Raiffeisen-CZK- LifeCycle Fund 2040

Transcription

1 Raiffeisen-CZK- LifeCycle Fund 2040 Annual fund report Financial year Note: The audit opinion issued by KPMG Austria GmbH only applies for the full German-language version.

2 Table of contents General fund information... 3 Fund characteristics... 3 Specific fund information after the end of the accounting year... 4 Legal notice... 4 Fund details... 5 Units in circulation... 5 Fund details for last 3 financial years... 5 Development of the fund assets and income statement... 6 Performance in financial year (fund performance)... 6 Development of fund assets in CZK... 6 Fund result in CZK... 7 A. Realized fund result... 7 B. Unrealized closing price... 7 C. Income adjustment... 7 Appropriation of fund result in CZK... 8 Capital market report... 9 Fund investment policy report Makeup of fund assets in CZK Portfolio of investments in CZK Calculation method for overall risk Audit opinion Fund regulations Appendix Financial year: 1 November October

3 Report for the financial year from 1 November 2013 to 31 October 2014 is a mixed fund. It pursues an investment goal of moderate capital growth and may invest in bonds and money market instruments issued by countries, supranational issuers and/or companies etc., in all types of other securities and in sight deposits and deposits at notice. An investment horizon for the unitholder up to the year 2040 is assumed. Units in other investment funds may be purchased for the investment fund for up to 100 % of its fund assets. The fund mainly selects units in investment funds on the basis of the quality of the investment process and these funds performance and risk management. The fund may invest more than 35 % of its fund assets in securities/money market instruments issued by the following issuers: Germany, France, Italy, United Kingdom, Switzerland, USA, Canada, Australia, Japan, Austria, Belgium, Finland, Netherlands, Sweden or Spain. The fund is actively managed and is not limited by means of a benchmark. General fund information Tranche Fund currency Tranche currency Launch date ISIN ISIN full income-retaining (outside Austria) (VTA) CZK CZK 3/11/2010 AT0000A0JPH4 Fund characteristics Financial year: 1 November 31 October Distribution/payment/reinvestment date: 15 January EU directive compliance: EU directive-compliant jointly owned fund under the 2011 Austrian Investment Fund Act (InvFG), as amended Max. management fee for the fund: 1.50 % Max. management fee for subfunds: 2.00 % (excluding any performance-related fee) Custodian bank: Raiffeisen Bank International AG Management company: Raiffeisen Kapitalanlage-Gesellschaft m.b.h. Schwarzenbergplatz 3, A-1010 Vienna Tel , Fax Companies register number: w Fund management: RCM segment: Raiffeisen Kapitalanlage-Gesellschaft m.b.h. RIC segment: Raiffeisen investiční společnost a.s., Prague Auditor: KPMG Austria GmbH Financial year: 1 November October

4 Specific fund information after the end of the accounting year Fund merger on 10 December 2014: Change of custodian bank: Change of management company: Absorbing fund: Raiffeisen fond pravidelných investic Merged fund: from 10 December 2014: UniCredit Bank Czech Republic and Slovakia from 10 December 2014: Raiffeisen investiční společnost a.s., Prague Legal notice All data and information has been compiled and checked with the greatest care. No liability or guarantee can be assumed for the recentness, correctness and completeness of the information provided. We consider the sources used to be reliable. The software used performs calculations on the basis of more than the two decimal places displayed. Minor discrepancies cannot be ruled out due to further calculations using published results. The value of a unit is calculated by dividing the entire value of the investment fund inclusive of its income by the number of units. The total value of the investment fund is calculated on the basis of the current market prices of the securities, money market instruments and subscription rights in the fund plus the value of the fund s financial investments, cash holdings, credit balances, receivables and other rights net of its payables. That value will be calculated by the custodian bank. The net assets are calculated in accordance with the following principles: a) In principle, the value of assets quoted or traded on a stock market or on another regulated market will be determined on the basis of the most recently available price. b) Where an asset is not quoted or traded on a stock market or another regulated market or where the price for an asset quoted or traded on a stock market or another regulated market does not appropriately reflect its actual market value, the prices provided by reliable data providers or, alternatively, market prices for equivalent securities or other recognized valuation methods shall be used. Financial year: 1 November October

5 Dear unitholder, Raiffeisen Kapitalanlage-Gesellschaft m.b.h. is pleased to present its annual fund report for Raiffeisen-CZK-LifeCycle Fund 2040 for the financial year from 1 November 2013 to 31 October Fund details 31/10/ /10/2014 Fund assets in CZK 127,174, ,076, Net asset value/unit (VTA) CZK 1, , Issue price/unit (VTA) CZK 1, , /1/2014 9/12/2014 Reinvestment/unit (VTA) CZK Units in circulation AT0000A0JPH4 VTA Units in circulation on 31/10/ , Sales 37, Repurchases - 41, Units in circulation on 31/10/ , Fund details for last 3 financial years 31/10/ /10/ /10/2014 Total fund assets 98,630, ,174, ,076, Net asset value/distributing units (AT0000A0JPF8) in CZK Net asset value/reinvested units (AT0000A0JPG6) in CZK Net asset value/fully reinvested units (AT0000A0JPH4) in CZK , , These figures are for 30 March 2012 since the distributing and reinvesting tranches have been wound up. Financial year: 1 November October

6 Development of the fund assets and income statement Performance in financial year (fund performance) Fully reinvested units (AT0000A0JPH4) Net asset value per unit at start of financial year in CZK 1, Net asset value per unit at end of financial year in CZK 1, Net income/net reduction per unit Performance of one unit during the financial year as % 7.94 The performance is calculated assuming wholesale reinvestment of distributed/paid-out amounts at their net asset value on the distribution/payment date. The custodian bank calculates the unit value separately for each unit certificate class. Discrepancies may arise in the annual performance figures for individual unit certificate classes. The performance is calculated by Raiffeisen Kapitalanlage-Gesellschaft m.b.h. using the method developed by OeKB (Österreichische Kontrollbank AG), on the basis of data supplied by the custodian bank (where outpayment of the redemption price is suspended, with use of indicative values). Some costs the subscription fee (not exceeding 3.50 % of the invested amount) and any redemption fee (not exceeding 0.00 % of the sold amount) are not included in the performance calculation. Where included in any calculation, they will accordingly result in a lower performance. Past results do not permit any reliable inferences as to the future performance of the fund. Development of fund assets in CZK Fund assets on 31/10/2013 (124, units) 127,174, Issuance of units 39,998, Redemption of units - 44,025, Pro rata income adjustment - 193, ,220, Overall fund result 10,122, Fund assets on 31/10/2014 (120, units) 133,076, Financial year: 1 November October

7 Fund result in CZK A. Realized fund result Ordinary fund result Income (excl. closing price) Interest income 214, Interest expenses - 155, Income from subfunds (incl. actual distributions) 997, Dividend income from subfunds 51, Dividend income (incl. dividend equivalent) 1,477, Austrian dividend income 30, ,615, Expenses Management fees - 1,456, Custodian bank fees - 244, Auditing expenses - 98, Custodian fee - 87, Statutory/publication expenses - 34, Management costs remuneration from subfunds 2, Custodian bank s administration fee in connection with management costs remuneration from subfunds ,919, Ordinary fund result (excl. income adjustment) 696, Realized closing price Profits realized from securities 4,318, Profits realized from derivative instruments 20,655, Losses realized from securities - 6,676, Losses realized from derivative instruments - 12,579, Realized closing price (excl. income adjustment) 5,718, Realized fund result (excl. income adjustment) 6,415, B. Unrealized closing price Change in unrealized closing price 2,798, Calculated distribution-equivalent income 715, ,513, C. Income adjustment Income adjustment for income during financial year 193, Overall fund result 10,122, The result for the past accounting year includes explicitly reported transaction costs in the amount of CZK 346, Financial year: 1 November October

8 Appropriation of fund result in CZK Reinvested amount (full reinvestment (AT0000A0JPH4)) 6,608, Total 6,608, Realized fund result (incl. income adjustment) 6,608, Total 6,608, Financial year: 1 November October

9 Capital market report Raiffeisen Kapitalanlage-Gesellschaft m.b.h. Most asset classes performed highly positively in the 1 st half of 2014, but the last few months have presented a far greater challenge. Increasing concerns over the economy and various crises (Ukraine, IS in the Middle East, Ebola) have clearly depressed sentiment. In September/October 2014 this gave rise to significant corrections on the stock markets, though these were rapidly followed by price gains. The US stock markets once again played a leading role the Dow Jones and the S&P500 have now even reached new record highs and have gained around 10 % since the start of the year. Considered in their totality, the emerging markets stock markets are lagging behind somewhat, but the picture for the individual emerging markets is highly variable. Despite some highly attractive valuations, stock markets in Central and Eastern Europe have significantly underperformed global averages. The EU s economic paralysis, the Ukraine crisis and the heightened tensions between NATO and Russia are having an impact, both on the real economy and on investor sentiment. This likely partly accounts for the Austrian stock market s current status as one of the weakest stock markets, having fallen more than 10 %. In the last few months, European equities which roughly matched the US markets over the 1 st half of 2014 have flagged considerably in performance terms. To the surprise of most market participants, bonds have been the strongest asset class so far this year. Due to the US central bank s gradual winding-down of its bond-purchasing activities, yields had generally been expected to rise. However, the opposite occurred. Government bonds of the USA, the Eurozone countries and almost all of the other industrialized nations have picked up strongly. Corporate and high-yield bond prices have also risen as part of this trend. Prices of emerging markets bonds, which were buffeted in 2013, have also recovered since the spring of For the time being, the activities of the central banks and the economic trend remain the key direct factors shaping the financial markets. The world economy is unlikely to recover much momentum for the time being. Following years of recession, in 2014 the Eurozone will return to positive territory with slight growth. However, to date the recovery has been significantly weaker than expected, and there is even a risk of a fallback into a mild recession. Most of the emerging markets are also continuing to suffer a loss of economic impetus. There is a need to reduce and to digest the very strong lending growth of the past few years in many countries. This is inevitably curbing new investments and economic activity. A significantly declining inflation trend is apparent worldwide, which will likely pick up further due to the very strong fall in commodities prices. In the Eurozone inflation has almost petered out, alarming the European Central Bank (ECB). It is seeking to counter a potentially deflationary trend through penalty interest rates for banks, additional liquidity support and a bond-purchasing program. This is not likely to help the real economy much, but it may provide an additional boost for the European financial markets. In the Eurozone, significant yield rises are not in sight for the next few years, and the ECB will likely maintain an expansionary monetary policy for some time to come. Of the industrialized nations, in 2014 and probably also in 2015 the USA will once again realize the strongest growth levels, but even here the economy is hardly likely to soar. The markets currently expect that the US central bank will implement initial interest-rate hikes in the spring or in mid However, this is by no means a certainty and even if it does so, in view of the global environment a huge rise in yields on a broad front should not be expected here any time soon. Moreover, US yields are in any case significantly higher than in the EU and Japan. In view of the disappointing results of the economic policy of the Japanese premier, Mr. Abe, Japan s central bank has recently announced further easing, causing the yen to fall again. In view of continuing low bond yields in the key economic blocs, for the developed stock markets this new normality means that they are likely less expensive than suggested by the valuation models of previous decades. At any rate, the financial market environment will remain challenging, even if the positive factors currently still slightly predominate. Financial year: 1 November October

10 Raiffeisen investiční společnost a.s., Prague In the past twelve months, as in previous years the financial markets were supported by the loose monetary policy of the key central banks on both sides of the Atlantic. These central banks expressly affirmed their intention to support economies shaken by the crisis (through programs such as QE3, LTRO etc.). The American economy benefited from this support and realized stable growth in the past year. However, the situation was entirely different in most of the European economies, which are struggling due to very weak momentum and growth rates which are close to zero. The markets were nervous in the spring and the summer months of 2014, due to instability in the emerging markets and the Ukraine crisis. The problems in Ukraine and the sanctions which the European Union has now imposed on Russia may prompt a further decline in economic growth in European countries. Judging by the markets performance, stocks in the industrialized nations were the clear winners (the US stock index S&P500 climbed to an all-time high in September 2014), while prices on most of the emerging markets are still pricing negatively from the point of view of the year as a whole. Due to a combination of moderate inflation in the Czech Republic (and elsewhere), the Czech national bank s extremely low interest rates and positive fundamental data for the Czech economy (relatively low debt, healthy banking system etc.) 10-year Czech government bonds, for instance, reached new record lows. Future rises in the prices of Czech government bonds were therefore foreseeable. We do not intend to make any significant changes to the portfolio s structure over the next few months. Companies fundamental data and equity valuations remain attractive in our view. Financial year: 1 November October

11 Fund investment policy report Raiffeisen Kapitalanlage-Gesellschaft m.b.h. The segment of Raiffeisen-CZK-Lifecycle Fund 2040 managed by Raiffeisen Kapitalanlage-Gesellschaft m.b.h.is a broadly diversified multiple asset-class portfolio. The goal is to realize a higher long-term risk/return ratio through balanced risk allocation for the various asset classes. In principle, this segment is strongly invested in higher-risk investments due to the fund s goal. Equities, commodities, corporate bonds and emerging markets bonds have strong weightings, while government bonds from developed regions only have a marginal weighting. In the period under review, the fund reduced or sold its corporate bond holdings and its peripheral bond investments (Italy). On the other hand, the fund developed its emerging markets exposure. It also increased its block of real assets. Raiffeisen investiční společnost a.s., Prague In the past twelve months, the assets of managed by Raiffeisenbank Czech Republic (50 % of the fund s total net asset value) remained mainly invested in equities in the Central and Eastern Europe region (in Poland and the Czech Republic especially). Within its RIC segment, the fund maintained its equities exposure almost unchanged around the 80 % mark throughout the period. From a geographical point of view, some of the assets under management were shifted away from Russian equities into Czech and Polish blue chips (which currently account for more than two-thirds of the RIC segment) due to the conflict between Russia and Ukraine. In terms of sectors, we prefer cyclical equities (technology, energy etc.). Fixedinterest investments remained diversified and comprised short-term corporate bonds and Czech government bonds with longer maturities (all in Czech crowns). The portfolio s duration (average maturity) is currently 2.5 years. Financial year: 1 November October

12 Makeup of fund assets in CZK Securities Market value % Equities: PLN 32,571, CZK 8,117, HUF 2,083, USD 982, EUR 646, Total equities 44,401, Investment certificates: EUR 74,151, Exchange traded funds: EUR 968, Bonds: CZK 8,770, Total securities 128,292, Derivative products Valuation of financial futures - 1,272, Bank balances Bank liabilities in fund currency - 3,372, Bank balances in foreign currency 9,135, Total bank balances 5,762, Accruals and deferrals Interest claims (on securities and bank balances) 38, Dividends receivable 254, Total accruals and deferrals 293, Total fund assets 133,076, Financial year: 1 November October

13 Portfolio of investments in CZK Dates indicated for securities refer to the issue and redemption dates. An issuer s right of premature redemption (where applicable) is not specified. The securities marked with a "Y" have an open-ended maturity. ISIN SECURITY TITLE CURRENCY VOLUME PURCHASES SALES PRICE MARKET % SHARE 31/10/2014 ADDITIONS DISPOSALS VALUE OF FUND UNITS/NOM. IN PERIOD UNDER REVIEW IN CZK ASSETS UNITS/NOM. EQUITIES IN EURO US80585Y3080 SBERBK ROS.ADR REGS/4 RL3 EUR 4, , EQUITIES IN US DOLLARS US67812M2070 NK ROSNEFT GDR REGS RL-01 USD 2, , US92719A1060 VIMPELCOM LTD ADR 1 USD 4, , EQUITIES IN POLISH ZLOTY PLAGORA00067 AGORA S.A. ZY 1 PLN 2, , PLSOFTB00016 ASSECO POLAND S.A. ZY 1 PLN 3,500 2, ,126, PLBZ BANK ZACHODNI WBK SA ZY10 PLN ,217, PLPEKAO00016 BK PEKAO SA ZY 1 PLN 4, ,691, PLLOTOS00025 GRUPA LOTOS S.A. ZY 1 PLN 2, , PLJSW JASTRZEBSKA SPOL.WEGL.ZY5 PLN 5,400 4, ,034, PLKGHM KGHM POLSKA MIEDZ ZY 10 PLN 3,800 1, ,244, PLTLKPL00017 ORANGE POLSKA SA A ZY 3 PLN 24, ,622, PLPGER PGE PL.GR.ENERGETY. ZY 10 PLN 15,500 4, ,191, PLPKN PKN ORLEN S.A. ZY 1.25 PLN 8,700 2, ,391, PLPKO PKO BANK POLSKI S.A. ZY 1 PLN 17,800 4, ,379, PLPGNIG00014 POLSKIE GO.NAF. A ZY 1 PLN 79,500 25, ,657, PLPZU POWSZECHNY ZAKLAD UBEZP. PLN 1, ,596, PLTAURN00011 TAURON POLSKA ENERGIA ZY5 PLN 28, , EQUITIES IN HUNGARIAN FORINT HU MAGYAR TELEK.T.NA A UF100 HUF 9, , HU MOL NYRT. NA A UF 1000 HUF , , HU ORSZAGOS TAKAR. KER.BK RT HUF 1,430 4, , HU RICHT.GEDE.VEG.GYAR UF100 HUF 2,250 3, , EQUITIES IN CZECH CROWNS BMG CENTRAL EU.ME.A NEW DL-01 CZK 2,000 2, , CZ CEZ AS INH. KC 100 CZK 1,900 14,850 18, ,153, AT ERSTE GROUP BK ST.AKT.ON CZK 1,132 12,250 16, , CZ KOMERCNI BANKA INH. KC500 CZK 500 3,236 3,006 4, ,331, CZ O2 CZECH REPUBLIC KC 87 CZK 1,138 5,000 10, , LU PEGAS NONWOVENS CZK 1, , CZ UNIPETROL AS INH. KC 100 CZK 7,000 7, , AT VIENNA INSURANCE ST.O.N. CZK 2,018 4,518 3,500 1, ,094, INVESTMENT CERTIFICATES IN EURO FOR OTHER ORGANIZED MARKETS LU AXA WLD-GL. INFL. I T. EO EUR 3,162 3, ,505, LI LGT-LGT B.F.G.INF.LIN.I1 EUR , ,438, AT0000A02YY1 RAIFFEISEN EURO CORPORATES (T) EUR 2, , ,918, AT RAIFFEISEN EMERGINGMARKETS BONDS (R) (T) EUR 1,499 2, ,588, AT RAIFFEISEN EUROPEAN EQUITIES (R) (T) EUR ,340, AT0000A0JQU5 RAIFFEISEN-INFLATION-SHIELD (T) EUR 10,003 5, ,354, AT0000A07FR3 RAIFFEISEN RUSSIA EQUITIES (R) (T) EUR 1, ,005, EXCHANGE TRADED FUNDS IN EURO FR LYXOR ETF TURKEY INH. EUR , BONDS IN CZECH CROWNS XS GENL E.C.CORP.10/15FLRMTN CZK 2,000, ,998, CZ CESKA POJISTOV CZK 1,500, ,541, XS VTB EURASIA 13/16 FLR CZK 3,000, ,979, CZ CZECH REP CZK 2,000,000 2,000, ,251, TOTAL SECURITIES PORTFOLIO 128,292, Any discrepancies in terms of % shares of the fund assets result from rounding-off. Financial year: 1 November October

14 ISIN SECURITY TITLE CURRENCY VOLUME PURCHASES SALES PRICE MARKET % SHARE 31/10/2014 ADDITIONS DISPOSALS VALUE OF FUND IN PERIOD UNDER REVIEW IN CZK ASSETS FINANCIAL FUTURES FTCB YR CMWHT TREASURY BOND AUD , FGBL BUND FUTURE EUR , FGBL BUND FUTURE EUR , FESX DJ EURX E-STXX50 FUTURE EUR , , FLGR LONG GILT FUTURE GBP , FLGR LONG GILT FUTURE GBP , FTSP TOKYO STOCK PRICE INDEX JPY 2 2 1, , FTN YR TREASURY NOTE FUTUR USD , FTN YR TREASURY NOTE FUTUR USD , FCEN BCOM ENERGY FUTURES USD , FCIN BCOM INDUSTRIAL METALS F USD , FCPR BCOM PRECIOUS METALS FUT USD , FEMI EMINI MSCI EMERG.MARKET USD 5 5 1, , FEC EURO FX FUTURE USD , TOTAL FINANCIAL FUTURES 1-1,272, BANK BALANCES CZK LIABILITIES -3,372, EUR BALANCES 6,488, BALANCES IN OTHER EU CURRENCIES GBP 200, HUF 3, PLN 1,234, BALANCES IN NON-EU CURRENCIES AUD 530, JPY 110, USD 568, TOTAL BANK BALANCES 5,762, ACCRUALS AND DEFERRALS INTEREST CLAIMS 38, DIVIDENDS RECEIVABLE 254, TOTAL ACCRUALS AND DEFERRALS 293, TOTAL FUND ASSETS 133,076, NET ASSET VALUE PER UNIT CZK 1, UNITS IN CIRCULATION UNITS 120, EXCHANGE RATES FOREIGN CURRENCY ASSETS WERE CONVERTED INTO CZK ON THE BASIS OF THE EXCHANGE RATES APPLICABLE ON 30/10/2014: CURRENCY UNIT PRICE AUSTRALIAN DOLLAR AUD 1 CZK = EURO EUR 1 CZK = BRITISH POUND GBP 1 CZK = HUNGARIAN FORINT HUF 1 CZK = JAPANESE YEN JPY 1 CZK = POLISH ZLOTY PLN 1 CZK = US DOLLAR USD 1 CZK = FUTURES EXCHANGE KEY: CODE CBT CME EUREX IFUS LIFFE OSE SFE STOCK EXCHANGE CHICAGO BOARD OF TRADE CHICAGO MERCANTILE EXCHANGE EUROPEAN EXCHANGE ICE FUTURES U.S. NYSE EURONEXT LIFFE OSAKA STOCK EXCHANGE SYDNEY FUTURES EXCHANGE 1 Price gains and losses as of cut-off date. Any discrepancies in terms of % shares of the fund assets result from rounding-off. Financial year: 1 November October

15 SECURITIES PURCHASES AND SALES DURING THE PERIOD UNDER REVIEW NOT LISTED UNDER THE PORTFOLIO OF ASSETS: ISIN SECURITY TITLE CURRENCY PURCHASES SALES ADDITIONS DISPOSALS UNITS/NOM. EQUITIES IN CZECH CROWNS GB00B42CTW68 NEW WORLD RES EO -,40 CZK 2,961 CS PHIL.MORR.CR NAM. KC 1000 CZK 50 EQUITIES IN US DOLLARS US46626D1081 JSC MMC NOR.NICK.ADR RL 1 USD 3,500 US LUKOIL N.K.SP.ADR RL-,025 USD 800 US MAGNITOGO.METALL.REGS/13 USD 7,000 15,400 US OAO GAZP.ADR SP./2 RL 5 USD 2,000 US SEVERSTAL GDR S OCT USD 4,700 INVESTMENT CERTIFICATES IN EURO FOR OTHER ORGANIZED MARKETS DE000A1C6919 METZLER AKT.DEUTSCHLAN.AI EUR AT0000A07YN3 RAIFFEISEN GTAA OVERLAY (I) (T) EUR 78 5,718 AT0000A0FXL8 RAIFFEISEN-EMERGINGMARKETS-LOCALBONDS (R) (T) EUR 727 AT RAIFFEISEN EUROPEAN HIGHYIELD (R) (T) EUR INVESTMENT CERTIFICATES IN US DOLLARS FOR OTHER ORGANIZED MARKETS CH FALCON GOLD EQUI.FD A USD BONDS IN CZECH CROWNS CZ CZECH REP CZK 2,000,000 Total return swaps and similar derivative instruments A total return swap is a credit derivative instrument. Income and fluctuations in the value of the underlying financial instrument (underlying instrument or reference asset) are exchanged for fixed interest payments. The fund did not enter into total return swaps or similar derivative instruments in the period under review. Financial year: 1 November October

16 Calculation method for overall risk Calculation method for overall risk: Value-at-risk method - absolute Reference assets:: - Lowest value: 5.59 Value-at-risk: Value: 6.96 Highest value: 8.65 Model used: Historical simulation (99 % confidence level, holding period of 20 banking days, data history period acc. 18 (1) item 3 of the Austrian Derivatives Ordinance) Average leverage subject to use of the value-at-risk calculation method in case of nominal value calculation: % Raiffeisen Kapitalanlage-Gesellschaft m.b.h. complies with the code of conduct for the Austrian investment fund industry Vienna, 19 December 2014 Financial year: 1 November October

17 Audit opinion We have audited the annual fund report including the accounting as of 31 October 2014 issued by Raiffeisen Kapitalanlage-Gesellschaft m. b. H., Vienna, for its fund, a jointly owned fund pursuant to the 2011 Austrian Investment Fund Act (InvFG), as amended, for the financial year from 1 November 2013 to 31 October Responsibility of the statutory representatives for the annual fund report, management of the asset portfolio and the accounting The statutory representatives of the management company/the custodian bank are responsible for the accounting, valuation of the asset portfolio, calculation of withholding taxes, preparation of the annual fund report and management of the asset portfolio in accordance with the provisions of the Austrian Investment Fund Act, the supplementary provisions in the fund regulations and the tax regulations. This responsibility includes the setup, execution and maintenance of an internal control system where this is significant for the registration and valuation of the fund and preparation of the annual fund report so that this report is free from significant factual misstatements resulting from intentional or unintentional errors; selection and application of suitable valuation methods; estimates which appear appropriate in view of applicable outline conditions. Responsibility of the bank auditor and description of the type and scope of the statutory audit of the annual fund report We are responsible for providing an audit opinion for this annual fund report on the basis of our audit. We performed our audit pursuant to 49 (5) of the Austrian Investment Fund Act whilst complying with the applicable Austrian statutory regulations and principles of proper balance-sheet auditing. These principles require our compliance with rules of professional conduct and our planning and execution of the audit so that we are able to form an opinion with a reasonable degree of certainty on whether the annual fund report is free from significant factual misstatements. An audit includes the performance of audit activities to obtain documentation of the figures and other disclosures in the annual fund report. The audit activities are chosen at the discretion of the bank auditor, with consideration of its assessment of the risk of significant factual misstatements due to intentional or unintentional errors. In performing the risk assessment, the bank auditor gives consideration to the internal control system where this is of significance for preparation of the annual fund report and valuation of the asset portfolio, so as to specify suitable audit activities with consideration of the applicable outline conditions. No audit opinion is provided on the effectiveness of the internal control measures implemented by the management company and the custodian bank, however. The audit also includes an assessment of the appropriateness of the valuation methods used and the key estimates made by the statutory representatives as well as an evaluation of the overall statement provided in the annual fund report. In our opinion we have obtained sufficient and suitable documentation for our audit, so that it provides an adequate degree of certainty on which to base our judgment. Financial year: 1 November October

18 Audit outcome Our audit has not met with any objections. On the basis of our audit findings, in our view the annual fund report as of 31 October 2014 for, a jointly owned fund pursuant to the 2011 Austrian Investment Fund Act (InvFG), as amended, complies with the statutory regulations. Compliance with the Austrian Investment Fund Act and the fund regulations Pursuant to 49 (5) InvFG our audit includes an assessment of whether this annual fund report complies with the Austrian Federal Act on Investment Funds (Austrian Investment Fund Act) and the fund regulations. We have implemented our audit in accordance with the above principles, so that we are able to determine with a sufficient level of certainty whether this annual fund report complies with the provisions of the Austrian Investment Fund Act and the fund regulations. According to our audit findings, the provisions of the Austrian Federal Act on Investment Funds (Austrian Investment Fund Act) and the fund regulations have been complied with. Report on activities performed during the past financial year We have undertaken a critical assessment of the disclosures provided by the management company s management in the annual fund report on its activities in the past financial year, but these were not subject to special audit activities in accordance with the above principles. Accordingly, our audit opinion does not include an evaluation of this information. In the context of the overall picture set out in this annual fund report, these disclosures are consistent with the information provided in the rest of the report. Vienna, 19 December 2014 KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft Rainer Hassler Auditor pp. Rainer Pasching Auditor Financial year: 1 November October

19 Fund regulations Fund regulations pursuant to the Austrian Investment Fund Act 2011 The Austrian Financial Market Authority (FMA) has approved the fund regulations for the investment fund, a jointly owned fund pursuant to the Austrian Investment Fund Act (InvFG) 2011, as amended. The investment fund is a fund complying with the Directive 85/611/EC and is managed by Raiffeisen Kapitalanlage-Gesellschaft m.b.h. (hereinafter: the management company ) which is headquartered in Vienna. Article 1 Fund units The fund units are embodied in unit certificates with the character of financial instruments which are issued to bearer. The unit certificates shall be represented by global certificates for each unit class and at the discretion of the management company by actual securities. Article 2 Custodian bank (custodian) Raiffeisen Bank International AG, Vienna, is the investment fund s custodian bank (custodian). The custodian bank (custodian), the regional Raiffeisen banks, Kathrein Privatbank Aktiengesellschaft, Vienna, and other payment offices referred to in the prospectus are the payment offices for unit certificates and the handover offices for income coupons (actual securities). Article 3 Investment instruments and principles The following assets pursuant to InvFG may be selected for the investment fund. The investment fund may invest in all types of securities and/or money market instruments in the form of directly purchased individual securities which are not held directly or indirectly through investment funds or derivatives. An investment horizon for the unitholder up to the year 2040 is assumed. The following investment instruments are purchased for the fund assets, while complying with the investment focus outlined above. Securities The fund may purchase securities (including securities with embedded derivative instruments) as permitted by law. Money market instruments The fund may purchase money market instruments as permitted by law. Securities and money market instruments Securities or money market instruments issued or guaranteed by Germany, France, Italy, the United Kingdom of Great Britain and Northern Ireland, Switzerland, the United States of America, Canada, Australia, Japan, Austria, Belgium, Finland, the Netherlands, Sweden and Spain may exceed 35 % of the fund assets directly or indirectly through investments in investment funds if the fund assets are invested in at least six different issues, with an investment in any single issue not exceeding 30 % of the fund assets. Not fully paid-in securities or money market instruments and subscription rights for such instruments or other not fully paid-in financial instruments may only be purchased for up to 10 % of the fund assets. Financial year: 1 November October

20 Securities and money market instruments may be purchased if they comply with the criteria concerning listing and trading on a regulated market or a securities exchange pursuant to InvFG. Securities and money market instruments which do not fulfill the criteria laid down in the above paragraph may be purchased for up to 10 % of the fund assets in total. Units in investment funds Units in investment funds (UCITS, UCI) may each amount to up to 20 % of the fund assets and up to the legally permitted limit overall insofar as these UCITS or UCI do not for their part invest more than 10 % of their fund assets in units in other investment funds. Units in investment funds may be purchased for up to 30 % of the fund assets in total. Derivative instruments Derivative instruments may be used as part of the fund s investment strategy as permitted by law (calculated on the basis of market prices) and for hedging purposes. Investment fund s risk measurement method The investment fund applies the following risk measurement method: Value at risk The VaR figure is calculated pursuant to the 4 th chapter of the 4 th Austrian Derivatives Risk Calculation and Reporting Ordinance (Derivate- Risikoberechnungs- und Meldeverordnung), as amended. Absolute VaR The attributable risk amount for the overall risk calculated as the value-at-risk amount for the investments held in the fund may not exceed 20 % of the net asset value of the fund assets (absolute VaR). Please refer to the prospectus for details and comments. Sight deposits or deposits at notice Sight deposits and deposits at notice with notice periods not exceeding 12 months may amount to up to 49 % of the fund assets. No minimum bank balance is required. Within the framework of restructuring of the fund portfolio and/or a justified assumption of impending losses, the investment fund may hold a higher proportion of sight deposits or deposits at notice with notice periods not exceeding 12 months. Short-term loans The management company may take up short-term loans of up to 10 % of the fund assets for account of the investment fund. Repos Repurchase agreements may comprise up to 100 % of the fund assets. Securities lending Securities lending transactions may comprise up to 30 % of the fund assets. Investment instruments may only be acquired uniformly for the entire investment fund, not for an individual unit class or for a group of unit classes. However, this does not apply for currency hedge transactions. These transactions may only be entered into in relation to a single unit class. Expenses and income resulting from a currency hedge transaction shall exclusively be allocated to the relevant unit class. Please refer to the prospectus for further details concerning Article 3. Financial year: 1 November October

21 Article 4 Issuance and redemption modalities The unit value shall be calculated in CZK or the currency of the unit class. Please refer to the prospectus for further details. The value of units will be calculated on each day of stock market trading. Issuance and subscription fee Units will be issued on any banking day. The issue price is the unit value plus a fee per unit of up to 3.50 % to cover the management company s issuing costs. Unit issuance shall not in principle be subject to limitation; however, the management company reserves the right temporarily or entirely to discontinue its issuance of unit certificates. The management company shall be entitled to introduce a graduated subscription fee. Please refer to the prospectus for further details. Redemption and redemption fee Units will be redeemed on any banking day. The redemption price is based on the value of a unit. No redemption fee will be charged. At the request of a unitholder, its unit shall be redeemed out of the investment fund at the applicable redemption price, against surrender of the unit certificate, those income coupons which are not yet due and the renewal certificate. Article 5 Accounting year The investment fund s accounting year runs from November 1 to October 31. Article 6 Unit classes and appropriation of income Income-distributing unit certificates, income-retaining unit certificates with capital gains tax deducted and income-retaining unit certificates without capital gains tax deducted may be issued for the investment fund. Various classes of unit certificates may be issued for this investment fund. The management company may decide to establish unit classes or to issue units in a given unit class. Please refer to the prospectus for further details. Appropriation of income for income-distributing unit certificates (income distribution) Once costs have been covered, the income received during the past accounting year (interest and dividends) may be distributed at the discretion of the management company. Distribution may be waived subject to due consideration of the unitholders interests. The distribution of income from the sale of assets of the investment fund including subscription rights shall likewise be at the discretion of the management company. A distribution from the fund assets and interim distributions are also permissible. The fund assets may not through distributions fall below the minimum volume for a termination which is stipulated by law. From January 15 of the following accounting year the amounts are to be distributed to the holders of income-distributing unit certificates. Any remaining balances shall be carried forward to a new account. Financial year: 1 November October

22 In any case, from January 15 an amount calculated pursuant to InvFG shall be paid out, to be used where applicable to meet any capital gains tax commitments on the distribution-equivalent return on those unit certificates, unless the management company ensures through appropriate proof from the custodians that at the time of payout the unit certificates may only be held by unitholders who are either not subject to Austrian income or corporate income tax or who fulfill the requirements for an exemption pursuant to 94 of the Austrian Income Tax Act or for a capital gains tax exemption. unitholders entitlement to the distribution of income shares shall become time-barred after five years. After this period, such income shares shall be treated as income of the investment fund. Appropriation of income in case of income-retaining unit certificates with capital gains tax deducted (income retention) Income during the accounting year net of costs shall not be distributed. In case of income-retaining unit certificates, from January 15 an amount calculated pursuant to InvFG shall be paid out, to be used where applicable to meet any capital gains tax commitments on the distributionequivalent return on those unit certificates, unless the management company ensures through appropriate proof from the custodians that at the time of payout the unit certificates are only held by unitholders who are either not subject to Austrian income or corporate income tax or who fulfill the requirements for an exemption pursuant to 94 of the Austrian Income Tax Act or for a capital gains tax exemption. Appropriation of income in case of income-retaining unit certificates without capital gains tax deducted (full income retention domestic and foreign tranches) Income during the accounting year net of costs shall not be distributed. No payment pursuant to InvFG will be made. January 15 of the following accounting year shall be the key date pursuant to InvFG in case of failure to pay capital gains tax on the annual income. The management company shall ensure through appropriate proof from the custodians that at the time of payout the unit certificates may only be held by unitholders who are either not subject to Austrian income or corporate income tax or who fulfill the requirements for exemption as per 94 of the Austrian Income Tax Act or for an exemption from capital gains tax. If these preconditions have not been met as of the outpayment date, the amount calculated pursuant to InvFG shall be paid out by the custodian bank in the form of credit. Appropriation of income in case of income-retaining unit certificates without capital gains tax deducted (full income retention foreign tranche) Income-retaining unit certificates without deducted capital gains tax shall only be sold outside Austria. Income during the accounting year net of costs shall not be distributed. No payment pursuant to InvFG will be made. The management company shall ensure through appropriate proof that at the time of payout the unit certificates may only be held by unitholders who are either not subject to Austrian income or corporate income tax or who fulfill the requirements for exemption pursuant to 94 of the Austrian Income Tax Act or for an exemption from capital gains tax. Article 7 Management fee, reimbursement of expenses, liquidation fee The management company shall receive for its management activity an annual remuneration of up to 1.50 % of the fund assets, calculated on the basis of the values at the end of each month. This remuneration is less the amount (max. 1.5 % p.a.) which the management company has received in management fees for this investment fund for those portions of the fund which it has invested in units of an investment fund managed by it. The management company is entitled to reimbursement of all expenses associated with its management of the fund. The management company shall be entitled to introduce a graduated management fee. The costs arising at the introduction of new unit classes for existing asset portfolios shall be deducted from the unit prices of the new unit classes. At the liquidation of the investment fund, the custodian bank shall receive remuneration amounting to 0.5 % of the fund assets. Please refer to the prospectus for further details. Financial year: 1 November October

23 Appendix List of stock exchanges with official trading and organized markets 1. Stock exchanges with official trading and organized markets in the member states of the EEA According to Article 16 of Directive 93/22/EEC (investment services in the securities field), each member state is obliged to maintain an up-todate directory of its licensed markets. This directory is to be made available to the other member states and to the Commission. According to this provision, the Commission is obliged to publish once a year a directory of the regulated markets of which it has received notice. Due to decreasing restrictions and to trading segment specialization, the directory of regulated markets is undergoing great changes. In addition to the annual publication of a directory in the official gazette of the European Communities, the Commission will therefore provide an updated version on its official internet site The current directory of regulated markets is available at: id= The following stock exchanges are to be included in the directory of Regulated Markets: Luxembourg Euro MTF Luxembourg 1.3. Recognized markets in the EU pursuant to 67 (2) item 2 InvFG: Markets in the EEA classified as recognized markets by the relevant supervisory authorities. 2. Stock exchanges in European states which are not members of the EEA 2.1. Bosnia & Herzegovina: Sarajevo, Banja Luka 2.2. Croatia: Zagreb Stock Exchange 2.3. Montenegro: Podgorica 2.4. Russia: Moscow (RTS Stock Exchange), Moscow Interbank Currency Exchange (MICEX) 2.5. Switzerland: SWX Swiss Exchange 2.6. Serbia: Belgrade 2.7. Turkey: Istanbul (for Stock Market, "National Market" only) 3. Stock exchanges in non-european states 3.1. Australia: Sydney, Hobart, Melbourne, Perth 3.2. Argentina: Buenos Aires 3.3. Brazil: Rio de Janeiro, Sao Paulo 3.4. Chile: Santiago 3.5. China: Shanghai Stock Exchange, Shenzhen Stock Exchange 3.6. Hong Kong: Hong Kong Stock Exchange 3.7. India: Mumbai 3.8. Indonesia: Jakarta 3.9. Israel: Tel Aviv Japan: Tokyo, Osaka, Nagoya, Kyoto, Fukuoka, Niigata, Sapporo, Hiroshima Canada: Toronto, Vancouver, Montreal 3.12 Colombia: Bolsa de Valores de Colombia Korea: Korea Exchange (Seoul, Busan) Malaysia: Kuala Lumpur, Bursa Malaysia Berhad Mexico: Mexico City New Zealand: Wellington, Christchurch/Invercargill, Auckland 1 Click on view all to open the directory. The link may be modified by the Austrian Financial Market Authority (FMA) or by the European Securities and Markets Authority (ESMA). [You may access the directory as follows by way of the FMA s website: - scroll down - link List of Regulated Markets (MiFID Database; ESMA) view all ] Financial year: 1 November October

24 3.17 Peru: Bolsa de Valores de Lima Philippines: Manila Singapore: Singapore Stock Exchange South Africa: Johannesburg Taiwan: Taipei Thailand: Bangkok USA: New York, American Stock Exchange (AMEX), New York Stock Exchange (NYSE), Los Angeles/Pacific Stock Exchange, San Francisco/Pacific Stock Exchange, Philadelphia, Chicago, Boston, Cincinnati Venezuela: Caracas United Arab Emirates: Abu Dhabi Securities Exchange (ADX) 4. Organized markets in states which are not members of the European Community 4.1. Japan: Over the Counter Market 4.2. Canada: Over the Counter Market 4.3. Korea: Over the Counter Market 4.4. Switzerland: SWX-Swiss Exchange, BX Berne exchange; Over the Counter Market of the members of the International Capital Market Association (ICMA), Zurich 4.5. USA: Over the Counter Market in the NASDAQ system, Over the Counter Market (markets organized by NASD such as Over-the-Counter Equity Market, Municipal Bond Market, Government Securities Market, Corporate Bonds and Public Direct Participation Programs) Over-the-Counter-Market for Agency Mortgage-Backed Securities 5. Stock exchanges with futures and options markets 5.1. Argentina: Bolsa de Comercio de Buenos Aires 5.2. Australia: Australian Options Market, Australian Securities Exchange (ASX) 5.3. Brazil: Bolsa Brasiliera de Futuros, Bolsa de Mercadorias & Futuros, Rio de Janeiro Stock Exchange, Sao Paulo Stock Exchange 5.4. Hong Kong: Hong Kong Futures Exchange Ltd Japan: Osaka Securities Exchange, Tokyo International Financial Futures Exchange, Tokyo Stock Exchange 5.6. Canada: Montreal Exchange, Toronto Futures Exchange 5.7. Korea: Korea Exchange (KRX) 5.8. Mexico: Mercado Mexicano de Derivados 5.9. New Zealand: New Zealand Futures & Options Exchange Philippines: Manila International Futures Exchange Singapore: The Singapore Exchange Limited (SGX) Slovakia: RM System Slovakia South Africa: Johannesburg Stock Exchange (JSE), South African Futures Exchange (SAFEX) Switzerland: EUREX Turkey: TurkDEX USA: American Stock Exchange, Chicago Board Options Exchange, Chicago, Board of Trade, Chicago Mercantile Exchange, Comex, FINEX, Mid America Commodity Exchange, ICE Future US Inc.New York, Pacific Stock Exchange, Philadelphia Stock Exchange, New York Stock Exchange, Boston Options Exchange (BOX) Financial year: 1 November October