FP Octopus UK Equity Fund

FP Octopus UK Equity Fund Short Report for the six months ended 30 April 2016 Investment Objective and Policy The Fund aims to achieve capital growth over the medium to longer term which is in excess of that of the UK equity market average. The Fund aims to generate a return, which is in excess of that of the UK equity market average as measured by generally accepted broad market indices, like the FTSE All-Share index. It will seek to achieve its objective through investments primarily in UK equities, through shares and units of Collective Investment Schemes such as unit trusts, OEICs and other UCITS funds, closed-ended schemes and individual stocks. Foreign currency exposure may be hedged back into GBP Sterling. The Fund may also invest, at the ACD s discretion, in other transferable securities and Collective Investment Schemes, money market instruments, cash and near cash and deposits to meet the investment objective. Use may also be made of stocklending, borrowing, cash holdings, derivatives for hedging and other investment techniques for efficient portfolio management permitted in COLL. Fund Facts Risk Profile Interim/Annual Accounting End Dates 30 April 31 October Ex-dividend (xd) Dates 01 May 01 November Income Distribution/ Accumulation Dates 30 June 31 December Please refer to the Full Prospectus for details of all the risks. The Fund has exposure to credit, counterparty and usual market risks. Past performance is not a guide to future performance. The value of investments and any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. You should always regard investments in the Fund as medium to long term. Charges Share Class Initial Charge Annual Management Charge as at 30/04/16 Total Expense Ratios as at 30/04/16 Total Expense Ratios as at 31/10/15 Share Class B 0.00% 0.55% 1.09% 1.08% Share Class C 0.00% 0.45% 0.99% 0.98% Share Class D 1 0.00% 0.75% 1.29% 1.28% 1 Share class D was launched 1 April 2015. The TER for Share Class D has exceeded the Target Maximum Total Expense Ratio disclosed in the Fund prospectus dated 12 August 2015. Going forward, the ACD will work with the Investment Manager to reduce the overall cost levels. Page 1

Distributions/Accumulations Distributions Distribution payable 30/06/16 Distribution paid 30/06/15 Share Class B Accumulation 1.9458 1.6350 Share Class C Accumulation 2.0519 1.7402 Share Class D Accumulation 0.9570 0.2663 Comparative Tables Net Asset Value Date Share Class B Accumulation Net Asset Value of Share Class ( ) Shares in Issue Net Asset Value per Share (p) 31/10/15 4,060,173 2,214,841 183.32 Percentage Change (%) 30/04/16 4,158,171 2,287,316 181.79 (0.83) Share Class C Accumulation 31/10/15 24,404,523 13,209,007 184.76 30/04/16 23,906,807 13,041,578 183.31 (0.78) Share Class D Accumulation 31/10/15 1,943 1,961 99.08 30/04/16 1,980 2,017 98.17 (0.92) Major Holdings Top 10 Holdings % of Fund as at 30/04/16 Majedie UK Equity 10.63 Legal & General UK Index 9.13 ishares Core FTSE 100 9.04 BlackRock UK Equity Tracker 8.87 Old Mutual UK Alpha 7.39 Ardevora UK Equity 6.71 Franklin UK Managers Focus 6.51 CF Woodford Equity Income 6.47 ishares UK Dividend 5.69 Marlborough Special Situations 5.38 Top 10 Holdings % of Fund as at 31/10/15 Legal & General UK Index 10.06 BlackRock UK Equity Tracker 10.03 Majedie UK Equity 8.98 ishares Core FTSE 100 8.97 Old Mutual UK Alpha 8.00 CF Woodford Equity Income 6.69 Ardevora UK Equity 5.76 Franklin UK Managers Focus 5.65 ishares UK Dividend 5.61 CF Lindsell Train UK Equity 5.52 Page 2

Portfolio Information Breakdown by Investment type 80 70 73.10% 60 50 40 30 20 15.64% 10 6.71% 4.55% 0 Collective Investment Schemes [74.55%] Exchange Traded Funds [16.05%] Offshore Funds [5.76%] Net other assets [3.64%] Comparative figures shown above in square brackets relate to 31 October 2015. Investment Manager s Report Investment Review The FP Octopus UK Equity Fund returned -0.75% in the six months from 1 November 2015 to 30 April 2016 (Source: Lipper. 01/11/15 29/04/16. returns, net income reinvested). It was a difficult period for the portfolio, as it has been for UK equities generally. Performance was affected by market volatility throughout the period, particularly the 2016 returns from many of the small and medium-sized businesses it invests in. These companies suffered from growing market uncertainty that was exacerbated by the forthcoming Brexit referendum to decide whether Britain should remain in the European Union. In November, funds with exposure to the oil sector suffered most, notably ishares UK Dividend, while the flat performance of the Alternative Investment Market (AIM) had a negative impact on Miton UK Smaller Companies. Losses in the portfolio were offset by gains made by active stock-picking funds, especially Ardevora UK Equity and Lindsell Train UK Equity. In December, the portfolio s focus on small and medium-sized companies and companies quoted on AIM reinforced its solid performance. Miton UK Smaller Companies and Marlborough Special Situations were among the best performers. Page 3

Investment Manager s Report (continued) Investment Review (continued) In January, we increased equities when the FTSE 100 Index fell, and we then took some profits when the market rallied towards the end of the month. We reduced Standard Life UK Equity slightly as we continued to monitor the progress of the fund s new manager. We increased Woodford Equity Income to give the portfolio a more cautious outlook. Markets continued to be volatile in February, and we reduced equity exposure a little, favouring actively managed funds rather than index trackers or exchange-traded funds (ETFs). We added to ishares FTSE 100 ETF before selling some of the holding at a profit by the end of the month. The improving performance of oil and mining stocks boosted Majedie UK Equity and JOCHM UK Dynamic following a disappointing January. Marlborough Special Situations was adversely affected by its exposure to the smaller UK companies listed on AIM, which didn t perform well in the month. We maintained a cautious approach in March and April by reducing equities as we monitored the actions of central banks in their efforts to stimulate economic growth. Standard Life UK Equity Unconstrained struggled as a result of its focus on medium-sized companies, which fared poorly compared with their larger counterparts. Our cash position was 4.5% at the end of the period under review. Market Overview Interest rates were a key concern during the six months under review, with investors keeping a close eye on central banks for signs of potential interest rate rises. The US Federal Reserve (Fed) led the way by raising interest rates in December, with expectations of further rises throughout 2016. These have yet to materialise, as the Fed reverted to a more cautious tone on the prospects of global growth. For as long as it remains low, the oil price will continue to be a deflationary factor for countries in the developed world. For oil-producing nations, it is likely to be a drag on growth. There has been little success in controlling oil production, and it seems the oil price is likely to remain low for a while. Global equity markets have struggled; however, efforts to stimulate economic growth in China and a weakening US dollar provided significant relief to Asian and emerging market equities. This helped to drive the rebound in global equity markets from lows in mid-february. In Europe, investor attention turned towards the Brexit referendum, which will decide whether Britain should remain in the European Union. While this added to uncertainty for investors, the European Central Bank caused a surprise with the extent of its continued measures to stimulate economic growth in the eurozone, which should provide welcome support to markets there. Page 4

Investment Manager s Report (continued) Outlook We feel it is prudent to remain cautious given the current level of uncertainty and resultant market volatility, particularly around the Brexit referendum. Given that there is no certainty of the outcome of the referendum in June, we prefer to focus on assessing and controlling portfolio risk rather than attempting to speculate on a particular outcome. We do know that this particular issue is likely to dominate headlines over the coming months and, if the Scottish referendum is anything to go by, volatility is likely to increase as we approach the actual referendum date on 23 June 2016. As a reflection, we have reduced our exposures to small and medium-sized companies slightly in the lead-up to the referendum date, preferring the relative safer haven of companies within the FTSE 100. This is based on the belief that the top 100 companies in the FTSE 100 are less likely to be affected by a vote to leave given that they are more global in nature. Domestically based small and mid-sized firms will bear the brunt of any exit, or any fears of an imminent exit. We are anticipating increased volatility over the coming months and will look to trade through the ups and downs, selling on rallies and deploying cash on dips when we feel the opportunity is right. We expect sterling to be weak and unpredictable in the run-up to the Brexit referendum. The value of an investment, and any income from it, can fall or rise. You may not get back the full amount invested. Past performance is not a reliable indicator of future results. Personal opinions may change and should not be seen as advice or a recommendation. These products are not suitable for everyone. Any recommendation should be based on a holistic review of your financial situation, objectives and needs. We do not offer investment or tax advice. We recommend you seek professional advice before deciding to invest. Investment Manager Octopus Investments Limited 23 May 2016 Page 5

Significant Information Under the Alternative Investment Fund Managers Directive, ( AIFMD ), acting as the Alternative Investment Fund Manager ( AIFM ), Fund Partners is required to disclose how those whose actions have a material impact on the Fund are remunerated. The remuneration strategy across Fund Partners is governed by the Remuneration Committee, a committee appointed by the Fund Partners Board. The Remuneration Committee has established an AIFM Remuneration Policy designed to ensure the AIFM Remuneration Code in the UK Financial Authority handbook is met proportionately for all AIFM Remuneration Code Staff. Fund Partners considers its activities as non complex due to the fact that regulation limits the AIF strategies conducted and the scope of investment in such a way that investor risk is mitigated. The discretion of Fund Partners and the portfolio manager is strictly controlled within certain pre-defined parameters as determined in the prospectus of each Alternative Investment Fund. In its role as an AIFM, Fund Partners deems itself as lower risk due to the nature of the activities it conducts. Fund Partners does not pay any form of variable remuneration currently. Therefore Fund Partners have provided a basic overview of how staff whose actions have a material impact on the Funds are remunerated. April 2016 Number of Beneficiaries Total remuneration paid Fixed remuneration Variable remuneration paid Carried interest paid by the AIF Total remuneration paid by the AIFM during the financial year 45 1,442,249 1,442,249 0 0 Remuneration paid to employees of the AIFM who have a material impact on the risk profile of the AIF 4 371,337 371,337 0 0 Due to the size and structure of Fund Partners, it is determined that employees of the AIFM who have a material impact on the risk profile of the AIF include the Board and the Head of Risk and Compliance. The delegated investment manager is subject to regulatory requirements on remuneration that Fund Partners deem to be equally as effective as those detailed in the AIFMD, which would include the Capital Requirements Directive or Markets in Financial Instruments Directive. The information in this report is designed to enable shareholders to make an informed judgment on the activities of the Fund during the period it covers and the result of those activities at the end of the period. The long Report and Accounts are available free of charge on request. For more information about the activities and performance of the Fund during the period and previous periods, please contact: Authorised Corporate Director Fund Partners Limited Cedar House, 3 Cedar Park, Cobham Road, Wimborne, Dorset, BH21 7SB Customer Service Centre: 01268 448 634 www.fundpartners co.uk Depositary State Street Trustees Limited 20 Churchill Place, London, E14 5HJ Investment Manager Octopus Investments Limited 33 Holborn, London, EC1N 2HT Authorised and regulated by the FCA Authorised regulated by the FCA Authorised and regulated by the FCA Please note that telephone calls may be recorded for monitoring and training purposes, and to confirm investors' instructions Auditor Deloitte LLP Chartered Accountants and Statutory Auditor Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2DB Page 6