PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT

Transcription

1 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT FOR THE PERIOD ENDING 31 DECEMBER 2015 Chairman s Report Market Review Trustee s Report Investment Council Compliance Fund Reports Abridged Financial Statements

2 1 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 INDEX PAGE Chairman s Report 2 Market Review 3 Trustee s Report 6 Investment Council 8 Compliance Function 9 Fund Range 10 Fund Performance 12 Schedule of Distributions 13 Abridged Income Statements 13 Abridged Balance Sheets 14

3 2 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 John le Roux CHAIRMAN S REPORT While it is a statutory responsibility of Personal Trust to disclose, in an annual report, the performance and investment composition of various Funds and Fund of Funds managed by Personal Trust, we would like this document to go further. Whilst our Funds and Fund of Funds are only available to existing clients, we realise the responsibility that our clients have entrusted upon us in the management and administration of these funds. So, in the preparation of this annual report, we hope that our investor clients will derive comfort from the management controls, audit arrangements and custodianship in respect of each of the Funds. In the event that you, our valued clients, have any uncertainty or questions, the names and contact details of independent parties that you can approach with your questions/concerns are listed on the back. We hope that this annual report will be of interest and give our investor clients comfort. JP le Roux Chairman

4 3 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 John Falconer MARKET REVIEW 2015 proved to be very similar to 2014 and was extremely volatile. The only difference being that in 2015 the South African market and world markets were flat or slightly down for the year and not up as in previous years. Commodity prices continued to fall with the oil price falling to a low of $28.00 a barrel and the iron ore price falling to $40.00 a ton. The gold price was down 11.4%, the platinum price was down 27.2% and the oil price was down 35.0% for the year. Two other major factors affected world equity markets. The first was the clear evidence that the Chinese economic growth was not as good as expected. This was also a negative for commodity prices. The other was the expectation that the US Federal Reserve (FED) would start to raise interest rates in the USA. This finally happened in December with a 0.25% increase. This caused a massive movement of investments out of emerging markets and back to developed markets and the USA in particular. This caused the US Dollar to appreciate and emerging market currencies to depreciate. The Rand was not helped by President Zuma appointing three Ministers of Finance in five days. The Rand lost 32.8% against the US Dollar, 24.8% against the Pound and 20.0% against the Euro. The US Dollar appreciated 9.7% against the Euro and 6.2% against the Pound. The Rand as an emerging market and commodity currency was not alone. The Russian Rouble lost 18.6% against the US Dollar, the Brazilian Real lost 49.0% against the US Dollar and the Australian Dollar lost 12.0% against the US Dollar. The JSE All Share Index was up 1.85% for the year but this was a result of the very good performance of the non-commodity Rand hedge shares such as South Africa Breweries, British American Tobacco, Richemont and Steinhoff. South African banks and retailers and commodity shares performed poorly. The only world equity market to end the year in positive territory was the Japanese Nikkei which was up by 5.9%. The FTSE 100 Index was down 4.9%, the Dow Jones Index was down by 2.3% and the S&P500 Index was down by 1.8%. The Chinese market rose very strongly in the

5 4 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 first quarter but then corrected sharply. The Shanghai Index was down 9.8% and the Hang Seng Index was down 16.7% for the year. During the year the Personal Trust Equity Fund and the Personal Trust High Yield Growth Fund were merged and repositioned. The short term performance has improved and the performance is very close to the fund s benchmark. Once again Personal Trust Asset Allocation Funds and the Fixed Income Fund had a good year and performed in line with their respective benchmarks. Thank you to our fund managers for their hard work and dedication. A particular mention must be made of the Personal Trust Managed Fund which received a Morningstar Award for the best aggressive asset allocation fund. The awards are based on data for the period 1 January 2015 to 31 December Our congratulations to Glenn for his ongoing management of this fund. And a very big thank you to you, our clients, for your continued support. John Falconer Director, Personal Trust International (Pty) Ltd

6 5 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 THE AUDITOR OF THE PERSONAL TRUST SCHEMES IS KPMG INC. OTHER INFORMATION The abridged financial statements on page 13, which have been prepared by management, have been derived from the audited financial statements of the Personal Trust Income Fund, Personal Trust Income ABIL Retention Fund, Personal Trust Conservative Managed Fund, Personal Trust Prudent Fund of Funds, Personal Trust Managed Fund, Personal Trust High Yield Growth Fund and Personal Trust Equity Fund (the schemes) for the year ended 31 December KPMG Inc, the auditor of the schemes, has issued an unmodified audit opinion on the financial statements of the above schemes for the year ended 31 December Those financial statements and auditor s report are available on request. Back row: left to right: Thando Gobe, John Bester, Keith Andrews, Edward Belstead (KPMG) Front row left to right: Philip Strachan, Peter Doyle

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9 8 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 PERSONAL TRUST INVESTMENT COUNCIL The Personal Trust Investment Council was established in 2010 to guide financial planning process and to co-ordinate and ensure alignment of fund solutions with client needs. It consists of two sub-committees; one to oversee the investments into unit trusts, and the other to manage investments into listed shares and the construction of segregated portfolios. Lorraine White, John Falconer, Peter Doyle, Glenn Moore, Mark Huxter, Svend Nielsen and Thando Gobe served on The Investment Council in Lorraine White John Falconer Peter Doyle Glenn Moore Mark Huxter Svend Nielsen Thando Gobe

10 9 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 PERSONAL TRUST COMPLIANCE A good corporate reputation is a company s most valuable and competitive asset. It is directly linked to uncompromising compliance with applicable laws, regulations and internal guidelines. Compliance is thus a central pillar of our management and corporate culture and, at the same time, an integral part of all business processes. Achieving outstanding performance and maintaining the highest level of ethical integrity is certainly not a contradiction. On the contrary, this mindset and approach have made Personal Trust successful. Compliance is not only mandatory, but a key prerequisite for sustainable corporate governance. Compliance is therefore an integral part of our corporate culture. It is based on the enduring company values that govern and guide our activities. Naazia Hoosain Compliance risk is the risk that Personal Trust fails to comply with the letter and spirit of statutes, regulations, supervisory requirements and industry codes of conduct which apply to our businesses. In keeping with our core values, we also endeavour to comply with the highest professional standards of integrity and behaviour, which promote, build and maintain trust. The compliance department has unrestricted access to the chairman of the audit committee and our Managing Director, Mr Thando Gobe. Compliance risk is managed through internal policies, processes and ongoing monitoring which include legal, regulatory and other technical requirements relevant to the business. Staff are provided with regular training to ensure that all employees of the Personal Trust Group are familiar with their regulatory obligations. The compliance department independently monitors the business to ensure adherence to any new legislative requirements as well as existing policies and procedures and other technical requirements. The Compliance department members work closely with Trust Officers to ensure consistent management of compliance risk and maintain a constructive working relationship with the regulators. With the support of the Audit Committee, the Board carries out a review of the effectiveness of risk management and internal control systems, covering all controls including financial, operational and compliance controls and risk management systems. The Company s risk management processes and system of internal controls enable the Board and the Audit Committee to monitor the risk management and internal control framework on a continuing basis throughout the year and to review its effectiveness. Ongoing compliance is monitored and tested through various means including internal and external audits. Report findings are presented to Management and the Audit Committee.

11 10 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 FUND RANGE Personal Trust offers a range of local and offshore funds that cover the full risk spectrum. Whether you are in the capital accumulation phase, approaching or in retirement, our aim is to ensure a balanced spread of assets to achieve the financial goals of you and your family. FUND FUND DESCRIPTION BENCHMARK RISK PROFILE LAUNCH DATE MINIMUM INVESTMENT PT Income Fund PT Conservative Managed Fund PT Prudent Fund of Funds Objective is to provide returns that exceed return on cash by more than 2% over the full interest rate cycle, while ensuring the security of the invested capital. Best suited to retired investors drawing income from their portfolio, the fund invests in a combination of local equities, property trusts, local and offshore bonds and cash. The asset allocation of the fund is biased toward a low equity exposure. Invests with a selection of top South African asset managers. The funds contain local & international securities in the equity, bond, money and property markets with the objective of achieving growth of inflation+5%. Cash + 2% 40% of JSE ALSI 40% of All Bond Index 20% JP Morgan Bond Index CPI +5% INITIAL CHARGE Low July 2002 R200,000 Negotiable to a max of 1% Low to Medium Medium to High August 2008 October 2001 R50,000 Negotiable to a max of 1% R50,000 Negotiable to a max of 1% ANNUAL FUND FEE 1.33% 1.21% 0.90% TER DISTRIBUTIONS 1.56% Quarterly 1.40% Quarterly 2.07% Quarterly

12 11 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 FUND FUND DESCRIPTION BENCHMARK RISK PROFILE LAUNCH DATE MINIMUM INVESTMENT PT Managed Fund PT Equity Fund Best suited to investors saving for retirement, the fund invests in a combination of local and foreign equities, property trusts, bonds and cash. The asset allocation of the fund is biased toward a full equity exposure. Aims to provide investors with capital growth over the long term. The objective is to achieve returns in excess of the JSE All Share Index. The fund has full exposure to the South African equity market. 60% of JSE ALSI 15% of Global S&P % of All Bond Index JSE All Share Index Medium to High August 2007 INITIAL CHARGE R50,000 Negotiable to a max of 1% High July 2009 R50,000 Negotiable to a max of 1% ANNUAL FUND FEE 1.21% 1.21% TER DISTRIBUTIONS 1.43% Quarterly 1.62% Quarterly

13 12 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 FUND PERFORMANCE Income Only Income & Growth Long Term Capital Growth Long Term Capital Growth FUND 1 YEAR DEC 2015 PT Income Fund 6.15% 5.36%* PT Income ABIL Retention Fund PT Conservative Managed Fund PT Prudent Fund of Funds PT Managed Fund PT Equity Fund 6.11% 5.36%* 10.81% 9.31%* 7.90% 10.30%* 11.30% 10.83%* 0.62% 5.13%* 1 YEAR DEC % 5.08%* 5.20% 5.08%* 11.23% 11.39%* 9.95% 10.99%* 12.47% 12.57%* 3.30% 10.88%* 3 YEAR DEC % 4.75%* 5.71% 4.75%* 12.73% 11.86%* 11.72% 10.48%* 15.83% 14.30%* 2.43% 12.28%* 5 YEAR DEC % 4.52%* 6.46% 4.52%* 12.61% 12.92%* 11.10% 10.76%* 14.82% 14.68%* 4.91% 12.96%* 10 YEAR DEC % 5.19%* 7.15% 5.19%* SINCE INCEPTION 9.79% 5.22%* 9.79% 5.22%* % 11.81%* 10.11% 11.51%* 12.16% 11.06%* % 11.80%* % 16.76%* Figures quoted are from Profile Data as at 31 December 2015 for a lump sum, using NAV prices which include fees and charges with income distributions reinvested. Returns are calculated on an annual compounded growth basis *Benchmark returns The Personal Trust High Yield Growth Fund and PT SA Equity Fund amalgamated effective 5 August 2015 to form the PT Equity Fund. On 21 August 2014, the PT Income ABIL Retention Fund was established to house the illiquid African Bank debt instruments. An equal percentage of the unitholding of all investors in the PT Income Fund at that date was moved to the Retention Fund. The performance table above indicates the combined performance of both the PT Income Fund, and PT Income ABIL Retention Fund. These performance figures are applicable to investors that were invested in the PT Income Fund on 21 August 2014.

14 13 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 SCHEDULE OF DISTRIBUTIONS Expressed as cents per unit 31 MARCH APRIL JUNE JULY SEPTEMBER DECEMBER 2015 PT Income Fund PT Income ABIL Retention Fund PT Conservative Managed Fund PT Prudent Fund of Funds PT Managed Fund Class A PT Managed Fund Class B PT High Yield Growth Fund PT Equity Fund ABRIDGED INCOME STATEMENTS FOR THE PERIOD ENDING 31 DECEMBER 2015 PT Income Fund PT Income ABIL Retention Fund PT Conservative Managed Fund PT Prudent Fund of Funds PT Managed Fund PT High Yield Growth Fund PT Equity Fund Income (48 500) ( ) Expenditure ( ) (10 952) ( ) ( ) ( ) ( ) ( ) Income from operations before financial costs (59 452) ( ) Distributions to unit holders Change in net assets attributable to unit holders ( ) (90 842) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( )

15 14 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 ABRIDGED BALANCE SHEETS FOR THE PERIOD ENDING 31 DECEMBER 2015 PT Income Fund PT Income ABIL Retention Fund PT Conservative Managed Fund PT Prudent Fund of Funds PT Managed Fund PT Equity Fund Assets Financial assets at fair value Creations receivable Accrued income Trade and other receivables Cash and cash equivalents Total assets Liabilities Trade and other payables Distributions payable Liquidations in transit Total liabilities Net assets attributable to unit holders Due to The Personal Trust High Yield Growth Fund and PT SA Equity Fund being amalgamated effective 5 August 2015 to form the PT Equity Fund, as from amalgamation date Net assets attributable to unit holders are zero and have thus not been included in the Abridged Balance Sheet above. Full KPMG audited financial statements available upon request.

16 15 PERSONAL TRUST UNIT TRUSTS ABRIDGED ANNUAL REPORT 31 DECEMBER 2015 PERSONAL TRUST INTERNATIONAL MANAGEMENT COMPANY (PTY) LTD Registration Number 2005/026983/07 REGULATORY CONTACT DETAILS: Association for Savings & Investment SA (ASISA) Tel: Fax: Website: FINANCIAL SERVICES BOARD Contact: Noluntu Bam Tel: Fax: Website: FIDUCIARY INSTITUTE OF SOUTH AFRICA (FISA) Tel: Fax: Website: PERSONAL TRUST COMPLIANCE OFFICER Name: Compliserve Tel: Fax: Website: RONDEBOSCH OFFICE: Personal Trust House Belmont Park Belmont Road Rondebosch 7700 PO Box 476 Rondebosch 7701 Telephone: Facsimile: NOORDHOEK OFFICE: Unit 1 No. 3 Carlton Close Sunnydale Noordhoek 7979 Telephone: Facsimile: SOMERSET WEST OFFICE: G03 Parc du Links Niblick Way Somerset West 7130 Postnet Suite Number 126 Private Bag X15 Somerset West 7129 Telephone: Facsimile: KNYSNA OFFICE: Thesen House 6 Long Street Knysna 6570 PO Box 2320 Knysna 6570 Telephone: Facsimile: PORT ELIZABETH OFFICE: Ground Floor Elizabeth Place Pickering Street Newton Park Port Elizabeth 6045 PO Box Newton Park 6055 Telephone: Facsimile: INTERNATIONAL OFFICE LONDON: 17 Hope Street Douglas Isle of Man IM1 1AQ PO Box 909 Beaconsfield Buckinghamshire HP9 1JH Telephone: Facsimile: personaltrust@ptrust.co.za Website: DIRECTORS: JA Meyer BCompt (Hons), SK Nielsen NON-EXECUTIVE DIRECTORS: JA Bester BCom (Hons) CA(SA) CMS (Oxon) PJ Strachan CA(SA) Please note: This is an abridged version of the annual report. Please contact the investment manager should you require a full annual report. Please also note: Unit Trusts are medium to long term investments, the value of which may fluctuate relative to the market value of the securities comprising the portfolio. Prices are calculated on a net asset value basis by determining the total market value of the assets in the portfolio, including any accruals, less any permissible deductions. The following costs may be deducted: brokerage fees, Uncertificated Securities Tax, Value Added Tax, auditors fees, bank charges, trustee and custodian fees, Regional Services Council Levies and the service charges of the manager. The unit trust portfolios are priced daily in arrears using the previous day s 17h00 closing prices. Instructions for purchases, redemptions or switches must be received before 14h00 for the instruction to be executed on that day. The manager may borrow up to 10% of the market value of the unit trust portfolio to cater for insufficient liquidity. The funds may engage in script lending subject to the conditions imposed by the deed. Statements will be sent out on a quarterly basis. The Manager reserves the right to close the fund to new investors. There were no material breaches during the accounting period 1 January December Contact details of Investment Manager: Personal Trust (Pty) Limited. Tel: +27 (21) Fax: +27 (21) PO Box 476, Rondebosch, Personal Trust House, Belmont Park, Belmont Road, Rondebosch, 7700, Cape Town South Africa. Web: Personal Trust (Pty) Ltd FSP Licence No 707