Interim Report & Financial Statements. FP Pictet OEIC. For the period ended 31 March 2016 (unaudited) FUND PARTNERS

Transcription

1 Interim Report & Financial Statements FP Pictet OEIC For the period ended 31 March 2016 (unaudited) FUND PARTNERS

2 contents Page FP Pictet OEIC Authorised Corporate Directors ( ACD ) Report* 3 Certification of Financial Statements by the Directors of the ACD* 4 Notes to the Financial Statements 5 FP Pictet Multi Asset Portfolio 6 General Information 15 Contact Information 18 * Collectively, these comprise the ACD s Report.

3 FP Pictet OEIC Authorised Corporate Director s Report We are pleased to present the Interim Report & Financial Statements for FP Pictet for the period ending 31 March Authorised Status FP Pictet OEIC ( the Company ) is an investment company with variable capital incorporated in England and Wales under registered number IC and authorised by the Financial Conduct Authority ( FCA ) with effect from 29 May The Company has an unlimited duration. Shareholders are not liable for the debts of the Company. Head Office: The Head Office of the Company is at Cedar House, 3 Cedar Park, Cobham Road, Wimborne, Dorset, BH21 7SB. The Head Office is the address of the place in the UK for service on the Company of notices or other documents required or authorised to be served on it. Structure of the Company The Company is structured as an umbrella company, in that different Funds may be established from time to time by the ACD with the approval of the FCA. On the introduction of any new Fund or Class, a revised prospectus will be prepared setting out the relevant details of each Fund or Class. The Company is a non-ucits retail scheme ( NURS ). The assets of each Fund will be treated as separate from those of every other Fund and will be invested in accordance with the investment objective and investment policy applicable to that Fund. Investment of the assets of each of the Funds must comply with the FCA s Collective Investment Schemes Sourcebook ( COLL ), the FCA s Investment Funds Sourcebook ( FUND ) and the investment objective and policy of the relevant Fund. Currently the Company has one Fund, but in the future there may be other Funds established. Under the Alternative Investment Fund Managers Directive ( AIFMD ) we are required to disclose remuneration information (see page 16) in regards to those individuals whose actions have a material impact on the risk profile of the Company. Important Events During the Period The Investment Association (IA) has published, in accordance with FRS 102, a revised Statement of Recommended Practice (SORP) in May 2014 which supersedes the previous SORP for the preparation of Financial Statements by UK Authorised Funds. The recommendations of this SORP are applicable to accounting periods beginning on or after 1 January 2015 and therefore have been applied in these Financial Statements. Base Currency: The base currency of the Company and each Fund is Pounds Sterling. Share Capital: The minimum Share capital of the Company is 1 and the maximum is 100,000,000,000. Shares in the Company have no par value. The Share capital of the Company at all times equals the Net Asset Values each of the Funds. 3

4 FP Pictet OEIC Certification of Financial Statements by the Directors of the ACD For the period ended 31 March 2016 Directors Certification This report has been prepared in accordance with the requirements of COLL and FUND, as issued and amended by the FCA. We hereby certify the report on behalf of the Directors of Fund Partners Limited. The Directors are of the opinion that it is appropriate to continue to adopt the going concern basis in the preparation of the Financial Statements as the assets of the Funds consist predominantly of securities that are readily realisable, and, accordingly the Funds have adequate resources to continue in operational existence for the foreseeable future. J. Gardner L. Isaacs Fund Partners Limited 23 May

5 Notes to the Financial Statements For the period ended 31 March 2016 (unaudited) Accounting Basis, Policies and Valuation of Investments (a) Basis of accounting The Interim Financial Statements have been prepared under the historical cost basis, as modified by the revaluation of investments and in accordance with the Statement of Recommended Practice ( SORP ) for Financial Statements of Authorised Funds issued by the Investment Association in May As described in the Certification of Financial Statements by Directors of the ACD on page 4, the ACD adopts the going concern basis in the preparation of the aggregated Financial Statements and the Financial Statements of the Funds. (b) Basis of valuation of investments Listed investments are valued at close of business bid prices excluding any accrued interest in the case of fixed interest securities, on the last business day of the accounting period. Market value is defined by the SORP as fair value which is the bid value of each security. Collective Investment Schemes are valued at quoted bid prices for dual priced funds and at quoted prices for single priced funds, on the last business day of the accounting period. The fair value of derivative instruments is marked to market value. The forward currency contracts are valued at the prevailing forward exchange rates. 5

6 Investment Manager s Report For the period ended 31 March 2016 (unaudited) Investment Objective The objective of the Fund is to provide investors with a positive absolute return in excess of the ICE LIBOR GBP 3 Month rate (London Interbank Offered Rate) in Pounds Sterling over 12-month rolling periods. Capital invested in the Fund is at risk and there is no guarantee that the investment objective will be met over any 12 month rolling period or at all. Investment Policy The Fund will invest in Collective Investment Schemes (third party and those managed by the Investment Manager and or its affiliates) and transferable securities, including fixed income investments (debt securities) and equities. Additionally, the Fund may invest directly in derivatives, structured products, warrants, money market instruments, cash and deposits. The Fund will also seek exposure to commodities, precious metals and property indirectly through investment in Collective Investment Schemes (third party and those managed by the Investment Manager and or its affiliates), and certain structured products (being transferable securities). During normal market conditions the investments of the Fund will be diversified across asset classes. However the investments of the Fund will not be restricted by asset class, geographic or economic sector, meaning that, from time-to-time, investment may be focussed on one, or on a limited number of asset classes, countries, or on one, or on a limited number of economic sectors. The portfolio will be hedged to ensure that Non-Sterling exposure will be a maximum of 40%. Where, in the opinion of the Investment Manager it is prudent to do so, the Fund may hold up to 100% of its assets in cash. Use may also be made of stock lending agreements and repurchase or reverse repurchase transactions, in order to increase its capital or to reduce its costs or risks and borrowing in accordance with the Regulations. Subject to the Regulations, all types of derivative financial instruments may be used for investment purposes and for the purposes of hedging and/or efficient portfolio management. Such instruments will include futures, options, swaps, forward contracts with underlying assets including, currencies, interest rates, transferable securities, indices, gold and Collective Investment Schemes. Investment Review We cut out exposure to risk assets aggressively lowering equities from over 50% in July to only 20% of the portfolio in August. Over the fourth quarter we increased equity exposure steadily but mainly through buying back in Europe and Japan where we had the most confidence in the potential for earnings to surprise on the upside. Generally our positioning in equities during the last quarter of 2015 was good. We had high exposure to Japan, the top performing market. In Europe, markets were very volatile, with the fourth quarter producing a positive contribution as our holdings in Italy, Germany, Small Cap and Telecoms all rallied. Global equities, principally our holdings in the Pictet-Digital Communication fund, contributed positively in the fourth quarter. Negatives for the quarter came from government bonds, holdings in UK gilts and US treasuries. Our holdings in credit, principally US high yield and UK investment grade bonds also performed poorly. Among the smaller asset categories, gold bullion fell during the quarter. On the other hand we did benefit in the quarter from real estate and alternative assets, which were mainly the holdings in listed aircraft leases. 6

7 Investment Manager s Report (continued) For the period ended 31 March 2016 (unaudited) Investment Review (continued) During the first quarter of the year the Fund had exposure to some of the better performing assets, such as Gold bullion, US Inflation Linked Government bonds, US High yield bonds and Emerging market government bonds which helped performance. Credit, principally our holdings in US high yield bonds which after sharp falls recovered, contributed positively to performance. Poor performance from the Fund s principal risk positions in Japanese and European equities, which gave back much of the ground which they had gained in 2015, detracted from performance. We cut our holding in Italian equities early on because of its heavy weighting towards banks, but the remaining holdings in Europe, especially the holding in Small Cap companies also suffered. The Fund has to hedge some of its overseas currency exposure back into pounds so that it is compliant with the minimum sterling exposure guidelines. With the pound weak during the period these hedges resulted in a loss to the Fund. Performance of the Fund FP Pictet Multi Asset Portfolio (A GBP): -0.35% net of fees Source: Pictet Asset Management Market Overview The period under review started with a bounce back in equity markets, together with a gentle drift upwards in bond yields as the 2015 summer flight for safety unwound. The US dollar s inexorable rise continued as investors correctly anticipated the December rise in official interest rates, the first since Sterling though began to come under increasing pressure at the end of the quarter, as nervousness over the forthcoming referendum on European Union membership and the very low level of inflation, further postponed the prospect of UK interest rate increases. Fixed income assets performed less well in the fourth quarter, as the summer rush to safety within government bonds reversed course. Equity markets plunged during the first six weeks of 2016, in what was one of the weakest starts to a new year on record. Although there was some recovery during late February and March, most stock markets remain down year to date in local currency terms. Markets remain fragile and nervous about the prospects for growth and earnings. At the end of the period there was much negative sentiment which in the normal run of events would allow for something of a relief rally. Outlook The key determinant of financial market performance will be the gentle recovery in US activity levels and the US consumers demand for imported products. If current trends remain in place and the US recovery neither becomes too robust, which could trigger early interest rate rises, or too weak, which would threaten corporate profits, then investors should gradually recover their nerves. In that environment the principal beneficiaries should be the exporting economies of Northern Asia. The process should be assisted by more determined efforts by the Chinese government to support domestic growth through further fiscal stimulus. We have therefore established a position in Asian equities where valuation levels still discount a considerable amount of bad news. For America itself a more consistent growth rate should be of greater benefit to the credit sector, especially high yield bonds where considerable corporate distress is currently priced into bond yields. We find this a more attractive way of benefitting from the moderate US recovery than the equity market itself, which looks fairly fully priced. 7

8 (continued) Investment Manager s Report (continued) For the period ended 31 March 2016 (unaudited) Outlook (continued) Then there is Europe, where political risk remains high in the run up to the UK referendum in June. We have tended to avoid UK assets over the previous year. While we are still cautious of the UK position, the bigger risk now is to European assets. We have consolidated our European holdings to the Telecom sector and some small cap stocks and hedged the Euro currency exposure. After a disappointing quarter we have retained a smaller exposure in Japan, allocating funds elsewhere in Asia. The market is cheap by international standards, but the government s reform drive has lost momentum, as has the Bank of Japan s efforts to restore inflation. To balance the portfolios risk positions in equities we have retained a position in US 30 year bonds, a switch from our holding in US Inflation linked securities that had already performed quite well. We have also retained a position in gold bullion and UK property which should serve the same function if growth is sufficiently strong to revive inflationary fears. We expect that the fragility of investment sentiment will keep markets choppy over the coming months. As a result we are not using all of our risk budget and have 16% cash to deploy as opportunities arise. Investment Manager Pictet Asset Management Ltd 18 April

9 Net Asset Value per Share As at 31 March 2016 (unaudited) Net Asset Value Date Net Asset Value of Share Class ( ) Shares in Issue Net Asset Value per Share (p) Share Class A Accumulation 31/03/16 1,774,458 1,858, Share Class E Accumulation 31/03/16 9,951,930 10,407, All Share Classes were launched on 10 June The first variable price dealing date was 24 June Distribution The Fund distributes annually, following the annual accounting period. Therefore there is no distribution in the current period. 9

10 Performance Information As at 31 March 2016 (unaudited) Total Expense Ratios Date AMC (%) Investment manager (%) Synthetic expense ratio (%) Total expense ratios (%) 31/03/16 Share Class A Accumulation Share Class E Accumulation * * The above figure is rounded, the actual Investment Manager fee for E Accumulation Share Class is as per prospectus. The Total Expense Ratio ( TER ) is the total expenses paid by the Fund in the period, annualised, against its average Net Asset Value. The TER will fluctuate as underlying costs change. The Fund has invested in Collective Investment Schemes during the period and the expenses incurred by these schemes are included in the above as the Synthetic expense ratio. Risk Warning An investment in an Open-Ended Investment Company should be regarded as a medium to long term investment. Investors should be aware that the price of Shares and the income from them may fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. Investments denominated in currencies other than the base currency of a fund are subject to fluctuation in exchange rates, which may be favourable or unfavourable. 10

11 Portfolio Statement As at 31 March 2016 (unaudited) Holdings or Nominal Value Investments Market Value % of Total Net Assets Bonds 11.91% GBP 500,000 UK Treasury Bill 0% 16/05/ , USD 1,320,000 US Treasury Bond 2.5% 15/02/ , ,396, Collective Investment Schemes 58.85% 8,092 AXA US High Yield Bonds I Capitalisation 1,088, ,000 GLI Alternative Finance 189, ,846 Henderson UK Property OEIC 1,085, ,817 M&G Corporate Bond 516, ,301 Neuberger Berman High Yield Bond Fund USD 1,116, ,765 Pictet-Asian Equities Ex Japan 579, ,043 Pictet-Digital Communication 759, ,828 Pictet-Japanese Equity Selection 898, Pictet-Small Cap Europe 436, ,102 Riverstone Energy 57, ,580 VPC Specialty Lending Investments 172, ,901, Equities 4.69% 277,000 Amedeo Air Four Plus 277, ,000 Doric Nimrod Air Three Preference Shares 272, , Exchange Traded Funds 13.66% 47,864 ishares Gold Producers 284, ,331 Source Physical Gold 617, Source STOXX Europe 600 Optimised 7,900 Telecommunications 699, ,601, Forward Currency Contracts (0.01%) Sold EUR1,700,000 for GBP1,327,945 Settlement 22/04/2016 (20,538) (0.18) Sold JPY44,200,000 for GBP275,099 Settlement 22/04/2016 1, Sold USD3,625,000 for GBP2,540,025 Settlement 22/04/ , (1,117) (0.01) 11

12 (continued) Portfolio Statement (continued) As at 31 March 2016 (unaudited) Holdings or Nominal Value Investments Market Value % of Total Net Assets Futures (0.11%) 6 CBOE VIX Index Futures April 2016 (13,797) (0.12) 5 CBOE VIX Index Futures May 2016 (348) Topix Market Index Futures June (13,204) (0.11) Portfolio of investments 10,435, Net other assets 1,290, Net assets 11,726, All investments are Collective Investment Schemes unless otherwise stated. All investments are ordinary Shares unless otherwise stated and admitted to official stock exchange listings. Gross purchases for the period: 35,050,279. Total sales net of transaction costs for the period: 23,536,

13 Statement of Total Return For the period ended 31 March 2016 (unaudited) 10/06/15 to 31/03/16 Income: Net capital losses (538,374) Revenue 124,213 Expenses (38,531) Interest payable and similar charges (2,053) Net revenue before taxation 83,629 Taxation (9,577) Net revenue after taxation 74,052 Total return before distributions (464,322) Distributions 6,227 Change in net assets attributable to Shareholders from investment activities (458,095) Statement of Change in Net Assets Attributable to Shareholders For the period ended 31 March 2016 (unaudited) 10/06/15 to 31/03/16 Opening net assets attributable to Shareholders Amounts receivable on issue of Shares 12,324,420 Amounts payable on cancellation of Shares (140,952) 12,183,468 Dilution adjustment 1,015 Change in net assets attributable to Shareholders from investment activities (see above) (458,095) Closing net assets attributable to Shareholders 11,726,388 13

14 (continued) Balance Sheet As at 31 March 2016 (unaudited) 31/03/16 Assets: Fixed assets: Investments 10,470,305 Current assets: Debtors 1,013,746 Cash and bank balances 2,224,396 Total current assets 3,238,142 Total assets 13,708,447 Liabilities: Investment liabilities (34,683) Creditors: Bank overdrafts (355,065) Other creditors (1,592,311) Total liabilities (1,982,059) Net assets attributable to Shareholders 11,726,388 14

15 FP Pictet OEIC General Information Classes of Shares The Company can issue different Classes of Shares in respect of any Fund. Holders of Income Shares are entitled to be paid the revenue attributable to such Shares, in respect of each annual accounting period. Holders of Accumulation Shares are not entitled to be paid the revenue attributable to such Shares, but that revenue is retained and accumulated for the benefit of Shareholders and is reflected in the price of Shares. Valuation Point The valuation point for each Fund is 12 noon on each dealing day (being each day which is a business day in London). Valuations may be made at other times under the terms contained within the Prospectus. Buying and Selling Shares The ACD will accept orders to deal in the Shares on normal business days between 9.00 am and 5.00 pm. Instructions to buy or sell Shares may be either in writing to: Fund Partners Ltd - Pictet, PO Box Chelmsford, CM99 2EH or by telephone on A contract note will be issued by close of business on the next business day after the dealing date to confirm the transaction. Prices The prices of Shares for each class in each Fund will be posted via a link on and prices can also be obtained by telephoning the Administrator on (UK only) or (outside the UK) during the ACD s normal business hours. Report The annual short report of the Company will normally be published within two months of each annual accounting period, although the ACD reserves the right to publish the annual report at a later date but not later than four months from the end of each annual accounting period and the interim short report will be published within two months of each interim accounting period. Interim Financial Statements period ended Annual Financial Statements year ended 31 March 30 September Distribution Payment Dates Interim Annual Not applicable as the Fund distributes annually 30 November * Please note that telephone calls may be recorded for monitoring and training purposes and to confirm investors instructions. 15

16 FP Pictet OEIC General Information (continued) Significant Information Under the Alternative Investment Fund Managers Directive ( AIFMD ), acting as the Alternative Investment Fund Manager ( AIFM ), Fund Partners are required to disclose how those whose actions have a material impact on the Fund are remunerated. The remuneration strategy across Fund Partners is governed by the Remuneration Committee, a committee appointed by the Fund Partners Board. The Remuneration Committee has established an AIFM Remuneration Policy designed to ensure the AIFM Remuneration Code in the UK Financial Authority handbook is met proportionately for all AIFM Remuneration Code Staff. Fund Partners considers its activities as non complex due to the fact that regulation limits the AIF strategies conducted and the scope of investment in such a way that investor risk is mitigated. The discretion of Fund Partners and the portfolio manager is strictly controlled within certain pre-defined parameters as determined in the prospectus of each Alternative Investment Fund. In its role as an AIFM, Fund Partners deems themselves as lower risk due to the nature of the activities it conducts. Fund Partners does not pay any form of variable remuneration currently. Therefore Fund Partners have provided a basic overview of how staff whose actions have a material impact on the Fund are remunerated. Number of Beneficiaries Total remuneration paid Fixed remuneration Variable remuneration paid Carried interest paid by the AIF March 2016 Total remuneration paid by the AIFM during the financial year 45 1,454,939 1,454, Remuneration paid to employees of the AIFM who have a material impact on the risk profile of the AIF 4 373, , Due to the size and structure of Fund Partners, it is determined that employees of the AIFM who have a material impact on the risk profile of the AIF include the Board and the Head of Risk and Compliance. The delegated investment manager is subject to regulatory requirements on remuneration that Fund Partners deem to be equally as effective as those detailed in the AIFMD, which would include the Capital Requirements Directive or Markets in Financial Instruments Directive. 16

17 FP Pictet OEIC General Information (continued) Other Information The Instrument of Incorporation, Prospectus and the most recent interim and annual reports may be inspected at the office of the ACD which is also the Head Office of the Company and copies may be obtained upon application. Shareholders who have any complaints about the operation of the Company should contact the ACD or the Depositary in the first instance. In the event that a Shareholder finds the response unsatisfactory they may make their complaint direct to the Financial Ombudsman Service at South Quay Plaza, 183 Marsh Wall, London E14 9SR. Data Protection Shareholders names will be added to a mailing list which may be used by the ACD, its associates or third parties to inform investors of other products by sending details of such products. Shareholders who do not want to receive such details should write to the ACD requesting their removal from any such mailing list. Effects of Personal Taxation Investors should be aware that unless their Shares are held within an ISA, selling Shares is treated as a disposal for the purpose of Capital Gains tax. Risk Warning An investment in an Open-Ended Investment Company should be regarded as a medium to long term investment. Investors should be aware that the price of Shares and the income from them may fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. Investments denominated in currencies other than the base currency of a fund are subject to fluctuation in exchange rates, which may be favourable or unfavourable. 17

18 FP Pictet OEIC Contact Information The Company and Head Office FP Pictet OEIC Cedar House, 3 Cedar Park, Cobham Road, Wimborne, Dorset BH21 7SB Incorporated in England and Wales under registration number IC Website address: (Authorised and regulated by the FCA) Authorised Corporate Director ( ACD ) Fund Partners Limited Cedar House, 3 Cedar Park, Cobham Road, Wimborne, Dorset BH21 7SB (Authorised and regulated by the FCA and a member of the Investment Association (formerly Investment Management Association)) Directors of the ACD Company Secretary of the ACD R. Coe (Resigned 31 July 2015) P. Legg J. Gardner V. Hoare L. Isaacs (appointed 4 May 2016) K. Lavery P. Legg Non-executive Directors M. Adorian (Resigned 2 October 2015) P. Wilcox Registrar International Financial Data Services Limited Head Office: IFDS House, St Nicholas Lane, Basildon, Essex SS15 5FS Customer Service Centre Fund Partners Ltd - Pictet PO Box 12265, Chelmsford CM99 2EH Telephone: * Fax: Depositary State Street Trustees Limited 20 Churchill Place, London E14 5HJ (Authorised and regulated by the FCA) Auditor Deloitte LLP Chartered Accountant and Statutory Auditor Saltire Court, 20 Castle Terrace, Edinburgh EH1 2DB Investment Manager Pictet Asset Management Limited Moor House, Level 11, 120 London Wall, London EC2Y 5ET (Authorised and regulated by the FCA) * Please note that telephone calls may be recorded for monitoring and training purposes, and to confirm investors instructions. 18

19 FUND PARTNERS