The Virgin UK Index Tracking Trust Thirty-first distribution payable 15 November 2010
Contents Page 1 Manager s investment report 3 Performance record 4 Investments 16 Summary of material portfolio changes 17 Statement of total return and Statement of change in net assets attributable to unitholders 18 Balance sheet and Notes to the financial statements 19 Distribution table 20 Directors statement 21 Management and professional services
Manager s investment report for the period 16 March 2010 to 15 September 2010 (unaudited) Investment objective and policy The objective of the Virgin UK Index Tracking Trust is to closely match the performance of the FTSE All-Share Index*, after taking charges into account. The policy for achieving this is to fully replicate the FTSE All-Share Index, which comprises approximately 600 company shares. Stock index futures contracts may also be used to manage the pool of investors' cash before it is invested in stocks which form the All-Share Index. This is for the purpose of efficient fund management. No trading or speculation in these investments is undertaken. Trust status The Trust is an authorised unit trust scheme under S243 of the Financial Services and Markets Act 2000 and is categorised as a UCITS scheme under the Collective Investment Schemes Sourcebook (COLL). Financial instruments and key risks In pursuing its investment objective set out above, the Trust holds a number of financial instruments. The Trust's financial instruments, other than derivatives, comprise securities and other investments, cash balances and debtors and creditors that arise directly from its operations. For example, in respect of sales and purchases awaiting settlement, amounts receivable for creations and payable for liquidations and debtors accrued income. Further details of the risks that arise in connection with financial instruments and how those risks are managed are set out in note 15 of the annual financial statements. Schemes are not permitted by the Regulations to enter into a transaction if its purpose could reasonably be regarded as speculative. The Trust's use of financial instruments satisfies these requirements and no trading in financial instruments is undertaken. Income The interim distribution for the period ended 15 September 2010 will be 2.387p net per unit payable on Monday 15 November 2010. Fund performance The Virgin UK Index Tracking Trust generated a gain of 0.20% compared with the FTSE All-Share Index gain of 0.19%. Based on bid market net asset value. Markets and economic commentary Following strong returns over the previous six month period, the global financial markets were severely tested around May and June 2010, before regaining ground to record a small positive performance for this reporting period. The second quarter of 2010 initially provided steady gains for equity investors, buoyed by good earnings announcements from some of the larger companies in the FTSE All-Share, and comfort surrounding news of an EU and IMF-led support package for the Greek debt crisis. Measures by central banks continued to underpin the markets and early indications showed that the economic recovery was continuing, albeit at a moderate pace. However, investor risk appetite proved to be very fragile, as the full impact of the heavy indebtedness of some members of the eurozone became clearer and risk aversion took hold at an accelerated pace in May and continued into June. The FTSE All-Share fell in each of these months by 6.6% and 4.9% respectively which led to concerns of a double dip recession. On the political front in May, the UK general election resulted in the first hung parliament since 1974 and a Conservative-Liberal Democrat coalition government. On 22 June the Chancellor delivered an emergency budget containing spending cuts and tax increases, including a rise in VAT to 20% from 2011, a reduction in corporation tax to 24% by 2014/15, and the abolition of various capital allowances. The large spending cuts accounted for 77% of the debt reduction, with tax rises making up the remaining 23%. The new Office for Budget Responsibility projected that the budget deficit would be 22bn lower than the Treasury had forecast for 2010-2015. Borrowing projections showed a reduction from 10.5% of GDP to 3.9% by 2015, and growth forecasts showed the economy expanding 1.3% in 2010, 2.6% in 2011 and 2.8% in 2012. In June, the Bank of England Monetary Policy Committee voted 7-1 to keep interest rates on hold, which was the first split vote since February 2009. The Bank of England s Andrew Sentance chose to dissent in favour of a 0.25% increase, citing inflation concerns, and he again voted for a rise in August. In July, a mix of better than expected second quarter earnings, an upbeat IMF report and a relatively solid set of European data all helped to improve the risk picture. The much talked about stress testing of the financial houses turned out to have a limited impact as only 7 of the 91 European banks failed the test, with a total of just 3.5bn new capital required. The unexpectedly low number of banks failing the test helped to reduce immediate fears around further financial issues in Europe, but served to raise some concerns about the credibility of the tests and increased focus on the medium-term risks surrounding the European banking system. * FTSE, FT-SE and Footsie are trade marks jointly owned by the London Stock Exchange Plc and The Financial Times Limited and are used by FTSE International Limited under licence. All-World, All-Share and All-Small are trade marks of FTSE International Limited. The FTSE All-Share Index is calculated by FTSE International Limited. FTSE International Limited does not sponsor, endorse or promote this product and is not in any way connected to it and does not accept any liability in relation to its issue, operation and trading. All copyright in the index values and constituent lists vests in FTSE International Limited. Virgin Unit Trust Managers Limited has obtained full licence from FTSE International Limited to use such copyright in the creation of this product. 1
Manager s investment report (continued) In September, equity markets rallied strongly as better than expected economic data started to emerge from the US and Asia. The late Q2 fears of a potential double dip recession appeared to ease as strong global economic data helped to strengthen investor risk appetite whilst the global government and central bank packages continued to provide support. In the US, the Fed s commitment to quantitative easing was emphasised after restating that they were ready to provide further support should it be required. Overall, the FTSE 100 fell by 0.70% over the period versus a rise of 0.19% in the FTSE All-Share. The biggest faller was BP, responsible for a drop of 69 index points over the period in the wake of the oil spill in the Gulf of Mexico and speculation over the clean-up costs and potential litigation. Under huge pressure, BP announced the cancellation of its 2010 dividend. The largest contributor to index returns was Lloyds Banking Group plc, adding 13 points to the index on the strength of the resurgence of the financial sector and a return to profitability. Finlay Williamson Chief Financial Officer Virgin Money Unit Trust Managers Limited 27 October 2010 2
Performance record as at 15 September 2010 (unaudited) The Virgin UK Index Tracking Trust was first offered on 3 March 1995 at an offer price of 100.00p per unit. Unit price history Highest Lowest Calendar year Offer price Bid price 2005 191.60p 159.94p 2006 215.40p 187.40p 2007 233.40p 203.90p 2008 219.90p 128.00p 2009 187.00p 120.80p 2010* 200.00p 168.60p General price information Trust year end Offer price Final 15 March 2006 204.03p Final 15 March 2007 213.60p Final 15 March 2008 194.20p Final 15 March 2009 129.80p Final 15 March 2010 193.00p Interim 15 September 2010 194.10p Revenue record The interim distribution for the period ended 15 September 2010 will be 2.387p net per unit payable on Monday 15 November 2010. The record of net distributions paid per unit is shown below: Net revenue Net revenue distributed distributed per unit per 1,000 invested Calendar year at 02/01/04 2005 3.850p 25.72 2006 4.473p 29.88 2007 4.658p 31.12 2008 5.617p 37.53 2009 4.850p 32.41 2010 4.116p 27.61 Net asset value Income Bid market NAV per Trust year end Units in issue NAV of Trust income unit Final 15 March 2008 1,021,162,859 1,961,764,148 192.11p Final 15 March 2009 1,032,508,266 1,310,771,472 126.95p Final 15 March 2010 1,054,073,816 2,017,871,519 191.44p Interim 15 September 2010 1,059,335,229 2,032,162,859 191.83p Total expense ratio and Portfolio turnover rate TER PTR (%) (%) 12 month period to 15 March 2010 1.00 28.45 6 month period to 15 September 2010 1.00 12.59 The Total Expense Ratio (TER) is the total expenses paid by the Trust in the period against its average net asset value. The Portfolio Turnover Rate (PTR) gives an indication of how much the Trust s investments have changed during the relevant period. As the Trust pays for any changes involved with buying and selling investments, the higher the percentage, the more costs it has paid. The formula used to calculate PTR is as follows: ((Purchase of securities + sales of securities) (subscription of units + redemption of units)) x 100 (Average Fund value over the period concerned) Purchases and sales of investments 16/03/10 to 15/09/10 For the year ended 15/03/10 000 000 Purchases 165,647 336,512 Sales 154,312 299,015 *To 15 September 2010. 3
Investments As at 15 September 2010 (unaudited) Important note: these comparative figures have been re-stated due to the adoption of new industry classifications as used in the Bloomberg ICB super sub-sector which will assist unitholders in comparing fund data to other sources of market information. Market Value % of Net Security Holdings 000 Assets BASIC RESOURCES (11.67%*) 228,596 11.25 Forestry & Paper Mondi 449,176 2,300 0.11 Industrial Metals & Mining Ferrexpo 223,184 694 0.04 International Ferro Metals 457,058 128 0.01 Talvivaara Mining 108,972 481 0.02 Mining African Barrick Gold 145,851 871 0.04 Anglo American 1,576,052 40,189 1.98 Anglo Pacific 126,564 371 0.02 Antofagasta 476,074 5,480 0.27 Aquarius Platinum 473,066 1,566 0.08 BHP Billiton 2,610,948 51,253 2.52 Centamin Egypt 1,215,476 2,047 0.10 Eurasian Natural Resources 467,744 4,051 0.20 Fresnillo 258,469 3,071 0.15 Gem Diamonds 75,490 143 0.01 Hochschild Mining 112,909 468 0.02 Kazakhmys 259,559 3,517 0.17 Lonmin 235,151 3,920 0.19 Namakwa Diamonds 140,959 58 Petropavlovsk 207,072 2,593 0.13 Randgold Resources 107,755 6,729 0.33 Rio Tinto 1,810,631 64,685 3.18 UK Coal 282,837 106 0.01 Vedanta Resources 165,545 3,538 0.18 Xstrata 2,616,344 30,337 1.49 CHEMICALS (0.35%*) 8,826 0.43 Chemicals Croda International 155,661 2,224 0.11 Elementis 531,993 485 0.02 Johnson Matthey 257,123 4,551 0.22 Victrex 100,410 1,237 0.06 Yule Catto 137,564 329 0.02 AUTOMOBILES & PARTS (0.12%*) 3,141 0.16 Automobiles & Parts GKN 1,965,783 3,141 0.16 FOOD & BEVERAGES (5.05%*) 99,239 4.88 Beverages A.G.BARR 35,352 450 0.02 Britvic 291,999 1,427 0.07 Diageo 2,936,005 31,973 1.57 SABMiller 1,388,593 27,932 1.38 Food Producers Anglo Eastern Plantations 25,362 148 0.01 Associated British Foods 478,460 5,091 0.25 Cranswick 56,055 478 0.02 Dairy Crest 153,656 575 0.03 Devro 200,452 497 0.03 Hilton Food 28,025 74 Northern Foods 611,355 289 0.01 Premier Foods 2,907,045 539 0.03 R.E.A. 10,156 71 Robert Wiseman Dairies 45,259 219 0.01 Tate & Lyle 549,488 2,576 0.13 Unilever 1,512,934 26,900 1.32 4
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets PERSONAL & HOUSEHOLD GOODS (6.12%*) 124,882 6.15 Household Goods & Home Constructions Aga Rangemaster 84,764 88 Barratt Developments 1,122,121 1,153 0.06 Bellway 139,503 792 0.04 Berkeley 145,339 1,210 0.06 Bovis Homes 159,200 601 0.03 Headlam 107,841 307 0.02 McBride 219,003 413 0.02 Persimmon 361,023 1,442 0.07 Reckitt Benckiser 848,421 29,245 1.44 Redrow 378,867 493 0.02 Taylor Wimpey 3,878,787 1,135 0.06 Leisure Goods Hornby 47,795 74 Photo-Me International 340,385 226 0.01 Personal Goods Burberry 520,240 4,713 0.23 PZ Cussons 265,440 909 0.05 SSL International 236,613 2,735 0.14 SuperGroup 37,463 416 0.02 Tobacco British American Tobacco 2,362,942 55,706 2.74 Imperial Tobacco 1,207,073 23,224 1.14 RETAIL (4.62%*) 91,713 4.51 Food & Drug Retailers Assura 284,377 132 0.01 Booker 1,782,628 864 0.04 Greggs 148,420 679 0.03 J Sainsbury 2,211,705 8,409 0.41 Tesco 9,367,406 40,341 1.99 Thorntons 86,317 75 WM Morrison Supermarkets 3,149,568 9,401 0.46 General Retailers Carpetright 63,377 469 0.02 Debenhams 1,559,290 1,034 0.05 Dignity 76,605 547 0.03 Dixons Retail 3,783,767 921 0.05 Dunelm 97,963 386 0.02 Findel 360,430 30 Game 449,840 307 0.02 Halfords 283,746 1,370 0.07 HMV 501,180 297 0.01 Home Retail 1,057,964 2,269 0.11 Inchcape 552,427 1,588 0.08 JD Sports Fashion 31,551 241 0.01 Kesa Electricals 708,051 956 0.05 Kingfisher 2,830,115 6,195 0.30 Laura Ashley 255,733 40 Lookers 305,506 162 0.01 Marks & Spencer 1,900,171 7,213 0.36 Mothercare 101,417 561 0.03 N Brown 248,719 584 0.03 Next 225,657 4,908 0.24 Pendragon 796,248 161 0.01 Sports Direct International 342,825 434 0.02 Ted Baker 39,881 216 0.01 Topps Tiles 159,913 86 WH Smith 190,162 837 0.04 5
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets MEDIA (2.51%*) 53,931 2.65 Media Aegis 1,480,507 1,797 0.09 Bloomsbury Publishing 88,892 107 0.01 British Sky Broadcasting 1,574,572 11,242 0.55 Centaur 185,727 87 Chime Communications 46,486 93 Chrysalis 61,727 60 Daily Mail & General Trust A 340,094 1,687 0.08 Euromoney Institutional Investor 37,958 227 0.01 Huntsworth 273,097 227 0.01 Informa 743,684 3,101 0.15 ITE 260,446 426 0.02 ITV 4,698,430 2,685 0.13 Johnston Press 698,986 105 0.01 Mecom 44,522 92 0.01 Moneysupermarket.com 300,195 254 0.01 Pearson 944,686 9,456 0.47 Reed Elsevier 1,451,536 7,817 0.38 Rightmove 142,867 1,043 0.05 Trinity Mirror 356,021 421 0.02 United Business Media 293,173 1,768 0.09 UTV Media 115,706 146 0.01 Wilmington 80,423 109 0.01 WPP 1,478,878 10,522 0.52 Yell 2,820,520 459 0.02 TRAVEL & LEISURE (2.74%*) 52,296 2.57 Travel & Leisure 888 125,784 56 Arena Leisure 174,545 56 Avis Europe 120,834 251 0.01 British Airways 1,383,971 3,244 0.16 Carnival 247,596 5,856 0.29 Cineworld 85,504 170 0.01 Compass 2,179,450 11,878 0.58 Domino s Pizza 146,545 700 0.03 easyjet 373,087 1,452 0.07 Enterprise Inns 610,895 562 0.03 Firstgroup 585,424 2,062 0.10 Fuller Smith & Turner 41,392 234 0.01 Go-Ahead 51,270 596 0.03 Greene King 284,854 1,222 0.06 Holidaybreak 85,287 226 0.01 Intercontinental Hotels 336,847 3,766 0.19 Ladbrokes 1,111,012 1,589 0.08 Marston s 788,708 753 0.04 Millennium & Copthorne Hotels 186,403 1,004 0.05 Mitchells & Butlers 494,566 1,494 0.07 National Express 614,349 1,499 0.07 Partygaming 365,732 1,072 0.05 Punch Taverns 778,154 657 0.03 Rank 473,767 567 0.03 Restaurant 234,481 626 0.03 Sportech 48,595 18 Stagecoach 852,690 1,577 0.08 Thomas Cook 1,027,609 2,015 0.10 TUI Travel 689,399 1,519 0.08 Wembley** 43,814 1 Wetherspoon (J.D.) 177,812 750 0.04 Whitbread 204,608 3,243 0.16 William Hill 863,242 1,581 0.08 6
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets BANKS (13.37%*) 278,116 13.69 Banks Barclays 14,306,446 45,316 2.23 HSBC 20,633,314 139,543 6.87 Lloyds Banking 47,177,643 36,473 1.79 Royal Bank Of Scotland 20,369,226 10,115 0.50 Standard Chartered 2,427,525 46,669 2.30 FINANCIAL SERVICES (4.51%*) 95,535 4.70 Equity Investment Instruments 3i Infrastructure 796,453 906 0.05 Aberdeen Asian Income Fund 134,700 212 0.01 Aberdeen Asian Smaller Companies Investment Trust 24,985 145 0.01 Aberdeen New Dawn Investment Trust 30,733 262 0.01 Aberforth Smaller Companies Trust 123,009 657 0.03 Absolute Return Trust 184,172 212 0.01 Advance Developing Markets Fund 73,240 319 0.02 Alliance Trust 816,388 2,705 0.13 Alternative Investment Strategies 219,801 223 0.01 Anglo & Overseas 144,103 139 0.01 Artemis Alpha Trust 37,885 93 0.01 Baillie Gifford Japan Trust 78,858 128 0.01 Bankers Investment Trust 146,659 544 0.03 Baring Emerging Europe 53,535 434 0.02 Beta Global Emerging Market Investment Trust** 66,409 2 BH Global (GBP) 30,249 339 0.02 BH Global (USD) 44,762 316 0.02 BH Macro (EUR) 32,275 454 0.02 BH Macro (GBP) 22,934 401 0.02 BH Macro (USD) 45,429 488 0.02 BlackRock Commodities Income Investment Trust 56,013 74 BlackRock Greater Europe Investment Trust 127,092 219 0.01 BlackRock Greater Europe Investment Trust (subscription shares) 25,418 3 BlackRock Latin America Investment Trust 60,631 412 0.02 BlackRock New Energy Investment Trust 273,250 105 0.01 BlackRock Smaller Companies Trust 61,909 237 0.01 BlackRock World Mining Trust 213,816 1,299 0.06 Bluecrest Allblue Fund 135,960 227 0.01 British Assets Trust 395,941 495 0.02 British Empire Securities and General Trust 199,286 903 0.04 Brunner Investment Trust 46,285 171 0.01 Caledonia Investments 53,690 871 0.04 Candover Investments 27,320 187 0.01 City Merchants High Yield 52,888 90 City Natural Resources High Yield Trust 50,593 110 0.01 City of London Investment Trust 259,415 706 0.04 Dexion Absolute 747,957 1,062 0.05 Dexion Equity Alternative 135,446 135 0.01 Dexion Trading 143,179 164 0.01 Dunedin Enterprise Investment Trust 37,795 107 0.01 Dunedin Income Growth Investment Trust 195,270 403 0.02 Eastern European Trust 73,859 202 0.01 Eastern European Trust (subscription shares) 14,771 1 Ecofin Water & Power Opportunities 255,273 329 0.02 Edinburgh Dragon Trust 295,258 689 0.03 Edinburgh Investment Trust 234,993 1,007 0.05 Edinburgh UK Tracker Trust 129,195 323 0.02 Edinburgh US Tracker Trust 44,834 255 0.01 Edinburgh Worldwide Investment Trust 62,404 160 0.01 Electra Private Equity 47,404 628 0.03 7
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets Electric and General Investment Trust 77,402 279 0.01 European Investment Trust 65,905 348 0.02 F&C Capital & Income Investment Trust 89,971 191 0.01 F&C Global Smaller Companies 64,232 294 0.01 F&C Private Equity Trust 43,621 53 F&C US Smaller Companies 25,125 88 Fidelity Asian Values 118,362 221 0.01 Fidelity China Special Situations 545,344 596 0.03 Fidelity European Values 65,947 674 0.03 Fidelity Special Values 74,104 412 0.02 Finsbury Growth & Income Trust 63,032 183 0.01 Foreign & Colonial Eurotrust 822,040 2,347 0.12 Framlington Innovative Growth Trust 44,481 142 0.01 Gartmore European Investment Trust 43,998 251 0.01 Gartmore Fledgling Trust 28,453 108 0.01 Gartmore Global Trust 64,731 211 0.01 Gartmore Irish Growth Fund 17,434 110 0.01 Genesis Emerging Markets Fund 161,612 804 0.04 Goldman Sachs Dynamic Opportunities (GBP) 95,000 84 Graphite Enterprise Trust 95,346 262 0.01 Hansa Trust 5,000 43 Hansa Trust A Non Voting 20,035 169 0.01 Henderson EuroTrust 32,459 159 0.01 Henderson Far East Income 91,639 291 0.01 Henderson High Income Trust 77,857 97 Henderson Smaller Companies Investment Trust 106,653 271 0.01 Henderson TR Pacific Investment Trust 232,188 406 0.02 Herald Investment Trust 108,285 452 0.02 HgCapital Trust 33,898 281 0.01 HSBC Infrastructure 533,493 610 0.03 Impax Enviromental Markets 277,653 315 0.02 ING Global Real Estate Secs 122,454 92 International Public Partnership 471,246 522 0.03 INVESCO Asia Trust 79,530 114 0.01 Invesco Income Growth Trust 72,521 136 0.01 Invesco Perpetual UK Smaller Companies Investment Trust 88,525 145 0.01 JPMorgan American Investment Trust 53,534 385 0.02 JPMorgan Asian Investment Trust 204,630 436 0.02 JPMorgan Chinese Investment Trust 57,469 85 JPMorgan Claverhouse Investment Trust 78,760 340 0.02 JPMorgan Emerging Markets Investment Trust 133,273 760 0.04 JPMorgan European Fledgeling Investment Trust 65,135 460 0.02 JPMorgan European Investment Trust 178,240 294 0.01 JPMorgan Fleming Japanese Smaller Companies Investment Trust 48,564 63 JPMorgan Indian Investment Trust 121,652 563 0.03 JPMorgan Japanese Investment Trust 232,784 363 0.02 JPMorgan Mid Cap Investment Trust 35,665 147 0.01 JPMorgan Overseas Investment Trust 37,989 306 0.02 JPMorgan Russian Securities 70,939 423 0.02 JPMorgan Smaller CosIT 30,771 120 0.01 Jupiter European Opportunities Trust 98,680 242 0.01 JZ Capital Partners 26,241 76 Keystone Investment Trust 16,986 198 0.01 Law Debenture 143,646 452 0.02 Lowland Investment 29,727 197 0.01 Majedie Investments 32,046 61 Martin Currie Pacific Trust 51,823 127 0.01 Martin Currie Portfolio Investment Trust 187,957 219 0.01 Mercantile Investment Trust 122,679 1,189 0.06 Merchants Trust 129,826 493 0.02 8
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets Monks Investment Trust 337,747 1,082 0.05 Montanaro UK Smaller Companies Investment Trust 43,605 128 0.01 Morant Wright Japan 177,212 78 Murray Income Trust 82,263 504 0.02 Murray International Trust 108,629 978 0.05 MW Tops (EUR) 8,419 69 MW Tops (GBP) 14,650 144 0.01 New Star Investment Trust 35,355 25 North Atlantic Smaller Companies Investment Trust 15,187 147 0.01 Pacific Assets Trust 156,492 187 0.01 Pacific Horizon Investment Trust 62,712 97 Pantheon International Participations 41,178 236 0.01 Perpetual Income and Growth Investment Trust 248,047 590 0.03 Personal Assets Trust 877 262 0.01 Polar Capital Technology Trust 169,943 523 0.03 RIT Capital Partners 188,051 2,132 0.10 Schroder Asia Pacific Fund 192,977 385 0.02 Schroder Income Growth Fund 94,168 179 0.01 Schroder Japan Growth Fund 157,307 123 0.01 Schroder Oriental Income Fund 186,270 270 0.01 Schroder UK Growth Fund 203,943 245 0.01 Schroder UK Mid & Small Cap Fund 43,255 93 Scottish American Investment 166,144 356 0.02 Scottish Investment Trust 166,167 741 0.04 Scottish Mortgage Investment Trust 336,174 2,057 0.10 Scottish Oriental Smaller Companies Trust 267 1 Securities Trust of Scotland 123,788 121 0.01 Shires Income 37,659 69 Standard Life Equity Income Trust 50,821 146 0.01 Standard Life European Private Equity Trust 99,558 105 0.01 SVM Global Fund 68,398 177 0.01 SVM UK Active Fund 54,131 80 Temple Bar Investment Trust 72,160 574 0.03 Templeton Emerging Markets Investment Trust 401,748 2,358 0.12 Thames River Multi Hedge PCC 230,387 259 0.01 Throgmorton Trust 170,663 255 0.01 TR European Growth Trust 94,845 336 0.02 TR Property Investment Trust 368,094 578 0.03 TR Property Investment Trust Sigma 35,000 24 Troy Income & Growth Trust 140,982 68 Value And Income Trust 57,738 94 Witan Investment Trust 262,203 1,202 0.06 Witan Pacific Investment Trust 91,575 171 0.01 Worldwide Healthcare Trust 61,337 414 0.02 Financial Services 3i 1,046,996 2,983 0.15 Aberdeen Asset Management 1,321,304 1,949 0.10 Ashmore 347,244 1,083 0.05 BlueBay Asset Management 175,051 556 0.03 Bradford & Bingley*** 1,736,429 Brewin Dolphin 248,214 310 0.02 Camellia 1,573 139 0.01 Charles Taylor Consulting 44,911 73 Close Brothers 178,821 1,261 0.06 Collins Stewart 258,654 217 0.01 Evolution 280,093 237 0.01 F&C Asset Management 463,289 290 0.01 Full Circle Future** 139,930 Gartmore 275,315 327 0.02 Hargreaves Lansdown 146,614 641 0.03 9
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets Helphire 334,591 112 0.01 Henderson 884,101 1,202 0.06 ICAP 781,055 3,552 0.17 IG 436,996 2,226 0.11 Intermediate Capital 489,652 1,426 0.07 International Personal Finance 312,555 845 0.04 Investec 593,391 3,023 0.15 IP 303,844 102 0.01 London Stock Exchange 244,517 1,691 0.08 Man 2,050,799 4,830 0.24 Paragon 396,066 606 0.03 Provident Financial 164,260 1,397 0.07 Rathbone Brothers 51,162 435 0.02 Schroders 204,713 2,923 0.14 Schroders (Non Voting A ) 72,196 837 0.04 SVG Capital 168,504 259 0.01 Tullett Prebon 258,654 1,027 0.05 INSURANCE (3.35%*) 78,476 3.86 Life Insurance Aviva 3,222,247 13,459 0.66 Chesnara 126,548 278 0.01 Hansard Global 55,232 93 Legal & General 6,876,415 7,028 0.34 Old Mutual 6,369,984 8,861 0.44 Prudential 2,909,303 18,256 0.90 Resolution 1,732,444 4,400 0.22 St James s Place 226,853 619 0.03 Standard Life 2,700,211 6,108 0.30 Non Life Insurance Admiral 243,640 4,010 0.20 Amlin 569,897 2,342 0.11 Beazley 655,457 743 0.04 Brit Insurance 99,801 988 0.05 Catlin 423,416 1,440 0.07 Chaucer 570,360 268 0.01 Hardy Underwriting Bermuda 64,772 142 0.01 Hiscox 476,319 1,748 0.09 Jardine Lloyd Thompson 196,690 1,150 0.06 Lancashire 178,725 989 0.05 Novae 94,288 302 0.01 RSA Insurance 4,062,056 5,252 0.26 REAL ESTATE (1.51%*) 30,747 1.51 Real Estate Investment & Services Capital & Counties Properties 739,669 956 0.05 Capital & Regional 263,028 89 CLS 40,186 205 0.01 Daejan 5,988 152 0.01 Development Securities 74,608 184 0.01 F&C Commercial Property Trust 368,328 333 0.02 Grainger 361,383 409 0.02 Helical Bar 111,756 340 0.02 ING UK Real Estate Income Trust 402,428 188 0.01 Invista Foundation Property Trust 428,239 170 0.01 IRP Property 103,426 85 ISIS Property 40,000 37 LSL Property Services 50,000 115 0.01 Medicx Fund 142,927 104 0.01 MWB 63,293 23 10
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets Quintain Estates & Development 636,228 259 0.01 Safestore 169,310 213 0.01 Savills 162,576 504 0.02 St. Modwen Properties 170,166 283 0.01 Standard Life Investment Property Income Trust 124,797 79 UK Commercial Property Trust 264,702 213 0.01 Unite 178,261 363 0.02 Wichford 1,285,936 99 Real Estate Investment Trusts Big Yellow 108,615 340 0.02 British Land 1,051,260 5,081 0.25 Capital Shopping Centres 739,669 2,670 0.13 Derwent London 122,233 1,840 0.09 Great Portland Estates 407,968 1,350 0.07 Hammerson 852,976 3,320 0.16 Hansteen 537,000 357 0.02 Land Securities 936,413 5,988 0.30 McKay Securities 43,069 54 Metric Property Investment 225,251 223 0.01 Mucklow (A & J) 30,450 84 Primary Health Properties 42,960 135 0.01 Real Estate Opportunities 123,589 3 Segro 893,379 2,406 0.12 Shaftesbury 308,321 1,367 0.07 Town Centre Securities 51,554 81 Workspace 215,515 45 HEALTH CARE (7.45%*) 157,404 7.75 Health Care Equipment & Services Consort Medical 34,204 151 0.01 Optos 32,737 29 Smith & Nephew 1,033,942 5,847 0.29 Southern Cross Healthcare 206,758 68 Synergy Health 64,099 455 0.02 Pharmaceuticals & Biotechnology AstraZeneca 1,709,754 57,243 2.82 Axis-Shield 60,667 171 0.01 BTG 347,723 789 0.04 Dechra Pharmaceuticals 78,176 383 0.02 Genus 71,469 559 0.03 GlaxoSmithKline 6,212,697 79,740 3.93 Hikma Pharmaceuticals 185,416 1,485 0.07 Oxford Biomedica 648,180 63 Prostrakan 94,573 44 Renovo 177,960 44 Shire 669,940 10,183 0.50 Vectura 300,207 150 0.01 CONSTRUCTION & MATERIALS (0.30%*) 5,641 0.28 Construction & Materials Balfour Beatty 764,948 1,980 0.10 Carillion 480,789 1,527 0.08 Costain 37,840 81 0.01 Galliford Try 77,321 229 0.01 Keller 80,125 511 0.03 Kier 51,155 544 0.03 Low & Bonar 187,528 68 Marshalls 247,230 262 0.01 MJ Gleeson 63,648 67 Morgan Sindall 39,441 274 0.01 11
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets ROK 195,285 36 0.00 T Clarke 48,501 62 0.00 INDUSTRIAL GOODS & SERVICES (6.81%*) 141,072 6.94 Aerospace & Defence BAE Systems 4,087,332 13,930 0.69 Chemring 42,887 1,265 0.06 Cobham 1,377,864 3,255 0.16 Hampson Industries 226,190 45 Meggitt 826,549 2,404 0.12 QinetiQ 842,711 965 0.05 Rolls-Royce 2,165,152 12,655 0.62 Senior 476,912 598 0.03 Ultra Electronics 87,348 1,526 0.08 Umeco 58,758 256 0.01 Electronic & Electrical Equipment Domino Printing Sciences 135,251 690 0.03 E2V Technologies 163,003 115 0.01 Halma 453,288 1,393 0.07 Laird 324,678 432 0.02 Morgan Crucible 370,085 769 0.04 Oxford Instruments 61,479 265 0.01 Renishaw 45,608 442 0.02 Spectris 152,575 1,553 0.08 TT Electronics 190,088 267 0.01 General Industrials British Polythene Industries 32,257 74 Cookson 313,072 1,495 0.07 DS Smith 484,034 740 0.04 Rexam 1,063,880 3,294 0.16 RPC 118,884 336 0.02 Smiths 445,630 5,446 0.27 Tomkins 1,093,701 3,541 0.17 Industrial Engineering Bodycote 228,745 570 0.03 Charter International 198,705 1,324 0.07 Fenner 189,703 449 0.02 Goodwin 820 10 Hill & Smith 90,745 266 0.01 IMI 384,921 2,839 0.14 Melrose 610,169 1,618 0.08 Rotork 106,269 1,787 0.09 Severfield-Rowen 100,556 204 0.01 Spirax-Sarco Engineering 90,676 1,522 0.07 Vitec 51,100 235 0.01 Weir 252,538 3,551 0.18 Industrial Transportation BBA Aviation 524,716 1,022 0.05 Braemar Shipping Services 24,589 123 0.01 Clarkson 16,553 162 0.01 Fisher (James) & Sons 62,105 307 0.02 Forth Ports 56,053 765 0.04 Goldenport 35,807 43 Stobart 148,055 220 0.01 UK Mail 27,172 103 0.01 Wincanton 148,338 345 0.02 Support Services Aggreko 325,649 4,976 0.25 Ashtead 674,605 678 0.03 12
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets Atkins WS 128,406 918 0.05 Babcock International 388,653 2,192 0.11 Brammer 123,456 220 0.01 BSS 147,832 656 0.03 Bunzl 394,608 2,977 0.15 Capita 723,826 5,552 0.27 Connaught 148,078 25 CPP 101,017 270 0.01 Davis Service 209,253 827 0.04 De La Rue 115,472 804 0.04 Diploma 142,310 360 0.02 eaga 260,114 292 0.01 Electrocomponents 533,577 1,291 0.06 Experian 1,200,060 8,088 0.40 Filtrona 271,735 698 0.03 G4S 1,686,630 4,257 0.21 Galiform 764,152 543 0.03 Hays 1,720,890 1,876 0.09 Homeserve 397,195 1,934 0.10 Hyder Consulting 43,215 145 0.01 Interserve 141,893 295 0.02 Intertek 187,810 3,379 0.17 Lavendon 128,380 68 Management Consulting 312,946 74 Management Consulting Call Expiry 01/12/2015 14,482 Mears 88,504 247 0.01 Menzies (John) 53,370 234 0.01 Michael Page International 419,749 1,862 0.09 Mitie 399,069 801 0.04 Mouchel 150,763 191 0.01 Northgate 96,043 205 0.01 PayPoint 63,646 195 0.01 Premier Farnell 448,756 1,212 0.06 Regus 908,058 682 0.03 Rentokil Initial 2,179,606 2,328 0.11 Ricardo 62,244 171 0.01 Robert Walters 105,633 243 0.01 RPS 264,688 487 0.02 Serco 593,003 3,653 0.18 Shanks 485,566 502 0.02 SIG 583,400 573 0.03 Smiths News 222,057 240 0.01 Speedy Hire 544,730 131 0.01 Spice 400,454 260 0.01 St. Ives 128,555 98 0.01 Sthree 129,137 378 0.02 Travis Perkins 266,563 2,204 0.11 Tribal 77,102 62 VP 30,426 48 Wolseley 342,255 4,905 0.24 WSP 75,705 294 0.01 Xchanging 194,156 255 0.01 OIL & GAS (18.10%*) 315,647 15.53 Alternative Energy Hansen Transmissions International 600,410 320 0.02 PV Crystalox Solar 251,806 135 0.01 Oil & Gas Producers Afren 1,062,113 1,102 0.05 BG 4,006,721 43,813 2.16 13
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets BP 22,338,538 90,270 4.44 Cairn Energy 1,675,710 7,266 0.36 Dana Petroleum 103,624 1,853 0.09 Enquest 691,509 831 0.04 Essar Energy 463,435 2,130 0.10 Fortune Oil 1,768,552 139 0.01 Hardy Oil & Gas 75,384 171 0.01 Heritage Oil 250,879 809 0.04 JKX Oil & Gas 155,466 505 0.02 Melrose Resources 71,144 206 0.01 Premier Oil 142,328 2,371 0.12 Royal Dutch Shell A (Eur) 5,894 110 0.01 Royal Dutch Shell A 4,199,643 78,218 3.85 Royal Dutch Shell B 3,197,148 57,788 2.84 Salamander Energy 145,672 361 0.02 Soco International 374,936 1,732 0.08 Tullow Oil 1,051,674 13,293 0.65 Oil Equipment, Services & Distribution Amec 398,695 3,788 0.19 Hunting 155,200 1,000 0.05 Lamprell 179,742 574 0.03 Petrofac 313,665 4,344 0.21 Wellstream 115,953 681 0.03 John Wood 477,871 1,837 0.09 TECHNOLOGY (1.48%*) 33,316 1.64 Software & Computer Services Anite 386,589 193 0.01 Autonomy 288,240 5,214 0.26 Aveva 82,035 1,136 0.05 Computacenter 147,235 464 0.02 Dimension Data 1,990,796 2,379 0.12 Fidessa 41,923 627 0.03 Intec Telecom Systems 370,378 224 0.01 Invensys 970,160 2,686 0.13 Kofax 107,941 286 0.01 Logica 1,751,751 2,156 0.11 Micro Focus International 183,308 674 0.03 Misys 658,276 1,909 0.09 NCC 26,975 113 0.01 Phoenix IT 59,391 116 0.01 RM 115,340 161 0.01 Sage 1,590,501 4,059 0.20 SDL 90,123 506 0.02 Telecity 92,723 486 0.02 Technology Hardware & Equipment ARM 1,511,598 5,847 0.29 BATM Advanced Communications 363,738 83 CSR 150,911 541 0.03 Imagination Technologies 264,027 918 0.05 Pace 291,801 586 0.03 Promethean World 118,553 135 0.01 Psion 170,252 167 0.01 Sepura 34,457 15 Spirent Communications 907,410 1,313 0.06 Wolfson Microelectronics 141,098 322 0.02 14
Investments As at 15 September 2010 (unaudited) Market Value % of Net Security Holdings 000 Assets TELECOMMUNICATIONS (5.74%*) 123,654 6.09 Fixed Line Telecommunications BT 9,261,672 13,365 0.66 Cable & Wireless Communications 3,291,783 2,001 0.10 Cable & Wireless Worldwide 3,109,725 2,306 0.12 Colt Telecom 334,907 402 0.02 Kcom 535,387 260 0.01 Micadant** 1 Talktalk Telecom 435,322 600 0.03 Telecom Plus 61,676 234 0.01 Mobile Telecommunications Inmarsat 556,934 4,032 0.20 Vodafone 62,393,607 100,454 4.94 UTILITIES (3.40%*) 78,245 3.85 Electricity Drax 408,940 1,627 0.08 International Power 1,845,876 7,173 0.35 Scottish & Southern Energy 1,104,892 12,828 0.63 Gas, Water & Multiutilities Centrica 5,990,274 20,511 1.01 National Grid 4,127,985 23,117 1.14 Northumbrian Water 478,213 1,657 0.08 Pennon 432,369 2,618 0.13 Severn Trent 284,307 3,943 0.20 United Utilities 815,584 4,771 0.23 DERIVATIVES (0.02%*) (14) Futures FTSE 100 Index Futures December 2010 457 (14) Investment assets 2,000,463 98.44 Total other assets 31,700 1.56 Net assets 2,032,163 100.00 * Comparative figures shown in brackets relate to 15 March 2010 and have been re-stated due to the adoption of new industry classifications as used in the Bloomberg ICB super sub-sector. ** Unlisted and suspended securities. *** Security nationalised 15
Summary of material portfolio changes as at 15 September 2010 (unaudited) Cost Purchases 000 FTSE 100 Index Futures June 2010 61,576 FTSE 100 Index Futures September 2010 47,451 FTSE 100 Index Futures December 2010 26,700 Resolution 6,613 National Grid FPR 3,928 HSBC 2,979 Essar Energy 2,147 Centamin Egypt 2,026 Standard Chartered 1,677 Afren 1,022 African Barrick Gold 953 ICAP 761 National Grid 728 Hansen Transmissions International 617 Gartmore 571 Fidelity China Special Situations 550 BH Macro (USD) 517 Aviva 508 Hansteen*** 454 Enquest 384 Other purchases 3,485 Total for the period 165,647 Major purchases are those that constitute the largest twenty of the total purchases for the period. *** Real Estate Investment Trusts (REIT) Proceeds Sales 000 FTSE 100 Index Futures June 2010 60,101 FTSE 100 Index Futures September 2010 49,848 FTSE 100 Index Futures March 2010 8,205 HSBC 4,413 Resolution NPR 4,159 Arriva 1,864 BP 1,576 FTSE 100 Index Futures December 2010 1,385 Standard Chartered 1,342 Chloride 1,157 AstraZeneca 1,131 Royal Dutch Shell B (Eur) 1,087 Vodafone 1,080 Aviva 988 GlaxoSmithKline 976 Diageo 899 Royal Dutch Shell A (Eur) 795 SABMiller 732 Prudential 654 National Grid 621 Other sales 11,299 Total for the period 154,312 Major sales are those that constitute the largest twenty of the total sales for the period. 16
Statement of total return for the 6 month period ended 15 September 2010 (unaudited) 15/09/10 15/09/09 000 000 000 000 Income Net capital gains 5,119 484,967 Revenue 35,553 37,844 Expenses (9,917) (8,072) Net revenue before taxation 25,636 29,772 Taxation (374) (352) Net revenue after taxation 25,262 29,420 Total return before distributions 30,381 514,387 Finance costs: Distributions (25,262) (29,415) Change in net assets attributable to unitholders from investment activities 5,119 484,972 Statement of change in net assets attributable to unitholders for the 6 month period ended 15 September 2010 (unaudited) 15/09/10 15/09/09 000 000 000 000 Opening net assets attributable to unitholders 2,017,872 1,310,772 Movement due to creation and cancellation of units: Amounts receivable on creation of units 40,771 47,480 Less: Amounts payable on cancellation of units (31,600) (14,733) 9,171 32,747 Stamp duty refund 1 Change in net assets attributable to unitholders from investment activities (see above) 5,119 484,972 Closing net assets attributable to unitholders 2,032,163 1,828,491 Notes to the Financial Statements are on page 18. 17
Balance sheet as at 15 September 2010 (unaudited) 15/09/10 15/03/10 000 000 000 000 Assets Investment assets 2,000,463 2,002,143 Debtors 9,489 10,080 Cash and bank balances 49,332 27,104 Total other assets 58,821 37,184 Total assets 2,059,284 2,039,327 Liabilities Creditors (1,838) (3,235) Distribution payable on income units (25,283) (18,220) Total liabilities (27,121) (21,455) Net assets attributable to unitholders 2,032,163 2,017,872 Notes to the financial statements for the 6 month period ended 15 September 2010 (unaudited) The interim financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued by the Investment Managers Association (IMA) in November 2008 (the IMA SORP 2008), and United Kingdom Generally Accepted Accounting Practice. In accordance with the IMA SORP 2008, no Notes to the financial statements have been presented in these interim financial statements. The accounting policies are consistent with those of the financial statements for the year ended 15 March 2010 and are described in those financial statements. 18
Distribution table for the 6 month period ended 15 September 2010 (unaudited) Distribution in pence per unit Group 1 Interim Units purchased prior to 16 March 2010 Group 2 Interim Units purchased on or after 16 March 2010 to 15 September 2010 Distribution Distribution Net payable paid income Equalisation 15/11/10 13/11/09 Group 1 (p) (p) (p) (p) Interim 2.387 2.387 2.805 Group 2 (p) (p) (p) (p) Interim 1.316 1.071 2.387 2.805 Corporate Tax A unitholder liable to corporation tax receives this distribution, excluding equalisation, as follows: Interim - 100% of the dividend, together with the tax credit, is received as franked investment income. 19
Directors statement We approve the Report and Financial Statements of The Virgin UK Index Tracking Trust for the period ending 15 September 2010 on behalf of Virgin Money Unit Trust Managers Limited in accordance with the requirements of the Collective Investment Schemes Sourcebook. Finlay Williamson Chief Financial Officer Marian Watson Chief Risk Officer 27 October 2010 20
Management and professional services Manager and registrar Virgin Money Unit Trust Managers Limited Discovery House Directors: F. Wiliamson Whiting Road M. Watson Norwich R. Russell NR4 6EJ Telephone 08456 10 20 30 Compliance Officer: M. Watson Secretary: B. Gerrard Authorised and regulated by the Financial Services Authority. Investment advisers State Street Global Advisors Limited 20 Churchill Place Canary Wharf London E14 5HJ Authorised and regulated by the Financial Services Authority. Trustee Citibank International Plc Citigroup Centre Canada Square Canary Wharf London E14 5LB Authorised and regulated by the Financial Services Authority. Independent auditors KPMG LLP Saltire Court 20 Castle Terrace Edinburgh EH1 2EG 21
Virgin Money Unit Trust Managers Limited Authorised and regulated by the Financial Services Authority. Registered office: Discovery House Whiting Road, Norwich, NR4 6EJ Registered in England no. 3000482 MR1 09.10