UK AND GENERAL PROGRESSIVE UNIT TRUST

Transcription

1 UK AND GENERAL PROGRESSIVE UNIT TRUST FOR THE PERIOD ENDED 30 SEPTEMBER 2015

2 Manager St. James's Place Unit Trust Group Limited PO Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: (Authorised and regulated by the Financial Conduct Authority) Directors of the Manager D. C. Bellamy A. M. Croft Investment Adviser J O Hambro Capital Management Limited Ryder Court 14 Ryder Street London, SW1Y 6QB United Kingdom I. S. Gascoigne D. J. Lamb Majedie Asset Management Limited 10 Old Bailey London, EC4M 7NG United Kingdom BlackRock Investment Management (UK) Limited 12 Throgmorton Avenue London, EC2N 2DL United Kingdom (Authorised and regulated by the Financial Conduct Authority) Trustee BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London, EC4V 4LA United Kingdom (Authorised and regulated by the Financial Conduct Authority) Registrar International Financial Data Services (UK) Limited IFDS House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Conduct Authority) Independent Auditor PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh, EH3 8EX United Kingdom Prospectus and Manager's Reports Copies of the up to date Prospectus (Scheme Particulars) and latest Manager's Report and Financial Statements for the range of St. James's Place Unit Trusts can be requested from a member of the St. James's Place Partnership or, at any time during normal business hours, from the Administration Centre at PO Box 9034, Chelmsford CM99 2XA. Freephone:

3 Report of the Manager (continued) During the period under review, 1 April 2015 to 30 September 2015, the St. James's Place UK and General Progressive Unit Trust Income unit offer price fell by 5.5% from 849.4p to 803.1p and the Accumulation unit offer price (in which revenue is reflected in the price rather than distributed) fell by 4.5% from 1,251p to 1,195p. The Manager's Report consists of Report of the Manager, The Trust's Performance, Investment Adviser's Comments, Risk and Reward Profile and Portfolio Statement. The Trust's Performance The performance of the Trust since its launch in October 1989, over the five year period since September 2010 and over the period under review is shown below, together with figures for the most commonly quoted indices in comparable markets where the major proportion of the Trust has been invested. St. James's Place UK and General Progressive Unit Trust Income units (offer to offer) Accumulation units (offer to offer) Indices - actual FTSE All-Share (Total Return) 02/10/89 to 30/09/10 to 31/03/15 to 30/09/15 30/09/15 30/09/15 % change % change % change , Source: FTSE International Limited ( FTSE ) FTSE FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent. REMEMBER THAT THE PRICE OF UNITS AND REVENUE FROM THEM MAY GO DOWN AS WELL AS UP. PLEASE BE AWARE THAT PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Investment Adviser's Comments The portfolio marginally outperformed the wider UK equity market over the reporting period. Despite a surprise General Election result in May, which provided a temporary boost to UK domestic stocks, equities experienced a torrid period. The UK stockmarket was buffeted by the woes of China and other Emerging Markets, by continuing speculation about the course of interest rates in the US and UK and, at the end of the period, by the corporate scandal at Volkswagen. Weaker demand from China and the unflinching resolve of OPEC to maintain production led commodity price weakness which, in turn, took its toll on the mining and oil sectors. Next, Sky, BAT and RELX, formerly known as Reed Elsevier, performed well in response to strong trading. Not holding Glencore and BP produced a positive, relative contribution as their share prices fell. Next reported growth from its online Directory business with revenue and profit growth beating most other UK retailers. Sky s results showed strong customer and revenue growth, whilst RELX continued to demonstrate the capital discipline which makes it such an attractive holding. Detractors to performance included Shire, which fell after the company made a hostile $30bn bid for US rare disease specialist, Baxalta. Johnson Matthey s share price suffered early in the period due to exposure to the weakening prices of platinum group metals; its share price fell again as Volkswagen, one of its catalyst customers, became embroiled in the scandal surrounding the testing of its diesel engines. During the period we added to positions in Barclays, RELX and to Johnson Matthey and Wolseley following share price falls. We reduced our position in Reckitt Benckiser and Melrose and sold Berkeley Group. 2

4 Report of the Manager (continued) Economic activity in the US and UK continues to suggest positive growth, whilst eurozone economic activity is showing signs of improvement. We remain constructive on UK equities and continue to focus on the specific drivers of individual companies and the ability to determine their future rather than relying on a specific macroeconomic outcome. BlackRock Investment Management (UK) Limited 14 October 2015 UK equities finished sharply down for the period under review after pronounced stock market volatility in August eroded earlier gains that been made despite worries over the UK general election outcome, the prospect of interest rate rises in the US and UK and a further eruption of the Greek debt crisis. The trigger for August's market unrest was a surprise devaluation of the Chinese currency and associated fears over the growth outlook for the world's second-largest economy. With commodity prices including oil falling sharply over the period, the oil & gas and basic materials sectors sold off heavily, the latter losing almost a third of its value. Brighter areas of the market were limited to the defensive consumer goods and utilities sectors. The portfolio outperformed the wider UK equity market over the six-month period. This performance was achieved with a high cash balance that reflected our discomfort with the prevailing level of valuations in the UK market; high valuations owed more to exceptionally loose monetary policy rather than any improvement in underlying corporate fundamentals. Sector exposures accounted for the majority of our outperformance. In addition to the benefits of holding a high cash balance in falling markets, other sector tailwinds included a virtually nil exposure to poor-performing basic materials stocks. Strong individual stock performers for the portfolio included National Grid, Imperial Tobacco, Sage Group and energy stocks BG Group and Royal Dutch Shell, the former being the recipient of a takeover approach from the latter. Engineering group IMI was the only material negative relative performer. Portfolio turnover remained very low over the course of the period. We continue to look for opportunities in companies with strong balance sheets and solid business models, producing goods and services in demand and run by skilled management teams with a long-term, investment-led approach. With western companies focused on out-of-favour emerging markets currently being overlooked by investors stampeding towards western domestic-biased cyclical stocks, we believe such opportunities may open up in the former. J O Hambro Capital Management Limited 14 October

5 Report of the Manager (continued) The portfolio slightly underperformed the broader UK equity market during the six months to 30 September. The period was dominated by a low oil price and, more latterly, concerns over the sustainability of Chinese economic growth. The result was a rout in commodity markets; mining and energy stocks both suffered. Having viewed China with a good dose of scepticism in recent years, avoiding stocks too reliant upon domestic demand (such as miners, energy companies and consumer staples), we began to feel that the combination of Chinese government stimulus packages, historic lows in select commodities, and mining company share prices, presented attractive risk-reward payoffs. We therefore started buying some mining and energy shares in May and June. In retrospect this was too early, and proved costly in terms of portfolio performance notably the holdings in Anglo American, Lonmin, BP and Tullow Oil. However, underperformance during the third quarter mostly resulted from not holding consumer staples, to which investors flocked (despite valuations) as perceived safe havens from volatility. Lead detractors were our not helds of BAT, Imperial Tobacco, Reckitt Benckiser and SABMiller. Tesco suffered over the summer but we remain convinced that the restructuring initiatives in place will bear fruit, while food price inflation contributes to our positive outlook for UK food retail more broadly. The key performance driver during the six months was the exposure to small cap companies, which is an integral part of the portfolio. Thanks to their strong domestic focus, smaller companies have benefited in recent months. In some cases this is due to the housing outlook (e.g. Mortgage Advice Bureau) while others have profited from the post-election business bounce (e.g. Staffline). Elsewhere in the fund, stock picking drove returns; Card Factory, Mondi, Rentokil and Ryanair remained unaffected by market turmoil while Amlin benefited from a bid by Japanese bank Mitsui Sumitomi. Meanwhile, our long-standing negativity on Glencore, partly the result of the high cost of its mines, was shown to be well-founded. We increasingly feel that the UK economy is operating in a late cycle environment: a tight labour market, evidence of wage inflation and unexciting growth lead us to avoid areas of the market reliant upon deflationary conditions. Majedie Asset Management Limited 16 October

6 Performance Record Unit Price History and Record of Net Distributions Paid/Payable The record of net distributions paid/payable per unit is shown below: Income Calendar year * Accumulation Calendar year * Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 04/01/10 p p p Net revenue distributed Highest Lowest per 1,000 Invested Offer Bid per unit at 04/01/10 p p p , , , , , Net Asset Values Income Year ended March * Accumulation Year ended March * Market NAV NAV Units in Issue of Class per Unit '000 p 1,883,255 13, ,899,311 14, ,837,015 14, ,793,974 13, Market NAV NAV Units in Issue of Class per Unit '000 p 92,294, ,261 1, ,054,484 1,120,739 1, ,125,488 1,250,914 1, ,548,227 1,221,779 1, Ongoing Charges Figure The Ongoing Charges Figure for the period ended 30 September 2015 was 1.96% (31 March 2015: 1.97%) for Income units and 1.96% (31 March 2015: 1.97%) for Accumulation Units. The Ongoing Charges Figure ('OCF') is the total expenses paid by the Trust in the year against its average net asset value. It excludes the cost of buying or selling assets for the Trust (unless these assets are shares of another trust). The OCF can fluctuate as underlying costs change. Risk and Reward Profile The synthetic risk and reward indicator for the St. James s Place UK and General Progressive Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 5. It was calculated using performance data up to 2 February The risk category is recalculated weekly and during the period under review, the risk category did not change. * To 30 September

7 Portfolio Statement as at 30 September 2015 (unaudited) Security Holdings Market Value 000 % of Net Assets Aerospace & Defence (2.58%) 19, BAE Systems 1,052,522 4, Ultra Electronics 858,303 14, Banks (4.65%) 69, Barclays 10,938,977 26, HSBC 4,464,266 22, Lloyds Banking Group 9,701,479 7, Royal Bank of Scotland 3,482,456 10, Standard Chartered 281,109 1, Beverages (0.95%) 22, Diageo 1,279,196 22, Chemicals (1.10%) 19, Johnson Matthey 807,500 19, Construction & Materials (0.06%) 1, Marshalls 291,700 1, Electricity (0.03%) SSE 16, Electronic & Electrical Equipment (0.00%) 6, Spectris 364,867 6, Financial Services (1.02%) 9, i 442,006 2, Hargreaves Lansdown 628,814 7, Fixed Line Telecommunications (1.08%) 11, BT 2,700,019 11, Food & Drug Retailers (1.40%) 20, J Sainsbury 973,046 2, Tesco 6,093,214 11, WM Morrison Supermarkets 3,823,291 6, Food Producers (0.00%*) - - Forestry & Paper (0.40%) 4, Mondi 356,748 4, Gas, Water & Multiutilities (3.75%) 59, Centrica 10,096,000 22, National Grid 4,014,209 36, General Industrials (2.33%) 26, Rexam 1,837,037 9, Smiths 1,706,659 17, General Retailers (5.45%) 60, Card Factory 593,455 2, Dunelm 131,470 1, Halfords 75, Home Retail 210, Kingfisher 872,201 3, Marks & Spencer 1,512,869 7, Next 563,055 42, Saga 1,718,314 3, Health Care Equipment & Services (1.33%) 16, Smith & Nephew 1,453,186 16,

8 Portfolio Statement (continued) as at 30 September 2015 (unaudited) Security Holdings Market Value 000 % of Net Assets Household Goods & Home Construction (3.37%) 29, Reckitt Benckiser 493,359 29, Industrial Engineering (1.98%) 22, IMI 1,565,946 14, Melrose Industries 2,880,000 7, Life Insurance (0.86%) 5, Aviva 607,591 2, Standard Life 652,309 2, Media (8.72%) 109, Auto Trader 1,505,291 5, Informa 2,095,751 11, Pearson 314,537 3, RELX 5,786,843 64, Sky 2,360,458 24, Mining (1.07%) 29, Anglo American 674,456 3, BHP Billiton 629,651 6, KAZ Minerals 412, Lonmin 1,697, Rio Tinto 864,781 19, Miscellaneous (0.00%) - - Yes Television** 26, Mobile Telecommunications (1.62%) 17, Vodafone 8,508,743 17, Non Equity Investment Instruments (7.04%) 89, BlackRock Institutional Sterling Liquidity Fund A Inc 3,816,553 3, Majedie UK Smaller Companies Fund B Acc 10,626,532 30, St. James's Place Money Market Unit Trust L Acc 53,118,987 55, Non Life Insurance (0.31%) 4, Amlin 564,280 3, Jardine Lloyd Thompson 86, Oil & Gas Producers (8.52%) 111, BG 3,168,086 30, BP 10,799,467 35, Cairn Energy 1,574,290 2, Royal Dutch Shell 'B' Shares 2,701,468 41, Tullow Oil 542, Personal Goods (1.91%*) 22, Unilever 849,586 22, Pharmaceuticals & Biotechnology (4.38%) 49, AstraZeneca 462,902 19, GlaxoSmithKline 985,320 12, Shire 390,000 17, Real Estate Investment & Services (0.73%) 12, Capital & Counties Properties 2,843,600 12, Software & Computer Services (1.86%) 21, FDM 267,730 1, Sage 4,109,109 20,

9 Portfolio Statement (continued) as at 30 September 2015 (unaudited) Security Holdings Market Value 000 % of Net Assets Support Services (11.78%) 152, Bunzl 1,041,262 18, Capita 1,894,956 22, De La Rue 245,908 1, Electrocomponents 1,458,069 2, Experian 2,186,738 23, Intertek 432,061 10, Mears 469,742 1, Michael Page International 2,740,402 12, Rentokil Initial 6,608,118 9, Serco 3,274,428 3, Travis Perkins 510,613 10, Wolseley 953,439 35, Technology Hardware & Equipment (0.23%) 1, ARM 181,152 1, Tobacco (6.04%) 83, British American Tobacco 1,573,269 57, Imperial Tobacco 792,506 26, Travel & Leisure (8.20%) 93, Bwin.Party Digital Entertainment 1,548,195 1, Carnival 26, Compass 5,143,586 53, easyjet 892,600 15, Firstgroup 4,230,022 4, International Consolidated Airlines 409,574 2, Merlin Entertainments 2,020,000 7, Ryanair 521,325 5, Thomas Cook 1,767,710 2, Investment assets 1,204, Total other assets (net) 31, Net assets 1,235, Comparative figures shown in brackets relate to 31 March *Since the previous report the Industry Sector Classification headings have been updated by data providers, where the portfolio statement shows Industry Sectors these new sector names have been reflected in the report in respect of the current holdings and we have restated comparative holdings where appropriate. ** Unlisted securities. All investments held are listed, unless otherwise stated. During the period under review the Manager decided to place some of the sterling cash held on deposit into the St. James s Place Money Market Unit Trust in order to spread risk across a number of institutions. The St. James s Place Money Market Unit Trust is highly liquid and is rated AAA by Standard & Poors. This investment is a related party. 8

10 Material Portfolio Changes Cost Purchases 000 St. James's Place Money Market Unit Trust L Acc 19,362 BlackRock Institutional Sterling Liquidity Fund A Inc 18,741 Royal Dutch Shell 'B' Shares 16,771 Centrica 13,806 Diageo 11,502 Rio Tinto 11,323 Johnson Matthey 9,947 BP 8,785 Barclays 8,704 RELX 8,684 Proceeds Sales 000 St. James's Place Money Market Unit Trust L Acc 21,067 BlackRock Institutional Sterling Liquidity Fund A Inc 20,027 Cobham 12,274 BG 10,578 Reckitt Benckiser 9,513 Wolseley 7,823 Informa 7,673 Marks & Spencer 7,557 Travis Perkins 7,557 Carnival 5,542 This investment is a related party. 9

11 Statement of Total Return for the period 01 April 2015 to 30 September 2015 (unaudited) Income Net capital losses Revenue Expenses Interest payable and similar charges Net revenue before taxation Taxation Net revenue after taxation Total return before distributions Equalisation Change in net assets attributable to unitholders from investment activities 01/04/15 to 30/09/15 01/04/14 to 30/09/ (68,119) (5,247) 21,885 19,713 (12,630) (11,524) - - 9,255 8, ,255 8,189 (58,864) 2, (58,710) 3,029 Statement of Change in Net Assets Attributable to Unitholders for the period 01 April 2015 to 30 September 2015 (unaudited) 01/04/15 to 30/09/15 01/04/14 to 30/09/ Opening net assets attributable to unitholders 1,265,610 1,135,037 Movement due to creation and cancellation of units: Amounts receivable on creation of units 79,224 23,374 Amounts payable on cancellation of units (50,776) (3,534) Dilution levy charged Stamp duty reserve tax Change in net assets attributable to unitholders from investment activities (see above) Unclaimed distributions Closing net assets attributable to unitholders 28,448 19, (66) (58,710) 3, ,235,479 1,157,841 Comparative information is provided for the Statement of Change in Net Assets Attributable to Unitholders. Since this information is for the prior interim period, the net assets at the end of that period do not correspond to the net assets at the start of the current period. The prices per unit as at 30 September 2015 (unaudited) were: Income units Accumulation units Bid Offer p p , ,

12 Balance Sheet as at 30 September 2015 (unaudited) Assets Fixed assets Investments Current assets Debtors Cash and bank balances Total assets Liabilities Creditors Distribution payable Other creditors Total liabilities Net assets attributable to unitholders 30/09/15 31/03/ ,204,318 1,199,183 3,323 7,417 35,166 59,313 1,242,807 1,265,913 - (142) (7,328) (161) (7,328) (303) 1,235,479 1,265,610 Accounting and Distribution policies for the period 01 April 2015 to 30 September 2015 (unaudited) Basis of accounting The interim financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the Investment Management Association (IMA) in May 2014 (the IMA SORP 2014) and United Kingdom Generally Accepted Accounting Practice. Adoption of IMA SORP 2014 Changing in accounting policies There have been no changes to the accounting policies as detailed in the audited financial statements for the year end 31 March Changes in presentation The presentation of these financial statements has been changed from the previous period to comply with the requirements of the IMA SORP The main change is: amendments to labelling of some line items within the financial statements. amendments to categorisation of some line items within the financial statements. Directors' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. Directors A. M. Croft London D. J. Lamb 26 November

13 General Information The Trust St. James's Place UK and General Progressive Unit Trust is an authorised Unit Trust scheme under section 243 of the Financial Services and Markets Act (2000) and is constituted by a Trust Deed dated 15 September The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective Investment Scheme Sourcebook and is classified as a UCITS Scheme. The Trust Manager The Manager of the Trust is St. James's Place Unit Trust Group Limited which is authorised and regulated by the Financial Conduct Authority. Investment Objectives The Scheme aims to maximise total return, comprising both capital appreciation and income, through investment principally but not exclusively in the United Kingdom. The Scheme may also invest in any other geographic area. The Scheme will concentrate on seeking opportunities for exceptional growth in undervalued stocks which may be less popular but which, in the opinion of the Investment Adviser, offer good value for money. The scheme is also permitted to invest in derivative and forward transactions for the purpose of efficient portfolio management (including hedging). It is the Manager's intention that the assets of the Unit Trust will be invested so that the Unit Trust will be eligible for inclusion in an ISA. European Savings Directive It is the Manager's intention that the Trust will not normally hold 15% or more of its value in money debt instruments. Unit Dealings Dealings on the Trust take place on a daily basis. Purchase or sale instructions can be made by telephone or in writing to St. James's Place Unit Trust Group Limited, PO Box 9034, Chelmsford, CM99 2XA, United Kingdom, freephone: The Manager adopts a policy of forward pricing, i.e. the order will be transacted on the dealing day following receipt of the client's instructions, or if received before noon, on that dealing day. In the case of telephone purchases of units from the Manager, settlement must be by return of post after receipt of the contract note. In the case of telephone redemptions, the proceeds will not become payable until the receipt at the Administration Centre of a written request. A contract note confirming the subscription or redemption price and the number of units involved will be forwarded, together with a cancellation notice, where appropriate, on the next business day. The most recent issue and redemption prices will be published on the Manager's website: and are available by calling the Administration Centre on Minimum Investment The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment is 150 and the minimum monthly increment is 50. The minimum annual investment is 1,500 and the minimum annual increment is

14 General Information (continued) Management Charges With effect from 26 October 2015 the Manager has changed the charging structure of the Scheme. The annual management charge has been adjusted to include many of the predictable costs, such as trustee fees and administration fees, which were previously charged directly to the Scheme, and to exclude the fees for Investment Advisers, which are now charged directly to the Scheme. These changes are therefore presentational only and there is no overall increase in the total charges met by the Scheme. In addition, the way the annual management charge is calculated has been changed. The charge was previously calculated monthly, based on the Scheme value on the first business day of the month; in future it will be calculated daily, based on the Scheme value every day. The Trust Deed permits the following management charges which are receivable by the Manager: (a) A Preliminary Charge of 5 per cent which is included in the offer price of the Units. (b) An Annual Management Charge at a rate of 1.37 per cent (1.85 per cent prior to 26 October 2015) of the value of the Trust. Income Distributions Income distributions are made annually on or before the 31 May. Accumulation Distributions Revenue due to accumulation unitholders is reflected in the price of their units. Tax Vouchers Income unitholders that receive income distributions by direct credit and accumulation unitholders (where the distribution income is reinvested) receive an annual consolidated tax voucher in May with all the relevant payment and tax information required to complete a tax return. Tax vouchers will be enclosed if income unitholders receive payment by cheque. Report A report is sent semi-annually to all unitholders on or before 31 May and 30 November. Capital Gains Tax The Trust is not liable to tax on capital gains and any individual holding units will not be liable to capital gains tax unless the total chargeable gains for the tax year 2015/2016 exceed 11,100 (2014/ ,000). To calculate capital gains on accumulation units, the total amount of reinvested net revenue (shown on the annual tax credit vouchers) should be added to the base cost of the units purchased. Unitholders should consult their professional advisers for any advice regarding their tax position. 13

15 St. James s Place Unit Trust Group Ltd is authorised and regulated by the Financial Conduct Authority. St. James s Place Unit Trust Group Ltd Registered Office: St. James s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number Perivan Financial Print UK and General Progressive (11/15)