Interim Report & Financial Statements. FP SCDavies Funds. For the six months ended 31 August 2016 (unaudited) FUND PARTNERS

Transcription

1 Interim Report & Financial Statements FP SCDavies Funds For the six months ended 31 August 2016 (unaudited) FUND PARTNERS

2 contents FP SCDavies Funds Page Authorised Corporate Director s ( ACD ) Report* 3 Certification of Financial Statements by Directors of the ACD* 4 Notes to the Financial Statements 5 Individual Funds Investment Commentary and Financial Statements FP SCDavies Global Alternatives Fund 6 FP SCDavies Global Equity Fund 13 FP SCDavies Global Fixed Income Fund 20 General Information 28 Contact Information 30 * Collectively, these comprise the ACD s Report. 2

3 FP SCDavies Funds Authorised Corporate Director's Report We are pleased to present the Interim Report & Financial Statements for FP SCDavies Funds for the six months ended 31 August Authorised Status FP SCDavies Funds ("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 12 November 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 Share Class, a revised prospectus will be prepared setting out the relevant details of each Fund or Share Class. The Company is a UCITS scheme. 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") and the investment objective and policy of the relevant Fund. Currently the Company has three Funds. In the future there may be other Funds established. Crossholdings There were no Shares in any fund held by any other fund 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 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 sum of the Net Asset Values of each of the Funds. 3

4 FP SCDavies Funds Certification of Financial Statements by Directors of the ACD For the six months ended 31 August 2016 (unaudited) Directors' Certification This report has been prepared in accordance with the requirements of COLL, 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 K. Lavery Fund Partners Limited 25 October

5 FP SCDavies Funds Notes to the Interim Financial Statements 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 FRS 102 The Financial Reporting Standards Applicable in the UK and Republic of Ireland and the Statement of Recommended Practice ( SORP ) for Financial Statements of Authorised Funds issued by the Investment Association in May The accounting policies applied are consistent with those of the audited annual Financial Statements for the year ended 28 February 2016 and are described in those Financial Statements. In this regard, comparative figures from previous periods are prepared to the same standards as the current period, unless otherwise stated. As described in the Certification of Financial Statements by Directors of the ACD on page 4, the ACD continues to adopt the going concern basis in the preparation of the Financial Statements of the Funds. (b) Basis of valuation of investments 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. Non-observable entity specific data is only used where relevant observable market data is not available. Typically this category will include single broker-priced instruments, suspended/unquoted securities, private equity, unlisted close-ended funds and open-ended funds with restrictions on redemption rights. 5

6 FP SCDavies Global Alternatives Fund Investment Manager s Report For the six months ended 31 August 2016 (unaudited) Investment Objective The Fund aims to achieve capital growth over the long term. Investment Policy The Fund will invest in a range of Collective Investment Schemes, money market instruments, transferable securities (including structured products) and derivative instruments in order to gain indirect exposure to property, commodities, hedge funds, currency funds and convertible bonds. The portfolio will be actively managed and will normally remain fully invested unless there is significant volatility in other asset markets or asset valuations are not attractive. There will, however, be no restrictions on the underlying investments held, in terms of investment type, geographical or economic sector and the fund manager has the absolute discretion to weight the portfolio towards any investment type or sector, including cash, at any time. Borrowing will be permitted up to the levels stated in the Regulations. Foreign currency exposure may be hedged back to the base currency. The Fund may hold derivatives for investment purposes as well as for efficient portfolio management purposes. It is not intended that the use of derivatives in this way will change the risk profile of the Fund. Investment Review During the period, we made two significant purchases. We invested into TwentyFour Income Fund at a capital raise that the manager believed offered an exceptional opportunity to invest in esoteric bonds backed by assets such as mortgages, credit cards and other loans. Another investment was made in to KLS Zebra Global Equity Beta Neutral Fund. This is a long / short equity fund that buys unpopular and cheap stocks, by their proprietary measures, and sells popular and expensive stocks against them. Their thesis is that popularity of fad stocks declines over time and, on the other side, unpopular stocks hit rock bottom in investor s minds offering significant opportunities for the future. The strategy has produced strong returns unlinked to the wider stock market. Performance of the Fund Over the period from end February 2016 to end August 2016, the Fund returned +0.78% vs +0.30% for the 3 Month LIBOR Cash in Sterling. (Source: Bloomberg) Market Overview Over the period from end February 2016 to end August 2016, the global stock markets traded in a tight range of around flat to +7% up until the UK Referendum on 23 June, as measured by the MSCI AC World net in Sterling. The result of the referendum surprised the world, with the UK public voting to exit the EU, sending markets into a spin and sterling into a nose dive. Sterling plummeted over 11% vs. the US dollar in the two days post the Brexit vote and the FTSE 100 followed, falling 5.6%. Since the initial shock, stability has somewhat returned, with the perceived effects of Brexit now priced in to the affected markets. This has meant that the FTSE 100 is almost 8% higher by the end of the period than the day before the Brexit vote. This should be put into context as the weakness of Sterling means that the FTSE is worth 4.21% less in US dollar terms whilst the S&P 500 has rallied 3.16% in USD or 16.26% in Sterling. Smaller, more domestically focused UK companies, as measured by the FTSE 250 index, have rallied only 2.75% in Sterling over the same time period. In short, international companies are expected to suffer little ill from the Brexit vote but the stock market is pricing in greater pain for companies exposed to the UK economy. 6

7 FP SCDavies Global Alternatives Fund Investment Manager s Report (continued) For the six months ended 31 August 2016 (unaudited) Outlook Over the next year or so, we have many political events that pose risks to and could create opportunities for the Fund. Over the course of the next year, Brexit is expected to be formalised by the triggering of article 50, there are general elections in Holland, France & Germany, and, of course, there is the US Presidential election in November. At SCDavies, we do not attempt to estimate the price impact of these largely unknowable events but seek assets that have an acceptable future return given any of the potential outcomes. In FP SCDavies Global Alternatives Fund, we attempt to build a portfolio of holdings with a low correlation to equity markets and therefore plan that together they will produce steady and reliable returns irrespective of fluctuations in global equities. Investment Manager SCDavies & Co Ltd 26 September

8 FP SCDavies Global Alternatives Fund Net Asset Value per Share and Comparative Table As at 31 August 2016 (unaudited) Net Asset Value Date Net Asset Value Net Asset Value Percentage Share Class ( ) Shares in issue pence per Share Change (%) Share Class GBP Accumulation 28/02/16 5,397,308 5,360, /08/16 4,898,462 4,831, Distribution The Fund distributes annually, following the annual accounting period. Therefore there is no distribution in the current period. 8

9 FP SCDavies Global Alternatives Fund Performance Information As at 31 August 2016 (unaudited) Operating Charges Other Synthetic Transaction Operating AMC expenses expense ratio costs Charges Date (%) (%) (%) (%) (%) 31/08/16 Share Class GBP /02/16 Share Class GBP The Operating Charge is the ratio of the Fund's total disclosable costs (excluding overdraft interest) to the average net assets of the Fund. When a Fund invests a substantial proportion of its assets in other UCITS or Collective Investment Undertakings (CIU), the Operating Charge shall take account of the operating charges incurred in the underlying CIUs and disclose as a Synthetic expense ratio. Risk and Reward Profile As at 31 August 2016 Typically lower rewards Typically higher rewards Lower risk Higher risk Share Class GBP The indicator is based on historical data and may not be a reliable indication of the future risk profile of the Fund. The risk category shown is not guaranteed to remain unchanged and may shift over time. The lowest category does not mean 'risk free'. The Fund appears as a "3" on the scale as it experiences some rises and falls due to the variety of assets chosen. The Fund uses derivatives which may reduce the impact of variations in value. 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. 9

10 FP SCDavies Global Alternatives Fund Portfolio Statement As at 31 August 2016 (unaudited) Holdings or Nominal Market value % of Total Value Investments Net Assets Collective Investment Schemes 94.09% [77.31%] 294,656 Absolute Insight Credit 585, ,684 DB Platinum IV Systematic Alpha 576, ,474 GAM Star Cat Bond 608, ,578 GAM Star Keynes Quantitative Strategies 324, ,698 Highbridge Multi Strategy* 461, ,000 KLS Zebra Global Equity Beta Neutral 397, ,393 Salar 596, ,960 Standard Life Global Absolute Return Strategies 575, ,376 TwentyFour Income* 482, ,609, * Investment Trusts Exchange Traded Funds 5.82% [4.62%] 3,000 Gold Bullion Securities 285, , Portfolio of investments 4,894, Net other assets 4, Net assets 4,898, All investments are Collective Investment Schemes unless otherwise stated. Comparative figures shown above in square brackets relate to 28 February Gross purchases for the six months: 899,999 [2015: Nil]. Total sales net of transaction costs for the six months: 498,436 [2015: 725,509]. 10

11 FP SCDavies Global Alternatives Fund Statement of Total Return For the six months ended 31 August 2016 (unaudited) 29/02/16 to 31/08/16 01/03/15 to 31/08/15 Income Net capital gains/(losses) 45,716 (129,824) Revenue 33,213 58,682 Expenses (51,221) (59,510) Interest payable and similar charges - (110) Net expense before taxation (18,008) (938) Taxation - - Net expense after taxation (18,008) (938) Total return before distributions 27,708 (130,762) Distributions 91 (29) Change in net assets attributable to Shareholders from investment activities 27,799 (130,791) Statement of Change in Net Assets Attributable to Shareholders For the six months ended 31 August 2016 (unaudited) 29/02/16 to 31/08/16 01/03/15 to 31/08/15 Opening net assets attributable to Shareholders 5,397,308 7,010,923 Amounts received on issue of Shares 223, ,235 Less: Amounts paid on cancellation of Shares (750,526) (779,120) (527,367) (520,885) Dilution adjustment charged Change in net assets attributable to Shareholders from investment activities (see above) 27,799 (130,791) Closing net assets attributable to Shareholders 4,898,462 6,359,879 The above statement shows the comparative closing net assets at 31 August 2015 whereas the current accounting period commenced 29 February

12 FP SCDavies Global Alternatives Fund Balance Sheet As at 31 August 2016 (unaudited) 31/08/16 28/02/16 Assets Fixed assets: Investment assets 4,894,195 4,422,186 Current assets: Debtors ,538 Cash and bank balances 19, ,459 Total current assets 19,546 1,067,997 Total assets 4,913,741 5,490,183 Liabilities Investment liabilities - - Creditors: Other creditors (15,279) (92,875) Total creditors (15,279) (92,875) Total liabilities (15,279) (92,875) Net assets attributable to Shareholders 4,898,462 5,397,308 12

13 FP SCDavies Global Equity Fund Investment Manager s Report For the six months ended 31 August 2016 (unaudited) Investment Objective The Fund aims to achieve capital growth over the medium to long term. Investment Policy The Fund will invest at least 80% of its portfolio in a combination of global equities and units in Collective Investment Schemes which themselves hold direct equity or equity related instruments. The Fund may also invest, at the ACD's discretion, in other transferable securities (including structured products), money market instruments, cash and near cash and deposits to meet the investment objective. Use may also be made of stock lending and borrowing. Foreign currency exposure may be hedged back to the base currency. The Fund may hold derivatives for investment purposes as well as for efficient portfolio management purposes. It is not intended that the use of derivatives in this way will change the risk profile of the Fund. Investment Review During the period, there were no significant purchases or sales. Outperformers included our allocation to emerging markets and the Asia Pacific region with our allocation to UK mid and smaller companies the worst performing area, although still positive over the time frame. Performance of the Fund Over the period from end February to end August 2016, the Fund returned 18.21% vs 20.80% for the MSCI AC World net in Sterling. (Source: Bloomberg) Whilst we are never happy with underperforming our main benchmark, it is worth noting that the FTSE 100 returned % over the same time period which included the EU referendum result. (Source: Bloomberg) Market Overview Over the period from end February to end August 2016, the global stock markets traded in a tight range of around flat to +7% up until the UK Referendum on 23 June, as measured by the MSCI AC World net in Sterling. The result of the referendum surprised the world, with the UK public voting to exit the EU, sending markets into a spin and sterling into a nose dive. Sterling plummeted over 11% vs. the US dollar in the two days post the Brexit vote and the FTSE 100 followed, falling 5.6%. Since the initial shock, stability has somewhat returned, with the perceived effects of Brexit now priced in to the affected markets. This has meant that the FTSE 100 is almost 8% higher by the end of the period than the day before the Brexit vote. This should be put into context as the weakness of Sterling means that the FTSE is worth 4.21% less in US dollar terms whilst the S&P 500 has rallied 3.16% in USD or 16.26% in Sterling. Smaller, more domestically focused UK companies, as measured by the FTSE 250 index, have rallied only 2.75% in Sterling over the same time period. In short, international companies are expected to suffer little ill from the Brexit vote but the stock market is pricing in greater pain for companies exposed to the UK economy. Outlook Over the next year or so, we have many political events that pose risks to and could create opportunities for the Fund. Over the course of the next year, Brexit is expected to be formalised by the triggering of article 50, there are general elections in Holland, France & Germany, and, of course, there is the US Presidential election in November. At SCDavies, we do not attempt to estimate the price impact of these largely unknowable events but seek assets that have an acceptable future return given any of the potential outcomes. 13

14 FP SCDavies Global Equity Fund Investment Manager s Report (continued) For the six months ended 31 August 2016 (unaudited) Outlook (continued) In FP SCDavies Global Equity Fund, companies with strong brands, diversified revenues and stable cash flows do, and will continue to, feature heavily in our portfolio. At current market prices, there is decent, if not exceptional, value available and, as such, we would expect reasonable but not extravagant returns from our equity investments over the medium term. Any periods of price volatility would, we hope, offer a chance to increase the return potential of the portfolio for our investors. Investment Manager SCDavies & Co Ltd 26 September

15 FP SCDavies Global Equity Fund Net Asset Value per Share and Comparative Table As at 31 August 2016 (unaudited) Net Asset Value Date Net Asset Value of Net Asset Value Percentage Share Class ( ) Shares in issue pence per Share Change (%) Share Class GBP Accumulation 28/02/16 10,800,633 7,401, /08/16 10,539,845 6,110, Distribution The Fund distributes annually, following the annual accounting period. Therefore there is no distribution in the current period. 15

16 FP SCDavies Global Equity Fund Performance Information As at 31 August 2016 (unaudited) Operating Charges Synthetic Other expense Transaction Operating AMC expenses ratio costs Charges Date (%) (%) (%) (%) (%) 31/08/16 Share Class GBP /02/16 Share Class GBP The Operating Charge is the ratio of the Fund's total discloseable costs (excluding overdraft interest) to the average net assets of the Fund. When a Fund invests a substantial proportion of its assets in other UCITS or Collective Investment Undertakings (CIU), the Operating Charge shall take account of the operating charges incurred in the underlying CIUs and disclose as a Synthetic expense ratio. Risk and Reward Profile Typically lower rewards Typically higher rewards Lower risk Higher risk Share Class GBP The indicator is based on historical data and may not be a reliable indication of the future risk profile of the Fund. The risk and reward category shown is not guaranteed to remain unchanged and may shift over time. The lowest category does not mean 'risk free'. The Fund appears as a 5 on the scale. This is because it invests in Shares of companies whose values tend to vary more widely. 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. 16

17 FP SCDavies Global Equity Fund Portfolio Statement As at 31 August 2016 (unaudited) Holdings or Nominal Market value % of Total Value Investments Net Assets Collective Investment Schemes % [100.83%] 107,546 Aberdeen Emerging Markets Equity 744, ,900 Artisan Global Value 1,250, ,500 Fundsmith Equity 1,333, ,321 GAM Star Continental European Equity 1,253, ,612 GLG Japan CoreAlpha Equity 926, ,393 Heptagon Yacktman US Equity 1,255, ,000 Hermes Asia Ex-Japan Equity 1,070, ,254 MI Chelverton UK Equity Income 343, ,910 TB Wise Evenlode Income 1,158, ,135 Vulcan Value Equity 1,327, ,665, Portfolio of investments 10,665, Net other liabilities (125,478) (1.19) Net assets 10,539, All investments are Collective Investment Schemes unless otherwise stated. Comparative figures shown above in square brackets relate to 28 February Gross purchases for the six months: 2,034,344 [2015: Nil]. Total sales net of transaction costs for the six months: 4,060,115 [2015: 1,456,626]. 17

18 FP SCDavies Global Equity Fund Statement of Total Return For the six months ended 31 August 2016 (unaudited) 29/02/16 to 31/08/16 01/03/15 to 31/08/15 Income Net capital gains/(losses) 1,726,951 (700,363) Revenue 88,949 78,282 Expenses (75,955) (86,123) Interest payable and similar charges (116) (102) Net revenue/(expense) before taxation 12,878 (7,943) Taxation - - Net revenue/(expense) after taxation 12,878 (7,943) Total return before distributions 1,739,829 (708,306) Distributions (742) (206) Change in net assets attributable to Shareholders from investment activities 1,739,087 (708,512) Statement of Change in Net Assets Attributable to Shareholders For the six months ended 31 August 2016 (unaudited) 29/02/16 to 31/08/16 01/03/15 to 31/08/15 Opening net assets attributable to Shareholders 10,800,633 12,920,743 Amounts received on issue of Shares 48, ,874 Less: Amounts paid on cancellation of Shares (2,050,171) (1,316,058) (2,001,299) (1,051,184) Dilution adjustment charged 1, Change in net assets attributable to Shareholders from investment activities (see above) 1,739,087 (708,512) Closing net assets attributable to Shareholders 10,539,845 11,161,841 The above statement shows the comparative closing net assets at 31 August 2015 whereas the current accounting period commenced 29 February

19 FP SCDavies Global Equity Fund Balance Sheet As at 31 August 2016 (unaudited) 31/08/16 28/02/16 Assets Fixed assets: Investment assets 10,665,323 10,890,324 Current assets: Debtors 4,383 10,740 Cash and bank balances 47,428 47,770 Total current assets 51,811 58,510 Total assets 10,717,134 10,948,834 Liabilities Creditors: Other creditors (177,289) (148,201) Total creditors (177,289) (148,201) Total liabilities (177,289) (148,201) Net assets attributable to Shareholders 10,539,845 10,800,633 19

20 FP SCDavies Global Fixed Income Fund Investment Manager s Report For the six months ended 31 August 2016 (unaudited) Investment Objective The Fund aims to achieve a competitive income whilst protecting capital wherever possible. Investment Policy The Fund will invest at least 80% of its portfolio in a combination of global fixed income securities and units in Collective Investment Schemes which themselves hold direct fixed income or fixed income related instruments. The Fund may also invest, at the ACD's discretion, in other transferable securities (including structured products), money market instruments, cash and near cash, deposits, fixed income exchange traded funds, government or corporate bonds, and/or fixed income structured products. Use may also be made of stock lending and borrowing. Foreign currency exposure may be hedged back to the base currency. The Fund may hold derivatives for investment purposes as well as for efficient portfolio management purposes. It is not intended that the use of derivatives in this way will change the risk profile of the Fund. Investment Review During the period, there were no new additions to the portfolio and the largest changes in position size were the reduction of the New Capital Wealthy Nations Bond Fund and Insight Libor Plus. The proceeds of sales were redistributed amongst other holdings in the portfolio. Performance of the Fund Over the period from end February to end August 2016, the Fund returned +5.18% vs +3.42% for the Citi World Government Bond Index net in Sterling. (Source: Bloomberg) Market Overview Over the period from end February to end August 2016, the global stock markets traded in a tight range of around flat to +7% up until the UK Referendum on 23 June, as measured by the MSCI AC World net in Sterling. The result of the referendum surprised the world, with the UK public voting to exit the EU, sending markets into a spin and sterling into a nose dive. Sterling plummeted over 11% vs. the US dollar in the two days post the Brexit vote and the FTSE 100 followed, falling 5.6%. Since the initial shock, stability has somewhat returned, with the perceived effects of Brexit now priced in to the affected markets. This has meant that the FTSE 100 is almost 8% higher by the end of the period than the day before the Brexit vote. This should be put into context as the weakness of Sterling means that the FTSE is worth 4.21% less in US dollar terms whilst the S&P 500 has rallied 3.16% in USD or 16.26% in Sterling. Smaller, more domestically focused UK companies, as measured by the FTSE 250 index, have rallied only 2.75% in Sterling over the same time period. In short, international companies are expected to suffer little ill from the Brexit vote but the stock market is pricing in greater pain for companies exposed to the UK economy. Outlook Over the next year or so, we have many political events that pose risks to and could create opportunities for the Fund. Over the course of the next year, Brexit is expected to be formalised by the triggering of article 50, there are general elections in Holland, France & Germany, and, of course, there is the US Presidential election in November. At SCDavies, we do not attempt to estimate the price impact of these largely unknowable events but seek assets that have an acceptable future return given any of the potential outcomes. 20

21 FP SCDavies Global Fixed Income Fund Investment Manager s Report (continued) For the six months ended 31 August 2016 (unaudited) Outlook (continued) In FP SCDavies Global Fixed Income, 1/3 of government bonds now trade on negative interest rates. We cannot rule out the potential for yields to trade at greater negative interest rates but do not view these bonds as investable on behalf of our clients. We are mainly invested in bonds that are not as exposed to changes in interest rates as most, with floating rate bonds making up a significant part of the portfolio along with shorter dated bonds. We have taken some credit risk instead of interest rate risk in order to generate a reasonable return for clients. Investment Manager SCDavies & Co Ltd 26 September

22 FP SCDavies Global Fixed Income Fund Net Asset Value per Share and Comparative Table As at 31 August 2016 (unaudited) Net Asset Value Date Net Asset Value of Net Asset Value Percentage Share Class ( ) Shares in issue pence per Share Change (%) Share Class GBP Income 28/02/16 455, , /08/16 496, , Share Class GBP Accumulation 28/02/16 2,364,675 2,257, /08/16 2,260,263 2,053,

23 FP SCDavies Global Fixed Income Fund Distribution Table As at 31 August 2016 (unaudited) First Distribution in pence per Share Group 1 Shares purchased prior to 29 February 2016 Group 2 Shares purchased on or after 29 February to 31 May 2016 Distribution Distribution Gross Income Net paid paid revenue tax revenue Equalisation 31/07/16 31/07/15 (p) (p) (p) (p) (p) (p) Share Class GBP Income Group Group Share Class GBP Accumulation Group Group Second Distribution in pence per Share Group 1 Shares purchased prior to 1 June 2016 Group 2 Shares purchased on or after 1 June to 31 August 2016 Distribution Distribution Gross Income Net payable paid revenue tax revenue Equalisation 31/10/16 31/10/15 (p) (p) (p) (p) (p) (p) Share Class GBP Income Group Group Share Class GBP Accumulation Group Group

24 FP SCDavies Global Fixed Income Fund Performance Information As at 31 August 2016 (unaudited) Operating Charge Other Synthetic Transaction Operating AMC expenses expense ratio costs Charges Date (%) (%) (%) (%) (%) 31/08/16 Share Class GBP /02/16 Share Class GBP The Operating Charge is the ratio of the Fund's total discloseable costs (excluding overdraft interest) to the average net assets of the Fund. When a Fund invests a substantial proportion of its assets in other UCITS or Collective Investment Undertakings (CIU), the Operating Charge shall take account of the operating charges incurred in the underlying CIUs and disclose as a Synthetic expense ratio. Risk and Reward Profile Typically lower rewards Typically higher rewards Lower risk Higher risk Share Class GBP The indicator is based on historical data and may not be a reliable indication of the future risk profile of the Fund. The risk category shown is not guaranteed to remain unchanged and may shift over time. The lowest category does not mean 'risk free'. The Fund appears as a 3 on the scale. The Fund invests in fixed income investments whose values do not fluctuate widely. 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. 24

25 FP SCDavies Global Fixed Income Fund Portfolio Statement As at 31 August 2016 (unaudited) Holdings or Nominal Market value % of Total Value Investments Net Assets Collective Investment Schemes 79.70% [83.35%] 282,628 Insight LIBOR Plus 341, ,889 Legg Mason Brandywine Global Fixed Income 321, ,985 MI TwentyFour AM Monument Bond 325, ,000 M&G Optimal Income 167, ,116 M&G UK Inflation Linked Corporate Bond 286, ,891 New Capital Wealthy Nations Bond 349, ,675 Smith & Williamson Short Dated Corporate Bond 144, ,500 TwentyFour Income* 259, ,197, Exchange Traded Funds 20.63% [18.29%] 1,960 ishares Core GBP Corporate Bond 301, ,479 ishares GBP Corporate Bond 0-5yr 267, , * Investment Trusts Portfolio of investments 2,766, Net other liabilities (9,160) (0.33) Net assets 2,757, All investments are Collective Investment Schemes unless otherwise stated. Comparative figures shown above in square brackets relate to 28 February Gross purchases for the six months: Nil [2015: Nil]. Total sales net of transaction costs for the six months: 255,918 [2015: 415,506]. 25

26 FP SCDavies Global Fixed Income Fund Statement of Total Return For the six months ended 31 August 2016 (unaudited) 29/02/16 to 31/08/16 01/03/15 to 31/08/15 Income Net capital gains/(losses) 139,994 (101,392) Revenue 50,880 42,926 Expenses (42,350) (45,841) Interest payable and similar charges (6) (2) Net revenue/(expense) before taxation 8,524 (2,917) Taxation - 1,135 Net revenue/(expense) after taxation 8,524 (1,782) Total return before distributions 148,518 (103,174) Distributions (50,875) (44,058) Change in net assets attributable to Shareholders from investment activities 97,643 (147,232) Statement of Change in Net Assets Attributable to Shareholders For the six months ended 31 August 2016 (unaudited) 29/02/16 to 31/08/16 01/03/15 to 31/08/15 Opening net assets attributable to Shareholders 2,820,652 3,667,662 Amounts received on issue of Shares 130, ,428 Less: Amounts paid on cancellation of Shares (324,963) (487,400) (194,337) (323,972) Dilution adjustment charged Change in net assets attributable to Shareholders from investment activities (see above) 97,643 (147,232) Retained distribution on accumulation Shares 32,899 28,840 Closing net assets attributable to Shareholders 2,757,143 3,225,750 The above statement shows the comparative closing net assets at 31 August 2015 whereas the current accounting period commenced 29 February

27 FP SCDavies Global Fixed Income Fund Balance Sheet As at 31 August 2016 (unaudited) 31/08/16 28/02/16 Assets Fixed assets: Investment assets 2,766,303 2,866,801 Current assets: Debtors 16,729 9,324 Cash and bank balances 2,040 14,463 Total current assets 18,769 23,787 Total assets 2,785,072 2,890,588 Liabilities Creditors: Distribution payable on income Shares (5,099) (4,713) Other creditors (22,830) (65,223) Total creditors (27,929) (69,936) Total liabilities (27,929) (69,936) Net assets attributable to Shareholders 2,757,143 2,820,652 27

28 FP SCDavies Funds 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 the Fund is 7am 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 Limited - SCDavies, PO Box 10832, Chelmsford, CM99 2BQ 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 the Fund will be posted via a link on and prices can also be obtained by telephoning the Administrator on * 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: Distribution Payment Dates 31 August 28 February Interim Annual FP SCDavies Global Alternatives Fund - 30 April FP SCDavies Global Equity Fund - 30 April FP SCDavies Global Fixed Income Fund 31 July, 31 October, 31 January 30 April * Please note that telephone calls may be recorded for monitoring and training purposes and to confirm investors instructions. 28

29 FP SCDavies Funds General Information (continued) HM Revenue and Customs (HMRC) has stated its intention to amend legislation in the 2017 Finance Bill to require Authorised Investment Funds (i.e. AUTs and OEICs) to distribute Interest from bond funds gross (i.e. without the deduction of tax), where such interest is payable on or after 6 April Subject to the adoption of the 2017 Finance Bill, HMRC has announced that it will change the tax rules so that interest distributions paid (or treated as paid in the case of accumulation interests) by UK open-ended investment companies (OEICs), authorised unit trusts (AUTs) and investment trust companies (ITCs) may be paid without deduction of income tax from 6 April Funds that are affected by these changes will need to take action promptly and, where possible, before the start of the first distribution period which ends in a payment date of interest on or after 6 April Action to be taken by funds in response to the change will include: changes to unit/share pricing, whereby all eligible interest income is accrued gross of tax; and the creation and implementation of appropriate procedures to enable the move from net to gross distributions. Following consultation with the Fund s Depositary, the ACD has decided to commence gross pricing of shares in all classes of the SCDavies Global Fixed Income Fund from 1 November Therefore the first distribution of gross interest to shareholders will take place on or about 30 April Other Information The Instrument of Incorporation, Prospectus, Key Investor Information Document ("KIID"), Supplementary Information Document ("SID") 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. 29

30 FP SCDavies Funds Contact Information The Company and its Head Office FP SCDavies Funds 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) Directors of the ACD Company Secretary of the ACD J. Gardner P. Legg V. Hoare L. Isaacs (Appointed 4 May 2016) K. Lavery P. Legg Non-executive Directors P. Wilcox Registrar International Financial Data Services Limited Head Office: IFDS House, St Nicholas Lane, Basildon, Essex, SS15 5FS Customer Service Centre Fund Partners Limited - SCDavies PO Box 10832, Chelmsford, CM99 2BQ Telephone: * Fax: Depositary Northern Trust Global Services Limited 50 Bank Street, Canary Wharf, London, E14 5NT (Authorised by the Prudential Regulation Authority ("PRA") and regulated by the PRA and FCA) Investment Manager SCDavies & Co Ltd 1 Berkeley Street, London, W1J 8DJ (Authorised and regulated by the FCA) Auditor Deloitte LLP Chartered Accountants and Statutory Auditor Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2DB * Please note that telephone calls may be recorded for monitoring and training purposes, and to confirm investors' instructions. 30

31 FUND PARTNERS