland Company Secretary*: Goodbody Secretarial Limited International Financial Services Centre North Wall Quay Dublin 1 Ireland Irish Legal Advisers: A&L Goodbody International Financial Services Centre North Wall Quay Dublin 1 Ireland Sponsoring Broker: A&L Listing International Financial Services Centre North Wall Quay Dublin 1 Ireland Independent Auditor: Deloitte Deloitte & Touche House Earlsfort Terrace Dublin 2 Ireland Registered number: *Effective 23 July 2015, Goodbody Secretarial Limited replaced Northern Trust as Company Secretary to the Company. 4

8 DIRECTORS REPORT Incorporation Canaccord Genuity Investment Funds plc (the Company ) is an umbrella type open-ended investment company with variable capital incorporated with limited liability in Ireland on 26 February 2003 and authorised under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 ( the UCITS Regulations ) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the "Central Bank UCITS Regulations"). The Directors are pleased to present their report on the activities of the Company for the financial year ended 31 December The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as adopted by the European Union. In previous years the financial statements of the Company were prepared in accordance with applicable Irish Generally Accepted Accounting Principles ( GAAP ) and the comparative information in these financial statements has been restated accordingly. Information on the effect of the transition to IFRS is given in note 2 to the audited financial statements. Review of Business and Future Developments A review of the activities of each of the Funds is provided in the Investment Managers' Reports. The reports are prepared by the portfolio manager of each of the Funds. The Directors consider that the reports prepared are appropriate for each of the Funds. Statement of Directors' Responsibilities The Directors are responsible for preparing the Directors report and the financial statements in accordance with the Companies Act 2014 and the Central Bank UCITS Regulations. Irish company law requires the Directors to prepare financial statements for each financial year. Under the law, the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union ( relevant financial reporting framework ). Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Company as at the financial year end date and of the profit or loss of the Company for the financial year and otherwise comply with the Companies Act In preparing these financial statements, the Directors are required to: select suitable accounting policies for the Company financial statements and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether the financial statements have been prepared in accordance with applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for ensuring that the Company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the Company, enable at any time the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy, enable them to ensure that the financial statements and Directors report comply with the Companies Act 2014, the Central Bank UCITS Regulations and the Listing Rules of the Irish Stock Exchange and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Accounting Records The measures that the Directors have taken to secure compliance with the requirements of sections 281 to 285 of the Companies Act 2014 with regard to the keeping of accounting records, are the employment of appropriately qualified accounting personnel and the maintenance of computerised accounting systems. The Directors have appointed Northern Trust International Fund Administration Services (Ireland) Limited to maintain proper books of account. The address at which this business is located is as follows: George s Court, Townsend Street, Dublin 2, Ireland. Revenue The result of operations for the financial year are set out in the Statement of Comprehensive Income on pages 29 to 32. Distribution Distributions for the financial year are disclosed in Note 13 to the Financial Statements. Directors Interests in Shares of the Company Mr John Renouf held 1, (2014: 1,274.37) shares in the CGWM Total Return Bond Fund at the financial year end date. No other Director, nor the Company Secretary, had any beneficial interest in the shares or any significant contracts with the Company during the financial year or in the prior financial year. 5

9 DIRECTORS REPORT (continued) Connected Persons Any transaction carried out with a UCITS by a management company or depositary to the UCITS, the delegates or subdelegates of the UCITS or management company or depositary, and any associated or group company of such a UCITS or management company, depositary, delegate or sub-delegate ( connected persons ) must be carried out as if negotiated at arm s length. Transactions must be in the best interests of the shareholders. The Directors are satisfied that there are arrangements (evidenced by written procedures) in place, to ensure that the obligations set out in Regulation 41(1) of the Central Bank UCITS Regulations are applied to all transactions with connected persons, and are satisfied that transactions with connected persons entered into during the year complied with the obligations set out in Regulation 41(1) of the Central Bank UCITS Regulations. UCITS Notice 14 deems a Custodian and its associated or group companies to be connected persons to the Company. As such, Northern Trust Fiduciary Services (Ireland) Limited (NTFSIL), the Custodian, and Northern Trust International Fund Administration Services (Ireland) Limited (NTIFASIL), the Administrator, are connected persons to the Company. During the period, NTFSIL and NTIFASIL earned fees for provision of custody and administration services to the Company as disclosed in the Statement of Comprehensive Income. NTFSIL were selected by the Company to execute foreign exchange transactions and purchase and sell securities on behalf of the sub-funds, the terms of such transactions are agreed/negotiated by the Company through the Investment Managers and The Northern Trust Company, London Branch (NTC). Significant Events during the financial year Mr Roger Phillips resigned as a Director of the Company, effective 9 February The Board of the Company appointed Goodbody Secretarial Limited as Company Secretary to the Company, effective from 23 July The Board of the Company appointed Mr Dave Burns from Carne Group as the Money Laundering Reporting Officer to the Company, effective from 29 September A new prospectus and updated supplements to the prospectus were issued dated 6 October 2015, which detailed the below changes: the investment policy of the CGWM Select Income Fund changed to remove the 30% limit on indirect exposure to international debt markets and to increase the allocation of investment management fee charged to capital to 100%; the CGWM REMAP funds changed their name to the CGWM GPS Optimized Portfolio funds and the CGWM Bond Fund changed its name to CGWM Select Bond Fund; Name changes and change of distribution policy for a number of share classes which are detailed in the table below. Prior Share Class Name CGWM Total Return Bond Fund GBP CGWM Select Income Fund A CGWM Select Income Fund B CGWM Select Income Fund R CGWM Select Diversity Fund A CGWM Select Diversity Fund B CGWM Select Diversity Fund R CGWM Select Global Diversity Fund B CGWM Select Global Diversity Fund B SGD Hedged CGWM Select Affinity Fund B CGWM Select Affinity Fund R CGWM Select Global Affinity Fund B CGWM Select Global Affinity Fund B SGD Hedged CGWM Select Opportunity Fund GBP CGWM Select Opportunity Fund R CGWM Select Global Opportunity Fund US Dollar CGWM Select Global Opportunity Fund B SGD Hedged CGWM REMAP 4 Fund A CGWM REMAP 4 Fund D CGWM REMAP 4(i) Fund A CGWM REMAP 4(i) Fund D CGWM REMAP 5 Fund A CGWM REMAP 5 Fund D CGWM Bond Fund A CGWM Bond Fund A EUR Hedged CGWM Bond Fund A USD Hedged New Share Class Name CGWM Total Return Bond Fund A GBP (Distribution) CGWM Select Income Fund A GBP (Accumulation) CGWM Select Income Fund A GBP (Distribution) CGWM Select Income Fund R GBP (Distribution) CGWM Select Diversity Fund A GBP (Accumulation) CGWM Select Diversity Fund A GBP (Distribution) CGWM Select Diversity Fund R GBP (Distribution) CGWM Select Diversity Fund A USD (Accumulation) CGWM Select Diversity Fund A SGD Hedged (Distribution) CGWM Select Affinity Fund A GBP (Accumulation) CGWM Select Affinity Fund R GBP (Accumulation) CGWM Select Global Affinity Fund A USD (Accumulation) CGWM Select Global Affinity Fund A SGD Hedged (Distribution) CGWM Select Opportunity Fund A GBP (Accumulation) CGWM Select Opportunity Fund R GBP (Accumulation) CGWM Select Global Opportunity Fund A USD (Accumulation) CGWM Select Global Opportunity Fund A SGD Hedged (Distribution) CGWM GPS Optimized Portfolio 4 Fund A GBP (Distribution) CGWM GPS Optimized Portfolio 4 Fund D GBP (Distribution) CGWM GPS Optimized Portfolio 4(i) Fund A GBP (Distribution) CGWM GPS Optimized Portfolio 4(i) Fund D GBP (Distribution) CGWM GPS Optimized Portfolio 5 Fund A GBP (Distribution) CGWM GPS Optimized Portfolio 5 Fund D GBP (Distribution) CGWM Select Bond Fund A GBP (Distribution) CGWM Select Bond Fund A EUR Hedged (Distribution) CGWM Select Bond Fund A USD Hedged (Distribution) 6

10 DIRECTORS REPORT (continued) Significant Events during the financial year (continued) The following share classes were launched during the financial year: CGWM Select Global Affinity Fund T USD (Accumulation) shares - Launched 18 February 2015; CGWM Select Global Opportunity Fund - T USD (Accumulation) shares - Launched 18 February 2015; CGWM Select Bond Fund - A EUR Hedged (Distribution) shares - Launched 22 April 2015; CGWM Select Global Opportunity Fund - T EUR Hedged (Accumulation) shares - Launched 12 May 2015; CGWM Select Global Diversity Fund - T USD (Accumulation) shares - Launched 26 May 2015; CGWM Select Income Fund - R GBP (Distribution) shares - Launched 29 May 2015; CGWM Select Affinity Fund - R GBP (Distribution) shares - Launched 3 June 2015; CGWM Select Global Opportunity Fund - A GBP Hedged (Accumulation) shares - Launched 15 June 2015; CGWM Select Diversity Fund - R GBP (Distribution) shares - Launched 22 June 2015; CGWM Select Global Diversity - T EUR Hedged (Accumulation) shares - Launched 30 June 2015; CGWM Select Opportunity Fund - R GBP (Accumulation) shares - Launched 1 July 2015; CGWM Select Income Fund - A GBP (Accumulation) shares - Launched 29 July 2015; CGWM Select Global Affinity Fund - T EUR Hedged (Accumulation) shares - Launched 28 August 2015 CGWM Select Global Opportunity Fund - A EUR Hedged (Accumulation) shares - Launched 1 September CGWM Select Diversity Fund - A GBP (Accumulation) shares - Launched 12 October 2015; CGWM Select Bond Fund - A USD Hedged (Accumulation) shares - Launched 12 October 2015; CGWM Select Bond Fund - A GBP (Accumulation) shares - Launched 16 October 2015; CGWM Select Global Affinity Fund - A EUR Hedged (Accumulation) shares - Launched 22 December The CGWM GPS Optimized Portfolio 4(i) Fund terminated on 18 December There was an in specie transfer from CGWM GPS Optimized Portfolio 4(i) Fund into the CGWM GPS Optimized Portfolio 4 Fund for an amount of GBP2,970,972 (consisting of 2,746,577 shares at a NAV per share of GBP1.08). Subsequent Events The CGWM Total Return Bond Fund terminated on 15 January 2016, proceeds were distributed to shareholders in two tranches paid on 25 January 2016 and 31 March The following share classes launched since the financial year end: CGWM Select Global Diversity Fund - A EUR Hedged (Accumulation) shares - Launched 25 January Up to the date of approval of these financial statements, no other significant events have occurred in respect of the Company subsequent to the financial year end that may be deemed relevant to the accuracy of these financial statements. Independent Auditor Deloitte have indicated their willingness to continue in office in accordance with Section 383(2) of the Companies Act Corporate Governance Statement The European Communities (Directive 2006/46/EC) Regulations (S.I. 450 of 2009 and S.I. 83 of 2010) (the Regulations ) requires the inclusion of a corporate governance statement in the Directors Report. Although there is no specific statutory corporate governance code applicable to Irish collective investment schemes whose shares are admitted to trading on the Irish Stock Exchange, the Company is subject to corporate governance practices imposed by: (i) The Irish Companies Act 2014 which is available for inspection at the registered office of the Company; (ii) The Articles of Association of the Company which are available for inspection at the registered office of the Company at North Wall Quay, IFSC, Dublin 1, Ireland and at the Companies Registration Office in Ireland; (iii) The Central Bank of Ireland in their Central Bank UCITS Regulations which can be obtained from the Central Bank of Ireland website and are available for inspection at the registered office of the Company; and (iv) The Irish Stock Exchange ( the ISE ) through the ISE Code of Listing Requirements and Procedures. The Board of Directors voluntarily complies with the Corporate Governance Code for Irish Domiciled Collective Investment Schemes as published by the Irish Funds Industry Association ( IFIA ) with effect from 1 January This forms the basis of the Company s corporate governance code. The Board of Directors have previously assessed the measures included in the Irish Funds Code as being consistent with its corporate governance practices and procedures for the financial year and have formally adopted this code. Internal Control and Risk Management Systems in Relation to Financial Reporting The Board of Directors is responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process. Such systems are designed to manage rather than eliminate the risk of error or fraud in achieving the Company s financial reporting objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. 7

11 DIRECTORS REPORT (continued) Internal Control and Risk Management Systems in Relation to Financial Reporting (continued) The Board of Directors has procedures in place to ensure all relevant books of account are properly maintained and are readily available, including the production of annual and half-yearly financial statements. The Board of Directors has appointed the Administrator to maintain the books and records of the Company. The Administrator is authorised and regulated by the Central Bank of Ireland and must comply with the rules imposed by the Central Bank. The financial statements are prepared by the Administrator in accordance with International Financial Reporting Standards (IFRS). The Administrator uses various internal controls and checklists to ensure that the financial statements include complete and appropriate disclosures required under IFRS and relevant legislation. From time to time the Board also examines and evaluates the Administrator s financial accounting and reporting routines. The annual financial statements of the Company are required to be approved by the Board of Directors of the Company and the annual and half yearly financial statements of the Company are required to be filed with the Central Bank of Ireland and the Irish Stock Exchange. The statutory annual financial statements are required to be audited by independent auditors who report annually to the Board on their findings. The Board of Directors monitors and evaluates the independent auditor s performance, qualifications and independence. As part of the review procedures the Board of Directors receives reports on the audit process. The Board of Directors evaluates and discusses significant accounting and reporting issues as the need arises. Dealings with Shareholders The convening and conduct of shareholders meetings are governed by the Articles of Association of the Company and the Companies Act Although the Directors may convene an extraordinary general meeting of the Company at any time, the Directors are required to convene an annual general meeting of the Company each year ensuring that it is held within fifteen months of the date of the previous annual general meeting. Not less than twenty one clear days notice of every annual general meeting and any extraordinary general meeting convened for the passing of a special resolution must be given to shareholders and fourteen clear days notice must be given in the case of any other extraordinary general meeting unless the auditors of the Company and all the shareholders of the Company entitled to attend and vote agree to shorter notice. Two members present either in person or by proxy constitute a quorum at a general meeting provided that the quorum for a general meeting convened to consider any alteration to the class rights of shares is two shareholders holding or representing by proxy at least one third of the issued shares of the relevant fund or class. Every member holding shares present in person or by proxy who votes on a show of hands is entitled to one vote. On a poll, every member holding participating shares present in person or by proxy is entitled to one vote in respect of each share held by him. Shareholders may resolve to sanction an ordinary resolution or special resolution at a shareholders meeting. An ordinary resolution of the Company or of the shareholders of a particular fund or class requires a simple majority of the votes cast by the shareholders voting in person or by proxy at the meeting at which the resolution is proposed. A special resolution of the Company or of the shareholders of a particular fund or class requires a majority of not less than 75% of the shareholders present in person or by proxy and voting in general meeting in order to pass a special resolution including a resolution to amend the Articles of Association. Board Composition and Activities Unless otherwise determined by an ordinary resolution of the Company in general meeting, the number of Directors may not be less than two. Currently the Board of Directors of the Company is composed of four Directors, being those listed in the directory in these financial statements. The business of the Company is managed by the Directors, who exercise all such powers of the Company as are not required by the Companies Act 2014, the UCITS Regulations, the Central Bank UCITS Regulations or by the Articles of Association of the Company to be carried out in general meeting. A Director may, and the Company secretary of the Company on the requisition of a Director will, at any time summon a meeting of the Directors. Questions arising at any meeting of the Directors are determined by a majority of votes. In the case of an equality of votes, the chairman has a second or casting vote. The quorum necessary for the transaction of business at a meeting of the Directors is two. On behalf of the Board Brian McDermott Director 14 April 2016 Bronwyn Wright Director 8

12 INVESTMENT MANAGERS REPORTS CGWM Total Return Bond Fund Fund Performance The Fund returned -0.25% in total return terms net of all fees and expenses in 2015 whilst 3 month sterling LIBOR returned +0.57% for the same period. Market Review 2015 was a volatile and broadly disappointing year for financial markets, with concerns centered on the state of the Chinese economy and the timing of the first US interest rate rise, both of which undermined sentiment. The end result is that the MSCI World Equity Index was flat for the year, the MSCI Emerging Markets was down by -14%, and US/UK/German 10-year government bonds made total returns of between +1% and +2% as yields ended the year close to where they were 12 months ago; 10-year US Treasuries continue to yield around 2.20%, UK Gilts now offer a slightly higher yield of 1.90% and German Bunds still yield around 0.60%. As was widely expected, the US Federal Reserve (Fed) raised the target range for the federal funds rate by 0.25% to 0.50%, the first raise in almost 7 years. The decision was largely expected by markets and telegraphed by the Fed in the preceding weeks. In justifying the hike the Fed s statement highlighted the considerable improvement in labour market conditions this year. Naturally investors are cautious of the potential headwinds for bond markets when a hiking cycle begins, but this is not like previous interest rate environments. As we have been constantly reminded by the Fed, any increases will be gradual, but the uncertainty of what may follow has served to constrain the markets and a sense of inertia prevails. Activity/review The Fund had an overall duration of years which was primarily focussed on foreign bonds with the UK exposure netted at years via the March 2016 Gilt future. The credit profile was well-spread across the range with 87% in AAA/AA bonds or cash and around 13% in single-a corporate bonds. Despite this cautious positioning, the Fund has a projected income yield of approximately 3%. The Fund terminated on 15 January Proceeds were distributed to shareholders in two tranches paid on 25 January 2016 and 31 March This was necessary in order to try to maximise the return from one bond for which sale was deferred. Canaccord Genuity Wealth (International) Limited March

13 INVESTMENT MANAGERS REPORTS (continued) CGWM Select Income Fund Fund Performance For the 12 months to 31 December 2015 the Fund returned 0.21% net of all fees and expenses in This compared to a return of exactly 0.00% for the Fund s peer group, the Morningstar GIFS GBP Cautious Allocation sector. Market Review It is true to say that 2015 has failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. In the UK, for example, the FTSE 100 ended the year down 1.32%, while in the US, the S&P 500 index closed the year up a modest 1.38%. A number of European markets performed more strongly; however, on an unhedged basis for sterling based investors those gains mostly moved to losses, as the euro weakened against sterling following the European Central Bank s adoption of quantitative easing. Asian and emerging markets were weak for most of the year; there has been carnage in commodities and the year ended with worrying signs of instability in the junk bond market, as evidenced by the closure of the Third Avenue Management Fund. Hedge funds, as measured by the HFRX Global Hedge Fund GBP Index, have had their worst year since 2011, reporting an overall loss. There are many factors cited to explain this nervousness but two obviously stand out. Fears concerning the growth rate of the Chinese economy have unsettled markets all year, resulting in a pronounced weakness in the Chinese equity market from June through to August. The second, and somewhat tiresome, factor has been the constant market speculation concerning the timing of the first US interest rate rise and the subsequent pace of future rises. Thankfully the wait is finally over following the widely anticipated quarter point rise in December. With the US Federal Reserve (Fed) modestly upbeat about prospects for the US economy, their forward guidance implies four further 0.25% rises in 2016, and whilst this will be data dependant, we would be surprised if this materialises. Activity/review The Fund outperformed its peer group over the reporting period. Initially, the defensive measures taken in June and August paid dividends over the course of the third quarter as markets fell and then our decision to rebuild the Fund s equity positions following the summer s setbacks enabled the Fund to fully participate in the subsequent rally in equity markets in the early part of the fourth quarter. In terms of activity, having added to the Fund s equity weighting in the first quarter, through an increased allocation to European equities, a combination of ever more acrimonious Greek debt negotiations, concerns over Fed tightening and increasingly stretched equity valuations, led us to believe some caution was warranted over the summer. We therefore reduced the Fund s equity allocation by 4% in June, crystallising some of the profits in the Fund s UK equity holdings. We did, however, increase the Fund s exposure to infrastructure via a purchase of The Renewables Infrastructure Group (TRIG). This asset class has served the Fund well over the past couple of years, generating an attractive return stream coupled with low levels of volatility and a low correlation to traditional risk assets. August s setback in markets was used as an opportunity to deploy some of the liquidity which had accrued as a result of a large cash injection. These investments focussed on risk diversifying assets the UK Gilt 4.25% 2027 strategic and defensive bond funds Man GLG Flexible Bond Fund; Jupiter Global Dynamic Bond Fund and lower beta equity income funds Artemis Income Fund; Invesco Perpetual UK Strategic Income Fund and Artemis Global Income Fund. We also took the opportunity to dispose of the John Laing Infrastructure Fund and switch the proceeds into Picton Property Income in order to moderate the Fund s infrastructure allocation. Generally, however, there was little activity during the second half of the year as we judged that the fund positioning was appropriate for the prevailing investment environment. Outlook As stated earlier, 2015 failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. Despite this, we enter 2016 with a reasonably constructive outlook, although we are expecting another volatile year for financial markets. Against a backdrop of continuing accommodative policies, low inflation and with a global growth of around 3.5%, it is not unreasonable to expect equities to make progress and to outperform bonds in Our mind-set is to persist with our emphasis on developed markets for the time being as we feel that it is still a little early to increase weightings to emerging markets, although specific countries are becoming a little more interesting. Canaccord Genuity Wealth (International) Limited January

14 INVESTMENT MANAGERS REPORTS (continued) CGWM Select Diversity Fund Fund Performance For the 12 months to 31 December 2015 the Fund returned 1.46% net of all fees and expenses in This compared to a return of -0.02% for the Fund s peer group, the Morningstar GIF GBP Moderate Allocation sector. Market Review It is true to say that 2015 has failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. In the UK, for example, the FTSE 100 ended the year down 1.32%, while in the US, the S&P 500 index closed the year up a modest 1.38%. A number of European markets performed more strongly, however, on an unhedged basis for Sterling based investors those gains mostly moved to losses, as the euro weakened against the pound following the European Central Bank s adoption of quantitative easing. Asian and Emerging markets were weak for most of the year, there has been carnage in commodities and the year ends with worrying signs of instability in the junk bond market, as evidenced by the closure of the Third Avenue Management Fund. Hedge funds, as measured by the HFRX Global Hedge Fund GBP Index, have had their worst year since 2011, reporting an overall loss. There are many factors cited to explain this nervousness but two obviously stand out. Fears concerning the growth rate of the Chinese economy have unsettled markets all year, resulting in a pronounced weakness in the Chinese equity market from June through to August. The second, and somewhat tiresome, factor has been the constant market speculation concerning the timing of the first US interest rate rise and the subsequent pace of future rises. Thankfully the wait is finally over following the widely anticipated quarter point rise in December. With the US Federal Reserve (Fed) modestly upbeat about prospects for the US economy, their forward guidance implies four further 0.25% rises in 2016, and whilst this will be data dependant, we would be surprised if this materialises. Activity/review The Fund comfortably outperformed its peer group over the reporting period, enjoying a particularly strong second half to the year. Initially, the defensive measures that we took in June and August paid dividends over the course of the third quarter as markets fell and then our decision to rebuild the Fund s equity positions following the summer s setbacks enabled the Fund to fully participate in the subsequent rally in equity markets in the early part of the fourth quarter. In terms of activity, having added to the Fund s equity weighting in the first quarter, through an increased allocation to European equities via the Baring German Growth Fund, a combination of ever more acrimonious Greek debt negotiations, concerns over Fed tightening and increasingly stretched equity valuations, led us to believe some caution was warranted over the summer. We therefore reduced the Fund s equity allocation by 5% in June, crystallising some of the profits in the Fund s European equity and technology holdings and selling the Fund s small allocation to the Investec Global Energy fund. We also elected to incorporate an exposure to the Legg Mason Western Asset Macro Opportunities Bond Fund over this period, partly funded via a disposal of the Fund s short dated government bond exposure. With investment sentiment deteriorating further as the summer progressed, we took the decision to supplement the cash that we raised in June by trimming the Fund s Asian equity allocation, through the sale of the Blackrock Asian Growth Leaders fund. This proved timely given the moves in the region s equity markets in the final two weeks of August. In addition, following the announcement by the People s Bank of China that they will move to a market based fix for the Chinese renminbi, allowing the currency to move up or down 2% every day, we sold the Fund s holding in the Asian focused Stratton Street UCITS - Renminbi Bond Fund in expectation of the Chinese currency drifting lower against its global peers. The proceeds from this sale were subsequently invested into the more diversified Kames Strategic Global Bond Fund. By early October, however, with many markets having retested then bounced off their summer lows, we were ready to add a small amount back to risk assets. We therefore increased the Fund s European equity position once again in expectation of markets moving higher into year end. Indeed, we added further to the Fund s equity allocation in November, as we established an allocation to Japanese equities, via the Man GLG Japan Core Alpha Equity Fund and the Aberdeen Global - Japanese Equity Fund. We believe there are many reasons for encouragement over the prospects of corporate Japan, which should enable the Japanese stockmarket to post attractive returns relative to its global peers in Outlook As stated earlier, 2015 has failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. Despite this, we enter 2016 with a reasonably constructive outlook, although we are expecting another volatile year for financial markets. Against a backdrop of continuing accommodative policies, low inflation and with a global growth of around 3.5%, it is not unreasonable to expect equities to make progress and to outperform bonds in Our mind-set is to persist with our emphasis on developed markets for the time being as we feel that it is still a little early to increase weightings to emerging markets, although specific countries are becoming a little more interesting. Canaccord Genuity Wealth (International) Limited January

15 INVESTMENT MANAGERS REPORTS (continued) CGWM Select Affinity Fund Fund Performance For the 12 months to 31 December 2015 the Fund returned 1.69% net of all fees and expenses in This compared to a return of -0.08% for the Fund s peer group, the Morningstar GIF GBP Aggressive Allocation sector. Market Review It is true to say that 2015 has failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. In the UK, for example, the FTSE 100 ended the year down 1.32%, while in the US, the S&P 500 index closed the year up a modest 1.38%. A number of European markets performed more strongly, however, on an unhedged basis for Sterling based investors those gains mostly moved to losses, as the euro weakened against the pound following the European Central Bank s adoption of quantitative easing. Asian and Emerging markets were weak for most of the year, there has been carnage in commodities and the year ends with worrying signs of instability in the junk bond market, as evidenced by the closure of the Third Avenue Management Fund. Hedge funds, as measured by the HFRX Global Hedge Fund GBP Index, have had their worst year since 2011, reporting an overall loss. There are many factors cited to explain this nervousness but two obviously stand out. Fears concerning the growth rate of the Chinese economy have unsettled markets all year, resulting in a pronounced weakness in the Chinese equity market from June through to August. The second, and somewhat tiresome, factor has been the constant market speculation concerning the timing of the first US interest rate rise and the subsequent pace of future rises. Thankfully the wait is finally over following the widely anticipated quarter point rise in December. With the US Federal Reserve (Fed) modestly upbeat about prospects for the US economy, their forward guidance implies four further 0.25% rises in 2016, and whilst this will be data dependant, we would be surprised if this materialises. Activity/review The Fund comfortably outperformed its peer group over the reporting period, enjoying a particularly strong second half to the year. Initially, the defensive measures that we took in June and August paid dividends over the course of the third quarter as markets fell and then our decision to rebuild the Fund s equity positions following the summer s setbacks enabled the Fund to fully participate in the subsequent rally in equity markets in the early part of the fourth quarter. In terms of activity, having added to the Fund s equity weighting in the first quarter, through an increased allocation to European equities via the Baring German Growth Fund, a combination of ever more acrimonious Greek debt negotiations, concerns over Fed tightening and increasingly stretched equity valuations, led us to believe some caution was warranted over the summer. We therefore reduced the Fund s equity allocation by 5% in June, crystallising some of the profits in the Fund s European equity holdings and selling the Fund s small allocation to the Investec Global Energy fund. We also elected to incorporate an exposure to the Legg Mason Western Asset Macro Opportunities Bond Fund over this period, partly funded via a disposal of the Fund s short dated government bond exposure. With investment sentiment deteriorating further as the summer progressed, we took the decision to supplement the cash that we raised in June by trimming the Fund s Asian equity allocation, through the sale of the Blackrock Asian Growth Leaders fund. This proved timely given the moves in the region s equity markets in the final two weeks of August. In addition, following the announcement by the People s Bank of China that they will move to a market based fix for the Chinese renminbi, allowing the currency to move up or down 2% every day, we sold the Fund s holding in the Asian focused Stratton Street UCITS - Renminbi Bond fund in expectation of the Chinese currency drifting lower against its global peers. The proceeds from this sale were subsequently invested into the more diversified Jupiter Global Dynamic Bond Fund. By early October, however, with many markets having retested then bounced off their summer lows, we were ready to add a small amount back to risk assets. We therefore increased the Fund s European equity position once again in expectation of markets moving higher into year end. Indeed, we added further to the Fund s equity allocation in November, as we established an allocation to Japanese equities, via the Man GLG Japan Core Alpha Equity Fund and the Aberdeen Global - Japanese Equity Fund. We believe there are many reasons for encouragement over the prospects of corporate Japan, which should enable the Japanese stockmarket to post attractive returns relative to its global peers in Outlook As stated earlier, 2015 has failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. Despite this, we enter 2016 with a reasonably constructive outlook, although we are expecting another volatile year for financial markets. Against a backdrop of continuing accommodative policies, low inflation and with a global growth of around 3.5%, it is not unreasonable to expect equities to make progress and to outperform bonds in Our mind-set is to persist with our emphasis on developed markets for the time being as we feel that it is still a little early to increase weightings to emerging markets, although specific countries are becoming a little more interesting. Canaccord Genuity Wealth (International) Limited January

16 INVESTMENT MANAGERS REPORTS (continued) CGWM Select Global Diversity Fund Fund Performance For the 12 months to 31 December 2015 the Fund returned -1.31% net of all fees and expenses in This compared to a return of -3.12% for the Fund s peer group, the Morningstar GIFS USD Moderate Allocation sector. Market Review It is true to say that 2015 has failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. In the UK, for example, the FTSE 100 ended the year down 1.32%, while in the US, the S&P 500 index closed the year up a modest 1.38%. A number of European markets performed more strongly; however, on an unhedged basis for US Dollar based investors those gains mostly moved to losses, as the euro weakened against the Dollar following the European Central Bank s adoption of quantitative easing. Asian and emerging markets were weak for most of the year; there has been carnage in commodities and the year ended with worrying signs of instability in the junk bond market, as evidenced by the closure of the Third Avenue Management Fund. Hedge funds, as measured by the HFRX Global Hedge Fund GBP Index, have had their worst year since 2011, reporting an overall loss. There are many factors cited to explain this nervousness but two obviously stand out. Fears concerning the growth rate of the Chinese economy have unsettled markets all year, resulting in a pronounced weakness in the Chinese equity market from June through to August. The second, and somewhat tiresome, factor has been the constant market speculation concerning the timing of the first US interest rate rise and the subsequent pace of future rises. Thankfully the wait is finally over following the widely anticipated quarter point rise in December. With the US Federal Reserve (Fed) modestly upbeat about prospects for the US economy, their forward guidance implies four further 0.25% rises in 2016, and whilst this will be data dependant, we would be surprised if this materialises. Activity/review The Fund comfortably outperformed its peer group over the reporting period. Initially, the defensive measures that we took in June and August paid dividends over the course of the third quarter as markets fell and then our decision to rebuild the Fund s equity positions following the summer s setbacks enabled the Fund to fully participate in the subsequent rally in equity markets in the early part of the fourth quarter. In terms of activity, having added to the Fund s equity weighting in the first quarter, through an increased allocation to European equities via the Baring German Growth Trust, a combination of ever more acrimonious Greek debt negotiations, concerns over Fed tightening and increasingly stretched equity valuations, led us to believe some caution was warranted over the summer. We therefore reduced the Fund s equity allocation by 5% in June, crystallising some of the profits in the Fund s European equity holdings and selling the Fund s small allocation to the Investec Global Energy Fund. We also elected to incorporate an exposure to the Legg Mason Western Asset Macro Opportunities Bond Fund over this period, partly funded via a disposal of the Fund s short dated government bond exposure. With investment sentiment deteriorating further as the summer progressed, we took the decision to supplement the cash that we raised in June by trimming the Fund s Asian equity allocation, through the sale of the Blackrock Global Asian Growth Leaders Fund. This proved timely given the moves in the region s equity markets in the final two weeks of August. In addition, following the announcement by the People s Bank of China that they will move to a market based fix for the Chinese renminbi, allowing the currency to move up or down 2% every day, we sold the Fund s holding in the Asian focused Stratton Street UCITS - Renminbi Bond Fund in expectation of the Chinese currency drifting lower against its global peers. The proceeds from this sale were subsequently invested into the more diversified Kames Strategic Global Bond Fund. By early October, however, with many markets having retested then bounced off their summer lows, we were ready to add a small amount back to risk assets. We therefore increased the Fund s European equity position once again in expectation of markets moving higher into year end. Indeed, we added further to the Fund s equity allocation in November, as we increased the allocation to Japanese equities, via the Man GLG Japan Core Alpha Equity Fund, Aberdeen Global - Japanese Equity Fund and ishares MSCI Japan. We believe there are many reasons for encouragement over the prospects of corporate Japan, which should enable the Japanese stockmarket to post attractive returns relative to its global peers in Outlook As stated earlier, 2015 has failed to live up to the expectations of most investors, as highly accommodative policies have produced relatively modest economic growth and consequently meagre returns from most equity markets. Despite this, we enter 2016 with a reasonably constructive outlook, although we are expecting another volatile year for financial markets. Against a backdrop of continuing accommodative policies, low inflation and with a global growth of around 3.5%, it is not unreasonable to expect equities to make progress and to outperform bonds in Our mind-set is to persist with our emphasis on developed markets for the time being as we feel that it is still a little early to increase weightings to emerging markets, although specific countries are becoming a little more interesting. Canaccord Genuity Wealth (International) Limited January