MI Bespoke Funds ICVC (formerly RHFS Bespoke Funds ICVC)

Transcription

1 MI Besoke Funds ICVC (formerly RHFS Besoke Funds ICVC) Interim Reort 25 Setember 2017

2 MI Besoke Funds ICVC (formerly RHFS Besoke Funds ICVC) Contents Page Directory Basis of Accounting Certification of the Interim Reort by the Authorised Cororate Director MI Besoke Funds ICVC - MI Diversified Strategy Fund (formerly RHFS Besoke Funds ICVC - RHFS Diversified Strategy Fund) Investment Objective and Policy Investment Manager s reort Portfolio Statement Comarative Tables Statement of Total Return Statement of Change in Net Assets Attributable to Shareholders Balance Sheet General Information

3 MI Besoke Funds ICVC (formerly RHFS Besoke Funds ICVC) Directory Authorised Cororate Director (ACD) & Registrar until 22 Setember 2017 R&H Fund Services (UK) Limited Office 14, Flexsace, 15 Pitreavie Court, Dunfermline, Fife KY11 8UU (Authorised and regulated by the Financial Conduct Authority) Directors of the Authorised Cororate Director until 22 Setember 2017 Laura Da Silva Graeme Ross Steven Ross Craig Stewart Authorised Cororate Director (ACD) & Registrar from 22 Setember 2017 Maitland Institutional Services Ltd Sringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telehone: Fax: Website: (Authorised and regulated by the Financial Conduct Authority) Customer Service Centre Sringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telehone: Fax: (Authorised and regulated by the Financial Conduct Authority) Directors of the Authorised Cororate Director from 22 Setember 2017 R. Ackermann P.J. Foley-Brickley S. Georgala D. Jones R.W. Leedham Investment Manager Lowes Financial Management Ltd Fernwood House, Clayton Road, Jesmond, Newcastle Uon Tyne NE2 1TL (Authorised and regulated by the Financial Conduct Authority) Fund Managers Paul Milburn Doug Millward MI Besoke Funds ICVC 1

4 MI Besoke Funds ICVC (formerly RHFS Besoke Funds ICVC) Directory continued Deositary BNP Paribas Securities Services 10 Harewood Avenue, London NW1 6AA (Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority) Indeendent Auditor KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square, Canary Wharf, London E14 5GL 2 MI Besoke Funds ICVC

5 MI Besoke Funds ICVC (formerly RHFS Besoke Funds ICVC) Basis of Accounting The interim financial statements have been reared under the historical cost basis, as modified by the revaluation of investments and in accordance with FRS 102 and the Statement of Recommended Practice (SORP) for Financial Statements of UK Authorised Funds issued by the Investment Association (IA) in May The interim financial statements have been reared on the same basis as the audited financial statements for the year ended 31 March The financial statements have been reared on the going concern basis. Certification of the Interim Reort by the Authorised Cororate Director This reort has been reared in accordance with the requirements of the Financial Conduct Authority s Collective Investment Schemes sourcebook ( the COLL Sourcebook ) and the Statement of Recommended Practice issued by the Investment Association. R.W. Leedham D. Jones Directors Maitland Institutional Services Ltd 10 November 2017 MI Besoke Funds ICVC 3

6 Investment Objective and Policy The investment objective of the MI Diversified Strategy Fund is to achieve long term caital growth. The Sub-fund intends to meet its objectives through exosure to a combination of equities, fixed interest and structured roducts. The majority of the Sub-fund s exosure will be to equities. It may also have exosure to roerty. With the excetion of structured roducts, this exosure will be through investment in OEICs, unit trusts, investment trusts, Exchange Traded Funds and other collective investment schemes across several management grous. It may also invest in equities from the world s major markets, bonds and other transferable securities. The Sub-fund has no secific limits on exosures to any asset class, geograhic area, industry or economic sectors. Investment Manager s Reort for the eriod ended 25 Setember 2017 Performance Review and Income Distribution For the eriod from 1 Aril 2017 until 25 Setember 2017 the total return of the C share class was 3.86%, comared to a rise of 1.15% for the FTSE UK Private Investor Balanced Index and 2.55% for the IA Flexible Investment sector average. The Sub-fund is ranked 49th out of 140 funds available over the eriod since launch, lacing it in the second quartile of its sector. The total return of the B share class was 3.45%. Source: FE Analytics. Total return. Bid to bid. Market Review The UK economy continued to grow during the eriod, although with a slowdown in the rate of growth. A growth rate of 0.3% in the second quarter reresented 1.7% year on year, with the service sector continuing to be the driving force behind the economy, whilst roduction and construction acted as a drag. One of the reasons behind the slowdown was a lack of business investment. Uncertainty around how the Brexit negotiations will develo has left business managers reluctant to commit to caital exenditure until they have clarity on how it will directly affect their comanies. Inflation in the UK is currently ahead of target, with CPI measured at 3% in Setember. Desite this, the Bank of England maintained its base rate at 0.25%. A lack of wage growth, even with the unemloyment rate falling to 4.5%, has made the Monetary Policy Committee reluctant to raise rates so far. With Average Weekly Earnings currently rising at only 2.1%, below headline inflation, the sending ower of the UK workforce is decreasing in real terms. As over two thirds of the UK economic outut is derived from consumer sending, this is an imortant dynamic for the UK economy. From a global ersective, economic growth continued throughout the eriod. The Eurozone continued to imrove, with IMF forecasts for its economy rising to a growth rate of 1.9% for the year, but in the US the inability of Donald Trum to deliver on his economic agenda saw their growth forecast dro slightly to 2.1%. Portfolio Activity The ortfolio continues to rovide a broad range of asset classes and geograhical allocations. The Sub-fund continued to see ositive inflows during the eriod. As reorted reviously, with stockmarkets around the globe continuing to reach new highs and valuations looking less attractive, we were hay to maintain the cash osition at its revious level and continued to use new money coming into the Sub-fund to either rebalance the ortfolio by investing in existing holdings, or to take advantage of oortunities when they arose. This was the case with the urchase of a new Barclays Structured Product on the secondary market, and adding to an existing one when the ricing was favourable in Aril. Aril also saw a switch from the Aberdeen Emerging Markets to the Goldman Sachs Emerging Markets Core Equity, which we felt gave the otential for better returns going forward. The Goldman Sachs fund also had a significantly lower charge than the Aberdeen fund, which will hel reduce the overall charges incurred by the Sub-fund internally going forward. In June, we sold out of the AXA Framlington UK Select Oortunities, reinvesting the roceeds into the SVM UK Growth. The two funds have a similar make-u in terms of the ratio between small, medium and large ca comanies, but we felt that SVM UK Growth had evidenced better stock selection of late. 4 MI Besoke Funds ICVC - MI Diversified Strategy Fund

7 Investment Manager s Reort continued The holding within the Old Mutual Global Equity was switched to the Goldman Sachs Global Core Equity Portfolio in August. We were hay with the erformance of the Old Mutual fund, but felt its strategy worked best in the North American and Asia Pacific regions. As these were areas that could be accessed secifically by other Old Mutual funds run by the same team with the same strategy, it was decided to use those funds to allocate to those areas directly, and use the Goldman Sachs fund as a relacement to rovide more diversification of styles. In Setember, we sold out of the Stewart Asia Pacific, reinvesting into the First State Asia Focus. Stewart Investors and First State are both art of the same investment grou, and whilst run autonomously, share a similar investment rocess and hilosohy. We were hay with the Stewart Asia Pacific, but they were imosing a 4% initial charge to try and limit the size of the fund, which meant that no new money could be added within the Diversified Strategy fund. We therefore researched the other Asian funds within their range, and identified the First State Asia Focus as a suitable alternative. At only two year s old and with a size of just 90 million at the time of investment, we felt it would not suffer the caacity constraints of the Stewart fund in the near future. All other activity within the Sub-fund was additions to existing holdings to hel maintain and adjust the asset and geograhical allocations within the ortfolio. Outlook Political uncertainty has dissiated in Euroe over the year, with ro-euroean arties winning the elections in France and Germany, and so the only real area of concern is the outcome of the Brexit negotiations. As already mentioned, the lack of clarity is deterring comanies from starting new rojects within the UK, and with the deadlock in the talks showing little sign of moving this uncertainty is likely to continue in the coming months. In the US, as we move towards the anniversary of Donald Trum s election victory, his inability to enact many of his election romises has meant very little actual change on the olitical front, which is leading to a benign environment for the stockmarkets. One area where he could make rogress is with tax-reform, which would be a ositive for US comanies, and with the ossibility of tax deals regarding the re-atriation of rofits from overseas bringing inflows of cash this could rovide a boost to the economy. The US stockmarket, as measured by the S&P 500 Index has shown steady gains over the last six months, whilst in the UK the FTSE 100 Index has traded within a definite range throughout the summer, without managing to break out in either direction. We continue to be cautious of these areas, and remain selective in how we gain exosure to these markets. For examle, we have a bias towards small and mid-ca funds in the UK, which tend to be more domestically focussed and therefore less exosed to fluctuations in the value of Sterling. The ortfolio continues to have a high equity allocation, favouring Euroe, Asia and Emerging Markets over UK and US when comared to the benchmark. The UK and US continue to be the biggest regions within the Sub-fund however. Due to high valuations in several areas, we continue to maintain a sizeable roortion in more defensive assets, including cash which currently accounts for around 8% of the Sub-fund. Source of all erformance figures: FE Analytics. Total Return. Bid to bid. MI Besoke Funds ICVC - MI Diversified Strategy Fund 5

8 Portfolio Statement as at 25 Setember 2017 Market % of total value net assets Holding Security STRUCTURED PRODUCTS 2.70% (5.58%) Structured Products 2.70% (5.58%) 112,000 Barclays Bank 0% , ,000 Morgan Stanley 0% , ,310 Societe Generale 0% , EQUITIES 0.90% (1.14%) 373, Far East 0.90% (1.14%) 36,478 Edinburgh Dragon 125, FUNDS* 87.67% (85.59%) Bond Funds 13.00% (10.61%) 32,582 Gam Star Credit Oortunities - GBP Accumulation 519, ,299 Henderson Strategic Bond - I Income 335, ,053 Invesco Peretual Tactical Bond - Z Accumulation 373, ,602 MI TwentyFour Dynamic Bond - I Net Accumulation 576, ,804, Emerging Markets 6.16% (6.48%) 38,695 Baillie Gifford Emerging Markets Growth - B Accumulation 287, ,417 Goldman Sachs Emerging Markets Core Equity - R Income 306, ,754 Henderson Emerging Markets Oortunities - I Accumulation 261, , Euroe 9.74% (7.67%) 82,271 Artemis Pan-Euroean Absolute Return - I Accumulation 100, ,105 Henderson Euroean Selected Oortunities - I Accumulation 237, ,419 Henderson Euroean Smaller Comanies - I Accumulation 163, ,825 Juiter Euroean - I Accumulation 426, ,073 Juiter Euroean Secial Situations - I Accumulation 286, ,475 Threadneedle Euroean Smaller Comanies - R Accumulation 136, ,351, Far East 4.92% (5.14%) 138,786 First State Asia Focus - B Accumulation 222, ,067 Old Mutual Asia Pacific - R Accumulation 460, , Global 13.05% (12.89%) 386,757 AHFM Defined Returns - B Accumulation 508, ,143 Goldman Sachs Global Core Equity Portfolio - R GBP 405, ,658 Invesco Peretual Global Targeted Returns - Z Accumulation 430, ,620 Invesco Peretual Smaller Comanies - Z Accumulation 336, ,899 Standard Life Global Absolute Return Strategies - Accumulation 129, ,810, MI Besoke Funds ICVC - MI Diversified Strategy Fund

9 Portfolio Statement continued Market % of total value net assets Holding Security Jaan 6.45% (7.56%) 5,609 Baillie Gifford Jaanese Smaller Comanies - B Income 201, ,306 First State Jaan Focus - B Accumulation 320, ,375 Man GLG Jaan Core Alha - A Accumulation 174, ,450 Schroder Tokyo - Z Accumulation 198, , United Kingdom 23.50% (22.81%) 123,989 CF Miton UK Smaller Comanies Fund - B Accumulation 274, ,444 Franklin UK Mid Ca - Z Accumulation 410, ,212 Henderson UK Absolute Return - I Accumulation 417, ,590 JO Hambro Caital UK Oortunities - A Accumulation 295, ,178 Liontrust Secial Situations - A Income 527, ,335 Old Mutual UK Smaller Comanies Focus - R Income 404, ,021 Schroder Recovery - Z Accumulation 440, ,746 SVM UK Growth - B Accumulation 489, ,260, United States of America 10.85% (12.43%) 30,528 Fidelity American Secial Situations - W Accumulation 428, ,089 Old Mutual North American Equity - R Accumulation 485, ,592 Schroder US Smaller Comanies - A Income 152, ,246 Vanguard US Equity Index - A Income 438, ,505, Investment assets 12,663, Net other assets 1,211, Net assets 13,875, All investments are ordinary shares or stock units on a regulated securities market unless otherwise stated. The ercentages in brackets show the equivalent % holdings as at * Collective Investment Schemes ermitted under COLL, not listed on any exchange. Total urchases for the eriod: 4,344,681 Total sales for the eriod: 1,941,646 MI Besoke Funds ICVC - MI Diversified Strategy Fund 7

10 Comarative Tables Change in net assets er share B Income Oening net asset value er share Return before oerating charges^ Oerating charges Return after oerating charges^ Distributions Closing net asset value er share ^After direct transaction costs of Performance Return after charges 3.79% 17.90% 4.09% Other Information Closing net asset value 857, , ,534 Closing number of shares 721, , ,541 Oerating charges 2.21% 2.04% 2.48% Direct transaction costs 0.01% 0.07% 0.04% Prices Highest share rice Lowest share rice B Income launched on 04 Setember C Income Oening net asset value er share Return before oerating charges^ Oerating charges Return after oerating charges^ Distributions Closing net asset value er share ^After direct transaction costs of Performance Return after charges 4.24% 18.97% -2.25% Other Information Closing net asset value 4,157,002 4,224,039 3,720,618 Closing number of shares 3,446,431 3,650,459 3,811,450 Oerating charges 1.31% 1.14% 1.58% Direct transaction costs 0.01% 0.07% 0.04% Prices Highest share rice Lowest share rice C Income launched on 06 May MI Besoke Funds ICVC - MI Diversified Strategy Fund

11 Comarative Tables continued Change in net assets er share (continued) C Accumulation Oening net asset value er share Return before oerating charges^ Oerating charges Return after oerating charges^ Distributions Retained distributions on accumulation shares Closing net asset value er share ^After direct transaction costs of Performance Return after charges 4.21% 18.97% -2.28% Other Information Closing net asset value 8,860,076 5,557, ,293 Closing number of shares 7,311,442 4,778, ,679 Oerating charges 1.31% 1.14% 1.58% Direct transaction costs 0.01% 0.07% 0.04% Prices Highest share rice Lowest share rice C Accumulation launched on 22 May Oerating charges include indirect costs incurred in the maintenance and running of the Sub-fund, as disclosed (but not limited to) the detailed exenses within the Statement of Total Return. The figures used within this table have been calculated by annualising the exenses incurred against the average Net Asset Value for the accounting eriod. The Sub-fund invests in Collective Investment Schemes, the exenses incurred by these schemes in relation to the Sub-fund (synthetic ongoing charge) are included within the oerating charges. The return after charges is calculated as the closing net asset value er share lus the distributions on income shares minus the oening net asset value er share as a % of the oening net asset value er share. Direct transaction costs include fees, commissions, transfer taxes and duties in the urchasing and selling of investments, which are offset (where alicable) against any dilution levies charged within the accounting eriod. The figures used within the table have been calculated against the average Net Asset Value for the accounting eriod. MI Besoke Funds ICVC - MI Diversified Strategy Fund 9

12 Comarative Tables continued Risk and reward rofile The Risk and Reward Indicator table demonstrates where the Sub-fund ranks in terms of its otential risk and reward. The higher the rank the greater the otential reward but the greater the risk of losing money. It is based on ast data, may change over time and may not be a reliable indication of the future risk rofile of the Sub-fund. The shaded area in the table below shows the Sub-fund s ranking on the Risk and Reward Indicator. Tyically lower rewards, Tyically higher rewards, lower risk higher risk The Sub-fund is ranked at 4 because funds of this tye have exerienced average rises and falls in value in the ast. Please note that even the lowest risk class can lose you money and that extreme market circumstances can mean you suffer severe losses in all cases. The indicator does not take into account the following risks of investing in this Sub-fund: Counterarty risk: The Sub-fund can conclude various transactions with contractual artners. If a contractual artner becomes insolvent, it can no longer or can only artly settle unaid debts owed to the Sub-fund. Market risk: External factors can cause an entire asset class to decline in value which would result in a decrease in the value of investments. Currency risk: As the Sub-fund invests in overseas securities, movements in exchange rates, when not hedged, may cause the value of investments to increase or decrease. Risk from use of derivatives: Investments in derivatives may result in gains or losses that are greater than the original amount invested. For further risk information lease see the rosectus. Risk warning An investment in an Oen Ended Investment Comany should be regarded as a medium to long-term investment. Investors should be aware that the rice of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past erformance is not a guide to future erformance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. 10 MI Besoke Funds ICVC - MI Diversified Strategy Fund

13 Statement of Total Return for the eriod ended 25 Setember to to Income Net caital gains 442, ,748 Revenue 72,885 9,771 Exenses (34,535) (28,143) Interest ayable and similar charges (60) Net revenue before taxation 38,290 (18,372) Taxation Net revenue after taxation 38,290 (18,372) Total return before distributions 480, ,376 Distributions 10 Change in net assets attributable to Shareholders from investment activities 480, ,376 Statement of Change in Net Assets Attributable to Shareholders for the eriod ended 25 Setember to to Oening net assets attributable to Shareholders 10,639,444 5,121,445 Amounts receivable on issue of shares 3,386,514 2,403,409 Less: Amounts ayable on cancellation of shares (631,499) (204,270) 2,755,015 2,199,139 Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) 480, ,376 Closing net assets attributable to Shareholders 13,875,025 7,947,960 The oening net assets attributable to shareholders for the current eriod do not equal the closing net assets attributable to shareholders for the comarative eriod as they are not consecutive eriods. MI Besoke Funds ICVC - MI Diversified Strategy Fund 11

14 Balance Sheet as at 25 Setember 2017 ASSETS Fixed Assets Investments 12,663,911 9,818,613 Current Assets Debtors 26,842 39,897 Cash and bank balances 1,488, ,770 Total current assets 1,515, ,667 Total assets 14,179,669 10,669,280 LIABILITIES Investment liabilities Creditors Distribution ayable (15,645) Other creditors (304,644) (14,191) Total creditors (304,644) (29,836) Total liabilities (304,644) (29,836) Net assets attributable to Shareholders 13,875,025 10,639, MI Besoke Funds ICVC - MI Diversified Strategy Fund

15 MI Besoke Funds ICVC (formerly RHFS Besoke Funds ICVC) General Information Authorised Status MI Besoke Funds ICVC (the Comany ) is structured as an Investment Comany with Variable Caital ( ICVC ), under regulation 12 (Authorisation) of the OEIC Regulations (Oen-Ended Investment Comanies Regulations 2001 (SI 2001/1228)). The Comany does not intend to have an interest in immovable roerty. The Comany is authorised and regulated in the UK by the Financial Conduct Authority ( FCA ) as a UCITS Retail Scheme and Umbrella Comany under the COLL Sourcebook. The Comany was incororated in England and Wales on 18 March 2015 under registration number IC The Shareholders are not liable for the debts of the Comany. MI Besoke Funds ICVC is structured as an umbrella comany. Provision exists for an unlimited number of Sub-funds, and at the date of this Reort one sub-fund, the MI Besoke Funds ICVC - Diversified Strategy Fund is authorised. Head Office Sringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Address for Service The Head Office is the address in the United Kingdom for service on the Comany of notices or other documents required or authorised to be served on it. Base Currency The base currency of the Comany is Pounds Sterling. Share Caital The minimum share caital of the Comany is 1,000 and the maximum is 100,000,000,000. Shares in the Comany have no ar value. The share caital of the Comany at all times equals the sum of the net asset value of the Sub-fund. Classes of Shares The Instrument of Incororation allows each Sub-fund to issue different classes of shares in resect of any Sub-fund. The Comany may issue both Income and Accumulation Shares. Share Class Sub-fund B Acc B Inc C Acc C Inc MI Besoke Funds ICVC - Diversified Strategy Fund Holders of Income shares are entitled to be aid the revenue attributable to such shares in resect of each annual accounting eriod in the currency of the relevant share class. Holders of Accumulation shares are not entitled to be aid the revenue attributable to such shares, but that revenue is retained and accumulated for the benefit of shareholders and is reflected in the rice of shares. Valuation Point The scheme roerty of the Comany and each Sub-Fund will normally be valued at 12:00 on each dealing day for the urose of calculating the rice at which shares in the Comany may be issued, sold, reurchased or redeemed. For the urose of the ricing of Shares, a business day is defined as a day on which the dealing office of the ACD is oen for the buying and selling of shares. The ACD may at any time during a business day carry out an additional valuation of the roerty of the Sub-fund if the ACD considers it desirable to do so, with the Deositary's aroval. MI Besoke Funds ICVC 13

16 MI Besoke Funds ICVC (formerly RHFS Besoke Funds ICVC) General Information continued Buying, Redeeming and Switching of Shares The ACD will accet orders for the urchase, sale and switching of shares on normal business days between 08:30 and 16:30. Instructions to buy or sell shares may either be in writing to: PO Box Sringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Or by telehone to: The ACD has the right to establish facilities for recording telehone calls made or received on this telehone line. A contract note giving details of the shares urchased will be issued no later than the next business day after the business day on which an alication to urchase shares is received and instrumented by the ACD. Certificates will not be issued in resect of shares. Ownershi of shares will be evidenced by an entry on the register of shareholders. Pricing Basis There is a single rice for buying, selling and switching shares in a Sub-fund which reresents the Net Asset Value of the Sub-fund concerned. The share rice is calculated on a forward ricing basis, that is at the next Valuation Point after the urchase or redemtion is deemed to be acceted by the ACD. The rices of shares are ublished daily on Neither the Comany nor the Comany can be held resonsible for any errors in the ublication of the rices. The shares in the Comany will be issued and redeemed on a forward ricing basis which means that the rice will not necessarily be the same as the ublished rice. Other Information The Instrument of Incororation, Prosectus, Key Investor Information Document and the most recent interim and annual reorts may be insected at the office of the Comany which is also the Head Office of the Comany. Coies may be obtained free of charge uon alication. They are also available from the website of the Comany, the details of which are given in the directory of this reort. Shareholders who have comlaints about the oeration of the Comany should in the first instance contact the ACD, or, following that, may make their comlaint direct to the Financial Ombudsman Service, Exchange Tower, London E14 9SR. Significant Information On 22 Setember, Maitland Institutional Services Ltd became both the Authorised Cororate Director and registrar for the Comany taking over resonsibility from R&H Fund Services Limited. The contact details of both can be found at the front of this document and further details can be found in the rosectus. On 25 Setember the umbrella comany changed its name from RHFS Besoke Funds ICVC to MI Besoke Funds ICVC and the Sub-fund changed its name from RHFS Diversified Strategy Fund to MI Diversified Strategy Fund. Risk Warning An investment in an Oen Ended Investment Comany should be regarded as a medium to long-term investment. Investors should be aware that the rice of shares and the revenue from them can fall as well as rise and investors may not receive back the full amount invested. Past erformance is not a guide to future erformance. Investments denominated in currencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable. 14 MI Besoke Funds ICVC

17 Registered in England No Authorised and regulated by the Financial Conduct Authority.