WAY Absolute Return Portfolio Fund

Transcription

1 WAY Absolute Return Portfolio Fund Short Report for the six months ended 30 September 2015 Investment Objective and Policy The objective of the Fund is to achieve long term capital appreciation in the form of a positive absolute return for investors in all market conditions on a 12 month basis. Capital invested in the Fund is at risk and there is no guarantee that the investment objective will be met over the 12 month period or in respect of any other period. The Fund will aim to achieve its investment objective by utilising a diversified portfolio of transferable securities (including investment trusts), Collective Investment Schemes, warrants, cash or near cash, deposits and money market instruments focussing on investment in a selection of closed ended investment funds which themselves seek to deliver absolute returns using a variety of suitable strategies. Subject to the requirements of the Regulations, the portfolio will normally remain fully invested. There will, however, be no restrictions on the underlying content of the investments held, in terms of investment type, geographical or economic sector, other than those imposed by the Regulations, meaning that the Investment Adviser has the absolute discretion to weight the portfolio towards any investment type or sector at any time. However, not more than 10% of the value of the Fund shall consist of units and/or shares in Collective Investment Schemes. The Fund may also invest in unregulated Collective Investment Schemes (where investment in such funds is consistent with the investment objective and policy of the Fund). The use of derivatives and/or hedging transactions are permitted in connection with the efficient portfolio management of the Fund, and borrowing will be permitted in accordance the Regulations. The Fund may, in addition to its other investment powers, use derivatives and forward transactions for investment purposes. It is not intended that the use of derivatives in this way will change the risk profile of the Fund. Fund Facts Risk Profile Interim/Annual Accounting End Dates Ex-dividend (xd) Dates 30 September 31 March 01 April 31 May Income Distribution/ Accumulation Dates Please refer to the Full Prospectus for details of all the risks. The Fund has exposure to credit, counterparty and usual market risks. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. You should always regard investments in the Fund as long term. Page 1

2 Charges Share Class Initial Charge Annual Management Charge as at Total Expense Ratios as at Total Expense Ratios as at 31/03/15 Performance Fee* as at Share Class A 5.25% 1.50% 2.02% 2.06% 0.00% Share Class E 2.00% 0.50% 1.02% 1.06% 0.00% Share Class Institutional 5.25% 0.50% 1.02% 1.06% 0.00% Share Class Retail 5.25% 1.00% 1.52% 1.56% 0.00% Share Class S 2.00% 1.00% 1.52% 1.56% 0.00% Share Class T 2.00% 0.80% 1.32% 1.36% 0.00% *Performance fee is applied under certain conditions. The amount of Performance Fee payable in respect of each Calculation Period is a Sterling amount equivalent to the product of (a) the Net Asset Value per Share on the last Business Day of the relevant Calculation Period (b) the excess performance within the qualifying performance band (c) the relevant performance fee increment (%) and, (d) the weighted average number of Shares in issue during the Calculation Period. The Performance Fee will be calculated and accrued daily but will only become payable annually in arrears in respect of each discrete period of twelve months ending on 31 March in each year (the 'Annual Calculation Period'). The Performance Fee will accrue daily as if each day were the end of an Annual Calculation Period. Distributions/Accumulations The Fund distributes annually, following the annual accounting period. Therefore there is no distribution in the current period. Comparative Tables Net Asset Value Date Net Asset Value of Share Class ( ) Shares in issue Net Asset Value pence per Share Share Class A Income 31/03/13 575, , /03/14 329, , /03/15 315, , , , Share Class E Accumulation 31/03/ /03/ /03/15 7,035,734 6,008, ,547,206 5,799, Share Class E Income 31/03/ /03/ /03/15 5,767 5, ,559 5, Page 2

3 Comparative Tables (continued) Net Asset Value (continued) Date Net Asset Value of Share Class ( ) Shares in issue Net Asset Value pence per Share Share Class Institutional Accumulation 31/03/13 4,081,674 3,599, /03/14 2,570,207 2,150, /03/15 27,104 21, ,135 21, Share Class Retail Accumulation 31/03/13 153, , /03/14 163, , /03/15 208, , , , Share Class Retail Income 31/03/13 1, /03/14 5,063 4, ,684 38, Share Class S Income 31/03/14 80,467 79, /03/15 517, , , , Share Class T Income 31/03/ /03/14 1,123,038 1,001, /03/15 1,302,864 1,138, ,271,698 1,154, Price and Revenue History Calendar Year Highest Published Lowest Published Net Revenue per Share (p) Share Class A Income Share Class E Accumulation Share Class E Income Share Class Institutional Accumulation Page 3

4 Comparative Tables (continued) Price and Revenue History (continued) Calendar Year Share Class Retail Accumulation Highest Published Lowest Published Net Revenue per Share (p) Share Class Retail Income Share Class S Income Share Class T Income From 17 January to 31 December From 18 January to 31 December From 5 December to 31 December From 1 January to 27 August From 1 January to 30 September From 4 August to 30 September Includes the distributions paid 31 May Share Classes A Income, Institutional Accumulation, Retail Accumulation and Retail Income were launched 30 July Share Classes E Accumulation and E Income were launched 17 January Share Class T Income was launched 18 January Share Class S Income was launched 25 November Major Holdings Top 10 Holdings % of Fund as at Chenavari Capital Solutions 8.67 Bluecrest Allblue 8.44 DW Catalyst 8.39 Empiric Student Property 7.87 NB Distressed Debt Investment 7.57 Pershing Square 7.19 Blackstone GSO Loan Financing 7.16 Third Point Offshore Investors 7.14 CVC Credit Partners European Opportunities 7.01 Alcentra European Floating Rate 6.94 Top 10 Holdings % of Fund as at 31/03/15 Pershing Square 8.62 DW Catalyst 8.55 NB Distressed Debt Investment 8.42 CQS Diversified 8.10 Bluecrest AllBlue 8.07 Boussard & Gavaudan 7.82 Carador Income 7.67 Third Point Offshore Investments 7.51 Empiric Student Property 7.11 Alcentra European Floating Rate 6.93 Page 4

5 Portfolio Information Breakdown by Geographic Region % % % % Europe [32.45%] Global [32.23%] United States of America [24.71%] United Kingdom [7.11%] (2.50%) Net other liabilities/assets [3.50%] Comparative figures shown above in square brackets relate to 31 March 2015 Investment Manager s Report Investment Review The period under review was characterised by anxiety about the state of the Chinese economy with the authorities possibly attempting to improve competitiveness by devaluing the Yuan and also seeking to support a severe sell off on the Chinese stock market. These concerns about the world s second biggest economy spilt over into anxiety about the world economy. Another source of worry was whether the Federal Reserve Board would at last normalise interest rates, which would not only make monetary conditions more demanding in the USA but also withdraw cheap funding for emerging markets. Quantitative easing continued in the moribund Eurozone and in Japan. There were also politicoeconomic concerns, not least the turmoil in the Middle East with the threat from ISIL and the flood of refugees seeking to enter the European Union. The Absolute Return Fund gave up 3.2% 1 during the period and the FTSE 100, for example, retreated by 8.72% 1. Sterling was strong against both the US dollar and the Euro during the period, which adversely affected the non-sterling denominated element of the portfolio. The two US activist managers, Pershing Square Holdings and Third Point Offshore Investments, were also affected by their slight correlation with Wall Street. Page 5

6 Investment Manager s Report (continued) Investment Review (continued) During the period a new investment was made in AEW UK Investment Management, which invests in secondary property. Likewise the Absolute Return Fund took a position at launch in Keynes Dynamic Beta Strategies, a multistrategy fund managed on a formulaic basis. A position was reintroduced in Starwood European Real Estate, which undertakes property finance and which had previously been sold at a substantial premium. The holding in Boussard & Gavaudan was lightened in order to reduce the Absolute Return Fund s Euro exposure. CQS Diversified, an in-house fund of funds which we had favoured, was wound up and returned money to shareholders. Performance of the Fund WAY Absolute Return Portfolio Date Price % Movement Published price E Accumulation 30 September Published price E Accumulation 31 March Outlook The strategy of the Absolute Return Fund remains to identify companies with investment strategies to invest in assets with a low correlation to public markets. This programme is supported by analysis and, importantly, by manager meetings. In the listed sector which accounts for the majority of the fund s investments, careful attention is paid to the premiums and discounts of the companies share prices to their net asset value. Investment Manager WM Capital Management Limited 28 October % Significant Information On 22 July 2014, WAY Fund Managers Limited was authorised by the FCA as an Alternative Investment Fund Manager ( AIFM ). Under the Alternative Investment Fund Managers Directive, acting as the AIFM, WAY Fund Managers is required to disclose how those whose actions have a material impact on the Fund are remunerated. The remuneration strategy across WAY Fund Managers is governed by the Remuneration Committee, a committee appointed by the WAY Fund Managers Board. The Remuneration Committee has established an AIFM Remuneration Policy designed to ensure the AIFM Remuneration Code in the UK Financial Authority handbook is met proportionately for all AIFM Remuneration Code Staff. WAY Fund Managers considers its activities as non complex due to the fact that regulation limits the AIF strategies conducted and the scope of investment in such a way that investor risk is mitigated. The discretion of WAY Fund Managers and the portfolio manager is strictly controlled within certain pre-defined parameters as determined in the prospectus of each Alternative Investment Fund. Page 6

7 Significant Information (continued) In its role as an AIFM, WAY Fund Managers deems themselves as lower risk due to the nature of the activities it conducts. WAY Fund Managers does not pay any form of variable remuneration currently. Therefore WAY Fund Managers has provided a basic overview of how staff whose actions have a material impact on the Fund are remunerated. September 2015 Number of Beneficiaries Total Remuneration paid Fixed remuneration Variable remuneration paid Carried interest paid by the AIF Total remuneration paid by the AIFM during the financial year , , Remuneration paid to employees of the AIFM who have a material impact on the risk profile of the AIF 5 163, , Due to the size and structure of WAY Fund Managers, it is determined that employees of the AIFM who have a material impact on the risk profile of the AIF include the Board and the Head of Risk and Compliance. The delegated investment manager is subject to regulatory requirements on remuneration that WAY Fund Managers deem to be equally as effective as those detailed in the Alternative Investment Fund Managers Directive, which would include the Capital Requirements Directive or Markets in Financial Instruments Directive. From 12 November 2015, the auditor for this Company will change from Grant Thornton LLP to Deloitte LLP. This brings the Company in line with other Funds operated within the Authorised Fund Manager s group. The information in this report is designed to enable shareholders to make an informed judgment on the activities of the Fund during the period it covers and the result of those activities at the end of the period. The long Report and Accounts are available free of charge on request. For more information about the activities and performance of the Fund during the period and previous periods, please contact: Authorised Corporate Director WAY Fund Manager s Limited Cedar House, 3 Cedar Park, Cobham Road, Wimborne, Dorset, BH21 7SB Customer Service Centre: Depositary State Street Trustees Limited 20 Churchill Place, London, E14 5HJ Investment Manager WM Capital Management Limited Fairway, Well Lane, Danbury, Chelmsford Essex, CM3 4AB Authorised and regulated by the FCA Authorised and regulated by the FCA Authorised and regulated by the FCA Auditor Grant Thornton UK LLP 30 Finsbury Square, London, EC2P 2YU From 12 November 2015 Deloitte LLP Chartered Accountants and Statutory Auditor Saltire Court 20 Castle Terrace Edinburgh, EH1 2DB Page 7 Please note that telephone calls may be recorded for monitoring and training purposes, and to confirm investors' instructions