GILTS UNIT TRUST FOR THE PERIOD ENDING 30 SEPTEMBER 2016
Manager St. James's Place Unit Trust Group Limited PO Box 9034, Chelmsford, CM99 2XA United Kingdom Freephone: 0800 027 1031 (Authorised and regulated by the Financial Conduct Authority) Directors of the Manager D. C. Bellamy A. M. Croft I. S. Gascoigne D. J. Lamb Investment Adviser Wellington Management International Ltd Cardinal Place, 80 Victoria Street London, SW1E 5JL United Kingdom (Authorised and regulated by the Financial Conduct Authority) Trustee BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London, EC4V 4LA United Kingdom (Authorised and regulated by the Financial Conduct Authority) Registrar International Financial Data Services (UK) Limited IFDS House St. Nicholas Lane Basildon, SS15 5FS United Kingdom (Authorised and regulated by the Financial Conduct Authority) Independent Auditor PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh, EH3 8EX United Kingdom Prospectus and Manager's Reports Copies of the up to date Prospectus (Scheme Particulars) and latest Manager's Report and Financial Statements for the range of St. James's Place Unit Trusts can be requested from a member of the St. James's Place Partnership or, at any time during normal business hours, from the Administration Centre at PO Box 9034, Chelmsford CM99 2XA. Freephone: 0800 027 1031 1
Report of the Manager The Report of the Manager consists of The Trust, Investment Objectives & Policy, The Trust's Performance, Risk and Reward Profile, Investment Adviser's Comments and Portfolio Statement. The Trust St. James's Place Gilts Unit Trust is an authorised Unit Trust scheme under section 243 of the Financial Services and Markets Act (2000) and is constituted by a Trust Deed dated 28 January 2009. The Unit Trust is subject to the rules of the Financial Conduct Authority's Collective Investment Scheme Sourcebook and is classified as a UCITS Scheme. Investment Objectives & Policy The investment objective of the Scheme is to provide a combination of growth and income, by investing primarily in a portfolio of UK Gilts. To achieve this, the Scheme will invest in a portfolio of UK Government debt securities, and cash and cash equivalents, including forward contracts for the purposes of efficient portfolio management only. The Scheme is also permitted to invest in other asset classes permitted for UCITS Schemes including transferable securities, money market instruments, units in collective investment schemes and deposits. The Scheme is permitted to invest in derivatives and forward transactions for the purposes of efficient portfolio management (including hedging). Please note that in order to add greater clarification, with effect from 10 October 2016 the investment objectives of the Scheme were amended to the following: The investment objective of the Scheme is to provide a combination of growth and income, by investing primarily in a portfolio of UK Gilts. The Scheme is managed with reference to a Benchmark Index and whilst the Manager will aim to outperform the index, it is not expected that returns will differ significantly. To achieve this, the Scheme will invest in a portfolio of UK Government debt securities, and cash and cash equivalents, including forward contracts for the purposes of efficient portfolio management only. The Scheme is also permitted to invest in other asset classes permitted for UCITS Schemes including transferable securities, money market instruments, units in collective investment schemes and deposits. The Scheme is permitted to invest in derivatives and forward transactions for the purposes of efficient portfolio management (including hedging). Benchmark Index: 50% FTSE Actuaries Government Securities UK Gilts Under 5 Years Index; 50% FTSE Actuaries Government Securities 5-15 Years Index It is the Manager's intention that the assets of the Unit Trust will be invested so that the Unit Trust will be eligible for inclusion in an ISA. 2
Report of the Manager (continued) The Trust's Performance The performance of the Trust since its launch in March 2009, over the five year period since September 2011 and over the period under review is shown below, together with figures for the most commonly quoted indices in comparable markets where the major proportion of the Trust has been invested. 16/03/09 to 30/09/11 to 31/03/16 to 30/09/16 30/09/16 30/09/16 % change % change % change St. James's Place Gilts Unit Trust Class L units (offer to offer) +14.4 +8.4 +2.8 Class L Accumulation units (offer to offer) +27.7 +14.8 +3.6 Class R units (offer to offer)* - +3.1 +2.8 Class R Accumulation units (offer to offer)* - +7.1 +3.5 Class L units (offer to offer)** - +14.5 +2.9 Class L Accumulation units (offer to offer)** - +28.1 +3.5 Class R units (offer to offer)** - +3.2 +2.8 Class R Accumulation units (offer to offer)** - +7.4 +3.5 Indices - actual FTSE British Government Gilts < 5 Years (Total Return) +18.4 +8.6 +1.3 FTSE British Government Gilts 5-15 Years (Total Return) +51.8 +28.9 +6.1 * Class R and Accumulation units were made available on 31 December 2012 and the performance shown is from that date. **Class R and Accumulation, L and Accumulation units were made available on 6 October 2014 and the performance shown is from that date. Source: FTSE International Limited ( FTSE ) FTSE 2016. FTSE is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE s express written consent. REMEMBER THAT THE PRICE OF UNITS AND REVENUE FROM THEM MAY GO DOWN AS WELL AS UP. PLEASE BE AWARE THAT PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. Risk and Reward Profile The synthetic risk and reward indicator for the St. James s Place Gilts Unit Trust, as disclosed in its most recent Key Investor Information Document (KIID), is a 3. It was calculated using performance data up to 31 May 2016. The risk category is recalculated weekly and during the period under review, the risk category did not change. 3
Report of the Manager (continued) Investment Adviser's Comments The portfolio achieved a positive absolute return over the reporting period ending 30 September 2016. The first half of the period was dominated by concerns over the UK referendum. Global fixed income markets initially enjoyed a rebound in commodity prices and central banks continued accommodative policy. However, as the June referendum approached the uncertainty weighed heavily on markets. The Fed left rates unchanged in the lead-up to the vote, expressing doubts about the strength of the global economy, while similar concerns affected UK business confidence and spending. The eventual vote for Brexit caused a sharp spike in market volatility and a flight to safety. Global government bond yields fell during the second quarter, led by the UK, and consequently our overweight positioning in gilts saw the portfolio outperform broader bond markets. Brexit fears later eased, particularly following some higher-than-expected UK data releases. Central bank policies diverged; at one end of the spectrum the Bank of England unveiled new stimulus to counter a potential Brexit-induced recession, and the Australian and New Zealand central banks both cut rates to record lows. The Bank of Japan replaced monetary easing with a new fiscal stimulus package. In the middle of all this, the European Central Bank left rates unchanged but avoided committing to further expansion of its quantitative easing programme, while at the other end, despite not raising rates, the Fed s hawkish overtones led to expectations of a hike before year-end. Global government bond yields rose in the US and Japan but fell in the UK, Europe, Australia and Canada. Global growth is improving moderately with US presidential elections now the key source of uncertainty. Central banks could begin under-delivering as they exhaust monetary toolkit. There is rising probability of a Fed increase; however, the longer-run rate hike path is likely to be revised downwards. The mismatch between accelerating central bank easing and the limited bond supply makes a meaningful bond sell-off in the absence of an inflation shock difficult. Wellington Management International Ltd 14 October 2016 4
Comparative Table as at 30 September 2016 (unaudited) Asset Value and Ongoing Charges Figure 30/09/16 31/03/16 31/03/15 31/03/14 Class L Closing net asset value ( 000) 1,341 1,372 1,585 11,749 Closing number of units 1,219,276 1,283,305 1,486,990 11,542,366 Closing net asset value per unit (p) 110.00 106.87 106.61 101.79 Operating charges** 0.99% 1.02% 1.05% 1.05% 30/09/16 31/03/16 31/03/15 31/03/14 Class L Accumulation Closing net asset value ( 000) 96,061 69,843 58,149 75,582 Closing number of units 78,078,521 58,764,221 49,626,060 68,278,915 Closing net asset value per unit (p) 123.03 118.85 117.17 110.70 Operating charges** 0.99% 1.01% 1.05% 1.05% 30/09/16 31/03/16 31/03/15 31/03/14 Class R Closing net asset value ( 000) 8,152 7,096 4,510 7,485 Closing number of units 4,162,554 3,724,273 2,368,088 4,106,136 Closing net asset value per unit (p) 195.83 190.53 190.45 182.28 Operating charges** 1.23% 1.25% 1.25% 1.30% 30/09/16 31/03/16 31/03/15 31/03/14 Class R Accumulation Closing net asset value ( 000) 24,679 16,308 10,083 14,002 Closing number of units 12,101,936 8,276,504 5,179,140 7,600,752 Closing net asset value per unit (p) 203.92 197.04 194.68 184.22 Operating charges** 1.23% 1.25% 1.25% 1.30% 5
Comparative Table as at 30 September 2016 (unaudited) (continued) 30/09/16 31/03/16 31/03/15 Class L Closing net asset value ( 000) 7,441 7,830 9,167 Closing number of units 6,764,644 7,330,965 8,604,237 Closing net asset value per unit (p) 110.00 106.80 106.54 Operating charges** 0.99% 1.02% 1.04% 30/09/16 31/03/16 31/03/15 Class L Accumulation Closing net asset value ( 000) 15,416 15,884 18,267 Closing number of units 12,483,556 13,313,128 15,571,920 Closing net asset value per unit (p) 123.49 119.31 117.31 Operating charges** 0.99% 1.02% 1.05% 30/09/16 31/03/16 31/03/15 Class R Closing net asset value ( 000) 20,861 16,160 10,890 Closing number of units 10,652,595 8,488,329 5,721,365 Closing net asset value per unit (p) 195.83 190.38 190.34 Operating charges** 1.24% 1.26% 1.26% 30/09/16 31/03/16 31/03/15 Class R Accumulation Closing net asset value ( 000) 54,781 36,094 21,129 Closing number of units 26,788,494 18,255,982 10,844,866 Closing net asset value per unit (p) 204.49 197.71 194.83 Operating charges** 1.23% 1.25% 1.26% **Operating charges are prepared using the same methodology as the ongoing charges appearing in the KIID, based on the information in this report. 6
Portfolio Statement as at 30 September 2016 (unaudited) Security Holdings Market Value 000 % of Assets UK GOVERNMENT GILTS (98.18%) 224,586 98.18 UK Treasury 1% 07/09/2017 13,645,000 13,760 6.02 UK Treasury 5% 07/03/2018 8,740,000 9,359 4.09 UK Treasury 1.25% 22/07/2018 9,800,000 10,008 4.38 UK Treasury 4.5% 07/03/2019 5,540,000 6,143 2.69 UK Treasury 1.75% 22/07/2019 11,875,000 12,431 5.43 UK Treasury 3.75% 07/09/2019 4,480,000 4,967 2.17 UK Treasury 4.75% 07/03/2020 7,865,000 9,130 3.99 UK Treasury 2% 22/07/2020 7,660,000 8,202 3.59 UK Treasury 3.75% 07/09/2020 6,210,000 7,104 3.11 UK Treasury 1.5% 22/01/2021 11,780,000 12,445 5.44 UK Treasury 8% 07/06/2021 9,795,000 13,367 5.84 UK Treasury 3.75% 07/09/2021 11,845,000 13,919 6.08 UK Treasury 4% 07/03/2022 11,270,000 13,588 5.94 UK Treasury 0.5% 22/07/2022 3,210,000 3,245 1.42 UK Treasury 1.75% 07/09/2022 8,405,000 9,135 3.99 UK Treasury 2.25% 07/09/2023 1,775,000 2,005 0.88 UK Treasury 2.75% 07/09/2024 7,740,000 9,114 3.98 UK Treasury 5% 07/03/2025 6,397,147 8,748 3.82 UK Treasury 2% 07/09/2025 9,565,000 10,741 4.70 UK Treasury 1.5% 22/07/2026 8,145,000 8,772 3.83 UK Treasury 4.25% 07/12/2027 9,265,000 12,694 5.55 UK Treasury 6% 07/12/2028 7,050,000 11,260 4.92 UK Treasury 4.75% 07/12/2030 9,630,000 14,449 6.32 DERIVATIVES (0.00%) (11) - Futures UK Long Gilt Bond Futures December 2016 (5) (11) - Investment Assets^ 224,575 98.18 Total other assets (net) 4,157 1.82 assets 228,732 100.00 Comparative figures shown in brackets relate to 31 March 2016. All investments are approved securities as defined in the Collective Investment Schemes sourcebook unless otherwise stated. ^ Including investment liabilities of ( 11k). 7
Material Portfolio Changes Cost Purchases 000 UK Treasury 1.25% 22/07/2018 9,973 UK Treasury 2% 22/07/2020 9,284 UK Treasury 4% 07/03/2022 9,109 UK Treasury 3.75% 07/09/2021 8,714 UK Long Gilt Bond Futures June 2016 8,100 UK Treasury 0.01% 28/12/2016 7,995 UK Long Gilt Bond Futures September 2016 7,742 UK Treasury 1.5% 22/07/2026 6,979 UK Treasury 4.25% 07/12/2027 6,671 UK Treasury 4.75% 07/12/2030 6,202 Proceeds Sales 000 UK Long Gilt Bond Futures June 2016 8,047 UK Treasury 0.01% 28/12/2016 7,994 UK Long Gilt Bond Futures September 2016 7,723 UK Treasury 2% 22/07/2020 6,817 UK Long Gilt Bond Futures December 2016 6,503 UK Treasury 8.75% 25/08/2017 6,293 UK Treasury 3.75% 07/09/2021 5,953 UK Treasury 2.75% 07/09/2024 5,923 UK Treasury 1.75% 22/07/2019 5,621 UK Treasury 1.25% 22/07/2018 5,269 Purchases and sales of futures have been included at the value of their exposure. 8
Statement of Total Return for the period 01 April 2016 to 30 September 2016 (unaudited) capital gains/(losses) Revenue Expenses Interest and similar charges before ation Taxation after ation Total return before distributions Change in net assets attributable to unitholders from investment activities 01/04/16 to 30/09/16 01/04/15 to 30/09/15 000 000 000 000 6,809 (714) 1,261 1,075 (1,104) (780) - - 157 295 - - 157 295 6,966 (419) (1,261) (982) 5,705 (1,401) Statement of Change in Assets Attributable to Unitholders for the period 01 April 2016 to 30 September 2016 (unaudited) 01/04/16 to 30/09/16 01/04/15 to 30/09/15 000 000 000 000 Opening net assets attributable to unitholders 170,587 133,780 Movement due to creation and cancellation of units: Amounts receivable on creation of units* 126,078 50,243 Amounts on cancellation of units* (74,613) (37,881) Change in net assets attributable to unitholders from investment activities (see above) Retained distribution on accumulation units Closing net assets attributable to unitholders 51,465 12,362 5,705 (1,401) 975 706 228,732 145,447 Comparative information is provided for the Statement of Change in Assets Attributable to Unitholders. Since this information is for the prior interim period, the net assets at the end of that period do not correspond to the net assets at the start of the current period. *Prior year figures in relation to Dilution Levy have been reclassified and included within creations and cancellation of units as this was income and expenses arising from creations and cancellations respectively. 9
Balance Sheet as at 30 September 2016 (unaudited) Assets Investments Current assets Debtors Cash and bank balances Total assets Liabilities Investment liabilities Creditors Distribution Other creditors Total liabilities assets attributable to unitholders 30/09/2016 31/03/2016 000 000 224,586 167,486 2,724 1,941 2,005 3,043 229,315 172,470 (11) - (244) (253) (328) (1,630) (583) (1,883) 228,732 170,587 Accounting and Distribution policies for the period 01 April 2016 to 30 September 2016 (unaudited) Basis of accounting The Financial Statements have been prepared under the historical cost basis, as modified by the revaluation of investments, in compliance with the Financial Conduct Authority's Collective Investment Schemes Sourcebook. They have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland FRS 102) and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the Investment Management Association May 2014 (IMA SORP 2014). The changes in the SORP 2014 are presentational only and there have been no changes to any figures detailed with the financial statements. The financial statements are prepared on the going concern basis. Directors of the Managers' Certificate This report is certified in accordance with the requirements of the rules in the Financial Conduct Authority's Collective Investment Schemes Sourcebook. A. M. Croft D. J. Lamb 25 November 2016 10
Distribution Tables in pence per unit Group 1 First interim Units purchased prior to 1 April 2016 Second interim Units purchased prior to 1 July 2016 Group 2 First interim Units purchased on or after 1 April 2016 to 30 June 2016 Second interim Units purchased on or after 1 July 2016 to 30 September 2016 Class L Equalisation / First interim 0.364 0.073 0.291-0.291 0.304 Second interim 0.326 0.065 0.261-0.261 0.289 First interim 0.158 0.032 0.126 0.165 0.291 0.304 Second interim 0.164 0.033 0.131 0.130 0.261 0.289 Class L Accumulation Equalisation / First interim 0.405 0.081 0.324-0.324 0.333 Second interim 0.363 0.073 0.290-0.290 0.319 First interim 0.158 0.031 0.127 0.197 0.324 0.333 Second interim 0.219 0.044 0.175 0.115 0.290 0.319 Class R Equalisation / First interim 0.650 0.130 0.520-0.520 0.542 Second interim 0.579 0.116 0.463-0.463 0.515 First interim 0.285 0.057 0.228 0.292 0.520 0.542 Second interim 0.293 0.059 0.234 0.229 0.463 0.515 Class R Accumulation Equalisation / First interim 0.671 0.134 0.537-0.537 0.553 Second interim 0.601 0.120 0.481-0.481 0.529 First interim 0.243 0.049 0.194 0.343 0.537 0.553 Second interim 0.292 0.058 0.234 0.247 0.481 0.529 11
Distribution Tables (continued) Class L Equalisation / First interim 0.364-0.364-0.364 0.379 Second interim 0.326-0.326-0.326 0.364 First interim 0.213-0.213 0.151 0.364 0.379 Second interim 0.157-0.157 0.169 0.326 0.364 Class L Accumulation Equalisation / First interim 0.407-0.407-0.407 0.417 Second interim 0.364-0.364-0.364 0.402 First interim 0.229-0.229 0.178 0.407 0.417 Second interim 0.180-0.180 0.184 0.364 0.402 Class R Equalisation / First interim 0.659-0.659-0.659 0.677 Second interim 0.579-0.579-0.579 0.650 First interim 0.342-0.342 0.317 0.659 0.677 Second interim 0.282-0.282 0.297 0.579 0.650 Class R Accumulation Equalisation / First interim 0.674-0.674-0.674 0.692 Second interim 0.603-0.603-0.603 0.668 First interim 0.311-0.311 0.363 0.674 0.692 Second interim 0.321-0.321 0.282 0.603 0.668 12
General Information Unit Dealings Dealings on the Trust take place on a daily basis. Purchase or sale instructions can be made by telephone or in writing to St. James's Place Unit Trust Group Limited, PO Box 9034, Chelmsford, CM99 2XA, United Kingdom, freephone: 0800 027 1031. The Manager adopts a policy of forward pricing, i.e. the order will be transacted on the dealing day following receipt of the client's instructions, or if received before noon, on that dealing day. In the case of telephone purchases of units from the Manager, settlement must be by return of post after receipt of the contract note. In the case of telephone redemptions, the proceeds will not become until the receipt at the Administration Centre of a written request. A contract note confirming the subscription or redemption price and the number of units involved will be forwarded, together with a cancellation notice, where appropriate, on the next business day. The most recent issue and redemption prices will be published on the Manager's website: www.sjp.co.uk and are available by calling the Administration Centre on 0800 027 1031. Minimum Investment The minimum lump sum investment is 1,500, thereafter the minimum additional investment is 1,000. The minimum monthly investment is 150 and the minimum monthly increment is 50. The minimum annual investment is 1,500 and the minimum annual increment is 500. H & Y Unit Classes On 10 October 2016 the Manager launched Class H and Class Y accumulation unit classes. Restrictions apply to all Class H and Class Y units, please see the Prospectus for details. Management Charges The Trust Deed permits the following management charges which are receivable by the Manager: (a) A Preliminary Charge of 3.75 per cent for Class L and Accumulation Units, Class L and Accumulation Units and 5 per cent for Class R and Accumulation Units, Class R and Accumulation Units, which is included in the offer price of the Units. (b) An Annual Management Charge at a rate of 0.87 per cent for Class L and Accumulation Units, and Class L and Accumulation Units; and 1.12 per cent for Class R and Accumulation Units, and Class R and Accumulation Units; of the value of the Trust. distributions are made quarterly on or before the 31 March, 30 June, 30 September and 31 December. Accumulation Revenue due to accumulation unitholders is reflected in the price of their units. Tax Vouchers unitholders that receive income distributions by direct credit and accumulation unitholders (where the distribution income is reinvested) receive an annual consolidated voucher in May with all the relevant payment and information required to complete a return. Tax vouchers will be enclosed if income unitholders receive payment by cheque. Capital Gains Tax The Trust is not liable to on capital gains and any individual holding units will not be liable to capital gains unless the total chargeable gains for the year 2016/2017 exceed 11,100 (2015/2016 11,100). To calculate capital gains on accumulation units, the total amount of reinvested net (shown on the annual credit vouchers) should be added to the base cost of the units purchased. Unitholders should consult their professional advisers for any advice regarding their position. 13
St. James s Place Unit Trust Group Ltd is authorised and regulated by the Financial Conduct Authority. St. James s Place Unit Trust Group Ltd Registered Office: St. James s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number 947644. Perivan Financial Print 243234 Gilts (11/16)