FP CAF International Equity Fund

Transcription

1 FP CAF International Equity Fund Short Report for the year ended 30 April 2016 Investment Objective and Policy The Fund aims to achieve capital growth over the medium to longer term which is in excess of that of international equities, excluding the UK. The Fund aims to generate a return, which is in excess of that of international equities, excluding the UK as measured by generally accepted broad market indices, like the FTSE All World ex UK±. The Fund will seek to achieve its objective through investments primarily in non UK equities, and may gain exposure either through direct investment or through Shares and units in Collective Investment Schemes such as unit trusts and open ended investment companies (OEICs), as well as closed ended schemes. Foreign currency exposure may be hedged back into GBP Sterling. The Fund may also invest, at the ACD s discretion, in other transferable securities and Collective Investment Schemes, money market instruments, cash and near cash and deposits to meet the investment objective. Use may also be made of stocklending, borrowing, cash holdings, derivatives for hedging and other investment techniques for efficient portfolio management permitted in COLL. ± The Shares in the FP CAF International Equity Fund are not in any way sponsored, endorsed, sold or promoted by FTSE International Ltd ( FTSE ) or by The London Stock Exchange plc, (the Exchange ) or by The Financial Times Limited ( FT ) and neither FTSE nor Exchange nor FT makes any warranty or representation whatsoever, expressly or implied, either as to the results to be obtained from the FTSE ALL World ex UK Index ( the Index ) and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTSE. However, neither FTSE nor Exchange nor FT shall be liable (whether in negligence or otherwise) to any person for any error in any of the Index and neither FTSE or Exchange or FT shall be under any obligation to advise any person of any error therein. FTSETM, FTSE and Footsie are trade marks of the London Stock Exchange plc and the Financial Times Limited and are used by FTSE International Limited ( FTSE ) under License. Fund Facts Risk Profile Interim/Annual Accounting End Dates 31 October 30 April Ex-dividend (xd) Dates 01 November 01 February 01 May 01 August Income Distribution/ Accumulation Dates 15 December 15 March 15 June 15 September Please refer to the Full Prospectus for details of all the risks. The Fund has exposure to credit, counterparty and usual market risks. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. You should always regard investments in the Fund as medium to long term. Page 1

2 Charges Initial Charge Annual Management Charge Total Expense Ratios as at Total Expense Ratios as at A 0.00% 0.55% 1.10% 1.23% C 0.00% 0.55% 1.10% 1.23% Distributions/Accumulations A Income A Accumulation C Accumulation Distribution payable 15/06/ Distribution paid 15/03/ Distribution paid 15/12/ Distribution paid 15/09/ Distribution paid 15/06/ Distribution paid 15/03/ Distribution paid 15/12/ Distribution paid 15/09/ Comparative Tables Performance Record A Income A Accumulation 30/04/14 30/04/14 Change in net assets per Share Opening net asset value per Share Return before operating charges* (2.33) (2.38) Operating charges (1.50) (1.62) (1.40) (1.55) (1.65) (1.42) Return after operating charges (3.83) (3.93) Distributions on income Shares (1.21) (1.00) (0.77) Closing net asset value per Share Retained distributions on accumulation Shares * after direct transaction costs of : Performance Return after operating charges (2.69%) 18.69% 4.60% (2.69%) 18.76% 4.60% Other information Closing net asset value 5,557,346 5,281,834 4,140, , , ,458 Closing number of Shares 4,045,956 3,709,099 3,426, , , ,158 Operating charges 1.10% 1.23% 1.17% 1.10% 1.23% 1.17% Direct transaction costs 0.02% 0.02% 0.04% 0.02% 0.01% 0.04% Prices Highest Share price Lowest Share price Page 2

3 Comparative Tables (continued) Performance Record (continued) C Accumulation 30/04/14 Change in net assets per Share Opening net asset value per Share Return before operating charges* (2.39) Operating charges (1.55) (1.65) (1.42) Return after operating charges (3.94) Closing net asset value per Share Retained distributions on accumulation Shares * after direct transaction costs of : Performance Return after operating charges (2.69%) 18.76% 4.61% Other information Closing net asset value 8,050,634 6,232,538 4,696,302 Closing number of Shares 5,656,277 4,261,075 3,813,258 Operating charges 1.10% 1.23% 1.17% Direct transaction costs 0.02% 0.01% 0.04% Prices Highest Share price Lowest Share price Major Holdings Top 10 Holdings % of Fund as at Vanguard S&P Artemis Global Income 5.96 Artemis US Extended Alpha 5.73 BlackRock North American Equity Tracker 5.22 Legal & General US Index 5.20 Legal & General International Index 5.13 JPMorgan US Equity Income 4.81 Odey Allegra International 3.70 JO Hambro Global Select 3.68 ishares MSCI World 3.33 Top 10 Holdings % of Fund as at Vanguard S&P JPMorgan US Equity Income 6.17 M&G Global Dividend 6.10 Artemis US Extended Alpha 5.52 Legal & General International Index 4.92 Odey Allegra International 4.59 BlackRock North American Equity Tracker 4.45 Legal & General US Index 4.42 Verrazzano Advantage European 4.05 Artemis Global Income 3.96 Page 3

4 Portfolio Information Breakdown by Investment type % % 24.16% % 0 Collective Investment Schemes [ 47.52%] Offshore Funds [31.92%] Exchange Traded Funds [18.08%] Net other assets [2.48%] Comparative figures shown above in square brackets relate to 30 April Investment Manager s Report Investment Review The FP CAF International Equity Fund produced a negative return of -2.31% in the twelve months from 1 May 2015 to 30 April 2016, against the benchmark index s return of -0.6% over the same period (Source: Lipper. 01/05/15 29/04/16. returns, net income reinvested). The portfolio s performance in the year under review was disappointing. Investor uncertainty about global economic growth and the ongoing debate around the interest rate policies of the main central banks contributed to the negative performance. At the start of the period, markets in the US and Japan were strongest. Following its solid performance, we sold some of Polar Capital Japan and added to L&G Japan Index. We also sold our remaining investment in Henderson European Special Situations, as fund manager Richard Pease prepared to move it to a new fund management house. In August, the yen and the euro strengthened against sterling. This provided an opportunity to add to holdings such as Verrazzano Advantage European and ishares MSCI Japan GBP Hedged exchange-traded fund (ETF). With the US economy recovering in November, we reduced several US investments, including ishares S&P 500 ETF. Weaker Asian and emerging markets meant returns were disappointing from Macquarie Asia New Stars and First State Asia Pacific Leaders. In December, we invested in a new fund, RWC Global Emerging Markets, to take advantage of anticipated improvements in emerging markets. The fund was launched by a US-based management team with analysts in the US and Asia. Page 4

5 Investment Manager s Report (continued) Investment Review (continued) When markets fell at the beginning of January, we took the opportunity to add to US equities by increasing Vanguard S&P 500 ETF and two other funds that track market indices, L&G US Index and BlackRock North American Equity. News of the Brexit referendum caused sterling to weaken compared with the yen, and so we reduced ishares MSCI Japan ETF. Polar Capital Japan and Verrazzano Advantage European also fell sharply as sterling weakened against the yen. In March, efforts to stimulate economic growth in China and the US Federal Reserve s (Fed) decision not to raise interest rates, boosted the performance of RWC Global Emerging Markets and Hermes Asia Pacific ex Japan, in particular. As sterling strengthened, we trimmed our exposure further to ishares MSCI Japan ETF and Verrazzano Advantage European in anticipation of further volatility ahead of the Brexit referendum. After a settling-in period, we purchased Richard Pease s new fund, Crux European Special Situations. Market Overview Interest rates were a key concern during the year under review, with investors keeping a close eye on the major central banks for possible indications of interest rate rises. The Fed led the way by raising interest rates in December. These have yet to materialise, as the Fed reverted to a more cautious tone on the prospects of global growth. In the UK, the General Election in May resulted in a surprise majority for the Conservative Party. This removed the uncertainty for investors that a hung parliament or coalition government would have caused. Investor attention has since turned towards the Brexit referendum, due to take place in June, which will decide whether Britain should remain in the European Union. For as long as it remains low, the oil price will continue to be a deflationary factor for countries in the developed world. For oil-producing nations, it is likely to be a drag on growth. There has been little success in controlling oil production, and it seems the oil price is likely to remain low for a while. Global equity markets have struggled throughout. However, Chinese stimulus measures and a weakening US dollar provided significant relief to Asian and emerging market equities, which drove the subsequent rebound in global equity markets from mid-february s lows. Outlook We remain cautious on the outlook for international equities due to the current level of uncertainty and resultant market volatility. We have adopted a more neutral position relative to our longer-term strategic asset allocations, which we feel is sensible when unsure of which direction the market is likely to take in the near term. As a reflection of this, we have reduced our equity market exposure across the board allocating to cash instead. We have tempered our previous long-term preference for developed markets over developing markets by adding to our emerging markets exposure. This is a short-term tactical decision that served us well in March and April, but we remain conscious of the Fed s longer-term desire to raise rates, as well as the impact this will have on both the US dollar and the emerging markets themselves. It is less clear how emerging markets might fare over a slightly longer time frame. We will be following the prospects for this region closely in the coming months. We expect sterling to be weak and unpredictable in the run-up to the Brexit referendum. Therefore, we have reduced our investments in certain funds that aim to shield UK investors from a strong sterling. Given that there is no certainty of the result, we prefer to focus on assessing and controlling portfolio risk rather than attempt to speculate on a particular outcome. We do know that this particular issue is likely to dominate headlines over the coming months and, if the Scottish referendum is anything to go by, volatility is likely to increase as we approach the actual referendum date on 23 June Page 5

6 Investment Manager s Report (continued) Outlook (continued) The value of an investment, and any income from it, can fall or rise. You may not get back the full amount invested. Past performance is not a reliable indicator of future results. Personal opinions may change and should not be seen as advice or a recommendation. These products are not suitable for everyone. Any recommendation should be based on a holistic review of your financial situation, objectives and needs. We do not offer investment or tax advice. We recommend you seek professional advice before deciding to invest. Investment Manager Octopus Investments Limited 19 May 2016 Page 6

7 Significant Information Under the Alternative Investment Fund Managers Directive, ( AIFMD ), acting as the Alternative Investment Fund Manager ( AIFM ), Fund Partners is required to disclose how those whose actions have a material impact on the Fund are remunerated. The remuneration strategy across Fund Partners is governed by the Remuneration Committee, a committee appointed by the Fund Partners Board. The Remuneration Committee has established an AIFM Remuneration Policy designed to ensure the AIFM Remuneration Code in the UK Financial Authority handbook is met proportionately for all AIFM Remuneration Code Staff. Fund Partners considers its activities as non complex due to the fact that regulation limits the AIF strategies conducted and the scope of investment in such a way that investor risk is mitigated. The discretion of Fund Partners and the portfolio manager is strictly controlled within certain pre-defined parameters as determined in the prospectus of each Alternative Investment Fund. In its role as an AIFM, Fund Partners deems itself as lower risk due to the nature of the activities it conducts. Fund Partners does not pay any form of variable remuneration currently. Therefore Fund Partners have provided a basic overview of how staff whose actions have a material impact on the Funds are remunerated. April 2016 Number of Beneficiaries Total remuneration paid Fixed remuneration Variable remuneration paid Carried interest paid by the AIF Total remuneration paid by the AIFM during the financial year 45 1,442,249 1,442, Remuneration paid to employees of the AIFM who have a material impact on the risk profile of the AIF 4 371, , Due to the size and structure of Fund Partners, it is determined that employees of the AIFM who have a material impact on the risk profile of the AIF include the Board and the Head of Risk and Compliance. The delegated investment manager is subject to regulatory requirements on remuneration that Fund Partners deem to be equally as effective as those detailed in the AIFMD, which would include the Capital Requirements Directive or Markets in Financial Instruments Directive. The information in this report is designed to enable Shareholders to make an informed judgment on the activities of the Fund during the period it covers and the result of those activities at the end of the period. The long Report and Accounts are available free of charge on request. For more information about the activities and performance of the Fund during the period and previous periods, please contact: Authorised Corporate Director Fund Partners Limited Cedar House, 3 Cedar Park Cobham Road, Wimborne Dorset BH21 7SB Customer Service Centre: Authorised and regulated by the Financial Conduct Authority (FCA) Depositary State Street Trustees Limited 20 Churchill Place, London E14 5HJ Authorised and regulated by the FCA Investment Manager Octopus Investments Limited 33 Holborn, London EC1N 2HT Sponsor CAF Investments Ltd 25 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4TA Authorised and regulated by the FCA Please note that telephone calls may be recorded for monitoring and training purposes, and to confirm investors' instructions Auditor Deloitte LLP Chartered Accountants and Statutory Auditor Saltire Court, 20 Castle Terrace, Edinburgh EH1 2DB Page 7