Elite CAM Balanced Discretionary Portfolio

Transcription

1 Elite CAM Balanced Discretionary Portfolio Short Report for the year ended 31 May 2016 Investment Objective and Policy The investment objective of the Fund is to provide a total return with an emphasis on providing capital appreciation over the investment period of 3 years. Capital invested in the Fund is at risk and there is no guarantee that the investment objective will be met over the 3 year investment period or in respect of any other period. Investments will be made on a multi-asset basis through a portfolio of transferable securities (including investment trusts), Collective Investment Schemes, deposits, money market instruments and derivatives. Subject to the requirements of the Regulations, the portfolio will normally remain fully invested. There will, however, be no restrictions on the underlying content of the investments held, in terms of investment type, geographical or economic sector, other than those imposed by the Regulations. This means that the Investment Adviser has the absolute discretion to weight the portfolio towards any investment type or sector, including cash, at any time provided such investment is compatible with the investment objective and policy of the Fund as a whole. Unregulated Collective Investment Schemes may be used to the fullest extent permitted by the Regulations. The portfolio will be actively managed. The Fund may invest in derivatives and forward transactions for investment purposes as well as for efficient portfolio management purposes (including hedging). Fund Facts Risk Profile Interim/Annual Accounting End Dates 30 November 31 May Ex-dividend (xd) Dates 01 December 01 June Income Distribution/ Accumulation Dates 31 January 31 July Please refer to the Full Prospectus for details of all the risks. The Fund has exposure to credit, counterparty and usual market risks. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. You should always regard investments in the Fund as medium to long term. Charges Share Class Initial Charge Annual Management Charge Total Expense Ratios as at Total Expense Ratios as at Share Class A 5.00% 1.50% 3.32% 3.05% Share Class B 0.00% 1.50% 3.32% 3.05% Share Class C 6.00% 0.70% 2.52% 2.25% Page 1

2 Distributions/Accumulations Distributions Distributions payable 31/07/16 Distributions paid 31/01/16 Distributions paid 31/07/15 Distributions paid 31/01/15 Share Class A Accumulation Share Class A Income Share Class B Accumulation Share Class B Income Share Class C Accumulation Share Class C Income Comparative Tables Performance Record A Accumulation A Income Change in net assets per Share Opening net asset value per Share Return before operating charges* (3.44) (3.44) Operating charges (3.81) (3.50) (3.10) (3.80) (3.49) (3.09) Return after operating charges* (7.25) (7.24) Distributions on income shares (0.32) Closing net asset value per Share Retained distributions on accumulation shares * after direct transaction costs of: Performance Return after operating charges (6.00%) 6.44% 2.66% (6.01%) 6.44% 2.65% Other information Closing net asset value 985,271 1,931,546 3,121,723 18,427 71,140 70,041 Closing number of Shares 867,426 1,598,385 2,749,705 16,272 59,042 61,876 Operating charges 3.32% 3.05% 2.80% 3.32% 3.05% 2.80% Direct transaction costs 0.02% 0.01% 0.00% 0.02% 0.01% 0.00% Prices Highest Share price Lowest Share price Page 2

3 Comparative Tables (continued) Performance Record (continued) B Accumulation B Income Change in net assets per Share Opening net asset value per Share Return before operating charges* (3.45) (3.44) Operating charges (3.81) (3.51) (3.10) (3.81) (3.50) (3.10) Return after operating charges* (7.26) (7.25) Distributions on income shares (0.15) Closing net asset value per Share Retained distributions on accumulation shares * after direct transaction costs of: Performance Return after operating charges (6.00%) 6.44% 2.70% (6.00%) 6.44% 2.70% Other information Closing net asset value 814,652 1,200,186 3,119,724 21,058 45, ,607 Closing number of Shares 716, ,196 2,745,235 18,551 37, ,403 Operating charges 3.32% 3.05% 2.80% 3.32% 3.05% 2.80% Direct transaction costs 0.02% 0.01% 0.00% 0.02% 0.01% 0.00% Prices Highest Share price Lowest Share price C Accumulation C Income Change in net assets per Share Opening net asset value per Share Return before operating charges* (3.50) (3.47) Operating charges (2.96) (2.62) (2.23) (2.93) (2.60) (2.22) Return after operating charges* (6.46) (6.40) Distributions on income shares (0.45) (0.27) (0.78) Closing net asset value per Share Retained distributions on accumulation shares * after direct transaction costs of: Performance Return after operating charges (5.24%) 7.30% 3.49% (5.24%) 7.12% 3.64% Other information Closing net asset value 1,445,650 1,560, ,025 78,114 65,461 46,911 Closing number of Shares 1,238,595 1,266, ,277 67,809 53,637 41,081 Operating charges 2.52% 2.25% 2.00% 2.52% 2.25% 2.00% Direct transaction costs 0.02% 0.01% 0.00% 0.02% 0.01% 0.00% Prices Highest Share price Lowest Share price Page 3

4 Comparative Tables (continued) Major Holdings Top 10 Holdings % of Fund as at Threadneedle UK Property 6.72 Kames Property Income 6.23 Muzinich Long Short Credit Yield 5.97 Ardevora UK Equity 5.88 JO Hambro Japan Dividend Growth 5.68 Majedie UK Income 5.59 Old Mutual UK Dynamic Equity 5.48 Standard Life Continental European Equity Income 5.39 NGAM H2O MultiReturns 5.32 Liontrust Special Situations 5.30 Top 10 Holdings % of Fund as at Threadneedle UK Property 6.86 Old Mutual UK Dynamic Equity 6.28 Majedie UK Income 5.66 Ardevora UK Equity 5.56 Kames Property Income 5.28 JO Hambro Japan Dividend Growth 5.06 Fidelity Active Strategy Emerging Markets 4.95 Muzinich Long Short Credit Yield 4.84 CF Miton UK Smaller Companies 4.81 Absolute Insight Credit 4.72 Portfolio Information Breakdown of Investment by Geographical Region % % % 10.21% 8.95% % 0 United Kingdom [41.58%] Global [19.15%] Asia [12.49%] Europe [8.12%] North America [10.57%] Net other assets [3.14%] % of Fund as at % of Fund as at Emerging Markets Comparative figures shown above in square brackets relate to 31 May Page 4

5 Investment Manager s Report Investment Review The reporting period 2015/16 was dominated by macro themes that the market took fright from. A perceived deteriorating environment was characterised by fears ranging from a Chinese slow down and debt crisis to a US recession. The oil price continued its fall over the period although managed a rally towards the end of the period. Oil s negative impact upon inflation has been well documented and its price resurgence will impact on headline levels. This has implications for global monetary policy but is still not considered the bogeyman that it once was. In fact, Europe and Japan have embarked upon Negative Interest Rate Policy (NIRP). Whilst the global consumer is showing tentative signs of spending, many commentators, including myself, have been surprised at the limited positive impact on spending the oil price has had. It appears likely that the consumer, as a whole, has used this opportunity to pay down debt. Performance over the period fell short of our inflation beating target, with only two asset classes positing a positive return; direct UK commercial property and US Equities. Over the period there were a number of changes to strategy. Global Emerging Markets was cut from the Fund as your manager believed the fundamental outlook for the asset class over the medium term had deteriorated. Other notable changes in strategy included the reduction of equity income strategies namely in the US. In this instance the exposure was cut with the capital reinvested in an absolute manager. Whilst attractive returns had been produced by the equity income manager, the outlook weakened as dividend coverage came under pressure. A move to a manager with an absolute return strategy gives greater visibility in terms of the return profile. The RWC US Absolute Alpha was purchased to fulfil this role. The Alternatives allocation witnessed the cutting of the MS Diversified Alpha Plus Fund. After a period of prolonged underperformance, faith in the managers was shaken so a replacement in the form of the TM Fulcrum Core Absolute Return Fund was purchased. The Natixis H20 Multi-returns was also purchased for the alternative segment of the Fund. Performance since launch is attractive, although it follows a very active style which leads to a more volatile return profile. However, its lack of correlation to other funds within this segment of the portfolio creates an appealing diversification profile. Outlook Looking out for the next year the environment will prove challenging, nevertheless there are still opportunities. Within equities, despite Japan s poor performance over the past year the impact of structural reform and the introduction of targeted fiscal packages should attract investor interest back to a market which is already cheap on a global basis. Europe also remains a favoured region for similar reasons to Japan. Global Emerging markets may well make a return to the Fund, there are a number of managers waiting in the wings, but a stronger signal of the market bottoming out will be required before the trigger is pulled. UK Commercial Property has been a valued component of the multi-asset approach employed in this Fund. However, returns have been characterised as super-normal with returns pulled forward from future years.therefore, whilst the asset class will remain an important diversifier, its return profile will, and has, started to lessen. As such, it is likely that the weight to this asset class will be reduced over the next reporting year. As this a sizable weight within the portfolio, the obvious question arises as to which asset class should the capital be redeployed? At this point the picture is cloudy but opportunities continue to arise within the alternative space. There is also an outside chance that the Fixed Interest market provides some single strategy opportunities. Page 5

6 Investment Manager s Report (continued) Outlook (continued) The portfolio s strategy of providing a multi-asset approach with lower volatility than equity markets will be maintained. Investment Manager City Asset Management Plc 7 June 2016 Significant Information Under the Alternative Investment Fund Managers Directive ("AIFMD"), acting as the Alternative Investment Fund Manager ("AIFM"), WAY Fund Managers is required to disclose how those whose actions have a material impact on the Fund are remunerated. The remuneration strategy across WAY Fund Managers is governed by the Remuneration Committee, a committee appointed by the WAY Fund Managers' Board. The Remuneration Committee has established an AIFM Remuneration Policy designed to ensure the AIFM Remuneration Code in the UK Financial Authority handbook is met proportionately for all AIFM Remuneration Code Staff. WAY Fund Managers considers its activities as non complex due to the fact that regulation limits the AIF strategies conducted and the scope of investment in such a way that investor risk is mitigated. The discretion of WAY Fund Managers and the portfolio manager is strictly controlled within certain pre-defined parameters as determined in the prospectus of each Alternative Investment Fund. In its role as an AIFM, WAY Fund Managers deems itself as lower risk due to the nature of the activities it conducts. WAY Fund Managers does not pay any form of variable remuneration currently. Therefore WAY Fund Managers has provided a basic overview of how staff whose actions have a material impact on the Fund are remunerated. May 2016 Number of Beneficiaries Total remuneration paid Fixed remuneration Variable remuneration paid Carried interest paid by the AIF Total remuneration paid by the AIFM during the financial year , , Remuneration paid to employees of the AIFM who have a material impact on the risk profile of the AIF 8 61,053 61, Due to the size and structure of WAY Fund Managers, it is determined that employees of the AIFM who have a material impact on the risk profile of the AIF include the Board, Head of Product Management and Client Relations and the Head of Finance. Page 6

7 Significant Information (continued) The delegated investment manager is subject to regulatory requirements on remuneration that WAY Fund Managers deem to be equally as effective as those detailed in the AIFMD, which would include the Capital Requirements Directive or Markets in Financial Instruments Directive. From 12 November 2015, the auditor for this Company changed from Grant Thornton LLP to Deloitte LLP. This brings the Company in line with other Companies operated within the ACD's group. The information in this report is designed to enable Shareholders to make an informed judgment on the activities of the Fund during the period it covers and the result of those activities at the end of the period. The long Report and Accounts are available free of charge on request. For more information about the activities and performance of the Fund during the period and previous periods, please contact: Authorised Corporate Director WAY Fund Managers Limited Cedar House, 3 Cedar Park, Cobham Road, Wimborne, Dorset BH21 7SB Customer Service Centre: Authorised and regulated by the Financial Conduct Authority (FCA) Depositary Northern Trust Global Services Limited 50 Bank Street, Canary Wharf, London E14 5NT Authorised by the Prudential Regulation Authority (PRA) and regulated by the FCA and the PRA Investment Manager City Asset Management Plc 7 Bishopsgate, London EC2N 3AR Authorised and regulated by the FCA Please note that telephone calls may be recorded for monitoring and training purposes, and to confirm investors' instructions Auditor Deloitte LLP Chartered Accountants and Statutory Auditor Saltire Court, 20 Castle Terrace, Edinburgh EH1 2DB Page 7