Interim Investment Report and unaudited Financial Statements November M&G Investment Fund s (8)

Transcription

1 M&G IF (8) Interim Investment Report and unaudited Financial Statements November 2014 M&G Investment Fund s (8)

2 Contents Introduction Page 1 Company Information [a] Page 1 For European Investors Page 2 Authorised Corporate Director s Report [a] Page 3 M&G Investment Funds (8) Page 4 Aggregated Financial Statements (unaudited) Page 4 Directors Statement Page 4 Investment Report [a] and Financial Statements for: M&G Global Real Estate Securities Fund Page 5 Further Information [a] Page 11 Liquidity Page 11 Dilution Page 11 The EU Savings Directive Page 11 Other Page 11 Portfolio Turnover Rates Page 11 Total Expense Ratios Page 11 [a] Collectively, these comprise the Authorised Corporate Director s Report.

3 Introduction COMPANY INFORMATION Company M&G Investment Funds (8) M&G is a member of the Investment Management Association and of the Tax Incentivised Savings Association. The Instrument of Incorporation can be inspected at our offices or at the office of the Depositary. Registered Office Laurence Pountney Hill, London EC4R 0HH, UK Authorised Corporate Director (ACD) M&G Securities Limited, Laurence Pountney Hill, London EC4R 0HH, UK Telephone: (UK only) (Authorised and regulated by the Financial Conduct Authority) Directors of the ACD W J Nott (Chief Executive), G N Cotton, P R Jelfs, M Lewis, G W MacDowall, L J Mumford Investment Manager M&G Investment Management Limited, Laurence Pountney Hill, London EC4R 0HH, UK Telephone: +44 (0) (Authorised and regulated by the Financial Conduct Authority) Fund manager The following fund manager is employed by M&G Limited which is an associate of M&G Securities Limited. M&G Global Real Estate Securities Fund Richard O Connor At the start of the review period Gillian Tiltman was the fund manager. Registrar International Financial Data Services (UK) Limited, IFDS House, St. Nicholas Lane, Basildon, Essex SS15 5FS, UK (Authorised and regulated by the Financial Conduct Authority) Depositary National Westminster Bank Plc, Trustee & Depositary Services, Younger Building, 3 Redheughs Avenue, Edinburgh EH12 9RH, UK (Authorised and regulated by the Financial Conduct Authority) Independent Auditor Ernst & Young LLP Ten George Street, Edinburgh EH2 2DZ, UK Customer Services and Administration for UK Clients M&G Securities Limited, PO Box 9039, Chelmsford CM99 2XG, UK Please remember to quote your name and M&G client reference and sign any written communication to M&G. Failure to provide this will affect your ability to transact with us. Telephone: (UK only) For security purposes and to improve the quality of our service, we may record and monitor telephone calls. You will require your M&G client reference. Failure to provide this will affect your ability to transact with us. INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November

4 Introduction FOR EUROPEAN INVESTORS The Prospectus, Instrument of Incorporation, Key Investor Information Documents as well as the latest Annual or Interim Investment Report and Financial Statements are available free of charge on request from the following addresses: Customer Services and Administration for European Clients including the Netherlands, Norway and Finland: M&G International Investments Limited, mainbuilding, Taunusanlage 19, Frankfurt am Main, Germany Please remember to quote your name and M&G client reference and sign any written communication to M&G. Failure to provide this will affect your ability to transact with us. Telephone: For security purposes and to improve the quality of our service, we may record and monitor telephone calls. You will require your M&G client reference. Failure to provide this will affect your ability to transact with us. Austrian Paying and Information Agent: Raiffeisen Bank International AG, Am Stadtpark 9, 1030 Wien, Austria State Street Bank S.p.A., Via Ferrante Aporti 10, Milano, Italy Société Générale Securities Services S.A., Via Benigno Crespi 19A - MAC 2, Milano, Italy Luxembourg Paying and Information Agent: J.P. Morgan Bank Luxembourg S.A., European Bank & Business Center, 6 c route de Trèves, 2633 Senningerberg, Luxembourg Spanish Representative: Allfunds Bank, S.A., Calle Estafeta, No 6 Complejo Plaza de la Fuente, La Moraleja 28109, Alcobendas, Madrid, Spain Swedish Paying Agent: Skandinaviska Enskilda Banken AB (publ), Sergels Torg 2, Stockholm, Sweden Swiss Paying Agent: JP Morgan Chase Bank, National Association, Columbus, Zurich Branch, Dreikönigstrasse 21, 8002 Zürich, Switzerland Swiss Representative: Carnegie Fund Services S.A., 11, rue du Général-Dufour, 1204 Genève, Switzerland Belgian Financial Agent: RBC Investor Services Belgium, Rogier Tower +10/43 Rogierplein 11 Place Rogier, 1210 Brussel, Belgium Danish Representative Agent: Nordea Bank Danmark A/S, Issuer Services, Postboks 850, 0900 Copenhagen C, Denmark French Centralising Agent: RBC Dexia Investor Services, Bank France S.A., 105 rue Réaumur, Paris, France German Paying and Information Agent: J.P. Morgan AG, Junghofstraße 14, Frankfurt am Main, Germany Irish Facilities Agent: BNY Mellon Fund Services (Ireland) Limited, Guild House, Guild Street, IFSC, Dublin 1, Ireland Italian Correspondent Banks: Allfunds Bank, S.A., Via Santa Margherita 7, Milano, Italy Banca Monte dei Paschi di Siena S.p.A., Piazza Salimbeni 3, Siena, Italy Banca Sella Holding S.p.A., Piazza Gaudenzio Sella 1, Biella, Italy BNP PARIBAS Securities Services, Via Ansperto 5, Milano, Italy 2 INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November 2014

5 Introduction AUTHORISED CORPORATE DIRECTOR S REPORT The Authorised Corporate Director (ACD) presents its interim investment report and unaudited financial statements for the six months ended 30 September The sub-fund in this report is part of an umbrella Open-Ended Investment Company (OEIC), M&G Investment Funds (8). This OEIC is an Investment Company with Variable Capital (ICVC) incorporated under the Open-Ended Investment Companies Regulations It is authorised and regulated by the Financial Conduct Authority (FCA) under the Financial Services and Markets Act M&G Investment Funds (8), as an umbrella OEIC, contains one sub-fund, which is a UCITS (Undertakings for Collective Investment in Transferable Securities) scheme as defined in the Collective Investment Schemes sourcebook, as issued (and amended) by the FCA: M&G Global Real Estate Securities Fund The Company was authorised on 1 April 2008 and the sub-fund was launched on 11 April The Company s principal activity is to carry on business as an OEIC. The Company is structured as an umbrella company, and different sub-funds may be established by the ACD from time to time with the agreement of the Depositary and approval from the FCA. The interim investment report and unaudited financial statements for the M&G Global Real Estate Securities Fund for the six months ended 30 September 2014 are set out in detail on pages 5 to 10. G W MacDowall Director of M&G Securities Limited L J Mumford Director of M&G Securities Limited 13 November 2014 INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November

6 M&G Investment Funds (8) AGGREGATED FINANCIAL STATEMENTS DIRECTORS STATEMENT As this umbrella Open-Ended Investment Company contains only one sub-fund there are no aggregated financial statements. The accounts of the sub-fund are the accounts of the company. 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. G W MACDOWALL } Directors L J MUMFORD 13 November INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November 2014

7 M&G Global Real Estate Securities Fund INVESTMENT OBJECTIVE, POLICY AND APPROACH INVESTMENT ACTIVITIES OVER THE REPORT PERIOD Investment objective of the M&G Global Real Estate Securities Fund The Fund aims to maximise long term total return, consisting of income and capital appreciation, through investment, on a global basis, mainly in both real estate investment trusts (REITs) and other types of property companies. Investment policy of the M&G Global Real Estate Securities Fund The Fund seeks to maximise total return to investors through investment globally in a diversified range of listed shares of companies whose activity is focused on or related to the real estate sector. The Fund may also invest in other assets including collective investment schemes, other transferable securities, cash and near cash, deposits, warrants and money market instruments. Derivative instruments may be used for both investment purposes and for Efficient Portfolio Management purposes. Investment approach The M&G Global Real Estate Securities Fund invests in real estate investment trusts (REITs) as well as other types of property companies to optimise long-term total return. The fund manager aims to exploit market pricing opportunities through the selection of global property stocks that are undervalued by investors, with overall portfolio construction also informed by top-down regional and sector views. The overlay of the fund takes into account real estate dynamics and risk assessment. A high-conviction investment process is utilised to select stocks, with a focus on structural shifts in global property markets through listed, rather than direct, property vehicles. While remaining risk aware, there is a pragmatic approach to stock selection. Attractively priced stocks are screened on an absolute basis, rather than on relative value, in the belief that real estate prices are driven by the net asset value of a company. Risk and reward profile* Low risk Typically lower rewards The above risk number is based on the rate at which the value of the Fund has moved up and down in the past. This risk number is based on historical data and may not be a reliable indicator of the future risk profile of the Fund. The risk number shown is not guaranteed and may change over time. The lowest risk number does not mean risk free. * This Risk and reward profile section is based on Sterling Class A shares. High risk Typically higher rewards As at 1 October 2014, for the six months ended 30 September 2014 The review period was marked by a comparatively low level of portfolio activity. Two notable new holdings added to the fund over the six-month review period were GAGFAH, the second-largest listed residential property company in Germany, and Leisureworld Senior Care Corporation, a North American care home operator. GAGFAH is strengthening its balance sheet and disposing of its non-core asset portfolio. The company is trading at a discount to its net asset value and has significant scope to raise rents, all of which we believe should help to drive future returns. Under a new, credible management team and as the asset-disposal programme gains momentum the company will have a tighter geographical focus, and so should, we believe, be well placed to deliver significant value for the fund. With 35 long-term care homes across Ontario and 10 retirement homes across British Columbia, Leisureworld provides exposure to a niche sector in a growing market that benefits from an ageing population and increasing life expectancies. Around 25% of the company s net income derives from retirement homes; with long-term care homes providing the remainder. Shares in Leisureworld are trading in line with the company s net asset value whereas other companies in the same segment are trading at a substantial premium. We expect this to improve as the market recognises the true potential of the business. Elsewhere, we reduced our below-index position in the US by initiating a holding in the ishares US Property Yield ETF, a fund that aims to track the performance of companies in the US property market. A significant exit from the portfolio was Hong Kong-based developer C C Land, which was sold in line with our strategy of reducing exposure to Chinese real estate companies, based on our view that the long-term prospects for property returns in that country are weakening. Richard O Connor Fund manager An employee of M&G Limited which is an associate of M&G Securities Limited. On 6 August 2014, Richard O Connor took over management of the M&G Global Real Estate Securities Fund from Gillian Tiltman. Please note that the views expressed in this Report should not be taken as a recommendation or advice on how the fund or any holding mentioned in the Report is likely to perform. If you wish to obtain financial advice as to whether an investment is suitable for your needs, you should consult a Financial Adviser. INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November

8 M&G Global Real Estate Securities Fund FUND STATISTICS DISTRIBUTION DATES AND FUND FACTS Distribution type xd payment Third interim Final First interim Second interim Interim distribution Inc Acc Ongoing Charges Figure [b] [a] [a] Sterling p p % % Class A 0,4272 0,5063 1,70 1,71 Class I 0,4362 0,7498 0,95 0,96 Class R 0,3699 0,3998 1,20 1,22 Class X 0,4169 0,5045 1,70 1,71 Euro % % Class A 4,5367 6,2014 1,71 1,71 Class C 4,7364 5,3050 0,95 0,96 US dollar % % Class A 3,6090 3,9159 1,71 1,71 Class C 3,7812 5,5918 0,94 0,96 [a] The date on which the interim distribution will be paid to Income shareholders and credited to Accumulation shareholders. [b] The Ongoing Charges Figure is the ratio of the relevant annualised total disclosable costs of each share class from the most recent reporting period to the average net asset value for that share class over the same period. PERFORMANCE SINCE LAUNCH six months one year five years since launch % % % p.a. [a] % p.a. [a] Sterling [b] Class A +5,1 +4,4 +6,3 +2,2 [c] Class I +5,5 +5,3 +7,1 +3,0 [c] Class R +5,4 +5,1 n/a +1,7 [d] Class X +5,1 +4,5 +6,3 +2,2 [c] Euro [e] Class A +13,3 +14,6 +12,5 +5,6 [c] Class C +13,7 +15,5 +13,5 +6,5 [c] US dollar [e] Class A +3,5 +6,7 +9,5 +2,1 [c] Class C +3,8 +7,4 +10,3 +2,8 [c] [a] Shows the compound rate of return, per annum, over the period. [b] Bid to bid excluding reinvested income. [c] 11 April 2008, the launch date of the fund. [d] 3 August 2012, the launch date of the share class. [e] Bid to bid with net income reinvested. SINGLE YEAR PERFORMANCE (5 YEARS ENDING SEPTEMBER) From To % % % % % Sterling Class A +5,9 +4,1 +21,5-4,4 +21,0 Source: Morningstar, Inc., bid to bid with net income reinvested. FUND PERFORMANCE Performance of share classes Net asset value Net asset value per share as at per share as at Net asset value % change Inc Acc Inc Acc Inc Acc Sterling p p p p % % Class A 115,20 139,45 108,63 129,97 +6,05 +7,29 Class I 120,77 146,14 113,48 135,66 +6,42 +7,73 Class R 103,69 109,42 97,53 101,71 +6,32 +7,58 Class X 115,28 139,44 108,70 129,97 +6,05 +7,29 Euro % % Class A 13, , , , ,98 +14,30 Class C 14, ,0355 n/a 13,1108 n/a +14,68 US dollar $ $ $ $ % % Class A 11, ,4359 n/a 10,9650 n/a +4,29 Class C 11, ,9749 n/a 11,4355 n/a +4,72 Past performance is not a guide to future performance. The value of stockmarket investments, and the income from them, will fluctuate. This will cause the fund price to fall as well as rise and you may not get back the original amount you invested. 6 INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November 2014

9 M&G Global Real Estate Securities Fund FUND STATISTICS PRICES Income shares Accumulation shares Calendar year Highest Lowest Highest Lowest Sterling (net) p p p p Class A ,42 51,07 95,77 52, ,19 83,27 116,92 88, ,38 88,69 124,00 99, ,74 99,00 132,20 111, ,85 105,11 157,31 124, [a] 122,45 104,12 147,69 123,85 Class I ,41 51,33 96,82 52, ,16 84,23 119,06 89, ,89 90,86 126,76 101, ,62 101,61 136,65 114, ,82 109,51 163,08 129, [a] 128,34 108,57 154,66 129,00 Class R 2012 [b] 102,25 97,23 102,82 97, ,40 94,20 122,62 97, [a] 110,19 93,37 115,83 96,79 Class X ,39 51,05 95,74 52, ,17 83,25 116,88 88, ,37 88,69 123,96 99, ,75 98,99 132,16 111, ,86 105,19 157,26 124, [a] 122,52 104,20 147,68 123,83 Euro (net) Class A 2009 n/a n/a 8,5159 4, n/a n/a 10,8698 8, n/a n/a 11,0601 9, n/a n/a 13, , ,2072 [c] 11,6025 [c] 14, , [a] 14, , , ,9445 Class C 2009 n/a n/a 8,6136 4, n/a n/a 11,1626 8, n/a n/a 11,3630 9, n/a n/a 13, , n/a n/a 15, , [a] 15,4226 [d] 14,3790 [d] 15, ,5506 US dollar (net) $ $ $ $ Class A 2009 n/a n/a 7,7526 3, n/a n/a 9,4980 7, n/a n/a 10,0693 7, n/a n/a 10,7855 8, n/a n/a 12, , [a] 12,0831 [d] 11,3989 [d] 12, ,3692 Class C 2009 n/a n/a 7,8411 3, n/a n/a 9,6682 7, n/a n/a 10,2936 7, n/a n/a 11,1572 8, n/a n/a 12, , [a] 12,6418 [d] 11,9303 [d] 12, ,7947 [a] To 1 October [b] From 3 August 2012 (the launch date of the share class). [c] From 12 July 2013 (the launch date of the Income shares). [d] From 8 August 2014 (the launch date of the Income shares). INCOME Dividend income per share Calendar Distributed Reinvested year Interim Final Interims Total Sterling (net) p p p p p Class A ,7960 0,7080 1,2650 2,7690 2, ,6300 0,7040 1,4110 2,7450 2, ,5700 0,7100 1,3320 2,6120 2, ,6420 0,8930 1,5760 3,1110 3, ,6620 0,7205 1,6141 2,9966 3, [a] 0,6225 0,6550 1,3284 2,6059 3,1407 Class I ,7980 0,7110 1,2750 2,7840 2, ,6340 0,7090 1,4370 2,7800 2, ,5660 0,7220 1,3610 2,6490 2, ,6570 0,9180 1,6310 3,2060 3, ,6840 0,7552 1,6343 3,0735 3, [a] 0,6481 0,6908 1,3778 2,7167 3,4747 Class R 2012 n/a n/a 0,4660 0,4660 0, ,5960 0,5978 1,4136 2,6074 2, [a] 0,5567 0,5829 1,1801 2,3197 2,4273 Class X ,7950 0,7080 1,2630 2,7660 2, ,6210 0,7080 1,4070 2,7360 2, ,5600 0,7100 1,3310 2,6010 2, ,6410 0,8890 1,5790 3,1090 3, ,6620 0,7361 1,5946 2,9927 3, [a] 0,6225 0,6741 1,3183 2,6149 3,1111 Euro (net) Class A 2009 n/a n/a n/a n/a 25, n/a n/a n/a n/a 26, n/a n/a n/a n/a 25, n/a n/a n/a n/a 34, n/a n/a 7,8860 7, , [a] 7,0320 7, , , ,2202 Class C 2009 n/a n/a n/a n/a 25, n/a n/a n/a n/a 27, n/a n/a n/a n/a 26, n/a n/a n/a n/a 35, n/a n/a n/a n/a 33, [a] n/a n/a 4,7364 4, ,7903 US dollar (net) Class A 2009 n/a n/a n/a n/a 22, n/a n/a n/a n/a 23, n/a n/a n/a n/a 22, n/a n/a n/a n/a 27, n/a n/a n/a n/a 25, [a] n/a n/a 3,6090 3, ,3821 Class C 2009 n/a n/a n/a n/a 22, n/a n/a n/a n/a 23, n/a n/a n/a n/a 23, n/a n/a n/a n/a 28, n/a n/a n/a n/a 28, [a] n/a n/a 3,7812 3, ,5302 [a] Up to interim: ex-distribution date 1 October 2014; payment date 30 November The level of income earned by the fund will fluctuate. INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November

10 M&G Global Real Estate Securities Fund FUND STATISTICS PORTFOLIO NET ASSETS Value per share Number of shares Period ended Inc Acc Inc Acc Sterling p p Class A Mar ,69 118, Mar ,26 145, Mar ,63 129, Sep ,20 139, Class I Mar ,64 122, Mar ,77 151, Mar ,48 135, Sep ,77 146, Class R Mar ,81 113, Mar ,53 101, Sep ,69 109, Class X Mar ,68 118, Mar ,27 145, Mar ,70 129, Sep ,28 139, Euro Class A Mar 2012 n/a 11,3430 n/a Mar 2013 n/a 13,6992 n/a Mar , , Sep , , Class C Mar 2012 n/a 11,7559 n/a Mar 2013 n/a 14,3044 n/a Mar 2014 n/a 13,1108 n/a Sep , , US dollar $ $ Class A Mar 2012 n/a 9,6335 n/a Mar 2013 n/a 11,1762 n/a Mar 2014 n/a 10,9650 n/a Sep , , Class C Mar 2012 n/a 9,9095 n/a Mar 2013 n/a 11,5854 n/a Mar 2014 n/a 11,4355 n/a Sep , , Total net asset value of sub-fund Period ended [a] Mar Mar Mar Sep [a] Based on the midday exchange rate on the last business day of each accounting period. PORTFOLIO STATEMENT as at 30 September 2014 Value Holding 000 % % Australia 7,71 7, Lend Lease , Scentre Group 666 0, Stockland , Westfield Group ,17 Canada 6,38 5, Allied Properties REIT , Boardwalk REIT , H&R REIT , Leisureworld Senior Care 715 1,04 France 3,09 3, Unibail-Rodamco ,09 Germany 1,88 2, Deutsche Wohnen ,88 Hong Kong 6,54 6, Link REIT , MTR , Sun Hung Kai Properties 919 1, Sun Hung Kai Properties WTS 22/04/ ,02 Indonesia 1,56 1, Summarecon Agung ,56 Japan 8,73 8, Japan Prime Realty REIT , Japan Retail Fund REIT 986 1, Mitsubishi Estate , Mitsui Fudosan ,73 Luxembourg 1,55 0, GAGFAH ,55 Malaysia 1,16 1, IJM Land 793 1,16 Netherlands 1,04 1, Corio 715 1,04 Singapore 3,11 2, CapitaMall Trust 768 1, Hong Kong Land Holdings ,99 Sweden 1,48 1, Hufvudstaden ,48 Thailand 1,25 1, Supalai 854 1,25 United Kingdom 9,35 11, Capital & Counties Properties , Great Portland Estates , Land Securities Group , Shaftesbury ,17 United States 43,93 42, Aimco , Alexandria Real Estate Equities , AvalonBay Communities , BioMed Realty Trust , Boston Properties , Chesapeake Lodging Trust , Federal Realty Investment Trust , Highwoods Properties , ishares US Property Yield ETF , Kilroy Realty ,79 8 INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November 2014

11 M&G Global Real Estate Securities Fund PORTFOLIO PORTFOLIO STATEMENT (continued) as at 30 September 2014 Value Holding 000 % % United States (continued) Kimco Realty , Macerich , Prologis , Public Storage 970 1, Simon Property Group , SL Green Realty , Vornado Realty Trust ,73 Eire ( AAA rated money market funds) [a] 0,63 1, Northern Trust Global Fund - Sterling 434 0,63 Portfolio of investments ,39 99,71 Net other assets 420 0,61 0,29 Net assets attributable to shareholders ,00 100,00 All securities are on an official stock exchange listing except where referenced. [a] Uncommitted surplus cash is placed into AAA rated money market funds with the aim of reducing counterparty risk. PORTFOLIO TRANSACTIONS for the six months ended 30 September 2014 Purchases 000 ishares US Property Yield ETF GAGFAH Leisureworld Senior Care Highwoods Properties 720 Summarecon Agung 656 Westfield Group 538 Capital & Counties Properties 406 Mitsubishi Estate 322 Supalai 286 Link REIT 283 Simon Property Group 277 Vornado Realty Trust 277 CapitaMall Trust 248 Corio 240 IJM Land 233 Allied Properties REIT 203 Sun Hung Kai Properties 182 H&R REIT 64 Stockland 58 MTR 45 Northern Trust Global Fund - Sterling [a] Total purchases Largest sales 000 Simon Property Group Vornado Realty Trust Capital & Counties Properties Link REIT Land Securities Group Alexandria Real Estate Equities Boston Properties Unibail-Rodamco Corio Lend Lease Mitsubishi Estate AvalonBay Communities Prologis Summarecon Agung Macerich Mitsui Fudosan Kimco Realty Kilroy Realty Chesapeake Lodging Trust Stockland Northern Trust Global Fund - Sterling [a] Other sales Total sales [a] Uncommitted surplus cash is placed into AAA rated money market funds with the aim of reducing counterparty risk. INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November

12 M&G Global Real Estate Securities Fund INTERIM FINANCIAL STATEMENTS (unaudited) For the six months ended 30 September STATEMENT OF TOTAL RETURN Income Net capital gains / (losses) (14.315) Revenue Expenses (790) (795) Net revenue before taxation Taxation (210) (214) Net revenue after taxation Total return before distributions (13.218) Finance costs: Distributions (1.420) (1.639) Change in net assets attributable to shareholders from investment activities (14.857) NOTE TO THE FINANCIAL STATEMENTS Accounting policies The interim financial statements have been prepared on the same basis as the audited annual financial statements for the year ended 31 March They are in accordance with the historical cost convention, as modified by the revaluation of investments, and the Statement of Recommended Practice for Authorised Funds issued by the Investment Management Association in October STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS Opening net assets attributable to shareholders Amounts received on issue of shares Amounts paid on cancellation of shares (71.751) (6.107) (63.598) Stamp Duty Reserve Tax 0 (3) Change in net assets attributable to shareholders from investment activities (see above) (14.857) Retained distributions on Accumulation shares Closing net assets attributable to shareholders The opening net assets attributable to shareholders for 2014 differs to the closing position in 2013 by the change in net assets attributable to shareholders for the second half of the comparative financial year. BALANCE SHEET as at as at 30 September March Assets Investment assets Debtors Cash and bank balances Total other assets Total assets Liabilities Creditors Net distributions payable on Income shares (170) (341) Other creditors (4.776) (206) Total liabilities (4.946) (547) Net assets attributable to shareholders INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November 2014

13 Further Information LIQUIDITY PORTFOLIO TURNOVER RATES The ACD s policy is that the sub-fund should normally be close to fully invested but this is subject to the need to retain liquidity for the purpose of effecting the redemption of shares, and the efficient management of the sub-fund in accordance with its objective. There may, therefore, be occasions when there will be higher levels of liquidity, for example following the issue of shares or the realisation of investments. Higher liquidity levels may also arise when the sub-fund s asset allocation policy is changed. DILUTION The Portfolio Turnover Rate (PTR) is a ratio that reflects the volume of trading within the sub-fund over the course of a 12 month period. The PTR is calculated by taking the sum of all transactions in securities less the sum of all transactions in the sub-fund s shares and is expressed as a percentage of the sub-fund s average net asset value. The unaudited PTRs for this sub-fund, published for sub-funds currently registered in Switzerland, are as follows: as at as at M&G Global Real Estate Securities Fund 36,38% 30,32% The actual cost of purchasing or selling a sub-fund s investments may deviate from the mid-market price due to dealing costs and these costs can have an adverse effect on the value of the sub-fund, known as dilution. The Collective Investment Schemes sourcebook, as issued (and amended) by the Financial Conduct Authority, allows the cost of dilution to be recovered from investors on the purchase or redemption of shares by means of a dilution adjustment to the dealing price, and this is the policy which has been adopted by the ACD. Further information on the ACD s dilution adjustment policy is in the Prospectus, which is available free of charge from the ACD, M&G Securities Limited. THE EU SAVINGS DIRECTIVE The percentage of the M&G Global Real Estate Securities Fund held in interest-bearing assets (as defined by the UK rules for the EU Savings Directive 2003/48/EC) is 1,19%. TOTAL EXPENSE RATIOS The Total Expense Ratio (TER) is shown only for those share classes currently available in Switzerland. The TER shows the relevant annualised operating expenses of each share class from the most recent reporting period as a single percentage of the average net asset value for that share class over the same period. The unaudited TERs for this sub-fund, published for sub-funds currently registered in Switzerland, are as follows: Total Expense Ratio Share class % % M&G Global Real Estate Securities Fund Euro Class A 1,71 1,71 Class C 0,95 0,96 US dollar Class A 1,71 1,71 Class C 0,94 0,96 OTHER A shareholder is not liable for the debts of the Company and will never be liable to make any further payment to the Company after paying the purchase price of the shares. M&G Securities Limited is authorised and regulated by the Financial Conduct Authority and provides investment products. The Company s registered office is Laurence Pountney Hill, London EC4R 0HH. Registered in England number INTERIM INVESTMENT REPORT AND UNAUDITED FINANCIAL STATEMENTS November

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