The Charity Multi-Asset Fund. Interim Report and Accounts September 2017

Transcription

1 Interim Report and Accounts September 2017

2 Contents The Charity Multi-Asset Fund Fund Information Investment objective and policy Financial highlights Fund information Ongoing charges figure Total purchases and sales Participation Management charges Investment Adviser Supervisory Board Review of Investment Activities Risk Profile Specific risks Net Asset Value and Comparative Tables Unit price range Net revenue Net asset value Fund performance Portfolio Statement Summary of Portfolio Transactions Largest purchases Largest sales Statement of the Manager s Responsibilities Statement of Total Return (unaudited) Statement of Change in Net Assets Attributable to Unitholders (unaudited) Balance Sheet (unaudited) Notes to the Accounts (unaudited) Basis for preparation Accounting policies Distribution Table (unaudited) Quarterly distribution for the three months ended 30 June Interim distribution for the three months ended 30 September Equalisation General Information Collectively these comprise the Manager s report.

3 Fund Information Investment objective and policy The Charity Multi-Asset Fund (the fund ) aims to at least maintain the real value of capital whilst generating a sustainable and reliable distribution through investment in collective investment schemes as well as directly held transferable securities, derivatives, cash, deposits and money market instruments. Financial highlights Selling price % change A Distribution units 53.82p 54.12p (0.55) A Accumulation units 80.17p 79.12p 1.33 S Distribution units 55.40p 55.69p (0.52) S Accumulation units 62.14p 61.23p to to Distributions per A Distribution unit p p Fund information Launch date 29 June 2007 Launch price 50.00p per A Distribution unit 50.00p per A Accumulation unit Launch date 1 October 2014 Launch price 50.00p per S Distribution unit 50.00p per S Accumulation unit Quarterly Interim Quarterly Final Accounting dates 30 June 30 September 31 December 31 March Distribution allocation dates 31 August 30 November 28 February 31 May Ongoing charges figure For the period For the period For the year to from to A Distribution units 1.18% % % A Accumulation units 1.18% % % S Distribution units 0.88% % % S Accumulation units 0.88% % % 1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period. 2 The Ongoing charges figure is a projected figure based on the latest expenses of these unit classes. 3

4 Fund Information (continued) Total purchases and sales For the period For the year to to s 000 s Total purchases 75, ,286 Total sales 43,056 96,713 Participation Charities in England and Wales (and every appropriate body in Scotland and Northern Ireland) may participate in the fund unless specifically precluded by their deeds or other governing instrument. For A Distribution units and A Accumulation units the minimum initial investment is 1,000 and, for subsequent purchases 500. Applications for subscriptions into the S Distribution units and S Accumulation units are accepted at Schroder Unit Trusts Limited (the Manager s) discretion. There is no maximum limit on the amount which may be invested. The fund can issue both Distribution and Accumulation units. Distribution unitholders receive regular quarterly distributions, while accumulation unitholders benefit from the reinvestment of their income into the fund. Management charges There is no preliminary charge. The Annual management charge is 0.65% (plus VAT) of the value of the fund for A Distribution units and A Accumulation units and 0.40% (plus VAT) of the value of the fund for S Distribution units and S Accumulation units and is charged to the capital of the fund. The Annual management charge in respect of Schroder funds in which the fund invests is rebated to the fund so that no double charging occurs. Investment Adviser The Manager has delegated the function of Investment Adviser to Schroder Investment Management Limited. The Investment Adviser has appointed Schroder & Co. Limited as its delegated sub-investment adviser. Supervisory Board The duties and responsibilities of the Supervisory Board are set out in the Scheme. These include the determination of the criteria and methods for evaluating the performance of the fund, making and revising a written statement of the investment objectives of the fund and an obligation to inform the Charity Commissioners promptly should the Supervisory Board not be satisfied at any time as to the compliance with the Scheme Particulars by the Trustee or the Manager. 4

5 Review of Investment Activities From 31 March 2017 to 29 September 2017, the price of A Accumulation units on a selling price to selling price basis rose 1.33%. In comparison, the FTSE 1 All Share Index generated a total return of 3.58% 2 and the FTSE 1 British Government Fixed All Stocks Index generated a negative total return of 1.73% 2. The strong returns of 2016, boosted by a weak sterling post EU referendum, have faded over the last six months. Returns are still positive, just more muted. At the margin, we have been reducing risk in the fund through the summer. We have reduced equities through the sale of the Artemis UK Special Situations Fund, decreasing domestic mid cap exposure. We have increased our allocation to European equities, where valuations are more reasonable, through the Jupiter European Special Situations Fund and Schroder European Alpha Income Fund. The eurozone, having lagged the rest of the developed world, has seen a notable improvement during 2017 and looks set to record the best annual gain in GDP since Within alternatives, we have also been increasing exposure to absolute return through the BMO Pyrford Global Total Return Fund from cash. Positive economic growth and strong corporate earnings are supportive for equity markets. Sentiment is upbeat, although it is a concern when consensus is as unanimous as it is today, with commentators and investors universally positive on equities and negative on government bonds. This does temper our enthusiasm for being overweight in equities our positioning is more neutral, noting that few markets are cheap on traditional valuation metrics. We agree with the negative view on bonds, where we maintain our long held underweight position. We continue to value diversifiers in portfolios, whether income generating assets such as property and infrastructure, or risk reducing assets such as absolute return. These help to protect the fund against geopolitical or economic risks that could upset the current calm and low volatility in investment markets. 1 FTSE International Limited ( FTSE ) FTSE. FTSE is a trade mark of London Stock Exchange plc and The Financial Times Limited and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent. 2 Source: Thomson Reuters Datastream. Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. Co-Fund Manager: Kate Rogers Kate has fifteen years investment experience, specialising in investment on behalf of charities, endowments and foundations and joined Schroders Charities in 2005 after four years with Kleinwort Benson Private Bank Charity team She is a CFA charterholder and has a BSc (Hons) in natural sciences from the University of Durham, is Chair of her local community foundation, and governor of her local primary school She is also Chair of the Charity Investors Group, which is a membership organisation providing a forum for investment debate Co-Fund Manager: Tom Montagu-Pollock Tom joined Schroders and began his investment career in 2005 after graduating from Newcastle University with a BA (Hons) in Business Management He co-manages the Charity Multi- Asset Fund having been involved in its running since launch in 2007 Tom is a full member (MCSI) of the Chartered Institute for Securities and Investment He has also completed the London Business School Foundation and Endowment Asset Management Course 5

6 Risk Profile Specific risks The fund invests in assets which are exposed to currencies other than sterling. Exchange rates may cause the value of overseas investments and the revenue from them to rise or fall. The fund invests in emerging markets and the Far East. This involves a high degree of risk and should be seen as long term in nature. The fund may invest in unregulated collective investment schemes, which involves a higher degree of risk as they are not regulated by the Financial Conduct Authority (FCA). The funds may not be readily realisable and priced less frequently than listed shares or authorised unit trusts, and therefore price swings may be more volatile. The fund invests in a wide range of derivatives in order to meet its investment objectives and for leverage. The use of leverage can increase gains as well as losses and expose the fund to increased risk. The fund invests in alternative investments (including commodities, hedge funds, real estate funds and private equity) which involves a higher degree of risk and can be more volatile. They should only be considered as a long term investment. As a result of the Annual management charges being charged wholly to capital, the distributable revenue of the fund may be higher, but the capital value of the fund may be eroded which may affect future performance. For these reasons, the purchase of units should not normally be regarded as a short term investment. 6

7 Net Asset Value and Comparative Tables Financial year to 31 March A Distribution units A Accumulation units Unit price range Highest Lowest Highest Lowest buying selling buying selling p p p p Financial period to 30 September Financial year to 31 March S Distribution units S Accumulation units Highest Lowest Highest Lowest buying selling buying selling p p p p Financial period to 30 September Net revenue A Distribution units A Accumulation units Financial year to 31 March pence per unit pence per unit Financial period to 30 September S Distribution units S Accumulation units Financial year to 31 March pence per unit pence per unit Financial period to 30 September

8 Net Asset Value and Comparative Tables (continued) Net asset value Net asset Net asset value value per unit Number of As at 31 March 000 s p units in issue 2015 A Distribution units 21, ,409,611 A Accumulation units 7, ,191,096 S Distribution units 283, ,315,291 S Accumulation units 77, ,308, A Distribution units 17, ,610,433 A Accumulation units 7, ,792,831 S Distribution units 285, ,035,408 S Accumulation units 105, ,100, A Distribution units 23, ,581,374 A Accumulation units 8, ,494,499 S Distribution units 315, ,221,547 S Accumulation units 148, ,757, at 30 September A Distribution units 25, ,919,212 A Accumulation units 8, ,968,480 S Distribution units 333, ,637,281 S Accumulation units 171, ,277,050 Fund performance Net asset Net asset value per unit value per unit p p as at as at % change A Distribution units (0.58) A Accumulation units S Distribution units (0.54) S Accumulation units Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. 8

9 Portfolio Statement Absolute Return Funds 15.97% ( %) Holding at Market Value % of net s assets BMO Pyrford Global Total Return Fund C Accumulation 1 844,299 9, CF Ruffer Total Return Fund I Income ¹ 5,568,819 17, Henderson Gartmore United Kingdom Absolute Return Fund G Distribution ¹ 2,160,195 12, Majedie Tortoise Fund Z Income 14,919,373 15, Schroder International Selection Fund SICAV Emerging Markets Debt Absolute Return C Distribution GBP Hedged ¹ ² 597,578 13, Trojan Fund S Income ¹ 7,062,158 17, , Asia Pacific ex Japan Equity Funds 2.55% ( %) Schroder Asian Alpha Plus Fund A Income ¹ ² 10,423,580 13, , Commercial Property Funds 9.74% ( %) Ground Rents Income Fund 9,200,000 10, Henderson UK Property PAIF A Income ¹ 11,442,519 11, Mayfair Capital Property Income Trust for Charities ¹ 22,390,304 18, The Charities Property Fund ¹ 9,399,457 11, , Commodity Funds 2.84% ( %) ETFS GBP Daily Hedged Physical Gold 1,154,711 8, Schroder Alternative Solutions SICAV Commodity Fund I Accumulation GBP Hedged ¹ ² 91,686 6, ,

10 Portfolio Statement (continued) Emerging Markets Equity Funds 5.40% ( %) Holding at Market Value % of net s assets Schroder Global Emerging Markets Fund A Income ¹ ² 15,692,879 29, , European Equity Funds 4.33% ( %) Jupiter European Special Situations Fund I Income ¹ 2,713,357 11, Schroder European Alpha Income Fund A Income ¹ ² 5,488,608 11, , Global Funds 10.26% ( %) Schroder QEP Global Core Fund I Income ¹ ² 18,182,207 55, , Infrastructure 2.87% ( %) 3i Infrastructure 2,484,924 4, HICL Infrastructure 2,989,008 4, International Public Partnerships 3,803,117 5, , Japanese Equity Funds 2.45% ( %) Schroder Tokyo Fund A Income ¹ ² 3,956,413 13, , UK Equity Funds 32.86% ( %) Aberdeen UK All Share Tracker Fund B Income ¹ 16,617,102 23, Majedie UK Equity Fund X Income ¹ 20,301,145 31, Old Mutual UK Alpha Fund U2 Income ¹ 27,434,673 32, The Charity Equity Fund A Income ¹ ² 10,301,151 42,

11 Portfolio Statement (continued) UK Equity Funds (continued) Holding at Market Value % of net s assets The Equity Income Trust for Charities A Income ,032,284 22, Trojan Income Fund S Income ¹ 12,273,319 23, , US Equity Funds 5.92% ( %) Vanguard S&P 500 UCITS ETF 896,482 31, , UK Fixed Interest Funds 1.42% ( %) Vontobel TwentyFour Absolute Return Credit Fund AQNG Income ¹ 73,921 7, , US Fixed Interest Funds 0.00% ( %) Portfolio of investments 521, Net other assets 18, Net assets attributable to unitholders 539, Unless otherwise stated the above securities are ordinary shares or common stock and admitted to official stock exchange listings or collective investment schemes permitted under the FCA s Collective Investment Schemes sourcebook (COLL). 1 Collective investment scheme permitted under the FCA s COLL, not listed on any exchange. 2 A related party to the fund. 11

12 Summary of Portfolio Transactions Largest purchases Largest sales Cost For the six months ended 30 September s Aberdeen UK All Share Tracker Fund B Income 14,176 Schroder European Alpha Income Fund A Income 1 11,708 The Charities Property Fund 11,574 BMO Pyrford Global Total Return Fund C Accumulation 9,545 Vontobel TwentyFour Absolute Return Credit Fund AQNG Income 7,670 Jupiter European Special Situations Fund I Income 5,992 Schroder Asian Alpha Plus Fund A Income 1 3,218 Schroder QEP Global Core Fund I Income 1 2,685 The Charity Equity Fund A Income 1 1,467 Henderson UK Property Fund PAIF A Income 1,339 Proceeds For the six months ended 30 September s Artemis UK Special Situations Fund R Accumulation 19,067 AXA US Short Duration High Yield Fund ZI Income 7,600 FP Argonaut European Alpha Fund I Institutional Income 5,178 Henderson UK Property Fund PAIF A Income 4,350 Vanguard S&P 500 UCITS ETF 3,536 Trojan Fund S Income 2,166 Henderson Gartmore United Kingdom Absolute Return Fund G Distribution 605 CF Ruffer Total Return Fund I Income A related party to the fund. 12

13 Statement of the Manager s Responsibilities The Manager is required by the Charities Act 2011 to prepare accounts for each annual and half yearly accounting period, in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which give a true and fair view of the financial position of the fund and of its net revenue and the net capital gains on the property of the fund for the period. In preparing the accounts the Manager is required to: select suitable accounting policies and then apply them consistently; comply with the requirements of the Charities Act 2011 and Regulation 6 of The Charities (Accounts and Reports) Regulations 2008; follow generally accepted accounting principles and applicable accounting standards; prepare the accounts on the basis that the fund will continue in operation unless it is inappropriate to do so; keep proper accounting records which enable it to demonstrate that the accounts as prepared comply with the above requirements; make judgements and estimates that are prudent and reasonable. The Manager is responsible for the management of the fund which was created by a Scheme of the Charity Commissioners under section 24 of the Charities Act 1993, in accordance with the Scheme Particulars and the Scheme made by the Charity Commissioners on 11 June 2007 and for taking reasonable steps for the prevention and detection of fraud, error and non-compliance with law or regulations. In accordance with the Scheme, Part 9 of the Charities Act 2011 and The Charities (Accounts and Reports) Regulations 2008 the Manager is deemed to be the Charity Trustee of the fund. In the opinion of the Manager, the Investment Adviser has complied with the terms of the Scheme, and the investment management agreement for the period from 1 April 2017 to 30 September The Manager s report and accounts for the period ended 30 September 2017 were signed on 14 November 2017 on behalf of the Manager by: J.A. Walker-Hazell Directors R.E. Stoakley 13

14 Statement of Total Return (unaudited) For the six months ended 30 September s 000 s 000 s 000 s Income Net capital gains 2,668 36,299 Revenue 5,752 5,229 Expenses (1,312) (1,112) Net revenue before taxation 4,440 4,117 Taxation 0 0 Net revenue after taxation 4,440 4,117 Total return before distributions 7,108 40,416 Distributions (10,098) (9,072) Change in net assets attributable to unitholders from investment activities (2,990) 31,344 Statement of Change in Net Assets Attributable to Unitholders (unaudited) For the six months ended 30 September s 000 s 000 s 000 s Opening net assets attributable to unitholders 495, ,494 Amounts receivable on in-specie transfers 1,458 0 Amounts receivable on issue of units 61,012 17,700 Amounts payable on cancellation of units (19,347) (11,379) 41,665 6,321 Dilution adjustment Change in net assets attributable to unitholders from investment activities (2,990) 31,344 Retained distribution on Accumulation units 3,255 2,574 Closing net assets attributable to unitholders 539, , The Opening net assets attributable to unitholders for the current period do not equal the Closing net assets attributable to unitholders for the comparative period as they are not consecutive periods. 14

15 Balance Sheet (unaudited) As at 30 September s 000 s Assets Investments 521, ,395 Current assets Debtors 5,276 1,719 Cash and bank balances 18,232 11,920 Total assets 544, ,034 Liabilities Creditors Distributions payable (3,630) (3,367) Other creditors (1,574) (769) Total liabilities (5,204) (4,136) Net assets attributable to unitholders 539, ,898 15

16 Notes to the Accounts (unaudited) Basis for preparation The accounts have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with applicable law and the Charities Act 2011, the Charities (Accounts and Reports) Regulations 2008, the Scheme of the Charity Commissioners of 11 June 2007 and the disclosure requirements of the Statement of Recommended Practice (SORP) for Financial Statements of UK Authorised Funds issued by the Investment Management Association (IMA (now The Investment Association)) in May 2014 (SORP 2014), and in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS102)). The accounts are exempt from complying with the Accounting and Reporting by Charities SORP 2015 under paragraph 15 of that document. Accounting policies The accounting policies applied are consistent with those of the annual accounts for the year ended 31 March 2017 and are described in those annual accounts. 16

17 Distribution Table (unaudited) Quarterly distribution for the three months ended 30 June 2017 Group 1 Units purchased prior to 1 April 2017 Group 2 Units purchased on or after 1 April 2017 A Distribution units Net Distribution Distribution income Equalisation paid paid p per unit p per unit p per unit p per unit Group Group A Accumulation units Group Group S Distribution units Group Group S Accumulation units Group Group Interim distribution for the three months ended 30 September 2017 Group 1 Units purchased prior to 1 July 2017 Group 2 Units purchased on or after 1 July 2017 Net Distribution Distribution income Equalisation payable paid p per unit p per unit p per unit p per unit A Distribution units Group Group A Accumulation units Group Group S Distribution units Group Group S Accumulation units Group Group Equalisation Equalisation applies to units purchased during the distribution period (Group 2 units). It is the average amount of revenue included in the purchase price of Group 2 units and is refunded to the holders of these units as a return of capital. 17

18 General Information Manager Schroder Unit Trusts Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Investment Adviser Schroder Investment Management Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Sub Investment Advisor Schroder & Co. Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Supervisory Board M. Pomery (Chairman) J. Brooke Turner C. Brown D. Gibbons R.E. Hills M. Samuel Trustee J.P. Morgan Europe Limited Chaseside Bournemouth BH7 7DA Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority Registrar Schroder Unit Trusts Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Administration Details Schroders FREEPOST RLTZ-CHSY-HBUT PO Box 1102 Chelmsford Essex CM99 2XX Investor Services Dealing Fax Independent Auditors PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh EH3 8EX The Charity Multi-Asset Fund is a registered charity. Its registered number is

19 For further literature please contact Schroder Investor Services on or at or visit our website at Issued in November 2017 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: England. Authorised and regulated by the Financial Conduct Authority. w35641 MR109BI17

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