GLOBAL EQUITY INCOME UNIT TRUST FOR THE PERIOD ENDING 30 SEPTEMBER 2016
Manager St. James's Place Unit Trust Group Limited PO Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: 0800 027 1031 (Authorised and regulated by the Financial Conduct Authority) Directors of the Manager D. C. Bellamy A. M. Croft I. S. Gascoigne D. J. Lamb Investment Adviser Manulife Asset Management (US) LLC 197 Clarendon Street, Boston, MA 02117 Boston, MA 02117 United States of America (Authorised and regulated by the Securities and Exchange Commission) Trustee BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London, EC4V 4LA United Kingdom (Authorised and regulated by the Financial Conduct Authority) Registrar International Financial Data Services (UK) Limited IFDS House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Conduct Authority) Independent Auditor PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh, EH3 8EX United Kingdom Prospectus and Manager's Reports Copies of the up to date Prospectus (Scheme Particulars) and latest Manager's Report and Financial Statements for the range of St. James's Place Unit Trusts can be requested from a member of the St. James's Place Partnership or, at any time during normal business hours, from the Administration Centre at PO Box 9034, Chelmsford CM99 2XA. Freephone: 0800 027 1031 1
Report of the Manager The Report of the Manager consists of The Trust, Investment Objectives & Policy, The Trust's Performance, Risk and Reward Profile, Investment Adviser's Comments and Portfolio Statement. The Trust St. James's Place Global Equity Income Unit Trust is an authorised Unit Trust scheme under section 243 of the Financial Services and Markets Act (2000) and is constituted by a Trust Deed dated 12 March 2012. The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective Investment Scheme Sourcebook and is classified as a UCITS Scheme. Investment Objectives & Policy The investment objective of the Scheme is to provide income, together with the potential for longterm capital appreciation, through investing primarily in global equities. The Scheme is also permitted to invest in other types of transferable securities, units and/or shares in collective investment schemes, money market instruments and deposits. The Scheme is permitted to invest in derivatives and forward transactions for the purposes of efficient portfolio management (including hedging). It is the Manager's intention that the assets of the Unit Trust will be invested so that the Unit Trust will be eligible for inclusion in an ISA. The Trust's Performance The performance of the Trust since its launch in April 2012 and over the period under review is shown below, together with figures for the most commonly quoted indices in comparable markets where the major proportion of the Trust has been invested. St. James's Place Global Equity Income Unit Trust Income units (offer to offer) Accumulation units (offer to offer) Indices - actual MSCI World (Total Return) Source: Lipper for Fund returns 10/04/12 to 31/03/16 to 30/09/16 30/09/16 % change % change +54.5 +11.2 +74.3 +13.3 +88.1 +17.6 REMEMBER THAT THE PRICE OF UNITS AND REVENUE FROM THEM MAY GO DOWN AS WELL AS UP. PLEASE BE AWARE THAT PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Risk and Reward Profile The synthetic risk and reward indicator for the St. James s Place Global Equity Income Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 5. It was calculated using performance data up to 1 February 2016. The risk category is recalculated weekly and during the period under review, the risk category did not change. 2
Report of the Manager (continued) Investment Adviser's Comments Global equity markets advanced over the period as low interest rates, coupled with monetary stimulus and signs of economic improvement, helped markets recover from volatile periods, including the immediate aftermath of the UK vote to exit the European Union. The US Federal Reserve Board left interest rates unchanged, and the Bank of Japan increased its monetary stimulus program and revamped its monetary policy. The price of oil stabilized and emerging markets stocks posted strong returns. The strategy underperformed the broader equity market as stock selection in the consumer discretionary and energy sectors detracted from performance. Individual detractors included Wells Fargo, SES and Macy s. Stock selection in the financials and consumer staples sectors contributed to the strategy s performance. Individual contributors included Arthur J. Gallagher, HSBC and Qualcomm. We believe equity markets are uncertain and volatile, with the global challenges of deflation risk, excess debt, slowing growth and political uncertainty potentially overwhelming the possibility of real global growth. We believe the Brexit vote in June introduced uncertainty about the future of the eurozone, which suggests that global monetary policies could remain accommodative for an extended time. As a result, real returns have been muted, while investors appetite for yield has been voracious. The European Central Bank delivered a stronger-than-expected package of quantitative easing to try to stimulate growth and inflation amid concerns about deflationary trends. In our view, this, coupled with uncertainty about the future of the eurozone, may contribute to a weaker euro. Japan's introduction of negative interest rates, presumably aimed at weakening the yen, has instead contributed to market volatility, as investors appear to be questioning whether central banks are running out of options. The Bank of Japan also adjusted its monetary policy to target Japan s yield curve. We remain wary of excess debt and continue to focus on companies with what we believe to be sustainable cash flow streams. Manulife Asset Management (US) LLC 14 October 2016 3
Comparative Table as at 30 September 2016 (unaudited) Net Asset Value and Ongoing Charges Figure 30/09/16 31/03/16 31/03/15 31/03/14 Income Closing net asset value ( 000) 212,435 178,274 142,300 83,892 Closing number of units 145,325,324 135,897,778 106,565,260 69,177,400 Closing net asset value per unit (p) 146.18 131.18 133.53 121.27 Operating charges** 1.69% 1.70% 1.65% 1.72% 30/09/16 31/03/16 31/03/15 31/03/14 Accumulation Closing net asset value ( 000) 1,771,297 1,413,095 1,092,361 672,985 Closing number of units 1,068,463,424 965,149,097 753,082,378 525,366,402 Closing net asset value per unit (p) 165.78 146.41 145.05 128.10 Operating charges** 1.69% 1.70% 1.65% 1.72% **Operating charges are prepared using the same methodology as the ongoing charges appearing in the KIID, based on the information in this report. 4
Portfolio Statement as at 30 September 2016 (unaudited) Security Holdings Market Value 000 % of Net Assets AUSTRALIA (2.90%) 53,879 2.72 Amcor 6,064,579 53,879 2.72 FRANCE (3.01%) 74,058 3.73 Sanofi 573,364 33,190 1.67 Total 1,128,994 40,868 2.06 GERMANY (0.26%) 37,874 1.91 Deutsche Boerse 622,075 37,874 1.91 HONG KONG (1.20%) 30,171 1.52 CK Hutchison 3,077,236 30,171 1.52 IRELAND (1.69%) - - JAPAN (6.06%) 151,268 7.63 Bridgestone 2,260,500 63,810 3.22 Canon 1,096,400 24,416 1.23 Japan Tobacco 2,007,700 63,042 3.18 LUXEMBOURG (4.49%) 64,310 3.24 Samsonite International 11,883,000 29,260 1.47 SES 1,872,396 35,050 1.77 NETHERLANDS (9.57%) 202,239 10.19 Heineken 603,257 40,308 2.03 Koninklijke Ahold Delhaize 3,383,009 58,230 2.93 Koninklijke Philips 3,303,556 73,805 3.72 Wolters Kluwer 917,461 29,896 1.51 SINGAPORE (1.06%) 20,561 1.04 ComfortDelGro 12,989,100 20,561 1.04 SWITZERLAND (8.70%) 240,389 12.12 Chubb 522,388 50,117 2.53 Nestle 1,041,973 63,272 3.19 Novartis 966,757 58,246 2.94 Roche 363,055 68,754 3.46 TAIWAN (0.00%) 31,357 1.58 Taiwan Semiconductor Manufacturing ADR 1,337,160 31,357 1.58 UNITED KINGDOM (10.15%) 184,196 9.29 British American Tobacco 1,242,319 61,389 3.09 HSBC 10,308,722 58,842 2.97 Pearson 2,472,575 18,421 0.93 St. James's Place Money Market Unit Trust L Acc 43,600,542 45,544 2.30 5
Portfolio Statement (continued) as at 30 September 2016 (unaudited) Security Holdings Market Value 000 % of Net Assets UNITED STATES (48.59%) 882,651 44.49 Apple 913,321 79,027 3.98 Arthur J Gallagher 1,282,764 49,803 2.51 Exxon Mobil 466,140 31,089 1.57 Honeywell International 557,662 49,978 2.52 Huntington Bancshares 6,728,713 50,400 2.54 Johnson & Johnson 694,955 62,872 3.17 Macy's 929,775 25,849 1.30 Microsoft 1,791,928 79,330 4.00 Mondelez International 1,196,247 39,809 2.01 Philip Morris International 511,655 38,581 1.94 PNC Financial Services 1,051,063 72,160 3.64 Procter & Gamble 944,308 64,270 3.24 Ralph Lauren 317,068 24,375 1.23 United Technologies 677,954 52,841 2.66 Verizon Communications 1,351,352 54,331 2.74 Wells Fargo 2,169,303 74,249 3.74 Whirlpool 272,377 33,687 1.70 Investment Assets 1,972,953 99.46 Total other assets (net) 10,779 0.54 Net assets 1,983,732 100.00 Comparative figures shown in brackets relate to 31 March 2016. All investments held are listed, unless otherwise stated. Stocks shown as ADRs represent American Depositary Receipts. During the period under review the Manager decided to place some of the sterling cash held on deposit into the St. James s Place Money Market Unit Trust in order to spread risk across a number of institutions. The St. James s Place Money Market Unit Trust is highly liquid and is rated AAA by Standard & Poors. This investment is a related party. 6
Material Portfolio Changes Cost Purchases 000 St. James's Place Money Market Unit Trust L Acc 190,693 Chubb 46,443 Taiwan Semiconductor Manufacturing ADR 29,642 Deutsche Boerse 29,313 Apple 26,653 Japan Tobacco 25,284 Koninklijke Philips 23,639 Huntington Bancshares 21,267 Wells Fargo 20,703 Mondelez International 19,798 Proceeds Sales 000 St. James's Place Money Market Unit Trust L Acc 179,247 Baxter International 34,558 QUALCOMM 30,100 Eaton 26,317 Arthur J Gallagher 25,307 JPMorgan Chase 21,699 Philip Morris International 17,650 Akzo Nobel 16,625 Johnson & Johnson 13,123 Kohl's 11,404 This investment is a related party. 7
Statement of Total Return for the period 01 April 2016 to 30 September 2016 (unaudited) Income Net capital gains/(losses) Revenue Expenses Interest payable and similar charges Net revenue before taxation Taxation Net revenue after taxation Total return before distributions Distributions Change in net assets attributable to unitholders from investment activities 01/04/16 to 30/09/16 01/04/15 to 30/09/15 000 000 000 000 208,727 (151,246) 31,565 19,239 (15,111) (10,769) (4) (2) 16,450 8,468 (2,588) (1,741) 13,862 6,727 222,589 (144,519) (28,980) (16,934) 193,609 (161,453) Statement of Change in Net Assets Attributable to Unitholders for the period 01 April 2016 to 30 September 2016 (unaudited) 01/04/16 to 30/09/16 01/04/15 to 30/09/15 000 000 000 000 Opening net assets attributable to unitholders 1,591,369 1,234,661 Movement due to creation and cancellation of units: Amounts receivable on creation of units* 345,009 299,497 Amounts payable on cancellation of units* (172,677) (141,621) Change in net assets attributable to unitholders from investment activities (see above) Retained distribution on accumulation units Closing net assets attributable to unitholders 172,332 157,876 193,609 (161,453) 26,422 15,650 1,983,732 1,246,734 Comparative information is provided for the Statement of Change in Net Assets Attributable to Unitholders. Since this information is for the prior interim period, the net assets at the end of that period do not correspond to the net assets at the start of the current period. *Prior year figures in relation to Dilution Levy have been reclassified and included within creations and cancellation of units as this was income and expenses arising from creations and cancellations respectively. 8
Balance Sheet as at 30 September 2016 (unaudited) Assets Investments Current assets Debtors Cash and bank balances Total assets Liabilities Creditors Bank overdrafts Distribution payable Other creditors Total liabilities Net assets attributable to unitholders 30/09/2016 31/03/2016 000 000 1,972,953 1,554,419 8,743 36,704 15,264 12,230 1,996,960 1,603,353 (709) - (3,246) (2,256) (9,273) (9,728) (13,228) (11,984) 1,983,732 1,591,369 Accounting and Distribution policies for the period 01 April 2016 to 30 September 2016 (unaudited) Basis of accounting The Financial Statements have been prepared under the historical cost basis, as modified by the revaluation of investments, in compliance with the Financial Conduct Authority's Collective Investment Schemes Sourcebook. They have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland FRS 102) and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the Investment Management Association May 2014 (IMA SORP 2014). The changes in the SORP 2014 are presentational only and there have been no changes to any figures detailed with the financial statements. The financial statements are prepared on the going concern basis. Directors of the Managers' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. A. M. Croft D. J. Lamb 25 November 2016 9
Distribution Tables Distributions in pence per unit Group 1 First interim Units purchased prior to 1 April 2016 Second interim Units purchased prior to 1 July 2016 Group 2 First interim Units purchased on or after 1 April 2016 to 30 June 2016 Second interim Units purchased on or after 1 July 2016 to 30 September 2016 Income Net revenue Equalisation Distributions paid to/ payable 31/01/17 Distributions paid to 31/01/16 Group 1 (p) (p) (p) (p) First interim 1.513-1.513 1.060 Second interim 0.764-0.764 0.673 Group 2 (p) (p) (p) (p) First interim 0.706 0.807 1.513 1.060 Second interim 0.433 0.331 0.764 0.673 Accumulation Net revenue Equalisation Distributions paid to/ payable 31/01/17 Distributions paid to 31/01/16 Group 1 (p) (p) (p) (p) First interim 1.689-1.689 1.179 Second interim 0.862-0.862 0.738 Group 2 (p) (p) (p) (p) First interim 0.823 0.866 1.689 1.179 Second interim 0.505 0.357 0.862 0.738 10
General Information Unit Dealings Dealings on the Trust take place on a daily basis. Purchase or sale instructions can be made by telephone or in writing to St. James's Place Unit Trust Group Limited, PO Box 9034, Chelmsford, CM99 2XA, United Kingdom, freephone: 0800 027 1031. The Manager adopts a policy of forward pricing, i.e. the order will be transacted on the dealing day following receipt of the client's instructions, or if received before noon, on that dealing day. In the case of telephone purchases of units from the Manager, settlement must be by return of post after receipt of the contract note. In the case of telephone redemptions, the proceeds will not become payable until the receipt at the Administration Centre of a written request. A contract note confirming the subscription or redemption price and the number of units involved will be forwarded, together with a cancellation notice, where appropriate, on the next business day. The most recent issue and redemption prices will be published on the Manager's website: www.sjp.co.uk and are available by calling the Administration Centre on 0800 027 1031. Minimum Investment The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment is 150 and the minimum monthly increment is 50. The minimum annual investment is 1,500 and the minimum annual increment is 500. Renaming of Unit Classes On 10 October 2016 the Manager denominated the existing unit class in the fund as Class L units. This change will have no impact on the way in which the fund is managed or how daily unit prices are calculated. H & Y Unit Classes On 10 October 2016 the Manager launched Class H and Class Y accumulation unit classes. Restrictions apply to all Class H and Class Y units, please see the Prospectus for details. Management Charges The Trust Deed permits the following management charges which are receivable by the Manager: (a) A Preliminary Charge of 5 per cent which is included in the offer price of the Units. (b) An Annual Management Charge at a rate of 1.36 per cent of the value of the Trust. Income Distributions Income distributions are made quarterly on or before the 31 January, 30 April, 31 July and 31 October. Accumulation Distributions Revenue due to accumulation unitholders is reflected in the price of their units. Tax Vouchers Income unitholders that receive income distributions by direct credit and accumulation unitholders (where the distribution income is reinvested) receive an annual consolidated tax voucher in May with all the relevant payment and tax information required to complete a tax return. Tax vouchers will be enclosed if income unitholders receive payment by cheque. Capital Gains Tax The Trust is not liable to tax on capital gains and any individual holding units will not be liable to capital gains tax unless the total chargeable gains for the tax year 2016/2017 exceed 11,100 (2015/2016 11,100). To calculate capital gains on accumulation units, the total amount of reinvested net revenue (shown on the annual tax credit vouchers) should be added to the base cost of the units purchased. Unitholders should consult their professional advisers for any advice regarding their tax position. 11
St. James s Place Unit Trust Group Ltd is authorised and regulated by the Financial Conduct Authority. St. James s Place Unit Trust Group Ltd Registered Office: St. James s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number 947644. Perivan Financial Print 243234 Global Equity Income (11/16)