Managers interim short report for the half year: 1 May 2014 to 31 October Ignis Smaller Companies Fund

Transcription

1 Managers interim short report for the half year: 1 May 2014 to 31 October 2014 Ignis Smaller Companies Fund

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3 Introduction to your short report Dear Investor, Welcome to your short report for the six months to 31 October As you will be aware, we send you a managers report every six months relating to the Fund you are invested in. Please note, following the acquisition of Ignis by Standard Life Investments, the management of Ignis equities transferred to Standard Life Investments on 26 August Going forward, the Fund will be managed in accordance with Standard Life Investments differentiated Focus on Change investment philosophy. This will not impact the investment objective and policy of the Ignis Smaller Companies Fund. The Long Report & Accounts are still available should you wish, and can be obtained by contacting Investor Support on Yours faithfully David Cameron Head of Investor Services & Provider Oversight 1

4 Ignis Smaller Companies Fund Investment objective To achieve maximum capital growth from investing principally in UK smaller companies. Investment policy The Fund aims to optimise capital return by investing primarily in well managed smaller companies, principally those that fall within the FTSE SmallCap Index, but also including AIM and Fledgling companies. Risk profile The Ignis Smaller Companies Fund is suitable for investors who are highly interested in specialised equity markets and who are aware of the risks. The investor must have experience with volatile products and must be able to accept high temporary losses. This Fund is suitable for investors who can afford to set aside the invested capital for at least five years. This Fund is a suitable addition to a widely diversified investment portfolio. 2

5 Fund facts Launch date 9 April 1985 Fund size as at 31 October m Initial charge 5.25% Annual management charge Class A 1.50% Class I 0.75% Historic yield* Income Accumulation Class A Class A Class I 0.18% 0.15% 0.79% Sector UK Smaller Companies Distribution payment dates 30 June, 31 December XD dates 1 May, 1 November Ignis Asset Management Income Accumulation Class A Class A Class I Ongoing Charges Figure as at 31 October % 1.63% 0.83% The Ongoing Charges Figure (OCF) shows the operating expenses, annualised, of each unit class as a percentage of average net assets of that class for the period. If you require any further information, please contact Investor Support on *Yield as at 31/10/14. Yields are historic based on the preceding 12 months distributions as a percentage of the mid market unit price, as at the date shown. Yields will vary, do not include any preliminary charges, and investors may be subject to tax on distributions. Risk and reward profile The Risk and Reward Indicator table demonstrates where the Fund ranks in terms of its potential risk and reward. The higher the rank the greater the potential reward but the greater the risk of losing money. It is based on past data, may change over time and may not be a reliable indication of the future risk profile of the Fund. The highlighted area in the table below shows the Fund s ranking on the Risk and Reward Indicator. Typically lower rewards, lower risk Typically higher rewards, higher risk The Fund is ranked at 6 because funds of this type have experienced high rises and falls in value in the past. The above figure applies to the following unit classes: Class A Income Class A Accumulation Class I Accumulation For more information on the Risk and Reward profiles of our funds, please refer to the most up to date relevant Fund and Unit Class Key Investor Information Documents (KIIDs). These are available online at 3

6 Summary of Fund performance Unit price Year to 31 December Income units Lowest redemption price (pence per unit) Income units Highest issue price (pence per unit) Accumulation units Lowest redemption price (pence per unit) Accumulation units Highest issue price (pence per unit) Class A Jan to 31 Oct Class I From launch 16 Dec to 31 Dec 2011 n/a n/a n/a n/a n/a n/a Jan to 31 Oct 2014 n/a n/a Distribution record Year to 31 December Income units Net distribution pence per unit (paid during the period) Accumulation units Net distribution pence per unit (paid during the period) Class A Jan to 31 Oct 2014 Class I From launch 16 Dec to 31 Dec 2011 n/a 2012 n/a n/a Jan to 31 Oct 2014 n/a Past performance is not a guide to future performance. The value of units can fall as well as rise and is not guaranteed. You might not get back the full amount invested. 4

7 Summary of distribution An interim distribution of pence per unit will be paid to Class A income unitholders, pence per unit credited to Class A accumulation unitholders and pence per unit credited to Class I accumulation unitholders on 31 December Net asset value Net Asset Value as at 31 October 2014 Net Asset Value as at 30 April 2014 Net Asset Value % change Class A Income p per unit p per unit % Class A Accumulation p per unit p per unit % Class I Accumulation p per unit p per unit % Note: Figures are calculated internally for accounting purposes (assets are valued at bid at 12pm based on holdings at close the same day). Past performance record Oct % growth Oct % growth Oct % growth Oct % growth Oct % growth Ignis Smaller Cos Fund Sector average Source: Lipper, bid to bid, net income reinvested to end October for each year. Past performance is not a guide to future performance. The value of units can fall as well as rise and is not guaranteed. You might not get back the full amount invested. Please note that past performance figures are calculated without taking account of initial charges. Sectoral spread of investments as at 31 October 2014 Sector % Others 33.7 Consumer Goods 31.0 Capital Goods 25.2 Financial Groups 9.7 Money Markets 1.6 Sectoral spread of investments as at 30 April 2014 Sector % Others 37.6 Consumer Goods 27.6 Capital Goods 23.3 Financial Groups 8.4 Money Markets 3.1 Cash (1.2) Source: Internal 5

8 Top ten holdings Holding % of Fund value as at 31 Oct 2014 Holding % of Fund value as at 30 Apr 2014 Quadrise Fuels International 3.2 Regenersis 3.3 Flowgroup 3.1 Ignis Sterling Liquidity Fund 3.1 Spirit Pub Company 3.0 Flowgroup 3.1 Lookers 2.6 Quadrise Fuels International 2.9 Mears Group 2.6 Quintain Estates & Development 2.6 Tarsus Group 2.6 Brammer 2.4 Pendragon 2.5 Internet Q 2.4 Lavendon Group 2.5 Spirit Pub Company 2.4 Internet Q 2.4 Lavendon Group 2.3 Game Digital 2.4 Lookers 2.3 6

9 Fund manager s comment The early summer months saw risk aversion affect the UK equity market, as investment managers sought to protect performance. This cautious approach was underpinned by Bank of England Governor Mark Carney s Mansion House speech, which brought forward expectations of an interest-rate increase in the UK. Market volatility was magnified by further deterioration of the situation in Iraq and the prospect of additional sanctions against Russia, following the tragic shooting down of an airliner over eastern Ukraine. Trading volumes were also light, which exacerbated the scale and speed of market moves. Despite this backdrop, macroeconomic data generally continue to demonstrate improvement, with second-quarter UK GDP data revealing that the domestic economy had recovered to pre-crisis levels. August saw a modest rally in UK equities, as upbeat US economic data and increased hopes that the European Central Bank (ECB) would introduce further supportive measures was positive for share prices. This led to a strengthening of the dollar compared with sterling, which relieved pressure on UK corporate earnings. Smaller companies lagged larger companies modestly at this time, but still recorded gains, recovering after the turbulence we saw in earlier months. This was assisted by a generally positive company results season. That said, the rally did not last for long as UK equities suffered a sharp decline in September, as investors appeared to lose confidence in the prospect of continued economic recovery. It is difficult to identify one single factor behind the change in market tone, but a combination of the ongoing situation in Ukraine, weakness in European data and concerns over looming US interest-rate increases all appear to have weighed on investor confidence. Smaller companies also fell as a result, performing largely in line with larger companies. Nevertheless, UK data continued to hold up, demonstrating the domestic economy s resilience. As the reporting period drew to a close, the market backdrop remained challenging with events, such as Iraq and the potential spread of Ebola, and understandable anxiety in relation to eurozone deflation conspiring against investor confidence. Notwithstanding this downbeat environment, we still expect the market to rally into the year-end, but to remain in negative territory for the year as a whole. From a performance perspective, the Fund was negatively affected by its overweight exposure to the software & computer services and support services sectors, and its underweight exposure to real estate and food & drug retailers. More positively, value came from being underweight the mining sector and overweight general retailers. Turning to stock specifics, our overweight positions in Regeneris and Bagir Group proved disappointing. However, this was partially offset by overweight positions in Tungsten Corporation and 4D Pharma. The Fund continues to boast a progressive line-up, with a decent mix of high-quality, more dependable holdings alongside stocks that exhibit significant growth potential. These two strands operating together should combine to deliver better risk-adjusted returns for investors, albeit for much of this year smaller companies have been generally regarded as higher risk rather than an opportunity for enhanced returns. The adjustments made to the Fund by its new manager should only enhance this improved risk/ return dynamic. Over the review period, the Ignis Smaller Companies Fund fell 10.2% compared to a fall of 6.3% from its sector average. (Source: Lipper, bid to bid, net income reinvested for six months to 31/10/14). 7

10 Availability of long report & accounts If you wish to receive a copy of the annual and half yearly Long Report & Accounts for the Ignis Smaller Companies Fund then please contact Investor Support on They are free of charge. Other information The information in this report is designed to enable unitholders 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. For more information about the activities and performance of the Fund during this period and previous periods, please contact Investor Support on Ignis Asset Management is the trading name for companies in the Ignis Asset Management Limited group of companies which includes the unit trust manager Ignis Fund Managers Limited and the investment manager Ignis Investment Services Limited. The Ignis Asset Management Limited group of companies is part of The Standard Life Investments group. Please note on 1 July 2014 global investment manager Standard Life Investments (Holdings) Limited successfully completed the acquisition of Ignis Asset Management from Phoenix Group Holdings. Unit prices and yields appear daily on the Ignis website and the Investment Management Association website Money Laundering If you have not already provided us with the required documentation to prove your identity we may have to freeze or terminate your account, and will not be able to accept any further subscriptions. There may also be a delay when repurchasing your investment. Please note that we will have previously contacted you by post if we do not have all the required documentation on file for your account. Manager Ignis Fund Managers Limited (IFM) 50 Bothwell Street, Glasgow G2 6HR Tel: Registered in Scotland No. SC85610 Member of the Investment Management Association Authorised and regulated by the Financial Conduct Authority. Directors *Appointed with effect 1 July 2014 N K Skeoch* Executive Chairman of IFM and Chief Executive of the Standard Life Investments group; J Aird* Managing Director of IFM; C Clark* Director of IFM and Director of the Standard Life Investments group s Global Client Group; C Fellingham Chief Investment Officer of IFM; R Paris* Director of IFM and Chief Investment Officer of the Standard Life Investments group; C Walklin* Director of IFM and Chief Operating Officer & Finance Director of the Standard Life Investments group. Resigned with effect 1 July 2014 C Samuel J McConville C Chene D Watts C Bannister E Stobart Resigned with effect 30 September 2014 G Hotson Investment Adviser Ignis Investment Services Limited 50 Bothwell Street, Glasgow G2 6HR Registered in Scotland No. SC Authorised and regulated by the Financial Conduct Authority. Trustee Citibank International Plc Registered office: Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Independent auditors to the Fund PricewaterhouseCoopers LLP 141 Bothwell Street, Glasgow G2 7EQ Registrar and Correspondence address Ignis Fund Managers Limited PO Box 9028 Chelmsford CM99 2WH Authorised Status This Fund is an Authorised Unit Trust scheme under Section 243 of the Financial Services and Markets Act 2000 and is categorised under the Collective Investment Schemes Sourcebook as a UCITS retail fund. 8

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12 Investor Support Call: Telephone calls may be monitored and/or recorded for the purposes of security, internal training, accurate account operation, internal customer monitoring and to improve the quality of service. Please note the Key Investor Information Document (KIID), the Supplementary Information Document (SID) and the Full Prospectus are available free of charge. For a copy, phone Investor Support on Ignis Investment Services Limited does not accept liability for any claims or losses of any nature arising directly or indirectly from use of the data or material in this report. The information supplied is not intended to constitute investment, tax, legal or other advice. Ignis Asset Management is the trading name of the Ignis Asset Management Limited group of companies which includes Ignis Asset Management Limited, *Ignis Investment Services Limited and *Ignis Fund Managers Limited. Issued by Ignis Investment Services Limited. Registered in Scotland No. SC Registered Office: 50 Bothwell Street, Glasgow G2 6HR. *Authorised and regulated by the Financial Conduct Authority. Ignis Asset Management Limited and its subsidiaries are part of the Standard Life Investments group (Standard Life Investments (Holdings) Limited and its subsidiaries). B