The Marks and Spencer UK Selection Portfolio

Transcription

1 M&S UNIT TRUST FUND The Marks and Spencer UK Selection Portfolio Manager s interim report May 2016 (unaudited)

2 Contents Page(s) Manager s investment report 2 to 4 Portfolio statement 5 to 8 Net asset value per unit and comparative table 9 Ongoing charges 10 Risk and reward profile 10 Authorised status 10 Certification of financial statements by Directors of the Manager 10 Statement of total return 11 Statement of change in net assets attributable to Unitholders 11 Balance sheet 12 Distribution table 13 Other information 13 Important Changes 14

3 The Marks and Spencer UK Selection Portfolio THE MARKS AND SPENCER UK SELECTION PORTFOLIO Manager, Registrar, dealing, administration and marketing Marks and Spencer Unit Trust Management Limited Authorised and regulated by the Financial Conduct Authority. Investor helpline: or if calling from abroad. Lines are open 8am-8pm Monday to Friday, 9am-5pm on Saturday and 10am-4pm bank holidays (closed on Sunday, Christmas Day, Boxing Day and New Year s Day). Please be aware that opening hours may be restricted over the Christmas period, please contact us for details. Calls may be recorded. Head office and registered office Kings Meadow Chester CH99 9FB Registered in England No Directors of the Manager Dame Denise Holt (Chairman and Non-Executive) Sue Fox (Chief Executive Officer) David Stewart (Non-Executive) Phillip Scott Douglas van den Aaardweg (Non-Executive) Matt Handley James Coyle (Non-Executive) appointed January 2016 Keith Woollard resigned December 2015 Investment advisers HSBC Global Asset Management (UK) Limited 8 Canada Square London EH14 5HQ HSBC Global Asset Management (UK) Limited directly manage a proportion of the Fund and sub-delegate the remaining fund management to the following specialist advisers: AXA Investment Managers (UK) Limited 7 Newgate Street London EC1A 7NX Schroder Investment Management Limited 31 Gresham Street London EC2V 7QA The above-listed investment advisers are authorised and regulated by the Financial Conduct Authority. Trustee State Street Trustees Limited 525 Ferry Road Edinburgh EH5 2AW Authorised and regulated by the Financial Conduct Authority. Independent auditor KPMG LLP 15 Canada Square London E14 5GL PAGE 1

4 Manager s investment report This section gives you confirmation of the Fund objective. It also gives you the investment strategy employed by each investment adviser; the percentage of the Fund allocated to each investment adviser as at the report date; and an economic, market and portfolio review for the period of the report. Our objectives and methods The Marks and Spencer UK Selection Portfolio was launched in October It has been developed to give our customers access to a range of UK shares in the form of a unit trust, with the objective to achieve long term capital growth and an above average level of income. The Fund invests in the shares of both large and small UK companies, and may invest in UK corporate bonds that have the option to convert into shares of the company (called convertible stocks ). The Fund may use derivative instruments (options, futures, and contracts for difference) and forward transactions in a currency for the purposes of efficient portfolio management. These instruments can therefore be used to reduce risk, reduce costs, or generate additional capital or income with no, or low levels of, risk. We use the skills of three investment advisers to select and manage the investments. Each company has been chosen for its specific skills which will be complementary when matched together. HSBC Global Asset Management (UK) Limited are allocated 20% of the Fund s assets. Their aim is to follow closely the performance of the UK stock market with the emphasis on those shares which give an above average income. AXA Investment Managers (UK) Limited manage 40% of the Fund s assets. They look to add value by investing in long term growth stocks which are trading at attractive valuations. Schroder Investment Management Limited manage the remaining 40% of the Fund s assets. They focus on companies with consistently high profitability, little debt and good cash generation, preferring companies with established franchises that deliver sustainable organic growth. All three investment advisers select across the full range of UK shares, from both large and small companies. We develop a working partnership with our investment advisers, and their performance is regularly monitored by the HSBC Governance Forum. The percentages given above reflect the target allocations for each manager. At 31 May 2016 the exact proportions were: HSBC Global Asset Management (UK) Limited 18.1% AXA Investment Managers (UK) Limited 40.3% Schroder Investment Management Limited 40.2% Cash 1.4% Percentage growth 01/06/11 to 01/06/12 01/06/12 to 01/06/13 01/06/13 to 01/06/14 01/06/14 to 01/06/15 01/06/15 to 01/06/16-9.3% 28.3% 11.6% 7.2% -7.1% This information relates to the past, and past performance is no guarantee of future performance. All the above figures are on a bid to bid basis, net income reinvested. The performance figures exclude the initial charge of the Fund. Source: Morningstar. PAGE 2

5 Review of the six months to 31 May 2016 Economic and market review The UK equity market ended the six month period broadly unchanged, despite witnessing substantial volatility as a number of uncertainties weighed on markets. Fears persisted at the beginning of the period over emerging markets, the outlook for China and the durability of US growth. This occurred against a backdrop of uncertainty over the consequences of the US Federal Reserve s decision to increase US interest rates by 0.25% in December, the first rise in nearly a decade. The accompanying dollar strength and uncertain global economic growth outlook weighed on commodities, with supply-side factors negatively impacting oil prices. Initially resource sectors performed poorly, with the mining sector hit particularly hard as the decline in metal prices called into question the resilience of balance sheets and the sustainability of dividends. However, during the first quarter the mining and oil sectors recovered and commodity prices rallied as a consequence of debt-led stimulus in China. Financials were another poor performer in the period as fears over a deteriorating economic outlook raised questions over the prospects for provisioning levels and interest margins for banks, and the potential for rising credit spreads to translate into increased bond defaults for insurers. In addition, uncertainty around the UK referendum over EU membership led to increased caution towards the banking sector given its economic sensitivity. Overall, the FTSE 350 ex investment trusts index was flat over the review period. Portfolio review In the part of the Fund managed by Schroder Investment Management Limited, returns outperformed the benchmark. Outperformance came from overweight exposure to the Software & Computer Services sector, in particular holdings in Fidessa and Sage. The exposure to Pharmaceuticals, principally GlaxoSmithKline, also added value. The decision to reduce further the mining sector exposure negatively impacted performance, as Glencore, Anglo American and Randgold Resources in particular recovered in value. During the period, Wm Morrison and Tesco were added to holdings and a position was initiated in life insurance company Prudential. Standard Chartered was also added following its right issue. Elsewhere the pharmaceuticals sector was broadened by reinitiating a position in Shire following significant weakness following its acquisition of Baxalta, as well as opening positions in small-cap companies Clinigen, Indivior and Skyepharma. Two small-cap technology companies (Iomart and Redcentric) were added, while positions in Rio Tinto and Glencore were sold. In the part of the Fund managed by AXA Investment Managers, under-performance occurred relative to benchmark during the period. Over the review period positive contributions came from the holdings in RPC Group, Reckitt Benckiser, Rightmove, and CRH, while being underweight banks, including HSBC and Barclays, also proved beneficial. This was balanced by negative contributions from Inmarsat, ITV, Ultra Electronics, Rank BT Group. Domestic stocks were hit particularly hard during the period with concerns rising ahead of the referendum vote in the UK on the 23rd June The part of the Fund managed by HSBC Global Asset Management (UK) Limited tracks the FTSE 350 Higher Yield index. During the period Assura plc was added to the index whilst Hunting plc was deleted. PAGE 3

6 Outlook While the economic cycle remains in the up-leg and hence supportive of global equity markets, it is susceptible to periods of doubt, such as that seen at the start of Such periods have the capacity to introduce significant volatility. The economic cycle, though by no means strong, is nonetheless slowly moving in the right direction, and is supported by the continuing central bank easing seen in Continental Europe and Japan. Although the overall environment is therefore broadly supportive, there is the capacity for near term upsets, not least from the UK referendum vote which could introduce market volatility, particularly should there be a vote for Brexit. The investment advisers in the period under review were: HSBC Global Asset Management (UK) Limited HSBC s primary objective is to track the FTSE 350 Higher Yield Index. They have constructed a portfolio which closely resembles the UK equity market as a whole but has a slightly above average level of dividend income. To do this they must inevitably have a large number of holdings. AXA Investment Managers (UK) Limited AXA look to add value by investing in long term growth stocks which are trading at attractive valuations. Schroder Investment Management Limited Schroders focus on companies with consistently high profitability, little debt and good cash generation, preferring companies with established franchises that deliver sustainable organic growth. PAGE 4

7 Portfolio statement This section details all the different fixed interest securities/government stocks in which the Fund invests, by denomination currency. It also shows the number of securities held, the percentage each fixed interest security/government stock represents of the Fund as a whole and the value of those securities at the end of the period (shown under bid value). As at 31 May 2016 HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS UK EQUITIES AND CONVERTIBLES (91.91%; 30/11/ %) OIL & GAS (11.13%; 30/11/ %) Oil & gas producers BP 1,157,805 4,136, Royal Dutch Shell A 91,536 1,517, Royal Dutch Shell B 402,200 6,678, Tullow Oil 103, , Vesuvius 5,688 19, Oil equipment & services 0.29 AMEC 8,104 35, Hunting John 98, , BASIC MATERIALS (2.39%; 30/11/ %) Chemicals 0.65 Johnson Matthey 18, , Victrex 15, , Forestry & paper 0.17 Mondi 14, , Mining 1.57 Anglo American 27, , BHP Billiton 43, , Rio Tinto 66,708 1,295, Vedanta Resources 2,183 8, INDUSTRIALS (10.39%; 30/11/ %) Construction & materials 1.42 Balfour Beatty 656,534 1,623, Kier Group 1,895 23, Aerospace & defence 3.77 BAE Systems 574,070 2,776, Chemring Group 409, , Cobham 23,615 38, QinetiQ 148, , Ultra Electronics Holding 36, , HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS General industrials 1.75 Rexam 14,524 91, RPC Group 137,663 1,108, Smiths Group 74, , Electronic & electrical equipment 0.16 Renishaw 9, , Industrial engineering 0.43 IMI 41, , Melrose Industries 21,872 83, Industrial transportation 0.12 BBA Group 21,527 43, Royal Mail 18, , Support services 2.74 Capita Group 58, , Carillion 8,992 24, Electrocomponents 162, , Essentra 109, , G4S 32,181 60, Howden Joinery Group 46, , Interserve 3,018 10, Mitie Group 7,565 21, Paypoint 1,341 12, Premier Farnell 125, , Rentokil Initial 256, , SIG 161, , CONSUMER GOODS (9.69%; 30/11/ %) Food producers 0.74 Dairy Crest Group 128, , Tate & Lyle 24, , Household goods 2.45 Berkeley Group Holdings 2,611 85, Bovis Homes Group 2,792 28, Countryside Properties 135, , PAGE 5

8 Portfolio statement This section details all the different fixed interest securities/government stocks in which the Fund invests, by denomination currency. It also shows the number of securities held, the percentage each fixed interest security/government stock represents of the Fund as a whole and the value of those securities at the end of the period (shown under bid value). As at 31 May 2016 Crest Nicholson Holdings 55, , Galliford Try 1,703 23, Reckitt Benckiser 29,241 2,010, Personal goods 0.68 Unilever 25, , Tobacco 5.82 British American Tobacco 78,362 3,289, Imperial Tobacco Group 92,273 3,470, HEALTHCARE (11.81%; 30/11/ %) Healthcare equipment & services 0.86 Smith & Nephew 84, , Pharmaceuticals & biotechnology AstraZeneca 103,926 4,186, BTG 114, , Clinigen Group 53, , GlaxoSmithKline 419,560 6,060, Hikma Pharmaceuticals 24, , Indivior 110, , SkyePharma 41, , Vectura Group 276, , CONSUMER SERVICES (11.68%; 30/11/ %) Food & drug retailers 2.49 Booker Group 415, , Morrison (Wm) 329, , Sainsbury (J) 29,290 78, Tesco 850,557 1,403, General retailers 2.01 Auto Trader Group 242, , Debenhams 25,616 18, Dixons Carphone 100, , Dunelm Group 62, , PAGE 6 HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS Game Digital 194, , Halfords Group 4,168 18, Marks & Spencer** 33, , N Brown Group 3,170 7, Media 4.78 Daily Mail & General Trust 136, , Informa 62, , ITV 395, , Pearson 17, , RELX 146,747 1,834, Rightmove Group 32,235 1,361, Travel & leisure 2.40 Carnival 23, , Compass Group 36, , FirstGroup 560, , Go-Ahead Group , Greene King 6,404 57, Ladbrokes 21,076 28, Marston s 12,007 18, Mitchells & Butlers 116, , National Express 8,745 29, Rank Group 165, , TELECOMMUNICATIONS (6.39%; 30/11/ %) Fixed line telecommunications 2.33 BT Group 601,700 2,664, TalkTalk Telecom Group 10,977 26, Telecom Plus 1,239 12, Mobile telecommunications 4.06 Inmarsat 9,290 66, Vodafone Group 2,016,230 4,654, UTILITIES (2.61%; 30/11/ %) Electricity 0.48 Drax Group 75, ,

9 Portfolio statement This section details all the different fixed interest securities/government stocks in which the Fund invests, by denomination currency. It also shows the number of securities held, the percentage each fixed interest security/government stock represents of the Fund as a whole and the value of those securities at the end of the period (shown under bid value). As at 31 May 2016 HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS Scottish & Southern Energy 20, , Gas, water & multi-utilities 2.13 Centrica 667,854 1,360, National Grid 78, , Pennon Group 8,525 73, Severn Trent 4, , United Utilities 14, , FINANCIALS (19.16%; 30/11/ %) Banks 8.48 Barclays 775,532 1,414, BGEO Group , HSBC Holdings** 490,500 2,182, Lloyds Banking Group 5,356,919 3,855, Royal Bank of Scotland 513,623 1,265, Standard Chartered 209,342 1,108, Non-life insurance 0.21 Admiral Group 4,110 80, Beazley 10,747 39, Direct Line Insurance 28, , esure Group 5,007 14, Life insurance 6.43 Aviva 470,617 2,114, JRP Group 684, , Legal & General 327, , Old Mutual Group 101, , Prudential 180,678 2,492, St. James s Place Capital 84, , Standard Life 40, , Real estate 1.61 Assura 33,869 18, Big Yellow Group REIT 83, , British Land REIT 120, , HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS Hansteen Holdings REIT 14,855 15, Hammerson REIT 16,266 94, Intu Properties 19,443 58, LondonMetric Property 12,114 19, Redefine International REIT 25,014 11, Segro REIT 15,383 67, General financial i Group 42, , Aberdeen Asset Management 20,501 57, Ashmore Group 8,148 23, Brewin Dolphin 5,548 14, Close Brothers 3,091 41, ICAP 80, , IG Group Holdings 7,534 60, Intermediate Capital Group 6,756 45, Investec 10,553 49, London Stock Exchange Group 21, , Man Group 31,774 41, Provident Financial 3,032 88, Tullett Prebon 191, , Worldpay Group 173, , Funds 0.08 City of London Investment Trust 6,706 25, Edinburgh Investment Trust 4,069 28, Murray International Trust 2,661 24, Securities Trust Scotland 22, Temple Bar Investment Trust 1,343 14, PAGE 7

10 Portfolio statement This section details all the different fixed interest securities/government stocks in which the Fund invests, by denomination currency. It also shows the number of securities held, the percentage each fixed interest security/government stock represents of the Fund as a whole and the value of those securities at the end of the period (shown under bid value). As at 31 May 2016 HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS TECHNOLOGY (6.66%; 30/11/ %) Software & computer services 5.65 Aveva Group 46, , Computacenter 106, , Fidessa Group 52,480 1,241, iomart Group 155, , Micro Focus International 37, , Redcentric 253, , Sage Group 280,586 1,718, Servelec Group 105, , Technology hardware & equipment 1.01 ARM Holdings 79, , Laird Group 5,589 19, Spirent Communications 468, , OVERSEAS EQUITIES & CONVERTIBLES (5.40%; 30/11/ %) Cayman Islands (0.64%; 30/11/ %) 0.64 Phoenix Group Holdings 84, , Channel Islands (2.98%; 30/11/ %) i Infrastructure 11,023 18, i Infrastructure Rights 2, Experian Group 43, , F&C Commercial Property Trust 10,942 13, GCP Infrastructure Investments 12,064 14, Glencore 241, , Henderson Group 21,882 58, HICL Infrastructure 28,297 46, International Public Partnership* 20,546 30, John Laing Infrastructure 15,980 19, HOLDING OR NOMINAL BID % OF VALUE OF POSITIONS VALUE NET TOTAL AS AT 31 MAY 2016 ( ) ASSETS NB Global Floating Rate Income* 24,346 22, Petrofac 5,369 41, Renewables Infrastructure Group 15,199 14, Sherborne Investors Guernsey 213, , Shire 42,845 1,825, UBM 37, , UK Commercial Property Trust 13,724 11, Germany (0.00%; 30/11/ %) 0.00 Ireland (1.78%; 30/11/ %) 1.78 CRH 53,206 1,104, DCC (London listed) 11, , ishares FTSE 100 ETF+ 34, , Luxembourg (0.00%; 30/11/ %) Portfolio of investments 113,013, Net other assets 3,126, Net assets 116,139, The securities held are approved and are admitted to an official listing unless otherwise stated. * Guernsey registered investment trusts ** Related parties + Exchange traded funds Total purchases for the period, including transaction charges, were 23,450,475. Total sales proceeds for the period, net of transaction charges, were 24,910,372. PAGE 8

11 Net asset value per unit and comparative table THE MARKS AND SPENCER UK SELECTION PORTFOLIO This section details in concise figures how the Fund has performed, in terms of the size of the Fund, the price of units and the income distributions made. FUND SIZE YEAR NET ASSET VALUE M NET ASSET VALUE PER UNIT (PENCE) NO OF UNITS IN ISSUE 2013 Income ,259 Accumulation ,180, Income ,574 Accumulation ,977, Income ,758 Accumulation ,615, * Income ,918 Accumulation ,072,798 *The Fund size as at 31/05/16 UNIT PRICE RANGE YEAR INCOME UNITS ACCUMULATION UNITS HIGH (PENCE) LOW (PENCE) HIGH (PENCE) LOW (PENCE) * High = Highest offer price Low = Lowest bid price * Over the period 01/01/16 to 31/05/16 NET INCOME DISTRIBUTION (CALENDAR YEARS ON A PAID BASIS) YEAR INCOME UNITS PENCE PER UNIT ACCUMULATION UNITS PENCE PER UNIT * *The next distribution will be payable on 31/07/16 Please remember that the value of units and the income from them can go down as well as up. Also, past performance is no guarantee of future performance. PAGE 9

12 Ongoing charges For the 12 month period to 31 May 2016: 1.60% For the 12 month period to 30 November 2015: 1.59% The ongoing charges measure the annual charges and expenses of an investment fund. These will affect the returns to the investor. Most European investment funds highlight the ongoing charges to help you compare the annual charges and expenses of different funds. Ex-distribution (XD) dates: Income payment dates: 1 December and 1 June 31 January and 31 July Risk and reward profile Lower risk Typically lower rewards Higher risk Typically higher rewards More about this rating The rating is based on price volatility over the last five years. As it is based on historical data, it may not be a reliable indicator of the future risk profile of the Fund. The rating is not guaranteed and may change over time. The lowest rating does not mean a risk-free investment. Why is this Fund in category 6? Share prices tend to fluctuate more than other asset classes as investors directly participate in the performance of companies and their earnings. Authorised status The Fund is an authorised unit trust under Section 243 of the Financial Services and Markets Act 2000 (authorisation orders) and the Financial Conduct Authority Handbook and is categorised as an Undertakings for Collective Investment in Transferable Securities (UCITS) scheme. Certification of financial statements by Directors of the Manager This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued and amended by the Financial Conduct Authority. Sue Fox (Chief Executive) 18 July 2016 Phillip Scott (Director) 18 July 2016 PAGE 10

13 Statement of total return THE MARKS AND SPENCER UK SELECTION PORTFOLIO This section details the income of the Fund over the period of the report and explains how this income is distributed to the investors. It also provides an analysis of increases and decreases in net assets over the accounting year. For the period ended 31 May * 2015** Income Net capital (losses)/gains (2,423,157) 7,866,095 Revenue 2,398,222 2,598,004 Expenses (905,987) (1,008,323) Interest payable and similar charges (2) - Net revenue before taxation 1,492,233 1,589,681 Taxation (6,094) (5,336) Net revenue after taxation 1,486,139 1,584,345 Total return before distributions (937,018) 9,450,440 Distributions/Accumulations (1,486,177) (1,584,347) Change in net assets attributable to Unitholders (2,423,195) 7,866,093 Statement of change in net assets attributable to Unitholders For the period ended 31 May * 2015** Opening net assets attributable to Unitholders 119,977, ,648,665 Amounts receivable on issue of units 277, ,073 Amounts payable on cancellation of units (3,147,121) (4,834,382) Change in net assets attributable to Unitholders from investment activities (see table above) (2,869,367) (4,564,309) (2,423,195) 7,866,093 Retained distribution on accumulation units 1,455,014 1,549,288 Unclaimed distributions over 6 years old Closing net assets attributable to Unitholders *Figures are for the period ended 31 May * Figures are for the period ended 31 May ** Figures are for the period ended 31 May ,139, ,499,793 ** Figures are for the period ended 31 May PAGE 11

14 Balance sheet As at 31 May * ASSETS Fixed Assets: Investments 113,013, ,938,345 Current assets: Debtors 1,655, ,773 Cash and bank balances 2,710,483 2,759,950 Total current assets 4,365,531 3,256,723 TOTAL ASSETS 117,379, ,195,068 LIABILITIES Creditors: Distribution payable (17,831) (12,869) Other creditors (1,221,427) (204,859) TOTAL LIABILITIES (1,239,258) (217,728) Net assets attributable to Unitholders 116,139, ,977,340 *Comparative figures are as at 30 November PAGE 12

15 Distribution table For the period ended 31 May 2016 Interim Group 1: Units purchased prior to 1 December 2015 Group 2: Units purchased between 1 December 2015 to 31 May 2016 Net Equalisation Distribution Distribution income payable paid pence per unit pence per unit pence per unit pence per unit Income units Group Group Accumulation units Group Group Other information The interim financial statements have been prepared on the historical cost basis, as modified by the revaluation of investments, in compliance with FRS 102 and in accordance with the Statement of Recommended Practice for Authorised Funds (SORP) issued by the Investment Association in May This is the first set of financial statements to be prepared for the Fund under the 2014 SORP however the impact is minimal for an interim reporting period and limited to some presentational amendments to the Statement of Total Return, Statement of Change in Net Assets Attributable to Unitholders and the Balance Sheet. The full disclosures under the new SORP will first be presented for the annual financial statements prepared for the year to 30 November Unless otherwise stated all other accounting policies applied are consistent with those of the annual financial statements for the year ended 30 November 2015 and are described in those financial statements. PAGE 13

16 Important Changes The following changes have been made to the Fund s Prospectus during the reporting period ending 31 May 2016: - Update to section 11 of the Prospectus Authorised Fund Manager reflecting changes in the Directors of the Authorised Fund Manager - Update to section 27 of the Prospectus Taxation reflecting changes as a result of the new tax year. The following changes have been made to the Fund s Prospectus after the end of the reporting period and was republished on 5 July 2016: - Update to section 2, Investment Objectives and Policy to provide the following further detail as to the strategy of the Fund: (a) the portion of the fund tracking an index; (b) the portions of the Fund managed by each Specialist Investment Adviser and (c) the definition of above average income within the investment strategy section. The current objective, policy and strategy have not changed as a result of these additional disclosures. - Update to the Definitions. - Update to section 18, Payments to the Authorised Fund Manager to reflect the reduced Trustee fees. - Update to section 13, Trustee to reflect additional information required by regulation which required further disclosure of information in relation to the relationship with the Trustee, the Trustee s responsibilities and the contractual arrangements between the Trustee and the Manager via the Depositary Agreement. - Update to section 30 Risks to provide more detailed descriptions of the types of risk applicable to the Fund. The following changes have been made to the Fund s Key Investor Information Document after the end of the reporting period and was republished on 5 July 2016: - Update to the Investment Objectives and Policy section to provide the following further detail as to the strategy of the Fund (a) the portion of the fund tracking an index; and (b) the definition of above average income. The current objective, policy and strategy have not changed as a result of these additional disclosures. - Update to the risk wording section to provide more detailed descriptions of the types of risk applicable to the Fund. The Key Investor Information Document (KIID) has been republished and dated 5 July 2016 to reflect the changes made to the Prospectus. Following receipt of permission from the Financial Conduct Authority (FCA), we will send the fund Key Investor Information Document (KIID) with the contract note after an investment is made, which is in line with market practice. Therefore, when the KIID is updated, we will no longer send it to all investors. You can request a copy of the latest KIID at any time by calling us on and it is available on our website, marksandspencer.com/investments. PAGE 14

17 Please call if you would like to receive this information in an alternative format such as large print, Braille or audio. FTSE is a trademark of the London Stock Exchange plc and The Financial Times Limited and is used by FTSE International Limited (FTSE ) under licence. The FTSE indices are calculated by FTSE and all rights in and to these indices vest in FTSE and its licensors. FTSE does not sponsor, endorse or promote our products. M&S Savings and Investments is a trading name of Marks and Spencer Unit Trust Management Limited. Registered in England No Registered office: Kings Meadow, Chester CH99 9FB. Authorised and regulated by the Financial Conduct Authority. A wholly owned subsidiary of HSBC Bank plc. Marks & Spencer is a registered trademark of Marks and Spencer plc and is used under licence. Marks and Spencer Unit Trust Management Limited All rights reserved. Marks and Spencer Unit Trust Management Limited is entered in the Financial Services Register under reference number Calls may be recorded for mutual security, training and monitoring purposes. MSB MSB /0716/M