IFSL AMR OEIC. Interim Report and Unaudited Financial Statements For the six month period ended 31 st March 2017

Transcription

1 Interim Report and Unaudited Financial Statements For the six month period ended 31 st March 2017

2 Registered Office Marlborough House 59 Chorley New Road Bolton BL1 4QP Authorised Corporate Director and Registrar Investment Fund Services Limited (IFSL) Marlborough House 59 Chorley New Road Bolton BL1 4QP Investor Support: Authorised and regulated by the Financial Conduct Authority. Investment Manager AMR Financial Management Limited 6 The Courtyard London Road Newbury RG14 1AX Authorised and regulated by the Financial Conduct Authority. Depositary HSBC Bank plc 8 Canada Square London E14 5HQ Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Auditor Barlow Andrews LLP Carlyle House 78 Chorley New Road Bolton BL1 4BY Directors of IFSL Andrew Staley Chairman Nicholas F J Cooling Deputy Chairman Allan Hamer Joint Managing Director Wayne D Green Joint Managing Director Dom M Clarke Finance Director Helen Derbyshire Director Compliance & Risk Helen Redmond Director Relationships John R Heap Director Strategic Development (resigned 9 February 2017) B John Leyland Director (resigned 9 February 2017)

3 CONTENTS PAGE AUTHORISED STATUS AND GENERAL INFORMATION 1 AUTHORISED CORPORATE DIRECTOR'S STATEMENT 2 AUTHORISED INVESTMENT ADVISER S REPORT 3 FUND INFORMATION Price and distribution record 5 Number of shares in issue/net asset value per share 5 Ongoing charges 5 Synthetic risk and reward indicator 5 PORTFOLIO STATEMENT 6 PORTFOLIO TRANSACTIONS 9 INTERIM FINANCIAL STATEMENTS STATEMENT OF TOTAL RETURN 10 STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS 10 BALANCE SHEET 11 NOTES TO THE INTERIM FINANCIAL STATEMENTS 11

4 AUTHORISED STATUS AND GENERAL INFORMATION Authorised Status The IFSL AMR OEIC (Company) is an investment company with variable capital (ICVC) incorporated under the Open Ended Investment Company (OEIC) Regulations The Company is a non-ucits retail scheme as defined in the Collective Investment Schemes Sourcebook (COLL) and is also an umbrella company for the purposes of the OEIC Regulations. The Company is incorporated in England and Wales with the registration number IC The Company was authorised by an order made by the FCA with effect from 20 July The operation of the Company is governed by the Regulations, the Instrument of Incorporation and the Prospectus. A sub-fund is not a legal entity. If the assets attributable to any sub-fund were insufficient to meet the liabilities attributable to it, the shortfall will not be met out of the assets attributable to one or more other sub-funds of the ICVC. The Company currently has one sub-fund, the IFSL AMR Diversified Portfolio. Investment Objectives IFSL AMR Diversified Portfolio The Portfolio aims to provide income with prospects for capital growth over the long term, 5-7 years. The Portfolio will invest through a diversified spread of asset classes, including some or all of UK and overseas equities, fixed interest, property, deposits, cash and near cash. Exposure to the above asset classes will be achieved either by investing in the asset directly (although the fund may not invest in immovable property directly) or, by investing indirectly typically through a diversified portfolio of collective investment schemes, investment trusts and/or exchange traded funds. The asset allocation will be determined by the investment manager s views of the opportunities available and there will be no restriction on exposure to particular geographic, economic or industrial sectors. Change in Prospectus No changes have been made since the last report. Up to date key investor information document, prospectus and reports and accounts for any fund can be requested by the investor at any time. Leverage In accordance with the Alternative Investment Fund Managers Directive (AIFMD) we are required to disclose the leverage of the Fund. Leverage is defined as any method by which the fund increases its exposure through borrowing or the use of derivatives. Exposure is defined in two ways: gross method; and commitment method. The fund must not exceed maximum exposures under both methods. Gross method exposure is calculated as the sum of all positions of the fund (both positive and negative), that is, all eligible assets, liabilities and derivatives, including derivatives held for risk reduction purposes. Commitment method is also calculated as the sum of all positions of the Fund (both positive and negative), but after netting off any derivative and security positions as specified by AIFMD rules. Therefore, the total amount of leverage calculated as at 31 March 2017 is as follows: Gross method: 99.42% Commitment method: 99.42% The maximum level of leverage which may be employed on behalf of the Fund when calculated in accordance with the gross method is 210%. The maximum level of leverage which may be employed on behalf of the Fund when calculated in accordance with the commitment method is 110%. 1

5 AUTHORISED CORPORATE DIRECTOR S STATEMENT This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued and amended by the Financial Conduct Authority. ALLAN HAMER JOINT MANAGING DIRECTOR WAYNE D GREEN JOINT MANAGING DIRECTOR INVESTMENT FUND SERVICES LIMITED 12 May

6 AUTHORISED INVESTMENT ADVISER S REPORT for the six month period ended 31 March 2017 Six Months 1 year Since Launch* IFSL AMR Diversified Portfolio 5.29% 14.36% 13.40% *11 October 2015 External Source of Economic Data: Morningstar (mid to mid, net income reinvested) The third quarter of 2016 was dominated by US politics, with the close-fought race between Clinton and Trump for the Whitehouse. A Clinton win was generally considered more benign for markets, so news of the Trump victory was initially greeted with a sharp sell-off of equities globally although this was very quickly reversed as investors focussed on aspects of his policies that were potentially good for US and hence global growth. These policies were also considered inflationary. This saw a number of sectors which had previously underperformed such as Financials perform well, along with Resources stocks, aided also by agreement amongst OPEC countries to limit oil output which saw the oil price rise sharply. This was at the expense of other more defensive sectors and stocks which might be considered bond proxies but nonetheless markets enjoyed a strong finish to 2016 with record highs for US equities despite a 0.25% increase in US interest rates started in a more cautious mood, with markets awaiting fourth quarter corporate results which were generally positive along with encouraging economic data. European politics impacted on investor confidence in Europe with fears of a rise in populist and non-eu friendly parties. However, investor concern dissipated following the Dutch election result where a mainstream party won and allowed a recovery in European equity markets. Triggering of article 50 that begun the UK s exit from the EU passed without event, although Sterling continued to be under pressure. In corporate news, Unilever rebuffed an audacious bid from Kraft Heinz. Toward the end of the first quarter Trump was forced to withdraw his healthcare reforms from Congress, which led to concern as to how easy it would be for him to enact his as yet unspecified economic policies. Equity markets took another 0.25% rise in US interest rates in their stride and continued to make progress to the end of the first quarter. Against this background, the portfolio performed relatively well. Good contributions were made by the portfolio s overseas holdings, partially helped by some US Dollar strength, although the Euro weakened against Sterling. As political concerns faded, the European holdings performed strongly, in particular JP Morgan European IT Income. Aided by an improving global growth outlook, the Asian funds performed well while in Japan, the CC Japan Income & Growth IT made strong returns. Similarly, the Emerging Markets funds made double-digit gains. In North America, Aberdeen s North American Income Trust performed in line with its passive counterpart, with both making good gains. Strong contributions were also made by the global funds, such as Polar Capital Technology and JP Morgan Global Growth and Income IT. Within the Fixed Interest part of the portfolio, despite rising inflation expectations the Strategic Bond funds made positive returns, with the best performances seen by those which used their investment powers to hold a portion of equities where the managers feel they offer an attractive risk/return opportunity vs the Fixed Income part of a company s capital structure. The more constrained corporate bond funds all detracted from overall returns, falling very modestly. The best returns in Fixed Interest were seen from High Yield, with the CQS New City High Yield IT making double-digit gains. Turning to UK Equities, those holdings which were oriented more to value or growth generally outperformed more defensive holdings as the outlook for global growth improved and inflation expectations rose. Good gains were seen from most of the portfolio s Income style holdings, although it was the more specialist Mid 250 funds and Special Situations funds which excelled. Within the portfolio s direct equity holdings, the Financial stocks, including Banks and Insurance performed well, partly due to expectations of less regulation from the Trump administration, along with higher interest rates being helpful for Bank lending margins. Royal Dutch Shell made strong gains as the oil price rose. Sky outperformed following a bid from Fox Corporation and ITV gained as results exceeded expectations. More defensive holdings such as the Pharmaceutical stocks only made modest positive returns and the Utilities holdings gave up some of their previous gains as bond yields rose. Activity on the portfolio over the period included taking profits from some of the larger more defensive equity holdings and participating in two IPOs; firstly, the BB Healthcare Trust, which invests across the market cap spectrum in healthcare companies, but with the aim of a 5% starting yield. Secondly, the LXI REIT trust, which invests in buildings with long index-linked leases. Capita was sold following a profit warning. The good performance by equities over the past six months has been well supported by robust earnings and dividend growth together with positive outlook statements dominating the recent results season. Valuations now need to be supported by continued earnings growth reflecting the consensus outlook for higher and more synchronised global growth this year, with investors also anticipating positive impact from Trump s economic policies which have yet to be properly set out. Economic growth remains generally favourable, with central banks continuing to act cautiously. We believe that this should make for a positive outlook for equities and fixed interest values should remain underpinned, but after a strong run we expect a degree of short term consolidation. AMR Financial Management Limited 27 April

7 AUTHORISED INVESTMENT ADVISER S REPORT for the six month period ended 31 March 2017 Distributions (pence per share) Year 2017 Year 2016 Class A Accumulation Net income paid last day of February Net income paid 31 May Net income paid 31 August Net income paid 30 November Material Portfolio Changes Major Purchases Cost ( ) Major Sales Proceeds ( ) LXI REIT 250,000 GlaxoSmithKline 165,484 BB Healthcare Trust 190,000 Fidelity Extra Income Fund 'A' Inc 165,001 SEGRO 36,725 Invesco Perpetual Income & Growth 149,566 Unilever 139,966 RELX 109,769 Vanguard UK Inv Gr Bd Index Fund ' ' Inc 101,102 Prudential 99,974 Capita 57,484 BT Group 49,827 Other purchases 1,464 Total purchases for the period 478,189 Total sales for the period 1,038,173 4

8 FUND INFORMATION Price and distribution record Accumulation shares were first offered at 100p on 11 October Financial year to Highest price Lowest price Net income per share Class A Accumulation 30 September 2016* p 92.37p p 30 September 2017** p p p * period from 11 October 2015 to 30 September 2016 ** six month period to 31 March 2017 Number of shares in issue/net asset value per share Net asset value of Number of shares Net asset value scheme property in issue per share Class A Accumulation 30 September ,710,286 18,336, p 31 March ,966,242 17,644, p Ongoing charges Class A Accumulation 30 September % 31 March % The ongoing charge figure is based on expenses for the year. This figure may vary from year to year. It excludes: Performance fees Portfolio transaction costs, except in the case of an entry/exit charge paid by the Fund when buying or selling shares in another collective investment scheme. Synthetic risk and reward indicator Lower risk Typically lower rewards Higher risk Typically higher rewards The risk and reward indicator above aims to provide you with an indication of the overall risk and reward profile of the fund. It is calculated based on the volatility of the fund using weekly historic returns over the last five years. If five years data is not available for a fund, the returns of a representative portfolio are used. This fund has been measured as 4 because it has experienced moderate volatility historically. 5

9 PORTFOLIO STATEMENT as at 31 March 2017 Holding or Bid Percentage of nominal value value total net assets % DEBT SECURITIES (0.08%, Sept %) 15,000 Royal Bank of Scotland 9.5% Perp 16, Total Debt Securities 16, PREFERENCE SHARES (0.30%, Sept %) 40,000 General Accident 8.875% Cum Irrd Prf 60, Total Preference Shares 60, UNIT TRUSTS / OEICS (41.58%, Sept %) 1,023,380 Artemis High Income Fund 'I' Inc 867, ,405 Fidelity Asia Fund 'A' Acc 212, ,223 Fidelity Extra Income Fund 'Y' Inc 745, ,690 Fidelity Global Special Situations Fund 'A' Acc 96, ,997 Fidelity Index UK Fund 'P' Inc 295, ,544 Invesco Perpetual Corporate Bond Fund Acc 157, ,958 Invesco Perpetual Corporate Bond Fund Inc (No Trail) 246, ,530 Invesco Perpetual Monthly Income Plus Fund Inc (No Trail) 176, ,144 Jupiter European Fund 'I' Inc 166, ,298,106 Jupiter Strategic Bond Fund 'I' Inc 867, ,951 Jupiter UK Special Situations Fund 'I' Inc 164, ,166 Lazard Emerging Markets Fund 'B' Inc 104, ,130 Liontrust UK Growth Fund 'R' 236, ,050 M&G Optimal Income Fund 'I' Inc 747, ,317 M&G Strategic Corporate Bond Fund 'I' Inc 778, ,437 Premier Monthly Income Fund 'A' Inc 29, ,818 Premier Monthly Income Fund 'C' Inc 188, ,177 Schroder Income Fund 'A' Acc 103, ,855 Stewart Investors Asia Pacific Leaders Fund 'B' Inc 67, ,710 Threadneedle UK Equity Income Fund 'Z' Inc 123, ,751 Threadneedle UK Mid 250 Fund 'Z' Acc 74, Vanguard Emerging Markets Stock Index Fund ' ' Inc 145, ,533 Vanguard FTSE UK Equity Income Index Fund 'A' Inc 638, ,900 Vanguard UK Investment Grade Bond Index Fund ' ' Inc 584, ,355 Vanguard US Equity Index Fund 'A' Inc 485, Total Unit Trusts / OEICs 8,303, AEROSPACE & DEFENCE (0.71%, Sept %) 22,000 BAE Systems 142, Total Aerospace & Defence 142, AUTOMOBILES & PARTS (0.91%, Sept %) 50,000 GKN 181, Total Automobiles & Parts 181, BANKS (1.27%, Sept %) 24,750 HSBC Holdings 161, ,000 Lloyds Banking Group 92, Total Banks 254, BEVERAGES (1.31%, Sept %) 11,500 Diageo 262, Total Beverages 262,

10 PORTFOLIO STATEMENT as at 31 March 2017 Holding or Bid Percentage of nominal value value total net assets % ELECTRICITY (1.06%, Sept %) 14,500 SSE 212, Total Electricity 212, EQUITY INVESTMENT INSTRUMENTS (22.13%, Sept %) 190,000 BB Healthcare Trust 216, ,000 CC Japan Income & Growth Trust 263, ,000 CQS New City High Yield Fund 198, ,000 Dunedin Income Growth Investment Trust 113, ,000 Fidelity European Values 506, ,000 Henderson Smaller Companies Investment Trust 111, ,000 Invesco Asia Trust 65, ,000 Invesco Income Growth Trust 201, ,650 JPMorgan Asian Investment Trust 336, ,000 JPMorgan European Investment Trust 'Growth' 376, ,268 JPMorgan European Investment Trust 'Income' 136, ,000 JPMorgan European Smaller Companies Trust 65, ,750 JPMorgan Global Growth & Income 92, ,000 JPMorgan Mid Cap Investment Trust 125, ,600 Miton UK MicroCap Trust 112, ,640 Perpetual Income and Growth Investment Trust 453, ,000 Polar Capital Technology Trust 234, ,374 Schroder Asian Total Return Investment Company 172, ,500 Schroder Oriental Income Fund 114, ,000 The Mercantile Investment Trust 126, ,000 The North American Income Trust 219, ,865 TR Property Investment Trust 171, Total Equity Investment Instruments 4,414, FINANCIAL SERVICES (0.72%, Sept %) 6,500 Schroders Non-Vtg 142, Total Financial Services 142, FIXED LINE TELECOMMUNICATIONS (1.39%, Sept %) 87,430 BT Group 277, Total Fixed Line Telecommunications 277, GAS, WATER & MULTIUTILITIES (2.71%, Sept %) 50,000 Centrica 108, ,100 National Grid 243, ,000 Severn Trent 189, Total Gas, Water & Multiutilities 540, GENERAL RETAILERS (1.00%, Sept %) 40,000 Kingfisher 131, ,000 Marks & Spencer Group 67, Total General Retailers 198, HOUSEHOLD GOODS & HOME CONSTRUCTION (1.10%, Sept %) 3,000 Reckitt Benckiser Group 219, Total Household Goods & Home Construction 219,

11 PORTFOLIO STATEMENT as at 31 March 2017 Holding or Bid Percentage of nominal value value total net assets % INDUSTRIAL TRANSPORTATION (0.28%, Sept %) 13,200 Royal Mail 55, Total Industrial Transportation 55, LIFE INSURANCE (3.78%, Sept %) 125,000 Legal & General Group 308, ,575 Prudential 345, ,636 Standard Life 101, Total Life Insurance 754, MEDIA (2.93%, Sept %) 68,700 ITV 145, ,370 RELX 286, ,800 Sky 154, Total Media 585, MOBILE TELECOMMUNICATIONS (1.99%, Sept %) 190,670 Vodafone Group 396, Total Mobile Telecommunications 396, OIL & GAS PRODUCERS (2.81%, Sept %) 35,150 BP 162, ,068 Royal Dutch Shell 'B' 399, Total Oil & Gas Producers 561, PERSONAL GOODS (1.71%, Sept %) 8,680 Unilever 342, Total Personal Goods 342, PHARMACEUTICALS & BIOTECHNOLOGY (3.15%, Sept %) 5,000 AstraZeneca 246, ,858 GlaxoSmithKline 382, Total Pharmaceuticals & Biotechnology 628, REAL ESTATE INVESTMENT TRUSTS (4.38%, Sept %) 13,000 British Land Company 78, ,125 Land Securities Group 136, ,000 LXI REIT 258, ,000 Schroder Real Estate Investment Trust 112, ,874 SEGRO 289, Total Real Estate Investment Trusts 874, SUPPORT SERVICES (Nil, Sept %) Total Support Services TOBACCO (1.56%, Sept %) 3,000 British American Tobacco 158, ,000 Imperial Brands 154, Total Tobacco 313,

12 PORTFOLIO STATEMENT as at 31 March 2017 Holding or Bid Percentage of nominal value value total net assets % TRAVEL & LEISURE (0.28%, Sept %) 5,500 easyjet 56, Total Travel & Leisure 56, OVERSEAS SECURITIES (0.28%, Sept %) 2,206 Morgan Stanley India Investment Fund 55, Total Overseas Securities 55, Portfolio of investments 19,850, Net current assets on capital account 115, Net assets 19,966, The investments of the Fund have been valued using bid market values ruling on international stock exchanges at 12 noon on 31 March 2017, being the last valuation point of the period. Market value is defined by the SORP as fair value which is generally the bid value of each security. Where a stock is unlisted or where there is a non liquid market, a valuation for this stock has been obtained from market makers where possible, and suspended stocks are normally valued at their suspension price. However, where the ACD believes that these prices do not reflect a fair value, or where no reliable price exists for a security, it is valued at a price which in the opinion of the ACD reflects a fair and reasonable price for that investment. PORTFOLIO TRANSACTIONS for the six month period ended 31 March 2017 Total purchases, including transaction charges 478,189 Total sales proceeds, net of transaction charges 1,038,173 9

13 STATEMENT OF TOTAL RETURN for the six month period ended 31 March March March 2016 Income: Net capital gains/(losses) 777,307 (355,371) Revenue 329, ,801 Expenses (104,515) (95,024) Net revenue before taxation 225, ,777 Taxation (905) (1,280) Net revenue/(expense) after taxation 224, ,497 Total return before distributions 1,001,806 (173,874) Distributions (282,962) (233,422) Change in net assets attributable to shareholders from investment activities 718,844 (407,296) STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS for the six month period ended 31 March March March 2016 Opening net assets attributable to shareholders * 19,710,286 0 Amounts receivable on issue of shares 0 335,163 Amounts receivable on inspecie transfers 0 20,272,397 Amounts payable on cancellation of shares (743,529) (1,119,375) (743,529) 19,488,185 Change in net assets attributable to shareholders from investment activities 718,844 (407,296) Retained distribution on accumulation shares 280, ,325 Closing net assets attributable to shareholders 19,966,242 * 19,320,214 * These figures are not the same as the comparatives are taken from the preceding interim period and not the last final accounts. 10

14 BALANCE SHEET as at 31 March March September 2016 Assets: Fixed Assets: Investments 19,850,874 19,627,934 Current Assets: Debtors 114, ,873 Cash and bank balances 42, ,473 Total assets 20,007,448 19,859,280 Liabilities: Creditors: Bank overdrafts 18, ,964 Other creditors 22,943 38,030 Total liabilities 41, ,994 Net assets attributable to shareholders 19,966,242 19,710,286 NOTES TO THE INTERIM FINANCIAL STATEMENTS for the six month period ended 31 March 2017 Basis for preparation The interim financial statements have been prepared in compliance with FRS102 and in accordance with the Statement of Recommended Practice for UK Authorised Funds issued by The Investment Association in May The financial statements are prepared in sterling, which is the functional currency of the Fund. Monetary amounts in these financial statements are rounded to the nearest pound. The financial statements have been prepared on the historical cost convention, modified to include the revaluation of investments and certain financial instruments at fair value. Accounting policies The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 September 2016 and are described in those annual financial statements. 11

15 Investment Fund Services Limited Marlborough House 59 Chorley New Road Bolton BL1 4QP Investor Support: (0808) (FREEPHONE) Fax: (01204) Website: Investment Fund Services Limited Registered in England No Authorised and regulated by the Financial Conduct Authority and a member of The Investment Association.