Short report For the year ended 31 Dec 2016
Architas MA Active Intermediate Income Fund For the year ended 31 Dec 2016 Investment objective The aim of the Fund is for you to receive an above average level of income and to maintain the amount of your investment over the medium to long term. Investment policy The Fund pursues its aim mainly by investing in other funds (underlying funds) including funds which are traded on stock exchanges (investment trusts and exchange traded funds). Underlying funds are selected principally on the basis of our assessment of their consistency of investment returns, the risks related to the investment strategy, the strength of the investment process and the stability of the underlying fund s management team. The underlying Funds may invest in a range of investments, including shares, tradable debt (bonds) issued by companies, governments worldwide and other institutions, some of which can easily be converted into cash (money market instruments), freely transferrable rights to buy other investments at a future date (warrants) and financial contracts that derive their values from those of other investment instruments or indices (derivatives). The Fund may also invest directly in such types of investment when there are specific benefits in doing so. However, investment in derivatives is limited to situations where their use may reduce risk or costs or to generate additional capital or income in a manner consistent with the Fund s risk profile. The Fund may use investment techniques including borrowing cash and shares and making investments intended to offset potential losses that may be incurred by other investments (hedging). Ex-dividend 31 Dec, 31 Mar, 30 Jun, 30 Sep Distribution date 28/29 Feb, 31 May, 31 Aug, 30 Nov Risk and reward profile The risk and reward category may shift over time and is not guaranteed. Your investment in the Fund is not guaranteed. The Fund is invested in financial assets and instruments and uses financial techniques that are subject to levels of variation, that may result in gains or losses. Funds of category 4 have shown in the past a low to medium volatility. The volatility describes how much the value of the fund went up and down in the past. The shares of a fund of category 4 might be subject to low to medium price fluctuations based on the historical volatility observed. More information in relation to risks in general may be found in the Risk Factors section of the prospectus and the current Key Investor Information Document (KIID). Important events during the year On 24 September 2016 Caspar Rock resigned as Chief Investment Officer for Architas Multi-Manager Limited. On 24 October 2016 Jaime Arguello was appointed Chief Investment Officer for Architas Multi-Manager Limited. As of November 2016 our regulator, the Financial Conduct Authority (FCA) has removed the requirement for us to provide certain information to you in the form of a Short Report. As a result this will be the last time that your ONE Report will include a Short Report. Your next edition of ONE will indicate documents available to you where you will be able to find fund information. Report and accounts The purpose of sending this Short Report for the Fund is to present you with a summary of how the Fund has performed during the accounting year in accordance with the Financial Conduct Authority s Collective Investment Scheme Sourcebook (COLL) rules. Copies of the latest annual or interim Long reports for Architas Multi-Manager Investments ICVC, which includes this sub-fund, are available free of charge on request to our customer services team who can be contacted on 0800 953 0197. Lower risk Higher risk Other information Potentially lower reward Potentially higher reward The risk indicator is based on historical data and may not be a reliable indication of the future risk profile of the Fund. The lowest category does not mean risk free. The Fund is a sub-fund of Architas Multi-Manager Investments ICVC which is an open ended investment company authorised by the Financial Conduct Authority, and is a UCITS scheme. Performance In the year ended 31 December 2016, the Architas MA Active Intermediate Income Fund rose 13.33% and ranked in the first quartile of its peer group, the IA Mixed Investment 20-60% Shares sector average. (Source: Morningstar Direct, January 2017.)
Market review Discrete annual performance Bond markets had a strong first half of the year as cautious investors looked for safe-haven assets, with global government bonds performing well, reflecting factors such as worries over possible deflation and political uncertainty. Equity markets generally made gains all round during the first half of 2016, despite worries around slow growth in China and the UK s EU Referendum at the end of June. 15 12 13.33 10.57 11.16 10.63 June s vote for Brexit caused sterling to fall dramatically, pushing UK equities up in the months after the vote. November s US election and what the outcome would mean for markets was one of the biggest concerns for investors in the second half of the year. US equities were the top performing sector in Q4 as Trump s promises of tax cuts, deregulation and increased infrastructure spending encouraged investors. Japanese equities had a strong second half of the year, ending as the top performing sector in the July-December period, as the weak yen supported exporters. Bond markets performed poorly in Q4, specifically government bonds, as expectations of higher economic growth towards the end of the year caused inflation expectations to surge. 9 % 6 3 1.63 1.25 6.70 4.78 8.92 8.83 Fund review The Fund s large allocations to UK government bonds and corporate bonds were the driving forces behind the Fund s returns. Allocations to US equity income and alternative assets provided strong returns, while investments in the UK equity income sector also performed well. The Fund s position in an absolute volatility fund was the portfolio s only position to make a loss for the year. Aside from the usual portfolio rebalancing, minimal changes were made in the first half of 2016. In January we sold the Artemis Income Fund and added the Fidelity MoneyBuilder Dividend Fund. In May we began to reduce the Fund s small exposure to emerging markets to zero by selling the Aberdeen Global Emerging Markets Equity Fund and in June we sold the JP Morgan Global Emerging Markets Income Trust. In July we sold our positions in BlackRock Fixed Income Global Opportunities Fund, as well as JP Morgan Senior Secured Loan Fund, followed by August s sale of PFS TwentyFour Monument Bond Fund, raising cash levels instead. In September we sold out of the Neuberger Berman High Yield Bond Fund, instead opening a position in Neuberger Berman Global High Yield Bond Fund, in order to increase geographic diversification to our high yield exposure. In October we bought the ishares $ Treasury Bond 20+ years. November s sale of the Newton International Bond Fund was the last total sale in 2016. 0 31 Dec 15 to 31 Dec 16 31 Dec 14 to 31 Dec 15 31 Dec 13 to 31 Dec 14 Architas MA Active Intermediate Income Fund IA Mixed Investment 20-60% Shares sector average 31 Dec 12 to 31 Dec 13 31 Dec 11 to 31 Dec 12 Source: Morningstar, mid to mid, net revenue reinvested. Please note that past performance is not a guide to future performance. The net value of investments may go down as well as up, and you may receive less back that you invested. The above graph shows performance for the R income (net) share class. Performance figures for the other share classes are available by contacting Architas. Net asset value record* Share class Net asset value 31/12/2016 Net asset value 31/12/2015 A accumulation (net) 146.52 128.50 A income (net) 127.83 115.51 R accumulation (net) 154.17 136.00 R income (net) 131.81 120.01 * Valued at bid market value.
Top ten holdings As at 31 Dec 2016 As at 31 Dec 2015 JP Morgan US Equity Income Fund 10.58% JP Morgan US Equity Income Fund 7.40% JO Hambro UK Equity Income Fund 9.15% CF Woodford Equity Income Fund 7.37% UBAM Global High Yield Solution 5.97% BlackRock Continental European Income Fund 6.16% BlackRock Asia Pacific Equity Income Fund 5.80% JO Hambro UK Equity Income Fund 5.37% Robeco US Premium Equities Fund 4.08% Schroder Tokyo Fund 4.93% Henderson Preference & Bond Fund 4.04% UBAM Global High Yield Solution 4.85% CF Woodford Equity Income Fund 3.93% PFS TwentyFour Dynamic Bond Fund 4.72% Fidelity MoneyBuilder Dividend Fund 3.89% Henderson Preference & Bond Fund 4.68% PFS TwentyFour Dynamic Bond Fund 3.87% Robeco US Premium Equities Fund 3.74% BlackRock Continental European Income Fund 3.84% Artemis Income Fund 3.72% Portfolio breakdown As at 31 Dec 2016 l UK equities 17.84% l North American equities 15.42% l High yield bonds 11.96% l UK corporate bonds 11.87% l Global bonds 10.37% l Alternatives 7.35% l Property 6.94% l Asia Pacific excluding Japan equities 6.10% l UK gilts 4.10% l Europe excluding UK equities 4.04% l Global emerging debt 4.01% As at 31 Dec 2015 l UK equities 16.72% l Global bonds 15.06% l North American equities 11.32% l High yield bonds 10.62% l UK corporate bonds 9.67% l Alternatives 8.21% l Europe excluding UK equities 6.26% l Property 5.73% l Japan equities 5.01% l UK gilts 3.16% l Global emerging debt 2.86% l Emerging markets equities 2.50% l Asia Pacific excluding Japan equities 1.49% l Global convertible bonds 1.39%
Ongoing charges figure(s) Share class Administrative expenses Underlying fund expenses[a] Total OCF 31/12/2016 A accumulation (net) 0.84% 0.49% 1.33% A income (net) 0.84% 0.49% 1.33% R accumulation (net) 1.59% 0.49% 2.08% R income (net) 1.59% 0.49% 2.08% Share class Administrative expenses Underlying fund expenses[a] Total OCF 31/12/2015 A accumulation (net) 0.84% 0.59% 1.43% A income (net) 0.84% 0.59% 1.43% R accumulation (net) 1.59% 0.59% 2.18% R income (net) 1.59% 0.59% 2.18% [a] Underlying fund expenses are in relation to your fund holding investments in other collective investment schemes but excludes holdings in investment trusts. Performance record A accumulation (net)[a] A income (net)[a] Calendar year 2012 104.60 100.00 104.30 100.00 2013 3.934 118.70 104.40 3.819 116.50 103.30 2014 3.691 125.70 114.80 3.523 117.50 110.00 2015 4.154 133.70 122.60 3.823 123.10 111.70 2016 3.804 146.70 122.10 3.423 128.90 109.80 2017[c] 1.082 N/A N/A 0.939 N/A N/A R accumulation (net) R income (net) Calendar year 2012 2.676 112.90 102.30 2.691 110.60 102.90 2013 4.191 127.90 112.70 4.064 123.20 109.50 2014 3.906 134.10 123.00 3.653 122.90 115.70 2015 4.361 142.10 130.10 3.948 128.50 116.30 2016 4.074 154.40 129.20 3.574 133.20 114.00 2017[c] 1.422 N/A N/A 1.182 N/A N/A [a] From 31 July 2013 (date of launch). [b] Highest and lowest share prices are at mid-market values. [c] Up to 28 February 2017 (the final distribution pay date).
Contact us Please contact customer services for all enquires: Call 0800 953 0197* * Monday to Friday 9.00am 5.30pm; calls may be recorded. Calls are free from landlines and mobiles within the UK. If you would like to access more information about Architas, our Funds or to give feedback, you can do so via our website. www.architas.com You can write to us at: Architas Multi-Manager Limited PO Box 10939 Chelmsford CM99 2XU Fax: 0844 620 0153 For a written valuation, general enquiries, dealing or notifying us if your customer circumstances change. Authorised corporate director Architas Multi-Manager Limited 5 Old Broad Street London EC2N 1AD United Kingdom Authorised and regulated by the Financial Conduct Authority. Member of the Investment Association. Depositary State Street Trustees Limited 20 Churchill Place Canary Wharf London E14 5HJ Authorised and regulated by the Financial Conduct Authority. Member of the Depository and Trustee Association. Independent auditors Ernst and Young 10 George Street Edinburgh EH2 2DZ