EMERGING MARKETS EQUITY UNIT TRUST

Transcription

1 EMERGING MARKETS EQUITY UNIT TRUST FOR THE PERIOD ENDED 30 SEPTEMBER 2018

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 A. M. Croft I. S. Gascoigne C. G. Gentle D. J. Lamb Investment Adviser Wasatch Advisors Inc. 3rd Floor 505 Wakara Way Salt Lake City UT United States of America (Authorised and regulated by the Securities and Exchange Commission) Trustee National Westminster Bank Plc 250 Bishopsgate London, EC2M 4AA United Kingdom As part of an internal reorganisation, trustee and depositary services provided to the St. James s Place range of authorised unit trusts by National Westminster Bank plc will be transferred to the newly established NatWest Trustee and Depositary Services Limited. The change is scheduled to be completed by the end of December (Authorised and regulated by the Financial Conduct Authority) Registrar DST Financial Services Europe Limited DST House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Conduct Authority) Independent Auditors 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 The Report of the Manager consists of The Trust, Investment Objectives & Policy, The Trust's Performance, Risk and Reward Profile, Investment Adviser's Comments and Portfolio Statement. The Trust St. James's Place Emerging Markets Equity 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 8 April 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. Investment Objectives & Policy The investment objective of the Scheme is to seek to achieve long-term capital appreciation. The Scheme aims to achieve this objective by primarily investing into a focused portfolio of the securities of companies which are either listed on the exchanges of countries in emerging markets or which are economically exposed to emerging markets. The Scheme is also permitted to invest in other types of transferable securities, UK and overseas fixed interest and index-linked securities, units and/or shares in collective investment schemes, money market instruments, deposits, cash and near cash, and derivatives and forward transactions for the purposes 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. The Trust's Performance The performance of the Trust since its launch in April 2014 and over the period under review is shown below. St. James's Place Emerging Markets Equity Unit Trust L Income units (offer to offer) L Accumulation units (offer to offer) H Accumulation units (offer to offer)* Source: Lipper for Fund returns 28/04/14 to 31/03/18 to 30/09/18 30/09/18 % change % change *Class H Accumulation units were made available on 1 December 2016 and the performance shown is from that date. 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. Risk and Reward Profile The synthetic risk and reward indicator for the St. James's Place Emerging Markets Equity Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 6. It was calculated using indicative performance data for the type of investments held. The risk category is recalculated weekly and during the year under review, the risk category did not change. 2

4 Report of the Manager (continued) Investment Adviser's Comments Fears of a global trade war dampened enthusiasm for emerging market assets already under pressure from rising US interest rates and a stronger dollar. Factory activity in China remained weak, threatening demand for raw materials and components from other emerging markets. Routs in the currencies of Argentina and Turkey placed countries with current account deficits under mounting scrutiny. Central bankers in several nations hiked interest rates to shore up their flagging currencies. The portfolio outperformed the wider market. India was the largest source of outperformance. Boosted by household spending and manufacturing, India s gross domestic product expanded 8.2% year over year in the April to June quarter the fastest growth since the first quarter of Our Mexican and Korean stocks also posted returns significantly ahead of their national counterparts. Taiwan was the primary source of weakness against the benchmark. Fears of a hard economic landing in China appeared to weigh on a few of our Asian holdings that have exposure to Chinese demand. BGF Retail and Bajaj Finance were the strongest contributors to portfolio performance. BGF operates convenience stores in Korea. The company s stock rebounded as sales of tobacco and e cigarettes drove modest improvement in same store revenues. Bajaj is a diversified lending company in India. Consolidated quarterly profits after tax at Bajaj surged 81% compared to the same quarter a year earlier. The greatest detractors from performance were Tencent and Ctrip.com Both stocks declined amid broad weakness in Chinese shares, especially those of online businesses and information technology (IT) companies. Ctrip operates a leading online travel agency in China. Tencent is a Chinese IT and media company impacted by a growing government campaign against games and online addiction in young people. New additions included Taiwan based ASPEED Technology, a fabless designer of integrated circuits. NMC Health, a top contributor during the period, was sold on valuation concerns. NMC is the largest private healthcare provider in the United Arab Emirates. Despite continued uncertainty surrounding tariffs and trade, the investment environment in emerging markets remains generally favourable. We are pleased that portfolio outperformance during the period was driven largely by the strong earnings growth of the companies we own. As fundamental, bottom up investors, we believe earnings driven market environments provide conditions beneficial to our investment approach. Wasatch Advisors Inc. 12 October

5 Comparative Table as at 30 September 2018 (unaudited) Net Asset Value and Ongoing Charges Figure 30/09/18 31/03/18 31/03/17 L Income Closing net asset value ( 000) 2,555 2,366 1,950 Closing number of units 2,061,401 1,921,543 1,680,046 Closing net asset value per unit (p) Operating charges* 1.90% 1.91% 1.93% 30/09/18 31/03/18 31/03/17 L Accumulation Closing net asset value ( 000) 806, , ,409 Closing number of units 650,456, ,837, ,205,542 Closing net asset value per unit (p) Operating charges* 1.90% 1.91% 1.93% 30/09/18 31/03/18 31/03/17 H Accumulation Closing net asset value ( 000) Closing number of units 236, ,986 8,827 Closing net asset value per unit (p) Operating charges* 2.40% 2.41% 2.44% H Accumulation units were made available on 1 December *Operating charges are prepared using the same methodology as the ongoing charges appearing in the KIID, based on the information in this report. 4

6 Portfolio Statement as at 30 September 2018 (unaudited) Security Holdings Market Value 000 % of Net Assets BRAZIL (6.99%) 60, M Dias Branco 2,059,832 15, Raia Drogasil 2,209,267 31, WEG 3,560,770 13, CAYMAN ISLANDS (19.56%) 164, job ADR 462,013 27, Alibaba ADR 285,330 36, Ctrip.com International ADR 1,146,057 33, Microport Scientific 7,040,427 7, Silergy 1,996,341 27, Tencent 1,032,200 32, COLOMBIA (2.61%) 21, Banco Davivienda Preference Shares 2,412,455 21, CYPRUS (0.00%) 13, TCS GDR 994,693 13, HONG KONG (3.96%) 47, Techtronic Industries 5,312,900 26, Vitasoy International 8,360,726 21, INDIA (23.74%) 214, Amara Raja Batteries 1,896,551 14, Asian Paints 1,248,788 17, Bajaj Finance 1,659,338 38, Britannia Industries 278,752 17, Godrej Consumer Products 1,854,426 15, HDFC Bank 1,270,560 26, ICICI Lombard General Insurance 3,476,081 29, ICICI Prudential Life Insurance 3,817,673 13, Page Industries 68,742 24, Pidilite Industries 1,014,370 11, PNB Housing Finance 654,384 6, INDONESIA (2.48%) 18, Bank Central Asia 14,746,407 18, MAURITIUS (2.73%) 18, MakeMyTrip 882,065 18, MEXICO (5.06%) 51, Aeroportuario del Pacifico 2,458,290 20, Aeroportuario del Sureste 1,312,375 20, Promotora y Operadora de Infraestructura 1,307,876 10, PHILIPPINES (1.30%) - - SOUTH AFRICA (4.36%) 32, Discovery 2,011,478 18, Naspers 87,470 14, SOUTH KOREA (9.17%) 83, BGF Retail 234,166 33, LG Household & Health Care 19,949 17, Medy-Tox 77,156 33, TAIWAN (3.31%) 32, ASPEED Technology 970,165 14, Ennoconn 1,179,995 8, Nien Made Enterprise 1,519,437 9,

7 Portfolio Statement as at 30 September 2018 (unaudited) Security Holdings Market Value 000 (continued) % of Net Assets THAILAND (3.77%) 12, Kasikornbank 'A' Shares 2,406,200 12, UNITED KINGDOM (8.09%) 18, St. James's Place Money Market Unit Trust L Acc 17,742,937 18, UNITED STATES (1.72%) 17, MercadoLibre 68,667 17, Investment Assets 807, Total other assets (net) 1, Net assets 809, Comparative figures shown in brackets relate to 31 March All investments held are listed, unless otherwise stated. Stocks shown as ADRs and GDRs represent American Depositary Receipts and Global Depositary Receipts. 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. 6

8 Material Portfolio Changes Cost Purchases 000 St. James's Place Money Market Unit Trust L Acc 116,767 ICICI Lombard General Insurance 31,435 Amara Raja Batteries 18,231 ASPEED Technology 18,072 TCS GDR 14,988 Ctrip.com International ADR 12,684 Pidilite Industries 12,603 Raia Drogasil 8,857 BGF Retail 8,494 M Dias Branco 8,381 Proceeds Sales 000 St. James's Place Money Market Unit Trust L Acc 122,712 NMC Health 35,983 Berger Paints India 16,308 Bajaj Finance 12,367 Bangkok Dusit Medical Services 7,841 International Container Terminal Services 7,525 Kasikornbank 'A' Shares 6,374 Page Industries 4,524 HDFC Bank 781 Nien Made Enterprise 697 Stocks shown as ADRs and GDRs represent American Depositary Receipts and Global Depositary Receipts. This investment is a related party. 7

9 Statement of Total Return for the period 01 April 2018 to 30 September 2018 (unaudited) Income Net capital gains Revenue Expenses Interest payable and similar charges Net expenses before taxation Taxation Net expenses after taxation Total return before equalisation Equalisation Change in net assets attributable to unitholders from investment activities 01/04/18 to 30/09/18 01/04/17 to 30/09/ ,091 24,838 4,945 3,981 (7,530) (5,221) (2) (5) (2,587) (1,245) (305) (278) (2,892) (1,523) , ,315 Statement of Change in Net Assets Attributable to Unitholders for the period 01 April 2018 to 30 September 2018 (unaudited) 01/04/18 to 30/09/18 01/04/17 to 30/09/ Opening net assets attributable to unitholders 696, ,369 Movement due to creation and cancellation of units: Amounts receivable on creation of units 113, ,765 Amounts payable on cancellation of units (945) (14,207) 112,124 90,558 Change in net assets attributable to unitholders from investment activities (see above) ,315 Closing net assets attributable to unitholders 809, ,242 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. 8

10 Balance Sheet as at 30 September 2018 (unaudited) Assets Investments Current assets Debtors Cash and bank balances Total assets Liabilities Creditors Bank overdrafts Other creditors Total liabilities Net assets attributable to unitholders 30/09/18 31/03/ , ,906 9,624 5,549 5,482 3, , ,943 (7,536) - (6,009) (1,053) (13,545) (1,053) 809, ,890 Accounting and Distribution policies for the period 01 April 2018 to 30 September 2018 (unaudited) Basis of accounting The Financial Statements have been prepared under the historical cost basis, as modified by the revaluation of investments, in compliance with the Financial Conduct Authority's Collective Investment Schemes Sourcebook. They have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland FRS 102) and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the Investment Management Association May 2014 (IMA SORP 2014). The financial statements are prepared on the going concern basis. Directors of the Managers' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. C. G. Gentle D. J. Lamb London 29 November

11 General Information 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 for Class H and Class L Units will be published on the Manager s website: Prices for all Units are available by calling the Administration Centre on Minimum Investment Class H and Class L - 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 500. After any withdrawal the minimum holding value is 500. Class Y The minimum lump sum investment is 10,000,000 thereafter the minimum additional investment is 10,000. After any withdrawal the minimum holding value is 1,000,000. Please note further investment restrictions also apply to Class H and Class Y Units as detailed in the Prospectus. Management Charges 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. For Class Y units the Preliminary Charge is 0 per cent. (b) An Annual Management Charge at a rate of 1.37 per cent for Class L Income and Accumulation Units; 1.87 per cent for Class H Accumulation Units; 0.66 per cent for Class Y Accumulation Units 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 Certificates 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 certificates will be enclosed if income unitholders receive payment by cheque. 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 2018/2019 exceed 11,700 (2017/ ,300). 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. 10

12 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 Emerging Markets Equity (11/18)