MI Activus Wealth Funds - MI Activus Investment Fund

Transcription

1 MI Activus Wealth Funds - MI Activus Investment Fund Interim Report 28 February 2017

2 Contents Page Directory Investment Objective and Policy Investment Manager's report Portfolio Statement Comparative Tables Statement of Total Return Statement of Change in Net Assets Attributable to Shareholders Balance Sheet Certification of the Interim Report by the Authorised Corporate Director Distribution Table General Information

3 Directory Authorised Corporate Director (ACD) & Registrar Maitland Institutional Services Ltd Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telephone: Fax: Website: (Authorised and regulated by the Financial Conduct Authority) Customer Service Centre Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Telephone: Fax: (Authorised and regulated by the Financial Conduct Authority) Directors of the Authorised Corporate Director R.A. Ackermann (appointed 30 December 2016) P.J. Foley-Brickley S. Georgala D. Jones R.W. Leedham D.W. Munting (retired 14 October 2016) Investment Manager Activus Wealth Ltd 9 Bowers Way, Harpenden AL5 4EP (Authorised and regulated by the Financial Conduct Authority) Depositary The Northern Trust Global Services Limited 50 Bank Street, Canary Wharf, London E14 5NT (Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority) Independent Auditor KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square, Canary Wharf, London E14 5GL MI Activus Wealth Funds - MI Activus Investment Fund 1

4 Investment Objective and Policy Investment objective The Fund aims to achieve capital growth before fees of at least the Bank of England Base Rate plus 5% with lower volatility than global equity market indices. Investors should note that, notwithstanding that the objective is to achieve capital growth before fees of at least the Bank of England Base Rate plus 5%, capital is in fact at risk. The Fund aims to achieve a positive return over a 3 year period, however, there is no guarantee that a positive return will be achieved over that, or any, time period. Investment policy The Investment Manager will adopt a global multi-asset approach without the constraints of a formal benchmark. The Fund will invest in collective investment schemes, listed investment companies and Exchange Traded Funds. Through such investments, the portfolio will achieve indirect exposure to a diversified range of asset classes. These asset classes will vary over time, but will be selected from the following: equities, fixed income, private equity, currencies, commodities, real estate and alternative investment strategies to the extent that each is permitted by the Regulations. The Fund may also invest in other transferable securities, money market instruments, deposits, cash and near cash investments and derivatives. Derivatives may be used both for investment purposes and for Efficient Portfolio Management. The composition of the portfolio will reflect the Investment Manager s view of the potential future return of different underlying asset classes and specific investments and will be actively managed to take advantage of relative value and pricing inefficiencies. 2 MI Activus Wealth Funds - MI Activus Investment Fund

5 Investment Manager's Report for the period ended 28 February 2017 During the period from 19 July 2016 to 28 February 2017, the Fund s shares increased in value by 3.9% (daily pricing basis). This is 1.3% ahead on a gross basis to its comparator the Bank of England Base rate plus five percent. The Fund has a 0.33 correlation to equities, a Beta* of just 0.16 and volatility of 4.5% which is less than half that of the major equity indices during the period. The portfolio is cautiously positioned in traditional asset classes with a 32% exposure to equities and no exposure to nominal fixed income. We hold 7% in private equity through two listed vehicles. The Fund has 15% in gold, silver and mining companies which provides portfolio insurance in the event of fiat currency debasement or a return of inflation. We own inflation-linked fixed income in the form of infrastructure cash flows from companies which have diversified portfolios of government backed public-private initiative assets such as schools, hospitals and roads. We are receiving an additional yield pickup over the equivalent inflation-linked government bond yield which we believe represents a significant premium for the additional risk. We have 24% invested in skill based trading strategy funds which seek to make positive returns regardless of market direction. Finally, 10% is in cash on a lookthrough basis. There is significant political and market risk at the current time. Populist politics are dethroning the establishment and we eagerly await the outcome of their policies. Central bank intervention has created a debt-filled world with a high probability that many assets are valued far too highly. Inflation is the most likely outcome since the alternative, conflict, is undesirable to the vast majority. Volatility is particularly subdued and it does feel like the calm before the storm. The expected returns on many traditional asset classes from their current levels are very low and we expect significant price corrections, notably in European government bonds and US equities. We continue to find listed companies and funds which trade at significant discounts to fair value which provide a comfortable level of downside protection and the potential for high returns. The balance between preserving capital and taking sufficient risk to make good risk adjusted returns is always a fine art but the focus for now is definitely with capital preservation. There will be better times ahead for increasing risk in order to increase expected return and in the meantime we will seek predominantly market neutral skill based strategies and assets which offer capital protection. * Beta measures the sensitivity of an investment to movements in the FTSE All Share Index using daily data. MI Activus Wealth Funds - MI Activus Investment Fund 3

6 Investment Manager's Report continued Material Portfolio Changes for the period ended 28 February 2016 Top 5 Purchases Costs Syncona 3,740,646 BlackRock Gold & General D Income GBP 3,100,000 Aberdeen Asian Smaller Companies Investment Trust 3,053,575 CF Odey Absolute Return Fund - Institutional Accumulation 2,900,000 Third Point Offshore Investors 2,790,003 Top 5 Sales Proceeds Syncona 3,847,299 ishares Physical Silver ETC 1,712,557 RIT Capital Partners 798,421 Capital Gearing Investment Trust 733,906 ishares Physical Gold ETC 579,882 4 MI Activus Wealth Funds - MI Activus Investment Fund

7 Portfolio Statement as at 28 February 2017 Market % of total value net assets Holding Security 2017 Absolute Return 22.39% 153,990 BH Global - GBP Shares 2,017, ,561 CF Odey Absolute Return Fund - Institutional Accumulation* 2,537, ,555 DW Catalyst 2,056, ,598 Third Point Offshore Investors 2,872, ,484, Asian Equities 7.56% 319,700 Aberdeen Asian Smaller Companies Investment Trust 3,203, Biotechnology 2.99% 167,500 Biotech Growth Trust 1,264, Commodities 13.83% 507,500 BlackRock World Mining Trust 1,851, ,976 BlackRock Gold & General D Income GBP* 2,811, ,000 ishares Physical Gold ETC 1,195, ,858, Emerging Equities 5.11% 405,000 Aberdeen Emerging Markets Investment Company 2,166, Fixed Income 10.24% 1,422,548 BBGI SICAV S.A. 2,016, ,456,531 International Public Partnerships 2,320, ,336, Global Market Indirect 7.42% 100,000 Hansa Trust 'A' 860, ,009 Personal Assets Trust 1,221, ,916 Ruffer Investment 1,063, ,145, Multi Asset 4.74% 735,583 Henderson Alternative Strategies Trust 2,008, Private Equity 9.55% 79,600 North Atlantic Smaller Companies Investment Trust 2,017, ,032 Pantheon International 2,028, ,046, MI Activus Wealth Funds - MI Activus Investment Fund 5

8 Portfolio Statement continued Market % of total value net assets Holding Security 2017 UK Equities 9.68% 198,178 Marlborough Special Situations Class P Accumulation* 2,870, ,315,000 Woodford Patient Capital Trust 1,230, ,100, Investment assets 39,614, Net other assets 2,749, Net assets 42,363, All investments are ordinary shares or stock units on a regulated securities market unless otherwise stated. *Collective Investment Schemes permitted under COLL, not traded on any exchange. Total purchases for the period: 47,162,031 Total sales for the period: 8,558,998 6 MI Activus Wealth Funds - MI Activus Investment Fund

9 Comparative Tables Change in net assets per share A Accumulation* Z Accumulation* p p Opening net asset value per share Return before operating charges^ Operating charges Return after operating charges^ Distributions Retained distributions on accumulation shares Closing net asset value per share ^After direct transaction costs of Performance Return after charges 3.14% 3.75% Other Information Closing net asset value 32,092,189 10,271,766 Closing number of shares 31,115,639 9,900,824 Operating charges 1.58% 0.58% Ongoing operating charges 1.31% 0.31% Direct transaction costs 0.43% 0.43% Prices Highest share price Lowest share price * Launched 19 July 2016 The net asset value of the Fund increased from 4,000,000 at launch to 42,668,000 at period end. Taking an average of the daily net asset values for the last month of the period has the effect of reducing Operating charges by 0.27%. The ACD believes this to be more representative of the charges going forward. Operating charges include indirect costs incurred in the maintenance and running of the Fund, as disclosed (but not limited to) the detailed expenses within the Statement of Total Return. The figures used within this table have been calculated against the average Net Asset Value for the accounting period. The return after charges is calculated as the closing net asset value per share plus the distributions on income shares minus the open net asset value per share as a % of the opening net asset value per share. The Fund invests in collective investment schemes, the expenses incurred by these schemes in relation to the Fund (synthetic ongoing charge) are included within the operating charges. Direct transaction costs include fees, commissions, transfer taxes and duties in the purchasing and selling of investments, which are offset (where applicable) against any dilution levies charged within the accounting period. The figures used within the table have been calculated against the average Net Asset Value for the accounting period. MI Activus Wealth Funds - MI Activus Investment Fund 7

10 Comparative tables continued Risk and reward profile The risk and reward indicator table demonstrates where the Fund ranks in terms of its potential risk and reward. The higher the rank the greater the potential reward but the greater the risk of losing money. It is based on past data, may change over time and may not be a reliable indication of the future risk profile of the Fund. The shaded area in the table below shows the Fund s ranking on the risk and reward indicator. Typically lower rewards, Typically higher rewards, lower risk higher risk The Fund is ranked 4 because funds of this type have experienced average rises and falls in value in the past. 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 Fund: The Fund invests into other funds which themselves invest in assets such as bonds, company shares, cash and currencies. The objectives and risk profiles of these underlying funds may not be fully in line with those of this Fund. Bond values are affected by changes in interest rates, inflation and any decline in creditworthiness of the bond issuer. Bonds that produce a higher level of income usually also carry greater risk as such bond issuers may not be able to pay the bond income as promised or could fail to repay the capital amount used to purchase the bond. There may be cases where the organisation from which we buy a bond fails to carry out its obligations, which could cause losses to the Fund. Investing overseas can bring additional returns and spread risk to different markets. There are risks, however, that changes in currency exchange rates may cause the value of your investment to decrease and increase. This Fund can use derivatives in order to meet its investment objectives or to protect from price and currency movement. This may result in gains or losses that are greater than the original amount invested. For further risk information please see the prospectus. 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 revenue from them can 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 are subject to fluctuation in exchange rates, which can be favourable or unfavourable. 8 MI Activus Wealth Funds - MI Activus Investment Fund

11 Statement of Total Return for the period from 19 July 2016 to 28 February to Income Net capital gains 1,007,409 Revenue 274,632 Expenses (245,560) Interest payable and similar charges (27) Net revenue before taxation 29,045 Taxation Net revenue after taxation 29,045 Total return before distributions 1,036,454 Distributions (37,244) Change in net assets attributable to Shareholders from investment activities 999,210 Statement of Change in Net Assets Attributable to Shareholders for the period from 19 July 2016 to 28 February to Opening net assets attributable to Shareholders Amounts receivable on issue of shares 42,230,055 Less: Amounts payable on cancellation of shares (918,794) 41,311,261 Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) 999,210 Retained distributions on accumulation shares 53,484 Closing net assets attributable to Shareholders 42,363,955 MI Activus Wealth Funds - MI Activus Investment Fund 9

12 Balance Sheet as at 28 February 2017 ASSETS Fixed Assets Investments 39,614,852 Current Assets Debtors 122,788 Cash and bank balances 2,670,501 Total current assets 2,793,289 Total assets 42,408,141 LIABILITIES Investment liabilities Creditors Other creditors (44,186) Total creditors (44,186) Total liabilities (44,186) Net assets attributable to Shareholders 42,363,955 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 and the Statement of Recommended Practice (SORP) for Financial Statements of UK Authorised Funds issued by the Investment Association (IA) in May The financial statements have been prepared on the going concern basis. Certification of Interim Report by the Authorised Corporate Director This report has been prepared 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 20 April MI Activus Wealth Funds - MI Activus Investment Fund

13 Distribution Table For the period ended 28 February 2017 Accumulation Share Distributions Share Distribution Shares Net Equalisation Amount class revenue reinvested 2017 p p p A Interim Group 1 Group 2 Z Interim Group Group Interim period: Group 1: Group 2: Shares purchased prior to a distribution period Shares purchased during a distribution period Equalisation Equalisation applies only to shares purchased during the distribution period (Group 2 shares). It represents accrued revenue included in the purchase price of the shares. After averaging, it is returned with the distribution as a capital repayment. It is not liable to income tax but must be deducted from the cost of the shares for capital gains tax purposes. MI Activus Wealth Funds - MI Activus Investment Fund 11

14 General Information Authorised Status MI Activus Wealth Funds - MI Activus Investment Fund (the Company ) is structured as an Investment Company with Variable Capital ( ICVC ), under regulation 12 (Authorisation) of the OEIC Regulations (Open-Ended Investment Companies Regulations 2001 (SI 2001/1228)). The Company does not intend to have an interest in immovable property. The Company is authorised and regulated in the UK by the Financial Conduct Authority (''FCA'') as a UCITS Retail Scheme and ''Umbrella Company'' under the COLL Sourcebook. The Company was incorporated in England and Wales on 30 June 2016 under registration number IC The Shareholders are not liable for the debts of the Company. The Company currently has one Sub-fund, which is detailed below: MI Activus Wealth Funds - MI Activus Investment Fund (launched ). Head Office Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Address for Service The Head Office is the address in the United Kingdom for service on the Company of notices or other documents required or authorised to be served on it. 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 value of the Fund. Classes of Shares The Instrument of Incorporation allows each Fund to issue different classes of shares in respect of any Fund. The Fund currently has the following classes of shares available for investment: Share class A A Z Z Sub-fund Acc Inc Acc Inc MI Activus Investment Fund 4 4 Class Z shares are only available to clients of Activus Wealth Ltd. The Company may issue both Income and Accumulation shares. Holders of Income shares are entitled to be paid the revenue attributable to such shares in respect of each annual accounting period in the currency of the relevant share class. 12 MI Activus Wealth Funds - MI Activus Investment Fund

15 General Information continued Classes of Shares (continued) 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 scheme property of the Company and each Sub-Fund will normally be valued at 12:00 on each dealing day for the purpose of calculating the price at which shares in the Company may be issued, sold, repurchased or redeemed. For the purpose of the pricing of shares, a business day is defined as a day on which the dealing office of the ACD is open for the buying and selling of shares. The ACD may at any time during a business day carry out an additional valuation of the property of the Fund if the ACD considers it desirable to do so, with the Depositary's approval. Buying, Redeeming and Switching of Shares The ACD will accept orders for the purchase, 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: Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW Or by telephone on: The ACD has the right to establish facilities for recording telephone calls made or received on this telephone line. A contract note giving details of the shares purchased will be issued no later than the next business day after the business day on which an application to purchase shares is received and instrumented by the ACD. Certificates will not be issued in respect of shares. Ownership of shares will be evidenced by an entry on the register of shareholders. Pricing Basis There is a single price for buying, selling and switching shares in a Fund which represents the Net Asset Value of the Fund concerned. The share price is calculated on a forward pricing basis, that is at the next Valuation Point after the purchase or redemption is deemed to be accepted by the ACD. The prices of shares are published daily on Neither the ACD nor the Company can be held responsible for any errors in the publication of the prices. The shares in the Company will be issued and redeemed on a forward pricing basis which means that the price will not necessarily be the same as the published price. MI Activus Wealth Funds - MI Activus Investment Fund 13

16 General Information continued Other Information The Instrument of Incorporation, Prospectus, Key Investor Information Document and the most recent report may be inspected at the office of the ACD which is also the Head Office of the Company. Copies may be obtained free of charge upon application. They are also available from the website of the ACD, the details of which are given in the directory of this report. Shareholders who have complaints about the operation of the Company should in the first instance contact the ACD, or, following that, may make their complaint direct to the Financial Ombudsman Service, Exchange Tower, London E14 9SR. 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 revenue from them can 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 are subject to fluctuation in exchange rates, which can be favourable or unfavourable. 14 MI Activus Wealth Funds - MI Activus Investment Fund

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