MODERATE Interim Short Report
Fund Manager Paul Craig Investment objective and policy To achieve long term capital growth. The portfolio will be moderate in that it will be broadly diversified across asset classes, but with typically a maximum exposure of 75% to equities. The Fund will have exposure to securities of UK and overseas companies, fixed interest securities, cash, moneymarket instruments and deposits. The Fund will focus on index tracking (passive) investments. The Fund will seek this exposure by investing in a combination of collective investment schemes and exchange traded funds. The Fund may also invest in transferable securities (including fixed interest securities) and investment companies (including investment trusts). Strategic asset allocation targets are agreed between the ACD and the Investment Manager and reviewed regularly. The Fund s investments will be regularly rebalanced to these targets. Further details on the asset allocation targets are available from the ACD on request. Derivatives may be used for investment purposes and EPM purposes. Risk profile Where the Fund invests in assets (including cash) which are denominated in currencies other than the base currency (pounds sterling) then currency exchange rate movements may cause the value of investments to fall as well as rise. The Fund invests indirectly in bonds so there is a risk that interest rate fluctuations could affect the capital value of investments. Where long term interest rates rise, the capital value of shares is likely to fall, and vice versa. In addition to the interest rate risk, bond investments are also exposed to credit risk reflecting the ability of the borrower to meet its obligations. The Fund is able to invest in shares issued by investment trust companies, including split capital investment trusts. The level of risk depends on both the share class and prevailing market conditions. The Fund may invest in exchange traded funds (ETF), ETF represent a basket of securities that are traded on an exchange and, therefore, unlike collective investment schemes, they do not necessarily trade at the net asset value (NAV) of their underlying holdings. As a result, they may trade at a price that is above or below the value of the underlying portfolio. Risk warning Past performance is not a guide to future performance. The value of investments and the income from them may fall as well as rise and shareholders may not get back the amount originally invested. Investment report Performance In the period ended 30 April 2014 the Cirilium Moderate Passive Fund fell 0.4% while the IMA Mixed Investment 40-85% sector rose by 0.4%. By comparison, the MSCI World Index was up by 1.4% and UK government bonds were down 3.3%, as measured by the Citigroup World Government Bond Index UK All Maturities. Against a positive period end for financial markets, it is disappointing to report that the Fund succumbed to a small loss, net of fees, and that performance fell short of the sector average. This was largely the result of a higher weighting in Asia, Japan and emerging markets, which underperformed developed markets. In addition, the Fund s holding in UK Index-Linked Gilts provided little return over the period.
Outlook While equities do not appear hugely overpriced based on conventional benchmarks, they are certainly not as cheap as they were this time last year. In addition, investors seem to be assuming a lot of things will go right over the next few years. Even if we believe structural forces, such as a glut of global savings, have pushed equilibrium asset prices higher, this implies relatively low returns to both bond and equity investors. Meanwhile, the aggressive polices of central banks may have just brought forward price gains from the future. As for bond markets, investors had been expecting yields to rise (prices to fall) but the steady pace of the economic recovery together with less hawkish tones from western central banks has kept yields in check. This backdrop is likely to remain in place for the time being resulting in modest returns from bonds, which is clearly better than a sharp sell-off. Summary of Fund performance Net asset value* Net asset value* Net asset value 30/04/14 31/10/13 % change Share class P p Class I accumulation 106.99 106.87 0.11 * The net asset value is calculated as at close of business on the last business day of the accounting period. The investments are valued at fair value which is generally deemed to be the bid market price. Accounting dates Payment dates 30 April, 31 October 28/29 February Total expense ratio 30/04/14 31/10/13 % % Class I 0.85 0.85 The total expense ratio (TER) of the Fund is the ratio of the Fund s total operating costs to its average net assets for the period. The TER includes a synthetic element of 0.18% (31/10/2013: 0.18%) to incorporate the TER of underlying funds.
Performance record Highest price (pence per share) Lowest price (pence per share) Revenue per share by calendar year (pence per share) Class I accumulation 2013^ 108.30 99.32-2014 107.40 * 103.10 * 0.5716+ * to 30 April 2014 + to 28 February 2014 ^ inception date 8 February 2013 Performance summary 31 Oct13-30 Apr 14 % Cirilium Moderate Passive Fund (0.4) IMA Mixed Investment 40-85% Sector Average 0.4 Source: Henderson Global Investors, bid to bid, net revenue reinvested net of fees, GBP, based on cumulative returns Figures in brackets are negative Past performance is not a guide to future performance. The value of investments and the income from them may fall as well as rise and shareholders may not get back the amount originally invested.
Major holdings as at 30 April 2014 % Vanguard S&P 500 ETF 24.52 Vanguard FTSE 100 ETF 19.11 Legal & General European Index I Accumulation 15.10 Vanguard UK Government Bond ETF 7.17 ishares FTSE Gilts UK 0-5 Years 7.08 ishares Markit iboxx Corporate Bond 6.36 ishares Barclays Index-Linked Gilts 5.88 Legal & General Japan Index Trust I Accumulation 4.40 Legal & General Pacific Index I Accumulation 4.30 Legal & General Emerging Markets Index R Accumulation 4.08 Major holdings as at 31 October 2013 % Vanguard S&P 500 ETF 23.96 Vanguard FTSE 100 ETF 19.31 Legal & General European Index I Accumulation 14.54 Vanguard UK Government Bond ETF 7.12 ishares FTSE Gilts UK 0-5 Years 7.04 ishares Markit iboxx Corporate Bond 6.15 ishares Barclays Index-Linked Gilts 5.82 Legal & General Japan Index Trust I Accumulation 4.87 Legal & General Pacific Index I Accumulation 4.44 Legal & General Emerging Markets Index R Accumulation 4.39 Portfolio information as at 30 April 2014 % Collective Investment Schemes 99.79 Net other assets 0.21 Total 100.00 Portfolio information as at 31 October 2013 % Collective Investment Schemes 99.54 Net other assets 0.46 Total 100.00 Prior year comparative percentages have been restated based on a new sector presentation basis in 2014.
Report and Accounts This document is a short report of the Cirilium Moderate Passive Fund. Copies of the half yearly Long Form Report and Accounts of this Fund are available on our website www.henderson.com/cirilium or contact client services on the telephone number provided. Other Information The information in this report is designed to enable you 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. Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Authorised Corporate Director Intrinsic Cirilium Investment Company Limited Wakefield House Aspect Park Pipers Way Swindon SN3 1SA Depositary National Westminster Bank Plc 135 Bishopsgate London EC2M 3UR Auditor KPMG Audit Plc Saltire Court 20 Terrace Castle Edinburgh EH12 2EG Client Services 0800 832 832 (option 4)
Important information Issued in the UK by Intrinsic Cirilium Investment Company Limited (reg. no 4033107, registered office at Wakefield House, Aspect Park, Pipers Way, Swindon SN3 1SA). Incorporated and registered in England and Wales and authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and monitored. Cirilium is a registered trademark of Cirilium Asset Management Limited. Intrinsic is a registered trademark of Intrinsic Financial Services Limited. H009314/0514