Aberdeen Asia Pacific Equity Enhanced Index Fund Interim short report for the period ended 30 June 2016 Investment objective and policy The Fund aims to achieve long-term capital growth by investing in equity and equity-related securities of companies in the Asia Pacific region (excluding Japan). The investment policy of the Fund is to invest primarily in equities and equity-related securities of companies that are constituents of the MSCI AC Asia Pacific ex Japan Index. The Fund will use a variety of quantitative techniques and adopt a disciplined approach to stock selection whilst seeking to maintain a level of risk similar to that of the MSCI AC Asia Pacific ex Japan Index. Equity-related securities include but are not limited to depository receipts, convertible securities, equity linked notes (debt securities linked to the performance of an equity security) warrants, and bonds convertible into common or preferred shares. The Fund may also invest in other transferable securities, money market instruments, cash, near cash, deposits, shares in collective investment schemes (including other funds managed by the Investment Adviser or its affiliates) and derivatives. It is not currently intended that derivatives will be used for any purpose other than the efficient portfolio management of the Fund, although derivatives may, subject to the ACD obtaining and maintaining the requisite permissions from the FCA under the Financial Services and Markets Act 2000 and on giving not less than 60 days notice to shareholders in the Fund, use derivatives in pursuit of its investment objective as well as hedging in the future. If derivatives are used for the purpose of meeting the investment objective of the Fund as well as hedging it is not intended that the use of derivatives would raise the risk profile. Market review As a group, equity markets in the Asia Pacific (ex Japan) region were slightly up in local currency terms over the period from the Fund s launch to 30 June 2016. At the country level, the best performers included the Philippines and India. In contrast, Malaysia and Singapore lagged behind. India s ruling party scored a comprehensive election victory, extending its political influence beyond its traditional strongholds to the north-eastern state of Assam. Elsewhere, equities in China and Hong Kong succumbed in May to concerns over faltering domestic growth and a possible increase to US interest rates. In political news, relations between China and Taiwan appear increasingly frosty. In the latest sign of growing friction, the mainland suspended communications with Taiwan after the island s new leadership failed to acknowledge the idea of a single Chinese nation. Retail sales slumped further in Hong Kong, while on the mainland, the divide between manufacturing and services persisted with weak external demand hurting factory output, but resilient domestic consumption supporting services growth. 121024534_IR_SF_AP.indd 1 11/08/2016 10:14
Portfolio review At asset level, the Fund benefited from its position in Australian gold miner Newcrest Mining. The stock rose in line with the gold price, as investors sought safe haven investments in the face of market volatility. Newcrest Mining scored highly according to our measures of analyst sentiment. On the downside, the overweight position (in comparison to the benchmark) in Australian airline Quantas had a negative influence on performance. The share price suffered declines after Quantas said it would make fewer seats available on domestic routes due to falling demand. The stock registered a positive score according to our measures of prudent management. Outlook Our central view is that that the Chinese government is likely to continue to successfully stimulate its economy, something that will also provide a boost to China s trading partners, including Japan, South Korea and Australia. 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 Asia Pacific Equity Enhanced Index Fund 121024534_IR_SF_AP.indd 2 11/08/2016 10:14
Portfolio breakdown As at 30/06/16 Portfolio of investments % Australia 18.72 South Korea 13.86 Taiwan 11.30 China 11.11 Cayman Islands 10.28 Hong Kong 9.09 India 7.05 Singapore 4.16 Malaysia 2.94 Indonesia 2.46 Thailand 2.18 Bermuda 2.01 Ireland 1.96 Philippines 1.53 New Zealand 0.51 Derivatives 0.20 Investment assets 99.36 Net other assets 0.64 Net assets 100.00 Fund facts Interim/annual Income accounting dates payment dates 30 June and 31 December 31 August and 28 February Ongoing charges figure % as at 30/06/16 B Accumulation 0.25 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. aberdeen-asset.co.uk 3 121024534_IR_SF_AP.indd 3 11/08/2016 10:14
Distribution summary Total distribution (p) for the period to 30/06/16 B Accumulation 1.1596 Performance summary Net asset value as at 30/06/16 pence per share B Accumulation 108.11 Net of tax and expenses. Share class B Accumulation was launched 22 March 2016. 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 6 because funds of this type have experienced high rises and falls in value in the past. Please note that even the lowest risk class can lose you money and that extreme market circumstances can mean you suffer severe losses in all cases. The indicator does not take into account the following risk of investing in this Fund: Exchange Rates: Investing globally can bring additional returns and diversify risk. However, currency exchange rate fluctuations may have a positive or negative impact on the value of your investment. A full list of risks applicable to this Fund can be found in the Prospectus. Emerging Markets: Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. This may mean your money is at greater risk. Derivative Risk: Derivatives may currently 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. 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 4 Aberdeen Asia Pacific Equity Enhanced Index Fund 121024534_IR_SF_AP.indd 4 11/08/2016 10:14
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 22 March 2016 Aberdeen Asia pacific Equity Enhanced Index Fund was launched. 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 5 121024534_IR_SF_AP.indd 5 11/08/2016 10:14
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 Asia Pacific Equity Enhanced Index Fund is a sub-fund of Aberdeen Investment Funds UK ICVC II. 6 Aberdeen Asia Pacific Equity Enhanced Index Fund 121024534_IR_SF_AP.indd 6 11/08/2016 10:14
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 7 121024534_IR_SF_AP.indd 7 11/08/2016 10:14
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. 121024534 121024534_IR_SF_AP.indd 8 11/08/2016 10:14