Cirilium Dynamic Passive Fund DYNAMIC

Transcription

1 DYNAMIC Annual Short Report

2 Fund Manager Paul Craig The Cirilium Dynamic Passive Fund launched on 8 February 2013 Investment objective To achieve long term capital growth. The Fund will typically have a maximum exposure of 90% to equities. Investment Policy The Fund will have exposure to securities of UK and overseas companies, fixed interest securities, cash, moneymarket instruments and deposits. The Fund will focus on index tracking (passive) investments. The Fund will seek this exposure by investing in a combination of collective investment schemes and exchange traded funds. The Fund may also invest in transferable securities (including fixed interest securities) and investment companies (including investment trusts). Strategic asset allocation targets are agreed between the ACD and the Investment Manager and reviewed regularly. The Fund s investments will be regularly rebalanced to these targets. Further details on the asset allocation targets are available from the ACD on request. Derivatives may be used for investment purposes and EPM purposes. Risk profile Where the Fund invests in assets (including cash) which are denominated in currencies other than the base currency (pounds sterling) then currency exchange rate movements may cause the value of investments to fall as well as rise. The Fund invests indirectly in bonds and there is a risk that interest rate fluctuations could affect the capital value of investments. Where long term interest rates rise, the capital value of shares is likely to fall and vice versa. In addition to the interest rate risk, bond investments are also exposed to credit risk reflecting the ability of the borrower to meet its obligations. The Fund is able to invest in shares issued by investment trust companies, including split capital investment trusts. The level of risk depends on both the share class and prevailing market conditions. The Fund may invest in exchange traded funds (ETF), ETF represent a basket of securities that are traded on an exchange and, therefore, unlike collective investment schemes, they do not necessarily trade at the net asset value (NAV) of their underlying holdings. As a result, they may trade at a price that is above or below the value of the underlying portfolio. Risk warning Past performance is not a guide to future performance. The value of investments and the income from them may fall as well as rise and shareholders may not get back the amount originally invested. Fund Manager s commentary Performance In the period ended 31 October 2013 the Cirilium Dynamic Fund rose 8.4% while the IMA Flexible sector rose by 8.2%. By comparison, the FTSE All-Share Total Return Index was up by 7.7% and UK government bonds were down 3.8%, as measured by the Citigroup World Government Bond Index UK All Maturities. Against a buoyant backdrop for financial markets, it is pleasing to report that the Fund achieved a return broadly inline with the sector average, which is actively managed. Performance was driven by equities with developed markets generating the strongest returns. Positive local returns from Japanese equities were eroded by a decline in the yen for UK-based investors while the Pacific regions and emerging markets lagged as investors weighed the prospects of a tightening in US monetary policy on economic growth in the emerging region.

3 Fund Manager s commentary continued Outlook Equity markets have risen sharply as investors have become more optimistic on the outlook for economic growth, which has been supported by a gradual improvement in forward-looking data. Anecdotally, corporates are talking about more positive trading conditions. Additionally, equities are regaining their popularity with investors as they represent good value on both an absolute and relative basis, particularly compared to bonds. Corporates are generally in rude health with balance sheets in good order, dividends are growing and although M&A activity has been muted, there are grounds for optimism as investors have started to favour growth over saving for a rainy day. There are, however, a number of caveats to this optimistic view; the US budget and debt ceiling has yet to be resolved and Europe is far from out of the woods. Additionally, equities have significantly re-rated over the past couple of years and while valuations have only risen to long-term averages, earnings growth has been marginal. Consequently, we would need to see a meaningful improvement in earnings growth to support higher valuations. Bond markets also face a number of challenges with the most significant being the low level of yields, which may rise sharply as the global economy recovers and interest rate policy in the western world normalises. That said, this could take longer than investors are expecting. Summary of fund performance Net asset value* 2013 Share class p Class I accumulation *The net asset value is calculated as at close of business on the last business day of the accounting period. The investments are valued at fair value which is generally deemed to be the bid market price. Accounting dates Payment dates 30 April, 31 October 28/29 February Total expense ratio 2013 Share class % Class I* 0.85 The total expense ratio (TER) of a Fund is the ratio of the Fund s total operating costs to its average net assets for twelve months. The TER includes a synthetic element of 0.19% to incorporate the TER of underlying funds. *This is an estimated TER as the Fund launched on 8 February 2013.

4 Performance record Highest price (pence per share) Lowest price (pence per share) Revenue per share by calendar year (pence per share) Class I accumulation 2013^ * * * to 31 October + to 28 February ^ inception date 8 February 2013 Performance summary 08/02/13* - 31/10/13 Cirilium Dynamic Passive Fund 8.4 IMA Flexible Investment sector average 8.2 Source: Morningstar, mid to mid, net income reinvested net of fees, GBP. * Inception date Past performance is not a guide to future performance. The value of investment and the income from them may fall as well as rise and shareholders may not get back the amount originally invested. Net revenue distribution 2013 Share class % Class I accumulation Total dividend distributions for the period ended 31 October 2013.

5 Major holdings as at 2013 Equities Vanguard S&P 500 ETF Vanguard FTSE 100 ETF Legal & General European Index I Acc Legal & General Emerging Markets Index R Acc 8.42 Legal & General Japan Index I Acc 5.55 Fixed Interest Vanguard UK Government Bond ETF 3.52 ishares FTSE Gilts UK 0-5 Years 3.09 ishares Barclays Index-Linked Gilts 2.76 ishares Markit iboxx Corporate Bond 2.69 ishares Markit iboxx Corporate Bond 1-5 Years 0.68 % Portfolio information as at 2013 % Equities US UK Europe Emerging Markets 8.42 Japan 5.55 Asia 4.94 Fixed Interest UK Other Net other assets 2.47 Total

6 Report and Accounts This document is a short report of the Cirilium Dynamic Passive Fund for the period 8 February 2013 to 31 October Copies of the annual and half yearly Long Form Report and Accounts of this Fund are available on our website or contact client services on the telephone number provided. Other information The information in this report is designed to enable you to make an informed judgement on the activities of the Fund during the period it covers and the results of those activities at the end of the period. Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Authorised Corporate Director Intrinsic Cirilium Investment Company Limited 201 Bishopsgate London EC2M 3AE From 31 May 2013 Intrinsic Cirilium Investment Company Limited Wakefield House Aspect Park Pipers Way Swindon SN3 1SA Depositary National Westminster Bank Plc 135 Bishopsgate London EC2M 3UR Auditor KPMG Audit Plc Saltire Court 20 Terrace Castle Edinburgh EH12 2EG Investment Services

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8 Important information Issued in the UK by Intrinsic Cirilium Investment Company Limited (reg. no , registered office at Wakefield House, Aspect Park, Swindon SN3 1SA). Incorporated and registered in England and Wales and authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and monitored. Cirilium is a registered trademark of Cirilium Asset Management Limited. Intrinsic is a registered trademark of Intrinsic Financial Services Limited. H005585/1113