Legal & General Multi Manager Growth Trust Annual Manager s Short Report for the year ended 15 January 2011 Distribution Number 6
Investment Objective and Policy The investment objective is to provide long-term capital growth. The Trust aims to invest in a wide range of collective investment schemes including unregulated Collective Investment Schemes, and will pursue an active asset allocation policy across all countries, currencies and sector representations. The Trust may also invest directly in transferable securities, money market instruments, near cash, cash and deposits. Risk Profile Market Risk Market risk arises mainly from uncertainty about future prices. The Manager adheres to the investment guidelines and in this way, monitors and controls the exposure to risk from any type of security, sector or issuer. Currency Risk This Trust is invested in Collective Investment Schemes which invest in overseas financial securities. The performance of the Trust may therefore be affected by changes in exchange rates, through its holdings in these funds. Trust Facts Period End Dates for Distributions: 15 January, 15 July Distribution Dates: 15 March, 15 September Total Expense Ratio: 15 January 11 15 January 10 R-Class Trust expenses 1.99% 1.81% Performance fees 0.43% 0.58% Total 2.42% 2.39% The Total Expense Ratio (TER) is the ratio of the Trust s operating costs (excluding overdraft interest and transaction charges) and all costs suffered through holdings in underlying Collective Investment Schemes, to the average net assets of the Trust. The TER represents an annualised figure. 1
Trust Performance Net Asset Net Asset Number of Accounting Value of Value Per Units Date Trust Unit In Issue 15 January 09 R Class Distribution Units 188,910,801 38.81p 486,702,706 Accumulation Units 2,119,476 38.81p 5,460,539 15 January 10 R Class Distribution Units 242,611,364 52.29p 464,013,313 Accumulation Units 20,548,071 52.93p 38,819,503 15 January 11 R Class Distribution Units 258,564,071 59.66p 433,378,676 Accumulation Units 37,001,795 60.47p 61,190,421 Past performance is not a guide to future performance. The price of units and 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. Distribution Information R-Class The distribution payable on 15 March 2011 is 0.0550p net per unit for distribution units and 0.0557p net per unit for accumulation units. 2
Portfolio Information The top 10 holdings and their associated weighting for the current and preceding year were: Top 10 Holdings at 15 January 2011 Percentage of Holding Net Asset Value First State Asia Pacific Leaders B Acc 17.04% Invesco Perpetual Income Fund 9.08% M&G Recovery Fund A Acc 8.57% Ignis Hexam Global Emerging Markets I Acc 8.14% Guinness Global Energy A Inc 6.73% Investec Global Gold A Acc 6.39% CF Neptune China B Acc 6.13% Neptune Russia & Greater Russia Fund B Acc 5.50% GLG Alpha Select UCITS III E 5.49% Investec American Fund A Acc 5.01% Holding Top 10 Holdings at 15 January 2010 Percentage of Net Asset Value First State Asia Pacific Leaders B Acc 15.07% M&G Recovery Fund A Acc 11.17% Invesco Perpetual Income Fund 11.08% Jupiter Financial Opportunities Fund 8.80% Lazard Emerging Markets Fund 8.46% New Star European Growth I Acc 6.98% Investec American Fund A Acc 6.95% CF Morant Wright Japan B Acc 5.01% First State Latin America B Acc 4.63% Guinness Global Energy A Inc 3.99% 3
Trust Holdings as at 15 January 2011 80% 70% 73% 60% 50% 40% 30% 27% 20% 10% 0% Funds investing in overseas shares Funds investing in UK shares Trust Holdings as at 15 January 2010 80% 70% 60% 67% 50% 40% 30% 30% 20% 10% 3% 0% Funds investing in overseas shares Funds investing in UK shares Funds investing in UK fixed interest securities 4
Unit Price Range and Net Revenue R-Class Highest Lowest Offer Bid Net Year Price Price Revenue Distribution Units 2008 (1) 55.27p 39.78p - 2009 54.25p 34.35p 0.4864p 2010 62.67p 49.34p 0.0603p 2011 (2) 63.26p 59.35p 0.0550p Accumulation Units 2008 (1) 55.27p 39.78p - 2009 54.93p 34.62p 0.4878p 2010 63.53p 49.96p 0.0611p 2011 (2) 64.12p 60.16p 0.0557p (1) The Trust s units were launched on 25 April 2008. (2) The above table shows highest offer and lowest bid prices to 15 January 2011 and net revenue per unit to 15 March 2011. Past performance is not a guide to future performance. The price of units and 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. 5
Manager s Investment Report During the year under review, the bid price of the Trust s accumulation units increased by 14.3%, compared to the IMA Active Managed sector median return, on a Total Return basis, of 12.9%. This placed the Trust in the second quartile (36th percentile) of the sector rankings. (Source: Lipper, bid to bid, net income reinvested, in sterling terms, no initial charge). Over the period since launch (25 April 2008) to 15 January 2011 the bid price of the Trust s accumulation units increased by 21.1% compared to the IMA Active Managed sector median return, on a Total Return basis, of 11.5%. This placed the Trust in the first quartile (12th percentile) of the sector rankings. (Source: Lipper, bid to bid, net income reinvested, in sterling terms, no initial charge). Past performance is not a guide to future performance. The value of investments and 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. Market/Economic Review The year was a volatile one for financial markets, with investors continuing to be concerned about the contagion effects of the escalating European sovereign (government) debt crisis and the potential for a double dip back into recession. All in all, however, the aggressive fiscal and monetary policy easing enacted in the world s major economies (including the delivery of the second round of Quantitative Easing by the US Federal Reserve in November 2010) instigated the process of a global recovery, and equity markets rallied hard to finish the year in distinctly positive form. The environment eventually served to benefit risk assets, while a meltdown in Developed Market government bond yields during the year did eventually reverse itself towards the end of December 2010. Commodities put in a strong performance for the year, with Gold in particular benefiting from the environment and rising more than 20% over the period, and Oil ending the year almost 10% ahead at more than $90 a barrel. Elsewhere, the MSCI AC World Index rose just over 15% in sterling terms over the period and the FTSE All Share Index by a similar amount. Trust Review Both fund selection and asset allocation contributed positively to the Trust s outperformance over the period under review. Beginning with the former, key outperformers included Schroder UK Alpha, Henderson European Growth, First State Asia Pacific Leaders, Investec Global Gold, First State Latin America, Neptune Russia and Greater Russia, Lazard Emerging Markets, GLG Alpha Select and CF Neptune China. Invesco Perpetual Income, Investec American and Jupiter International Financials lagged. 6
Manager s Investment Report continued Turning to asset allocation, the overall bias to equities added value, most notably our overweight positions in Asia Pacific (ex Japan) and Emerging Markets. The Trust also gained from the above-average exposure to the Energy sector, but the positions in Financials proved detrimental. Activity over the period included the introduction of new holdings in GLG Alpha Select, Veritas Global Equity Income and Investec Global Gold, together with the disposal of our small holdings in River & Mercantile UK Equity Unconstrained and M&G Optimal Income. We also switched our holdings in Jupiter Financial Opportunities into Jupiter International Financials and sold our holding in Lazard Emerging Markets, due to it closing to all new monies for capacity reasons, and reinvested the proceeds into the Ignis Hexam Global Emerging Markets Fund. Outlook Looking forward, we remain cautiously optimistic in our investment strategy and hence biased to risk assets, based on a view that economic and financial trends will continue to show overall signs of improvement over the next 12 months certainly recent, more upbeat, economic data and the extra US fiscal stimulus supports such a view. The key fundamentals for equities valuation, earnings outlook and liquidity still look favourable to reasonable. That said, we expect problems to surface throughout the year given the still fragile backdrop and thus currently see volatility remaining high, with the market likely to continue oscillating between risk-on rally periods and risk-off retrenchment ones. When one stops to consider the pain inflicted by the financial crisis that began in late 2007, then it should come as no surprise that the healing process will take place over a number of years, rather than months, and there is still much work to be done. Part of the life-support surgery to date has involved massive government and central bank interventions, at times unprecedented and unorthodox, which have introduced major dislocations and distortions into the economic and financial landscape. This has taken us into uncharted territory and is causing much uncertainty and anxiety over what will come to pass when such stimulus is ultimately removed and normality is restored. Legal & General (Unit Trust Managers) Limited (Investment Adviser) 11 February 2011 7
Manager s Report and Accounts Copies of the most recent Interim and Annual Long Form Manager s Report are available free of charge by telephoning 0370 050 0955 or by writing to the Manager. Call charges will vary. We may record and monitor calls. Significant changes Calculation of Unit Prices From 7 June 2010, the way we price units in this Trust changed. Each day, two unit prices are calculated: The Creation Price - based on the price of buying all the Trust s assets plus any costs involved, and; The Cancellation Price - based on the price of selling all the Trust s assets less any costs involved. The difference between these two prices is known as the spread. Prior to 7 June 2010, we based our daily dealing price on either the creation or cancellation price, depending on the volume of overall transactions in the Trust for that valuation point. Generally, we would use the creation price if we were selling more units to clients than we were buying back and the cancellation price if we were buying back more units from clients than we were selling. This price would then become the published bid price - we would then add any applicable initial charge to arrive at the published offer price. From 7 June 2010, we have based the price of selling units to clients on the creation price and refer to this as the offer price (creation price plus any initial charge). The price at which we will buy back clients units is based on the cancellation price and is referred to as the bid price. This means that there is a difference between the selling (offer) and buying (bid) prices for units, being the spread plus any initial charge. Both the bid and offer prices are published on our website www.legalandgeneral.com/utprices. 8
Other Information The information in this report is designed to enable unitholders to understand how the Trust has performed during the period under review and how it is invested at the period end. Further information on the activities and performance of the Trust can be obtained by telephoning 0370 050 0955 or by writing to the Manager. Call charges will vary. We may record and monitor calls. Manager: Legal & General (Unit Trust Managers) Limited Registered in England No. 01009418 Registered office: One Coleman Street, London EC2R 5AA Telephone: 0370 050 3350 Authorised and regulated by the Financial Services Authority Trustee: The Royal Bank of Scotland Plc, Trustee and Depositary Services, Gogarburn, P.O. Box 1000, Edinburgh EH12 1HQ Authorised and regulated by the Financial Services Authority Independent Auditors: PricewaterhouseCoopers LLP, Hay s Galleria, 1 Hay s Lane 9
Authorised and regulated by the Financial Services Authority Legal & General (Unit Trust Managers) Limited Registered in England No.01009418 Registered office: One Coleman Street, London EC2R 5AA www.legalandgeneral.com Q0031078