Threadneedle UK Mid 250 Fund

Interim Short Report 31 October 2017 Fund Managers Report James Thorne Philip Macartney Performance of Class 1 Accumulation shares* Over the six months to 31 October 2017, the published share price of Class 1 Accumulation shares in the Threadneedle UK Mid 250 Fund has risen from 252.41p to 275.33p. For comparison, using noon prices, the performance of the Class 1 share class was +9.08% and +9.40% for the Class 2 share class compared to a return of +5.54% for the Morningstar UK Unit Trusts/OEICs (IA) UK All Companies Peer Group (on a bid to bid basis, with income reinvested for a UK basic rate taxpayer). For information purposes, using global close prices, the total return of the FTSE Mid 250 (ex Investment Trusts) Index was +4.66%. Market Overview and Portfolio Activity It was a positive period for UK mid-cap stocks, despite jitters over Brexit and the UK s domestic political and economic prospects. The performance of UK mid-caps was largely driven by generally consensusbeating earnings updates from companies in this area of the market. Another factor fuelling interest in these stocks was the increase in mergers and acquisitions activity. In May, the FTSE 250 index closed above 20,000 for the first time, and it went on to reach 20,227 at the end of the reporting period. The start of the period was characterised by greater political uncertainty following the prime minister s unexpected decision in April to call a snap general election on 8 June. In the event, the strong and stable government that Theresa May had hoped to put in place did not materialise as the Conservatives lost their overall majority in parliament. The surprise election result triggered a short-lived sell-off by the market on fears that political instability could have an adverse impact on the UK s Brexit negotiations with the EU. However, the market made a swift recovery, with the FTSE 250 recording solid gains of 4.7% over the reporting period. Nevertheless, the index lagged the broader FTSE All- Share, which gained 5.9% over the six months under review. The review period was also marked by continued speculation over when the Bank of England (BoE) would begin to raise official UK interest rates. Fuelled by the fall in sterling since the Brexit vote, there has been a pick-up in the annual rate of consumer price inflation, with September s figure of 3.0% the highest since April 2012, and well above the BoE s 2.0% target. Higher inflation and sluggish pay growth has been negative for real wages and a hindrance to retail sales. However, sterling s decline Ongoing Charges Figure has benefited the UK manufacturing sector, which has seen solid growth in output and new orders. New additions to the portfolio included Coats Group, a global leader in supplying threads to manufacturers of shoes and clothes. We are positive on the company s expansion into technical fibres, a segment with high margins and high barriers to entry. Other purchases included Cobham, DS Smith, Restaurant Group, Breedon and Spectris. We feel that defence system manufacturer Cobham has a resilient underlying business, offering multiple opportunities for value creation. DS Smith has acquired US business Interstate Resources, which provides access to the US market at a sensible price. For other purchases, we are positive on Restaurant Group s management and turnaround strategy; infrastructure firm Breedon is run by a proven team; and Spectris (a global leader in test and measurement equipment) is undertaking an efficiency drive that should boost shareholder returns. Another new position was consulting firm First Derivatives. Among the stocks sold were WS Atkins and Market Tech, following takeover bids for these companies. In addition, we profitably sold out of Rentokil and Victrex. We also closed our position in Paddy Power and used the proceeds to top up GVC; we felt the latter offered stronger prospects for sustainable returns. Other sales included Saga and Amec Foster Wheeler. The latter was acquired by John Wood Group in which we retain a position. The indicators on the UK economy are mixed and growth is slowing as the UK consumer reduces spending due to the headwind of inflation. Inflation has not slowed as quickly as we would have expected but we still expect it to decline as we move into 2018. Employment remains at historically high levels and the vacancy rate is still high; this should lead to higher wage inflation in 2018 and stop a continued decline in consumer spending next year. The weaker pound does seem to have some benefits for the corporate outlook, with businesses benefiting from their improved competitive positions, but the gains are not as strong as we might have hoped. However, PMI readings indicate demand could be strong in Q4. While the mid-cap index is perceived to be largely domestic-oriented, many firms are seeing growth opportunities overseas and therefore the UK economy is not the sole driver of the index. We would also note that the fund is positioned with less exposure than the index to UK domestics. UK mid-caps continue to look attractively valued compared to the wider market, albeit that the differential has narrowed since the start of the year. We still see investment opportunities in stocks where the market is not recognising the intrinsic value of the business. Fund Facts Fund Accounting and Distribution Dates Accounting Dates Payment Dates 30 April 30 June The Ongoing Charges Figure (OCF) is the European standard method of disclosing the charges of a share class of a fund based on the financial year s expenses and may vary from year to year. It includes charges such as the fund s annual management charge, registration fee, custody fees and distribution cost but ordinarily excludes the costs of buying or selling assets for the fund (unless these assets are shares of another fund). Where published, the Key Investor Information Document (KIID) contains the current OCF. For a more detailed breakdown please visit columbiathreadneedle.com/fees. Share class 31 October 2017 30 April 2017 Class 1 Accumulation shares 1.64% 1.65% Class 2 Accumulation shares 1.07% 1.08% Class X Accumulation shares 0.02% 0.03% Class Z Accumulation shares 0.89% 0.90% The Ongoing Charges Figure is annualised based on the fees incurred during the accounting period or since commencement date. *In pound Sterling and against UK peer group.

Summary of Fund Performance Performance History (%) Share class 2017 1 2016 2015 2014 2013 2012 Class 1 Accumulation shares +23.66-3.64 +19.11 +2.98 +29.72 +26.89 Class 2 Accumulation shares +24.26-3.08 +19.79 +3.57 +30.47 +27.61 Class X Accumulation shares 2 +25.35-2.10 +0.62 Class Z Accumulation shares 3 +24.44-2.91 +20.00 +3.75 +30.69 +1.59 1 To 31 October 2017. 2 Commenced 2 December 2015. 3 Commenced 7 September 2012. Source: Morningstar and Threadneedle. Bid to bid prices are quoted (i.e. not including any initial charge) with net income reinvested for a UK basic rate tax payer and gross income reinvested for a non-uk resident. Performance data is quoted in sterling apart from hedged share classes, where applicable, which are in the hedged currency. Past performance is not a guide to future investment performance. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Net Asset Value (NAV) NAV pence per share Number of shares in issue As at Share class NAV ( ) 31 October 2017 Class 1 Accumulation shares 18,416,679 275.00 6,696,876 30 April 2017 Class 1 Accumulation shares 14,958,849 252.12 5,933,290 30 April 2016 Class 1 Accumulation shares 17,692,545 215.87 8,196,031 30 April 2015 Class 1 Accumulation shares 23,969,336 213.97 11,202,200 31 October 2017 Class 2 Accumulation shares 32,786,907 298.31 10,990,910 30 April 2017 Class 2 Accumulation shares 41,426,604 272.68 15,192,158 30 April 2016 Class 2 Accumulation shares 27,385,932 232.13 11,797,761 30 April 2015 Class 2 Accumulation shares 53,860,319 228.77 23,543,378 31 October 2017 Class X Accumulation shares 3,700 123.33 3,000 30 April 2017 Class X Accumulation shares 3,365 112.16 3,000 30 April 2016 Class X Accumulation shares 2,835 94.50 3,000 31 October 2017 Class Z Accumulation shares 58,692,368 206.82 28,378,362 30 April 2017 Class Z Accumulation shares 59,893,131 188.90 31,707,053 30 April 2016 Class Z Accumulation shares 59,578,103 160.53 37,114,309 30 April 2015 Class Z Accumulation shares 26,537,003 157.92 16,803,968 Distribution History/Share Price Range Pence per share Highest share price (pence) Lowest share price (pence) Year to Share class 31 October 2017 Class 1 Accumulation shares 275.33 250.98 30 April 2017 Class 1 Accumulation shares 1.5378 252.41 189.90 30 April 2016 Class 1 Accumulation shares 1.5984 231.84 204.01 30 April 2015 Class 1 Accumulation shares 1.6377 217.75 170.75 31 October 2017 Class 2 Accumulation shares 298.65 271.77 30 April 2017 Class 2 Accumulation shares 3.0352 272.98 204.41 30 April 2016 Class 2 Accumulation shares 3.0819 248.72 219.11 30 April 2015 Class 2 Accumulation shares 2.9242 232.75 181.99 31 October 2017 Class X Accumulation shares 123.48 111.96 30 April 2017 Class X Accumulation shares 2.2503 112.27 83.37 30 April 2016 Class X Accumulation shares¹ 1.0336 100.90 89.01 31 October 2017 Class Z Accumulation shares 207.07 188.33 30 April 2017 Class Z Accumulation shares 2.3913 189.10 141.41 30 April 2016 Class Z Accumulation shares 2.4171 171.88 151.46 30 April 2015 Class Z Accumulation shares 2.2640 160.66 125.51 1 Commenced 2 December 2015. Past performance is not a guide to future performance.

Classification of Investments 31 October 2017 vs 30 April 2017 35% 30% Threadneedle UK Mid 250 Fund 31 October 2017 30 April 2017 25% 20% 15% 10% 5% 0% Industrials Consumer Services Financials Technology Health Care Oil & Gas Consumer Goods Basic Materials Net other assets Portfolio Information Top Five Holdings as at 31 October 2017 % of Fund Ascential 4.75 John Wood Group 4.62 Just Group 4.59 Coats Group 4.45 GVC Holdings 4.24 Top Five Holdings as at 30 April 2017 % of Fund Ascential 5.02 Micro Focus International 4.97 Paysafe Group 3.67 BTG 3.53 JRP Group 3.37

Investment Objective and Policy The investment objective of the UK Mid 250 Fund is to achieve capital growth from a portfolio of UK mid cap equities. The ACD s investment policy is to invest the assets of the Fund primarily in a selection of medium sized companies which are constituents of the FTSE 250 (ex Investment Trusts) Index. If the ACD considers it desirable, it may also invest in companies which are not included in that index, and may hold cash and/or money market instruments. Key Investor Information Document (KIID) Subscription requirements The KIID is a pre-contractual document and investors have to confirm that they have read the latest KIID before making a subscription. Threadneedle has the right to reject a subscription if the investor does not confirm that they have read the latest KIID at the time of application. Investors can obtain the latest KIID from columbiathreadneedle.com. Changes to the management of the ACD The following changes have been made to the directors of the ACD: Appointment of Michelle Scrimgeour on 14 August 2017. Changes to the Prospectus The main changes to the prospectus of the Threadneedle Specialist Investment Funds ICVC (the Company) during the period from 1 May 2017 to 31 October 2017 were as follows: Updates to include disclosures required as a result of implementation of the Securities Financing Transaction Regulation (SFTR) in relation to Funds investing in total return swaps; Updates to reflect changes being made to UK tax on distributions (gross vs net shares, as well as tax changes more generally); Updates to the list of funds managed by the ACD and the directors of the ACD; Addition of W Shares available to investors in the Global Equity Income Fund; Update to list of countries where the funds are available; Updates to performance, dilution adjustments and available share classes. Changes to the Instrument of Incorporation There were no changes to the instrument of incorporation of the Company during the period from 1 May 2017 to 31 October 2017. Key Risks Investment Risk: The value of investments can fall as well as rise and investors might not get back the sum originally invested. Currency Risk: Where investments are in assets that are denominated in multiple currencies, or currencies other than your own, changes in exchange rates may affect the value of the investments. Derivatives for EPM/Hedging Risk: The investment policy of the fund allows it to invest in derivatives for the purposes of reducing risk or minimising the cost of transactions. High Volatility Risk: The fund typically carries a risk of high volatility due to its portfolio composition or the portfolio management techniques used. This means that the fund s value is likely to fall and rise more frequently and this could be more pronounced than with other funds. Further risks applicable to the fund can be found in the Prospectus. Risk and Reward Profile As at 31 October 2017 the figure for the risk and reward profile disclosed in the most recent KIID representing this fund is 5. The fund is in this specific category because historically it has shown a medium to high level of volatility (how much the value of the fund went up and down compared to other categories). It is based on past performance data in pound sterling. If your investment in the fund is not in pound sterling, please check the figure for the risk and reward profile disclosed on our website (columbiathreadneedle.com) according to the currency of your investment in the fund.

General Information The information in this report is designed to enable shareholders to make an informed judgement on the activities of the fund during the period it covers and the results of those activities at the end of the period. For further information, please contact Threadneedle Investment Services Limited. The Long Form Report and Financial Statements is available free of charge on request from the ACD and on our website. For more information about the activities and performance of the Company during the period and previous periods, please contact the ACD at the administration address noted below, or visit our website at columbiathreadneedle.com. Contacts: Registered Office Cannon Place 78 Cannon Street London EC4N 6AG Authorised Corporate Director (ACD) Threadneedle Investment Services Limited Cannon Place 78 Cannon Street London EC4N 6AG Registrar Threadneedle Investment Services Limited Delegated to: DST Financial Services Europe Limited* (Authorised and regulated by the Financial Conduct Authority (FCA)) St Nicholas Lane Basildon Essex SS15 5FS Investment Manager Threadneedle Asset Management Limited Cannon Place 78 Cannon Street London EC4N 6AG Depositary Citibank Europe plc, UK branch (Authorised by the Prudential Regulatory Authority (PRA) and regulated by the FCA and PRA) Citigroup Centre 33 Canada Square Canary Wharf London E14 5LB Legal Advisers Eversheds Sutherland (International) LLP One Wood Street London EC2V 7WS Baum Financial Services Law Team Grosser Burstah 42 20457 Hamburg Germany Independent Auditor PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh EH3 8EX Authorised Corporate Director Client Services Details UK Investors Address: Threadneedle Investment Services Limited PO Box 10033 Chelmsford Essex CM99 2AL Telephone (dealing & customer enquiries): 0800 953 0134** Fax (dealing): 0845 113 0274 Email (enquiries): questions@service.columbiathreadneedle.co.uk Asian Investors Address: Threadneedle Investment Services Limited International Financial Data Services 47, avenue JF Kennedy L-1855 Luxembourg Telephone (dealing & customer enquiries): +852 3667 7111** Fax (dealing): +352 2452 9807 Email (enquiries): threadneedleenquiries@statestreet.com All Other Investors Address: Threadneedle Investment Services Limited International Financial Data Services 47, avenue JF Kennedy L-1855 Luxembourg Telephone (dealing & customer enquiries): +352 464 010 7020** Fax (dealing): +352 2452 9807 Email (enquiries): questions@service.columbiathreadneedle.co.uk Website: columbiathreadneedle.com Paying and Information Agent in Belgium CACEIS Belgium S.A. avenue du Port 86 C b 320 1000 Brussels Belgium Representative and Paying Agent in Switzerland BNP Paribas Securities Services, Paris, succursale de Zurich Selnaustrasse 16 8002 Zurich Switzerland *International Financial Data Services (UK) Limited changed its name to DST Financial Services Europe Limited on 15 August 2017. **Calls will be recorded.

To find out more visit columbiathreadneedle.com Threadneedle Investment Services Limited, ISA Manager, Authorised Corporate Director and Unit Trust Manager. Registered No. 3701768. Registered in England and Wales. Registered Office: Cannon Place, 78 Cannon Street, London EC4N 6AG. Authorised and regulated by the Financial Conduct Authority. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com ENUK 209882