Jupiter Merlin Funds Société d Investissement à Capital Variable (SICAV) Semi-Annual Review and Unaudited Financial Statements For the six month period ended 31 March 2018 R.C.S. B 139.274
Contents Contents Investment Objectives 4 Management, Administration and Independent Auditor 5 Board of Directors Report 6 Unaudited Statement of Net Assets 8 Unaudited Statement of Operations and Changes in Net Assets 9 Unaudited Statement of Changes in Shares Issued 10 Unaudited Statistical Information 11 Schedule of Investments Jupiter Merlin Funds Jupiter Managed European Portfolio (1) 13 Jupiter Merlin Funds Jupiter Merlin International Balanced Portfolio (1) 14 Jupiter Merlin Funds Jupiter Merlin International Equities Portfolio (2) 16 Jupiter Merlin Funds Jupiter Merlin Real Return Portfolio (2) 18 Notes to the Financial Statements 20 Additional Information 28 Subscriptions cannot be received on the basis of this report. Subscriptions can only be accepted on the basis of the current prospectus accompanied by the key investor information document supplemented by the latest annual report and semi-annual report if published thereafter. (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents 3
Investment Objectives Jupiter Merlin Funds Jupiter Managed European Portfolio ( Jupiter Managed European Portfolio ) (1) Jupiter Merlin Funds Jupiter Merlin International Balanced Portfolio ( Jupiter Merlin International Balanced Portfolio ) (1) Jupiter Merlin Funds Jupiter Merlin International Equities Portfolio ( Jupiter Merlin International Equities Portfolio ) (2) Jupiter Merlin Funds Jupiter Merlin Real Return Portfolio ( Jupiter Merlin Real Return Portfolio ) (2) The investment objective of Jupiter Managed European Portfolio is to achieve long-term capital growth by investing predominantly in SICAVs, unit trusts, OEICs, ETFs (whether open-ended or closed-ended) and other collective investment schemes across several management groups. The Underlying Funds invest predominantly in international equities. The Fund may also invest in Underlying Funds investing in fixed interest stocks, and, to the extent permitted by the Investment Restrictions, in Underlying Funds investing in or seeking exposure to commodities and property. The investment objective of Jupiter Merlin International Balanced Portfolio is to achieve long-term capital growth with income by investing predominantly in SICAVs, unit trusts, OEICs, Exchange Traded Funds (whether openended or closed-ended) and other collective investment schemes across several management groups. The Underlying Funds invest predominantly in international equities and bonds. To the extent permitted by the Investment Restrictions, the Fund may also invest in Underlying Funds investing in or seeking exposure to commodities and property. The investment objective of Jupiter Merlin International Equities Portfolio is to achieve long-term capital growth by investing predominantly in SICAVs, unit trusts, OEICs, Exchange Traded Funds and other collective investment schemes across several management groups. The Underlying Funds invest predominantly in international equities. To the extent permitted by the Investment Restrictions, the Fund may also invest in Underlying Funds investing in or seeking exposure to commodities and property. The investment objective of the Jupiter Merlin Real Return Portfolio is to achieve real returns over a 3 year rolling period by investing predominantly in exchange traded funds (ETFs) and closed ended funds qualifying as transferable securities within the meaning of article 41 of the Law across several management groups. The Underlying Funds invest predominantly in international equities and bonds. To the extent permitted by the Investment Restrictions, the Fund may also invest in Underlying Funds investing in or seeking exposure to commodities and property. (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. 4
Management, Administration and Independent Auditor Management, Administration and Independent Auditor Directors Registered Office Depositary, Paying Agent and Administrator Management Company Adrian Creedy (Chairman) Garth Lorimer Turner* Jacques Elvinger* Patrick Zurstrassen* Paula Moore 6, route de Trèves Senningerberg L-2633 Luxembourg J.P. Morgan Bank Luxembourg S.A. 6, route de Trèves Senningerberg L-2633 Luxembourg Jupiter Unit Trust Managers Limited The Zig Zag Building 70 Victoria Street London SW1E 6SQ United Kingdom Independent Auditor Ernst & Young S.A. (prior to 12 January 2018) 35E avenue John F. Kennedy L-1855 Luxembourg PricewaterhouseCoopers société coopérative (from 12 January 2018) 2, rue Gerhard Mercator L-2182 Luxembourg Legal Adviser Investment Manager Distributor Elvinger Hoss Prussen, société anonyme 2, Place Winston Churchill L-1340 Luxembourg Jupiter Asset Management Limited The Zig Zag Building 70 Victoria Street London SW1E 6SQ United Kingdom Authorised and regulated by the Financial Conduct Authority Jupiter Asset Management Limited The Zig Zag Building 70 Victoria Street London SW1E 6SQ United Kingdom *Independent 5
Board of Directors Report Board of Directors Report The Board presents the Semi-Annual Review and Unaudited Financial Statements of the Company for the period ended 31 March 2018. Structure of the Company The board of directors of the Company (the Board ) has designated Jupiter Unit Trust Managers Limited ( JUTM ) as Management Company of the Company to perform investment management, administration and marketing functions for the Company. JUTM is authorised as a management company managing UCITS governed by the UCITS Directive and is authorised and regulated by the Financial Conduct Authority of the United Kingdom. As at 31 March 2018, the Company comprised 4 funds with multiple share classes. Corporate Governance and the ALFI Code of Conduct The Board undertakes an annual review of ongoing compliance with the principles of the Code and considers that the Company has been in compliance with its principles in all material aspects throughout the financial year ended 30 September 2017. Board Composition The Board is composed of five Board members, three of them being independent from JUTM and Jupiter Asset Management Limited ( JAM ). ADRIAN CREEDY Director and Chairman Adrian Creedy (British) is a Senior Adviser at Jupiter Asset Management Limited and former Chief Operating Officer of Jupiter Fund Management plc. He is a Solicitor of the Supreme Court of England and Wales. GARTH LORIMER TURNER Director Garth Lorimer Turner (British) is a Solicitor of the Supreme Court of England & Wales, a Solicitor of the Supreme Court of Hong Kong and a Bermuda Barrister & Attorney. He is a director of several companies, including investment funds. JACQUES ELVINGER Director Jacques Elvinger (Luxembourgish) is a partner of the Luxembourg law firm of Elvinger Hoss Prussen, société anonyme. PATRICK ZURSTRASSEN Director Patrick Zurstrassen (Belgian) is an independent director. He is honorary chairman of the European Confederation of Directors Associations. PAULA MOORE Director Paula Moore (British) is a Chartered Accountant and a member of the Institute of Chartered Accountants in England and Wales. She is a Director of JAML, a Director of JUTM and Joint Chief Operating Officer of Jupiter Fund management plc. Chairman s Review For a while it could have felt like stock markets across the globe were rising despite what was happening in the world, rather than because of it. Rising inflation and interest rates, the uncertainties surrounding Brexit, the unpredictable actions of President Trump and a potentially dangerous situation in North Korea were just some of the reasons why investors might worry. Yet markets had been relatively buoyant, as economic growth was generally strong, many companies were making good profits and some of the dire geopolitical predictions didn t come to pass. Volatility returns to stock markets The mood in the market changed at the end of January as concerns about the impact of higher interest rates finally took a grip on investors thinking and markets fell. From 26th January to the end of March 2018, the major stock market indices in the UK, US, Europe and Japan each fell about 8%-9% in local currency terms, more than wiping out the gains made over previous months. As the European economy accelerates, the European Central Bank has been reducing its quantitative easing programme; while in the US, the Federal Reserve has gone even further by not only reducing quantitative easing but also by raising interest rates, with further interest rate rises expected this year. The UK has also raised interest rates and is guiding the market to expect another. Central banks started taking these actions because of the relatively strong economic growth and rising levels of inflation. It was the inflation factor in particular that focused their attention, and there is a concern that low levels of unemployment in Europe and the US could lead to wages going up, which would further stoke inflation. If that proves to be the case, then central banks are likely to be more aggressive in raising interest rates to keep inflation under control. Higher interest rates, however, risk stifling economic growth in an environment where growth already feels quite fragile in some parts of the world. It is a delicate balancing act, and one that markets are nervous may not be achieved successfully. It is too early to tell whether the recent market falls are just a sudden squall or the start of more enduring weakness. Many companies across the world have strong business models, solid accounts and growth potential, yet clearly there are risks that should not be ignored. The US and China clash over trade At the start of March, President Trump announced trade tariffs on steel and aluminium products imported into the USA. This was greeted with some dismay in Europe, but the most robust reaction came from China, which responded in kind by imposing its own tariffs on a wide range of goods imported from the US, such as peanut butter and wine, to an equivalent economic value. As ever in geopolitics, the true motivations of the various parties are open to debate. To what extent are the US and China prepared to be stubborn and risk a trade war, or are they likely to reach a mutuallyagreeable compromise in a way that allows each to save face and appear strong? Furthermore, to what extent is trade being used as a bargaining chip to create leverage in the ongoing diplomatic affairs with North Korea? Nobody can know the answers to those questions, but for the time being many investors seem to have taken the approach that being cautious is the best policy, as illustrated by the market falls. 6
Board of Directors Report Board of Directors Report (continued) Chairman s Review (continued) The prevailing uncertainty in the world makes life challenging for investors, but it is at times like this that active funds have the best opportunity to lay the foundations upon which long-term outperformance can be built. The Jupiter Independent Funds team s ability to identify fund managers with the skills and experience to guide investors through this period is especially valuable in such an environment. Annual General Meeting The next annual general meeting of the Company will be held on 11 January 2019 at the registered office of the Company to consider matters relating to the year ended on 30 September 2018. For and on behalf of the Board Adrian Creedy Chairman Luxembourg, 24 May 2018 7
Unaudited Statement of Net Assets Unaudited Statement of Net Assets as at 31 March 2018 Notes Combined Jupiter Managed European Portfolio (1) Jupiter Merlin International Balanced Portfolio (1) Jupiter Merlin International Equities Portfolio (2) Jupiter Merlin Real Return Portfolio (2) Assets Investments in securities at cost 285,475,442 27,813,698 61,164,274 62,484,211 134,013,259 Unrealised gain 51,911,682 4,806,186 7,531,797 19,219,881 20,353,818 Investments in securities at market value 337,387,124 32,619,884 68,696,071 81,704,092 154,367,077 Net unrealised gain on forward currency exchange contracts 363,448 668 362,780 Other Assets Cash and short-term deposits* 6,318,853 175,337 2,021,970 247,912 3,873,634 Dividends receivable 214,813 46,258 138,831 29,724 Due from brokers 1,799,337 1,050,711 748,626 Management fee rebates 227,693 35,673 64,475 54,948 72,597 Subscriptions receivable 318,204 51,195 1,036 265,973 Other Assets 8,878,900 257,268 3,327,182 1,082,246 4,212,204 Total Assets 346,629,472 32,877,152 72,023,253 82,787,006 158,942,061 Liabilities Net unrealised loss on forward currency exchange contracts 862 862 Due to shareholders 1,155,401 487,328 384,348 283,725 Bank overdraft** 13 4,795 1,907 2,888 Investment management fees payable 3 397,342 52,517 92,716 128,226 123,883 Accounts payable and accrued expenses 72,794 5,317 16,269 20,590 30,618 Total Liabilities 1,631,194 57,834 599,082 533,164 441,114 Net Assets 344,998,278 32,819,318 71,424,171 82,253,842 158,500,947 *Cash held by depositary and other banks. **Includes negative cash at brokers. (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 8
Unaudited Statement of Operations and Changes in Net Assets Unaudited Statement of Operations and Changes in Net Assets for the six month period ended 31 March 2018 Notes Combined Jupiter Managed European Portfolio (1) Jupiter Merlin International Balanced Portfolio (1) Jupiter Merlin International Equities Portfolio (2) Jupiter Merlin Real Return Portfolio (2) Income Income from investments, net 9 1,323,722 355,294 571,485 155,154 241,789 Management fee rebates 571,925 90,354 140,201 174,266 167,104 Total Income 1,895,647 445,648 711,686 329,420 408,893 Expenses Bank charges and interest 20,374 431 3,130 1,765 15,048 Investment management fees 2,650,066 340,168 596,486 930,777 782,635 Aggregate operating fee 4 436,615 34,016 90,334 135,788 176,477 Total Expenses 3,107,055 374,615 689,950 1,068,330 974,160 Net Operating Income/(Loss) for the Period (1,211,408) 71,033 21,736 (738,910) (565,267) Net realised Gains/(Losses) on: Investments in securities 21,398,890 323,990 3,606,562 17,419,287 49,051 Forward currency exchange contracts (1,211,637) 1,938 20,433 (1,234,008) Currency exchange transactions 2,261,378 (1,301) (26,253) 306,289 1,982,643 Total Net realised Gains/(Losses) 22,448,631 322,689 3,582,247 17,746,009 797,686 Net change in unrealised Gains/(Losses) on: Investments in securities (15,805,617) (854,338) (3,385,909) (13,906,772) 2,341,402 Forward currency exchange contracts (1,136,697) 612 758 (1,138,067) Total Change in Unrealised Gains/(Losses) on Investments (16,942,314) (854,338) (3,385,297) (13,906,014) 1,203,335 and Derivatives Net Increase/(Decrease) in Net Assets from Operations 4,294,909 (460,616) 218,686 3,101,085 1,435,754 Capital transactions Received on issue of shares 27,496,211 118,906 2,928,765 1,925,361 22,523,179 Paid on redemptions of shares (68,470,139) (1,383,956) (6,596,529) (39,534,390) (20,955,264) Total Increase/(Decrease) in Net Assets for the Period (36,679,019) (1,725,666) (3,449,078) (34,507,944) 3,003,669 Beginning of the Period 381,677,297 34,544,984 74,873,249 116,761,786 155,497,278 End of the Period 344,998,278 32,819,318 71,424,171 82,253,842 158,500,947 (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 9
Unaudited Statement of Changes in Shares Issued Unaudited Statement of Changes in Shares Issued for the six month period ended 31 March 2018 Shares oustanding at beginning of period Shares issued Shares redeemed Shares outstanding at end of period Jupiter Managed European Portfolio (1) Class E EUR Acc 71,620 244 (2,846) 69,018 Jupiter Merlin International Balanced Portfolio (1) Class D EUR Acc 128,817 10,215 139,032 Class D GBP A Inc 19,227 8,429 (3,043) 24,613 Class D USD Acc 20,007 6,886 26,893 Class E EUR Acc 46,929 387 (2,375) 44,941 Class E GBP Acc 1,637 96 (194) 1,539 Class E USD Acc 1,524 (76) 1,448 Class L EUR Acc 945,855 57,905 (122,112) 881,648 Class L GBP A Inc 1,036,289 42,974 (94,232) 985,031 Class L USD Acc 961,376 30,207 (83,364) 908,219 Jupiter Merlin International Equities Portfolio (2) Class D EUR Acc 72,552 72,552 Class D GBP A Inc 4,603 2,199 (2,681) 4,121 Class D USD Acc 67,061 (5,363) 61,698 Class E EUR Acc 80,871 313 (4,732) 76,452 Class E GBP Acc 134 134 Class L EUR Acc 1,110,800 38,907 (677,561) 472,146 Class L GBP A Inc 636,331 9,487 (188,217) 457,601 Class L USD Acc 2,374,307 39,957 (1,018,578) 1,395,686 Jupiter Merlin Real Return Portfolio (2) Class D EUR Acc 16,503 801 17,304 Class D GBP Acc HSC 396,925 2,711 (9,469) 390,167 Class I EUR Acc 4,914,095 927,713 5,841,808 Class I GBP Acc HSC 2,231,590 (869,650) 1,361,940 Class I USD Acc HSC 258,827 (53) 258,774 Class L EUR Acc 313 4,722 (215) 4,820 Class L GBP Acc HSC 175,853 6,399 (28,591) 153,661 Class L SGD Acc HSC 2,577,908 624,403 (380,109) 2,822,202 Class L USD Acc HSC 2,278,751 423,122 (330,238) 2,371,635 (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 10
Unaudited Statistical Information Unaudited Statistical Information as at 31 March 2018 Total Net Assets: Currency As at 31 March 2018 As at 30 September 2017 As at 30 September 2016 Jupiter Managed European Portfolio (1) EUR 32,819,318 34,544,984 34,498,933 Jupiter Merlin International Balanced Portfolio (1) EUR 71,424,171 74,873,249 82,097,199 Jupiter Merlin International Equities Portfolio (2) EUR 82,253,842 116,761,786 121,963,147 Jupiter Merlin Real Return Portfolio (2) EUR 158,500,947 155,497,278 185,781,446 (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 11
Unaudited Statistical Information Unaudited Statistical Information as at 31 March 2018 (continued) Net Asset Value per Share: As at 31 March 2018 As at 30 September 2017 As at 30 September 2016 Jupiter Managed European Portfolio (1) Class E EUR Acc 474.99* 481.37* 434.14 Jupiter Merlin International Balanced Portfolio (1) Class D EUR Acc 12.45* 12.34* 11.57* Class D GBP A Inc 13.28* 13.26* 12.24* Class D USD Acc $11.50* $10.93* $9.69* Class E EUR Acc 397.27* 396.17* 375.93* Class E GBP Acc 345.71* 347.24* 321.54* Class E USD Acc $306.69* $293.17* $262.94* Class L EUR Acc 16.75* 16.67* 15.74* Class L GBP A Inc 18.74* 18.78* 17.34* Class L USD Acc $19.66* $18.76* $16.75* Jupiter Merlin International Equities Portfolio (2) Class D EUR Acc 13.01* 12.76* 11.73* Class D GBP A Inc 14.00* 13.83* 12.40* Class D USD Acc $12.30* $11.56* $10.04* Class E EUR Acc 448.49* 442.40* 411.50* Class E GBP Acc 391.18* 388.65* 352.77* Class L EUR Acc 18.87* 18.58* 17.20* Class L GBP A Inc 24.78* 24.57* 22.21* Class L USD Acc $21.49* $20.27* $17.75* Jupiter Merlin Real Return Portfolio (2) Class D EUR Acc 12.18* 12.03* 11.35* Class D GBP Acc HSC 12.49* 12.29* 11.52* Class I EUR Acc 13.75* 13.58* 12.81* Class I GBP Acc HSC 13.99* 13.77* 12.90* Class I USD Acc HSC $14.14* $13.81* $12.83* Class L EUR Acc 12.07* 11.97* 11.38* Class L GBP Acc HSC 12.06* 11.91* 11.25* Class L SGD Acc HSC SGD 12.69* SGD 12.48* SGD 11.72* Class L USD Acc HSC $12.24* $12.00* $11.24* * Net Asset Values per Share include Swing Pricing Adjustments. For the current year, refer to Note 15 for further details. (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 12
Jupiter Managed European Portfolio Jupiter Managed European Portfolio (1) Schedule of Investments as at 31 March 2018 Investments Currency Quantity/ Nominal Value Market Value EUR % of Net Assets Units of authorised UCITS or other collective investment undertakings Collective Investment Schemes UCITS Luxembourg Argos Argonaut Fund Class A EUR EUR 13,500 4,981,230 15.18 The Jupiter Global Fund Jupiter Europa Class L EUR A Acc EUR 220,000 3,163,600 9.64 The Jupiter Global Fund Jupiter European Growth Class L EUR Acc EUR 145,000 4,602,300 14.02 12,747,130 38.84 United Kingdom FP CRUX European Special Situations Fund Class I Income GBP GBP 2,350,000 5,922,764 18.05 Jupiter UK Special Situations Fund I-Class Income Units GBP 1,850,000 3,920,936 11.95 Schroder European Alpha Income Fund Class L Income GBP GBP 7,107,000 5,987,799 18.24 TB Evenlode Income C Income GBP 1,750,000 4,041,255 12.31 19,872,754 60.55 Total Collective Investment Schemes UCITS 32,619,884 99.39 Total Units of authorised UCITS or other collective investment undertakings 32,619,884 99.39 Total Investments 32,619,884 99.39 Cash 175,337 0.53 Other Assets/(Liabilities) 24,097 0.08 Total Net Assets 32,819,318 100.00 (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. Related Party Fund Geographic Allocation of Portfolio % of Net Assets United Kingdom 60.55 Luxembourg 38.84 Total Investments 99.39 Cash and Other Assets/(Liabilities) 0.61 Total 100.00 The accompanying notes form an integral part of these financial statements. 13
Jupiter Merlin International Balanced Portfolio Jupiter Merlin International Balanced Portfolio (1) Schedule of Investments as at 31 March 2018 Investments Currency Quantity/ Nominal Value Market Value EUR % of Net Assets Units of authorised UCITS or other collective investment undertakings Collective Investment Schemes UCITS Ireland Findlay Park American Fund Dollar Shares USD 82,000 7,146,462 10.01 7,146,462 10.01 Luxembourg Argos Argonaut Fund Class A EUR EUR 4,000 1,476,092 2.07 The Jupiter Global Fund Jupiter Dynamic Bond Class I EUR Q Inc EUR 1,250,000 13,537,500 18.95 The Jupiter Global Fund Jupiter Global Value Class I GBP Acc GBP 450,000 6,135,778 8.59 Vontobel TwentyFour Global Unconstrained Bond AMH (hedged) EUR EUR 135,000 13,621,500 19.07 34,770,870 48.68 United Kingdom Capita CF Morant Wright Japan Fund B Accumulation GBP 250,000 1,196,833 1.68 First State Stewart Investors Asia Pacific Leaders Fund Class B (Accumulation) GBP GBP 250,000 1,933,640 2.71 FP CRUX European Special Situations Fund Class I Income GBP GBP 550,000 1,386,179 1.94 Fundsmith Equity Fund I Class Income Shares GBP 1,700,000 6,210,582 8.69 Jupiter Global Emerging Markets Fund I-Class Accumulation Units GBP 2,500,000 2,135,399 2.99 Jupiter Japan Income Fund I-Class Income Units GBP 1,100,000 1,182,691 1.66 Old Mutual North American Equity Fund R (GBP) Accumulation Shares GBP 2,300,000 6,930,833 9.70 Schroder European Alpha Income Fund Class L Income GBP GBP 1,750,000 1,474,412 2.06 22,450,569 31.43 Total Collective Investment Schemes UCITS 64,367,901 90.12 Exchange Traded Funds Ireland ishares USD Treasury Bond 20+yr Fund EUR 150,000 722,175 1.01 722,175 1.01 Jersey ETFS Physical Gold Fund USD 35,000 3,605,995 5.05 3,605,995 5.05 Total Exchange Traded Funds 4,328,170 6.06 Total Units of authorised UCITS or other collective investment undertakings 68,696,071 96.18 Total Investments 68,696,071 96.18 Cash 2,020,063 2.83 Other Assets/(Liabilities) 708,037 0.99 Total Net Assets 71,424,171 100.00 (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. Related Party Fund The accompanying notes form an integral part of these financial statements. 14
Jupiter Merlin International Balanced Portfolio Jupiter Merlin International Balanced Portfolio (1) Schedule of Investments as at 31 March 2018 (continued) Geographic Allocation of Portfolio % of Net Assets Luxembourg 48.68 United Kingdom 31.43 Ireland 11.02 Jersey 5.05 Total Investments 96.18 Cash and Other Assets/(Liabilities) 3.82 Total 100.00 Forward Currency Exchange Contracts Currency Purchased Amount Purchased Currency Sold Amount Sold Maturity Date Counterparty Unrealised Gain/(Loss) EUR % of Net Assets USD 39,300 EUR 31,637 03/04/2018 J.P. Morgan 254 Total Unrealised Gain on Forward Currency Exchange Contracts 254 EUR 8,440 USD 10,512 04/04/2018 J.P. Morgan (90) GBP 6,560 EUR 7,519 03/04/2018 J.P. Morgan (34) GBP 321,141 EUR 367,416 04/04/2018 J.P. Morgan (992) Total Unrealised Loss on Forward Currency Exchange Contracts (1,116) Net Unrealised Loss on Forward Currency Exchange Contracts (862) (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 15
Jupiter Merlin International Equities Portfolio Jupiter Merlin International Equities Portfolio (2) Schedule of Investments as at 31 March 2018 Investments Currency Quantity/ Nominal Value Market Value EUR % of Net Assets Units of authorised UCITS or other collective investment undertakings Collective Investment Schemes UCITS Ireland Findlay Park American Fund Dollar Shares USD 179,000 15,600,214 18.96 15,600,214 18.96 Luxembourg Argos Argonaut Fund Class A EUR EUR 13,000 4,796,814 5.83 The Jupiter Global Fund Jupiter Global Value Class I GBP Acc GBP 1,035,000 14,112,289 17.16 18,909,103 22.99 United Kingdom Capita CF Morant Wright Japan Fund B Accumulation GBP 550,000 2,633,033 3.20 First State Stewart Investors Asia Pacific Leaders Fund Class B (Accumulation) GBP GBP 550,000 4,254,008 5.17 FP CRUX European Special Situations Fund Class I Income GBP GBP 800,000 2,016,260 2.45 Fundsmith Equity Fund I Class Income Shares GBP 3,800,000 13,882,478 16.88 Jupiter Global Emerging Markets Fund I-Class Accumulation Units GBP 5,100,000 4,356,214 5.30 Jupiter Japan Income Fund Income Units GBP 2,500,000 2,578,110 3.14 Old Mutual North American Equity Fund R (GBP) Accumulation Shares GBP 5,100,000 15,368,369 18.68 Schroder European Alpha Income Fund Class L Income GBP GBP 2,500,000 2,106,303 2.56 47,194,775 57.38 Total Collective Investment Schemes UCITS 81,704,092 99.33 Total Units of authorised UCITS or other collective investment undertakings 81,704,092 99.33 Total Investments 81,704,092 99.33 Cash 247,912 0.30 Other Assets/(Liabilities) 301,838 0.37 Total Net Assets 82,253,842 100.00 (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. Related Party Fund The accompanying notes form an integral part of these financial statements. 16
Jupiter Merlin International Equities Portfolio Jupiter Merlin International Equities Portfolio (2) Schedule of Investments as at 31 March 2018 (continued) Geographic Allocation of Portfolio % of Net Assets United Kingdom 57.38 Luxembourg 22.99 Ireland 18.96 Total Investments 99.33 Cash and Other Assets/(Liabilities) 0.67 Total 100.00 Forward Currency Exchange Contracts Currency Purchased Amount Purchased Currency Sold Amount Sold Maturity Date Counterparty Unrealised Gain/(Loss) EUR % of Net Assets USD 142,000 EUR 114,312 03/04/2018 J.P. Morgan 917 USD 86,000 EUR 69,478 04/04/2018 J.P. Morgan 308 Total Unrealised Gain on Forward Currency Exchange Contracts 1,225 EUR 509 USD 632 03/04/2018 J.P. Morgan (4) GBP 144,291 EUR 165,165 04/04/2018 J.P. Morgan (528) USD 8,704 EUR 7,087 05/04/2018 J.P. Morgan (25) Total Unrealised Loss on Forward Currency Exchange Contracts (557) Net Unrealised Gain on Forward Currency Exchange Contracts 668 (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 17
Jupiter Merlin Real Return Portfolio Jupiter Merlin Real Return Portfolio (2) Schedule of Investments as at 31 March 2018 Investments Currency Quantity/ Nominal Value Market Value EUR % of Net Assets Units of authorised UCITS or other collective investment undertakings Collective Investment Schemes UCITS Ireland Findlay Park American Fund Dollar Shares USD 115,000 10,022,478 6.32 Old Mutual Global Equity Absolute Return Fund I (EUR) Hedged Accumulation Shares EUR 9,450,000 16,232,265 10.24 Old Mutual UK Specialist Equity Fund F (EUR) Hedged Accumulation Shares EUR 2,340,000 28,401,750 17.92 Polar Capital UK Absolute Equity Fund Class I Hedged Euro Share EUR 1,140,000 29,651,400 18.71 Prusik Asian Equity Income Fund Class '2X' US Dollar Distributing Shares USD 70,000 10,385,394 6.55 94,693,287 59.74 Luxembourg The Jupiter Global Fund Jupiter Europa Class L EUR A Acc EUR 230,000 3,307,400 2.09 The Jupiter Global Fund Jupiter Global Levered Absolute Return Fund Class F EUR Acc HSC EUR 120,000 11,506,800 7.26 The Jupiter Global Fund Jupiter Global Value Class I GBP Acc GBP 750,000 10,226,296 6.45 25,040,496 15.80 United Kingdom Fundsmith Equity Fund I Class Income Shares GBP 2,800,000 10,229,194 6.45 Jupiter Absolute Return Fund I-Class Accumulation Units GBP 9,500,000 6,057,162 3.82 Man GLG UK Absolute Value Fund Professional Accumulation (Class CX) GBP 7,900,000 10,104,665 6.38 26,391,021 16.65 Total Collective Investment Schemes UCITS 146,124,804 92.19 Exchange Traded Funds Jersey ETFS Physical Gold Fund USD 80,000 8,242,273 5.20 8,242,273 5.20 Total Exchange Traded Funds 8,242,273 5.20 Total Units of authorised UCITS or other collective investment undertakings 154,367,077 97.39 Total Investments 154,367,077 97.39 Cash 3,870,746 2.44 Other Assets/(Liabilities) 263,124 0.17 Total Net Assets 158,500,947 100.00 (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. Related Party Fund The accompanying notes form an integral part of these financial statements. 18
Jupiter Merlin Real Return Portfolio Jupiter Merlin Real Return Portfolio (2) Schedule of Investments as at 31 March 2018 (continued) Geographic Allocation of Portfolio % of Net Assets Ireland 59.74 United Kingdom 16.65 Luxembourg 15.80 Jersey 5.20 Total Investments 97.39 Cash and Other Assets/(Liabilities) 2.61 Total 100.00 Forward Currency Exchange Contracts Currency Purchased Amount Purchased Currency Sold Amount Sold Maturity Date Counterparty Unrealised Gain/(Loss) EUR % of Net Assets EUR 258,778 GBP 226,245 13/04/2018 J.P. Morgan 696 EUR 391,151 USD 481,524 13/04/2018 J.P. Morgan 651 GBP 26,024,207 EUR 29,299,075 13/04/2018 J.P. Morgan 387,231 0.24 SGD 109,443 EUR 67,318 03/04/2018 J.P. Morgan 382 SGD 36,777,462 EUR 22,698,151 13/04/2018 J.P. Morgan 43,514 0.03 USD 53,101 EUR 42,811 03/04/2018 J.P. Morgan 278 USD 214,865 EUR 173,398 05/04/2018 J.P. Morgan 946 USD 350,812 EUR 283,883 13/04/2018 J.P. Morgan 614 Total Unrealised Gain on Forward Currency Exchange Contracts 434,312 0.27 EUR 15,343,524 GBP 13,500,000 26/04/2018 J.P. Morgan (50,487) (0.03) EUR 65,343 SGD 106,103 04/04/2018 J.P. Morgan (291) EUR 160,933 SGD 260,976 05/04/2018 J.P. Morgan (497) EUR 574,779 SGD 933,266 13/04/2018 J.P. Morgan (2,314) EUR 28,261 USD 35,065 04/04/2018 J.P. Morgan (193) EUR 876,721 USD 1,085,069 13/04/2018 J.P. Morgan (3,234) USD 33,910,765 EUR 27,515,035 13/04/2018 J.P. Morgan (14,516) (0.01) Total Unrealised Loss on Forward Currency Exchange Contracts (71,532) (0.04) Net Unrealised Gain on Forward Currency Exchange Contracts 362,780 0.23 (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. The accompanying notes form an integral part of these financial statements. 19
Notes to the Financial Statements Notes to the Financial Statements for the six month period ended 31 March 2018 1. General Information Jupiter Merlin Funds (the Company ) is an open-ended investment company which qualifies as an undertaking for collective investment in transferable securities (UCITS) under part I of the law of 17 December 2010, as amended, regarding undertakings for collective investment. The Company was incorporated in Luxembourg as a société d investissement à capital variable (SICAV) on 4 June 2008 for an unlimited duration. The Company may issue multiple classes of Shares in several funds (the Funds ). A separate pool of assets and liabilities is maintained for each Fund and is invested in accordance with the investment objective applicable to the relevant Fund. All liabilities attributable to a particular Fund are binding solely upon that Fund. As at 31 March 2018 the Company was comprised of the following Funds with the following share classes in issue: Jupiter Managed European Portfolio (1) E Jupiter Merlin International Balanced Portfolio (1) D E L Jupiter Merlin International Equities Portfolio (2) D E L Jupiter Merlin Real Return Portfolio (2) D I L Class (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. Class E and I Shares are reserved for certain Institutional Investors only while Class D and L Shares are also available for subscription by Retail Investors. Unless a Class is identified as a Distributing Fund or a dividend policy is otherwise specified in the relevant Information Sheet, all Classes of all Funds with the exception of Jupiter Merlin International Balanced Portfolio s Class L and D Sterling and Jupiter Merlin International Equities Portfolio s Class L and D Sterling, have an accumulation policy and, consequently, no dividends will be paid on those classes. The share class names reflect the specifications of each Class, including their respective (i) categories (D, E, I or L), (ii) reference currencies, (iii) distribution policies (accumulation or distribution of income and if the latter case, the frequency thereof, i.e. annually, quarterly or monthly) and (iv) hedging share class (HSC) status. For example Class L EUR A Inc distributes income annually with payment (no automatic reinvestment by default). 2. Summary of Significant Accounting Policies a) Basis of preparation The financial statements have been prepared in conformity with Luxembourg generally accepted accounting principles applicable to investment funds. b) Financial Statements Financial statements are presented for each Fund in the base currency of the Fund and the combined Statement of Net Assets, Statement of Operations and Changes in Net Assets of the Company are presented in Euro ( ), based on the exchange rate ruling at the date of these financial statements. c) Foreign currency translation Assets and liabilities denominated in currencies other than the Fund s base currency are translated into that base 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. Differences arising on translation are included In the Statement of Operations and Changes in Net Assets. 20
Notes to the Financial Statements Notes to the Financial Statements for the six month period ended 31 March 2018 (continued) 2. Summary of Significant Accounting Policies (continued) d) Investments Securities are initially recognised at cost, being the market value of the consideration given. Securities, listed on an official stock exchange or dealt in on any regulated market are valued at the last available price. Units or shares in open-ended investment funds are valued at their last available Net Asset Value. Wherever practicable, the last available Net Asset Value is deemed to include the Net Asset Value calculated on the same Valuation Day for any underlying fund which itself has a valuation point at or before the Company s Valuation Point being 1pm Luxembourg time. In the event that any of the securities held by a Fund on the relevant day are not listed on any stock exchange or dealt in on any regulated market or if, with respect to securities listed on any stock exchange or dealt in on any other regulated market, the basis of the price as determined above is not representative of the fair market value of the relevant securities, the value of such securities will be determined based on the reasonably foreseeable sales price determined prudently and in good faith by the Board of Directors of the Company (the Board of Directors ). 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. All purchases and sales of securities are recognised on the trade date, i.e. the date the Fund commits to purchase or sell the security. e) Forward currency exchange contracts The Company may enter into forward currency 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 in the Statement of Net Assets as Net unrealised gain/(loss) on forward currency exchange contracts. Upon the closing of the contract, the gain or loss is recorded in Net realised gains/(losses) on forward currency exchange contracts. f) Income recognition Interest income is recognised as the interest accrues unless collectability is in doubt. Dividend income is recognised when the right to receive the dividend is established, on the ex-date. Income is presented net of withholding taxes in the Statement of Operations and Changes in Net Assets. g) Management fee rebates Management fee rebates from Related Party Funds are accrued daily and those from Third Party Funds accrue on a monthly basis. h) Expense recognition Expenses are accounted for on an accrual basis. Expenses are charged to the Statement of Operations and Change in Net Assets except for expenses incurred on the acquisition of an investment which are included within the cost of that investment. Expenses arising on the disposal of investments are deducted from the disposal proceeds. i) Dividend distributions payable Dividend distributions payable by the Company are recorded on the ex-date. Refer to Note 12 for details of dividends declared during the period ended 31 March 2018. j) Net Asset Value per Share The Net Asset Value per Share is calculated by dividing the Net Assets of the relevant Class of Shares in a Fund included in the Statement of Net Assets by the number of Shares of the relevant class in that Fund in issue at the period end. k) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in Luxembourg requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. 21
Notes to the Financial Statements Notes to the Financial Statements for the six month period ended 31 March 2018 (continued) 3. Investment Management and Performance Fees The Management Company appointed Jupiter Asset Management Limited ( JAML ) as the Investment Manager to provide certain administrative and management services. The Investment Management Fee is calculated and accrued on the basis of the Net Asset Value of each Fund at each Valuation Point and is payable monthly in arrears. The fee per annum charged and applicable to each Class of Shares during the period ended 31 March 2018 is as follows: D E I L Jupiter Managed European Portfolio (1) 2.00% Jupiter Merlin International Balanced Portfolio (1) 0.75% 2.00% 1.50% Jupiter Merlin International Equities Portfolio (2) 0.75% 2.00% 1.50% Jupiter Merlin Real Return Portfolio (2) 0.75% 0.75% 1.50% Where a Fund invests in other funds managed by the Investment Manager, the Fund will not be subject to additional management fees. These related management fee reimbursements are included in Management fee rebates in the Statement of Operations and Change in Net Assets and amounted to 490,742 for the period ended 31 March 2018 as follows: Fund Amount in Fund Currency Jupiter Managed European Portfolio (1) 79,569 Jupiter Merlin International Balanced Portfolio (1) 77,016 Jupiter Merlin International Equities Portfolio (2) 170,609 Jupiter Merlin Real Return Portfolio (2) 163,548 (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. None of the Funds are entitled to accrue a performance fee on any of the Classes of Shares. 4. Aggregate Operating Fee To seek to protect the Shareholders from fluctuations in ordinary operating expenses, the Company shall pay to the Management Company a fixed level of fee (the Aggregate Operating Fee ), which will be determined as an annual percentage of the Net Asset Value of the Class of Shares for each Fund, and the Management Company will be responsible for paying all of the ordinary fees and expenses out of the Aggregate Operating Fee received by it, including (but not limited to) the following: Management Company fees and expenses (but not the Investment Manager fees and expenses); Depositary, fund accounting, transfer agency and fiduciary fees: J.P. Morgan Bank Luxembourg S.A., acting as Administrator and Depositary, is entitled to receive depositary fees, fund accounting fees, transfer agency fees and fiduciary fees. The depositary fee consists of safekeeping, administration and transaction charges; Set up costs incurred in connection with the launch of a new Fund; Costs of operating special purpose subsidiaries; Any fees and expenses involved in registering and maintaining the registration of the Fund with any governmental agencies or stock exchanges in the Grand Duchy of Luxembourg and in any other country together with associated support fees; Paying agent fees; Dividend/income distribution fees; Costs of agents employed by the Company, Correspondents and permanent representatives in places of registration; Financial and regulatory reporting costs; Governmental charges, taxes and duties; Costs related to the preparation and filing of tax or other reports in respect of the operations of the Company or its Shareholders; Costs related to the preparation and publication of data, literature and shareholder communications, including the costs of preparing, printing and distributing prospectuses, Key Investor Information Documents ( KIIDs ), explanatory memoranda, periodical reports or registration statements, and the costs of any reports to Shareholders; Directors remuneration, their insurance coverage and reasonable travelling costs and out-of-pocket expenses in connection with board meetings; Legal fees; and Audit fees. 22
Notes to the Financial Statements Notes to the Financial Statements for the six month period ended 31 March 2018 (continued) 4. Aggregate Operating Fee (continued) Save for the payment of the Aggregate Operating Fee, the Company shall have no obligation with respect to the ordinary operating expenses. The Aggregate Operating fee will accrue on a daily basis. The Aggregate Operating Fee will, in the first instance, be applied against any income in the relevant Fund. The Aggregate Operating Fee is accrued at each calculation of the Net Asset Value and is disclosed in the relevant KIIDs from time to time by comprising part of the ongoing charges of a Share Class. The Aggregate Operating Fee is calculated and accrued per Fund on the basis of the daily Net Asset Value of each Fund at each Valuation Point and is payable monthly. The fee rates per annum charged and applicable to each Class of Shares during the period ended 31 March 2018 are as follows: D E I L Jupiter Managed European Portfolio (1) 0.20% Jupiter Merlin International Balanced Portfolio (1) 0.24% 0.20% 0.26% Jupiter Merlin International Equities Portfolio (2) 0.24% 0.20% 0.26% Jupiter Merlin Real Return Portfolio (2) 0.24% 0.20% 0.26% (1) This Fund is not authorised in Hong Kong and not available to Hong Kong residents. (2) With effect from 1 February 2018 this Fund is not authorised in Hong Kong and not available to Hong Kong residents. Further details of the Aggregate Operating Fee are published in the Company s prospectus which is available at www.jupiteram.com. 5. Management Company Fee Jupiter Unit Trust Managers Limited ( JUTM ) is appointed as the Management Company. The list of the funds managed by the Management Company may be obtained, on request, at the registered office of the Management Company. The Management Company is responsible on a day-to-day basis, under the supervision of the Board of Directors of the Company, for providing administration, marketing and investment management services in respect of all Funds. The Management Company has delegated its investment management function to Jupiter Asset Management Limited, the Investment Manager. In the context of its administration functions, the Management Company has delegated its administration functions to J.P. Morgan Bank Luxembourg S.A. the Administrator. In the context of its marketing function, the Management Company may enter into agreements with Distributors pursuant to which the Distributors agree to act as intermediaries or nominees for investors subscribing for Shares through their facilities. The Management Company will monitor on a continual basis the activities of the third parties to which it has delegated functions. The agreements entered into between the Management Company and the relevant third parties provide that the Management Company can give at any time further instructions to such third parties, and that it can withdraw their mandate with immediate effect if this is in the interest of the Shareholders. The Management Company s liability towards the Company is not affected by the fact that it has delegated certain functions to third parties. With JUTM s appointment, certain Company costs will be paid for by JUTM. The Company pays to JUTM the Aggregate Operating Fee and JUTM will be responsible for paying the Company costs out of the Aggregate Operating Fee received by it. Refer to Note 4 for further information. Full details are published in the Company s prospectus which is available at www.jupiteram.com. 6. Administration, Custodian and Depositary Fees J.P. Morgan Bank Luxembourg S.A. was appointed to perform central administration duties for the Company pursuant to a delegation of such duties to it by the Management Company. J.P. Morgan Bank Luxembourg S.A. as Administrator, Custodian and Depositary is entitled to receive custodian fees, fund accounting fees, transfer agency fees and fiduciary fees. The custodian fee consists of safekeeping, administration and transaction charges. Safekeeping and administration charges are applied to the market value of the assets of the country of the underlying investments held in custody at the end of the billing period. The transaction charges are based on the number of transactions in a particular country. The safekeeping and administration fee rate varies according to the country of the underlying investments and decreases depending on the thresholds in a particular country. The maximum annual fee which may be paid to J.P. Morgan Bank Luxembourg S.A. in its capacity as Custodian will be 0.15% of the average monthly Net Asset Value of each Fund. The fund accounting fee is the sum of the base NAV calculation fee plus the total of all other fees, including but not limited to financial reporting, share class valuation, tax reporting and all other fees detailed in the fee schedule agreement. The base fee per Fund which may be paid to J.P. Morgan Bank Luxembourg S.A. in its capacity as Administrator is calculated as the greater of the minimum annual fee of 15,000 or an ad valorem fee (from 0.50 to 2.50 basis points) based upon the Fund s month-end NAV. 23
Notes to the Financial Statements Notes to the Financial Statements for the six month period ended 31 March 2018 (continued) 6. Administration, Custodian and Depositary Fees (continued) The transfer agency fee is based on the number of transactions processed, the number of holdings (shareholder accounts), the number of new investor accounts opened and include fund/class set-up and annual maintenance fees, enhanced fund distribution support, platform connectivity fee and out-of-pocket expenses. The fiduciary fee per Fund is calculated as the greater of the minimum annual fee or an ad valorem fee based upon the Company s month end NAV. These fees are included under the Aggregate Operating Fee. Refer to Note 4 for further details. 7. Other Fees There are certain other fees that are payable in addition to the Aggregate Operating Fee, the Investment Manager fees and any performance fees. Each Share Class bears the costs relating to certain transactions such as the costs of buying and selling underlying securities, costs charged by any financial institution or organisation in relation to swap agreements or over-the-counter transactions, bank charges relating to delivery, receipt of securities or to foreign exchange transactions and fees relating to collateral management, transaction costs, stock lending charges, interest on bank overdraft and any other extraordinary fees and expenses. Each Share Class also bears any extraordinary expenses incurred due to external factors, some of which may not be reasonably foreseeable in the normal course of activity of the Company such as, without limitation, any litigation expenses or any tax, levy, duty or similar charge of a fiscal nature imposed on the Company or its assets by virtue of a change of laws or regulations. 8. Directors Fees, Expenses and Interests Mr. Jacques Elvinger is a partner of the Luxembourg law firm of Elvinger Hoss Prussen, société anonyme, which provides legal services to the Company. Each independent Director receives fees of 15,000 (including taxes) per annum. Mr. Adrian Creedy and Mrs. Paula Moore are employed by the Investment Manager and fees due to them are paid directly to JAML although JAML commenced a waiver of these fees with effect from 1 April 2016. In addition, all Directors are entitled to reimbursement by the Company of any expenses directly incurred in the execution of their duties as Directors. No Director holds any shares in the Company nor has any interest in any transaction which, during the period under review, has been affected by the Company and is unusual in its nature or conditions, or is significant to the business of the Company. Directors remuneration, insurance coverage and reasonable expenses directly incurred in the execution of their duties as Directors are included under the Aggregate Operating Fee. Refer to Note 4 for further details. 9. Taxe d abonnement and Other Operational Taxes The Company is liable in Luxembourg to a tax (taxe d abonnement), such tax being payable quarterly and calculated on the Net Asset Value of the Company at the end of the relevant calendar quarter. The taxe d abonnement is levied at a rate of 0.01% per annum on Funds or Classes reserved to Institutional Investors (Class E and I) and at 0.05% per annum on other Funds or Classes (Class D and L). No such tax is payable in respect of the portion of the assets of each Fund invested in other Luxembourg collective investment undertakings which are subject to this tax. Taxe d abonnement is included under the Aggregate Operating Fee, refer to Note 4 for further details. Under current law and practice, the Company is not liable to Luxembourg taxes on income or capital gains, nor are dividends paid by the Company liable to any Luxembourg withholding tax. Interest, dividends and capital gains on securities may be subject to withholding or capital gains taxes in certain countries. Where the withholding tax in certain jurisdictions has been raised at a rate higher than the rate applicable to comparable domestic UCITS funds, the Company has launched a withholding tax reclaim with the national tax authorities of those countries, with no guarantee of success. If and when those tax reclaims are successful, the proceeds of tax reimbursement are recognised in the Statement of Operations and Changes in Net Assets as Income from investment, net. Treaty based withholding tax reclaims (excluding European Court of Justice reclaims) accrued by the Company during the period ended 31 March 2018 amounted to nil. 24