COUTTS MULTI ASSET FUND PLC

Transcription

1 An open-ended umbrella investment company with variable capital and segregated liability between its sub-funds established under Irish law Audited Annual Report and Accounts For the financial year ended 30 November 2015

2 Table of Contents Page Company Information...2 Directors Report...3 Statement of Directors Responsibilities...5 Investment Managers Report...6 Fund Summary Information...13 Portfolio and Statement of Investments & Portfolio Changes...20 Statement of Total Return...68 Statement of Net Assets...70 Statement of Changes in Net Assets Attributable to Redeemable Shareholders...72 Notes forming part of the Financial Statements...74 Custodian s Report Independent Auditor s Report Management and Administration

3 Company Information Coutts Multi Asset Fund plc (the Company ) was incorporated on 15 February 2012 as an open-ended investment company with variable capital and segregated liability between its funds (each a Fund, together the Funds ) under the laws of Ireland as a public limited company pursuant to the Companies Act The Company is authorised by the Central Bank of Ireland as an Undertaking for Collective Investment in Transferable Securities ( UCITS ) pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (the UCITS Regulations ) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (the Central Bank UCITS Regulations ). The Company is structured as an umbrella fund and has established several Funds, each comprising one or more classes of shares. The assets of each Fund will be separate from one another and will be invested separately in accordance with the investment objective and policies of each Fund. The specific investment objectives and policies for each Fund are set out in Note 15 of these financial statements and detailed in the Company s Prospectus and Fund Supplements. The different share classes available for issue in each Fund are set out in the supplement for the relevant Fund. The different share classes in a Fund may, inter alia, have the following distinguishing features: Currency of denomination Hedging arrangements Levels of fees and expenses to be charged Different minimum initial / additional investment amounts The Company issues both accumulating and distributing shares which represent interests in the same distinct portfolio of investments. The income per distributing share may be distributed or re-invested in accordance with the dividend policy for the Fund as set out in the relevant supplement. No dividends or distributions shall be made in respect of the accumulating shares. The Company has eight Funds (seven of which have launched) as of 30 November 2015 as follows: Fund Name Base Currency Launch Date Coutts Multi Asset UK Funds Coutts Multi Asset UK Defensive Fund GBP 15 November 2012 Coutts Multi Asset UK Balanced Fund GBP 15 November 2012 Coutts Multi Asset UK Growth Fund GBP 15 November 2012 Coutts Multi Asset UK Equity Growth Fund GBP 15 November 2012 Coutts Multi Asset UK Distribution Fund GBP Not yet launched Coutts Multi Asset Global Funds Coutts Multi Asset Global Defensive Fund USD 15 November 2012 Coutts Multi Asset Global Balanced Fund USD 15 November 2012 Coutts Multi Asset Global Growth Fund USD 15 November 2012 All Funds offer A and B accumulating and distributing share classes and C distribution share class. The Coutts Multi Asset Global Funds offer all share classes in CHF, EUR, GBP and USD. The Coutts Multi Asset UK Funds offer all share classes in GBP only. 2

4 Directors Report The Directors submit their annual report together with the audited financial statements of the Company for the year ended 30 November Review of Business and Future Developments The Company was incorporated on 15 February 2012 and subsequently launched seven Funds with different share classes on 15 November A list of the Funds and relevant share classes is found in the Company Information section. A review of market activities and outlook by the Investment Managers can be found in their report on pages 6 to 12. Results and Dividends The results for the period and financial position are set out on pages 68 to 73. Distributing Shares will declare a dividend in May and November of each year and it will be paid within four months of the declaration date. Dividends will be paid in the currency denomination of the relevant Share Class. Dividends will be declared out of net income (i.e. income less expenses). See pages 13 to 14 for details of dividends declared and paid during the year. No dividends or distributions shall be made in respect of accumulating shares. Accordingly, any distributable income will remain in the relevant Fund s assets and will be reflected in the Net Asset value of the accumulating shares. Risk Management Objectives and Policies Investment in the Company carries with it a degree of risk including, but not limited to, the risks referred to in Note 15 of these financial statements and in the Company Prospectus. Significant events Class C-Distributing shares were launched on 19 January 2015 for all sub-funds. GBP Class B-Accumulating shares were launched on 6 May 2015 for the Coutts Multi Asset UK Growth Fund. A new Prospectus was filed with the Central Bank of Ireland (CBI) on 28 August 2015 to reflect revised disclosure requirements in relation to marketing of the sub-funds of the Company in Switzerland, the resignation of Scott McMunn from the Board of the Company and revised Irish tax language to include language in relation to the Common Reporting Standard. There were no other significant events affecting the Company during the year. Subsequent events There are no significant events affecting the Company subsequent to year end. Directors The names of the persons who were Directors at any time during the year ended and as at 30 November 2015 are set out below. Brian McDermott (Irish) Leslie Gent (Canadian) Keith McGough (Irish) Pat McArdle (Irish) Gayle Schumacher (British) Company Secretary The Company Secretary is Goodbody Secretarial Limited, North Wall Quay, International Financial Services Centre, Dublin 1, Ireland. Directors and Secretary s Interests Neither the Directors nor their families nor the Secretary hold or held any interest in the shares of the Company during the year. Brian McDermott, Gayle Schumacher, Keith McGough, Leslie Gent and Pat McArdle are Directors of the Manager, RBS Asset Management (Dublin) Limited. 3

5 Directors Report (continued) Directors and Secretary s Interests (continued) Brian McDermott is a Partner of the Legal Advisers, A&L Goodbody, and a Director of the Company Secretary, Goodbody Secretarial Limited. Leslie Gent is an employee of Coutts & Co, an Investment Manager to the Company and is an executive Director. Ms Gent is a Managing Director and Head of Coutts Investment Products. Details of the related party transactions between the Company and the Manager are disclosed in Note 14 to the financial statements. Connected Parties The Directors are satisfied that there are arrangements and written procedures in place to ensure that all connected party transactions are carried out on an arm s length basis and are in the best interests of the shareholders. The Directors are satisfied that these arrangements have been applied to all transactions with connected parties, and that all connected party transactions during the year complied with these obligations. Corporate Governance Code The Board voluntarily adopted the 'Corporate Governance Code for Collective Investment Schemes and Management Companies' (the Code ) as published by the Irish Funds Industry Association ( IFIA ) in 2011, as the Company s corporate governance code with effect from 31 December The Board is satisfied that it has complied with the provisions of the Code during the year ended 30 November Accounting Records The Directors confirm that they have complied with the requirements of the Companies Act 2014 with regard to adequate accounting records. The measures taken by the Directors to secure compliance with the Company s obligation to keep adequate accounting records are the use of appropriate systems and procedures and employment of competent persons. The Administrator, on behalf of the Company, maintains adequate accounting records of the Company at its registered office in Guild House, Guild Street, International Financial Services Centre, Dublin 1. Auditors The independent auditors, KPMG Chartered Accountants have expressed their willingness to continue in office in accordance with Section 383(2) of the Companies Act Approved on behalf of the Board Director Director Date: 21 March

6 Statement of Directors Responsibilities The Directors are responsible for preparing the annual report and financial statements in accordance with applicable Irish law and regulations, and a Directors report that complies with the Companies Act Irish company law requires the Directors to prepare financial statements for each financial period. Under that law the Directors have elected to prepare the financial statements in accordance with Generally Accepted Accounting Principles in Ireland, comprising applicable law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland. The financial statements are required by law to give a true and fair view of the state of affairs of the Company at 30 November 2015 and of the profit or loss for the year then ended. In preparing those financial statements, the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether the financial statements have been prepared in accordance with applicable accounting standards, identify these standards, and note the effect and reasons for any material departure from these standards; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue business. The Directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with Irish statute comprising the Companies Act 2014, the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations The Directors are also responsible for safeguarding the assets of the Company. In this regard, they have entrusted the assets of the Company to the Custodian for safe-keeping. They have general responsibility for taking such steps as are reasonably open to them to prevent and detect fraud and other irregularities. Approved on behalf of the Board Director Director Date: 21 March

7 Investment Managers Report Market Commentary 2015 was a year of contradictions, punctuated by global growth fears and ending with a vote of confidence in the economic recovery as US interest rates were lifted for the first time in nearly a decade. Many asset classes suffered losses as falling commodity prices and fears of a China-led slowdown in global growth hit investor sentiment. Global equities were little changed, but outperformed falling bonds and emerging-market shares. Overall global equities came out slightly ahead of safe haven Government bonds, with European and Japanese equities the clear winners. Comments on the Investment Strategy adopted by the Funds Equity A selloff in the third quarter presented a buying opportunity and we increased our equity exposure We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. There was a definite benefit from favouring European equities, as the Euro Stoxx Index posted returns of 11% compared to a modest gain of 2.6% for the MSCI World Index of developed markets. Japan s Nikkei 225, another of our preferred markets at the start of 2015 and the only other major market to even come close to Europe was also up 11% on the year. Fixed Income Within equities we remain slight underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. Falling commodity prices and fears of a China-led slowdown in global growth were especially bad news for high yield bonds and emerging equity markets, both of which we had exposure to over the course of We scaled back our position in emerging equities over the course of the year, but see high-yield bonds as oversold on fears of defaulting energy bonds. Throughout 2015 we maintained exposure to European peripheral government bonds (Italy, Spain and Portugal). We saw relatively higher volatility across these markets than in previous years amid European Central Bank (ECB) activity, political tensions and geopolitical events, however we favour European periphery bonds over core markets due to the improving economic backdrop and strong technical support from monetary policies across the region. During the year we retained our exposure to global investment credit split across bonds and floating rate notes reflecting our underweight duration and preference to invest across a range of sectors and issuers. We also allocated to loans and Collateralised Loan Obligation (CLO) equity where we see the additional yield sufficiently compensating for the added volatility and the risk adjusted returns remain favourable amid a low default environment. Higher yields are also offering a cushion against potential rising interest rates in the UK and actual rises in the US, while loans help reduce our overall duration. Market Outlook We believe recent global growth fears were overblown and maintain a positive outlook for the global economy. Developed economies are in good health, and lower energy prices should help stimulate consumer demand. We see very gradual rate increases taking US and UK interest rates to peaks of about 2-2.5% over the next several years, with Eurozone rates on hold. Slowing growth in China is part of a transition to a more sustainable economy but is having a knock-on effect on commodity-producing emerging economies. 6

8 Investment Managers Report (continued) Market Outlook (continued) Equity Continued recovery and accommodative monetary policy across the globe, with very modest US tightening, should support our overweight position in equities. Banks remain at a steep discount to global equities in general, despite substantial improvements in the sector, making them an attractive investment. We expect the world economy to speed up this year, with China and the rest of emerging Asia remaining firm, and Europe and the US stronger than in Corporate profit margins are healthy across the globe and earnings growth should be comfortably positive. US consumer demand and employment growth remain strong, with household spending boosted by falling energy prices and a healthy housing sector. We expect US manufacturing to respond to healthy demand and rebound in the months ahead, which should be positive for equities. Markets have fallen sharply so far this year, but the actual underlying economic fundamentals continue to support our positive view for It may continue to be painful in the short run, but as long-term investors we are taking the view that this sell-off is an opportunity to buy oversold assets. Fixed Income In our view bonds are expensive with limited potential for improvement in the current low-rate environment. Developed market investment grade debt offers an attractive premium over government debt for an only marginally higher level of risk. We favour high yield and hard-currency denominated emerging market debt due to compelling risk-adjusted yields. We are looking to take profits on some of our bonds and other safe-haven assets that have rallied sharply on market fears and use the proceeds to add to our UK and European equity holdings. Other Assets Gold prices are still low following short-lived gains during market weakness, and our neutral stance is unchanged. Oil prices remain weak amid concerns of oversupply, though given our favourable outlook for world growth substantial price falls seem unlikely. We remain positive on UK commercial property, which we think will be supported by rental growth amid the still-robust economic recovery. Coutts Multi Asset UK Defensive Fund We remain underweight fixed income, particularly in government bonds and global credit reflecting the low yields available. We have allocated more to loans and CLO equity where we see the additional yield sufficiently compensating for the added volatility and the risk adjusted returns remain favourable amid a low default environment. Higher yields are also offering a cushion against rising interest rates in the UK and the US, while loans help reduce our overall duration. During the year we have maintained exposure to global investment credit split across bonds and floating rate notes reflecting our underweight duration and preference to invest across a range of sectors and issuers. We have exposure to special situation bonds such as Volkswagen Group of America Finance LLC and Kinder Morgan Inc balanced by high quality issuers such as Apple Inc and Kraft Heinz Foods Co. We have taken tactical overweight positions in certain peripheral European government bonds (fully hedging the currency) in search of higher yields following recovering fundamentals in these economies vs core countries, which complement the emerging market debt position we hold. We also rotated out of PIMCO Funds Global Investor Series Plc to allocate to UBAM - Global High Yield Solution, a strategy that uses credit default swap indices, which results in a cheaper, more liquid approach to high yield. Within equities we remain slightly underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. 7

9 Investment Managers Report (continued) Coutts Multi Asset UK Defensive Fund (continued) Following a strong run in the first quarter, we trimmed our overweight in equities in favour of a cash allocation as we wait for better valued opportunities. We sold European equities ahead of the recent dip, while rotating out of the Japan Nikkei 400 index into Japanese banks, reflecting our favourable view on financials. We also took profits on Russian government bonds after a recent rebound. A selloff in the third quarter presented a buying opportunity and we increased our equity exposure. We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. We also allocated to the Investec Fund Series i - UK Alpha Fund, to increase the active exposure of the fund. Within the Global/Sector/Themes we hold a global energy fund, US energy infrastructure and European financial exposure. Within alternatives we hold a UCITS eligible market neutral fund called AQR UCITS Funds - Style Premia UCITS Fund in a bid to seek returns that have a low correlation to bonds and equities. We have also invested in a Euro dividend futures strategy to express our positive view on the future income stream from European companies. Net Performance of the GBP Class A - Distributing share class for the year ended 30 November 2015: 0.51%. Coutts Multi Asset UK Balanced Fund We remain underweight fixed income, particularly in government bonds and global credit reflecting the low yields available. We have allocated more to loans and CLO equity where we see the additional yield sufficiently compensating for the added volatility and the risk adjusted returns remain favourable amid a low default environment. Higher yields are also offering a cushion against rising interest rates in the UK and the US, while loans help reduce our overall duration. During the year we have maintained exposure to global investment credit split across bonds and floating rate notes reflecting our underweight duration and preference to invest across a range of sectors and issuers. We have exposure to special situation bonds such as Volkswagen Group of America Finance LLC and Kinder Morgan Inc balanced by high quality issuers such as Apple Inc and Kraft Heinz Foods Co. We have taken tactical overweight positions in certain peripheral European government bonds (fully hedging the currency) in search of higher yields following recovering fundamentals in these economies vs core countries, which complement the emerging market debt position we hold. We also rotated out of PIMCO Funds Global Investor Series Plc to allocate to UBAM - Global High Yield Solution, a strategy that uses credit default swap indices, which results in a cheaper, more liquid approach to high yield. Within equities we remain slightly underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. Following a strong run in the first quarter, we trimmed our overweight in equities in favour of a cash allocation as we wait for better valued opportunities. We sold European equities ahead of the recent dip, while rotating out of the Japan Nikkei 400 index into Japanese banks, reflecting our favourable view on financials. We also took profits on Russian government bonds after a recent rebound. A selloff in the third quarter presented a buying opportunity and we increased our equity exposure. We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. We also allocated to the Investec Fund Series i - UK Alpha Fund, to increase the active exposure of the Fund. Within the Global/Sector/Themes we hold a global energy fund, US energy infrastructure and European financial exposure. Within alternatives we hold a UCITS eligible market neutral fund called AQR UCITS Funds - Style Premia UCITS Fund in a bid to seek returns that have a low correlation to bonds and equities. We have also invested in a Euro dividend futures strategy to express our positive view on the future income stream from European companies. Net Performance of the GBP Class A - Distributing share class for the year ended 30 November 2015: 0.03%. 8

10 Investment Managers Report (continued) Coutts Multi Asset UK Growth Fund We remain underweight fixed income, particularly in government bonds and global credit reflecting the low yields available. We have allocated more to loans and CLO equity where we see the additional yield sufficiently compensating for the added volatility and the risk adjusted returns remain favourable amid a low default environment. Higher yields are also offering a cushion against rising interest rates in the UK and the US, while loans help reduce our overall duration. During the year we have maintained exposure to global investment credit split across bonds and floating rate notes reflecting our underweight duration and preference to invest across a range of sectors and issuers. We have exposure to special situation bonds such as Kinder Morgan Inc. We have taken tactical overweight positions in certain peripheral European government bonds (fully hedging the currency) in search of higher yields following recovering fundamentals in these economies vs core countries, which complement the emerging market debt position we hold. We also rotated out of PIMCO Funds Global Investor Series Plc to allocate to UBAM - Global High Yield Solution, a strategy that uses credit default swap indices, which results in a cheaper, more liquid approach to high yield. Within equities we remain slightly underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. Following a strong run in the first quarter, we trimmed our overweight in equities in favour of a cash allocation as we wait for better valued opportunities. We sold European equities ahead of the recent dip, while rotating out of the Japan Nikkei 400 index into Japanese banks, reflecting our favourable view on financials. We also took profits on Russian government bonds after a recent rebound. A selloff in the third quarter presented a buying opportunity and we increased our equity exposure. We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. We also allocated to the Investec Fund Series i - UK Alpha Fund, to increase the active exposure of the Fund. Within the Global/Sector/Themes we hold a global energy fund, US energy infrastructure and European financial exposure. Within alternatives we hold a UCITS eligible market neutral fund called AQR UCITS Funds - Style Premia UCITS Fund in a bid to seek returns that have a low correlation to bonds and equities. We have also invested in a Euro dividend futures strategy to express our positive view on the future income stream from European companies. Net Performance of the GBP Class A - Distributing share class for the year ended 30 November 2015: 0.62%. Coutts Multi Asset UK Equity Growth Fund We remain slightly underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. Following a strong run in the first quarter, we trimmed our overweight in equities in favour of a cash allocation as we wait for better valued opportunities. We sold European equities ahead of the recent dip, while rotating out of the Japan Nikkei 400 index into Japanese banks, reflecting our favourable view on financials. We also took profits on Russian government bonds after a recent rebound. A selloff in the third quarter presented a buying opportunity and we increased our equity exposure. We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. We also allocated to the Investec Fund Series i - UK Alpha Fund, to increase the active exposure of the Fund. Within the Global/Sector/Themes we hold a global energy fund, US energy infrastructure and European financial exposure. Net Performance of the GBP Class A - Distributing share class for the year ended 30 November 2015: 0.47%. 9

11 Investment Managers Report (continued) Coutts Multi Asset Global Defensive Fund We remain underweight fixed income, particularly in government bonds and global credit reflecting the low yields available. We have allocated more to loans and CLO equity where we see the additional yield sufficiently compensating for the added volatility and the risk adjusted returns remain favourable amid a low default environment. Higher yields are also offering a cushion against rising interest rates in the UK and the US, while loans help reduce our overall duration. During the year we have maintained exposure to global investment credit split across bonds and floating rate notes reflecting our underweight duration and preference to invest across a range of sectors and issuers. We have exposure to special situation bonds such as Volkswagen Group of America Finance LLC and Kinder Morgan Inc balanced by high quality issuers such as Apple Inc, General Electric Capital Corp and Westpac Banking Corp. We have taken tactical overweight positions in certain peripheral European government bonds (fully hedging the currency) in search of higher yields following recovering fundamentals in these economies vs core countries, which complement the emerging market debt position we hold. We also reduced exposure to Goldman Sachs Global High Yield Portfolio to allocate to UBAM - Global High Yield Solution, a strategy that uses credit default swap indices, which results in a cheaper, more liquid approach to high yield. Within equities we remain slightly underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. Following a strong run in the first quarter, we trimmed our overweight in equities in favour of a cash allocation as we wait for better valued opportunities. We sold European equities ahead of the recent dip, while rotating out of the Japan Nikkei 400 index into Japanese banks, reflecting our favourable view on financials. We also took profits on Russian government bonds after a recent rebound. A selloff in the third quarter presented a buying opportunity and we increased our equity exposure. We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. We also allocated to the Investec Fund Series i - UK Alpha Fund, to increase the active exposure of the Fund. Within the Global/Sector/Themes we hold a global energy fund, US energy infrastructure and European financial exposure. Within alternatives we hold a UCITS eligible market neutral fund called AQR UCITS Funds - Style Premia UCITS Fund in a bid to seek returns that have a low correlation to bonds and equities. We have also invested in a Euro dividend futures strategy to express our positive view on the future income stream from European companies. Net Performance of the GBP Class A - Distributing share class for the year ended 30 November 2015: (0.01)%. Coutts Multi Asset Global Balanced Fund We remain underweight fixed income, particularly in government bonds and global credit reflecting the low yields available. We have allocated more to loans and CLO equity where we see the additional yield sufficiently compensating for the added volatility and the risk adjusted returns remain favourable amid a low default environment. Higher yields are also offering a cushion against rising interest rates in the UK and the US, while loans help reduce our overall duration. During the year we have maintained exposure to global investment credit split across bonds and floating rate notes reflecting our underweight duration and preference to invest across a range of sectors and issuers. We have exposure to special situation bonds such as Volkswagen Group of America Finance LLC and Kinder Morgan Inc balanced by high quality issuers such as General Electric Capital Corp and Westpac Banking Corp. We have taken tactical overweight positions in certain peripheral European government bonds (fully hedging the currency) in search of higher yields following recovering fundamentals in these economies vs core countries, which complement the emerging market debt position we hold. 10

12 Investment Managers Report (continued) Coutts Multi Asset Global Balanced Fund (continued) We also reduced exposure to Goldman Sachs Global High Yield Portfolio to allocate to UBAM - Global High Yield Solution, a strategy that uses credit default swap indices, which results in a cheaper, more liquid approach to high yield. Within equities we remain slightly underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. Following a strong run in the first quarter, we trimmed our overweight in equities in favour of a cash allocation as we wait for better valued opportunities. We sold European equities ahead of the recent dip, while rotating out of the Japan Nikkei 400 index into Japanese banks, reflecting our favourable view on financials. We also took profits on Russian government bonds after a recent rebound. A selloff in the third quarter presented a buying opportunity and we increased our equity exposure. We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. We also allocated to the Investec Fund Series i - UK Alpha Fund, to increase the active exposure of the Fund. Within the Global/Sector/Themes we hold a global energy fund, US energy infrastructure and European financial exposure. Within alternatives we hold a UCITS eligible market neutral fund called AQR UCITS Funds - Style Premia UCITS Fund in a bid to seek returns that have a low correlation to bonds and equities. We have also invested in a Euro dividend futures strategy to express our positive view on the future income stream from European companies. Net Performance of the GBP Class A - Distributing share class for the year ended 30 November 2015: (0.76)%. Coutts Multi Asset Global Growth Fund We remain underweight fixed income, particularly in government bonds and global credit reflecting the low yields available. We have allocated more to loans and CLO equity where we see the additional yield sufficiently compensating for the added volatility and the risk adjusted returns remain favourable amid a low default environment. Higher yields are also offering a cushion against rising interest rates in the UK and the US, while loans help reduce our overall duration. During the year we have maintained exposure to global investment credit split across bonds and floating rate notes reflecting our underweight duration and preference to invest across a range of sectors and issuers. We have exposure to special situation bonds such as Kinder Morgan Inc balanced by high quality issuers such as General Electric Capital Corp. We have taken tactical overweight positions in certain peripheral European government bonds (fully hedging the currency) in search of higher yields following recovering fundamentals in these economies vs core countries, which complement the emerging market debt position we hold. Within equities we remain slightly underweight US in favour of Europe, Japan, Emerging markets and Pacific Basin. Following a strong run in the first quarter, we trimmed our overweight in equities in favour of a cash allocation as we wait for better valued opportunities. We sold European equities ahead of the recent dip, while rotating out of the Japan Nikkei 400 index into Japanese banks, reflecting our favourable view on financials. We also took profits on Russian government bonds after a recent rebound. A selloff in the third quarter presented a buying opportunity and we increased our equity exposure. We added to inexpensive shares in Europe, where the earnings outlook has improved, and Japan, where earnings growth remains strong. We also allocated to the Investec Fund Series i - UK Alpha Fund, to increase the active exposure of the Fund. 11

13 Investment Managers Report (continued) Coutts Multi Asset Global Growth Fund (continued) Within the Global/Sector/Themes we hold a global energy fund, US energy infrastructure and European financial exposure. Net Performance of the GBP Class A - Distributing share class for the year ended 30 November 2015: (1.02)%. Coutts & Co Date: February

14 Fund Summary Information Dividend Rates (Unaudited) Final Dividend Rate 30 November 2015* Interim Dividend Rate 31 May 2015** Coutts Multi Asset UK Defensive Fund GBP Class A-Distributing GBP Class B-Distributing GBP Class C-Distributing*** Coutts Multi Asset UK Balanced Fund GBP Class A-Distributing GBP Class B-Distributing GBP Class C-Distributing*** Coutts Multi Asset UK Growth Fund GBP Class A-Distributing GBP Class B-Distributing GBP Class C-Distributing*** Coutts Multi Asset UK Equity Growth Fund GBP Class A-Distributing GBP Class B-Distributing GBP Class C-Distributing*** Coutts Multi Asset Global Defensive Fund CHF Class A-Distributing CHF CHF CHF Class B-Distributing CHF CHF EUR Class A-Distributing EUR Class B-Distributing EUR Class C-Distributing*** GBP Class A-Distributing GBP Class B-Distributing GBP Class C-Distributing*** USD Class A-Distributing US$ US$ USD Class B-Distributing US$ US$ USD Class C-Distributing*** US$ US$ Coutts Multi Asset Global Balanced Fund CHF Class A-Distributing CHF CHF CHF Class B-Distributing CHF CHF EUR Class A-Distributing EUR Class B-Distributing EUR Class C-Distributing*** GBP Class A-Distributing GBP Class B-Distributing GBP Class C-Distributing*** USD Class A-Distributing US$ US$ USD Class B-Distributing US$ US$ USD Class C-Distributing*** US$ US$

15 Fund Summary Information (continued) Dividend Rates (Unaudited) (continued) Final Dividend Rate 30 November 2015* Interim Dividend Rate 31 May 2015** Coutts Multi Asset Global Growth Fund EUR Class A-Distributing EUR Class B-Distributing EUR Class C-Distributing*** GBP Class A-Distributing GBP Class B-Distributing GBP Class C-Distributing*** USD Class A-Distributing US$ US$ USD Class B-Distributing US$ US$ USD Class C-Distributing*** US$ US$ * The above dividends were declared on 16 November 2015 and paid on 30 November ** The above dividends were declared on 15 May 2015 and paid on 29 May *** The share class was launched on 19 January No other dividends were paid during the year. Soft Commission Arrangements There were no soft commission arrangements in operation during the year ended 30 November 2015 and during the year ended 30 November

16 Fund Summary Information (continued) Investment in Collective Investment Schemes (Unaudited) Management fees are charged to the underlying collective investment schemes by their respective managers. In certain circumstances, the Funds may receive management fee rebates in respect of investments in collective investment schemes. During the year all Funds held investments in collective investment schemes. The below tables details the gross management fee charge for each of the underlying collective investment schemes by their respective managers: Coutts Multi Coutts Multi Coutts Multi Coutts Multi Coutts Multi Coutts Multi Coutts Multi Asset UK Asset UK Asset UK Asset UK Equity Asset Global Asset Global Asset Global Collective Investment Schemes Defensive Fund Balanced Fund Growth Fund Growth Fund Defensive Fund Balanced Fund Growth Fund Aberdeen UK ICVC - Aberdeen Asia Pacific Equity Fund* 1.75% Algebris UCITS Funds Plc - Algebris Financial Credit Fund % 0.50% 0.50% GBP Algebris UCITS Funds Plc - Algebris Financial Credit Fund % 0.50% 0.50% USD AQR UCITS Funds - Style Premia UCITS Fund A USD % 0.60% - AQR UCITS Funds - Style Premia UCITS Fund F GBP 0.50% 0.50% 0.50% Artemis Income Fund* 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% BlackRock Global Funds - Asian Tiger Bond Fund 0.50% 0.50% 0.50% % 0.50% 0.50% BlackRock Gold and General Fund* 1.75% 1.75% 1.75% 1.75% 1.75% 1.75% 1.75% BlueBay Investment Grade Absolute Return Bond Fund % 1.00% 1.00% BlueBay Investment Grade Libor Fund* % % Carador Income Fund Plc 1.50% 1.50% 1.50% % 1.50% 1.50% DB X-trackers DAX UCITS ETF 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% DB X-trackers Euro Stoxx 50 UCITS ETF 0.01% 0.01% 0.01% % 0.01% 0.01% DB X-trackers FTSE MIB UCITS ETF % 0.20% 0.20% DB X-trackers IBEX 35 Index UCITS ETF DR - 1D % DB X-trackers IBEX 35 UCITS ETF % 0.10% 0.10% 0.10% 0.10% 0.10% DB X-trackers II - ITRAXX Crossover UCITS ETF 0.14% 0.14% 0.14% % 0.14% 0.14% DB X-trackers MSCI AC Asia ex Japan Index UCITS ETF % 0.45% 0.45% DB X-trackers MSCI Pacific ex Japan Index UCITS ETF % DB X-trackers SMI UCITS ETF % 0.20% 0.20% Fidelity Funds - Global Financial Services Fund* % 1.50% 1.50% Goldman Sachs Global Credit Portfolio Hedged % 0.50% 0.50% Goldman Sachs Global High Yield Portfolio* % Guinness Asset Management Funds plc - Global Energy Fund* % 0.75% 0.75% 0.75% 0.75% 15

17 Fund Summary Information (continued) Investment in Collective Investment Schemes (Unaudited) (continued) Coutts Multi Asset UK Coutts Multi Asset UK Coutts Multi Asset UK Coutts Multi Asset UK Coutts Multi Asset Global Coutts Multi Asset Global Coutts Multi Asset Global Defensive Fund Balanced Fund Growth Fund Equity Growth Defensive Fund Balanced Fund Growth Fund Collective Investment Schemes (continued) Fund Hermes Investment Funds Plc - Hermes Sourcecap European 0.75% 0.75% 0.75% 0.75% Alpha Fund* International Public Partnerships 1.20% 1.20% % 1.20% - Invesco Perpetual Fixed Interest Investment Series % Corporate Bond Fund* Investec Fund Series i - UK Alpha Fund 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% ishares Core FTSE 100 UCITS ETF % 0.07% 0.07% % ishares Core S&P 500 UCITS ETF % 0.07% 0.07% % 0.07% ishares MSCI Canada UCITS ETF % 0.48% 0.48% ishares MSCI Europe ex-uk UCITS ETF % % 0.40% ishares S&P 500 Minimum Volatility UCITS ETF % 0.20% - ishares UK Property UCITS ETF 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% 0.40% JPMorgan Funds - Emerging Markets Strategic Bond Fund % 0.95% 0.95% CHED JPMorgan Funds - Emerging Markets Strategic Bond Fund % 0.95% 0.95% CINC KBI Institutional Emerging Markets Fund 0.60% 0.60% 0.60% 0.60% Lyxor ETF MSCI Emerging Markets % 0.55% 0.55% 0.55% 0.55% 0.55% Lyxor ETF MSCI EMU Small Caps % 0.40% Lyxor UCITS ETF China Enterprise Ltd HSCEI - C-USD % 0.65% 0.65% 0.65% 0.65% 0.65% Lyxor UCITS ETF FTSE MIB % 0.35% 0.35% Lyxor UCITS ETF JPX-Nikkei % 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% Lyxor UCITS ETF STOXX Europe 600 Banks 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% Macquarie Fund Solutions - Macquarie Asia New Stars Fund % 0.95% 0.95% Mellon Investments Funds ICVC - Newton Asian Income 1.00% Fund Institutional Shares (Income) - GBP* Mellon Investments Funds ICVC - Newton Asian Income % 1.00% 1.00% Fund Institutional Shares (Income) - USD* Merrill Lynch Investment Solutions - Marshall Wace Tops % 1.50% 1.50% UCITS Fund Montanaro European Smaller Companies Fund* % 1.50% Morgan Stanley Investment Funds - Asian Property Fund %

18 Fund Summary Information (continued) Investment in Collective Investment Schemes (Unaudited) (continued) Coutts Multi Asset UK Defensive Fund Coutts Multi Asset UK Balanced Fund Coutts Multi Asset UK Growth Fund Coutts Multi Asset UK Equity Growth Fund Coutts Multi Asset Global Defensive Fund Coutts Multi Asset Global Balanced Fund Coutts Multi Asset Global Growth Fund Collective Investment Schemes (continued) NB Global Floating Rate Income Fund Ltd 0.75% 0.75% 0.75% % 0.75% 0.75% Parvest Equity Russia 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% Pershing Square Holdings Ltd/Fund % 1.50% 1.50% % 1.50% Pictet - Emerging Local Currency Debt* 1.05% 1.05% 1.05% PIMCO Funds Global Investor Series Plc - UK Long Term 0.46% 0.46% Corporate Bond Fund* PIMCO Funds Global Investors Series Plc - Global % - - Investment Grade Credit Fund Robeco Capital Growth - Robeco European Conservative % 0.50% 0.50% Equities Royal London FTSE 350 Tracker Fund % 0.10% 0.10% Schroder International Selection Fund - Asian Opportunities* % 1.50% Somerset Emerging Markets Dividend Growth Fund 1.00% Source Morningstar US Energy Infrastructure MLP UCITS 0.50% 0.50% 0.50% % 0.50% 0.50% ETF B SOURCE S&P 500 UCITS ETF % 0.05% 0.05% 0.05% 0.05% SPDR S&P 500 UCITS ETF % SPDR S&P UK Dividend Aristocrats UCITS ETF 0.30% SPDR S&P US Dividend Aristocrats UCITS ETF 0.35% 0.35% % 0.35% - TwentyFour Income Fund Ltd 0.75% 0.75% UBAM - Global High Yield Solution USD % 0.25% - UBAM - Global High Yield Solution GBP 0.25% 0.25% 0.25% UK Mortgages Ltd 0.75% 0.75% 0.75% % 0.75% 0.75% Vanguard FTSE 100 UCITS ETF 0.09% 0.09% 0.09% 0.09% Vanguard S&P 500 UCITS ETF % 0.07% 0.07% Vontobel Fund - Emerging Markets Equity % 0.83% 0.83% * There are rebate agreements in place on these Collective Investment Schemes 17

19 Fund Summary Information (continued) Fund Performance Data (Unaudited) For the year ended 30 November 2015 For the year ended 30 November 2014 Coutts Multi Asset UK Defensive Fund GBP Class A-Accumulating 0.51% 8.76% GBP Class A-Distributing 0.51% 8.76% GBP Class B-Accumulating 0.00% 2.13% GBP Class B-Distributing 0.01% 8.21% GBP Class C-Distributing* (0.11)% - Coutts Multi Asset UK Balanced Fund GBP Class A-Accumulating 0.03% 7.19% GBP Class A-Distributing 0.03% 7.19% GBP Class B-Accumulating (0.47)% 6.66% GBP Class B-Distributing (0.48)% 6.66% GBP Class C-Distributing* 0.83% - Coutts Multi Asset UK Growth Fund GBP Class A-Accumulating 0.65% 5.98% GBP Class A-Distributing 0.62% 5.98% GBP Class B-Accumulating 0.15% 5.45% GBP Class B-Distributing 0.15% 5.45% GBP Class C-Distributing* 1.85% - Coutts Multi Asset UK Equity Growth Fund GBP Class A-Accumulating 0.49% 4.67% GBP Class A-Distributing 0.47% 4.66% GBP Class B-Accumulating** (7.28)% - GBP Class B-Distributing (0.01)% 4.16% GBP Class C-Distributing* 1.80% - Coutts Multi Asset Global Defensive Fund CHF Class A-Distributing (1.41)% 5.17% CHF Class B-Accumulating (1.94)% 4.64% CHF Class B-Distributing (1.94)% 4.64% EUR Class A-Accumulating (0.35)% 5.43% EUR Class A-Distributing (0.40)% 5.45% EUR Class B-Accumulating (0.86)% 4.89% EUR Class B-Distributing (0.84)% 4.91% EUR Class C-Distributing* 0.76% - GBP Class A-Accumulating (0.03)% 5.76% GBP Class A-Distributing (0.01)% 5.77% GBP Class B-Accumulating (0.54)% 5.24% GBP Class B-Distributing (0.54)% 5.23% GBP Class C-Distributing* 0.71% - USD Class A-Accumulating (0.20)% 5.54% USD Class A-Distributing (0.16)% 5.55% USD Class B-Accumulating (0.70)% 5.02% USD Class B-Distributing (0.70)% 5.01% USD Class C-Distributing* 0.56% - 18

20 Fund Summary Information (continued) Fund Performance Data (Unaudited) (continued) For the year ended 30 November 2015 For the year ended 30 November 2014 Coutts Multi Asset Global Balanced Fund CHF Class A-Accumulating (2.15)% 5.83% CHF Class A-Distributing (2.11)% 5.84% CHF Class B-Accumulating (2.63)% 5.32% CHF Class B-Distributing (2.64)% 5.33% EUR Class A-Accumulating (1.15)% 6.11% EUR Class A-Distributing (1.20)% 6.11% EUR Class B-Accumulating (1.66)% 5.59% EUR Class B-Distributing (1.66)% 5.58% EUR Class C-Distributing* 1.24% - GBP Class A-Accumulating (0.83)% 6.45% GBP Class A-Distributing (0.76)% 6.46% GBP Class B-Accumulating (1.34)% 5.92% GBP Class B-Distributing (1.33)% 5.92% GBP Class C-Distributing* 1.19% - USD Class A-Accumulating (0.88)% 6.24% USD Class A-Distributing (0.88)% 6.24% USD Class B-Accumulating (1.37)% 5.71% USD Class B-Distributing (1.37)% 5.71% USD Class C-Distributing* 1.13% - Coutts Multi Asset Global Growth Fund EUR Class A-Accumulating (1.36)% 6.37% EUR Class A-Distributing (1.45)% 6.38% EUR Class B-Accumulating (1.85)% 5.84% EUR Class B-Distributing (1.83)% 5.85% EUR Class C-Distributing* 2.61% - GBP Class A-Accumulating (1.11)% 6.71% GBP Class A-Distributing (1.02)% 6.71% GBP Class B-Accumulating (1.60)% 6.17% GBP Class B-Distributing (1.59)% 6.19% GBP Class C-Distributing* 2.49% - USD Class A-Accumulating (1.03)% 6.52% USD Class A-Distributing (1.01)% 6.54% USD Class B-Accumulating (1.50)% 5.99% USD Class B-Distributing (1.53)% 5.99% USD Class C-Distributing* 2.51% - * The share class was launched on 19 January The performance data reflects the share class performance from the share class launch date to the year ended 30 November ** The share class was launched on 6 May The performance data reflects the share class performance from the share class launch date to the year ended 30 November

21 Coutts Multi Asset UK Defensive Fund Portfolio and Statement of Investments as at 30 November 2015 Description Nominal Holdings Fair Value % of Net Assets Collective Investment Schemes Aberdeen UK ICVC - Aberdeen Asia Pacific Equity Fund 3,568 5, Algebris UCITS Funds Plc - Algebris Financial Credit Fund 7, , AQR UCITS Funds - Style Premia UCITS Fund 21,000 2,283, Artemis Income Fund 1,420,456 3,152, BlackRock Global Funds - Asian Tiger Bond Fund 105, , BlackRock Gold and General Fund 110, , Carador Income Fund Plc~ 1,750, , DB X-trackers DAX UCITS ETF 9, , DB X-trackers Euro Stoxx 50 UCITS ETF 45,000 1,159, DB X-trackers II - ITRAXX Crossover UCITS ETF 11,800 1,481, Hermes Investment Funds Plc - Hermes Sourcecap European Alpha Fund 1,216,698 1,570, International Public Partnerships~ 660, , Invesco Perpetual Fixed Interest Investment Series - Corporate Bond Fund 1,201,700 1,400, Investec Fund Series i - UK Alpha Fund 834,000 2,498, ishares UK Property UCITS ETF 250,000 1,690, JPMorgan Funds - Emerging Markets Strategic Bond Fund 16, , KBI Institutional Emerging Markets Fund 44, , Lyxor UCITS ETF JPX-Nikkei ,600 1,881, Lyxor UCITS ETF STOXX Europe 600 Banks 22, , Mellon Investments Funds ICVC - Newton Asian Income Fund Institutional Shares (Income) USD 445, , NB Global Floating Rate Income Fund Ltd~ 1,676,693 1,550, Parvest Equity Russia 5, , Pictet - Emerging Local Currency Debt 19,923 1,555, PIMCO Funds Global Investor Series Plc - UK Long Term Corporate Bond Fund 322,900 4,475, Somerset Emerging Markets Dividend Growth Fund 1,610,000 1,697, Source Morningstar US Energy Infrastructure MLP UCITS ETF B 24,100 1,034, SPDR S&P UK Dividend Aristocrats UCITS ETF 268,230 3,255, SPDR S&P US Dividend Aristocrats UCITS ETF 12, , TwentyFour Income Fund Ltd~ 908,435 1,037, UBAM - Global High Yield Solution 5, , UK Mortgages Ltd~ 1,121,037 1,157, Vanguard FTSE 100 UCITS ETF 34, , Total Collective Investment Schemes % (30 November 2014: 59.18%) 42,510, Transferable Securities - Equities Australia % (30 November 2014: 0.00%) BHP Billiton Plc 25, , Japan % (30 November 2014: 0.17%) Mitsubishi UFJ Financial Group Inc 37, , Mizuho Financial Group Inc 136, , Sumitomo Mitsui Financial Group Inc 5, , ,