Teachers Cautious Investment Fund

Teachers Cautious Investment Fund Annual Long Report for the year ended 30 June 2015

Report of the Manager Constitution The Fund was established on 9 February 2006 and is a unit trust scheme authorised by an authorisation order under Section 243 of the Financial Services and Markets Act 2000. The Scheme is classified as a non-ucits retail scheme and an Authorised Investment Fund (AIF). Fund Investment Objective and Policy The objective of the Fund is to achieve a high level of income along with an element of capital growth. The Manager s policy to achieve this objective is to invest directly, or indirectly through investment in a range of collective investment schemes, so as to gain exposure to a diversified portfolio of fixed interest securities and equities. Risk Profile and Attitude to Risk You are only willing to take low levels of risk. You are prepared to accept the potential for only a small amount of capital growth for the greater security of your money. You understand that you could still lose money on a Low Risk investment. You understand that Teachers Assurance may categorise its own investment fund as Low Risk where the fund typically invests: Up to 20% in equity markets (company shares) and the remainder in gilts, corporate bonds and cash. Risk Management Risk is managed by the careful management of the weighting of assets in the portfolio. Manager and Registrar Sovereign Unit Trust Managers Limited Registered Office: Tringham House, Deansleigh Road, Bournemouth, BH7 7DT. Authorised and regulated by the Financial Conduct Authority. Entered on the Financial Services register, registration number 121998. Registered in England and Wales number 2072297 Telephone 01202 435000 Directors of Sovereign Unit Trust Managers Limited I P Blanchard D H Furniss (Chairman) W Michie Secretary T A F Smith Trustee National Westminster Bank Plc Trustee & Depositary Services Ground Floor, 15 Bishopsgate, London, EC2P 2AP. Authorised and regulated by the Financial Conduct Authority Auditors Mazars LLP Tower Bridge House, St Katharine s Way, London, E1W 1DD Investment Adviser BlackRock Fund Managers Limited 12 Throgmorton Avenue, London, EC2N 2DL Authorised and regulated by the Financial Conduct Authority

Report of the Manager (continued) Market Review The first half of the year was an eventful one. Investors had to navigate through the developments around Greece s financial and geopolitical future, which included a possible Grexit, a stock market bubble in China, signs of softening US economic growth, and key elections in Europe and the UK. Sentiment was generally positive in the first three months, as global economic activity stabilised and continued to warrant a continuation of accommodative monetary policies in developed countries with limited concerns around price inflation. However, the following three months were characterised by a material increase in market volatility, which began with a European bond market correction and the escalation of political events in Europe. The turmoil spread to other bond markets and eventually affected market sentiment more broadly. Against this backdrop, equity markets posted reasonable gains, but this masked considerable volatility and regional/ country divergence. US and UK equities added 1.7% and 1.2% over the period respectively, which contrasted with double digit returns for the Eurozone (+13.5%) and Japan (+16.1%). Monetary stimulus was a major driving theme of performance, particularly in the first three months. In January, the European Central Bank (ECB) committed for the first time in its history to engage in a full-scale Quantitative Easing (QE) programme, which was subsequently launched in March. Elsewhere, Chinese, Singaporean, Australian, Turkish, Canadian, Danish, Polish and Indian central banks all eased monetary policy in the first quarter of 2015. The QE announcement boosted confidence across Europe and, together with positive economic data, contributed to strong stock performance in the region. The attention of markets returned to Greece in the second quarter, with the focus on the Greek government s attempts to negotiate a vital extension of the bailout program it has relied upon for the past five years. As hopes for a deal between the nation and its creditors vanished, and the ECB ended its Emergency Lending Assistance program, the Greek government was forced to shut its banks and impose capital controls to avert the collapse of its financial system. Over the second quarter, equities corrected sharply, notably in Europe, with the UK down 3.4%, whilst the continent registered a 7.6% drop. In fixed income, concerns over a spillover of the Greek crisis led market participants to seek the safety of low-risk bonds such as German Bunds, UK Gilts and US Treasuries. Whilst these climbed during the days of turmoil, this did not compensate for the declines earlier in the month driven by a readjustment of inflation expectations in Europe and the anticipation of interest rate increases later this year in the US and the UK. Report of the Manager continued Overseas market moves were materially impacted by movements in Sterling (GBP) versus major developed currencies. For example, over the period, GBP gained 8.6% against the Euro. The movement was more muted against the US Dollar (USD) (+0.8%), but again this masked significant volatility. In the first quarter GBP posted a 5.1% decline against the USD, a move that helped the returns of assets held overseas. In contrast though, in the second quarter GBP added 5.7% against the USD, a move that was detrimental to overseas equities and bonds, and corporate bonds in particular, where the widening of spreads was relatively muted despite the market turmoil. Performance The Teachers Cautious Investment Fund declined by 0.35% over the past 6 months. Given the relatively low active risk budget, this is a positive outcome. The absolute performance of the Fund reflected the impact of negative returns within bonds (where the fund holds the majority of its assets). Nominal gilts declined by 1.3% alongside overseas corporate bonds, which were down 3.7%. The positive relative return was driven by favourable tactical positioning, notably in equities. These were funded by underweight exposures in both gilts and overseas corporate bonds a key contributor to returns given their negative performance over the period.

Report of the Manager (continued) Outlook BlackRock s core scenario for 2015 remains unchanged. They expect global economic growth to be below trend. Private sector deleveraging remains a headwind, but a varying one, whilst fiscal policy is likely to remain fairly restrictive globally. BlackRock expect developed short-term rates to diverge. US rates are set to rise by the end of 2015, whilst in contrast, the Eurozone and Japan maintain an accommodative stance. In emerging markets, BlackRock expect growth to normalize further. From an inflation perspective, BlackRock expect low to very low inflation, notably in the Euro area. Risk premia on risk assets remain attractive despite the recent rise in government bond yields. An improving growth environment in the US has materialized, whilst the Euro area and Japan have both benefited from central bank support. Equity valuations are on average at fair value across regions, but valuations in the US are starting to look stretched. In fixed income, credit spreads are narrow relative to long term averages, although BlackRock have seen some normalisation between US and Euro credit spreads, with Euro spreads widening. Overall, returns are likely to be less substantial and more volatile going forward. BlackRock regard the combination of moderate risk premia, loose monetary policy and no sustained downside growth surprises as supporting a risk-on strategy.

Report of the Manager (continued) Performance Record 30.06.14 to 30.06.15 Percentage change to 30 June 2015 1 Year 3 Years 5 Years 10 Years Since launch 30.06.12 to 30.06.15 30.06.10 to 30.06.15 30.06.05 to 30.06.15 Figures are on a single pricing basis with net income reinvested or accumulated (Source: Teachers Assurance). 10.02.06 to 30.06.15 4.92% 11.60% 27.42% n/a 38.17% Past performance is not a guide to future performance. The value of units and the income generated can go down as well as up. Total Expense Ratio Expense Type 12 months to 30 June 2015 2014 Manager s Charge 1.25% 1.25% Other Expenses 0.18% 0.18% Total Expense Ratio 1.43% 1.43% The total expense ratio is the ratio of the Fund s total operating costs, excluding custody transaction costs, to its average net assets. The initial charge of the price of units purchased is 3%. Major Holdings BlackRock UK Gilts All Stocks Tracker Fund 28.34 BlackRock UK Equity Tracker Fund 21.34 BlackRock Overseas Corporate Bond Tracker Fund 16.36 BlackRock Corporate Bond Tracker Fund 16.31 BlackRock Index Linked Gilt Tracker Fund 12.81 BlackRock Institutional Sterling Liquidity Fund 4.90 %

Report of the Manager (continued) Portfolio Statement as at 30 June 2015 Holding Market Percentage value of total net assets % Unit Funds 95.16% (93.63%) BlackRock Corporate Bond Tracker Fund 8,361,396 9,356,402 16.31 BlackRock Overseas Corporate Bond Tracker Fund 9,340,252 9,386,953 16.36 BlackRock UK Equity Tracker Fund 9,648,569 12,244,034 21.34 BlackRock UK Gilts All Stocks Tracker Fund 15,606,215 16,261,676 28.34 BlackRock Index Linked Gilt Tracker Fund 6,116,565 7,352,111 12.81 Other 4.90% (6.18%) BlackRock Institutional Sterling Liquidity Fund 2,814,827 2,814,827 4.90 Portfolio of investments 57,416,003 100.06 Net other assets -0.06% (0.19%) (36,266) (0.06) Net assets 57,379,737 100.00 Figures in brackets are the percentage holdings at 30 June 2014.

Comparative Table Net Asset Values For the year ended 30 June 2015 2014 2013 Change in net assets in pence per unit Opening net asset value per unit 57.45 56.58 54.53 Return before operating charges 3.70 2.33 2.86 Operating charges (0.86) (0.82) (0.81) Return after operating charges 2.84 1.51 2.05 Distributions on income units (0.49) (0.64) 0.00 Closing net asset value per unit 59.80 57.45 56.58 Performance Return after charges 4.94% 2.67% 3.76% Other information Closing net asset value ( 000) 57,380 58,776 64,462 Closing number of units 95,949,410 102,303,407 113,930,899 Operating charges 1.43% 1.44% 1.46% Direct transaction costs 0.00% 0.00% 0.00% Prices Highest unit price 63.38 58.43 59.40 Lowest unit price 57.42 56.50 54.64 The return after charges is calculated as the return after operating charges per unit divided by the opening net asset value per unit.

Financial Statements Statement of Total Return For the year ended 30 June Note 2015 2014 Income Net capital gains 4 2,385,828 932,793 Revenue 4 1,469,501 1,775,005 Expenses 5 (843,744) (880,322) Net revenue before taxation 625,757 894,683 Taxation 6 0 0 Net revenue after taxation 625,757 894,683 Total return before distributions 3,011,585 1,827,476 Distributions 7 (625,757) (894,683) Change in unitholders funds from investment activities 2,385,828 932,793 Statement of Change in Unitholders Funds For the year ended 30 June Note 2015 2014 Opening net assets 58,775,699 64,461,756 Amounts receivable on issue of units 1,701,185 1,296,124 Amounts payable on cancellation of units (5,483,218) (7,912,039) (3,782,033) (6,615,915) Stamp duty reserve tax 16 0 (3,249) Excess cash transferred after the transfer date 0 314 Unclaimed distributions 243 0 Change in unitholders funds from investment activities 2,385,828 932,793 Closing net assets 57,379,737 58,775,699

Financial Statements (continued) Balance Sheet as at 30 June Assets: Fixed assets: Note 2015 2014 Investments 54,601,176 55,029,617 Current assets: Debtors 9 79,825 135,600 Cash and bank balances 10 289,641 342,929 Cash equivalents 10 2,814,827 3,632,596 Total assets 57,785,469 59,140,742 Liabilities: Distribution payable 7 (230,538) (267,155) Other creditors 11 (175,194) (97,888) Total liabilities (405,732) (365,043) Net assets 57,379,737 58,775,699 Unitholders funds 57,379,737 58,775,699 Notes to the Financial Statements 1 Accounting policies a) The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments, and in accordance with the Statement of Recommended Practice for Authorised Funds issued by the Investment Management Association in May 2014. The early adoption of the statement of recommended practice and UK GAAP in accordance with FRS102 has resulted in no restatement of the 2014 financial statements other than the changes required to disclosures within these notes. b) The investments of the Fund have been measured at fair value using the single price for single priced funds and bid price for dual priced funds at close of business on 30 June 2015. c) Dividend income distributions from collective investment schemes are recognised when the security is quoted ex-dividend and are included net of tax credit. Interest income distributions from collective investment schemes are also recognised when the security is quoted ex-dividend and are included gross of tax deducted. Equalisation received as part of the distribution from collective investment schemes is included within net capital gains or losses. Interest on deposits is accounted for on an accruals basis. d) Expenses are recognised as incurred. e) Current tax: Corporation tax is charged on the net taxable income of the Fund at the rate applicable to unit trusts. f) Deferred tax: In accordance with Financial Reporting Standard 19, deferred tax liabilities are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except where the timing difference is permanent. Deferred tax assets are recognised to the extent that they are regarded as recoverable. Where appropriate, discounting has been used to take account of the time value of the amount of tax deferred until future periods.

Notes to the Financial Statements (continued) 2 Distribution policies a) The distribution is determined based on the net revenue after taxation. All items of revenue are distributed. b) Unclaimed distributions from previous periods are taken to capital. c) Equalisation received as part of the distribution from collective investment schemes is treated as capital and is not distributed. d) Expenses, apart from custody transaction costs, which are included within net capital gains or losses, are deducted from revenue and no adjustment is made in determining the distribution. e) Equalisation, which forms part of the distribution, only applies to units purchased during the distribution period (group 2 units). It is the average amount of income included in the purchase price of all group 2 units and is refunded to holders of these units as a return of capital. Being capital it is not liable to income tax and must be deducted from the cost of units for capital gains tax purposes. 3 Purchases, sales and transaction costs As the Fund is currently invested in a range of collective investment schemes there are no direct broker charges and purchases of investments ( 7,738,980) and sales of investments ( 11,372,187) are the same before and after transaction costs. 2015 2014 4 Income Revenue Dividend income distribution on collective investment schemes 422,037 500,420 Interest income distribution on collective investment schemes 1,047,132 1,272,867 Bank interest 332 1,718 1,469,501 1,775,005 Capital Realised gains on non derivative securities 541,997 389,942 Unrealised gains on non derivative securities 1,845,001 545,041 Custody transaction costs payable to the Trustee (1,170) (2,190) Net capital gains 2,385,828 932,793 Where realised gains include gains arising in previous periods a corresponding loss is included in unrealised gains. Revenue Dividend income distribution on collective investment schemes 422,037 500,420 Interest income distribution on collective investment schemes 1,047,132 1,272,867 Bank interest 332 1,718 1,469,501 1,775,005 5 Expenses Payable to the Manager, associates of the Manager and agents of either of them: Manager s periodic charge 742,771 774,222 Registration fees 61,007 64,824 803,778 839,046 Payable to the Trustee, associates of the Trustee and agents of either of them: Trustee s fees 31,085 32,171 Custody fees 2,664 2,657 33,749 34,828 Other expenses: FCA fee 434 441 Audit fee 5,760 5,520 Interest payable 23 487 6,217 6,448 Total expenses 843,744 880,322

Notes to the Financial Statements (continued) 2015 2014 6 Taxation a) Analysis of the tax charge for the year Current and total tax charge for the year 0 0 b) Factors affecting the tax charge for the year Net revenue before taxation 625,757 894,683 Corporation tax at 20% 125,151 178,937 Effects of: Tax not charged on UK dividends (84,407) (100,084) Utilisation of tax losses (40,744) (78,853) Current tax charge for the year 0 0 c) Provision for deferred taxation Provision at start and end of year 0 0 A deferred tax asset has not been recognised for 226,278 (2014: 268,041) in respect of excess management expenses of 1,131,392 (2014: 1,340,205). This deferred tax asset will be recovered should the investment objectives of the Fund change so that the Fund pays taxation. 7 Distributions Interim distribution 371,548 581,089 Final distribution 230,538 267,155 602,086 848,244 Amounts deducted on cancellation of units 30,134 52,691 Amounts added on issue of units (6,463) (6,252) Total distributions 625,757 894,683 8 Distribution table The distribution is made up as follows in pence per unit: Group 1 Units purchased prior to 1 January 2015 Group 2 Units purchased from 1 January 2015 to 30 June 2015 Tax Interest distribution Gross deducted Net Equalisation payable income at 20% income 31.08.15 28.02.15 Group 1 0.2403 0.0481 0.1922 0.0000 0.1922 0.3027 Group 2 0.0000 0.0000 0.0000 0.1922 0.1922 0.3027

Notes to the Financial Statements (continued) 9 Debtors 2015 2014 Accrued income 1,359 1,465 Income tax recoverable 78,466 134,135 79,825 135,600 10 Cash Cash at bank 289,641 342,929 Cash equivalents 2,814,827 3,632,596 Cash and bank balances 3,104,468 3,975,525 Cash equivalents comprise units held in the BlackRock Institutional Sterling Liquidity Fund. The BlackRock Institutional Sterling Liquidity Fund s objective is to maximise current income consistent with preservation of principal and liquidity. The Fund will only invest in high quality money market instruments, which consist of investments that have been awarded one of the two highest available short-term credit ratings by each recognised credit rating agency that has rated the instrument, or, if the instrument is not rated, it is of equivalent quality as determined by the investment manager of the Fund. 11 Creditors Amount payable for cancellation of units 100,320 22,499 Accrued expenses 74,874 75,389 175,194 97,888 12 Commitments and contingent assets or liabilities There were no commitments and contingent assets or liabilities at 30 June 2015. 13 Related party transactions Sovereign Unit Trust Managers Limited, as manager of the Fund, is a related party and acts as principal in respect of all transactions of units and is the Registrar. National Westminster Bank Plc, as Trustee of the Fund, is a related party. Please refer to notes 3 and 6 of the financial statements where any amounts payable in respect of the fund administration are disclosed. 14 Risk management The Fund is principally directly exposed to market risk and in particular other price risk as explained in c) below. Market risk a) Currency risk All financial instruments are designated in sterling and therefore there is no direct exposure to currency risk. b) Interest rate risk The Fund is principally invested in a range of collective investment schemes that are not themselves interest bearing and so is not significantly exposed to direct interest rate risk.

Notes to the Financial Statements (continued) 2015 2014 Floating rate financial assets 3,104,468 3,975,525 Financial assets not carrying interest 54,681,001 55,165,217 Financial liabilities not carrying interest (405,732) (359,986) 57,379,737 58,775,699 The non interest bearing financial assets are the investment in collective investment schemes, excluding sterling liquidity collective investment schemes, and current assets which do not have maturity dates. The floating rate financial assets comprise sterling denominated cash and bank balances (see note 10). Sterling denominated bank balances and overdrafts bear interest at the current Bank of England Bank Rate less 50 basis points for net credit positions and are charged at the current Bank of England Bank Rate plus 100 basis points for net overdrawn positions. c) Other price risk and sensitivity analysis The Fund is subject to other price risk as a result of its holdings in a range of collective investment schemes. This risk is managed by the careful management of the asset allocation to benchmarks and regular monitoring of the weighting of these funds in the portfolio. Other risk The Fund has minimal liquidity risk as it is invested in readily realisable collective investment schemes. These collective investment schemes have minimal credit risk in themselves and so the Fund is not significantly exposed to direct credit risk. 15 Fair value disclosure The fair value of the investment assets and liabilities of the Fund was determined as follows: 2015 2014 Assets Liabilities Assets Liabilities Prices of recent transactions for identical instruments 54,601,176 0 55,029,617 0 Portfolio of investments 54,601,176 0 55,029,617 0 There are no investment assets and liabilities for which the fair value is based on a valuation technique using either observable market data or non-observable data. 16 Stamp duty reserve tax Prior to the 1st April 2014 where units were transferred back to the Manager, a charge to stamp duty reserve tax (SDRT) could occur, being a liability of the Trustee. The SDRT charge was reduced where units sold back to the Managers exceed sales to unitholders and also to the degree that the assets of a trust consist of bonds and direct holdings of foreign equities. The Manager, as permitted by the regulations, offset SDRT against the capital values of each trust. The anticipated charge was of the order of 0.5% for trusts invested primarily in UK equities held either directly or indirectly via a collective investment scheme of which they represent more than 20% by market value. It represented a negligible amount for those invested primarily in cash, bonds or in foreign equities held either directly or indirectly via a collective investment scheme of which no more than 20% by market value was represented by UK equities. Where units were transferred between unitholders for money or money s worth, SDRT was also applied. In these circumstances the Manager reserved the right not to re-register the units until the liability to SDRT was discharged by either the transferor or transferee. With effect from 1st April 2014 SDRT for UK funds was abolished.

17 Registration fee The current rate of registration fee will increase automatically once a year in line with inflation. Inflation is measured by the change in the Retail Price Index (RPI) at the end of each year. With effect from 1 March 2015 the registration fee was increased from 14.11 to 14.34 per policy for the Fund. 18 Units in issue All units in issue are classified as income units which pay distributions net of basic rate tax deducted. Opening number of units 102,303,407 Number of units issued 2,817,639 Number of units cancelled (9,171,636) Closing number of units 95,949,410 Statement of Manager s Responsibilities The Manager is responsible for the management of the Fund in accordance with its Trust Deed, Prospectus and the Financial Conduct Authority s Collective Investment Schemes Sourcebook (COLL) and Investment Funds Sourcebook (FUND). These regulations require the Manager to prepare financial statements for each accounting period which give a true and fair view of the financial affairs of the Fund and of its income and expenditure for the period. In preparing the financial statements the Manager is required to: select suitable accounting policies and then apply them consistently. make judgements and estimates that are reasonable and prudent. comply with the disclosure requirements of the Statement of Recommended Practice for Authorised Funds issued by the Investment Management Association in May 2014. keep proper accounting records which enable the Manager to demonstrate that the financial statements as prepared comply with the above requirements. Statement of Trustee s Responsibilities The Trustee is responsible for the safekeeping of all the property of the Fund (other than tangible moveable property) which is entrusted to it and for the collection of income that arises from that property. It is the duty of the Trustee to take reasonable care to ensure that the Fund is managed in accordance with the Financial Conduct Authority s Collective Investment Schemes Sourcebook (COLL) and Investment Funds Sourcebook (FUND), as amended, the Fund s Trust Deed and Prospectus, in relation to the pricing of, and dealings in, units in the Fund; the application of income of the Fund; and the investment and borrowing powers of the Fund. Report of the Trustee Having carried out such procedures as we considered necessary to discharge our responsibilities as Trustee of the Fund, it is our opinion, based on the information available to us and the explanations provided, that, in all material respects, the Manager: has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Fund s units and the application of the Fund s revenue in accordance with COLL, FUND, the Trust Deed and Prospectus, and has observed the investment and borrowing powers and restrictions applicable to the Fund. National Westminster Bank Plc Trustee & Depositary Services 25 August 2015 London Independent Auditors Report to the Unitholders of Teachers Cautious Investment Fund We have audited the financial statements of the Teachers Cautious Investment Fund ( the Fund ) for the year ended 30 June 2015 which comprise the Statement of Total Return, the Statement of Change in Unitholders Funds, the Balance Sheet and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Respective Responsibilities of the Manager and Auditors As explained more fully in the Statement of Manager s Responsibilities, the Manager is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. The Trustee is required to take reasonable care to ensure compliance by the Manager with all relevant requirements. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s (APB s) Ethical Standards for Auditors. This report is made solely to the unitholders, as a body, in accordance with paragraph 4.5.12 of the rules of the Collective Investment Schemes Sourcebook of the Financial Conduct Authority. Our audit work has been undertaken so that we might state to the unitholders those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the unitholders as a body, for our audit work, for this report, or for the opinions we have formed. Basis of Audit Opinion A description of the scope of an audit of financial statements is provided on the Financial Reporting Council s web-site at www. frc.org.uk/auditscopeukprivate. Opinion on the financial statements In our opinion the financial statements: give a true and fair view of the financial position of the Fund as at 30 June 2015 and of the net income and the net gains on the property of the Fund for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been properly prepared in accordance with the Statement of Recommended Practice for Authorised Funds issued by the Investment Management Association in May 2014, the rules in the Collective Investment Schemes Sourcebook of the Financial Conduct Authority and the Trust Deed. Opinion on other matters prescribed by the Collective Investments Schemes Sourcebook of the Financial Conduct Authority In our opinion the information given in the Report of the Manager for the financial year for which the financial statements are prepared is consistent with the financial statements. We have received all the information and explanations, which, to the best of our knowledge and belief, are necessary for the purpose of our audit. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Collective Investment Schemes Sourcebook and Investment Funds Sourcebook of the Financial Conduct Authority requires us to report to you if, in our opinion: proper accounting records have not been kept; or the financial statements are not in agreement with the accounting records. Mazars LLP Chartered Accountants and Statutory Auditor 25 August 2015 London

Compliance with ISA Requirements Throughout the period, the affairs of the Fund have been conducted in such a way so as to meet the requirements of the Individual Savings Account Regulations 1998 (and their subsequent amendments). Remuneration Policy The Teachers Assurance (TA) group consists of four regulated firms, Teachers Provident Society (TPS), Teachers Assurance Company, Teachers Financial Services and Sovereign Unit Trust Managers (SUTM); SUTM manage the Alternative Investment Fund (AIF). SUTM does not have any direct employees. Employees of TA involved in the management and administration of the AIF do not have a material impact on the risk profile of the fund nor do they receive any type of remuneration directly as a result of their activities on behalf of SUTM or any based on the performance of the funds. The amount of remuneration paid to TA employees involved in the management and administration of the AIF has therefore not been disclosed in the Report as it is not materially relevant to the AIF. Periodic Disclosure The Fund does not currently hold assets of an illiquid nature. The Fund does not employ leveraging techniques. Information for Investors The full Prospectus for each of the Sovereign and Teachers Funds and copies of the most recent Manager s Reports are available free of charge from the Manager on request. Directors Statement This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook and Investment Funds Sourcebook as issued and amended by the Financial Conduct Authority. D H Furniss (Chairman) Sovereign Unit Trust Managers Limited I P Blanchard Sovereign Unit Trust Managers Limited 25 August 2015 Teachers Assurance is a trading name of Teachers Provident Society Limited (TPS), an incorporated friendly society No. 372F. Authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority. Sovereign Unit Trust Managers Limited is a wholly owned subsidiary of TPS, authorised and regulated by the Financial Conduct Authority entered on the Financial Services register no. 121998. Registered in England and Wales. Registered Office: Tringham House, Deansleigh Road, Bournemouth, BH7 7DT. 2657615