Standard Life Investments Global SICAV II

Transcription

1 Audited Annual Report Standard Life Investments Global SICAV II Société d'investissement à Capital Variable Audited Annual Report as at 31 December 2017 No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the basis of the current prospectus accompanied by the latest annual and the most recent semi-annual report, if published thereafter. R.C.S. Luxembourg B

2 Registered Office 2-4, rue Eugène Ruppert L-2453 Luxembourg Grand Duchy of Luxembourg Board of Directors Members Mr Alan Stephen Acheson Chairman Global Head of Insurance Aberdeen Standard Investments 1 George Street Edinburgh EH2 2LL Scotland Mr Michael McKenna Managing Director Ireland Standard Life Employee Services Limited 90 St Stephen s Green Dublin 2 Ireland Mr Manuel Hauser (until 15 November 2017)** Independent Director 11, rue Beaumont L-1219 Luxembourg Grand Duchy of Luxembourg Ms Jennifer Richards Head of Distribution, Ireland Aberdeen Standard Investments 90 St Stephen s Green Dublin 2 Ireland Mr Stephen Campbell (until 4 December 2017)** Director, Product Management and Governance Aberdeen Standard Investments 1 George Street Edinburgh EH2 2LL Scotland Investment Manager Aberdeen Standard Investments 1 George Street Edinburgh EH2 2LL Scotland Management Company Standard Life Investments (Mutual Funds) Limited 1 George Street Edinburgh EH2 2LL Scotland Auditor** KPMG Luxembourg Société coopérative 39, Avenue John F. Kennedy L-1855 Luxembourg Grand Duchy of Luxembourg Legal Advisor Clifford Chance 10, Boulevard G.D. Charlotte L-1011 Luxembourg Grand Duchy of Luxembourg Principal Distributor Aberdeen Standard Investments 1 George Street Edinburgh EH2 2LL Scotland Mr Robert Curtis (from 4 May 2017)** Investment Director Fund Governance Aberdeen Standard Investments 1 George Street Edinburgh EH2 2LL Scotland Mr Ian Boyland (from 4 May 2017)** Independent Director 25, rue du Schlamestee L-5770 Weiler-la-Tour Luxembourg Administration and Advisors Registrar, Transfer Agent, Corporate and Domiciliary Agent, Central Administrator and Depositary Agent The Bank of New York Mellon SA/NV* 2-4, rue Eugène Ruppert L-2453 Luxembourg Grand Duchy of Luxembourg *Effective 1 April 2017, BNY Mellon has merged its legal entity The Bank of New York Mellon (Luxembourg) S.A., including its Milan branch, into The Bank of New York Mellon SA/NV. **See note 11 for details.

3 Contents Page Report of the Board of Directors... 2 General Information... 3 Audit Report... 4 Investment Markets Overview... 6 Statement of Net Assets... 7 Statement of Operations and Changes in Net Assets Statistics Notes to the Financial Statements Remuneration Policy (unaudited) Appendix 1: Share classes issued in the Sub-funds Appendix 2: Securities Financing Transactions Regulations ( SFTR ) (unaudited) Sub-fund Objective and Investment Policy Sub-fund Performance Review and Outlook Schedule of Investments Enhanced-Diversification Multi Asset Fund Global Equity Impact Fund* Global Short Duration Corporate Bond Fund* MyFolio Multi-Manager Sub-funds Investment Markets Overview MyFolio Multi-Manager I Fund MyFolio Multi-Manager II Fund MyFolio Multi-Manager III Fund MyFolio Multi-Manager IV Fund MyFolio Multi-Manager V Fund *Please refer to note 11 of the notes to the financial statements. 1

4 Report of the Board of Directors As at 31 December 2017, the total net assets of Standard Life Investments Global SICAV II (the Company ) stood at EUR 217,182,485. The Company's objective is to provide the shareholder with a choice of professionally managed sub-funds (the Sub-funds ) investing in a wide range of transferable securities in order to achieve an optimum return from capital invested, while reducing investment risk through diversification. The Board of Directors adheres to the Association of the Luxembourg Fund Industry ( ALFI ) code of conduct for Luxembourg investment funds (revised June 2013). The code of conduct sets a framework of high-level principles and best practice recommendations for the governance of Luxembourg investment funds. The Board of Directors Luxembourg, 27 April 2018 The figures stated in this report are historical and not necessarily indicative of future performance. 2

5 General Information Standard Life Investment Global SICAV II (the Company ) was incorporated on 15 March 2016 under Luxembourg Law as a Société d Investissement à Capital Variable (SICAV). The Company s articles of incorporation have also been deposited with the Luxembourg Trade and Companies Register and have been published in the Registre de Commerce et des Sociétés on 22 March The Company has been registered under number B with the Luxembourg Trade and Companies Register. The Company has appointed Standard Life Investments (Mutual Funds) Limited, incorporated in Scotland under the Companies Acts (registered number SC123322), to act as its management company with effect as of 1 June The Company's articles of incorporation may be amended from time to time by a meeting of shareholders, subject to the quorum and majority requirements provided by Luxembourg law. Any amendment to the terms and conditions of the Company, which has, as an effect, a decrease of the rights or guarantees of the shareholders or which imposes on them additional costs, shall only come into force after a period of three months starting at the date the amendment is approved at the general shareholders' meeting. Any amendment to the articles shall be published in the Registre de Commerce et des Societes and, if necessary, in the official publications specified for the respective countries in which Company shares are sold. Any amendments affecting the rights of the holders of shares of any class vis-à-vis those of any other class shall be subject further to the said quorum and majority requirements in respect of each relevant class. The Company is a single legal entity. However, each Sub-fund is regarded as being separate from the others and is liable for all of its own obligations, unless other terms have been specifically agreed with its creditors. The first annual general meeting of shareholders was held at the registered office of the Company on the first Thursday in May 2017 and will be held on the same day each year thereafter (unless such date falls on a legal bank holiday, in which case on the next Luxembourg business day) at midday (Luxembourg time). Notices of all general meetings are sent by mail to all registered shareholders at their registered address at least 8 days prior to each such meeting. Such notice will indicate the time and place of such meeting and the conditions of admission thereto, will contain the agenda and will refer to the requirements of Luxembourg law with regard to the necessary quorum and majorities at such meeting. To the extent required by Luxembourg law, further notices will be published in the Registre de Commerce et des Societes and in one Luxembourg newspaper. Audited annual reports and unaudited semi-annual reports will be made available on the Standard Life Investments Website ( and at the registered office of the Company. The Company s financial year ends on 31 December of each year. The net asset value per share and the issue and redemption price can be obtained from the registered office of the Company. Statement of Changes in Portfolio A statement giving the changes in the Schedule of Investments for the year ended 31 December 2017 can be obtained free of charge from the registered office of the Company. 3

6 Audit Report To the Shareholders of Standard Life Investments Global SICAV II 2-4, rue Eugène Ruppert L-2453 Luxembourg Grand Duchy of Luxembourg REPORT OF THE REVISEUR D ENTREPRISES AGREE Report on the audit of the financial statements Opinion We have audited the accompanying financial statements of Standard Life Investments Global SICAV II and each of its Sub-funds ( the Fund ), which comprise the statement of net assets and the schedule of investments as at December 31, 2017 and the statement of operations and changes in net assets for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position of Standard Life Investments Global SICAV II and each of its Sub-funds as at December 31, 2017, and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements. Basis for opinion We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession ( Law of 23 July 2016 ) and with International Standards on Auditing ( ISAs ) as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier ( CSSF ). Our responsibilities under the Law of 23 July 2016 and ISAs are further described in the «Responsibilities of Réviseur d Entreprises agréé for the Audit of the Financial Statements» section of our report. We are also independent of the Fund in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information The Board of Directors of the Fund is responsible for the other information. The other information comprises the information stated in the annual report but does not include the financial statements and our report of Réviseur d Entreprises agréé thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. Responsibilities of the Board of Directors of the Fund for the financial statements The Board of Directors of the Fund is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements, and for such internal control as the Board of Directors of the Fund determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board of Directors of the Fund is responsible for assessing the Fund s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors of the Fund either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so. Responsibilities of the Réviseur d Entreprises agréé for the audit of the financial statements The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of Réviseur d Entreprises agréé that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors of the Fund. 4

7 Societe d'investissement a Capital Variable Audit Report (continued) Conclude on the appropriateness of the Board of Directors of the Fund's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of "Reviseur d'entreprises agree" to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of "Reviseur d'entreprises agree". However, future events or conditions may cause the Fund to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Luxembourg, April 30, 2018 KPMG Luxembourg Societe cooperative cabinet de revision agree 39, Avenue John F. Kennedy L-1855 Luxembourg Grand Duchy of Luxembourg P. Leroy 5

8 Investment Markets Overview Equities Global equity markets performed well during 2017 Better economic data and strong corporate results were positive factors Political events created uncertainty but failed to derail markets Global equity markets delivered impressive returns over 2017, with several major indices hitting record highs. The improving global economy, robust corporate profits and fluctuating commodity prices dictated sentiment. Politics also played a major role, notably the reverberations from the United Kingdom s (UK s) European Union (EU) referendum and elections across Europe (including the UK, Germany and France). After a subdued start, global equity markets embarked on a strong rally, on expectations that President Trump s agenda would boost global growth and lift inflation. Meanwhile, the populist wave that some commentators thought Brexit would unleash across Europe failed to materialise, with pro-eu parties winning in the Dutch, Austrian and French elections. As we moved into the summer, investors took heart from favourable global economic trends and better-than-expected corporate earnings results. Importantly, the recovery finally broadened out to include Europe. Meanwhile, export-dependent emerging markets were the standout performers in 2017, as global trading activity picked up. As a consequence of the increasingly positive global growth outlook, several central banks are now gradually reducing their monetary support programmes. Finally, President Trump passed his much-vaunted $1.5 trillion tax-cut plan at the close of the year, giving one final boost to equity markets. Fixed income Corporate bonds outperformed government bonds, helped by improving global growth Major central banks started to reduce monetary support as 2017 progressed Political developments caused some market volatility In fixed income markets, corporate bonds outperformed government bonds over the last 12 months. While political risks caused some volatility, later in the period it was central banks and the prospects for changes in monetary policy that preoccupied investors. Corporate bonds generally made progress over the period, supported by an improving economic backdrop that engendered a more optimistic outlook. The market-friendly outcome of the French presidential elections also helped sentiment. Thereafter, opinion was dominated by central banks. Policymakers in the United States (US), UK and, less so, Europe moved to tighten policy as the year progressed but corporate bonds still posted positive returns. Sufficient progress being made in Brexit negotiations provided a further boost to risk assets (corporate bonds included) in the last weeks of December. Signs that central bankers were prepared to take a pre-emptive stance on inflation and review ultra-accommodative monetary policy also affected government bond markets, which were unable to sustain extremely low yield levels amid continued and progressive tightening indications. Having raised rates for the first time in 10 years, the Bank of England (BoE) subsequently reiterated its cautious outlook for the UK economy, dampening expectations for another rate hike (which was positive for government bonds). The European Central Bank s (ECB) announcement that it would reduce its bond-buying programme more gradually than expected also helped sentiment. UK direct real estate UK commercial real estate recorded positive returns during 2017 Capital values strengthened, recovering losses incurred after the EU referendum Industrials were the best-performing sector, while retail struggled UK commercial real estate recorded positive returns during 2017, supported by a relatively robust domestic economy, and were stronger than many analysts originally anticipated at the start of the year. There was a positive backdrop for real estate at the start of 2017, including better-than-expected economic data and improved trading volumes in the commercial real estate market. Overseas investors were particularly active, enticed by a combination of the weaker pound and expensive pricing in their domestic markets. As a result, capital values turned positive early in 2017 and subsequently continued to rise. Income returns were also strong, supported by robust occupational demand. In terms of real estate occupier sectors, industrials were the strongest performers, supported by favourable supply/demand dynamics, as well as the structural shift to online retailing. There was some improvement in sentiment towards the retail sector although it remained under pressure. The bankruptcy of Toys R Us in the US served as a reminder of the threat to traditional bricks & mortar retailers from internet shopping. Market outlook Equities Global equity markets enter 2018 on a sound footing. The world economy is growing at a robust rate, which is feeding into healthy corporate profits. Central banks have started to withdraw monetary stimulus, although any future moves will be measured and data-dependent. Challenges remain, notably around geopolitics, the US debt ceiling and potential policy missteps. China could also slow more sharply than expected. Nonetheless, the overall the outlook is encouraging. Fixed income The outlook for bonds is generally less positive. Despite this, there is enough uncertainty to make it unlikely that government bonds will fall in value significantly. Valuations in some parts of the corporate bond market are a little stretched. However, we believe that the fairly benign macroeconomic environment should provide support. UK direct real estate UK real estate dynamics remain supportive, although we expect returns to moderate as the economy experiences weaker growth in Although Brexit negotiations progressed at the end of 2017, the full economic impact remains unknown and this will continue to affect sentiment towards UK commercial real estate. Despite this uncertainty, we expect real estate to remain attractive to investors seeking a source of sustainable income. 6

9 Statement of Net Assets As at 31 December 2017 Enhanced- Diversification Multi Asset Fund Global Short Duration Corporate Bond Fund 2 Global Equity Impact Fund 1 MyFolio Multi- Manager I Fund (EUR) (USD) (USD) (EUR) Assets Investments in securities at market value (note 2b) 14,647,693 5,021, ,915,066 2,294,489 Acquisition cost: 14,626,251 4,904, ,966,501 2,249,040 Cash and cash equivalents 2,997, ,414 3,540, ,474 Margin account 13,802 Interest and dividends receivable, net 12,411 7,402 1,995,894 Receivables resulting from subscriptions 4,876 Other receivables 160,639 28,613 23,449 46,063 Unrealised appreciation on: Open forward foreign exchange contracts (note 2f) 107,007 1,844,593 Open exchange traded futures contracts (note 2h) 144, ,805 Swap contracts at market value (note 2g) 395,557 Option contracts at market value (note 2i) 140,267 Total assets 18,618,991 5,163, ,429,183 2,507,902 Liabilities Bank overdraft 23,644 Cash collateral (note 9) 310,000 Margin account 135 Payables resulting from purchases of securities 1,251,133 Fees payable 117,325 30,309 63,947 62,597 Unrealised depreciation on: Open forward foreign exchange contracts (note 2f) 195,566 1,134,988 Open exchange traded futures contracts (note 2h) 58,384 16,286 Swap contracts at market value (note 2g) 136,663 Option contracts at market value (note 2i) 26,499 Total liabilities 2,119,349 30,309 1,215,221 62,597 Total net assets prior to swing adjustment 16,499,642 5,132, ,213,962 2,445,305 Adjustment due to swing pricing (note 8) 31,349 14, ,421 Total net assets after swing adjustment 16,530,991 5,147, ,858,383 2,445,305 1 This Sub-fund was launched on 18 October This Sub-fund was launched on 2 November The accompanying notes form an integral part of these financial statements. 7

10 Statement of Net Assets (continued) As at 31 December 2017 MyFolio Multi- Manager II Fund MyFolio Multi- Manager III Fund MyFolio Multi- Manager IV Fund MyFolio Multi- Manager V Fund (EUR) (EUR) (EUR) (EUR) Assets Investments in securities at market value (note 2b) 1,882,866 3,026,962 2,086,543 1,500,662 Acquisition cost: 1,820,175 2,912,510 1,980,780 1,404,629 Cash and cash equivalents 32,925 56,897 20,833 14,280 Margin account Interest and dividends receivable, net Receivables resulting from subscriptions 1,693 18,982 Other receivables 44,428 52,080 48,387 43,845 Unrealised appreciation on: Open forward foreign exchange contracts (note 2f) Open exchange traded futures contracts (note 2h) Swap contracts at market value (note 2g) Option contracts at market value (note 2i) Total assets 1,961,912 3,135,939 2,174,745 1,558,787 Liabilities Bank overdraft Cash collateral (note 9) Margin account Payables resulting from purchases of securities Fees payable 67,094 64,639 61,730 63,340 Unrealised depreciation on: Open forward foreign exchange contracts (note 2f) Open exchange traded futures contracts (note 2h) Swap contracts at market value (note 2g) Option contracts at market value (note 2i) Total liabilities 67,094 64,639 61,730 63,340 Total net assets prior to swing adjustment 1,894,818 3,071,300 2,113,015 1,495,447 Adjustment due to swing pricing (note 8) Total net assets after swing adjustment 1,894,818 3,071,300 2,113,015 1,495,447 The accompanying notes form an integral part of these financial statements. 8

11 Statement of Net Assets (continued) As at 31 December 2017 Combined (EUR)* Assets Investments in securities at market value (note 2b) 209,754,649 Acquisition cost: 208,419,511 Cash and cash equivalents 6,326,344 Margin account 13,802 Interest and dividends receivable, net 1,683,651 Receivables resulting from subscriptions 25,551 Other receivables 438,874 Unrealised appreciation on: Open forward foreign exchange contracts (note 2f) 1,645,850 Open exchange traded futures contracts (note 2h) 235,767 Swap contracts at market value (note 2g) 395,557 Option contracts at market value (note 2i) 140,267 Total assets 220,660,312 Liabilities Bank overdraft 23,644 Cash collateral (note 9) 310,000 Margin account 135 Payables resulting from purchases of securities 1,251,133 Fees payable 515,358 Unrealised depreciation on: Open forward foreign exchange contracts (note 2f) 1,142,424 Open exchange traded futures contracts (note 2h) 71,971 Swap contracts at market value (note 2g) 136,663 Option contracts at market value (note 2i) 26,499 Total liabilities 3,477,827 Total net assets prior to swing adjustment 217,182,485 Adjustment due to swing pricing (note 8) 581,373 Total net assets after swing adjustment 217,763,858 *Refer to note 2c and 2j for details. The accompanying notes form an integral part of these financial statements. 9

12 Statement of Operations and Changes in Net Assets For the year ended 31 December 2017 Enhanced- Diversification Multi Asset Fund Global Short Duration Corporate Bond Fund 2 Global Equity Impact Fund 1 MyFolio Multi- Manager I Fund (EUR) (USD) (USD) (EUR) Net assets at the beginning of the year after Swing Adjustment 12,379,424 1,012,126 Reversal of prior year swing adjustment (22,243) Net assets at the beginning of the year prior to Swing Adjustment 12,357,181 1,012,126 Income Dividend and investment income, net (note 2d) 11,857 13,168 5,788 Interest income, net (note 2d) 2, ,943 Bank interest (note 3g) ,771 Interest income on swap contracts (note 2g) 224 Total income 14,209 13, ,714 5,788 Expenses Annual management charges (note 3a) 32,624 6,954 70,717 5,637 Management company fees (note 3e) , Central administration fees (note 3d) 49,880 3,474 5,022 14,960 Depositary fees (note 3b) 26,238 3,552 2,812 9,864 Professional fees 9,566 6,268 5,738 9,599 Transfer agency fees 16,271 1,594 1,262 9,505 Taxe d'abonnement (note 5a) 1, , Bank interest (note 3g) 18, Interest expense on swap contracts (note 2g) 37,664 Sundry expenses 61,928 13,149 10,750 57,384 Total expenses prior to reimbursement 254,352 35, , ,628 Expense reimbursement (note 3f) 149,589 27,045 1,138 97,879 Total expenses after reimbursement 104,763 8,233 99,734 9,749 Net (deficit)/income (90,554) 5, ,980 (3,961) Net realised appreciation/(depreciation) on: Investments (104,928) (5) (273,176) 15,612 Forward foreign exchange contracts (note 2f) (158,887) (8,872) 2,871,907 Swap contracts (note 2g) 345,249 Exchange traded futures contracts (note 2h) 753,397 26,026 Option contracts (note 2i) 424,796 Foreign currencies (note 2c) (17,167) 5, ,549 Net realised appreciation/(depreciation) for the year 1,242,460 (3,041) 3,018,306 15,612 Net change in unrealised appreciation/(depreciation) on: Investments 36, , ,565 40,217 Forward foreign exchange contracts (note 2f) (84,645) 709,605 Swap contracts (note 2g) 129,214 Exchange traded futures contracts (note 2h) 75,244 93,519 Option contracts (note 2i) 9,811 Foreign currencies (note 2c) (1,067) ,500 Net change in unrealised appreciation for the year 165, ,814 1,766,189 40,217 Increase in net assets as a result of operations 1,316, ,804 5,487,475 51,868 Movements in share capital Subscriptions 15,374,564 5,013, ,743,050 2,446,699 Redemptions (12,549,048) (16,563) (1,065,388) Increase in net assets as a result of movements in share capital 2,825,516 5,013, ,726,487 1,381,311 Foreign exchange adjustment Total net assets prior to Swing Adjustment at the end of the year 16,499,642 5,132, ,213,962 2,445,305 Adjustment due to swing pricing (note 8) 31,349 14, ,421 Total net assets after Swing Adjustment at the end of the year 16,530,991 5,147, ,858,383 2,445,305 1 This Sub-fund was launched on 18 October This Sub-fund was launched on 2 November The accompanying notes form an integral part of these financial statements. 10

13 Statement of Operations and Changes in Net Assets (continued) For the year ended 31 December 2017 MyFolio Multi- Manager II Fund MyFolio Multi- Manager III Fund MyFolio Multi- Manager IV Fund MyFolio Multi- Manager V Fund (EUR) (EUR) (EUR) (EUR) Net assets at the beginning of the year after Swing Adjustment 1,012,431 1,012,522 1,012,328 1,011,805 Reversal of prior year swing adjustment Net assets at the beginning of the year prior to Swing Adjustment 1,012,431 1,012,522 1,012,328 1,011,805 Income Dividend and investment income, net (note 2d) 5,315 8,896 6,412 4,991 Interest income, net (note 2d) Bank interest (note 3g) Interest income on swap contracts (note 2g) Total income 5,315 8,896 6,412 4,991 Expenses Annual management charges (note 3a) 6,336 13,581 6,893 5,644 Management company fees (note 3e) Central administration fees (note 3d) 14,960 14,960 14,960 14,960 Depositary fees (note 3b) 9,624 12,856 12,044 8,826 Professional fees 9,599 9,599 9,599 9,599 Transfer agency fees 11,274 12,860 8,878 8,205 Taxe d'abonnement (note 5a) Bank interest (note 3g) Interest expense on swap contracts (note 2g) Sundry expenses 57,481 57,545 57,352 57,319 Total expenses prior to reimbursement 109, , , ,899 Expense reimbursement (note 3f) 100, ,238 99,481 96,247 Total expenses after reimbursement 9,651 18,930 10,688 8,652 Net (deficit) (4,336) (10,034) (4,276) (3,661) Net realised appreciation/(depreciation) on: Investments 9,061 16,639 13,569 18,579 Forward foreign exchange contracts (note 2f) Swap contracts (note 2g) Exchange traded futures contracts (note 2h) Option contracts (note 2i) Foreign currencies (note 2c) Net realised appreciation for the year 9,061 16,639 13,569 18,579 Net change in unrealised appreciation/(depreciation) on: Investments 57, , ,330 91,124 Forward foreign exchange contracts (note 2f) Swap contracts (note 2g) Exchange traded futures contracts (note 2h) Option contracts (note 2i) Foreign currencies (note 2c) Net change in unrealised appreciation for the year 57, , ,330 91,124 Increase in net assets as a result of operations 61, , , ,042 Movements in share capital Subscriptions 1,898,272 3,321,711 2,382,019 1,739,644 Redemptions (1,077,765) (1,378,364) (1,390,955) (1,362,044) Increase in net assets as a result of movements in share capital 820,507 1,943, , ,600 Foreign exchange adjustment Total net assets prior to Swing Adjustment at the end of the year 1,894,818 3,071,300 2,113,015 1,495,447 Adjustment due to swing pricing (note 8) Total net assets after Swing Adjustment at the end of the year 1,894,818 3,071,300 2,113,015 1,495,447 The accompanying notes form an integral part of these financial statements. 11

14 Statement of Operations and Changes in Net Assets (continued) For the year ended 31 December 2017 Combined (EUR)* Net assets at the beginning of the year after Swing Adjustment 17,440,636 Reversal of prior year swing adjustment (22,243) Net assets at the beginning of the year prior to Swing Adjustment 17,418,393 Income Dividend and investment income, net (note 2d) 54,444 Interest income, net (note 2d) 677,972 Bank interest (note 3g) 5,034 Interest income on swap contracts (note 2g) 224 Total income 737,674 Expenses Annual management charges (note 3a) 136,598 Management company fees (note 3e) 2,465 Central administration fees (note 3d) 131,890 Depositary fees (note 3b) 84,854 Professional fees 67,751 Transfer agency fees 69,417 Taxe d'abonnement (note 5a) 5,394 Bank interest (note 3g) 19,143 Interest expense on swap contracts (note 2g) 37,664 Sundry expenses 369,295 Total expenses prior to reimbursement 924,471 Expense reimbursement (note 3f) 670,460 Total expenses after reimbursement 254,011 Net income 483,663 Net realised appreciation/(depreciation) on: Investments (263,158) Forward foreign exchange contracts (note 2f) 2,269,294 Swap contracts (note 2g) 345,249 Exchange traded futures contracts (note 2h) 775,470 Option contracts (note 2i) 424,796 Foreign currencies (note 2c) 321,566 Net realised appreciation for the year 3,873,217 Net change in unrealised appreciation/(depreciation) on: Investments 1,338,379 Forward foreign exchange contracts (note 2f) 517,184 Swap contracts (note 2g) 129,214 Exchange traded futures contracts (note 2h) 154,559 Option contracts (note 2i) 9,811 Foreign currencies (note 2c) 11,550 Net change in unrealised appreciation for the year 2,160,697 Increase in net assets as a result of operations 6,517,577 Movements in share capital Subscriptions 215,244,609 Redemptions (18,837,611) Increase in net assets as a result of movements in share capital 196,406,998 Foreign exchange adjustment (3,160,483) Total net assets prior to Swing Adjustment at the end of the year 217,182,485 Adjustment due to swing pricing (note 8) 581,373* Total net assets after Swing Adjustment at the end of the year 217,763,858 *Refer to note 2c and 2j for details. The accompanying notes form an integral part of these financial statements. 12

15 Statistics Currency Shares outstanding at the end of the year 31 December December 2016 Enhanced-Diversification Multi Asset Fund Total net assets EUR 16,499,642 12,357,181 Net asset value per share of: A Accumulation Shares EUR 25, A Accumulation Hedged CHF Shares CHF A Accumulation Hedged SEK Shares SEK 5, A Accumulation Hedged USD Shares USD B Accumulation Shares EUR B Accumulation Hedged CHF Shares CHF B Accumulation Hedged SEK Shares SEK 5, D Accumulation Shares EUR 191, D Accumulation Hedged CHF Shares CHF D Accumulation Hedged SEK Shares SEK 5, D Accumulation Hedged USD Shares USD K Accumulation Shares EUR 1,198, K Accumulation Hedged CHF Shares CHF K Accumulation Hedged SEK Shares SEK 5, K Accumulation Hedged USD Shares USD S Accumulation Shares EUR S Accumulation Hedged CHF Shares CHF S Accumulation Hedged SEK Shares SEK 5, S Accumulation Hedged USD Shares USD Z Accumulation Shares EUR 75, Global Equity Impact Fund 1 Total net assets USD 5,132,828 Net asset value per share of: A Accumulation Unhedged EUR Shares* EUR A Distribution Unhedged EUR Shares* EUR B Accumulation Unhedged EUR Shares* EUR B Accumulation Unhedged GBP Shares* GBP D Accumulation Shares* USD 500, D Accumulation Unhedged EUR Shares* EUR D Accumulation Unhedged GBP Shares* GBP D Distribution Unhedged EUR Shares* EUR K Accumulation Unhedged GBP Shares* GBP S Accumulation Unhedged EUR Shares* EUR Z Accumulation Shares* USD Global Short Duration Corporate Bond Fund 2 Total net assets USD 222,213,962 Net asset value per share of: S Accumulation Shares* USD S Accumulation Hedged EUR Shares* EUR S Accumulation Hedged GBP Shares* GBP 13,134, S Distribution Hedged GBP Shares* GBP 477, Z Accumulation Shares* USD Z Accumulation Hedged EUR Shares* EUR Z Accumulation Hedged GBP Shares* GBP 2,852, This Sub-fund was launched on 18 October This Sub-fund was launched on 2 November *New Share Class, refer to Note 11 for details. Total net assets for each Sub-fund is before any adjustment due to swing pricing. The net asset value per share for each share class is after any adjustment due to swing pricing. 13

16 Statistics (continued) Currency Shares outstanding at the end of the year 31 December December 2016 MyFolio Multi-Manager I Fund Total net assets EUR 2,445,305 1,012,126 Net asset value per share of: A Accumulation Shares EUR A Distribution Shares EUR 47, B Accumulation Shares EUR B Distribution Shares EUR D Accumulation Shares EUR 100, D Distribution Shares EUR Z Accumulation Shares EUR 87, MyFolio Multi-Manager II Fund Total net assets EUR 1,894,818 1,012,431 Net asset value per share of: A Accumulation Shares EUR 15, A Distribution Shares EUR 45, B Accumulation Shares EUR B Distribution Shares EUR D Accumulation Shares EUR 100, D Distribution Shares EUR Z Accumulation Shares EUR 19, MyFolio Multi-Manager III Fund Total net assets EUR 3,071,300 1,012,522 Net asset value per share of: A Accumulation Shares EUR 11, A Distribution Shares EUR 102, B Accumulation Shares EUR B Distribution Shares EUR D Accumulation Shares EUR 100, D Distribution Shares EUR Z Accumulation Shares EUR 75, MyFolio Multi-Manager IV Fund Total net assets EUR 2,113,015 1,012,328 Net asset value per share of: A Accumulation Shares EUR A Distribution Shares EUR 21, B Accumulation Shares EUR B Distribution Shares EUR D Accumulation Shares EUR 100, D Distribution Shares EUR Z Accumulation Shares EUR 73, MyFolio Multi-Manager V Fund Total net assets EUR 1,495,447 1,011,805 Net asset value per share of: A Accumulation Shares EUR 2, A Distribution Shares EUR 7, B Accumulation Shares EUR B Distribution Shares EUR D Accumulation Shares EUR 100, D Distribution Shares EUR Z Accumulation Shares EUR 26, Total net assets for each Sub-fund is before any adjustment due to swing pricing. The net asset value per share for each share class is after any adjustment due to swing pricing. 14

17 Notes to the Financial Statements as at 31 December Organisation Standard Life Investments Global SICAV II (the "Company") was incorporated on 15 March 2016 under the laws of the Grand Duchy of Luxembourg as a "" ("SICAV") with multiple Sub-funds for an unlimited period. The Company has received approval from the Luxembourg authorities for registration under Part I of the law of 17 December 2010, as amended, relating to Undertakings for Collective Investment in Transferable Securities (the "UCITS Law") in conformity with Directive 2009/65/EC (the UCITS Directive ). The Company is not a self-managed SICAV. A management company was appointed on 1 June The legal notice ("notice légale") required by Luxembourg laws in connection with the issue and sale of shares in the Company has been deposited with the Registrar of the District Court of Luxembourg (the "Registrar"). The Company's articles of incorporation have also been deposited with the Registrar and have been published in the Recueil des Sociétés et Associations (the "Mémorial") on 8 April The Company has been registered under number B at the Luxembourg Trade and Companies Register. During the year ended 31 December 2017, there were 8 Sub-funds available for investment and 17 classes of shares were offered to investors: Class A, Class A Hedged, Class A Unhedged, Class B, Class B Hedged, Class B Unhedged, Class D, Class D Hedged, Class D Unhedged, Class K, Class K Hedged, Class K Unhedged, Class S, Class S Hedged, Class S Unhedged, Class Z, and Class Z Hedged, which differ in the fee structure applying to them. Details of the classes of shares issued in the Sub-funds are noted in the Statistics and in Appendix 1 of the annual report. Further details of each Share Class can also be found in the Prospectus. 2. Summary of Significant Accounting Policies a) General These financial statements are prepared in accordance with Luxembourg regulations applicable to Undertakings for Collective Investment Funds. b) Investment valuation In determining the value of the assets of the Company, securities and money market instruments listed on a recognised stock exchange or dealt on any other regulated market that operates regularly, is recognised and is open to the public, will be valued at their latest available prices, or, in the event that there should be several such markets, on the basis of their latest available prices on the main market for the relevant security. Securities and money market instruments not listed or traded on a stock exchange or not dealt on another regulated market will be valued on the basis of the probable sales proceeds determined prudently and in good faith by the Board of Directors of the Management Company. Suspended or delisted securities held at 31 December 2017 have been valued at fair value as instructed by the Investment Manager; details of these securities are included in Schedule of Investments. All other securities and other assets will be valued at fair market value as determined in good faith pursuant to procedures established by the Board of Directors of the Management Company. In the event that the latest available price does not, in the opinion of the Board of Directors of the Management Company, truly reflect the fair market value of the relevant securities and money market instruments, the value of such securities will be defined by the Board of Directors of the Management Company based on the reasonably foreseeable sales proceeds determined prudently and in good faith. The liquidating value of futures, forward or options contracts traded on exchanges or on other regulated markets shall be based upon the last available settlement prices of these contracts on exchanges and regulated markets on which the particular futures, forward or options contracts are traded by the Company; provided that if a futures, forward or options contract could not be liquidated on the day with respect to which net assets are being determined, the basis for determining the liquidating value of such contract shall be such value as the Board of Directors of the Management Company may deem fair and reasonable. c) Conversion of foreign currencies The books and records of each Sub-fund are denominated in the base currency of the corresponding Sub-fund. Amounts denominated in other currencies are translated into the base currency on the following basis: (i) investment valuations and other assets and liabilities initially expressed in other currencies are converted on each business day into the base currency using exchange rates prevailing on each business day; and (ii) purchases and sales of foreign investments, income and expenses are converted into the base currency using currency exchange rates prevailing on the respective dates of such transactions. Net realised gains and losses on foreign exchange represent: (i) foreign exchange gains and losses from the sale and holding of foreign currencies; (ii) gains and losses between trade date and settlement date on securities transactions; and (iii) gains and losses arising from the difference between amounts of dividends and interest recorded and the amounts actually received. The resulting gains and losses on transactions are included in the Statement of Operations and Changes in Net Assets. 15

18 Notes to the Financial Statements as at 31 December 2017 (continued) 2. Summary of Significant Accounting Policies (continued) c) Conversion of foreign currencies (continued) Main exchange rates used as at 31 December 2017 are as follows: 1 EUR = AUD 1 EUR = KES 1 EUR = BRL 1 EUR = 1, KRW 1 EUR = CAD 1 EUR = MXN 1 EUR = CHF 1 EUR = NOK 1 EUR = DKK 1 EUR = SEK 1 EUR = GBP 1 EUR = TWD 1 EUR = 16, IDR 1 EUR = USD d) Securities transactions and investment income Securities transactions are recorded on a trade date basis. Dividend income is recorded on the ex-dividend date, net of withholding tax. Realised gains and losses are determined on the basis of the average cost of securities sold. Interest income is accrued on a daily basis, net of withholding tax. Investment income relates to rebates from external Fund Managers, of a portion of the annual management charges on investments held by the Sub-fund. e) Formation expenses The formation expenses of the Company and each of the Sub-funds have been borne by the Standard Life group of companies. f) Forward foreign exchange contracts The Forward foreign exchange contracts are valued on the basis of forward foreign exchange rates prevailing at the Statement of Net Assets date. As at the Statement of Net Assets date the value of the Forward foreign exchange contracts is presented in the Statement of the Net Assets under the heading Unrealised appreciation on Open forward foreign exchange contracts or Unrealised depreciation on Open forward foreign exchange contracts. The resulting net change in unrealised appreciation/(depreciation) on Forward foreign exchange contracts is included in the Statement of Operations and Changes in Net Assets, under the heading Net Change in unrealised appreciation/(depreciation) on Forward foreign exchange contracts. The realised appreciation/(depreciation) on Forward foreign exchange contracts is disclosed in the Statement of Operations and Changes in Net Assets, under the heading Net realised appreciation/(depreciation) on Forward foreign exchange contracts. g) Swap contracts The interest rate swap contracts are valued at their fair value based on current market interest rates. The value of the interest rate swap includes the amount of accrued interest as at the date of valuation. The interest income/(expenses) on swap contracts are included in the Statement of Operations and Changes in Net Assets under the heading Interest income on swap contracts and Interest expense on swap contracts respectively. Interest expense on swap contracts arises from contractual obligations and are not included in the Total Expense Ratio calculations. The inflation linked swaps, credit default swaps and total return swaps are valued at their fair value daily based on broker prices. The receivable and payable for swap contracts is recorded in the Statement of Net Assets under the heading Swap contracts at market value. The net change in unrealised appreciation/(depreciation) on swap contracts is included in the Statement of Operations and Changes in Net Assets, under the heading Net change in unrealised appreciation/(depreciation) on Swap contracts. Realised appreciation/(depreciation) on swap contracts are disclosed in the Statement of Operations and Changes in Net Assets under the heading Net realised appreciation/(depreciation) on Swap contracts. h) Exchange traded futures contracts The Exchange traded futures contracts are valued on the basis of futures contracts exchange rates prevailing on the Statement of Net Assets date. As at the Statement of Net Assets date the value of the Exchange traded futures is presented in the Statement of the Net Assets under the heading Unrealised appreciation on Open Exchange traded futures contracts or Unrealised depreciation on Open Exchange traded futures contracts. The resulting net change in unrealised appreciation/(depreciation) on Exchange traded futures contracts is included in the Statement of Operations and Changes in Net Assets, under the heading Net change in unrealised appreciation/(depreciation) on Open Exchange traded futures contracts. The realised appreciation/(depreciation) on Exchange traded futures contracts is disclosed in the Statement of Operations and Changes in Net Assets under the heading Net realised appreciation/(depreciation) on Open Exchange traded futures contracts. i) Option contracts The Option contracts are valued on the basis of option contracts exchange rates prevailing at the Statement of Net Assets date. As at the Statements of Net Assets date the value of the Option contracts is presented in the Statement of the Net Assets under the heading Option contracts at market value. The resulting net change in unrealised appreciation/(depreciation) on Option contracts is included in the Statement of Operations and Changes in Net Assets under the heading Net change in unrealised appreciation/(depreciation) on Option contracts. The realised appreciation/(depreciation) on Option contracts is disclosed in the Statement of Operations and Changes in Net Assets under the heading Net realised appreciation/(depreciation) on Option contracts. j) Functional and Combined Currency Items included in each Sub-funds financial statements are measured using the currency of the primary economic environment in which it operates (the functional currency). Please refer to Statement of Net Assets for the functional currency of each Sub-fund. The currency of the combined statements is Euro. The combined statements correspond to the sum of the statements of each sub-fund, converted to Euro. The combined figures in the Statement of Operations and Changes in Net Assets have been calculated using the average exchange rates throughout the year. The resulting Foreign exchange adjustment of Euro (3,160,483) represents the movement in exchange rates between 31 December 2016 and 31 December This is a notional amount, which has no impact on the Net Assets of the individual Sub-funds. 16