Aberdeen Foundation Growth Fund Interim short report for the period ended 30 June 2016 Investment objective and policy The Fund aims to achieve long term capital growth and to produce a return that, before charges and expenses, matches the total return of the FTSE All-Share index. The Fund will invest predominantly in equities. The Fund may also invest in cash, near cash, deposits, other collective investment schemes and other transferable securities. Performance The Aberdeen Foundation Growth Fund B Accumulation share price value increased by 1.86% in sterling terms over the six month period to 30 June 2016, compared to an increase in the benchmark, FTSE All Share, of 4.27%. Aberdeen Foundation Growth Fund A Accumulation share price movement in GBP at valuation point; Revenue (net of tax) reinvested and net of expenses; Source: Lipper. FTSE All Share index in GBP at close of business; Revenue (gross of tax) reinvested and gross of expenses; Source: State Street. The Anticipated Tracking Error calculated using the performance of the Fund against the closing position of the Benchmark Index will be in the region of 0.0-0.5%. Factors likely to affect the ability of the Fund in meeting this objective are transaction costs, small illiquid components, dividend reinvestment, rebalancing, Fund expenses, significant inflows/outflows and the cash management thereof. The realised tracking error for the six month period to 30 June 2016 was 0.05. The Realised Tracking Error measures how consistently the Fund follows its benchmark and is defined as being the volatility of differences in returns between the Fund and its benchmark over a 3 year period to 30 June 2016. Past performance is not a guide to future results. The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested.
Market review Despite Brexit-induced volatility towards the end of the six months, wider UK equity markets were up in sterling terms over the reporting period. At the sector level, basic materials and oil & gas were the strongest performers. In May, crude oil prices reached $50 per barrel for the first time since November. By contrast, financials and consumer services lost ground. In the run-up to June, all eyes were on the UK referendum to decide whether the country should remain a member of the European Union (EU). This led to some big share price movements as opinion polls swung between the Leave and Remain camps. The market rose strongly in the days before the vote, as a consensus emerged among financial analysts, bookmakers and political pundits that the country would elect to remain a member of the EU. However, they were proved wrong. The backlash after the Leave result was swift: global stockmarkets sold off; sterling fell to a 30-year low against the US dollar; and David Cameron announced that he would step down as prime minister. Bank of England Governor Mark Carney issued an immediate statement, which provided some comfort, reminding investors of the robustness of the financial system and the central bank s ability to keep markets functioning. In the following days, Mr Carney also announced that the Bank is likely to cut rates during the summer to mitigate the effects of the post-brexit slowdown. This boosted investors confidence, and helped the main index of UK shares finish the month up by more than 4%. The fall in the value of the pound also helped to lift the market. Many of the biggest companies that are listed in London derive large portions of their profits from overseas. As sterling declines, this increases the value of these revenues in other currencies, which investors anticipate will enhance these companies profits when they report results. Portfolio review In terms of activity, the Fund continued to track the FTSE All-Share index. We therefore periodically rebalanced its holdings in accordance with the changes made by index provider FTSE at its quarterly reviews. Among the top performers in the index over the period were Hochschild Mining, Acacia Mining, Anglo American, Fresnillo and Lonmin. In contrast, the biggest fallers included Sepura, Circassia Pharmaceuticals, Brammer, St Ives and Cambian. Outlook While the substantial fall in the value of sterling relative to other currencies might boost exports, we do not expect this to be sufficient to offset a fall in the rate of growth of the UK economy, as measured by gross domestic product. Investment markets and conditions can change rapidly and as such the views expressed should not be taken as statements of fact nor should reliance be placed on these views when making investment decisions. 2 Aberdeen Foundation Growth Fund
Portfolio breakdown Portfolio of investments As at 30/06/16 % As at 31/12/15 % United Kingdom 86.96 89.59 Jersey, C.I. 6.09 5.02 Ireland 3.41 2.54 Australia 0.94 - Guernsey, C.I. 0.79 0.83 Spain 0.30 0.54 Bermuda 0.25 0.26 Isle Of Man 0.20 0.11 Germany 0.19 0.27 Switzerland 0.14 0.14 Luxembourg 0.11 0.12 Cayman Islands 0.09 0.10 Chile 0.08 - Canada 0.03 0.03 India 0.02 - Singapore 0.01 0.01 Virgin Islands, British 0.01 0.01 Gibraltar - 0.05 Derivatives 0.12 0.06 Investment assets 99.74 99.68 Net other assets 0.26 0.32 Net assets 100.00 100.00 aberdeen-asset.co.uk 3
Fund facts Interim/annual accounting dates Income payment dates 30 June and 31 December 31 August and 28 February Ongoing charges figure % as at 30/06/16 Ongoing charges figure % as at 31/12/15 A Accumulation 0.74 1.12 B Accumulation 0.10 0.10 B Income 0.10 0.10 C Accumulation 0.28 0.28 K Accumulation 1.50 1.50 L Accumulation 0.23 0.22 The ongoing charges figure (OCF) is the total expenses paid by each share class in the period, annualised, against its average net asset value. This includes the annual management charge, the other operating expenses and any synthetic element to incorporate the ongoing charges of any underlying collective investments. The OCF can fluctuate as underlying costs change. Where underlying costs have changed, the OCF disclosed in the Key Investor Information Document will be updated to reflect current changes. The ACD fee rate changed on 1st April 2016 from 1% to 0.15% on share class A Accumulation. Distribution summary Total distribution (p) for the period to 30/06/16 Total distribution (p) for the period to 30/06/15 A Accumulation 0.7559 0.5984 B Accumulation 3.0209 2.8002 B Income 2.6335 2.5293 C Accumulation 2.8598 2.6423 K Accumulation 2.5418 2.2204 L Accumulation 2.6316 2.4317 Prior period distributions in respect of the Fund come with a tax credit of 1/9th of the amount stated. UK higher and additional rate taxpayers not holding through an ISA may have additional income tax to pay. Non taxpayers are not entitled to a refund of the 1/9th tax credit. Distributions received by corporate investors are subject to the corporate streaming rules. 4 Aberdeen Foundation Growth Fund
Performance summary Net asset value as at 30/06/16 pence per share Net asset value as at 31/12/15 pence per share Net asset value % change A Accumulation 41.98 40.37 3.99 B Accumulation 145.43 139.45 4.29 B Income 124.14 121.56 2.12 C Accumulation 143.42 137.66 4.18 K Accumulation 178.44 172.31 3.56 L Accumulation 130.46 125.18 4.22 Net of tax and expenses. aberdeen-asset.co.uk 5
Risk profile Synthetic risk and reward indicator: The Risk and Reward Indicator table demonstrates where the Fund ranks in terms of its potential risk and reward. The higher the rank the greater the potential reward but the greater the risk of losing money. It is based on past data, may change over time and may not be a reliable indication of the future risk profile of the Fund. The highlighted area in the table below shows the Funds ranking on the Risk and Reward Indicator. The synthetic risk and reward indicator shown here is accurate as at 30 June 2016 and there has been no change to this ranking during the period. Typically lower rewards, lower risk Typically higher rewards, higher risk 1 2 3 4 5 6 7 The Fund is ranked at 5 because the value of the underlying investments are subject to price fluctuations. The lowest category 1 does not mean a risk-free investment. The risk indicator was calculated using simulated historical data. Investing in this fund also carries the following risks: Derivatives Risk: Derivatives may be used for efficient portfolio management only. At times, though the use of these instruments could lead to considerable short term fluctuations in price. The impact to the Fund is greater where derivatives are used in an extensive or complex way. Further details of the risks relating to investment in this Fund can be found in the Prospectus, which is available on request or at our website aberdeen-asset.com The latest risk and reward profile can be found on the Key Investor Information Document (KIID) for this Fund which is available on our website at aberdeen-asset.co.uk 6 Aberdeen Foundation Growth Fund
Important information The value of investments, and the income from them, can go down as well as up and you may get back less than the amount invested. Past performance is not a guide to future results. A full list of risks applicable to this Fund can be found in the Prospectus. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. You should obtain specific professional advice before making any investment decision. Prior to the end of the reporting period, the UK voted on 23 June 2016 to leave the European Union in a referendum. This result may have caused the net asset value of the Fund to move up or down, and it may continue to fluctuate on a daily basis. Consumers rights and protections, including any derived from EU legislation, are unaffected by the result of the referendum and will remain unchanged unless and until the UK Government changes the applicable legislation. Significant Events The following change was made to the Fund and was duly reflected in the Prospectus of Aberdeen Investment Funds UK ICVC II: On 1 April 2016 the AMC for Aberdeen Foundation Growth Fund class A was reduced to 0.15%. Further information about the above change can be found in the Prospectus, which is available on our website or by contacting Customer Services. aberdeen-asset.co.uk 7
What if I have a complaint? If you need to complain about any aspect of our service, you should write to the Complaints Team, Aberdeen Fund Managers Limited, 10 Queen s Terrace, Aberdeen, AB10 1YG, who will initiate our formal complaints procedure. If you prefer, you may call the Complaints Team on 01224 404490 or email complaints@aberdeen-asset.com in the first instance. A leaflet detailing our complaints procedure is available on request. If the complaint is not resolved by us to your satisfaction then you may take your complaint to the Financial Ombudsman Service. In order to contact the Financial Ombudsman Service or obtain details of the compensation scheme you should write to The Financial Ombudsman Service, Exchange Tower, London, E14 9SR or telephone 0300 1239 123 or 0800 023 4567. Literature and Fund information Our website contains a wealth of information on our funds and investment approach, including the Prospectus, Supplementary Information Document and Application forms for the Aberdeen Investment Funds UK ICVC II. You can invest online and access fund performance and pricing information. Please visit: aberdeen-asset.co.uk Alternatively please contact our Customer Services Team on: Tel: 0345 300 2890 Email: customer.services@aberdeen-asset.com Report and accounts Long reports are available on our website or by contacting Customer Services. Aberdeen Foundation Growth Fund is a sub-fund of Aberdeen Investment Funds UK ICVC II. 8 Aberdeen Foundation Growth Fund
Appointments Authorised Corporate Director Aberdeen Fund Managers Limited Registered Office and Head Office Bow Bells House 1 Bread Street London EC4M 9HH Correspondence Address: PO Box 9029 Chelmsford CM99 2WJ Investment Adviser Aberdeen Asset Managers Limited Registered Office: 10 Queen s Terrace Aberdeen AB10 1YG Correspondence Address: Bow Bells House 1 Bread Street London EC4M 9HH Auditors KPMG LLP 191 West George Street Glasgow G2 2LJ Legal Advisers CMS Cameron McKenna Saltire Court 20 Castle Terrace Edinburgh EH1 2EN Depositary State Street Trustees Limited Registered Office 20 Churchill Place Canary Wharf London E14 5HJ Correspondence Address: 525 Ferry Road Edinburgh EH5 2AW Registrar International Financial Data Services (UK) Limited IFDS House St. Nicholas Lane Basildon Essex SS15 5FS (the register of shareholders can be inspected at this address) Contact us Phone (Lines are open 9:00am to 5:00pm, Mondays to Fridays, excluding bank holidays) Dealing 0800 833 580 Customer Services 0345 300 2890 Broker Desk 0800 592 487 Post All enquiries Aberdeen Fund Managers Limited, PO Box 9029, Chelmsford, CM99 2WJ For more information on Aberdeen Asset Management PLC and our product range please visit aberdeen-asset.com aberdeen-asset.co.uk 9
The Fund is a sub-fund of Aberdeen Investment Funds UK ICVC II, an authorised open-ended investment company (OEIC). The Authorised Corporate Director is Aberdeen Fund Managers Limited. Nothing herein constitutes investment, legal, tax or other advice and is not to be relied upon in making an investment or other decision. No recommendation is made, positive or otherwise, regarding individual securities mentioned. This is not an invitation to subscribe for shares in the Fund and is by way of information only. Subscriptions will only be received and shares issued on the basis of the current Prospectus, relevant Key Investor Information Document (KIID) and Supplementary Information Document (SID) for the Fund. These can be obtained from Aberdeen Fund Managers Limited, Freepost RLTZ-CKGZ-ESTA, PO Box 9029, Chelmsford, CM99 2WJ. Issued by Aberdeen Fund Managers Limited. Authorised and regulated by the Financial Conduct Authority in the United Kingdom. 121024536