Rathbone Luxembourg s SICAV Société d'investissement à Capital Variable (SICAV) R.C.S. B 206.009 Annual report including audited financial statements For the period from 4 May 2016 (date of incorporation) to 30 September 2016
Table of Contents Management and Administration 2 Investment Objectives 3 Directors Report 5 Report of the Réviseur d'entreprises Agréé 6 Statement of Net Assets 8 Statement of Operations 9 Statement of Changes in Net Assets 10 Statistical Information 11 Schedule of Investments Rathbone Multi-Asset Enhanced Growth 12 Rathbone Multi-Asset Strategic Growth 12 Rathbone Multi-Asset Strategic Growth Income 12 Rathbone Multi-Asset Total Return 13 Rathbone Multi-Asset Total Return Income 13 Rathbone Ethical Bond 13 Rathbone Ethical Bond Income 14 Notes to the Financial Statements 15 Unaudited Information 28 Subscriptions may not be received on the basis of annual reports. Subscriptions are valid only if made on the basis of the current prospectus, supplemented by the last annual report including audited financial statements and the most recent semi-annual unaudited report, if published thereafter.
Management and Administration Directors Mr Michael Mark Webb (Chairman) Chief Executive Officer, Rathbone Unit Trust Management Limited Mrs Suman Sharma Senior Manager, Rathbone Unit Trust Management Limited Mr Garvan Rory Pieters (Independent Director) Partner, The Directors Office Registered Office Auditors Deloitte Audit Cabinet de revision agréé Société à responsabilité limitée 560 rue de Neudorf L-2220 Luxembourg Grand Duchy of Luxembourg Legal Advisers in Luxembourg Elvinger Hoss & Prussen 2, place Winston Churchill L-1340 Luxembourg Grand Duchy of Luxembourg 16, boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg Management Company Rathbone Unit Trust Management Limited 1 Curzon Street London W1J 5FB United Kingdom Depositary, Central Administrative Agent, Paying Agent, Transfer and Register Agent and Domiciliary and Corporate Agent HSBC Bank plc, Luxembourg Branch 16, boulevard d Avranches L-1160 Luxembourg Grand Duchy of Luxembourg Rathbone Luxembourg s SICAV Annual Report 2016 2
Investment Objectives Rathbone Multi-Asset Enhanced Growth The investment objective of the Master is to seek to achieve a long term total return in excess of the Consumer Price Index (CPI) +5% over a minimum five to ten year period. The Master has a targeted risk budget of 100% of the volatility of global equities as measured by the MSCI World Equity Index. The income yield will at best be minimal. There is no guarantee that the Master will achieve a positive return over this, or any other, period and investors may not get back the original amount they invested. The Master will make investments in a mix of UK and overseas securities, which may include equities, convertibles, loan stock, money market instruments, deposits, warrants, collective investment schemes and other investments to the extent that each is permitted by the FCA Rules. Collective Investment Schemes are typically established in the UK and Europe including the Channel Islands. Subject to the FCA Rules, the relative weightings of each asset class will be determined by the manager s view on worldwide securities markets, and their ability to provide both capital return and income over the long term. The impact of potential currency movements on the sterling value of capital and income will be taken into account when selecting investments. The Management Company s investment policy may mean that at times it is appropriate for the property of the Master not to be fully invested and for cash or near cash to be held. This will only occur when the Management Company reasonably regards it as necessary in order to enable redemption of shares, efficient management of the Master or for a purpose ancillary to the objectives of the Master. Rathbone Multi-Asset Strategic Growth The investment objective of the Master is to seek to achieve a long term total return of between 3% and 5% above the Consumer Price Index (CPI) over a minimum five year period. The Master has a targeted risk budget of two thirds of the volatility of global equities as measured by the MSCI World Equity Index over a rolling three year period. There is no guarantee that the Master will achieve a positive return over this, or any other, period and investors may not get back the original amount they invested. The Master will make investments in a mix of UK and overseas securities, which may include equities, convertibles, loan stock, money market instruments, deposits, warrants, collective investment schemes and structured products. Collective investment schemes invested by the Master are typically established in the UK and Europe including the Channel Islands. Subject to the FCA Rules, the relative weightings of each asset class, will be determined by the Management Company s view on worldwide securities markets, and their ability to provide both capital return and income over the long term. The impact of potential currency movements on the sterling value of capital and income will be taken into account when selecting investments. The Management Company s investment policy may mean that at times it is appropriate for the property of the Master not to be fully invested and for cash or near cash to be held. This will only occur when the Management Company reasonably regards it as necessary in order to enable redemption of shares, efficient management of the Master or for a purpose ancillary to the objectives of the Master. Derivatives and forward transactions may be used by the Master for the purposes of efficient portfolio management (including hedging). 3 Rathbone Luxembourg s SICAV Annual Report 2016
Investment Objectives (continued) Rathbone Multi-Asset Total Return The investment objective of the Master is to seek to achieve a total return in excess of 2% above sterling six month LIBOR over a minimum three year period. The Master has a targeted risk budget of one third of the volatility of global equities as measured by the MSCI World Equity Index. There is no guarantee that the Master will achieve a positive return over this, or any other, period and investors may not get back the original amount they invested. The Master will make investments in a mix of UK and overseas securities, which may include equities, convertibles, loan stock, money market instruments, deposits, warrants, collective investment schemes and other investments to the extent that each is permitted by the FCA Rules. Collective Investment Schemes are typically established in the UK and Europe including the Channel Islands. Subject to the FCA Rules, the relative weightings of each asset class will be determined by the Management Company s view on worldwide securities markets, and their ability to provide both capital return and income over the long term. The impact of potential currency movements on the sterling value of capital and income will be taken into account when selecting investments. The Management Company s investment policy may mean that at times it is appropriate for the property of the Master not to be fully invested and for cash or near cash to be held. This will only occur when the Management Company reasonably regards it as necessary in order to enable redemption of shares, efficient management of the Master or for a purpose ancillary to the objectives of the Master. Derivatives and forward transactions may be used by the Master for investment purposes as well as for the purposes of efficient portfolio management (including hedging). The use of derivatives for investment purposes may increase the volatility of the Master s Net Asset Value, and may increase its risk profile. Rathbone Ethical Bond The objective of the Master is to provide a regular, above average income through investing in a range of bonds and bond market instruments that meet strict criteria ethically and financially. To meet the objective the Master may also invest at the Master investment manager discretion in other transferable securities, money market instruments, warrants, cash and near cash, deposits and units in collective investment schemes. Use may be made of stocklending, borrowing, cash holdings, hedging and other investment techniques permitted by the FCA Rules. Rathbone Luxembourg s SICAV Annual Report 2016 4
Directors Report At the year end, the total net assets of the Rathbone Luxembourg s SICAV (the Company ) stood at GBP 192,259,049. Since Launch the SICAV has made excellent progress, albeit enhanced by the transfer of the Rathbone Jersey PCC funds in July of around GBP 87m. Due to increased demand we launched additional P classes on the 19 September 2016. The Feeder s have approximately 98% of their assets in the relevant Master s. Below is the performance table for s L share classes in the various currency classes (Euros, Dollars, and Pound Sterling). This will enable you to understand the relative performance in the share classes of this fund in the respective currencies: Performance Table % Rathbone - Ethical Bond L ACC EUR 16.93 Rathbone - Ethical Bond L ACC GBP 5.72 Rathbone - Ethical Bond L ACC USD 16.49 Rathbone - Ethical Bond L INC EUR 17.82 Rathbone - Ethical Bond L INC GBP 6.53 Rathbone - Ethical Bond L INC USD 18.79 Rathbone - Multi-Asset Strategic Growth L ACC EUR 3.49 Rathbone - Multi-Asset Strategic Growth L ACC GBP 2.26 Rathbone - Multi-Asset Strategic Growth L INC EUR 4.42 Rathbone - Multi-Asset Strategic Growth L INC GBP 2.06 Rathbone - Multi-Asset Strategic Growth L INC USD 3.73 Rathbone - Multi-Asset Total Return L ACC EUR 2.90 Rathbone - Multi-Asset Total Return L ACC GBP 1.26 Rathbone - Multi-Asset Total Return L INC EUR 3.97 Rathbone - Multi-Asset Total Return L INC GBP 1.27 Rathbone - Multi-Asset Total Return L INC USD 2.95 The costs of running the SICAV are shown later in this report. The Board of Directors 23 November 2016 5 Rathbone Luxembourg s SICAV Annual Report 2016
Report of the Réviseur d'entreprises Agréé Following our appointment by the Board of Directors of the SICAV, we have audited the accompanying financial statements of Rathbone Luxembourg s SICAV and of each of its sub-funds, which comprise the statement of net assets and the schedule of investment as at September 30, 2016 and the statement of operations and the statement of changes in net assets for the period from 4 May 2016 to September 30, 2016, and a summary of significant accounting policies and other explanatory information. Responsibility of the Board of Directors of the SICAV for the financial statements The Board of Directors of the SICAV is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements and for such internal control as the Board of Directors of the SICAV determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the réviseur d entreprises agréé Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the réviseur d entreprises agréé s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the réviseur d entreprises agréé considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors of the SICAV, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Rathbone Luxembourg s SICAV Annual Report 2016 6
Report of the Reviseur d'entreprises Agree (continued) Opinion In our opinion, the financial statements give a true and fair view of the financial position of Rathbone Luxembourg s SICAV and of each of its sub-funds as at September 30, 2016, and of the results of its operations and changes in its net assets for the the period from May 4, 2016 to September 30, 2016 in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements. Other matter Supplementary information included in the annual report has been reviewed in the context of our mandate but has not been subject to specific audit procedures carried out in accordance with the standards described above. Consequently, we express no opinion on such information. However, we have no observation to make concerning such information in the context of the financial statements taken as a whole. For Deloitte Audit, Cabinet de revision agree Virginie Ng Wing Lit-Boulot, Reviseur d'entreprises agree Partner ~ -N)~ Luxembourg, 15 December 2016 560, rue de Neudorf L-2220 Luxembourg 7 Rathbone Luxembourg s SICAV Annual Report 2016
Statement of Net Assets As at 30 September 2016 Investments Rathbone Multi- Rathbone Multi- Rathbone Multi- Rathbone Multi- Rathbone Multi- Asset Enhanced Asset Strategic Asset Strategic Asset Total Asset Total Rathbone Total Growth Growth Growth Income Sub- Return Return Income Sub- Ethical Bond Rathbone Ethical Bond Income Note GBP GBP GBP GBP GBP GBP GBP GBP Investments in securities at cost 184,552,579 1,178,820 25,935,360 55,555,575 44,710,698 22,258,076 5,642,470 29,271,580 Unrealised appreciation/depreciation 4,968,261 53,283 1,134,663 1,334,672 1,071,482 334,712 84,371 955,078 Investments in securities at market value 2d 189,520,840 1,232,103 27,070,023 56,890,247 45,782,180 22,592,788 5,726,841 30,226,658 Other assets Cash at bank 3,284,415 14,838 310,045 474,231 529,599 167,213 166,835 1,621,654 Receivable resulting from sales of securities 8,101 - - - - 8,101 - - Unrealised appreciation on forward foreign exchange contracts 9 12,768 - - 4,262-7,199-1,307 Due from shareholders 521,721-167,200-158,890 - - 195,631 Dividend receivable 74,797 - - - - - - 74,797 Other receivables 60,323 221 6,964 19,960 13,439 7,829 1,841 10,069 Total assets 193,482,965 1,247,162 27,554,232 57,388,700 46,484,108 22,783,130 5,895,517 32,130,116 Liabilities Payable resulting from purchases of securities 979,277-314,005 7,504 360,931 - - 296,837 Unrealised depreciation on forward foreign exchange contracts 9 2,261 21 766-856 - 618 - Due to shareholders 46,740-3,555-4,202 8,103-30,880 Dividends payable 10 9,627 - - - - - - 9,627 Other payables 186,011 6,074 38,877 36,376 58,572 15,563 7,157 23,392 Total liabilities 1,223,916 6,095 357,203 43,880 424,561 23,666 7,775 360,736 Net assets at the end of the period 192,259,049 1,241,067 27,197,029 57,344,820 46,059,547 22,759,464 5,887,742 31,769,380 The accompanying notes form an integral part of these combined financial statements. Rathbone Luxembourg s SICAV Annual Report 2016 8
Statement of Operations Rathbone Multi- Rathbone Multi- Rathbone Multi- Rathbone Multi- Rathbone Multi- Asset Enhanced Asset Strategic Asset Strategic Asset Total Asset Total Rathbone Total Growth Growth Growth Income Sub- Return Return Income Sub- Ethical Bond Rathbone Ethical Bond Income Note GBP GBP GBP GBP GBP GBP GBP GBP Income Dividend income 2e 74,797 - - - - - - 74,797 Other income 2k 189,399 - - 1,603 126 194 27,778 159,698 Total income 264,196 - - 1,603 126 194 27,778 234,495 Expenses Management fees 3 358,189 3,385 86,756 57,534 142,162 22,816 4,207 41,329 Subscription tax 6 22,024 115 3,184 5,753 5,590 2,283 478 4,621 Administration fees 4 16,959 2,005 1,778 4,310 1,829 2,180 1,233 3,624 Audit fees 8,439 1,275 1,363 807 1,363 807 1,412 1,412 Directors fee and expenses 7 6,565 91 979 838 1,629 311 885 1,832 Bank charges and interest 6,281-15 4,199 384-2 1,681 Depositary bank fees 6,196 777 841 1,150 1,151 492 861 924 Preliminary expenses 3,282 32 429 713 795 276 267 770 Other expenses 5,029 266 1,077 232 1,090 202 1,066 1,096 Total expenses 432,964 7,946 96,422 75,536 155,993 29,367 10,411 57,289 Net (loss)/profit frominvestments (168,768) (7,946) (96,422) (73,933) (155,867) (29,173) 17,367 177,206 Net profit realised on investments portfolio 114,605 - - 18,399 3,797 680-91,729 Net profit realised on forward foreign exchange contract 1,643,090 634 53,707 520,471 85,089 184,874 35,965 762,350 Net profit/(loss) realised on foreign exchange transactions (108,697) 8 (2,764) (72,027) (281) (36,122) 926 1,563 Net realised gain 1,648,998 642 50,943 466,843 88,605 149,432 36,891 855,642 Net change in unrealised appreciation on investments portfolio 4,968,261 53,283 1,134,663 1,334,672 1,071,482 334,712 84,371 955,078 Net change in unrealised (depreciation)/appreciation on forward foreign exchange contract 10,507 (21) (766) 4,262 (856) 7,199 (618) 1,307 Net change in unrealised (depreciation)/appreciation on foreign exchange transactions (224) (131) 34 (49) (4) (32) 32 (74) Net change in unrealised appreciation 4,978,544 53,131 1,133,931 1,338,885 1,070,622 341,879 83,785 956,311 Increase in net assets as a result fromoperation 6,458,774 45,827 1,088,452 1,731,795 1,003,360 462,138 138,043 1,989,159 The accompanying notes form an integral part of these combined financial statements. 9 Rathbone Luxembourg s SICAV Annual Report 2016
Statement of Changes in Net Assets Rathbone Multi- Rathbone Multi- Rathbone Multi- Rathbone Multi- Rathbone Multi- Asset Enhanced Asset Strategic Asset Strategic Asset Total Asset Total Rathbone Total Growth Growth Growth Income Sub- Return Return Income Sub- Ethical Bond Rathbone Ethical Bond Income Note GBP GBP GBP GBP GBP GBP GBP GBP Net assets at the beginning of the period - - - - - - - - Increase in net assets as a result of operations 6,458,774 45,827 1,088,452 1,731,795 1,003,360 462,138 138,043 1,989,159 Subscriptions received 194,096,976 1,196,660 26,169,286 57,927,445 46,076,349 22,351,044 5,756,626 34,619,566 Redemption paid (8,287,074) (1,420) (60,709) (2,314,420) (1,020,162) (53,718) (6,927) (4,829,718) Dividends paid 10 (9,627) - - - - - - (9,627) Net assets at the end of the period 192,259,049 1,241,067 27,197,029 57,344,820 46,059,547 22,759,464 5,887,742 31,769,380 The accompanying notes form an integral part of these combined financial statements. Rathbone Luxembourg s SICAV Annual Report 2016 10
Statistical Information As at 30 September 2016 Rathbone Multi- Rathbone Multi- Asset Enhanced Asset Strategic Growth Growth Rathbone Multi-Asset Strategic Growth Income Sub- Rathbone Multi- Asset Total Return Rathbone Multi-Asset Total Return Income Sub- Rathbone Ethical Bond Rathbone Ethical Bond Income Net Asset Value 1,241,067 27,197,029 57,344,820 46,059,547 22,759,464 5,887,742 31,769,380 Net Asset Value per Share L ACC EUR - 1.0124-1.0069-1.0462 * - L ACC GBP - 1.0263-1.0138-1.0522 * - L ACC USD - - - - - 1.0482 * - L INC EUR - - 1.0196-1.0096-1.0599 * L INC GBP - - 1.0215-1.0122-1.066 * L INC USD - - 1.0251-1.0159-1.0648 * L0 ACC GBP 1.0647 1.0818-1.0429 - - - L1 ACC GBP 1.0585 1.0816-1.0426 - - - L2 ACC GBP 1.0380 1.0824-1.0425 - - - L3 ACC EUR 1.0571 1.0791-1.0371 - - - L3 ACC GBP - - - 1.0193 - - - P0 ACC EUR - - - 1.0024 - - - P2 ACC GBP - 0.9996 - - - - - P3 ACC GBP - 0.9965-1.0013 - - - Number of Shares Outstanding L ACC EUR - 7,000.00-15,000.00-935,083.95 - L ACC GBP - 178,881.63-7,489,508.00-4,630,939.60 - L ACC USD - - - - - 213,625.82 - L INC EUR - - 8,954,270.94-74,800.00-4,210,008.74 L INC GBP - - 36,803,835.77-14,607,852.81-21,678,933.43 L INC USD - - 15,028,857.49-10,090,907.83-6,052,576.50 L0 ACC GBP 675,121.11 8,955,812.31-15,862,795.77 - - - L1 ACC GBP 276,927.84 8,386,471.26-16,327,078.00 - - - L2 ACC GBP 196,138.20 6,655,226.62-3,578,549.61 - - - L3 ACC EUR 28,130.00 978,154.05-1,095,707.14 - - - L3 ACC GBP - - - 9,700.00 - - - P0 ACC EUR - - - 29,985.02 - - - P2 ACC GBP - 66,640.00 - - - - - P3 ACC GBP - 69,355.00-145,500.00 - - - The accompanying notes form an integral part of these combined financial statements. * These Net Asset Value per Share are disclosed swung. Please refer also to Note 2f. 11 Rathbone Luxembourg s SICAV Annual Report 2016
Schedule of Investment As at 30 September 2016 Rathbone Multi-Asset Enhanced Growth Quantity Description Fair Value GBP Fair Value as a Percentage of Total Net Assets % Collective Investment Schemes United Kingdom Investment in Rathbone Multi-Asset Enhanced 1,102,750 Growth - Class X 1,232,103 99.28 Total Investment 1,232,103 99.28 Other Net Assets 8,964 0.72 Total Net Assets 1,241,067 100.00 Rathbone Multi-Asset Strategic Growth Quantity Description Collective Investment Schemes Fair Value GBP Fair Value as a Percentage of Total Net Assets % United Kingdom Investment in Rathbone Multi-Asset Strategic 24,956,230 Growth - Class X 27,070,023 99.53 Total Investment 27,070,023 99.53 Other Net Assets 127,006 0.47 Total Net Assets 27,197,029 100.00 Rathbone Multi-Asset Strategic Growth Income Quantity Description Collective Investment Schemes Fair Value GBP Fair Value as a Percentage of Total Net Assets % United Kingdom Investment in Rathbone Multi-Asset Strategic 55,551,457 Growth - Class X Income 56,890,247 99.21 Total Investment 56,890,247 99.21 Other Net Assets 454,573 0.79 Total Net Assets 57,344,820 100.00 The accompanying notes form an integral part of these combined financial statements. Rathbone Luxembourg s SICAV Annual Report 2016 12
Schedule of Investment (continued) As at 30 September 2016 Rathbone Multi-Asset Total Return Quantity Description Collective Investment Schemes Fair Value GBP Fair Value as a Percentage of Total Net Assets % United Kingdom Investment in Rathbone Multi-Asset Total 43,827,474 Return - Class X 45,782,180 99.40 Total Investment 45,782,180 99.40 Other Net Assets 277,367 0.60 Total Net Assets 46,059,547 100.00 Rathbone Multi-Asset Total Return Income Quantity Description Collective Investment Schemes Fair Value GBP Fair Value as a Percentage of Total Net Assets % United Kingdom Investment in Rathbone Multi-Asset Total 22,256,711 Return - Class X Income 22,592,788 99.27 Total Investment 22,592,788 99.27 Other Net Assets 166,676 0.73 Total Net Assets 22,759,464 100.00 Rathbone Ethical Bond Quantity Description Collective Investment Schemes United Kingdom Fair Value GBP Fair Value as a Percentage of Total Net Assets % 5,396,627 Investment in Rathbone Ethical Bond - Class X 5,726,841 97.27 Total Investment 5,726,841 97.27 Other Net Assets 160,901 2.73 Total Net Assets 5,887,742 100.00 The accompanying notes form an integral part of these combined financial statements. 13 Rathbone Luxembourg s SICAV Annual Report 2016
Schedule of Investment (continued) As at 30 September 2016 Rathbone Ethical Bond Income Quantity Description Collective Investment Schemes United Kingdom Fair Value GBP Fair Value as a Percentage of Total Net Assets % 28,577,318 Investment in Rathbone Ethical Bond - Class X Income 30,226,658 95.14 Total Investment 30,226,658 95.14 Other Net Assets 1,542,722 4.86 Total Net Assets 31,769,380 100.00 The accompanying notes form an integral part of these combined financial statements. Rathbone Luxembourg s SICAV Annual Report 2016 14
Notes to the Financial Statements 1 General information Rathbone Luxembourg s SICAV (the Company or the ) is an open-ended investment fund with multiple compartments ("société d'investissement à capital variable" (SICAV) à compartiments multiples) governed by Luxembourg law. The Company, incorporated on 4 May 2016, is registered under Part I of the Luxembourg law of 17 December 2010 regarding undertakings for collective investment, as amended and qualifies as a UCITS fund under the European directive 2009/65/EC. The Articles of Incorporation were published in the Mémorial on 17 May 2016. The Company offers investors the choice between several Classes of Shares (each a Class ) in a number of s. As at 30 September 2016, the Company is composed of the following s: Rathbone Multi-Asset Enhanced Growth The is a Feeder of Rathbone Multi-Asset Enhanced Growth (the Master ), an open-ended investment Company with variable capital, incorporated in England and Wales. The issues Class L, L0, L1, L2 and L3 ("ACC") accumulation shares in different currencies. Rathbone Multi-Asset Strategic Growth The is a Feeder of Rathbone Multi-Asset Strategic Growth (the Master ), an open-ended investment Company with variable capital, incorporated in England and Wales. The issues Class L, L0, L1, L2, L3, P0, P1, P2 and P3 ("ACC") accumulation shares in different currencies. Rathbone Multi-Asset Strategic Growth Income The is a Feeder of Rathbone Multi-Asset Strategic Growth (the Master ), an open-ended investment Company with variable capital, incorporated in England and Wales. The issues Class L ("INC") income shares in different currencies. Rathbone Multi-Asset Total Return The is a Feeder of Rathbone Multi-Asset Total Return (the Master ), an open-ended investment Company with variable capital, incorporated in England and Wales. The issues Class L, L0, L1, L2, L3, P0, P1, P2 and P3 ("ACC") accumulation shares in different currencies. Rathbone Multi-Asset Total Return Income The is a Feeder of Rathbone Multi-Asset Total Return (the Master ), an open-ended investment Company with variable capital, incorporated in England and Wales. The issues Class L ("INC") income shares in different currencies. 15 Rathbone Luxembourg s SICAV Annual Report 2016
Notes to the Financial Statements (continued) 1 General information (continued) Rathbone Ethical Bond The is a Feeder of Rathbone Ethical Bond (the Master ), a unit trust scheme. The issues class L ("ACC") accumulation shares in different currencies. Rathbone Ethical Bond Income The is a Feeder of Rathbone Ethical Bond (the Master ), a unit trust scheme. The issues class L ("INC") income shares in different currencies. Each Class of Shares is open to individuals or other investors wishing to invest through a financial intermediary and Institutional Investors. All GBP Classes of Shares are subject to a minimum initial subscription amount and minimum holding amount of GBP 1,000 and a minimum subsequent subscription amount of GBP 500. All EUR Classes of Shares are subject to a minimum initial subscription amount and minimum holding amount of EUR 2,000 and a minimum subsequent subscription amount of EUR 1,000. All USD Classes of Shares are subject to a minimum initial subscription amount and minimum holding amount of USD 2,000 and a minimum subsequent subscription amount of USD 1,000. The objective of the Company is to maximise the value of its assets by means of professional management within the framework of an optimal risk-return profile for the benefit of its shareholders. As per decision dated 18 July 2016 the Board of Directors of the approved a subscription into Rathbone Luxembourg s SICAV Rathbone Multi-Asset Strategic Growth Income, in each of the share classes L INC GBP, L INC USD and L INC EUR, through contribution of all assets (investments and cash) of Strategic Growth Sterling Distributor PC, Strategic Growth US Dollar Distributor No. 2 PC and Strategic Growth Euro Distributor PC as at effective date on 18 July 2016. In exchange for the contribution, Rathbone Luxembourg s SICAV Rathbone Multi-Asset Strategic Growth Income issued 37,479,367.89 shares of share class L INC GBP at a net asset value per share of GBP 1.00, 16,282,485.64 shares of share class L INC USD at a net asset value per share of USD 1.00 and 9,191,907.75 shares of share class L INC EUR at a net asset value per share of EUR 1.00. As per decision dated 18 July 2016 the Board of Directors of the approved an initial subscription into Rathbone Luxembourg s SICAV Rathbone Multi-Asset Total Return, in share class L ACC GBP, through contribution of all assets (investments and cash) of Conservative Total Return Sterling PC as at effective date on 18 July 2016. In exchange for the contribution, Rathbone Luxembourg s SICAV Rathbone Multi-Asset Total Return issued 7,844,436.53 shares of share class L ACC GBP at a net asset value per share of GBP 1.00. Rathbone Luxembourg s SICAV Annual Report 2016 16
Notes to the Financial Statements (continued) 1 General information (continued) As per decision dated 18 July 2016 The Board of Directors of the approved an initial subscription into Rathbone Luxembourg s SICAV Rathbone Multi-Asset Total Return Income, in each of the share classes L INC GBP and L INC USD, through contribution of all assets (investments and cash) of Conservative Total Return Sterling Distributor PC and Conservative Total Return US Dollar Distributor PC as at effective date on 18 July 2016. In exchange for the contribution, Rathbone Luxembourg s SICAV Rathbone Multi-Asset Total Return Income issued 14,549,388.48 shares of share class L INC GBP at a net asset value per share of GBP 1.00 and 10,096,885.97 shares of share class L INC USD at a net asset value per share of USD 1.00. In compliance with the relevant provisions of the 2010 law, the s at all-time invest at least 85% of their assets in the Master. The s may hold up to 15% of their assets in liquid assets, including cash, cash equivalents and short term bank deposits in accordance with the provisions of Article 41(2) of the 2010 Law. However, the s intend to be normally fully invested in the Master. The Sub- s may use derivative financial instruments for hedging purposes only. The s invest in a share class of the Master which bears no management fees. 2 Summary of significant accounting policies a) Accounting convention The financial statements have been prepared in accordance with Luxembourg generally accepted accounting principles applicable to investment funds. b) Financial statements Financial statements are presented for each on a consolidated basis in the base currency of the Sub- and the statements of net assets, operations and changes in net assets are presented in GBP, based on the exchange rate ruling at the date of these financial statements. c) Foreign currency translation Assets and liabilities in currencies other than the s base currency have been translated into that currency at exchange rates ruling at the date of these financial statements. Transactions occurring during the period in currencies other than the base currency are translated at rates of exchange ruling at the transaction dates. The exchange rates applicable as at 30 September 2016 are: GBP/USD 1.2961 GBP/EUR 1.1608 d) Investments Securities listed on Regulated Markets, which operate regularly and are recognized and open to the public, are valued at the last available price of the main market for the relevant security. Securities not listed on Regulated Markets, which operate regularly and are recognized and open to the public, are valued on the basis of their last available price. 17 Rathbone Luxembourg s SICAV Annual Report 2016
Notes to the Financial Statements (continued) 2 Summary of significant accounting policies (continued) d) Investments (continued) Investment in the Underlying s shall be valued on the basis of the last determined net asset value of the Master s. In the event that extraordinary circumstances render such a valuation impracticable or inadequate, the Directors may, at their discretion, prudently and in good faith follow other methods of valuation to be used if they consider such method of valuation better reflects the value and is in accordance with good accounting practice in order to achieve a fair valuation of the assets of the Company. Gains or losses arising on the disposal of investments are calculated by reference to the net sales proceeds and the average cost attributable to those investments. e) Income and expenses Dividends arising on the Company s equity investments are credited to the statement of operations when the security is quoted ex-dividend, net of withholding taxes where applicable. Interest income is recognised as the interest accrues (taking into account the effective yield on the asset) unless recoverability is in doubt. Where the Company incurs an expense which relates to any particular or to any action taken in connection with a particular, such liability shall be allocated to the relevant. In the case where any expense of the Company cannot be considered as being attributable to a particular, such expense shall be allocated to all the s pro rata to their NAV s or in such other ways that the Directors deem equitable. Notwithstanding the provisions of the preceding paragraph, all liabilities of the Company, whatever they are attributable to, shall, unless otherwise agreed upon with the creditors, be binding upon the Company as a whole. f) Swing pricing Swing pricing will be used to adjust the Net Asset Value per Share for a in order to reduce the effect of dilution on that, thereby reflecting the true cost of buying or selling investments for the. The SICAV swing pricing model takes into account that small levels of shareholder activity may not necessarily result in material transaction costs and maybe covered by existing cash balances held within the. Swing pricing mechanism will activate without any threshold level of Shareholder activity. The SICAV currently does not use partial or semi swing pricing. If on any particular day net shareholder activity the sub-fund will swing in the same direction. In such an occasion, the NAV per share will have an adjustment applied, known as the swing factor. If the is expanding then the share price can be adjusted upwards to reflect the costs to the fund of buying new assets. On the other hand, if the fund is contracting, the unit price can be adjusted downwards to reflect the costs to the of selling assets to meet the cost of redemptions. The swing factor is an estimate of the costs of trading taking into account brokerage fees, market spreads and relevant taxes. These factors will be reviewed on a regular basis and adjusted as required. Swing pricing was applied during the period. Rathbone Luxembourg s SICAV Annual Report 2016 18
Notes to the Financial Statements (continued) 2 Summary of significant accounting policies (continued) f) Swing pricing (continued) The table below discloses the NAV per share in each 's currency before swing price adjustment (the Un-swung NAV per share ) and the NAV per share in each 's currency after swing price adjustment (the Swung NAV per share ) for s which have been impacted by swing price adjustment on 30 September 2016. Unswung NAV Swung NAV price price per share per share Rathbone Ethical L INC EUR 1.0547 1.0599 Bond L INC GBP 1.0608 1.0660 Income L INC USD 1.0595 1.0648 g) Forward foreign exchange contracts The Company may enter into forward foreign exchange contracts to hedge against exposures to foreign currency fluctuations. The carrying value of these contracts is the gain or loss that would be realised if the position were closed out on the valuation date, and is recorded as an unrealised gain or loss. Upon the closing of the contract, the gain or loss is recorded in the net realised gain or loss on foreign exchange. h) Formation expenses Formation expenses include initial set-up costs, registration fees and related legal fees. Formation expenses were mainly paid by the Management Company and the remaining costs were expensed. i) Dilution adjustment The Board of Directors will apply the dilution adjustment if the existing shareholders (in case of subscriptions) or remaining shareholders (in case of redemptions) might otherwise be adversely affected. The dilution adjustment is a percentage adjustment applied to each share class in a on a dealing day determined on the basis of estimates of any effective dealing, other costs and fiscal charges that the Board of Directors believes are appropriate to take into account in respect of that. The Board of Directors will apply the dilution adjustment if the existing shareholders (in case of subscriptions) or remaining shareholders (in case of redemptions) might otherwise be adversely affected. As the dilution adjustment for each will be calculated by reference to the costs of the dealing spread, which can vary with market conditions, the amount of dilution adjustment can vary over time. The Company has the power to charge a "dilution levy" of up to 1% of the applicable Net Asset Value on individual subscriptions or redemptions, such "dilution levy" to accrue to the affected. The Company will operate this measure in a fair and consistent manner to reduce dilution and only for that purpose and such dilution levy will not be applied if the swing pricing mechanism is used. 19 Rathbone Luxembourg s SICAV Annual Report 2016
Notes to the Financial Statements (continued) 2 Summary of significant accounting policies (continued) j) Dividends payable Within each, there may be created different Classes which are entitled to dividend payments ( Income Shares ) or with earnings reinvested ( Shares ). If a dividend is declared by the Company, it will be paid to each Shareholder concerned in the currency of the relevant or Class. k) Other income Other income is made of amount of dilution adjustment and cash adjustment. The cash adjustment is related to the in-specie transfer of the Rathbone Jersey PCC funds into the Company done on 18 July 2016, please refer to Note 1. 3 Management fees Rathbone Unit Trust Management Limited ("RUTM"), as Investment Manager is entitled to receive fees from the Company in respect of their respective investment management services. The management fees are calculated based on a certain percentage per annum of the net asset values of the various s. The Sub- s invest in a share class of the Master which bears no management fees. The percentages of management fees at 30 September 2016 are as follows: Rathbone Multi-Asset Enhanced Growth Class L ACC GBP: 0.50% Class L0 ACC GBP: 1.50% Class L1 ACC GBP: 1.50% Class L2 ACC GBP: 1.50% Class L3 ACC GBP: 1.50% Class L ACC EUR: 0.50% Class L3 ACC EUR: 1.50% Rathbone Multi-Asset Strategic Growth Class L ACC GBP: 0.50% Class L0 ACC GBP: 1.50% Class L1 ACC GBP: 1.50% Class L2 ACC GBP: 1.50% Class L3 ACC GBP: 1.50% Class L ACC EUR: 0.50% Class L3 ACC EUR: 1.50% Class P0 ACC EUR: 1.50% Class P1 ACC GBP: 1.50% Class P1 ACC EUR: 1.50% Rathbone Luxembourg s SICAV Annual Report 2016 20
Notes to the Financial Statements (continued) 3 Management fees (continued) Rathbone Multi-Asset Strategic Growth Income Class L INC GBP: 0.50% Class L INC EUR: 0.50% Class L INC USD: 0.50% Rathbone Multi-Asset Total Return Class L ACC GBP: 0.50% Class L0 ACC GBP: 1.50% Class L1 ACC GBP: 1.50% Class L2 ACC GBP: 1.50% Class L3 ACC GBP: 1.50% Class L ACC EUR: 0.50% Class L3 ACC EUR: 1.50% Class P1 ACC GBP: 1.50% Class P1 ACC EUR: 1.50% Class P2 ACC GBP: 1.50% Class P2 ACC EUR: 1.50% Rathbone Multi-Asset Total Return Income Class L INC GBP: 0.50% Class L INC EUR: 0.50% Class L INC USD: 0.50% Rathbone Ethical Bond Class L ACC GBP: 0.50% Class L ACC EUR: 0.50% Class L ACC USD: 0.50% Rathbone Ethical Bond Income Class L INC GBP: 0.50% Class L INC EUR: 0.50% Class L INC USD: 0.50% Management fees, for the period ended 30 September 2016 amounted to GBP 358,189. 4 Administration fees HSBC Bank plc, Luxembourg Branch, as Administration Agent, Registrar and Transfer Agent, is entitled to receive administration fee determined as an annual percentage based on the aggregate Net Asset Value of the s as of each valuation day. 21 Rathbone Luxembourg s SICAV Annual Report 2016
Notes to the Financial Statements (continued) 4 Administration fees (continued) Administration fees First EUR 100m Above EUR 100m 0.020% on Net Asset Value 0.015% on Net Asset Value This fee is subject to a minimum annual fee at legal entity level of EUR 20,000 for Administration. Transfer agency services Fees type Fee (EUR ) Charging Basis maintenance fee for the legal entity 2,500 p.a For the maintenance fee 500 p.a Per Share Class maintenance fee 500 p.a Per Share Class These fees are calculated and accrued on each valuation day and is payable by the Rathbone Unit Trust Management Limited monthly in arrears and as agreed from time to time in writing. The Company will be charged for the preparation of annual and semi-annual financial statements which is subject to an annual fee of EUR 7,500 for the legal entity. Administration fee, for the period from 4 May 2016 (date of incorporation) to 30 September 2016, amounted to GBP 16,959. 5 Depository and custody fees HSBC Bank Plc, Luxembourg Branch, as Depository receives a fee for this service subject to a minimum annual fee at legal entity level of EUR 20,000 for Depository services. First EUR 100m Above EUR 100m 0.01% on Net Asset Value 0.0075% on Net Asset Value Supervisory services provided as part of depository bank function will be subject to the prevailing rate of Value Added Tax. These fees are calculated and accrued on each valuation day and is payable by the Company monthly in arrears and as agreed from time to time in writing. Depository and custody fees, for the period from 4 May 2016 (date of incorporation) to 30 September 2016, amounted to GBP 6,196. 6 Taxation Under current law and practice, the Company is not liable to Luxembourg taxes on income or capital gains. The Company is subject to the taxe d abonnement (subscription tax) at the rate of 0.05% per annum, except for the share classes dedicated to institutional investors which benefit from a reduced tax rate of 0.01%. Interest and dividend income, and gains on securities, may be subject to non-recoverable withholding taxes deducted at source in the countries of origin. The Company is not subject to net wealth tax. Rathbone Luxembourg s SICAV Annual Report 2016 22
Notes to the Financial Statements (continued) 6 Taxation (continued) No stamp duty, capital duty or other tax will be payable in Luxembourg upon the issue of the shares of the Company. The Company is registered for Value Added Tax in the Grand Duchy of Luxembourg and subject to account for Value Added Tax in accordance with applicable laws. The Company may benefit from double tax treaties entered into by Luxembourg, which may provide for exemption from withholding tax or reduction of withholding tax rate. 7 Directors expenses In addition to directors fees, directors are entitled to be reimbursed for reasonable traveling, hotel and other incidental expenses in respect of attending meetings of the Directors or General Meetings of the. Total directors fees incurred during the period amount to GBP 6,565. 8 Transaction costs No transaction costs were charged to the SICAV for the period from 4 May 2016 to 30 September 2016. 9 Forward Foreign Exchange Contracts As at 30 September 2016, the Company had entered into various forward foreign exchange contracts, for the purpose of hedging of investments which obliges the Company to deliver currencies at specified dates. Open forward foreign exchange contracts as at 30 September 2016, are as follows: Maturity Date Currency Bought Currency Sold Counterparty Unrealised Bought Amount Sold Amount Gain / (Loss) GBP Rathbone Multi-Asset Enhanced Growth 26 October 2016 EUR 29,329 GBP (25,302) HSBC Bank plc (21) (21) Rathbone Multi-Asset Strategic Growth 26 October 2016 EUR 7,022 GBP (6,058) HSBC Bank plc (5) 26 October 2016 EUR 1,046,293 GBP (902,661) HSBC Bank plc (761) (766) 23 Rathbone Luxembourg s SICAV Annual Report 2016
Notes to the Financial Statements (continued) 9 Forward Foreign Exchange Contracts (continued) Maturity Date Currency Bought Currency Sold Counterparty Unrealised Bought Amount Sold Amount Gain / (Loss) GBP Rathbone Multi-Asset Strategic Growth Income 26 October 2016 USD 15,256,154 GBP (11,754,301) HSBC Bank plc 10,839 26 October 2016 EUR 9,047,017 GBP (7,805,070) HSBC Bank plc (6,577) 4,262 Rathbone Multi-Asset Total Return 26 October 2016 EUR 15,053 GBP (12,986) HSBC Bank plc (11) 26 October 2016 EUR 1,132,866 GBP (977,350) HSBC Bank plc (823) 26 October 2016 EUR 30,000 GBP (25,882) HSBC Bank plc (22) (856) Rathbone Multi-Asset Total Return Income 26 October 2016 USD 10,210,042 GBP (7,866,458) HSBC Bank plc 7,254 26 October 2016 EUR 75,251 GBP (64,920) HSBC Bank plc (55) 7,199 Rathbone Ethical Bond 26 October 2016 USD 222,656 GBP (171,548) HSBC Bank plc 158 26 October 2016 EUR 955,029 GBP (823,925) HSBC Bank plc (694) 26 October 2016 EUR 21,070 GBP (18,244) HSBC Bank plc (82) (618) Rathbone Ethical Bond Income 26 October 2016 USD 6,386,415 GBP (4,920,496) HSBC Bank plc 4,537 26 October 2016 EUR 4,443,183 GBP (3,833,236) HSBC Bank plc (3,230) 1,307 Rathbone Luxembourg s SICAV Annual Report 2016 24
Notes to the Financial Statements (continued) 10 Dividend payable During the period ended 30 September 2016, the distributed the following dividends: Share Class Code Currency Ex Date Pay date Rate Per share Number of shares Total amount paid Sub Name Rathbone Ethical Bond Income L INC USD GBP 9/30/2016 10/7/2016 0.00007684 6,052,577 465 L INC EUR GBP 9/30/2016 10/7/2016 0.00008017 4,210,009 338 L INC GBP GBP 9/30/2016 10/7/2016 0.00040700 21,678,933 8,824 9,627 11 Total Expense Ratio (TER) The percentages disclosed below are the TERs, meaning the actual expenses incurred during the period which are annualised and calculated as a percentage of the average Asset Under Management of the share class for the period. Share Class Rathbone Multi- Asset Enhanced Growth Rathbone Multi- Asset Strategic Growth Rathbone Multi- Asset Strategic Growth Income Sub- Rathbone Multi- Asset Total Return Rathbone Multi- Asset Total Return Income Sub- Rathbone Ethical Bond Rathbone Ethical Bond Income L ACC - 0.62% - 0.61% - 1.13% - L ACC EUR - 0.69% - 0.70% - 1.56% - L ACC USD - - - - - 1.36% - L INC - - 0.59% - 0.61% - 0.64% L INC EUR - - 0.68% - 0.70% - 0.74% L INC USD - - 0.68% - 0.70% - 0.73% L0 ACC 3.32% 1.64% - 1.61% - - - L1 ACC 2.65% 1.66% - 1.61% - - - L2 ACC 2.65% 1.64% - 1.61% - - - L3 ACC - - - 1.64% - - - L3 ACC EUR 3.43% 1.73% - 1.70% - - - P0 ACC EUR - - - 1.62% - - - P2 ACC - 1.61% - - - - - P3 ACC - - - 1.60% - - - 12 Aggregate Charges The SICAV is investing in Income Shares and Shares of the X Share Class of the Master. The SICAV is not subject to a management fee nor to a subscription or redemption fee on its investment into the Master. The management fees disclosed in Note 3 can therefore be considered as the aggregate management fees of the SICAV and the Master. 25 Rathbone Luxembourg s SICAV Annual Report 2016
Notes to the Financial Statements (continued) 12 Aggregate Charges (continued) The aggregate charges of the SICAV (after fee reimbursements) and the Master are detailed in the following table. The SICAV s Ongoing Charges and Fees ( OCF ) and aggregate charges are based on the average holdings by the Feeder in the Master during the year. Rathbone Multi- Asset Enhanced Growth Rathbone Multi- Asset Strategic Growth Rathbone Multi- Asset Strategic Growth Income Sub- Rathbone Multi- Asset Total Return Rathbone Multi- Asset Total Return Income Sub- Rathbone Ethical Bond Rathbone Ethical Bond Income Charges at SICAV level Total expense in GBP 7,946 96,422 75,536 155,993 29,367 10,411 57,289 Total NAV in GBP 1,241,067 27,197,029 57,344,820 46,059,547 22,759,464 5,887,742 31,769,380 OCF (% ) 0.64 0.35 0.13 0.34 0.13 0.18 0.18 Charges at Master level Rathbone Enhanced Growth The amount charged to the SICAV within the Master has been calculated based on the Ongoing Charges Figure as disclosed in the Final Report and Accounts of the Master for the year ended 30 September 2016. 13 Feeder Ownership in the Master Rathbone Strategic Growth Rathbone Total Return Rathbone Ethical Bond Total expense in GBP 105,830 694,928 516,686 1,394,142 Total NAV in GBP 18,563,515 208,409,418 150,498,851 545,613,390 OCF (% ) 0.57 0.33 0.34 0.26 Aggregate charges in GBP 113,776 866,886 702,046 1,461,842 Aggregate OCF (% ) 0.57 0.30 0.32 0.25 As at 30 September 2016 the Rathbone Multi-Asset Enhanced Growth ownership of the Rathbone Enhanced Growth was equal to 7%. As at 30 September 2016 the Rathbone Multi-Asset Strategic Growth ownership of the Rathbone Strategic Growth was equal to 13%. As at 30 September 2016 the Rathbone Multi-Asset Strategic Growth Income ownership of the Rathbone Strategic Growth was equal to 27%. As at 30 September 2016 the Rathbone Multi-Asset Total Return ownership of the Rathbone Strategic Total Return was equal to 30%. As at 30 September 2016 the Rathbone Multi-Asset Total Return Income ownership of the Rathbone Strategic Total Return was equal to 15%. As at 30 September 2016 the Rathbone Ethical Bond ownership of the Rathbone Ethical Bond was equal to 1%. As at 30 September 2016 the Rathbone Ethical Bond Income ownership of the Rathbone Ethical Bond was equal to 6%. Rathbone Luxembourg s SICAV Annual Report 2016 26
Notes to the Financial Statements (continued) 14 Master Reports The most recent semi-annual and annual reports of each Master may be inspected at the registered office of Rathbone Unit Trust Management Limited or obtained free of charge upon request. 15 Subsequent Events Rathbone Income and Rathbone Income Income were launched subsequent to period end on 17 October 2016. 27 Rathbone Luxembourg s SICAV Annual Report 2016