Distribution Number 7 Legal & General Multi Manager Growth Trust Interim Manager s Report for the period ended 15 July 2011 (Unaudited)
Contents Page Number Manager s Investment Report 2 Authorised Status 5 Directors Statement 5 Portfolio Statement 6 Statement of Total Return 7 Statement of Change in Net Assets attributable to Unitholders 7 Balance Sheet 8 Notes to the Financial Statements 9 Trust Facts 10 Performance Record 11 General Information 12 1
Manager s Investment Report Investment Objective and Policy The investment objective is to provide longterm 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. Manager s Investment Report During the period under review, the bid price of the Trust s accumulation units decreased by 2.51% compared to the IMA Active Managed sector median return, on a total return basis, of 0.45%. This placed the Trust in the fourth quartile (92nd 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 July 2011 the bid price of the Trust s accumulation units increased by 18.02% compared to the IMA Active Managed sector median return, on a total return basis, of 11.81%. This placed the Trust in the first quartile (21st 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 any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. Market/Economic Review High volatility continued for the period under review. Concerns over the sovereign (government) debt crisis in the eurozone returned to the forefront, yet despite this the European Central Bank (ECB) became the first of the G4 central banks to raise interest rates since the financial crisis. Investors also had to contend with softer economic data and the tragic events in Japan in March 2011. There were wild swings in the commodities markets, with events in the Middle East and North Africa (MENA) region and the Arab Spring (the current prodemocracy uprisings in the Middle East and North Africa) impacting energy prices. West Texas Intermediate (WTI) Oil rose during the period by more than 6%. Against this backdrop and also benefiting from fears of a US default, inflation and a hard landing in China, gold embedded itself as a safehaven investment, increasing by 17% and encroaching, at the end of the review period, on the US $1,600 an ounce barrier. The FTSE Global Government Bond Index also did well, returning 3.1%, whilst both the MSCI AC World Index (in Sterling terms) and the FTSE All Share Index were broadly flat despite the volatile environment. 2
Manager s Investment Report continued Trust Review The Trust was negatively impacted by both asset allocation and, to a lesser extent, fund selection over the review period. Regarding the former, the overweight positions in emerging market equities detracted from performance, as did the underweight position in UK Government bonds. The Trust did, however, gain from its position in energy equities. In terms of fund selection, key laggards included Investec American, Ignis HEXAM Global Emerging Markets, Investec Global Gold and GLG Alpha Select. Positive contributions came from First State Asia Pacific Leaders and Invesco Perpetual Income. We started the review period by taking some profits from our positions in emerging markets (excluding Russia) and Asia Pacific (excluding Japan), reinvesting primarily into US equities. Following sharp declines in Japanese equities post the Sendai earthquake, we increased our exposure in the CF Morant Wright Japan Fund. Over the review period, we also increased our exposure to our positions in gold and energy stocks, with the two investments continuing to serve as useful hedges against global uncertainties. In line with the weakening economic data towards the end of the period under review, we tweaked the Trust s equity exposure in favour of the more high quality, income focused holdings and added further to our holding in the CF Morant Wright Japan Fund, primarily on valuation grounds. Outlook Although we share some of the markets cautiousness in the near term, we continue to view the current slowdown as a mid cycle soft patch, believing that there are sufficient positive factors in place to allow for further headway to be made. Specifically, we feel there is upside potential for stocks, corporate bonds and select commodities; more so than in developed market government bonds and cash. That said, volatility looks set to remain high and we remain fully aware of the downside risks. One such risk is the eurozone and its sovereign debt crisis. With the periphery still struggling with soaring debt levels and European banks remaining in a fragile state, we feel the underlying forces are still very much deflationary in many parts of Europe and we struggled to see the merits of the ECB s decision to raise rates. Changing continents, we hold the view that China will engineer a soft landing and that markets fears of a hard landing are overblown. In the money markets, the ending of a second round of Quantitative Easing (QE2) in itself should not have a major impact, in part because the US Federal Reserve has implied that policy will continue to be accommodative. Elsewhere, although the current price of oil may have a higher geopolitical risk premium built in, we continue to remain bullish (hopeful of rising prices) and believe that the longerterm positive fundamental story remains intact. 3
Manager s Investment Report continued Finally, we remain positive on the outlook for gold, increasingly viewing it as a currency rather than a commodity and one whose fundamentals appear a lot sounder than those of the US Dollar, the Euro and Sterling. Legal & General (Unit Trust Managers) Limited (Investment Adviser) 5 August 2011 4
Authorised Status Authorised Status This Trust is an Authorised Unit Trust Scheme as defined in section 243 of the Financial Services and Markets Act 2000 and is a nonucits Retail Scheme within the meaning of the FSA Collective Investment Schemes sourcebook. Directors Statement We hereby certify that this Manager s Report has been prepared in accordance with the requirements of the FSA Collective Investment Schemes sourcebook. M. B. Boardman S. D. Thomas (Director) (Director) Legal & General (Unit Trust Managers) Limited 31 August 2011 5
Portfolio Statement Portfolio Statement as at 15 July 2011 All investments are in distribution units or ordinary shares unless otherwise stated. The percentages in brackets show the equivalent sector holdings as at 15 January 2011. Holding/ Market % of Nominal Value Net Value Investment Assets Funds investing in Overseas shares 73.62% (73.15%) 9,030,135 CF Morant Wright Japan 'B' Acc 18,532,547 6.54 9,589,422 First State Asia Pacific Leaders 'B' Acc 36,403,362 12.84 2,974,194 First State Latin America Fund 'B' Acc 6,080,811 2.14 3,472,813 Guinness Global Energy 'A' Inc 23,295,694 8.22 2,233,349 Henderson European Growth Fund 'I' Acc 5,579,753 1.97 11,037,097 Ignis Hexam Global Emerging Markets 'I' Acc 13,984,002 4.93 14,481,276 Investec American Fund 'A' Acc 25,088,811 8.85 11,992,622 Investec Global Gold 'A' Acc 25,907,660 9.14 20,731,236 Jupiter International Financials Acc 8,816,994 3.11 4,199,017 Neptune China Fund 'B' Acc 13,046,347 4.60 3,684,941 Neptune Russia & Greater Russia Fund 'B' Acc 14,813,461 5.22 117,791 Veritas Global Equity Income Fund Inc 17,190,415 6.06 208,739,857 73.62 Funds investing in UK Shares 25.96% (26.56%) 151,594 GLG Alpha Select UCITS III 'E' Inc 14,492,353 5.11 1,443,010 Invesco Perpetual Income Fund Acc 28,056,445 9.90 8,385,551 M&G Recovery Fund 'A' Acc 22,149,595 7.82 6,954,116 Schroder UK Alpha 'A' Acc 8,888,069 3.13 73,586,462 25.96 Portfolio of investments 282,326,319 99.58 Net other assets 1,202,454 0.42 Total net assets 283,528,773 100.00% Where any of the above securities are unlisted, they are valued at the Manager s best assessment of their fair value. The total value of Purchases during the period was 61,766,922. The total value of Sales during the period was 66,085,465. 6
Financial Statements Statement of Total Return for the period ended 15 July 2011 15/07/11 15/07/10 Income Net capital losses (7,948,062) (271,498) Revenue 1,800,749 2,161,828 Expenses (1,221,528) (1,640,134) Finance costs: Interest (165) (60) Net revenue before taxation 579,056 521,634 Taxation (30,015) Net revenue after taxation for the period 579,056 491,619 Total return before distributions (7,369,006) 220,121 Finance costs: Distributions (290,955) (247,674) Change in net assets attributable to Unitholders from investment activities (7,659,961) (27,553) Statement of Change in Net Assets attributable to Unitholders for the period ended 15 July 2011 15/07/11 15/07/10 Opening net assets attributable to Unitholders 295,565,866 263,159,435 Amounts received on creation of units 5,299,113 9,149,614 Less: Amounts paid on cancellation of units (9,673,674) (10,141,596) (4,374,561) (991,982) Stamp Duty Reserve Tax (43,231) (51,349) Retained distribution on accumulation units 40,660 26,752 Change in net assets attributable to Unitholders from investment activities (7,659,961) (27,553) Closing net assets attributable to Unitholders 283,528,773 262,115,303 The difference between the opening net assets and the comparative closing net assets is the movement in the second half of the year. 7
Financial Statements continued Balance Sheet as at 15 July 2011 15/07/11 15/01/11 ASSETS Investment assets 282,326,319 294,711,869 Debtors 2,606,290 2,122,049 Cash and bank balances 844,383 157,644 Total other assets 3,450,673 2,279,693 Total assets 285,776,992 296,991,562 LIABILITIES Investment liabilities Creditors (2,004,169) (774,757) Bank overdrafts (412,529) Distribution payable on distribution units (244,050) (238,410) Total other liabilities (2,248,219) (1,425,696) Total liabilities (2,248,219) (1,425,696) Net assets attributable to Unitholders 283,528,773 295,565,866 8
Notes to the financial statements 1. Accounting Policies (a) Changes to accounting policies The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments and in accordance with the Statement of Recommended Practice for Authorised Funds issued by the IMA in October 2010 ( the IMA SORP 2010 ). The financial statements have been prepared on the basis of the accounting policies set out in the most recent annual financial statements (15 January 2011). As at 15 July 2010, the financial statements were prepared in accordance with the Statement of Recommended Practice for Authorised Funds issued by the IMA in November 2008. There has been no impact on the financial statements disclosure for the period. 9
Trust Facts Distribution Information RClass The distribution payable on 15 September 2011 is 0.0586p net per unit for distribution units and 0.0595p net per unit for accumulation units. Total Expense Ratio RClass 15 Jul 11 15 Jan 11 Trust expenses 2.05% 1.99% Performance fees 0.00% 0.43% Total 2.05% 2.42% 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. 10
Performance Record Net Asset Values Net Asset Net Asset Number Of Accounting Value Of Value Per Units Date Trust Unit In Issue 15 Jan 09 RClass Distribution Units 188,910,801 38.81p 486,702,706 Accumulation Units 2,119,476 38.81p 5,460,539 15 Jan 10 RClass Distribution Units 242,611,364 52.29p 464,013,313 Accumulation Units 20,548,071 52.93p 38,819,503 15 Jan 11 RClass Distribution Units 258,564,071 59.66p 433,378,676 Accumulation Units 37,001,795 60.47p 61,190,421 15 Jul 11 RClass Distribution Units 243,037,501 58.11p 418,251,726 Accumulation Units 40,491,272 58.95p 68,683,225 Unit Price Range and Net Revenue RClass Units Highest Lowest Net Year Offer Bid 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 55.73p 0.1136p 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 56.54p 0.1152p (1) The Trust s units were launched on 25 April 2008. (2) The above table shows highest offer and lowest bid prices to 15 July 2011 and net revenue per unit to 15 September 2011. Past performance is not a guide to future performance. The price of units and any income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. 11
General Information Constitution Launch date: 25 April 2008 Year end: 15 January Period end dates for distributions: 15 January, 15 July Distribution dates: 15 March, 15 September Minimum initial lump sum investment: 500 Minimum monthly contribution 50 Valuation point: 12 noon Management charge: Annual 1%* Performance fee charges: Please refer to Simplified Prospectus. Initial charge: 5% * The annual management charge was reduced to 0.85% on 1 October 2009. This was done on a temporary basis and the Manager reserves the right to increase this back to 1% at some point in the future. Pricing and Dealing The prices are published on the internet at www.legalandgeneral.com/investments/fundinformation/dailyfundprices/fundprices/multimanager.html immediately after they become available. Dealing in units takes place on a forward pricing basis, from 8:30am to 6:00pm, Monday to Friday. Buying and Selling Units Units may be bought on any business day from the Manager or through a financial adviser by telephoning, completing an application form or on the internet at www.legalandgeneral.com. Units may normally be sold back to the Manager on any business day at the bid price calculated at the following valuation point. ISA Status This Trust may be held within this Tax advantaged savings arrangement. The favourable Tax treatment of ISAs may not be maintained. For full written information, please contact your usual financial adviser or ring 0370 050 0955. Call charges will vary. We may record and monitor calls. Stamp Duty Reserve Tax Stamp Duty Reserve Tax suffered on the surrender of units where applicable, has been charged against the capital assets of the Trust. 12
General Information continued Prospectus and Manager s Reports The Manager will send to all persons on the Unitholder Register annual and interim short form reports. Copies of the Prospectus and the most recent annual or interim reports are available free of charge by telephoning 0370 050 0955 or by writing to the Manager. Do you have difficulty in reading information in print because of a disability? If so, we can help. We are able to produce information for our clients in large print and braille. If you would like to discuss your particular requirements, please contact us on 0370 050 0955. Call charges will vary. We may monitor and record calls. 13
General Information continued 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 Directors of the Manager M. B. Boardman S. C. Ellis M. J. Gregory S. R. Pistell S. D. Thomas Secretary A. Fairhurst Registrar Legal & General (Portfolio Management Services) Limited P.O. Box 6080 WolverhamptonWV1 9RB Authorised and regulated by the Financial Services Authority Dealing: 0370 050 0956 Enquiries: 0370 050 0955 Registration: 0370 050 0955 Call charges will vary. We may record and monitor calls. 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 7 More London Riverside London SE1 2RT Investment Adviser Legal & General (Unit Trust Managers) Limited One Coleman Street, London EC2R 5AA Authorised and regulated by the Financial Services Authority 14
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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