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LLOYDS
INVESTMENT FUNDS
LIMITED
Annual Report and
Audited Financial Statements
For the year ended 30 September 2016
Lloyds Investment Funds Limited
Contents
Company Information
2
Investment Objectives and Policy
3
Directors’ Profiles
4
Report of the Directors
5
Report of the Investment Manager
7
Report of the Custodian to the Members of Lloyds Investment Funds Limited
12
Report of the Independent Auditor to the Members of Lloyds Investment Funds
Limited
13
Statements of Financial Position
14
Statements of Comprehensive Income
18
Statements of Changes in Net Assets Attributable to Holders of Participating
Redeemable Preference Shares
20
Cash Flow Statements
22
Investment Dealing
26
Euro High Income Fund Investment Portfolio
27
European Fund Investment Portfolio
30
High Income Fund Investment Portfolio
32
International Fund Investment Portfolio
37
North American Fund Investment Portfolio
39
Sterling Bond Fund Investment Portfolio
41
UK Fund Investment Portfolio
45
Investments Purchased and Sold
48
Summary of Material Portfolio Changes
49
Notes to the Financial Statements
53
Distribution Tables (Unaudited)
84
Performance Record (Unaudited)
88
Net Asset Value per Share (Unaudited)
91
Notice of Meeting
92
Form of Proxy
93
1
Lloyds Investment Funds Limited
Company Information
Registered Office
Investment Manager
PO Box 160, 25 New Street,
St Helier,
Jersey, JE4 8RG,
Channel Islands.
Aberdeen Asset Investments Limited
Bow Bells House,
1 Bread Street,
London, EC4M 9HH.
Principal Place of Business
Custodian
Capita Trust Company (Jersey) Limited
PO Box 532, 12 Castle Street,
St Helier,
Jersey, JE2 3RT,
Channel Islands.
PO Box 311, 11 - 12 Esplanade,
St Helier,
Jersey, JE4 8ZU,
Channel Islands.
Directors
Secretary
c/o Registered Office
R. D. Willcox (Chairman)
I. M. J. Hardy
B. C. James
B. Lysiak
Lloyds Corporate Services (Jersey) Limited
PO Box 160, 25 New Street,
St Helier,
Jersey, JE4 8RG,
Channel Islands.
T. J. Herbert
PO Box 87, 22 Grenville Street,
St Helier,
Jersey, JE4 8PX,
Channel Islands.
Independent Auditor
PricewaterhouseCoopers CI LLP
37 Esplanade,
St Helier,
Jersey, JE1 4XA,
Channel Islands.
Manager and Registrar
Lloyds Investment Fund Managers Limited
PO Box 160, 25 New Street,
St Helier,
Jersey, JE4 8RG,
Channel Islands.
Paying Agent
Lloyds Bank International Limited
PO Box 111,
Peveril Buildings, Peveril Square,
Douglas,
Isle of Man, IM99 1JJ.
Legal Advisers
Mourant Ozannes
PO Box 87, 22 Grenville Street,
St Helier,
Jersey, JE4 8PX,
Channel Islands.
2
Lloyds Investment Funds Limited
Investment Objectives and Policy
International Fund
Lloyds Investment Funds Limited (‘the Company’) is an open-ended
investment company registered in Jersey with seven classes, each
being an individual ‘Fund’.
Objective
To seek long term capital appreciation through investment in
securities world-wide.
It is known as an ‘Umbrella’ Fund because it provides its
shareholders with a variety of investment options under the
umbrella of a single Company.
Investment Policy
To be invested primarily in a diversified portfolio of international
equities and from time to time in securities convertible into equities.
The overall objective of the Company is to provide investors with a
managed investment designed to meet the specific objectives laid
down for each Fund. The investment objectives and policy of each
Fund is set out below.
North American Fund
Objective
Euro High Income Fund
To seek long term capital appreciation through investment
in North American securities.
Objective
To maintain a high income through investment in a spread of fixed
interest securities denominated predominately in euro.
Investment Policy
To be invested primarily in a diversified portfolio of North
American equities and from time to time in securities convertible
into equities.
Investment Policy
To support the payment of dividends above the level of short term
euro interest rates. This policy will result in a gradual reduction in
the capital value of the shares, except when bond prices generally
are rising. The Fund will normally hold a relatively wide range of
securities in order to keep a low level of exposure to individual bond
issues other than government securities. The Fund may also hold
a substantial part of its assets in bank deposits and money market
instruments from time to time. The Fund is permitted to invest in
securities denominated in currencies other than euro. The current
policy of the Directors is that any such investments in non-euro
denominated securities should be fully hedged against euro to
eliminate the effects of any exchange rate movements.
Sterling Bond Fund
Objective
To provide a regular income from a managed portfolio of sterling
fixed interest securities with a particular emphasis on those
securities on which interest is paid gross to non-residents of the
United Kingdom.
Investment Policy
The assets of the Fund are generally invested in a managed portfolio
of sterling fixed interest securities which have been issued by
governments, local authorities, public utilities and corporations.
If it appears advisable to hold assets having a short term maturity,
then the Fund may also place money on bank deposit (subject to
certain limitations) or to purchase money market instruments.
European Fund
Objective
To seek long term capital appreciation through investment in
European securities.
Similarly, derivative instruments such as traded options
and financial futures may be used to reduce risk.
Investment Policy
UK Fund
To be invested primarily in a diversified portfolio of European
(excluding the United Kingdom) equities and from time to time in
securities convertible into equities.
Objective
To seek long term capital appreciation through investment
in United Kingdom securities.
High Income Fund
Investment Policy
Objective
To be invested primarily in a diversified portfolio of United Kingdom
equities and from time to time in securities convertible into equities.
To seek a high income from a spread of fixed interest securities.
Investment Policy
Financial risk
To support the payment of dividends above the level of short term
sterling interest rates. This policy will result in a gradual reduction in
the capital value of the shares, except when bond prices generally
are rising. The Fund will normally hold a relatively wide range of
securities in order to keep a low level of exposure to individual bond
issues other than government securities. The Fund may also hold
a substantial part of its assets in bank deposits and money market
instruments from time to time. The Fund is permitted to invest in
securities denominated in currencies other than sterling. The current
policy of the Directors is that any such investments in non-sterling
denominated securities should be fully hedged against sterling to
eliminate the effects of any exchange rate movements.
It should be remembered that the price of shares and the income
from them can go down as well as up and is not guaranteed.
Consequently, and particularly in the case of early encashment, you
might not get back the amount originally invested. Dividends are not
guaranteed and may fluctuate in money terms.
3
Lloyds Investment Funds Limited
Directors’ Profiles
Brian Charles James – Head of Investment Operations Jersey,
Retail, Lloyds Banking Group.
Ross Davey Willcox (Chairman) – Head of International Products,
Retail, Customer Products, Lloyds Banking Group.
Joined the Lloyds Banking Group in 1977 and held a number of
managerial positions in the UK and Internationally. Was appointed
Managing Director of the Lloyds Investment Fund Managers Limited
in 1999 and is currently Chairman/Director of the Jersey based Fund
Management Company. Current responsibilities include the value
proposition of all investment products for International Wealth. A
qualified Banker, a Fellow of the Securities & Investment Institute and
a Chartered Director.
Aged 57.
Joined the Lloyds Banking Group in 1988 and held a number
of managerial positions primarily in Financial Control and Risk
Management roles before being appointed as a Director of the
Jersey based Fund Management Company and as a Director of the
Company in 1997. Current responsibilities include leading a team
of specialists delivering operational support for a range of offshore
investment products and services. A Chartered Director.
Aged 55.
Bronislaw Lysiak – Senior Manager Intermediary Sales, Lloyds
Bank International Limited, Lloyds Banking Group.
Ian Mark Jeremie Hardy – Senior Product Manager,
International Products, Retail, Lloyds Banking Group.
Joined the Lloyds Banking Group in 1993 and has held a number
of managerial positions within a regulated personal customer
environment. Current responsibilities are for sales and distribution
of investment products to regulated intermediaries and institutions.
Holder of an Advanced Financial Planning Certificate in Taxation,
Trust and Investment Planning and Higher National Diploma in
Business and Finance.
Aged 52.
Joined the Lloyds Banking Group in 1981 and held a number of
managerial positions before being appointed Managing Director of
the Group’s Guernsey based Fund Management Company in 1997
and a Director of the Company in 2000. Current responsibilities
include provision of technical and regulatory advice on a range of
investment products and services. Holder of an upper second class
honours degree from the University of Aston in Birmingham in
Business Administration and Transport Planning.
Aged 57.
Timothy Joseph Herbert – Consultant, Mourant Ozannes.
Jersey born and educated. M.A. in jurisprudence Trinity College
Oxford 1982. Member of Middle Temple. Joined Mourant du Feu &
Jeune (now Mourant Ozannes) in May 1983. Sworn in as an advocate
of the Royal Court, September 1985. Tim Herbert was a partner of
Mourant Ozannes from 1987 to 2012. In July 2012 he stepped down
from the partnership and is now retained by Mourant Ozannes as
a consultant to the firm. He has extensive experience in corporate
and commercial law and mutual funds advice. Holds other external
directorships and also acts as Honorary Consul for Finland.
Aged 57.
4
Lloyds Investment Funds Limited
Report of the Directors
Prospectus
The Directors have pleasure in submitting their Annual Report
together with the Audited Financial Statements for the year ended
30 September 2016. The Company is domiciled and incorporated
as a limited liability company in Jersey, Channel Islands, United
Kingdom under the Companies (Jersey) Law 1991 and is listed on
the Channel Islands Securities Exchange Authority and the Malta
Stock Exchange. Full details of the Company are stated on pages 2
to 6.
Copies of the Prospectus are available, free of charge, on application
to the Manager. Alternatively they can be accessed on our website at
http://international.lloydsbank.com/international-investments/
funds/
Management and Administration Providers
The names and addresses of management and administration
providers are stated on page 2.
Results
The results for the year are set out in the financial statements on
pages 14 to 83.
Comparatives Tables
The Distribution Tables (unaudited), Performance Records
(unaudited) and Net Asset Value per Share tables (unaudited) are
stated on pages 84 to 91.
Distributions
Distributions for the year are detailed in Note 5 to the financial
statements.
Directors’ Responsibilities
The Directors are responsible for preparing the financial statements
in accordance with applicable law and International Financial
Reporting Standards (IFRS). The Directors are required by the
Companies (Jersey) Law 1991 to prepare financial statements
for each financial year which give a true and fair view of the state
of affairs of the Company for that year and are in accordance
with applicable laws. In preparing these financial statements the
Directors are required to:
Directors
The Directors of the company who were in office during the year and
up to the date of signing the financial statements were:
Mr I.M.J. Hardy ( appointed 8 May 2000)
Mr T.J. Herbert (appointed 11 February 2005)
Mr B.C. James (appointed 12 March 1997)
Mr B. Lysiak (appointed 5 June 2014)
Mr R.D. Willcox (appointed 31 July 1998)
• select suitable accounting policies and then apply
them consistently;
As at 30 September 2016, the Shares held in the Company by the
Directors were as follows:
Mr I. M. J. Hardy International Fund • make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been
Shares
followed subject to any material departures disclosed and
explained in the financial statements; and
4,441.80
No Director has a service contract with the Company and no Director
is, or was, materially interested in any service or other contract
entered into by the Company.
• prepare the financial statements on the going concern basis
Mr T.J. Herbert is a consultant to Mourant Ozannes, who are the
Jersey legal advisers to the Company and the Manager. Mourant
Ozannes receives fees in connection with advising the Company and
the Manager. These are disclosed in Note 10.
The Directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the Company and to enable them to ensure that the
financial statements comply with the Companies (Jersey) Law 1991
and the Collective Investment Funds (Recognized Funds) (Rules)
(Jersey) Order 2003 (as amended).
unless it is inappropriate to presume that the Company will
continue in business.
Mr B.C. James, Mr I.M.J. Hardy and Mr R.D. Willcox (Chairman)
are Directors of Lloyds Investment Fund Managers Limited (the
‘Manager’) which has a management contract with the Company.
Fees earned by the Manager are disclosed in these financial
statements in note 9.
They are also responsible for the safeguarding of the assets of
the Company which includes the appointment of a duly qualified
Custodian. The Directors must also ensure that they or their
duly appointed agents take reasonable steps for the prevention
and detection of fraud, error and non-compliance with law and
regulations.
Investment Activities
The Report of the Investment Manager is set out on pages 7 to 11.
Independent Auditor
The Directors confirm that they have complied with the above
requirements in preparing the financial statements.
PricewaterhouseCoopers CI LLP were re-appointed as Independent
Auditor at the Annual General Meeting held on 16 March 2016 and
have indicated their willingness to remain in office.
So far as the Directors are aware, there is no relevant audit
information of which the Company’s Auditors are unaware, and
each Director has taken all the steps that he ought to have taken
as Director, in order to make himself aware of any relevant audit
information and to establish that the Company’s Auditors are
aware of that information.
5
Lloyds Investment Funds Limited
Report of the Directors (continued)
Market Conditions
The market value per Share of the assets of each Fund was as
follows:
Assets held within certain Funds can be affected by market
conditions and this may affect the share price of those Funds. The
Directors would like to remind shareholders that investment in the
Funds should be considered as a long term commitment, as the price
of shares may rise and fall in the short term in response to changing
market conditions.
Sterling Denominated Strategies
30 September
2016
1 October
2015
(pence)
(pence)
European Fund
Information Exchange
Jersey has entered into a number of information exchange
agreements with the authorities of other jurisdictions. These include
requirements set out under The European Union Savings Tax
Directive (EUSD), Foreign Account Tax Compliance Act (FATCA) in
the United States of America, Corporate Reporting Standards (CRS)
and UK Crown Dependencies Inter Governmental Agreements.
871.23
716.60xd
High Income Fund
92.50
85.60xd
International Fund
489.38
380.90xd
1,882.32
1,479.00xd
Sterling Bond Fund
160.28
144.80xd
UK Fund
709.44
642.90xd
(Euro cents)
(Euro cents)
167.49
158.90xd
North American Fund
Euro Denominated Strategies
Shareholders should be aware that information on their investment
may be shared with the relevant authorities, and may be passed
to the tax authorities in their country of residence, citizenship
or residence for tax purposes. For the avoidance of doubt
this information may include (but not be limited to) details of
shareholder names, addresses, unique identifiers (such as tax or
national insurance numbers), amount of investment, redemption or
sale proceeds and dividend payments.
Euro High Income Fund
The latest prices can be viewed on our website.
http:// international.lloydsbank.com/international-investments/
funds/prices/
Website
The Directors have selected Lloyds Bank International Limited’s
website as the host website for the Company’s financial statements
and believe this selection to be a reasonable one; the work carried
out by the Auditors does not involve consideration of these matters
and, accordingly, the Auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the website.
Financial Risk Management
The Directors have taken into consideration the financial risk
management of the Company, this has been disclosed in Note 19 of
the financial statements.
Reporting Funds Regime
Information published on the internet is accessible in many
countries. Legislation in Jersey governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
HM Revenue & Customs has accepted the entry of the Company into
the Reporting Funds Regime with effect from 1 October 2010 for the
purposes of regulation 51 of the Offshore Funds (Tax) Regulations
2009.
By order of the Board
Lloyds Corporate Services (Jersey) Limited
Secretary
General Information
The Company is an open-ended investment Company with variable
capital and shareholders are not liable for the debts of the Company.
16 December 2016
The Company holds a certificate as a recognized Securities Fund
under the Collective Investment Funds (Recognized Funds) (Rules)
(Jersey) Order 2003 (as amended), and holds a permit under Article
7 of the Collective Investment Funds (Jersey) Law, 1988.
The Manager maintains an appropriate level of “own funds” to cover
the professional liability risks.
The Company is listed on the Channel Islands Securities Exchange
Authority (the “CISEA”) and the Malta Stock Exchange.
6
Lloyds Investment Funds Limited
Report of the Investment Manager
Euro High Income Fund
From July onwards we reduced overall credit exposure for
clients, particularly in cyclically sensitive areas such as financials.
Furthermore, we kept duration positions close to index levels
and asset allocation between sectors was reduced, leaving fund
performance to come through from stock selection.
Performance
The Fund produced a return of 8.7% over the period ended 30
September 2016, compared to a return of 11% in the iBOXX Euro
Corporates 5 years + index.
Outlook
Background and Strategy
The outlook for bond yields and therefore returns from the asset
class are somewhat mixed. Yields have started to rise in developed
markets as the efficacy of monetary policy actions is being
challenged. Credit spreads appear well supported but volatility
around the US election and Italian referendum can be expected.
During the first three months of the review period, corporate bonds
outperformed government bonds as risk premiums fell. The Federal
Reserve acted on policy rates moving the target for funds up by 25
basis points in December. Bonds issued by companies with exposure
to commodity prices were among the worst performers, while those
issued by banks and insurers performed well, reflecting a significant
improvement in credit fundamentals. These market moves
benefitted the fund.
European Fund
Performance
The Fund produced a return of 22.5% over the period ended 30
September 2016, compared to a return of 21.8% in the Lipper
Hindsight European excluding UK Equity sector.
Moving into 2016, risk assets had a very poor January as global
markets started the year in panic mode. Fears over a faltering
Chinese economy, general emerging markets weakness and the
collapse in oil price were triggers for wider risk aversion. European
investment grade credit was not immune to the selloff, although it
was relatively resilient compared to equities and emerging markets
linked assets. February was very volatile month for European
investment grade credit. Euro denominated bond spreads widened
sharply in the first half of the month before rebounding strongly.
Supportive central bank comments together with a halt in the fall of
oil appeared to be the catalysts for the shift in sentiment. However
sterling spreads materially underperformed, failing to retrace in the
second half of the month as fears around the UK referendum on
European Union membership kept them elevated.
Background and Strategy
European equities rose in the year under review, marked by distinct
halves. Initially, investors were spooked by a sell-off in Chinese
equities and a sustained fall in oil prices. Mitigating the declines
were the US Federal Reserve’s well-telegraphed interest-rate
normalisation and the European Central Bank’s bolder-thanexpected package of fresh stimulus. Subsequently, share prices
rebounded from the sell-off following the shock Brexit vote. The
backlash was swift: global stock markets plunged; sterling sank to a
30-year low against the US dollar; and David Cameron stepped down
as prime minister. Subsequently, risk appetites returned amid relief
from the smooth change in the political leadership and a rebound in
oil prices. However, the gains were capped by worries over Deutsche
Bank’s troubles.
Further monetary easing from the European Central Bank (ECB)
and in particular the surprise announcement that non-financial
investment grade corporate bonds would be purchased by the
central bank contributed to a sharp contraction in credit spreads
in March. Spreads were further supported by a modest bounce in
commodity prices.
In economic news, the Eurozone expanded in the second quarter
on foreign demand, with employment growing at a steady pace.
Economic sentiment rebounded to an eight-month high in
September, underpinned by rising confidence among industrialists
and retailers, with consumers cautiously optimistic. Conversely,
inflation rose to its highest since late 2014 but remained well
below the ECB’s target. Private sector growth was the slowest in 20
months, with positive manufacturing activity counterbalanced by
the sluggish services sector.
The lead into the UK’s EU referendum at the end of June was one of
falling yields but stable credit yield spreads. This perhaps reflected
the uncertainty of the vote’s impact, balanced by the start of the
ECB’s Corporate Sector Purchase Programme.
However, this uncertain market backdrop was soon replaced by
strong performance of risk assets and some very strong returns in
credit markets. Confidence swiftly returned as European markets
also rallied strongly with ECB corporate bond purchases once again
providing some positive momentum.
Despite the difficult environment for credit in the early part of 2016,
the Fund’s total return was strong due to a sharp fall of underlying
government bond yields. For example, 10-year German bond
yields fell between from 0.63% on 31 December to -0.12% on 30
September.
7
Lloyds Investment Funds Limited
Report of the Investment Manager (continued)
European (continued)
High Income Fund
Outlook
Performance
Global growth looks set to improve next year, aided by an on-going
recovery in the US, both Russia and Brazil exiting recession and a
Chinese economy that increasingly looks to have stabilised, albeit
at levels of expansion below those enjoyed previously. However,
the risks posed by Brexit, the fragility of the European banking
system and US presidential elections mean that there are significant
uncertainties facing investors, companies and consumers.
The Fund produced a return of 13.8% over the period ended 30
September 2016, compared to a return of 15.5% in the iBoxx Non Gilt
ex Sovereign All Maturities index.
Background and Strategy
Corporate bonds outperformed government bonds in the first three
months of the review period. The UK Federal Reserve finally acted
on policy rates moving the target for funds up by 25 basis points in
December. This action was widely anticipated by financial markets.
However, some volatility returned at the end of 2015, as investors
became cautious about the outlook for the year ahead.
OPEC aims to reduce supply for the first time since 2008, good news
for those with exposure to the sector as reflected in the rebound in
oil prices. However, history shows that compliance with such quotas
is often weak and only time will tell if this will genuinely lead to a
structural re-balancing between supply and demand.
That volatility continued into the new year, which began with a
very negative tone and some significant re-pricing of corporate
bonds. Credit spreads across all sectors moved materially wider as
slower global growth, and greater risk of some stress in the financial
sector, was priced in. That weakness continued into February. While
developed market government bonds were the safe haven, driving
up prices and causing government bond yields to fall materially,
credit spreads continued to widen and overall returns were negative
both in January and February. In contrast credit markets received
a significant boost from European Central Bank (ECB) actions
in March. The introduction of further monetary easing and new
measures, including a corporate bond buying programme, had a
very positive impact causing credit spreads in the sterling market to
tighten significantly.
Sterling has continued to weaken as markets have focused on the
risks of a so-called hard Brexit. It remains much too early to tell what
the ramifications of leaving the EU will be. It is notable that, as more
data becomes available, some of the more downbeat prognosis
have been forced to shift to less extreme positions. In the meantime,
sterling weakness is being regarded as a positive for the profitability
of many UK companies, especially the larger ones and hence, the
optimism in equity markets. That holds true to a point but devaluing
the currency is not a panacea. It brings with it the risk of future
inflation, particularly at a time when the tools conventionally used to
control rising prices are unavailable.
The lead into the UK’s EU referendum at the end of June was
one of falling yields but stable credit yield spreads. This perhaps
reflected the uncertainty of the vote’s impact, balanced by the
start of the ECB’s Corporate Sector Purchase Programme. However,
this uncertain market backdrop was soon replaced by strong
performance of risk assets and some very strong returns in credit
markets. Investors preferred to focus on the shorter term news flow,
which included a further loosening of monetary policy by the Bank of
England. While sterling was weak, reflecting those policy decisions
and the increased likelihood of a slowdown in economic activity, UK
investment grade bonds performed very strongly.
Throughout the first half of the review period, the Fund was long
of credit risk on the grounds that credit spreads offered compelling
value. A short duration position relative to the benchmark reflected
the low level of government bond yields, and a view that in the
medium term UK yields would be moving higher.
From July onwards we reduced overall credit exposure for
clients, particularly in cyclically sensitive areas such as financials.
Furthermore, we kept duration positions close to index levels
and asset allocation between sectors was reduced, leaving fund
performance to come through from stock selection.
8
Lloyds Investment Funds Limited
Report of the Investment Manager (continued)
High Income Fund (continued)
Meanwhile, positive stock selection in Japan boost performance,
as Daito Trust Construction benefited from lower financing costs in
Japan, which led to an influx in rental housing orders. Similarly, our
non-benchmark exposure to Brazil contributed to performance, as
confidence in its economy climbed after suspended President Dilma
Rousseff was ousted and Michel Temer was formally sworn into
office.
Outlook
The High Income Bond Fund remains long of credit risk as spreads
continue to offer compelling value. Bond issued by banks and
insurers, whilst not without risk, are strongly favoured with UK
institutions and old style instruments favoured. The Bank of England
is purchasing corporate bonds as part of its quantitative easing
programme and bonds which fit the criteria are favoured.
Outlook
International Fund
Global growth seems to be faltering again, particularly in developed
economies, which are suffering from sluggish investment and
tepid private sector confidence. At the same time, mixed economic
data has led to uncertainty over whether the Federal Reserve
will hike interest rates by the end of the year. In addition, political
risks, namely, the outcome of the US presidential election and the
triggering of Article 50 by the UK, under which the UK will begin the
formal Brexit negotiation process, are likely to add to volatility. Major
central banks have started to realise that prolonged easy monetary
policy lacks the muscle to boost growth, and we are beginning to see
the return of fiscal stimulus, notably in Japan and China.
Performance
The Fund produced a return of 30.4% over the period ended
30 September 2016, compared to a return of 30.6% in the
LipperHindsight Global Equity sector.
Background and Strategy
Global equities rose during the volatile year under review, with major
central banks’ monetary policies weighing on sentiment. Initially,
markets were spooked when the US Federal Reserve hiked interest
rates for the first time in a decade. Plunging oil prices, on the back
of failure by OPEC members to set an oil production ceiling despite
an already oversupplied market, sent shockwaves throughout stock
markets. Subsequently, investors found relief as tepid economic
data and persistent deflationary pressures forced the Fed to keep
rates unchanged for the rest of the year. Sentiment picked up
dramatically after Japan and parts of Europe unexpectedly imposed
negative interest rates to combat low inflation and boost spending.
The change in tone resulted in US dollar weakness, which provided
relief to commodities and commodity related emerging markets
such as Brazil. Towards the end of the period, oil prices received
a further boost when OPEC members reached a preliminary deal
to curb production. Elsewhere, markets recovered quickly from
the temporary jolt of Britain’s unexpected decision to leave the
European Union, as central banks pledged to help stabilise the
financial markets.
Elsewhere, the outlook for commodities is murky, with the slowdown
in China plaguing iron ore demand and hurdles still unresolved in the
tentative deal among OPEC members to limit production. Despite
such a challenging environment, we continue to have faith in our
bottom up investment process.
We remain focused on quality, and will seek opportunities to
build our positions in well-managed businesses that are trading at
attractive valuations.
North American Fund
Performance
The Fund produced a return of 29.6% over the period ended 30
September 2016, compared to a return of 34.6% in the Lipper
Hindsight North American Equity sector.
The fund rose by 32.27% during the year under review,
outperforming the benchmark’s total return of 30.64%. Stock
selection and asset allocation were positive, while currency effects
were negative.
Background and Strategy
US equities posted solid gains for the 12 month period ended
September 30, 2016 amid generally positive economic data reports
and increasing clarity on US Federal Reserve (Fed) monetary policy.
All 10 sectors within the US broader-market S&P 500 Index recorded
positive returns for the review period. The telecommunication
services and information technology sectors were the strongest
performers, while the financials and consumer discretionary sectors
were the primary market laggards.
During the year, our non-benchmark exposure to South Africa
cost the fund, amid concerns of weak economic growth and
political instability. In particular, our holding MTN Group fell, after
the Nigerian regulator suspended negotiations over a US$3.9
billion fine for missing the deadline to disconnect unregistered
SIM cards. The overweight to the UK also cost the fund, due to
sterling weakness post-Brexit. In addition, Swiss-based Novartis
detracted from performance, in line with the broader healthcare and
pharmaceuticals sectors, due to increased pricing scrutiny.
The Fed raised its benchmark interest rate by 25 basis points to
a range of 0.25%-0.50% at its meeting in December 2015, and
subsequently left the rate unchanged over the next nine months. US
GDP grew by a relatively slow but sustainable year-over-year pace of
1.1% to 2.0% in each quarter during the period. While U.S. payrolls
grew by a monthly average of 166,000 over the review period, the
unemployment rate was little changed at 5.0%, as more workers
entered the job market.
In contrast, our non-benchmark exposure to Taiwan benefited the
fund, as the market was buoyed by foreign demand for large-cap
stocks. Our position in Taiwan Semiconductor performed well, as it
rose in line with the semiconductor sector.
9
Lloyds Investment Funds Limited
Report of the Investment Manager (continued)
North American Fund (continued)
Sterling Bond Fund
Background and Strategy (continued)
Performance
The Fund produced a return of 14.9% over the period ended 30
September 2016, compared to a return of 15.5% in the iBoxx Non Gilt
ex Sovereign All Maturities Index.
The Fund’s underperformance versus the benchmark S&P 500 Index
for the review period was attributable mainly to stock selection in
the information technology and consumer discretionary sectors.
Background and Strategy
The primary individual stock detractors were IT services provider
Cognizant Technology Solutions and marketing and loyalty solutions
services provider Alliance Data Systems. Shares of Cognizant
Technology underperformed as the company faced questions
about the pace of revenue growth. Additionally, towards the end of
the review period, Cognizant’s president, Gordon Coburn, resigned
following an internal investigation into whether certain payments
the company made relating to facilities in India were in violation of
the US Foreign Corrupt Practices Act. Alliance Data Systems was
hampered by relative weakness in its Epsilon business segment and
concerns about rising credit losses, which have yet to materialize.
Corporate bonds outperformed government bonds in the first three
months of the review period. The UK Federal Reserve finally acted
on policy rates moving the target for funds up by 25 basis points in
December. This action was widely anticipated by financial markets.
However, some volatility returned at the end of 2015, as investors
became cautious about the outlook for the year ahead.
That volatility continued into the new year, which began with a
very negative tone and some significant re-pricing of corporate
bonds. Credit spreads across all sectors moved materially wider as
slower global growth, and greater risk of some stress in the financial
sector, was priced in. That weakness continued into February. While
developed market government bonds were the safe haven, driving
up prices and causing government bond yields to fall materially,
credit spreads continued to widen and overall returns were negative
both in January and February. In contrast credit markets received
a significant boost from European Central Bank (ECB) actions
in March. The introduction of further monetary easing and new
measures, including a corporate bond buying programme, had a
very positive impact causing credit spreads in the sterling market to
tighten significantly.
Stock selection in industrials and health care bolstered Fund
performance for the period. The largest contributors among
individual holdings included diversified health care company
Baxter Intl and semiconductor manufacturer Texas Instruments.
Baxter Intl benefited from healthy revenue growth in its hospital
products segment and its US business over the review period.
Texas Instruments’ results for the first two quarters of 2016 were
bolstered by record-high margins attributable mainly to a reduction
in manufacturing costs and a switch in production from 200 to 300
millimeter semiconductor wafers.
The lead into the UK’s EU referendum at the end of June was
one of falling yields but stable credit yield spreads. This perhaps
reflected the uncertainty of the vote’s impact, balanced by the
start of the ECB’s Corporate Sector Purchase Programme. However,
this uncertain market backdrop was soon replaced by strong
performance of risk assets and some very strong returns in credit
markets. Investors preferred to focus on the shorter term news flow,
which included a further loosening of monetary policy by the Bank of
England. While sterling was weak, reflecting those policy decisions
and the increased likelihood of a slowdown in economic activity, UK
investment grade bonds performed very strongly.
Outlook
With the Fed’s September announcement behind us our broader
outlook from prior months is largely unchanged.
The company fundamentals have generally remained stable through
a trickle of US economic data showing slow and steady improvement
as global growth has maintained a more measured pace. For the
overall US equity market, valuations have expanded in aggregate but
still appear to be fair in the context of underlying earnings growth,
in our opinion. However, we believe that valuations of high dividend
paying companies remain extended beyond fundamental fair value
as a result of their favourable yield spreads compared to risk-free US
Treasury securities.
From July onwards we reduced overall credit exposure for
clients, particularly in cyclically sensitive areas such as financials.
Furthermore, we kept duration positions close to index levels
and asset allocation between sectors was reduced, leaving fund
performance to come through from stock selection.
Amid this landscape, we feel that the task for us active managers
is to remain carefully selective as we sift through the investable
universe.
Throughout the review period we have favoured subordinated
bank paper issued by banks in stronger jurisdictions. In the sterling
area, Aviva, Prudential, RBS and Lloyds Banking Group all remain
attractive. Exposure to telecoms is being pared back but remains an
overweight. A neutral duration position is being maintained.
10
Lloyds Investment Funds Limited
Report of the Investment Manager (continued)
Sterling Bond Fund (continued)
Sterling has continued to weaken as markets have focused on the
risks of a so-called hard Brexit. It remains much too early to tell what
the ramifications of leaving the EU will be. It is notable that, as more
data becomes available, some of the more downbeat prognoses
have been forced to shift to less extreme positions. In the meantime,
sterling weakness is being regarded as a positive for the profitability
of many UK companies, especially the larger ones and hence, the
optimism in equity markets. That holds true to a point but devaluing
the currency is not a panacea. It brings with it the risk of future
inflation, particularly at a time when the tools conventionally used to
control rising prices are unavailable.
Outlook
As markets recovered following the ECB’s March meeting,
financials lagged the recovery. Nevertheless, despite the recent
underperformance, financials remain favoured relative to nonfinancials on both fundamental and valuation grounds.
We continue to favour subordinated bank paper issued by banks in
stronger jurisdictions such as the UK where banks such as RBS and
Lloyds Banking Group have addressed their balance sheet issues
with a degree of success over recent years.
Throughout the review period, the Fund was long of credit risk on
the grounds that credit spreads offer compelling value.
UK Fund
This report is solely for information purposes and is not intended
to be and should not be construed as an offer or recommendation
to buy and sell investments, nor shall it form the basis or part of any
contract to be relied upon in any way.
Performance
The Fund produced a return of 14.6% over the period ended 30
September 2016, compared to a return of 16.8% in the Lipper
Hindsight UK Offshore Funds sector.
Aberdeen Assets Investments Limited
Background and Strategy
16 December 2016
Most UK equities rose in the year under review. Initially, investors
were spooked by a sell-off in Chinese equities and a sustained fall in
oil prices. Mitigating the declines were the US Federal Reserve’s welltelegraphed interest-rate normalisation and the European Central
Bank’s bolder-than-expected package of fresh stimulus. Investors
were also cheered by the Bank of England’s interest rate cut, which
left the official lending rate at a new low of 0.25%, as well as sterling’s
fall to its lowest level since Britain’s shock vote to exit the European
Union in June. The backlash to that historic decision was swift: global
stockmarkets tumbled; sterling fell to a 30-year low against the US
dollar; and David Cameron stepped down as the prime minister.
Since then, however, market benchmarks have bounced back and
approached their highest in more than 14 months. Sentiment has
steadily recovered, helped by robust corporate results and dovish
comments from major central banks, particularly the Fed, which
continued to hold interest rates steady in the face of still-lacklustre
jobs data. However, the benchmark’s gains were capped by worries
over Deutsche Bank’s troubles.
Outlook
Global growth looks set to improve next year, aided by an on-going
recovery in the US, both Russia and Brazil exiting recession and a
Chinese economy that increasingly looks to have stabilised, albeit
at levels of expansion below those enjoyed previously. However,
the risks posed by Brexit, the fragility of the European banking
system and US presidential elections mean that there are significant
uncertainties facing investors, companies and consumers.
OPEC aims to reduce supply for the first time since 2008, good news
for those with exposure to the sector as reflected in the rebound in
oil prices. However, history shows that compliance with such quotas
is often weak and only time will tell if this will genuinely lead to a
structural re-balancing between supply and demand.
11
Lloyds Investment Funds Limited
Report of the Custodian to the Members of Lloyds Investment Funds Limited
Statement of Custodian’s Responsibilities.
The Custodian is required under the Collective Investment Funds
(Recognized Funds) (Rules) (Jersey) Order 2003 (as amended)
(the ‘Rules’) to ensure that, inter alia, it:
• satisfies itself that the sale, issue, redemption, cancellation and
valuation of shares in the Company are carried out in accordance
with the Rules; and
• takes into its custody all the assets of the Company and holds
them in trust for the shareholders in accordance with the
Rules; and
• enquires into the conduct of the Company in each annual
accounting year and reports thereon to shareholders in a report,
which shall contain the matters prescribed by the Rules.
The Custodian’s Report is included in this Annual Report.
Report of the Custodian to the Members of Lloyds
Investment Funds Limited
In accordance with Article 2.06 of the Rules, Capita Trust Company
(Jersey) Limited, has acted throughout the year as independent
Custodian to the Company.
In accordance with Article 7.08 of the Rules we confirm, in our
capacity as the Custodian, that we have enquired into the conduct
of the Company for the year ended 30 September 2016 and in our
opinion, to the best of our knowledge having made such enquiry, the
affairs of the Company have been conducted in all material respects
for the year then ended:
• in accordance with the limitations imposed on the investment
and borrowing powers of the Company by the Memorandum and
Articles of Association, by prospectuses and by all Orders for the
time being in force under Article 11 of the Collective Investment
Funds (Jersey) Law 1988 (as amended) (‘the Law’); and
• otherwise in accordance with the provisions of the Memorandum
and Articles of Association and the Law.
Capita Trust Company (Jersey) Limited,
Custodian,
12 Castle Street, St Helier,
Jersey, JE2 3RT
Channel Islands
16 December 2016
12
Lloyds Investment Funds Limited
Report of the Independent Auditors to the Members of Lloyds Investment Funds
Limited
Report on the financial statements
Opinion
We have audited each of the accompanying financial statements
of Lloyds Investment Funds Limited (“the Company”) and the
separate financial statements of each Fund listed below (together
“the Financial Statements”). The Financial Statements comprise
the Statements of Financial Position as of 30 September 2016 and
the Statements of Comprehensive Income, Statements of Changes
in Net Assets Attributable to Holders of Participating Redeemable
Preference Shares, the Cash Flow Statements and the Investment
Portfolios for the year then ended and a summary of significant
accounting policies and other explanatory information.
In our opinion, the Financial Statements give a true and fair view
of the financial position of the Company and the Funds as of 30
September 2016, and of their financial performance and their cash
flows for the year then ended in accordance with International
Financial Reporting Standards and have been properly prepared
in accordance with the requirements of the Companies (Jersey)
Law 1991 and the Collective Investment Funds (Recognized Funds)
(Rules)(Jersey)Order 2003 (as amended).
Report on other legal and regulatory requirements
We read the other information contained in the Annual Report
and consider the implications for our report if we become aware of
any apparent misstatements or material inconsistencies with the
financial statements. The other information comprises the company
information, the investment objectives and policy, the Directors’
profiles, the Report of the Directors, Report of the Investment
Manager, the Report of the Custodian to the Members of Lloyds
Investment Funds Limited, the Investment Dealing, the Investments
Purchased and Sold, the Summary of Material Portfolio Changes, the
distribution table (Unaudited), the performance record (Unaudited),
the net asset value per share (Unaudited), the notice of meeting and
the form of proxy.
The Funds are:
• Euro High Income Fund
• European Fund
• High Income Fund
• International Fund
• North American Fund
• Sterling Bond Fund
• UK Fund
Respective responsibilities of directors and auditors
The Directors are responsible for the preparation of financial
statements that give a true and fair view in accordance with
International Financial Reporting Standards and with the
requirements of the Companies (Jersey) Law 1991 (and the
Collective Investment Funds (Recognised Funds)(Rules)(Jersey)
Order 2003 (as amended)). The Directors are also responsible for
such internal control as they determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In our opinion the information given in the Report of the Directors is
consistent with the Financial Statements.
This report, including the opinion, has been prepared for and only
for the Company’s members as a body in accordance with Article
113A of the Companies (Jersey) Law 1991, and part 4 of the Rules
Schedule 3 of the Collective Investment Funds (Recognized Funds)
(Rules)(Jersey)Order 2003 (as amended) and for no other purpose.
We do not, in giving this opinion, accept or assume responsibility
for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Auditors’ responsibilities
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those
Standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance whether
the financial statements are free from material misstatement.
Rebecca Brewer
For and on behalf of PricewaterhouseCoopers CI LLP
Chartered Accountants
Jersey, Channel Islands
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the Auditors’ judgement, including
the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the Auditor considers internal control relevant to the
entity’s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by
the Directors, as well as evaluating the overall presentation of the
financial statements.
16 December 2016
The maintenance and integrity of the Lloyds Investment Funds Limited
(http://international.lloydsbank.com/international-investments/funds/
uk/) website is the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and, accordingly,
the auditors accept no responsibility for any changes that may have
occurred to the financial statements since they were initially presented on
the website.
Legislation in Jersey governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
13
Lloyds Investment Funds Limited
Statements of Financial Position
As at 30 September 2016
Notes
Company
Euro High Income
Fund
European
Fund
£
€
£
Assets
Current Assets
Cash and cash equivalents
7,398,978
326,014
117,349
27,993
—
5,637
193,954
—
171,456
373,032,529
15,248,556
14,213,725
7,226,964
247,623
—
387,880,418
15,822,193
14,508,167
Equity
Ordinary share capital
1,000
—
—
Total Equity
1,000
—
—
Cancellation payable
269,604
10,032
—
Investment purchases payable
101,334
—
23,447
Creations receivable
Investment sales receivable
Financial assets at fair value through
profit or loss
Other accrued income and other debtors
4
Total Assets
Current Liabilites
Distribution payable
5
1,620,876
105,980
—
Accrued expenses and other creditors
6
527,616
25,098
35,835
Nominal shares
14
1,333,160
3,852,590
141,110
59,282
384,026,828
15,681,083
14,448,885
387,880,418
15,822,193
14,508,167
Total Liabilities*
Net assets attributable to holders
of participating redeemable
preference shares
Total Liabilities and Equity
17
* Excluding net assets attributable to holders of participating redeemable preference shares
The financial statements on pages 14 to 83 were approved by the Board of Directors on 16 December 2016 and are signed on their behalf by:
R. D. Willcox
B. Lysiak
} Directors
The notes on pages 53 to 83 form an integral part of these financial statements.
14
Lloyds Investment Funds Limited
Statements of Financial Position
As at 30 September 2016
Assets
Current Assets
Cash and cash equivalents
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
5,702,339
331,269
111,655
557,390
296,933
Creations receivable
—
1,709
20,647
—
—
Investment sales receivable
—
—
22,498
—
—
277,848,172
21,202,633
9,976,334
21,406,272
15,193,459
5,250,124
21,506
8,745
379,433
18,771
288,800,635
21,557,117
10,139,879
22,343,095
15,509,163
Equity
Ordinary share capital
—
—
—
—
—
Total Equity
—
—
—
—
—
238,139
17,310
1,877
—
3,599
—
—
29,729
—
48,158
1,123,677
—
—
194,489
211,024
326,901
48,113
25,213
32,815
37,026
—
—
—
Financial assets at fair value through profit
or loss
Other accrued income and other debtors
Total Assets
Current Liabilites
Cancellation payable
Investment purchases payable
Distribution payable
Accrued expenses and other creditors
Nominal shares
—
—
Total Liabilities*
1,688,717
65,423
56,819
227,304
299,807
Net assets attributable to holders
of participating redeemable
preference shares
287,111,918
21,491,694
10,083,060
22,115,791
15,209,356
Total Liabilities and Equity
288,800,635
21,557,117
10,139,879
22,343,095
15,509,163
* Excluding net assets attributable to holders of participating redeemable preference shares
The notes on pages 53 to 83 form an integral part of these financial statements.
15
Lloyds Investment Funds Limited
Statements of Financial Position (continued)
As at 30 September 2015
Notes
Company
Euro High
Income
Fund
European
Fund
£
€
£
Assets
Current Assets
Cash and cash equivalents
4,628,831
695,455
172,481
21,188
—
6,370
345,632
102,028
—
370,336,365
14,030,693
11,937,617
7,982,552
218,566
—
383,314,568
15,046,742
12,116,468
Equity
Ordinary share capital
1,000
—
—
Total Equity
1,000
—
—
227,220
—
—
722,885
—
—
Creations receivable
Investment sales receivable
Financial assets at fair value through
profit or loss
Other accrued income and other debtors
4
Total Assets
Current Liabilites
Cancellation payable
Investment purchases payable
Distribution payable
5
1,795,564
108,025
—
Accrued expenses and other creditors
6
606,815
29,877
36,839
Nominal shares
14
1,053,019
—
—
4,405,503
137,902
36,839
378,908,065
14,908,840
12,079,629
383,314,568
15,046,742
12,116,468
Total Liabilities*
Net assets attributable to holders
of participating redeemable
preference shares
Total Liabilities and Equity
17
* Excluding net assets attributable to holders of participating redeemable preference shares
The notes on pages 53 to 83 form an integral part of these financial statements.
16
Lloyds Investment Funds Limited
Statements of Financial Position (continued)
As at 30 September 2015
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
2,453,088
90,996
78,928
511,489
809,355
—
6,542
—
—
8,276
176,082
—
—
94,364
—
277,989,695
18,235,186
8,544,573
29,215,074
14,074,725
6,110,661
28,047
7,888
605,122
15,751
286,729,526
18,360,771
8,631,389
30,426,049
14,908,107
Equity
Ordinary share capital
—
—
—
—
—
Total Equity
—
—
—
—
—
219,845
—
—
6,420
955
—
—
—
648,105
74,780
1,248,508
—
—
264,418
203,033
382,011
52,865
27,315
43,039
42,730
—
—
—
Assets
Current Assets
Cash and cash equivalents
Creations receivable
Investment sales receivable
Financial assets at fair value through
profit or loss
Other accrued income and other debtors
Total Assets
Current Liabilites
Cancellation payable
Investment purchases payable
Distribution payable
Accrued expenses and other creditors
Nominal shares
—
—
Total Liabilities*
1,850,364
52,865
27,315
961,982
321,498
Net assets attributable to holders
of participating redeemable
preference shares
284,879,162
18,307,906
8,604,074
29,464,067
14,586,609
Total Liabilities and Equity
286,729,526
18,360,771
8,631,389
30,426,049
14,908,107
* Excluding net assets attributable to holders of participating redeemable preference shares
The notes on pages 53 to 83 form an integral part of these financial statements.
17
Lloyds Investment Funds Limited
Statement of Comprehensive Income
For the year ended 30 September 2016
Notes
Operating Profit
Net gains on financial assets at fair value
through profit or loss
7
Investment income
Other income
8
Total operating expenses
9
Operating profit
Finance Costs
Distributions to holders of participating
redeemable preference shares
5
Total finance costs
Profit before tax
Withholding tax on dividends
and other investment income
Company
Euro High
Income
Fund
European
Fund
£
€
£
38,801,383
994,026
2,867,918
18,141,165
450,056
398,772
18,382
264
220
(4,484,254)
(195,756)
(258,005)
52,476,676
1,248,590
3,008,905
(15,837,532)
(450,254)
—
(15,837,532)
(450,254)
—
36,639,144
798,336
18
Increase in net assets attributable
to holders of participating redeemable
preference shares from operations
(251,545)
—
3,008,905
(95,552)
36,387,599
798,336
2,913,353
Company
Euro High
Income
Fund
European
Fund
£
€
£
For the year ended 30 September 2015
Notes
Operating Profit
Net gains / (losses)on financial assets at fair
value through profit or loss
7
Investment income
Other income
8
Total operating expenses
9
(6,042,508)
(720,287)
(644,260)
18,173,407
542,960
388,480
7,509
—
292
(4,803,708)
(198,155)
(277,501)
7,334,700
(375,482)
(532,989)
(17,748,954)
(496,387)
—
Total finance costs
(17,748,954)
(496,387)
—
Profit before tax
(10,414,254)
(871,869)
(532,989)
(257,228)
(910)
(75,368)
(10,671,482)
(872,779)
(608,357)
Operating profit
Finance Costs
Distributions to holders of participating
redeemable preference shares
Withholding tax on dividends
and other investment income
Increase in net assets attributable
to holders of participating redeemable
preference shares from operations
5
18
The notes on pages 53 to 83 form an integral part of these financial statements.
18
Lloyds Investment Funds Limited
Statement of Comprehensive Income
For the year ended 30 September 2016
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
Operating Profit
Net gains on financial assets at fair value
through profit or loss
22,977,323
5,051,026
2,365,062
2,867,465
1,895,191
Investment income
14,710,173
517,390
188,965
1,466,079
507,811
10,714
1,080
5
3,962
2,195
Other income
Total operating expenses
(2,884,509)
(381,812)
(185,988)
(320,324)
(300,521)
Operating profit
34,813,701
5,187,684
2,368,044
4,017,182
2,104,676
Finance Costs
Distributions to holders of participating
redeemable preference shares
(14,255,510)
—
—
(1,008,523)
(211,024)
Total finance costs
(14,255,510)
—
—
(1,008,523)
(211,024)
5,187,684
2,368,044
Profit before tax
Withholding tax on dividends
and other investment income
Increase in net assets attributable
to holders of participating redeemable
preference shares from operations
20,558,191
(20,530)
(81,671)
3,008,659
(51,669)
—
1,893,652
(2,123)
20,537,661
5,106,013
2,316,375
3,008,659
1,891,529
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
For the year ended 30 September 2015
£
£
Operating Profit
Net gains / (losses)on financial assets at fair
value through profit or loss
(1,096,890)
(2,756,375)
Investment income
14,960,201
606,826
201,799
1,104,549
509,979
5,867
239
74
299
738
Other income
Total operating expenses
(3,162,196)
Operating profit
10,706,982
(434,137)
(2,583,447)
138,347
(24,769)
(1,125,836)
(189,133)
(269,361)
(324,825)
151,087
810,718
(939,944)
Finance Costs
Distributions to holders of participating
redeemable preference shares
(16,276,045)
—
—
(903,590)
(203,033)
Total finance costs
(16,276,045)
—
—
(903,590)
(203,033)
151,087
(92,872)
(1,142,977)
Profit before tax
Withholding tax on dividends
and other investment income
Increase in net assets attributable
to holders of participating redeemable
preference shares from operations
(5,569,063)
(2,583,447)
(22,298)
(91,721)
(5,591,361)
(2,675,168)
The notes on pages 53 to 83 form an integral part of these financial statements.
19
(55,070)
96,017
—
(92,872)
(12,098)
(1,155,075)
Lloyds Investment Funds Limited
Statement of Changes in Net Assets Attributable to Holders
of Participating Redeemable Preference Shares
For the year ended 30 September 2016
Company
Euro High
Income
Fund
European
Fund
£
€
£
Net assets attributable to holders of
participating redeemable preference
shares as at 1 October 2015
378,908,065
14,908,840
12,079,629
Creation of participating redeemable
preference shares
14,013,417
1,500,554
463,970
(47,343,683)
(1,526,647)
Redemption of participating redeemable
preference shares
Dilution levies
Net (decrease) from
share transactions
38,390
(1,008,067)
—
—
(33,291,876)
(26,093)
(544,097)
36,387,599
798,336
2,913,353
2,023,040
—
—
384,026,828
15,681,083
14,448,885
Company
Euro High
Income
Fund
European
Fund
£
€
£
Net assets attributable to holders of
participating redeemable preference
shares as at 1 October 2014
414,771,626
14,281,016
14,196,527
Creation of participating redeemable
preference shares
23,627,298
2,887,051
592,736
(48,247,862)
(1,386,448)
Increase in net assets attributable
to holders of participating redeemable
preference shares from operations
Movement in currency translation
Net assets attributable to holders of
participating redeemable preference
shares as at 30 September 2016
For the year ended 30 September 2015
Redemption of participating redeemable
preference shares
Dilution levies
30,942
—
Net (decrease)/increase from
share transactions
(24,589,622)
1,500,603
(Decrease)/increase in net assets attributable
to holders of participating redeemable
preference shares from operations
(10,671,482)
(872,779)
Movement in currency translation
Net assets attributable to holders of
participating redeemable preference
shares as at 30 September 2015
(602,457)
378,908,065
The notes on pages 53 to 83 form an integral part of these financial statements.
20
(2,101,277)
—
(1,508,541)
(608,357)
—
—
14,908,840
12,079,629
Lloyds Investment Funds Limited
Statement of Changes in Net Assets Attributable to Holders
of Participating Redeemable Preference Shares
For the year ended 30 September 2016
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
Net assets attributable to holders of
participating redeemable preference
shares as at 1 October 2015
284,879,162
18,307,906
8,604,074
29,464,067
14,586,609
Creation of participating redeemable
preference shares issued
9,096,234
79,874
243,395
2,089,306
885,937
Redemption of participating redeemable
preference shares
(27,401,139)
Dilution levies
Net (decrease) from
share transactions
(2,002,099)
—
(1,080,784)
—
(1,922,225)
20,537,661
5,106,013
—
38,390
—
(1,268,782)
2,316,375
3,008,659
1,891,529
—
—
—
—
287,111,918
21,491,694
10,083,060
22,115,791
15,209,356
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
Net assets attributable to holders of
participating redeemable preference
shares as at 1 October 2014
316,214,234
24,279,013
9,329,332
22,429,857
17,194,744
Creation of participating redeemable
preference shares issued
9,792,150
446,226
410,799
9,509,677
748,187
Movement in currency translation
Net assets attributable to holders of
participating redeemable preference
shares as at 30 September 2016
(837,389)
(2,154,719)
(10,356,935)
Increase in net assets attributable
to holders of participating redeemable
preference shares from operations
(18,304,905)
—
(12,484,631)
For the year ended 30 September 2015
Redemption of participating redeemable
preference shares
Dilution levies
Net (decrease)/increase from
share transactions
(Decrease)/increase in net assets attributable
to holders of participating redeemable
preference shares from operations
Movement in currency translation
Net assets attributable to holders of
participating redeemable preference
shares as at 30 September 2015
(35,566,803)
(3,742,165)
30,942
—
(1,232,074)
—
(25,743,711)
(3,295,939)
(821,275)
(5,591,361)
(2,675,168)
96,017
(2,382,595)
—
7,127,082
(92,872)
(2,201,247)
—
(1,453,060)
(1,155,075)
—
—
—
—
—
284,879,162
18,307,906
8,604,074
29,464,067
14,586,609
The notes on pages 53 to 83 form an integral part of these financial statements.
21
Lloyds Investment Funds Limited
Cash Flow Statement
For the year ended 30 September 2016
Company
Euro High
Income
Fund
European
Fund
£
€
£
Cash flows from operating activities
Purchases of financial assets and
settlement of financial liabilities
(81,234,707)
(8,086,938)
(1,988,622)
Receipts from sale of investments
118,886,761
7,928,363
2,434,510
18,872,084
457,779
303,220
11,638
210
218
Bank interest received
6,744
54
2
Interest paid
(991)
(437)
(6)
Operating expenses paid
(4,565,898)
(200,098)
(259,003)
Net cash inflow from operating activities
51,975,631
98,933
490,319
(16,015,555)
(452,298)
Investment income received
Unclaimed distributions over 10 years old
Cash flows from financing activities
Distributions paid to holders of participating
redeemable preference shares issued
Proceeds received from issue
of participating redeemable
preference shares
14,025,453
1,500,555
Payments on redemption of
participating redeemable
preference shares
(47,283,825)
(1,516,615)
Tax
464,702
(1,008,066)
(20,530)
—
—
38,390
—
—
Dilution levies
Net cash (outflow)
from financing activities
—
(49,256,067)
(468,358)
(543,364)
Net increase/(decrease)
in cash and cash equivalents
2,719,564
(369,425)
(53,045)
Cash and cash equivalents
as at 1 October 2015
4,628,831
695,455
172,481
Exchange (losses)/gains on
cash and cash equivalents
(7,898)
(16)
Movement in currency
translation
58,481
—
—
7,398,978
326,014
117,349
Cash and cash equivalents
as at 30 September 2016
The notes on pages 53 to 83 form an integral part of these financial statements.
22
(2,087)
Lloyds Investment Funds Limited
Cash Flow Statement
For the year ended 30 September 2016
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
(52,833,513)
(3,626,327)
(1,754,614)
(10,908,797)
(3,798,285)
Receipts from sale of investments
76,169,479
5,719,816
2,693,559
21,123,283
4,545,581
Investment income received
15,529,673
442,260
136,439
1,599,809
502,668
Unclaimed distributions over 10 years old
5,557
777
—
3,831
1,092
Bank interest received
5,157
303
5
131
1,103
(84)
(521)
(6)
(23)
(7)
Operating expenses paid
(2,939,535)
(386,042)
(188,084)
(330,525)
(306,218)
Net cash inflow from operating activities
35,936,734
2,150,266
887,299
—
—
84,706
222,761
Cash flows from operating activities
Purchases of financial assets and
settlement of financial liabilities
Interest paid
Cash flows from financing activities
Distributions paid to holders of participating
redeemable preference shares issued
(14,380,341)
Proceeds received from issue
of participating redeemable
preference shares
9,096,227
Payments on redemption of
participating redeemable
preference shares
(27,382,839)
Tax
Dilution levies
Net cash (outflow)
from financing activities
(1,984,789)
(20,530)
—
(32,687,483)
(1,078,907)
11,487,709
945,934
(1,078,452)
(203,033)
2,089,305
894,215
(12,491,051)
(2,152,075)
—
—
—
—
—
—
38,390
—
(1,900,083)
(856,146)
(11,441,808)
(1,460,893)
Net increase/(decrease)
in cash and cash equivalents
3,249,251
250,183
31,153
45,901
(514,959)
Cash and cash equivalents
as at 1 October 2015
2,453,088
90,996
78,928
511,489
809,355
(9,910)
1,574
—
2,537
—
—
—
557,390
296,933
Exchange (losses)/gains on
cash and cash equivalents
—
Movement in currency
translation
—
Cash and cash equivalents
as at 30 September 2016
—
5,702,339
331,269
The notes on pages 53 to 83 form an integral part of these financial statements.
23
111,655
Lloyds Investment Funds Limited
Cash Flow Statement (continued)
For the year ended 30 September 2015
Company
Euro High
Income
Fund
European
Fund
£
€
£
Cash flows from operating activities
Purchases of financial assets and
settlement of financial liabilities
(82,393,035)
(15,221,442)
(1,718,738)
Receipts from sale of investments
112,658,613
13,589,386
3,151,496
20,827,537
568,399
313,112
—
—
—
7,509
—
292
(6,910)
(335)
(83)
Operating expenses paid
(4,824,938)
(197,654)
(287,272)
Net cash inflow/(outflow)
from operating activities
46,268,776
Investment income received
Unclaimed distributions over 10 years old
Bank interest received
Interest paid
Cash flows from financing activities
Distributions paid to holders of participating
redeemable preference shares issued
(17,985,256)
(1,261,646)
1,458,807
(521,210)
—
Proceeds received from issue
of participating redeemable
preference shares
23,693,426
2,917,929
Payments on redemption of
participating redeemable
preference shares
(48,051,815)
(1,386,448)
Tax
(21,453)
Dilution levies
Net cash (outflow)/inflow
from financing activities
Net increase/(decrease)
in cash and cash equivalents
30,942
(42,334,156)
3,934,620
586,365
(2,128,735)
1,142
—
—
—
1,011,413
(1,542,370)
(250,233)
(83,563)
945,674
272,998
Cash and cash equivalents
as at 1 October 2014
754,600
Exchange (losses)/gains on
cash and cash equivalents
(21,066)
14
Movement in currency
translation
(39,323)
—
—
695,455
172,481
Cash and cash equivalents
as at 30 September 2015
4,628,831
The notes on pages 53 to 83 form an integral part of these financial statements.
24
(16,954)
Lloyds Investment Funds Limited
Cash Flow Statement (continued)
For the year ended 30 September 2015
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
(42,839,073)
(3,338,321)
(1,610,309)
(20,046,900)
(1,581,925)
Receipts from sale of investments
73,535,744
6,439,239
2,470,126
13,375,106
3,636,200
Investment income received
17,829,008
536,904
150,064
1,067,179
510,879
—
—
—
—
—
5,867
239
74
299
738
(6,133)
(35)
(389)
(22)
—
Operating expenses paid
(3,164,231)
(440,037)
(193,189)
(265,250)
Net cash inflow/(outflow)
from operating activities
45,361,182
3,197,989
816,377
(5,869,588)
—
—
(878,136)
448,151
413,760
Cash flows from operating activities
Purchases of financial assets and
settlement of financial liabilities
Unclaimed distributions over 10 years old
Bank interest received
Interest paid
Cash flows from financing activities
Distributions paid to holders of participating
redeemable preference shares issued
(16,458,792)
Proceeds received from issue
of participating redeemable
preference shares
9,792,150
Payments on redemption of
participating redeemable
preference shares
(35,346,957)
Tax
Dilution levies
Net cash (outflow)/inflow
from financing activities
(3,742,165)
(1,232,074)
9,509,677
(2,376,172)
(328,772)
2,237,120
(262,840)
785,221
(2,200,292)
(22,298)
—
—
—
—
30,942
—
—
—
—
(42,004,955)
(3,294,014)
(818,314)
6,255,369
(1,677,911)
Net increase/(decrease)
in cash and cash equivalents
3,356,227
(96,025)
(1,937)
385,781
559,209
Cash and cash equivalents
as at 1 October 2014
(903,139)
186,704
85,586
125,708
249,864
—
282
Exchange (losses)/gains on
cash and cash equivalents
—
317
Movement in currency
translation
—
—
—
—
—
2,453,088
90,996
78,928
511,489
809,355
Cash and cash equivalents
as at 30 September 2015
The notes on pages 53 to 83 form an integral part of these financial statements.
25
(4,721)
Lloyds Investment Funds Limited
Investment Dealing
For the year ended 30 September 2016
During the year transactions representing more than 10% of the
aggregate value of the transactions in the property of the Funds
were carried out with the following counterparties:
European Fund
Liquidnet
Deutsche Bank AG
Instinet
High Income Fund
Barclays Capital
Royal Bank of Canada
J.P. Morgan
International Fund
Liquidnet
North American Fund
Sanford C Bernstein & Co
Liquidnet
CS First Boston
Sterling Bond Fund
J.P. Morgan
UK Fund
CS First Boston
Instinet
Liquidnet
Merrill Lynch
26
Lloyds Investment Funds Limited
Investment Portfolios
As at 30 September 2016
Euro High Income Fund
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
€
€
Asia 1.32% (2.60%)
Bank of Tokyo Mitsubishi 0.875% 2022
HSBC Holdings 6% (Perp)
200,000
200,000
200,000
—
206,804
—
1.32
—
191,527
197,180
Australia and New Zealand 2.00% (3.77%)
APT Pipelines 1.375% 2022
APT Pipelines 2% 2027
Ausnet Services1.5% 2027
BHP Billiton Finance 0.75% 2022
Santos Finance FRN 2070
Transurban Finance 2% 2025
Westpac Securities 3.875% 2017
100,000
—
100,000
100,000
85,000
120,000
75,000
100,000
100,000
100,000
—
—
—
—
102,173
103,236
107,541
—
—
—
—
0.65
0.66
0.69
—
—
—
—
95,606
—
90,609
93,499
86,261
116,163
78,872
—
100,000
107,153
0.68
—
—
—
200,000
100,000
200,000
100,000
—
—
100,000
—
100,000
100,000
100,000
—
100,000
100,000
—
—
—
—
100,000
—
—
100,000
—
150,000
—
100,000
200,000
100,000
100,000
200,000
100,000
150,000
100,000
150,000
100,000
100,000
150,000
100,000
150,000
100,000
130,000
—
—
200,000
100,000
200,000
200,000
—
100,000
100,000
100,000
—
100,000
100,000
100,000
90,000
250,000
270,000
121,000
—
300,000
100,000
100,000
200,000
150,000
200,000
100,000
100,000
100,000
100,000
—
100,000
150,000
100,000
150,000
—
100,000
150,000
100,000
150,000
105,775
158,238
—
—
192,320
102,509
233,041
240,116
—
104,357
102,305
110,341
—
101,091
99,728
111,792
104,162
317,418
308,616
215,501
—
377,336
103,661
99,122
262,865
160,432
223,396
104,469
102,500
106,143
102,637
—
110,136
287,963
153,899
213,441
—
102,862
190,402
127,779
176,460
0.67
1.01
—
—
1.23
0.65
1.49
1.53
—
0.67
0.65
0.70
—
0.64
0.64
0.71
0.66
2.02
1.97
1.37
—
2.41
0.66
0.63
1.68
1.02
1.42
0.67
0.65
0.68
0.65
—
0.70
1.84
0.98
1.36
—
0.66
1.21
0.81
1.13
—
—
195,130
106,006
173,850
94,074
—
—
95,669
—
93,946
101,760
102,828
—
93,713
113,658
—
—
—
—
103,107
—
—
94,174
—
149,612
—
98,093
189,497
96,050
97,966
217,894
115,308
246,226
124,234
189,551
99,580
103,487
191,087
128,116
180,014
Central America 0.68% (0.00%)
America Movil 2.125% 2028
Europe 62.98% (53.15%)
ABN Amro Bank 2.88% 2028
ABN Amro 4.125% 2022
ABN Amro Bank 5.75% (Perp)
Achmea 6% 2043 FRN
AG Insurance 3.5% 2047
Allianz 3.75% (Perp)
Allianz Financial 5.75% 2041
Anheuser Busch 2.75% 2036
Arkema SA 1.5% 2025
ASML Holdings 1.375% 2026
AXA SA 3.875% (Perp)
Banque Federative Credit Mutuel 3% 2024
Banque Federative Credit Mutuel 4.375% 2016
Bayer 3% FRN 2075
BNP Paribas FRN (Perp)
BNP Paribas FRN (Perp)
BNP Paribas 2.875% 2022
BNP Paribas 4.5% 2023
Bundesrepublic 2.25% 2021
Bundesrepublic 5.5% 2031
CAP Gemini 2.5% 2023
Cooperatieve Rabobank 4.75% 2022
Credit Agricole .875% 2022
Credit Agricole 4.5% 2025
Credit Agricole 5.125% 2023
CRH Finance Germany 1.75% 2021
CRH Finance 5% 2019
Danica Pension 4.375% 2045
Demeter Investments 4.375% (Perp)
Deutsche Annington FRN (Perp)
Deutsche Annington 0.875% 2020
Deutsche Bank 5.125% 2017
Deutsche Telekom Intl Finance 6.625% 2018
Deutsche Telekom Intl Finance 7.5% 2033
EDF 4.5% 2040
EDF 4.625% 2030
EDF 5% (Perp)
EDF 5.375% FRN (Perp)
EDF 6.25% 2021
Engie SA 6.375% 2021
Gas Natural Capital Markets 6.375% 2019
27
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
Euro High Income Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
€
Market
Value
30.09.15
€
Europe (continued)
Gas Natual Fenosa 1.375% 2025
Gas Natual Fenosa 3.375% (Perp)
GDF Suez 3.875% (Perp)
GDF Suez 5.95% 2111
GE Capital European Funding 6% 2019
GE Capital European Funding 6.025% 2038
GE Capital Trust 4.625% 2066 FRN
General Motors Financial 0.85% 2018
Heidelberg Cement 2.25% 2024
Heidelberg Cement 8.5% 2019
Hemsö Fastighets 1% 2026
Iberdrola 5.625% 2018
ING Groep 4.75% 2017
KFW Bankengruppe 4.675% 2023
Koninklijke DSM 1% 2025
Metrovacesa SA 2.375% 2022
Orange SA 8.125% 2033 (formerly France Telecom)
Orange SA GRN (Perp)
Peugeot 2.375% 2023
Renault 3.625% 2018
Repsol International Finance 4.5% 2075
Roche Finance Europe 0.875% 2025
Ryanair 1.125% 2023
Sanofi SA 0.875% 2021
Santander Consumer Finance 0.9% 2020
Santander 1.125% 2023
SAP SE 1.75% 2027
Siemens FRN 2066
Snam SpA 3.5% 2020
Societe Generale SA 2.625% 2025
Statkraft 1.5% 2030
TDF Infrastructure 2.875% 2022
Terna Rete Elettrica Nazionale 0.875% 2022
Total FRN (Perp)
Unibail Rodamco 2% 2016
Unitymedia Hessen 8.125% 2017
Valeo 3.25% 2024
Vattenfall 6.25% 2021
Vesteda Finance 2.5% 2022
Volkswagon 5.375% 2018
Volkswagon FRN (Perp)
Volkswagen International Finance 3.75% (Perp)
Xstrata Finance Dubai 2.625% 2018
100,000
100,000
100,000
70,000
50,000
202,000
70,000
125,000
—
100,000
—
—
105,000
53,000
100,000
—
200,000
100,000
—
200,000
100,000
241,000
130,000
200,000
100,000
—
200,000
115,000
100,000
100,000
200,000
—
200,000
100,000
—
100,000
—
120,000
—
50,000
130,000
150,000
100,000
100,000
100,000
—
70,000
50,000
202,000
—
125,000
128,000
100,000
100,000
200,000
105,000
570,000
—
100,000
170,000
—
55,000
—
—
—
130,000
—
—
108,000
—
—
—
100,000
—
100,000
—
159,000
300,000
100,000
100,000
—
100,000
—
130,000
—
—
106,920
95,715
—
124,624
56,977
383,242
—
126,303
135,039
123,840
100,688
218,318
108,407
752,878
—
105,667
343,466
—
58,128
—
—
—
133,493
—
—
108,156
—
—
—
103,744
—
111,654
—
153,917
345,542
111,906
120,689
—
110,294
—
132,970
—
—
0.68
0.61
—
0.79
0.36
2.44
—
0.81
0.86
0.79
0.64
1.39
0.69
4.80
—
0.67
2.19
—
0.37
—
—
—
0.85
—
—
0.69
—
—
—
0.66
—
0.71
—
0.98
2.20
0.71
0.77
—
0.70
0.00
0.85
—
—
94,288
84,375
99,374
99,678
58,843
312,433
71,225
123,418
—
123,210
—
—
112,604
68,929
93,974
—
328,571
102,195
—
212,639
81,063
231,005
123,975
198,840
96,801
—
199,070
119,219
110,413
93,390
177,730
—
193,155
88,007
—
105,380
—
149,286
—
45,906
112,313
129,570
87,874
United Kingdom 18.42% (20.47%)
3i Group 5.625% 2017
Abbey National Treasury Services 1.125% 2022
Aviva Plc 3.375% 2045
Aviva Plc FRN 2038
Barclays Bank 6.625% 2022
BAT International Finance 0.875% 2023
BP Capital Markets 1.573% 2027
BG Energy Capital 6.5% FRN 2072
British American Tobacco 2.375% 2023
British Telecom 1.75% 2026
EE Finance 3.25% 2018
150,000
100,000
100,000
100,000
—
200,000
105,000
100,000
100,000
—
200,000
150,000
—
100,000
100,000
100,000
—
105,000
100,000
—
137,000
200,000
153,728
—
98,959
109,713
122,767
—
111,983
106,790
—
149,612
211,910
0.98
—
0.63
0.70
0.78
—
0.71
0.68
—
0.95
1.35
160,118
96,997
92,035
110,937
—
189,709
97,809
108,469
106,368
—
213,938
28
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
Euro High Income Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
€
United Kingdom (continued)
Global Switch 5.5% 2018
HBOS 4.5% FRN 2030
Heathrow Funding 4.6% 2020
Imperial Tobacco 8.375% 2016
Lloyds Bank 1% 2021
Lloyds Bank 1.25% 2025
National Grid 5% 2018
Nationwide Building Society 1.25% 2025
Nationwide 6.75% 2020
NGG Finance 4.25% FRN 2076
Pentair Finance ZERO 2019
Royal Bank of Scotland 2.5% 2023
Royal Bank of Scotland 5.375% 2019
Scottish and Southern Energy 5.025% FRN (Perp)
SSE FRN (Perp)
€
—
100,000
250,000
—
—
—
175,000
100,000
100,000
—
150,000
100,000
150,000
—
100,000
—
111,288
265,761
—
—
—
190,530
104,360
120,235
—
157,866
102,314
172,420
—
98,473
—
0.71
1.69
—
—
—
1.22
0.67
0.77
—
1.01
0.65
1.10
—
0.63
Total Capital 5.125% 2024
United Utilities Water 4.25% 2020
100,000
—
250,000
107,000
100,000
100,000
175,000
100,000
150,000
100,000
150,000
—
150,000
100,000
200,000
—
—
200,000
200,000
273,364
227,512
1.74
1.45
112,216
—
273,282
110,241
98,250
95,890
196,364
94,784
183,271
104,210
150,324
—
175,030
100,040
183,283
—
—
United States 11.76% (14.10%)
AT&T 2.45% 2035
AT&T 2.75% 2023
AT&T 3.375% 2034
Bank of America 4.75% 2017
Bank of America 7% 2016
Citigroup 1.75% 2025
Directv Holdings 2.75% 2023
Goldman Sachs 2% 2023
Goldman Sachs 4.5% 2016
Jefferies Group 2.375% 2020
JP Morgan Chase 2.75% 2022
Lehman Brothers Holdings FRN 2019
Metlife Global Funding 2.375% 2019
Mondelez Inc 2.375% 2035
National Capital Instruments FRN (Perp)
The Coca Cola Company 1.125% 2027
Thermo Fisher Scientific 1.375% 2028
Verizon Communications 1.625% 2024
Verizon Communications 2.625% 2031
200,000
—
—
100,000
100,000
200,000
100,000
200,000
150,000
150,000
120,000
150,000
100,000
—
150,000
158,000
—
200,000
200,000
—
100,000
200,000
100,000
—
200,000
—
200,000
—
—
120,000
150,000
100,000
150,000
—
—
100,000
200,000
200,000
—
114,008
245,899
102,483
—
215,287
—
215,484
—
—
136,748
765
107,189
160,564
—
—
100,564
215,629
232,054
—
0.73
1.57
0.65
—
1.37
—
1.37
—
—
0.87
0.00
0.68
1.02
—
—
0.64
1.38
1.48
173,259
—
—
106,532
104,815
193,833
105,183
200,398
154,208
146,200
129,689
765
105,983
—
146,807
145,654
—
194,771
195,931
15,248,556
573,637
15,822,193
(141,110)
15,681,083
97.16
3.68
100.84
(0.84)
100.00
14,030,693
1,016,049
15,046,742
(137,902)
14,908,840
Total Value of Investments
Other Assets
Total Assets
Liabilities
Total Net Assets
Cost of investments purchased
Proceeds from investments sold
Year
ended
30.09.16
Year
ended
30.09.15
€8,086,938
€7,826,335
€15,221,442
€13,691,414
29
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
European Fund
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
£
Austria 4.05% (4.57%)
Schoeller—Bleckmann
Vienna Insurance Group
6,600
15,900
6,600
15,900
336,309
249,078
2.33
1.72
244,132
308,451
Denmark 4.33% (4.76%)
Novo Nordisk
Novozymes
12,200
5,000
12,200
6,900
390,855
234,084
2.71
1.62
431,735
143,627
France 13.87% (12.27%)
Casino Guichard-Perrachon
Dassault Systèmes
Edenred
Essilor International
Engie (formerly GDF SUEZ)
Grandvision
L'Oréal
Schneider Electric
6,600
7,000
—
2,600
17,600
—
1,800
8,400
—
4,550
14,800
3,050
17,600
17,400
2,100
4,500
—
303,983
266,417
302,981
209,970
373,432
305,398
241,623
—
2.10
1.84
2.10
1.45
2.58
2.11
1.67
230,842
340,483
—
208,556
187,251
—
205,634
309,537
Germany 13.13% (13.38%)
Bayer
Fuchs Petrolub
Henkel
KION Group
Linde
MTU Aero Engines AG
—
8,400
3,400
10,100
3,950
8,300
3,600
7,200
5,100
2,761
3,000
4,850
277,890
253,352
458,257
137,750
391,498
378,534
1.92
1.75
3.17
0.95
2.71
2.62
—
244,909
197,786
295,044
421,203
456,763
Italy 0.95% (1.63%)
Brunello Cucinelli
Eni
—
19,000
9,163
—
137,179
—
0.95
—
—
196,651
Netherlands 11.63% (10.27%)
Furgo
Royal Dutch Shell
Unilever
Vopak
20,000
22,838
17,200
7,450
25,000
24,700
16,700
7,450
311,446
473,849
593,472
301,136
2.16
3.28
4.11
2.08
232,609
356,581
454,938
195,803
Norway 2.55% (2.60%)
Kongsberg Gruppen
32,800
30,675
367,852
2.55
313,510
Spain 3.09% (2.91%)
Amadeus IT Holdings
12,500
11,600
446,252
3.09
352,040
Sweden 14.79% (16.40%)
Assa Abloy
Atlas Copco
Ericsson
Nordea Bank
Svenska Handelsbanken
Swedish Match
26,000
30,300
42,700
51,600
30,300
14,500
19,000
24,800
51,200
41,600
30,300
14,000
296,720
520,780
284,892
317,355
320,860
395,822
2.05
3.60
1.97
2.20
2.22
2.74
306,880
445,760
276,364
378,340
285,487
288,133
30
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
European Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
Switzerland 30.00% (30.03%)
Givaudan
Holcim
Nestle 'R'
Novartis
Partners Group AG
Roche Holdings
Schindler
Syngenta
Syngenta N 2L
The Swatch Group B
The Swatch Group R
Temenos Group
UBS Group
VZ Holding N
Zurich Insurance Group
130
6,825
10,900
5,400
—
3,050
4,000
1,650
—
1,020
1,800
9,000
31,000
—
1,100
115
8,700
9,600
6,700
600
2,840
2,100
—
900
1,020
2,700
9,000
42,800
108
850
Total Value of Investments
Other Assets
Liabilities
Total Net Assets
Cost of investments purchased
Proceeds from investments sold
Year
ended
30.09.16
Year
ended
30.09.15
£2,012,069
£2,605,966
£1,718,738
£3,151,496
31
£
180,502
362,889
583,776
406,629
233,353
543,417
303,764
—
303,359
222,468
115,730
437,225
449,498
23,372
168,717
1.25
2.51
4.04
2.81
1.62
3.76
2.10
—
2.10
1.54
0.80
3.03
3.11
0.16
1.17
139,170
235,285
539,624
326,258
—
529,386
378,623
347,814
—
248,815
85,373
243,379
377,106
—
177,735
14,213,725
294,442
14,508,167
(59,282)
14,448,885
98.37
2.04
100.41
(0.41)
100.00
11,937,617
178,851
12,116,468
(36,839)
12,079,629
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
High Income Fund
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
UK Government 0.66% (0.04%)
Treasury 1.75% 2022
Treasury 4.25% 2049
Treasury 4.5% 2042
UK Corporate 67.40% (64.92%)
Abbey National Treasury Services 1.875% 2020
Anglian Water Services Financing 4.5% 2026
Anglian Water Osprey Financing 7% 2018
Annington Finance 5.3236% 2023
Annington Finance 8.07% 2023
Annington Finance No 4 2023 FRN
Arkle Master Issuer 4.681% 2060
Aspire Defence Finance 4.674% 2040
Autolink 8.39% 2022
Aviva Plc 4.375% 2049
Aviva Plc 5.125% FRN
Aviva Plc FRN (Perp)
Aviva Plc G/R (Perp)
Aviva 6.625% 2058
Barclays Bank 5.75% 2026
Barclays Bank 7.875% FRN (Perp)
Barclays Bank 9.5% 2021
Barclays Bank 10% 2021
Barclays Bank 2049 FRN (Perp)
BG Energy Capital 2072 FRN
BHP Billiton Finance 4.3% 2042
BHP Billiton Finance 6.5% 2077
BL Superstores 5.27% 2030
British American Tobacco 6% 2022
British American Tobacco 6.375% 2019
British Telecom 6.375% 2037
Broadgate Financing 4.821% 2036
Canary Wharf II 6.455% 2030
Centrica 5.25% 2075
Centrica 6.375% 2022
Centrica 7% 2018
City of Greenwich & Lewisham Rail Link 9.375% 2020
Close Brothers 6.5% 2017
Clydesdale Bank 4.625% 2026
Co-operative Group 5.625% 2020
Coventry Building Society 2050
CRH Finance 4.125% 2029
CYBG Plc 5% 2026
Daily Mail and General 6.375% 2027
Dignity Finance 4.6956% 2049
Dukinfiled No 1 FRN 2045
Dwr Cymru Finance 6.907% 2021
Eastern Power Networks 8.5% 2025
EE Finance 4.375% 2019
Electricity North Western 8.785% 2026
EMH Treasury Plc 4.5% 2044
E.ON International Finance 6.375% 2032
EUR LN Conduit 5.0636% 2033
FCE Bank 2.727% 2022
First Hydro 9% 2021
£
100,000
—
—
—
378,000
753,000
—
656,057
1,248,060
—
0.23
0.43
101,866
—
—
940,000
1,000,000
600,000
—
1,500,000
2,000,000
1,200,000
1,643,000
1,500,000
—
1,200,000
1,200,000
1,000,000
600,000
550,000
1,000,000
1,697,000
2,860,000
500,000
3,617,000
—
—
750,000
700,000
1,240,000
506,000
1,340,000
1,380,000
1,100,000
1,500,000
2,400,000
600,000
900,000
2,050,000
2,300,000
—
—
—
—
2,121,000
824,000
1,900,000
3,530,000
600,000
1,452,000
—
—
1,903,000
—
1,550,000
—
1,000,000
600,000
1,120,000
1,500,000
—
—
1,643,000
1,500,000
317,000
1,200,000
1,200,000
1,000,000
1,600,000
—
—
1,697,000
2,860,000
500,000
3,617,000
1,000,000
700,000
750,000
700,000
1,240,000
506,000
1,340,000
1,510,000
1,100,000
1,500,000
2,400,000
600,000
900,000
2,050,000
2,300,000
1,677,000
430,000
653,000
300,000
2,121,000
824,000
1,900,000
3,530,000
600,000
1,452,000
800,000
600,000
1,903,000
600,000
1,550,000
—
1,209,965
650,964
1,304,568
1,997,459
—
—
2,005,571
996,380
313,212
1,245,780
1,260,180
1,073,331
1,782,538
—
—
2,172,907
3,693,221
627,500
3,820,670
1,285,860
780,524
621,746
891,086
1,458,861
844,883
1,839,926
604,751
1,140,336
1,919,366
2,685,746
240,857
916,448
2,631,565
2,740,841
1,508,810
517,515
630,145
378,219
2,720,817
698,604
2,407,429
5,464,733
651,577
2,360,891
1,049,712
896,582
2,100,779
636,444
2,077,992
—
0.42
0.23
0.45
0.70
—
—
0.70
0.35
0.11
0.43
0.44
0.37
0.62
—
—
0.76
1.29
0.22
1.33
0.45
0.27
0.22
0.31
0.51
0.29
0.64
0.21
0.40
0.67
0.94
0.08
0.32
0.92
0.95
0.53
0.18
0.22
0.13
0.95
0.24
0.84
1.90
0.23
0.82
0.37
0.31
0.73
0.22
0.72
919,133
1,070,995
653,088
—
1,983,278
2,056,620
1,254,889
1,842,587
1,123,207
—
1,118,465
1,229,250
1,037,475
649,882
612,091
986,250
2,147,837
3,670,006
645,778
3,806,231
—
—
701,513
837,623
1,448,561
655,021
1,609,311
506,690
1,053,931
1,791,714
2,735,438
300,828
952,102
2,424,533
2,473,604
—
—
—
—
2,304,997
801,057
2,330,637
5,068,889
637,774
2,172,212
—
—
2,046,174
—
2,033,616
32
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
High Income Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
UK Corporate (continued)
Friends Life Group 8.25% 2022
Gatwick Funding Limited 2028 FRN
Gemgarto 2015 ZERO 2047
GlaxoSmithKline Capital 6.375% 2039
Great Rolling Stock 6.25% 2031
HBOS FRN (Perp)
HBOS 12% (Perp)
Heathrow Funding 4.625% 2048
Heathrow Funding 6.45% 2033
Heathrow Funding 6.75% 2028
Housing Association Funding 8.25% 2027
HSBC FRN 2023
HSBC Bank 5.862% (Perp)
HSBC 6.00% 2040
HSBC 6.5% 2024
Hutchison Whampoa Finance UK 5.625% 2017
Imperial Tobacco 8.125% 2024
Imperial Tobacco 9% 2022
InterContinental Hotels 3.75% 2025
Integrated Accommodation Service 6.48% 2029
Intu Metrocentre 4.125% 2028
Jaguar Land Rover Automotive 5% 2022
Land Securities FRN 2026
Lloyds Bank 9.625% 2023
Lloyds Bank 2049 FRN (Perp)
Lloyds of London 4.75% 2024
Longstone Finance 4.896% 2036
Marstons Issuer 2035 FRN
Manchester Airport 4.125% 2024
Manchester Airport 4.75% 2034
Motability 3.625% 2036
Motability Operations Group 6.625% 2019
Motability 3.75% 2026
National Grid Electricity Transmission 6.5% 2028
National Grid Gas 2.75% 2046
National Grid Gas 2.625% 2038
National Grid Gas 8.75% 2025
Nationwide 5.625% 2019
NIE Finance 6.375% 2026
NGG Finance 2073 FRN
Northern Powergrid 2.5% 2025
Northern Powergrid Yorkshire 9.25% 2020
Northumberland Services 6.875% 2023
Paragon Zero 2043
Paragon Treasury 3.625% 2047
PICTS 5.218% 2039
Places For People Homes 5.875% 2031
Prudential 5% FRN
Prudential 11.375 2039 FRN
QBE Insurance 6.115% 2042
QBE Capital Funding 2041 FRN
RL Finance 6.125% 2028
Rolls-Royce Plc 3.375% 2026
Royal Bank of Scotland 6.625% 2018
RSA Insurance Group 2039 FRN
1,300,000
1,550,000
466,000
957,000
1,000,000
1,940,000
2,000,000
2,650,000
1,000,000
900,000
1,500,000
3,000,000
—
3,550,000
1,100,000
1,850,000
850,000
1,200,000
1,700,000
1,951,000
760,000
1,500,000
467,000
2,000,000
692,000
646,000
—
2,712,000
1,000,000
2,030,000
—
1,500,000
1,000,000
2,600,000
—
—
1,380,000
1,450,000
1,000,000
1,590,000
600,000
3,032,000
2,250,000
—
600,000
1,000,000
1,500,000
2,100,000
1,420,000
—
700,000
—
—
1,200,000
1,300,000
1,300,000
1,550,000
466,000
957,000
1,000,000
1,940,000
2,000,000
2,650,000
1,000,000
900,000
1,500,000
2,900,000
402,000
3,550,000
700,000
1,850,000
850,000
1,200,000
1,700,000
1,951,000
760,000
1,500,000
467,000
1,500,000
692,000
646,000
65,000
2,712,000
1,000,000
2,030,000
360,000
1,500,000
1,000,000
—
1,500,000
1,500,000
—
1,450,000
1,000,000
1,590,000
600,000
3,032,000
2,250,000
897,000
600,000
1,000,000
1,500,000
2,100,000
1,420,000
787,000
—
600,000
500,000
1,200,000
546,000
33
1,648,195
2,052,592
197,111
1,671,962
1,323,116
2,350,174
2,600,000
3,762,669
1,561,059
1,307,317
1,328,796
3,027,400
433,165
4,614,982
904,646
1,946,335
1,225,217
1,669,201
1,930,182
1,765,277
858,953
1,649,160
594,397
2,085,467
889,289
714,245
74,950
2,576,400
1,190,837
2,766,060
455,085
1,779,716
1,214,447
—
1,572,908
1,563,375
—
1,642,174
1,415,418
1,789,017
651,570
3,850,200
3,005,345
880,789
688,955
1,175,709
1,983,008
2,124,784
1,745,718
843,455
—
653,912
567,585
1,325,566
639,421
£
0.57
0.71
0.07
0.58
0.46
0.82
0.91
1.31
0.54
0.46
0.46
1.05
0.15
1.61
0.32
0.68
0.43
0.58
0.67
0.61
0.30
0.57
0.21
0.73
0.31
0.25
0.03
0.90
0.41
0.96
0.16
0.62
0.42
—
0.55
0.54
—
0.57
0.49
0.62
0.23
1.34
1.05
0.31
0.24
0.41
0.69
0.74
0.61
0.29
—
0.23
0.20
0.46
0.22
1,540,601
1,654,458
423,204
1,331,033
1,237,095
2,286,057
2,489,600
2,818,074
1,312,694
1,180,990
1,360,274
3,137,829
—
3,979,628
1,362,132
1,997,434
1,122,506
1,592,555
1,698,037
1,793,917
795,686
1,481,250
555,769
2,685,564
1,031,080
656,884
—
2,576,400
1,062,321
2,236,481
—
1,776,908
1,071,613
3,508,071
—
—
2,068,503
1,637,384
1,277,932
1,668,176
577,308
3,876,191
2,826,104
—
567,438
1,063,192
1,805,265
1,966,646
1,791,394
—
766,876
—
—
1,349,040
1,515,709
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
High Income Fund (continued)
Holding
30.09.15
UK Corporate (continued)
Santander UK 3.625% 2026
Santander UK 7.375% FRN (Perp)
Santander UK 10.0625% (Perp)
Scottish & Southern Energy FRN (Perp)
Scottish Power 6.375% (Step) 2041
Segro Plc 6.75% 2021
Severn Trent 6.25% 2029
Society of Lloyds 7.421% FRN (Perp)
Southern Gas Networks 4.875% 2029
Southern Gas Networks 6.375% 2040
Southern Water Services 6.125% 2019
Southern Water Greensands Financing 8.5% 2019
SSE FRN (Perp)
Stagecoach Group 4% 2025
Standard Chartered 7.75% 2018
Standard Chartered FRN (Perp)
Standard Chartered Bank 7.75% FRN (Perp)
Standard Life Finance 6.75% FRN (Perp)
Telereal Securitisation 5.3887% 2033
Telereal Securitisation 6.1645% 2031
Thames Water Kemble Finance 7.75% 2019
Thames Water Utilities Finance 5.125% 2037
Thames Water Utilities Finance 6.75% 2028
Thames Water Utilities (Cayman) Finance 2025 FRN
The Housing Finance Corporation Funding No.2 6.35% 2041
UBS AG (London Branch) 6.625% 2018
UBS AG (Jersey) 8.75% 2025
UPP Bond 1 4.9023% 2040
Vicinity Centres 3.375% 2026
Vodafone Group Plc 3% 2056
Western Power 3.625% 2023
Western Power 5.75% 2032
Whitbread Group Plc 3.375% 2025
WM Morrisons Supermarket 4.75% 2029
WW Grainger PLC 5% 2020
Yorkshire Water Services Odsal Finance 6.5876% 2023
Zurich Finance UK FRN (Perp)
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
£
—
500,000
3,000,000
1,655,000
1,000,000
—
1,250,000
1,189,000
2,550,000
300,000
1,447,000
938,000
1,100,000
505,000
1,350,000
1,500,000
850,000
2,140,000
13,000
1,130,000
1,800,000
1,486,000
—
2,600,000
1,080,000
944,000
2,724,000
—
—
—
—
1,300,000
759,000
500,000
1,250,000
842,000
800,000
34
908,000
—
500,000
—
1,000,000
800,000
1,550,000
1,189,000
2,550,000
300,000
1,447,000
938,000
2,350,000
705,000
1,350,000
—
850,000
2,140,000
13,000
—
1,800,000
1,486,000
800,000
2,600,000
1,080,000
944,000
—
1,100,000
520,000
450,000
1,000,000
1,300,000
—
—
1,250,000
842,000
800,000
967,774
—
794,375
—
1,571,290
1,014,443
2,332,713
1,230,223
3,428,776
516,382
1,632,756
1,071,037
2,375,154
797,112
1,473,080
—
966,875
2,462,427
10,910
—
2,041,884
2,224,046
1,238,966
2,680,990
1,722,351
1,027,495
—
1,353,039
582,574
432,349
1,111,586
1,928,020
—
—
1,371,875
1,111,255
924,270
Market
Value
30.09.15
£
0.34
—
0.28
—
0.55
0.35
0.81
0.43
1.19
0.18
0.57
0.37
0.83
0.28
0.51
—
0.34
0.86
—
—
0.71
0.77
0.43
0.93
0.60
0.36
—
0.47
0.20
0.15
0.39
0.67
—
—
0.48
0.39
0.32
—
496,900
4,230,000
1,657,896
1,326,900
—
1,626,236
1,252,730
2,983,255
409,332
1,635,682
1,057,820
1,051,875
506,358
1,498,995
1,528,125
965,813
2,386,635
11,250
1,285,227
1,968,894
1,740,735
—
2,719,571
1,485,001
1,054,240
3,881,853
—
—
—
—
1,613,464
761,915
488,738
1,287,438
1,044,562
876,260
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
High Income Fund (continued)
Holding
30.09.15
Market
Value
30.09.16
Holding
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
Overseas Borrowers 28.69% (32.56%)
Aegon 6.125% 2031
America Movil SAB 2073 FRN
AIG SunAmerica Institutional Funding 5.375%
2016
APT Pipelines
AT&T 4.25% 2043
AT&T 4.375% 2029
AT&T 4.875% 2044
AXA 7.125% 2020
AXA 6.686% Perp
AXA 5.453% Perp
Bank of America 2.3% 2025
Bank of America 7% 2028
Bank of America Merrill Lynch 7.75% 2018
BNP Paribas FRN (Perp)
Chorus Ltd 6.75% 2020
Cie de Saint Gobain 5.625% 2016
Citigroup 6.8% 2038
Cooperatieve Rabobank 5.375% 2060
Cooperatieve 6.6% PERP
Deutsche Telekom 6.5% 2022
DIRECTV Holdings 4.375% 2029
E.ON International Finance 5.825% 2037
EDF 5.5% 2041
EDF 5.875% 2031
EDF 6% 2014
EDF 6% FRN
EDF 5.125% 2050
Enel 5.75% 2037
European Coal and Steel 6.875% 2019
First Group 8.75% 2021
Freshwater Finance 5.182% 2035
GE Capital UK Funding 5.125% 2023
GE Capital UK Funding 8% 2039
General Electric Cap. Corp. 2067 6.5% FRN
Glencore Finance GR 2022
Glencore Finance 6.5% 2019
Goldman Sachs 7.125% 2025
Goldman Sachs 7.25% 2028
Health Care REIT
Highbury Finance 7.017% 2023
H J Heinz 4.125% 2027
Holcim Finance 8.75% 2017
Koninklijke KPN 5% 2026
MetLife 5.25% 2020
Muenchener Rueckversicherungs 2028 FRN
Orange G/R (Perp)
Orange SA FRN (Perp)
RWE Finance 6.125% 2039
£
1,102,000
3,240,000
—
2,240,000
—
2,399,936
—
0.84
1,397,350
3,353,400
2,504,000
—
—
—
2,602,713
920,000
2,027,000
—
1,300,000
1,100,000
1,030,000
2,492,000
—
2,700,000
2,150,000
1,200,000
—
1,450,000
2,291,000
—
—
—
2,300,000
2,100,000
3,700,000
1,178,000
700,000
1,500,000
1,600,000
1,500,000
1,700,000
1,000,000
858,000
3,998,000
1,500,000
1,900,000
1,400,000
750,000
850,000
577,000
700,000
1,550,000
500,000
1,450,000
700,000
1,238,000
2,000,000
725,000
2,002,000
—
920,000
2,027,000
1,000,000
1,300,000
1,100,000
1,030,000
2,492,000
1,000,000
2,700,000
2,150,000
—
1,200,000
—
2,291,000
500,000
500,000
400,000
—
2,100,000
1,700,000
1,178,000
700,000
1,500,000
1,600,000
1,300,000
1,700,000
1,561,000
858,000
—
1,500,000
—
—
—
850,000
577,000
700,000
1,550,000
1,500,000
1,450,000
700,000
—
2,000,000
725,000
2,002,000
500,000
987,091
2,386,924
1,211,855
1,694,048
1,350,934
1,157,445
2,640,857
1,011,220
3,911,220
2,370,225
—
1,408,534
—
3,793,777
871,640
620,950
515,522
—
3,161,850
2,424,924
1,668,214
1,090,193
1,510,448
2,222,034
1,803,758
1,926,466
2,020,956
1,200,148
—
3,043,736
—
—
—
1,178,623
838,998
850,143
1,405,927
1,756,263
1,511,763
863,448
—
2,189,160
785,127
2,179,712
715,333
0.34
0.83
0.42
0.59
0.47
0.40
0.92
0.35
1.36
0.83
—
0.49
—
1.32
0.30
0.22
0.18
—
1.10
0.84
0.58
0.38
0.53
0.77
0.63
0.67
0.70
0.42
—
1.06
—
—
—
0.41
0.29
0.30
0.49
0.61
0.53
0.30
—
0.76
0.27
0.76
0.25
852,094
1,843,915
—
1,299,355
1,281,331
1,138,580
2,501,355
—
3,657,301
2,459,020
1,222,860
—
1,517,406
3,231,792
—
—
—
2,330,967
2,394,212
4,187,283
1,414,361
851,167
1,491,563
1,746,342
1,737,776
1,982,982
1,245,884
1,024,929
4,632,834
2,491,170
1,974,020
1,197,473
689,023
1,117,856
780,672
750,186
1,463,215
519,158
1,602,198
751,962
1,403,467
2,244,466
724,764
2,016,983
—
35
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
High Income Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
£
Overseas Borrowers (continued)
RWE Finance 6.25% 2030
RWE Finance 6.5% 2021
Scentre Management 2.375% 2022
SLM Student Loan 2038 FRN
Societe Generale FRN (Perp)
ELM FRN (Perp)
Telefonica Emisione 5.445% 2029
Time Warner Cable 5.25% 2042
United Mexico STS 5.625% 2014
Vattenfall 6.875% 2039
Verizon Communications 4.75% 2034
Wal-Mart Stores 5.25% 2035
Westpac Bank 2.625% 2022
1,200,000
700,000
1,200,000
1,350,000
2,067,000
1,850,000
1,250,000
800,000
1,710,000
1,976,000
1,400,000
2,483,000
—
700,000
700,000
—
1,000,000
1,665,000
1,850,000
—
800,000
1,710,000
—
2,500,000
2,483,000
1,200,000
Total Value of Investments
Other Assets
Total Assets
Liabilities
Total Net Assets
Cost of investments purchased
Proceeds from investments sold
Year
ended
30.09.16
Year
ended
30.09.15
£52,833,513
£75,993,396
£42,119,713
£71,181,061
36
Market
Value
30.09.15
£
953,159
856,791
—
876,475
1,841,940
2,038,817
—
934,297
1,921,613
—
3,246,973
3,759,272
1,294,687
0.33
0.30
—
0.31
0.64
0.71
—
0.33
0.67
—
1.13
1.31
0.45
1,315,898
798,317
1,172,773
1,221,170
2,291,580
1,949,438
1,408,053
702,274
1,613,813
2,647,731
1,479,104
3,122,003
—
277,848,172
10,952,463
288,800,635
(1,688,717)
287,111,918
96.75
3.84
100.59
(0.59)
100.00
277,989,695
8,739,831
286,729,526
(1,850,364)
284,879,162
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
International Fund
Holding
30.09.15
Market
Value
30.09.16
Holding
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
£
Brazil 2.12% (2.88%)
Banco Bradesco
Vale
96,025
84,900
65,147
—
455,126
—
2.12
—
339,471
188,044
Canada 1.28% (3.04%)
Canadian National Railway Co.
Potash Corp. of Saskatchewan
7,800
19,600
—
21,900
—
274,255
—
1.28
291,072
264,731
France 0% (1.37%)
Schneider Electric
6,800
—
—
—
250,578
Germany 4.32% (1.62%)
Fresenius Medical care
Henkel
—
4,400
6,300
4,800
424,486
502,466
1.98
2.34
—
297,436
119,400
6,200
—
26,000
96,600
8,300
61,500
26,000
494,506
387,206
260,345
215,548
2.30
1.80
1.21
1.00
407,344
192,887
—
191,300
26,000
26,000
401,310
1.87
274,950
3,800
7,100
424,169
1.97
199,025
Japan 9.99% (7.50%)
Daito Trust Construction
FANUC
Japan Tobacco
Keyence
3,100
2,700
21,300
—
2,100
2,700
18,000
600
258,462
348,832
563,769
335,205
1.20
1.62
2.62
1.56
206,978
272,435
432,953
—
Shin-Etsu Chemical
13,700
12,100
643,573
2.99
461,037
Luxembourg 1.69% (2.14%)
Tenaris
24,600
16,600
362,989
1.69
391,473
7,400
5,800
410,978
1.91
436,110
Singapore 1.11% (0.91%)
City Developments
46,700
46,700
239,024
1.11
167,173
South Africa 1.08% (1.64%)
MTN Group
35,400
35,400
233,006
1.08
301,183
South Korea 2.56% (2.64%)
Samsung
950
610
549,389
2.56
483,616
17,200
40,700
39,100
17,200
—
—
398,124
—
—
1.85
—
—
272,196
263,419
286,688
Hong Kong 6.31% (4.31%)
AIA Group
Jardine Matheson
MTR
Swire Pacific
Ireland 1.87% (1.50%)
Experian
Israel 1.97% (1.09%)
Check Point Software Technologies
Mexico 1.91% (2.38%)
Fomento Economico Mexicano
Sweden 1.85% (4.50%)
Atlas Copco
Ericsson
Nordea Bank
37
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
International Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
Switzerland 9.30% (11.22%)
Nestle
Novartis
Roche Holding
Zurich Insurance Group
9,000
10,400
3,700
2,100
7,200
13,100
4,000
—
437,832
795,051
765,376
—
2.04
3.70
3.56
—
445,561
628,349
642,206
339,312
—
55,800
233,066
1.08
—
43,000
29,500
694,806
3.23
589,183
—
28,100
18,000
80,651
40,284
23,000
47,741
127,100
—
7,200
17,900
8,982
—
43,034
23,000
49,524
234,000
8,628
320,619
208,043
442,858
—
309,952
459,368
311,184
518,848
337,786
1.49
0.97
2.06
—
1.44
2.14
1.45
2.41
1.57
—
282,335
655,785
402,231
272,823
359,375
305,900
264,978
—
10,200
8,100
4,900
7,800
10,200
10,000
15,000
—
—
—
—
9,700
9,200
8,800
12,200
1,500
—
—
—
355,629
469,809
602,824
908,191
310,924
—
—
—
1.65
2.19
2.80
4.23
1.45
211,912
175,636
255,149
322,350
382,715
636,970
720,812
—
6,200
4,600
418,267
1.95
382,069
2,500
24,100
7,900
—
8,900
4,100
8,400
7,000
8,000
5,000
18,400
7,900
4,400
7,300
4,700
5,500
5,500
8,000
446,844
556,320
661,465
312,691
546,095
437,129
332,943
316,599
509,346
2.08
2.59
3.08
1.45
2.54
2.03
1.55
1.47
2.37
201,263
574,438
491,524
—
466,079
275,598
382,138
330,025
366,371
21,202,633
354,484
21,557,117
(65,423)
21,491,694
98.63
1.65
100.30
(0.30)
100.00
18,235,186
125,585
18,360,771
(52,865)
18,307,906
Thailand 1.08% (0.00%)
Kasikornbank
Taiwan 3.23% (3.22%)
Taiwan Semiconductor Manufacturing
UK 13.53% (13.89%)
Amdocs
BNP Billiton
British American Tobacco
HSBC
Rolls Royce Holdings
Royal Dutch Shell
Standard Chartered
Vodafone Group
Whitbread
USA 33.43% (33.74%)
Baxalta
Baxter International
Chevron
Cognizant Technology Solutions
Comcast
CVS Healthcare
EOG Resources
Intercontinental Exchange
Johnson & Johnson
M&T Bank
Oracle
Pepsico
Perrigo
Philip Morris International
Praxair
Schlumberger
TJX Companies
Visa
Total Value of Investments
Other Assets
Total Assets
Liabilities
Total Net Assets
Cost of investments purchased
Proceeds from investments sold
£
Year
ended
30.09.16
Year
ended
30.09.15
£3,626,327
£5,719,816
£3,338,321
£6,439,239
38
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
North American Fund
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
£
Chemicals 7.97% (5.88%)
International Flavors & Fragrances
Parexel Intl
Potash Corp. of Saskatchewan
Praxair
Consumer Goods 37.48% (40.62%)
BorgWarner
Canadian National Railway Co.
Casey's General Stores
Costco Wholesale
CVS Healthcare
Deere & Company
Emerson Electric
Estée Lauder
Gilead Sciences
Johnson & Johnson
Kraft Heinz
Monsato
Pepsico
Pfizer
Philip Morris International
PVH Corporation
Target
TJX Companies
United Technologies
Verisk Analytics
Energy 11.63% (10.96%)
Chevron
Ecolab
EOG Resources
National Oilwell Varco
Schlumberger
Texas Instruments
Financials 23.73% (20.49%)
AIG
American Express
Charles Schwab
Equifax
Intercontinental Exchange
M&T Bank
Moodys
Royal Bank of Canada
Visa
Wells Fargo
Information Technology 8.11% (10.61%)
Cognizant Technology Solutions
EMC
Oracle
Qualcomm
Rockwell Automation
TELUS
2,630
—
9,220
2,830
1,980
4,700
10,804
2,139
217,968
251,155
135,695
198,940
2.16
2.49
1.35
1.97
179,225
—
125,114
190,230
4,900
6,080
1,797
2,350
4,420
2,300
3,800
2,126
3,020
3,320
3,110
3,100
2,920
11,700
3,700
3,730
3,900
4,480
2,830
—
9,719
5,373
2,532
2,215
3,474
3,318
—
2,047
2,908
2,669
—
2,342
3,237
11,267
2,639
3,070
2,531
3,371
—
3,210
263,176
270,471
234,186
260,062
237,978
217,905
—
139,547
177,122
242,686
—
184,286
271,033
293,731
197,417
261,210
133,808
194,047
—
200,829
2.61
2.68
2.32
2.58
2.36
2.16
—
1.38
1.76
2.41
—
1.83
2.69
2.91
1.96
2.59
1.33
1.92
—
1.99
134,522
227,787
122,080
224,272
281,541
112,362
110,795
113,216
195,565
204,592
144,880
174,662
181,677
242,574
193,763
250,973
202,537
211,216
166,166
—
2,930
—
4,000
3,860
2,710
4,200
2,822
2,140
3,852
—
3,477
4,656
223,577
200,450
286,750
—
210,480
251,510
2.22
1.99
2.84
—
2.09
2.49
152,569
—
192,217
96,006
123,285
137,278
2,883
3,900
10,750
3,200
1,760
1,800
—
3,580
5,880
7,060
4,902
3,755
10,352
2,183
1,599
3,385
2,400
3,448
5,662
4,314
223,911
185,105
251,628
226,123
331,445
302,513
200,065
164,195
360,489
147,071
2.22
1.84
2.50
2.24
3.29
3.00
1.98
1.63
3.58
1.46
108,116
190,797
202,651
205,267
272,915
144,909
—
129,937
269,282
239,124
5,500
6,900
8,930
4,790
—
9,300
4,763
—
7,798
—
2,189
7,940
174,625
—
235,771
—
205,621
201,331
1.73
—
2.34
—
2.04
2.00
227,298
110,031
212,852
169,875
—
192,791
39
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
North American Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
Services 10.02% (13.69%)
Aetna
Alliance Data Systems
Baxalta
Baxter International
Comcast
Lockheed Martin
Quest Diagnostics
Starwood Hotels & Resorts Worldwide
3,330
1,000
3,800
6,300
4,770
923
2,900
2,910
2,157
1,232
—
6,195
4,869
756
—
—
Total Value of Investments
Other Assets
Total Assets
Liabilities
Total Net Assets
Cost of investments purchased
Proceeds from investments sold
Year
ended
30.09.16
Year
ended
30.09.15
£1,784,343
£2,716,057
£1,610,309
£2,470,126
40
£
191,797
203,470
—
226,983
248,641
139,531
—
—
1.90
2.02
—
2.25
2.47
1.38
—
—
240,459
170,933
78,948
136,606
178,975
126,341
117,637
127,725
9,976,334
163,545
10,139,879
(56,819)
10,083,060
98.94
1.62
100.56
(0.56)
100.00
8,544,573
86,816
8,631,389
(27,315)
8,604,074
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
Sterling Bond Fund
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
UK Government 2.90% (5.59%)
Treasury 4.25% 2032
Treasury 4.25% 2049
Treasury 4.25% 2055
Treasury 5% 2025
Treasury 6% 2028
UK Corporate 66.14% (57.62%)
Abbey National 5.25% 2029
Alba 2007-1 Plc FRN 2039
Amlin FRN 6.5% 2026
Annington Finance 5.3236% 2023
Annington Finance 8.07% 2023
Aspire Financial Management 4.674% 2040
Autolink 8.39% 2022
Aviva FRN 2058
Aviva 6.625% 2058
Bank of Scotland 6.375% 2019
Bank of Scotland 9.375% 2021
Bank of Scotland 10.5% 2018
Barclays Bank FRN 6.75% 2023
Barclays Bank 9.5% 2021
Barclays Bank 10% 2021
BG Energy Capital 5.00% 2036
BG Energy Capital 2072 FRN
BL Superstores 4.482% 2030
British American Tobacco 6% 2022
British Telecom 6.375% 2037
Canary Wharf Finance 5.952% 2035
Centrica 5.25% 2075
Centrica 7% 2033
Centrica 6.375% 2022
Close Brothers 6.5% 2017
Clydesdale Bank 4.625% 2026
CRH Finance 4.125% 2029
Daily Mail and General 6.375% 2027
Dignity Finance 4.6956% 2049
Dukinfiled No 1 FRN 2045
Dukinfiled ZERO 2052
Eastern Power Networks 5.75% 2024
EMH Treasury Plc 4.5% 2044
EE Finance 4.375% 2019
FCE Bank 2.727% 2022
First Group 6.875% 2024
First Group 8.125% 2018
First Group 8.75% 2021
Friends Life Group 8.25% 2022
Gatwick Funding Ltd 6.125% 2026
Gatwick Funding 6.5% 2043
Gemgarto 2015 ZERO 2047
GlaxoSmithKline 5.25% 2042
Great Rolling Stock 6.25% 2020
Great Rolling Stock 6.25% 2031
Hutchinson WHAMPOA Finance UK 5.625% 2026
Heathrow Funding 5.875% 2043
Heathrow Funding 6% 2020
£
877,000
—
350,000
—
—
—
63,000
150,000
57,000
111,000
—
109,343
278,483
77,551
176,174
—
0.49
1.26
0.35
0.80
1,126,875
—
521,411
—
—
137,000
—
100,000
—
120,000
300,000
300,000
225,000
—
72,000
40,000
100,000
100,000
—
425,000
200,000
320,000
241,154
100,000
101,000
150,000
100,000
120,000
225,000
100,000
100,000
—
—
151,000
100,000
—
250,000
—
100,000
—
120,000
140,000
204,000
300,000
100,000
100,000
—
—
—
100,000
69,000
356,000
100,000
—
290,000
—
—
150,000
100,000
120,000
225,000
—
100,000
100,000
50,000
151,000
100,000
100,000
169,000
100,000
—
100,000
85,000
—
90,000
100,000
100,000
100,000
100,000
100,000
204,000
100,000
50,000
115,000
100,000
—
77,311
—
139,775
186,429
249,585
199,276
121,007
111,409
—
—
—
105,024
88,350
459,716
142,201
—
267,859
—
—
201,155
103,667
199,395
287,905
—
128,369
120,352
63,037
193,703
84,782
99,253
219,748
131,214
—
106,074
113,344
—
116,519
126,784
137,277
171,719
42,299
159,929
240,477
132,312
67,501
184,019
115,459
—
0.35
—
0.63
0.84
1.13
0.90
0.55
0.50
—
—
—
0.47
0.40
2.08
0.64
—
1.21
—
—
0.91
0.47
0.90
1.30
—
0.58
0.54
0.29
0.88
0.38
0.45
0.99
0.59
—
0.48
0.51
—
0.53
0.57
0.62
0.78
0.19
0.72
1.09
0.60
0.31
0.83
0.52
174,829
—
101,833
—
158,662
335,660
224,641
246,146
—
80,866
50,732
117,668
107,592
—
545,368
235,914
336,741
268,767
119,660
130,745
187,756
95,812
161,967
268,757
105,789
118,270
—
—
164,099
97,216
—
300,064
—
106,296
—
161,932
171,593
112,130
118,508
123,379
—
90,816
—
345,006
123,710
122,164
143,723
112,657
100,000
—
135,000
150,000
90,000
100,000
100,000
—
100,000
—
300,000
100,000
100,000
115,000
100,000
41
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
Sterling Bond Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
UK Corporate (continued)
Heathrow Funding 6.45% 2033
Heathrow Funding 6.75% 2028
Heathrow Funding 7.125% 2024
HSBC FRN 2023
HSBC Bank 5.84%
HSBC 6.00% 2040
HSBC 6.375% FRN 2022
HSBC 6.5% 2024
Imperial Tobacco 8.125% 2024
Imperial Tobacco 9% 2022
Integrated Accommodation Service 6.48% 2029
InterContinental Hotels 3.75% 2025
InterContinental Hotels 3.875% 2022
Lloyds Bank 5.75% 2025
Lloyds Bank 6% 2029
Lloyds Bank 6.5% 2040
Lloyds Bank 7.625% 2025
Manchester Airport 4.75% 2034
Marks & Spencer 4.75% 2025
Meadowhall 4.988% 2037
Mitchells FRN 2032
Mitchells & Butler 5.965% 2025
Motability 3.75% 2026
Motability 4.375% 2027
NATS En Route 5.25% 2026
National Grid Gas 2.625% 2038
National Grid Gas 2.75% 2046
National Grid Gas 8.75% 2025
Nationwide 5.625% 2019
NGG Finance 2073 FRN
NIE Finance 6.375% 2026
Northumbrian Water 5.125% 2042
Orbit Capital 3.5% 2045
Paragon Mortgages No.23 2015
Permanent Master 4.805% 2017
Places For People Homes 5.875% 2031
Porterbrook Rail Finance 5.5% 2019
Prudential 5.7% 2063
Prudential 11.375 2039 FRN
QBE Insurance 6.115% 2042
QBE Capital Funding 2041 FRN
Rio Tinto Finance 4% 2029
RL Finance 6.125% 2028
RMPA Services 5.337% 2038
Rolls-Royce Plc 3.375% 2026
Royal Bank of Scotland 5.125% 2024
Royal Bank of Scotland 6.875% 2025
Royal Sun Alliance 5.125% 2045
Santander UK 9.625% 2023 FRN
Scottish Amicable Finance 8.5%
Scottish & Southern Energy FRN (Perp)
Segro Plc 6.75% 2021
Severn Trent 6.25% 2029
Society of Lloyds 7.421% FRN (Perp)
Southern Gas Networks 4.875% 2020
Southern Gas Networks 6.375% 2040
Southern Water 5% 2021
SSE Plc 6.25% 2038
200,000
150,000
100,000
300,000
—
365,000
200,000
200,000
150,000
200,000
225,000
100,000
110,000
308,000
100,000
155,000
—
200,000
112,000
300,000
150,000
550,000
100,000
100,000
200,000
—
—
100,000
170,000
120,000
100,000
100,000
100,000
139,000
147,000
150,000
300,000
—
100,000
—
100,000
125,000
—
180,000
—
200,000
200,000
200,000
125,000
—
150,000
—
170,000
114,000
150,000
100,000
180,000
90,000
200,000
150,000
100,000
204,000
50,000
115,000
200,000
200,000
150,000
—
152,000
—
110,000
100,000
100,000
—
370,000
100,000
112,000
300,000
100,000
371,000
—
—
—
100,000
100,000
—
—
120,000
200,000
100,000
100,000
139,000
147,000
150,000
—
210,000
—
112,000
—
—
100,000
—
100,000
—
—
100,000
125,000
123,000
—
200,000
170,000
114,000
—
100,000
180,000
90,000
42
£
312,212
217,886
134,452
212,962
57,783
149,499
208,771
258,470
216,215
—
137,531
—
123,559
110,503
149,056
—
490,055
136,259
131,138
299,515
74,292
161,232
—
—
—
104,225
104,861
—
—
135,020
283,084
151,768
112,660
132,352
149,120
198,301
—
225,185
—
120,034
—
—
108,985
—
113,517
—
—
103,435
143,397
132,628
—
253,611
255,846
117,952
—
172,127
211,026
146,648
1.41
0.99
0.61
0.96
0.26
0.68
0.94
1.17
0.98
—
0.62
—
0.56
0.50
0.67
—
2.22
0.62
0.59
1.35
0.34
0.73
—
—
—
0.47
0.47
—
—
0.61
1.28
0.69
0.51
0.60
0.67
0.90
—
1.02
—
0.54
—
—
0.49
—
0.51
—
—
0.47
0.65
0.60
—
1.15
1.16
0.53
—
0.78
0.95
0.66
262,539
196,832
124,170
313,783
—
409,173
213,239
247,660
198,089
265,426
206,884
99,885
112,869
332,061
135,826
215,428
—
220,343
121,429
285,682
125,625
268,652
107,161
111,911
185,826
—
—
149,892
191,969
125,900
127,793
117,353
93,208
137,129
153,285
180,527
331,085
—
126,155
—
109,554
123,627
—
175,359
—
239,967
254,933
197,129
149,369
—
150,263
—
221,168
120,110
167,992
136,444
201,066
117,063
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
Sterling Bond Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
£
UK Corporate (continued)
SSE FRN (Perp)
Standard Chartered Bank 5.125% 2034
Standard Chartered Bank 7.75% FRN (Perp)
Standard Life Finance 6.75% FRN (Perp)
Swan Housing Capital Plc 3.625% 2048
Telereal Securitisation 6.1645% 2031
Thames Water Utilities 3.5% 2028
Trafford Centre Finance 6.5% 2033
United Utilities 5% 2035
UPP Bond 1 4.9023% 2040
Western Power 3.625% 2023
Western Power 5.75% 2040
Western Power 5.75% 2040
Whitbread Group Plc 3.375% 2025
Yorkshire Building Society 3.5% 2026
Yorkshire Building Society 4.75% 2018
200,000
100,000
200,000
220,000
—
150,000
—
200,000
120,000
—
—
—
100,000
100,000
—
100,000
200,000
100,000
140,000
100,000
100,000
—
100,000
200,000
120,000
150,000
100,000
50,000
100,000
—
100,000
—
202,141
98,699
159,250
115,067
114,796
—
117,945
258,241
172,184
184,505
111,159
80,068
160,055
—
108,928
—
0.91
0.45
0.72
0.52
0.52
—
0.53
1.17
0.78
0.83
0.50
0.36
0.72
—
0.49
—
191,250
87,846
227,250
245,355
—
170,605
—
252,032
140,794
—
—
—
126,538
100,384
—
108,714
Overseas Borrowers 27.73% (35.92%)
America Movil SAB 4.948% 2033
America Movil SAB 2073 FRN
Apple Incorporated 3.6% 2042
APT Pipelines
AT&T 4.25% 2043
AT&T 4.875% 2044
AT&T 7% 2040
AXA 5.453% Perp
AXA 6.686% Perp
Bank of America 2.3% 2025
Bank of America 7% 2028
Bank of America Merrill Lynch 7.75% 2018
BHP Billiton Finance 4.3% 2042
BMW Finance 1.6675% 2047
Chorus Ltd 6.75% 2020
Citigroup 4.5% 2031
Citigroup 6.8% 2038
Cooperatieve 6.6% PERP
Deutsche Telekom 6.5% 2022
Deutsche Telekom Intl Finance GRN 2030
Direct TV Holdings 5.2% 2033
E.ON International Finance 6.375% 2032
EDF 5.125% 2050
EDF 5.5% 2041
EDF 6% FRN
EDF 6.125% 2034
ELM FRN (Perp)
European Investment Bank 4.5% 2044
General Electric Cap Corp 5.875% 2033
General Electric Cap Corp 8% 2039
General Electric Cap Corp 2067 6.5% FRN
GKN Holdings 5.375% 2022
Glencore Finance GR 2022
Glencore Finance 6.5% 2019
H J Heinz 4.125% 2027
Iberdrola Finanzas 7.375% 2024
ING Groep 6.875% 2023 FRN
Koninklijke KPN 5% 2026
Linde Finance 8.125% 2068
150,000
100,000
180,000
100,000
235,000
100,000
100,000
250,000
225,000
—
150,000
150,000
200,000
—
—
270,000
85,000
—
—
165,000
130,000
275,000
150,000
300,000
200,000
250,000
150,000
150,000
140,000
210,000
317,000
170,000
150,000
50,000
210,000
150,000
126,000
100,000
125,000
150,000
—
180,000
100,000
135,000
100,000
100,000
100,000
100,000
173,000
—
—
200,000
40,000
100,000
170,000
—
80,000
50,000
—
—
275,000
150,000
200,000
—
200,000
200,000
—
—
—
—
—
—
—
210,000
—
126,000
100,000
—
193,671
—
220,455
107,293
158,971
130,311
162,672
105,973
112,373
174,941
—
—
257,172
42,929
117,378
197,884
—
99,352
64,440
—
—
410,934
208,316
285,285
—
292,090
220,413
—
—
—
—
—
—
—
245,877
—
135,092
123,350
—
0.88
—
1.00
0.49
0.72
0.59
0.74
0.48
0.51
0.79
—
—
1.16
0.19
0.53
0.89
—
0.45
0.29
—
—
1.86
0.94
1.29
—
1.32
1.00
—
—
—
—
—
—
—
1.11
—
0.61
0.56
—
164,498
103,500
175,191
92,619
213,774
99,950
129,837
250,939
248,719
—
203,183
171,560
196,630
—
—
277,361
119,905
—
—
232,874
138,762
329,916
163,720
339,509
198,875
304,445
158,063
200,492
184,971
348,764
329,350
185,300
128,301
45,935
218,046
193,392
138,111
107,423
130,330
43
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
Sterling Bond Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
Overseas Borrowers (continued)
Mellon Capital FRN 2066
MetLife 5.25% 2020
Mondelez International 4.5% 2035
National Capital Trust FRN (Perp)
Orange SA 5.25% 2025
Orange SA 5.375% 2050
Orange SA FRN (Perp)
PGH Capital Ltd 5.75% 2021
Precise Mortgage Funding 1.6675% 2047
Rabobank Capital FRN (Perp)
RCI Banque 1.8% 2017
Residential Mortgage Securities FRN 2046
RWE Finance 6.125% 2039
Saint Gobain 4.625% 2029
Scentre Management 2.375% 2022
Siemens 6.125% FRN 2066
SLM Student Loan 2038 FRN
Stagecoach Group 4% 2025
Svenska Handelsbanken 2.75% 2022
Talisman Energy Incorporated 5.875% 2017
Telefonica Emisiones 5.289% 2022
Thames Water Utilties Cayman 4.375% 2034
Thames Water Utilities Finance 2025 FRN
UBS AG (London Branch) 6.625% 2018
United Mexico STS 5.625% 2014
Vattenfall 6.875% 2039
Verizon Communications 4.75% 2034
Welltower Inc 4.8% 2028
Westpac Bank 2.625% 2022
150,000
189,000
—
220,000
115,000
150,000
222,000
—
100,000
156,000
250,000
100,000
100,000
100,000
100,000
150,000
190,000
—
150,000
300,000
150,000
100,000
140,000
140,000
100,000
194,000
200,000
100,000
—
—
—
120,000
150,000
—
100,000
—
124,000
100,000
110,000
—
200,000
—
—
100,000
—
190,000
100,000
—
—
150,000
—
—
—
—
—
300,000
100,000
100,000
Total Value of Investments
Other Assets
Total Assets
Liabilities
Total Net Assets
Cost of investments purchased
Proceeds from investments sold
Year
ended
30.09.16
Year
ended
30.09.15
£10,260,692
£21,028,918
£20,595,772
£13,469,470
44
£
—
—
147,056
158,160
—
155,005
—
135,521
24,578
117,323
—
138,936
—
—
105,148
—
166,530
113,066
—
—
182,804
—
—
—
—
—
389,637
121,449
107,891
—
—
0.66
0.72
—
0.70
—
0.61
0.11
0.53
—
0.63
—
—
0.48
—
0.75
0.51
—
—
0.83
—
—
—
—
—
1.76
0.55
0.49
151,781
214,261
—
228,323
133,703
174,790
223,661
—
73,783
162,989
248,947
88,937
106,160
107,973
97,731
154,100
171,868
—
152,344
326,071
165,948
106,523
146,438
156,349
94,375
259,949
211,301
107,169
—
21,406,272
936,823
22,343,095
(227,304)
22,115,791
96.77
4.26
101.03
(1.03)
100.00
29,215,074
1,210,975
30,426,049
(961,982)
29,464,067
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
UK Fund
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
Basic Resources 1.91% (4.35%)
Rio Tinto
£
8,500
11,300
290,947
1.91
187,829
16,500
105,000
14,300
104,000
498,284
226,512
3.28
1.49
447,068
234,255
8,500
10,500
17,600
115,000
107,000
36,000
—
7,600
9,600
12,800
—
106,000
28,300
8,200
12,000
78,000
121,000
23,000
—
67,200
119,500
17,300
197,562
480,336
631,104
—
339,465
464,898
325,807
—
484,008
218,542
632,185
1.30
3.16
4.15
—
2.23
3.06
2.14
—
3.18
1.44
4.16
283,943
439,084
641,212
328,325
286,707
455,580
—
240,840
528,255
221,648
617,550
Energy 11.96% (16.88%)
BG Group
BHP Billiton
Centrica
John Wood Group
KSK Power Ventur
Royal Dutch Shell 'A'
Royal Dutch Shell
Weir Group
61,000
40,000
124,000
75,767
31,668
27,914
—
24,500
—
40,000
—
54,400
—
—
29,300
20,900
—
464,900
—
413,032
—
—
585,194
355,405
—
3.06
—
2.72
—
—
3.85
2.34
580,141
401,900
284,270
465,778
10,609
433,714
—
286,528
Financials 15.09% (14.32%)
Capita
HSBC Holdings
Provident Financial
Prudential
Schroders
Schroders Non-Voting
Standard Chartered Bank
14,000
107,561
—
42,500
3,500
12,500
66,106
33,000
86,703
1,145
47,500
2,900
16,301
76,500
221,018
501,794
34,739
648,969
78,170
330,095
480,688
1.45
3.30
0.23
4.27
0.51
2.17
3.16
167,650
536,439
—
592,131
98,158
270,875
423,574
14,000
19,500
388,928
2.56
283,850
—
9,160
48,500
7,500
235,710
337,163
1.55
2.22
—
256,526
Chemicals 4.77% (1.29%)
Croda International
Elementis
Consumer Goods 24.81% (27.72%)
Associated British Foods
AstraZeneca
British American Tobacco
Cobham
GKN
GlaxoSmithKline
Imperial Brands
Persimmon
Rolls Royce Holdings
Tesco
Unilever
Information Technology 2.56% (1.95%)
Aveva Group
Materials 3.77% (1.76%)
Essentra Plc
Spirax-Sarco Engineering
45
Lloyds Investment Funds Limited
Investment Portfolios (continued)
As at 30 September 2016
UK Fund (continued)
Holding
30.09.15
Holding
30.09.16
Market
Value
30.09.16
% of
Total Net
Assets
Market
Value
30.09.15
£
Services 35.03% (27.90%)
Aggreko
American Leisure (Suspended)
BTG Group
Bunzl
Compass Group
Dignity
Experian
Inchcape
Inmarsat
Intertek Group
Pearson
Rotork
RPC Group
Sage Group
Ultra Electronics
Vodafone Group
Whitbread
20,500
416,667
—
—
50,000
—
43,000
45,500
43,000
—
48,000
108,000
—
96,000
23,500
25,300
416,667
24,839
7,000
38,800
8,417
34,000
46,500
50,500
9,500
40,500
161,200
30,000
65,500
23,200
138,000
5,500
136,000
7,800
Total Value of Investments
Other Assets
Total Assets
Liabilities
Total Net Assets
Cost of investments purchased
Proceeds from investments sold
Year
ended
30.09.16
Year
ended
30.09.15
£3,771,663
£4,545,581
£1,656,705
£3,636,200
46
£
241,362
—
157,417
159,635
579,866
235,844
524,790
306,319
356,151
331,503
305,066
340,374
288,075
483,226
411,452
301,553
305,371
1.59
—
1.04
1.05
3.81
1.55
3.45
2.01
2.34
2.18
2.01
2.24
1.89
3.18
2.71
1.98
2.01
195,006
—
—
—
526,750
—
454,725
326,918
422,153
—
540,720
177,930
—
479,376
402,320
287,702
256,686
15,193,459
315,704
15,509,163
(299,807)
15,209,356
99.90
2.08
101.97
(1.97)
100.00
14,074,725
833,382
14,908,107
(321,498)
14,586,609
Lloyds Investment Funds Limited
47
Lloyds Investment Funds Limited
Investments Purchased and Sold
For the year ended 30 September 2016
This schedule refers to investments both purchased and sold during the year and as a result do not appear on the portfolio listings.
Nominal
Euro High Income Fund
AP Moeller FRN 2019
100,000
AT&T Inc 2.4% 2024
100,000
Bayer AG 3% 2075
47,000
Kraft Heinz Foods 2% 2023
305,000
Molson Coors 1.25% 2024
100,000
Rio Tinto Finance 2% 2020
100,000
Royal Bank of Scotland 2.5% 2023
100,000
High Income Fund
Treasury Gilt 4.25% 2036
1,680,000
Treasury Gilt 4.75% 2030
3,770,000
Treasury Gilt 5% 2018
1,000,000
Treasury Gilt 2% 2025
4,205,000
Vodafone Group 3.375% 2049
980,000
Wells Fargo & Co 2% 2025
530,000
Sterling Bond Fund
AT&T Inc 5.2% 2033
130,000
Charter Communications inc 5.75% 2031
125,000
Cooperatieve Rabobank 5.375% 2060
50,000
Glencore Finance 7.375% 2020
150,000
Motability 3.625% 2036
100,000
Santander UK 3.625% 2026
122,000
South Eastern Power GRN 2031
100,000
Treasury Gilt 5% 2018
150,000
Treasury Gilt 3.75% 2020
161,000
Treasury Gilt 3.75% 2021
100,000
Treasury Gilt 1.75% 2022
95,000
Treasury Gilt 2% 2025
262,000
Vodafone Group 3.375% 2049
105,000
Wells Fargo & Co 2% 2025
100,000
48
Lloyds Investment Funds Limited
Summary of Material Portfolio Changes
For the year ended 30 September 2016
This schedule refers to securities purchased and sold during the year which had a value of greater than 2% of the net asset value of each Fund.
The Directors consider that where applicable the disclosure of the 20 largest purchases and sales is sufficient to reflect the nature of the
operating activity of the Funds.
Euro High Income Fund
Purchases
Cooperatieve Rabobank 4.75% 2022
KFW Bankengruppe 4.675% 2023
BNP Paribas 4.5% 2023
Barclays Bank 6.625% 2022
Unibail Rodamco 2% 2016
Total Capital 5.125% 2024
Credit Agricole 5.125% 2023
KFW Bankengruppe 4.675% 2023
HBOS Plc 4.5% 2030
United Utilities Water 4.25% 2020
Total FRN (Perp)
Iberdrola 5.625% 2018
CRH Finance 5% 2019
AT&T 3.375% 2034
Kraft Heinz 2% 2023
Bundesrepublic 5.5% 2031
ABN Amro Bank 2.88% 2028
Anheuser Busch 2.75% 2036
America Movil 2.125% 2028
Bundesrepublic 2.25% 2021
Cost €
Sales
381,613
377,100
323,059
309,249
299,412
269,304
267,343
266,965
265,069
235,631
234,435
234,255
229,266
225,238
210,682
205,892
198,766
197,228
196,922
195,826
Roche Finance Europe 0.875% 2025
Renault 3.625% 2018
Deutsche Bank 5.125% 2017
Kraft Heinz 2% 2023
SAP SE 1.75% 2027
Sanofi SA 0.875% 2021
HSBC Holdings 6% (Perp)
Terna Rete Elettrica Nazionale 0.875% 2022
BAT International Finance 0.875% 2023
ABN Amro Bank 5.75% (Perp)
AT&T 2.45% 2035
Statkraft 1.5% 2030
The Coca Cola Company 1.125% 2027
Barclays Bank 6.625% 2022
Vattenfall 6.25% 2021
Goldman Sachs 4.5% 2016
National Capital Instruments FRN (Perp)
Jefferies Group 2.375% 2020
Volkswagen International Finance 3.75% (Perp)
HBOS Plc 4.5% 2030
Proceeds €
254,463
219,881
219,847
217,939
215,798
206,380
202,659
198,328
193,589
191,688
186,905
184,757
165,665
161,874
154,914
150,000
148,446
147,437
139,366
134,719
European Fund
Purchases
Bayer
Partners Group Holding
UBS Group
Essilor International
L'Oreal
Bayer
Henkel
Grandvision
Edenred
Grandvision
Holcim
Edenred
Ericsson
Novartis
Bayer
Unilever
Novozymes
UBS Group
Brunello Cucinelli
Furgo
Cost £
Sales
150,581
147,690
76,938
73,254
63,681
59,835
59,279
59,038
58,754
54,583
52,538
51,150
45,571
41,078
40,768
40,394
39,552
38,339
37,553
36,796
KION Group
ENI
Atlas Copco
Schindler
Schindler
Casino Guichard-Perrachon
Syngenta
Syngenta
Casino Guichard-Perrachon
Swedish Match
Nordea Bank
MTU Aero Engines AG
Syngenta
Schindler
Assa Abloy
ENI
MTU Aero Engines AG
Casino Guichard-Perrachon
Linde
Schneider Electric
49
Proceeds £
131,616
120,371
85,630
81,016
77,718
73,839
73,071
71,769
70,821
70,291
68,477
67,612
62,954
61,172
61,130
54,344
50,055
48,152
44,269
44,239
Lloyds Investment Funds Limited
Summary of Material Portfolio Changes (continued)
For the year ended 30 September 2016
High Income Fund
Purchases
Treasury Gilt 2% 2025
Treasury Gilt 4.75% 2030
Westpac Bank 2.625% 2022
SSE FRN (Perp)
Treasury Gilt 4.25% 2036
Coventry Building Society 2050
National Grid Gas 2.625% 2038
National Grid Gas 2.75% 2046
Chorus Ltd 6.75% 2020
Thames Water 6.75% 2028
UPP Bond 1 4.9023% 2040
Treasury Gilt 5% 2018
Aviva 2041 FRN
Treasury Gilt 4.75% 2030
Treasury Gilt 1.75% 2022
AT&T Inc 4.375% 2029
Bank of America 2.3% 2025
Western Power 3.625% 2023
Vodafone Group 3.375% 2049
H J Heinz 4.125% 2027
Cost £
Sales
3,043,073
2,685,566
2,191,156
2,046,452
2,016,571
1,677,000
1,490,475
1,479,045
1,438,324
1,267,214
1,263,267
1,110,490
1,098,606
1,074,400
1,023,099
1,022,831
998,040
995,810
969,269
923,823
National Grid Electricity Transmission 6.5% 2028
UBS AG (Jersey) 8.75% 2025
Santander UK 10.0625% (Perp)
GE Capital UK Funding 5.125% 2023
Vattenfall 6.875% 2039
AIG SunAmerica Institutional Funding 5.375% 2016
National Grid Gas 8.75% 2025
General Electric Capital Corp 2067 FRN
Scottish & Southern Energy (Perp) FRN
Aegon 6.125% 2031
Annington Finance No 4 2023 FRN
Cie de Saint Gobain 5.625% 2016
Treasury Gilt 4.75% 2030
Standard Chartered (Perp) FRN
Telefonica Emisione 5.445% 2029
MetLife 5.25% 2020
Treasury Gilt 2% 2025
Telereal Securitisation 6.1645% 2031
Arkle Master Issuer 4.681% 2060
Scentre Management 2.375% 2022
Proceeds £
4,081,846
3,953,483
3,699,381
3,603,927
2,664,878
2,617,424
2,294,332
2,071,339
1,655,000
1,622,683
1,560,311
1,526,642
1,504,555
1,500,000
1,424,014
1,414,232
1,340,844
1,247,217
1,239,207
1,200,339
International Fund
Purchases
Novartis
M&T Bank
Perrigo
Whitbread
Perrigo
Standard Chartered
Standard Chartered
Whitbread
Perrigo
Perrigo
Keyence
Roche Holdings
Kasikornbank
M&T Bank
Perrigo
Keyence
Keyence
Keyence
Keyence
Keyence
Cost £
Sales
98,887
98,317
91,856
90,577
80,285
63,426
63,426
60,096
58,016
53,654
53,277
51,241
48,975
47,888
43,978
42,401
42,232
41,466
40,940
40,902
Chevron
Schlumberger
Oracle
Samsung
British American Tabacco
Taiwan Semiconductor Manufacturing
Schneider Electric
British American Tabacco
BNP Billiton
Chevron
Philip Morris International
Fomento Economico Mexicano
Zurich Insurance Group
Banco Bradesco
Nestle
Shin-Etsu Chemical
AIA Group
Banco Bradesco
EOG Resources
Daito Trust Construction
50
Proceeds £
202,524
150,944
136,143
123,557
114,636
110,240
107,407
104,935
103,011
98,165
96,057
95,856
95,413
94,437
89,602
86,216
84,524
84,338
82,924
82,554
Lloyds Investment Funds Limited
Summary of Material Portfolio Changes (continued)
For the year ended 30 September 2016
North American Fund
Purchases
Rockwell Automation
Moodys
Parexel International
Ecolab
Verisk Analytics CL A
Parexel International
Moodys
M&T Bank
Casey's General Stores
Schlumberger
Lockheed Martin
BorgWarner
Verisk Analytics CL A
M&T Bank
Alliance Data Systems
Ecolab
BorgWarner
M&T Bank
AIG
Lockheed Martin
Cost £
Sales
113,934
112,464
105,113
102,061
88,927
85,103
51,109
50,669
48,261
45,381
45,167
45,112
44,524
44,091
42,601
42,528
42,170
38,973
37,659
37,063
Kraft Heinz
Qualcomm
Starwood Hotels & Resorts Worldwide
United Technologies
EMC
Emerson Electric
Quest Diagnostics
National Oilwell Varco
Equifax
Lockheed Martin
Target
Lockheed Martin
TJX Companies
Wells Fargo
PVH Corporation
Monsato
Qualcomm
CVS Healthcare
Wells Fargo
Texas Instruments
Proceeds £
160,538
143,742
135,488
130,106
124,185
122,093
111,573
83,880
76,912
62,411
61,929
59,036
52,850
52,157
47,454
46,317
43,366
37,616
37,448
36,118
Sterling Bond Fund
Purchases
Treasury Gilt 4.25% 2032
Treasury Gilt 6% 1998
Lloyds Bank 7.625% 2025
PGH Capital Ltd 5.75% 2021
Treasury Gilt 5% 2025
Treasury Gilt 4.25% 2032
Bank of America 2.3% 2025
Treasury Gilt 4.25% 2055
Westpac Bank 2.625% 2022
Prudential 5.7% 2063
UPP Bond 1 4.9023% 2040
Glencore 7.375% 2020
Treasury Gilt 5% 2018
Treasury Gilt 2% 2025
National Grid Gas 8.75% 2025
Swiss Reinsurance Co via ELM BV (Perp) FRN
Treasury Gilt 4.25% 2055
HSBC Bank 5.84%
Treasury Gilt 6% 1998
Gatwick Funding 6.5% 2043
Cost £
Sales
532,418
495,469
487,498
276,777
275,037
269,297
257,169
232,384
199,196
174,713
172,264
171,711
166,574
165,609
158,650
158,510
154,981
154,846
153,848
144,492
Treasury Gilt 4.25% 2032
Treasury Gilt 4.25% 2032
GE Capital UK Funding 8% 2039
BG Energy Capital 2072 FRN
General Electric Capital Corp 2067 FRN
Porterbrook Rail Finance 5.5% 2019
Talisman Energy Incorporated 5.875% 2017
Imperial Tobacco 9% 2022
Royal Bank of Scotland 6.875% 2025
HSBC Holdings 6% 2040
Royal Bank of Scotland 5.125% 2024
Vattenfall 6.875% 2039
RCI Banque 1.8% 2017
Treasury Gilt 4.25% 2055
Deutsche Telekom Intl Finance GRN 2030
Orange SA FRN (Perp)
Lloyds Bank 5.75% 2025
Treasury Gilt 4.25% 2055
General Electric Cap. Corp. 5.875% 2033
National Grid Gas 8.75% 2025
51
Proceeds £
1,120,684
395,548
367,047
354,793
345,587
339,329
319,002
282,714
278,526
276,541
264,023
261,633
257,900
239,068
237,123
234,461
232,830
228,622
228,547
226,108
Lloyds Investment Funds Limited
Summary of Material Portfolio Changes (continued)
For the year ended 30 September 2016
UK Fund
Purchases
Royal Dutch Shell
Imperial Brands
Royal Dutch Shell
RPC Group
Standard Chartered
Standard Chartered
Imperial Brands
Imperial Brands
Prudential
Essentra Plc
Capita
Dignity
Rio Tinto
Schroders Non-Voting
Whitbread
Rotork
Associated British Foods
Intertek Group
Intertek Group
Essentra Plc
Cost £
Sales
399,113
147,503
102,544
92,853
87,825
87,825
75,060
72,205
70,981
69,883
69,276
65,435
61,552
52,110
50,965
49,203
46,878
43,933
43,193
42,183
BG Group
Royal Dutch Shell 'A'
Royal Dutch Shell 'A'
Unilever
GlaxoSmithKline
Royal Dutch Shell 'A'
John Wood Group
British American Tabacco
Persimmon
HSBC
Standard Chartered
Persimmon
Associated British Foods
Royal Dutch Shell
Rolls Royce Holdings
British American Tabacco
Centrica
Pearson
Cobham
Sage Group
52
Proceeds £
632,743
150,585
141,547
126,304
122,880
101,318
99,151
96,383
90,108
89,953
87,825
84,358
75,459
74,846
74,560
71,359
68,463
67,535
65,741
62,007
Lloyds Investment Funds Limited
Notes to the Financial Statements
For the year ended 30 September 2016
1. The Company
Significant accounting estimates and judgements
The Company is domiciled and incorporated as a limited liability
company in Jersey, Channel Islands, United Kingdom under the
Companies (Jersey) Law 1991 and is listed on the Channel Islands
Securities Exchange Authority and the Malta Stock Exchange. Full
details of the Company, Investment Objectives and Policy and
Report of the Directors are stated on pages 2 to 6.
The Company makes assumptions and estimates that affect the
reported amounts of assets and liabilities at the statement of
financial position date. Estimates and judgements are continually
evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be
reasonable under the circumstances. The accounting policies
deemed significant to the Company’s results and financial position,
based upon materiality and significant judgements and estimates,
are discussed in the following notes. See Note 3 for further details
on what are considered to be the significant accounting estimates
and judgments.
2. Basis of Presentation
The financial statements of the Company and the Funds have been
prepared in accordance with International Financial Reporting
Standards (‘IFRS’) on the going concern basis. The Funds are:
•
•
•
•
•
•
•
Euro High Income Fund
European Fund
High Income Fund
International Fund
North American Fund
Sterling Bond Fund
UK Fund
3. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been
applied consistently to all years presented, unless otherwise stated
in the following text:
The policies set out below have been consistently applied to all
years presented.
The Directors also monitor new standards and ensure that they are
applied where relevant.
The financial statements have been prepared under the historical
cost convention, as modified by the revaluation of investments, held
at fair value through the profit or loss and in accordance with the
Companies (Jersey) Law 1991 and with the Collective Investment
Funds (Recognized Funds) (Rules) (Jersey) Order 2003 (as
amended). Jersey is not part of the United Kingdom (‘UK’) and the
Company is not regulated by the Financial Conduct Authority (‘FCA’)
or the Prudential Regulation Authority (‘PRA’) of the UK.
3. Adoption of new and revised IFRS’s
The capital of the Company comprises various classes of Shares
each relating to a separate Fund consisting of securities, cash,
other assets and liabilities. These financial statements present the
statements of financial position, statements of comprehensive
income, statements of changes in net assets attributable to
holders of participating redeemable preference shares, cash
flow statements, investment portfolios, notes to the financial
statements, distribution tables (unaudited) and performance
records (unaudited). At the statement of financial position date
there were seven Funds in existence; Euro High Income Fund,
European Fund, High Income Fund, International Fund, North
American Fund, Sterling Bond Fund and UK Fund. The Directors may
from time to time create further classes (Funds).
The amendments address issues that have arisen in the context of
applying the consolidation exception for investment entities.
3.1 Standards, amendments and interpretations effective for the
current year
The following new standards, amendments and interpretations have
been adopted in these financial statements.
Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: The
Company has applied the amendments to IFRS 10, IFRS 12 and IAS 28
- Investment Entities for the first time in the current year.
The Company did not control any entities during the year or the prior
year and as a result, the investment entities amendments have had
no impact on the Company.
Amendments to IAS 28 Investments in Associates and Joint Ventures:
The Company has applied the amendments to IAS 28 Investments in
Associates and Joint Ventures for the first time in the current year.
The Company had no Associates or Joint Ventures during the year or
the prior year and as a result, the investment entities amendments
have had no impact on the Company.
3.2 The following New and revised standards, amendments and
interpretations have been published but are not yet effective:
• IFRS 9, ‘Financial Instruments’ (effective from 1 January 2018).
• IFRS 15, ‘Revenue from contracts with customers’ (effective 1
The net assets attributable to holders of participating redeemable
preference shares are classified as financial liabilities and therefore,
in the opinion of the Directors, the Capital of the Company is only
represented by the Founders Shares. Details of Founders Shares are
disclosed in Notes 3 and 14.
January 2017).
• IAS 7, ‘Cash Flow Statements’ (effective from 1 January 2017).
• IAS 12, ‘Income Taxes’ (effective from 1 January 2017).
There are no other standards, interpretations or amendments to
existing standards that are not yet effective that would be expected
to have a significant impact on the Company.
Where assets of an individual Fund are insufficient to meet the
Funds liabilities, then any liabilities that remain undischarged will
revert to the Company as a whole and be allocated amongst the
other Funds.
53
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
3. Summary of Significant Accounting Policies (continued)
Foreign currency translation
Assets and liabilities denominated in currencies other than the
functional currency of the Fund are translated at the rate of
exchange ruling at the statement of financial position date. The
currency profits or losses arising on translation, together with
currency profits or losses realised during the year, are recognised in
the statement of comprehensive income.
Functional currency and presentational currency
Items included in the Company’s financial statements are measured
using the currency of the primary economic environment in which
it operates (the ‘functional currency’). The Directors have
adopted sterling as the functional and presentational currency
for consolidation purposes which reflects the Company’s primary
economic environment in which financial assets are invested and the
regulatory environment of the majority of investors, being UK based.
The rate of exchange to sterling from euro ruling at 30 September
2016 used for the conversion of statement of financial position items
was 1.1559 and the average rate for the year used for the conversion
of the statement of comprehensive income was 1.2787.
The Company has adopted sterling as its presentational and
functional currency for European Fund, High Income Fund,
International Fund, North American Fund, Sterling Bond Fund
and UK Fund as the majority of Shares in each Fund have been
subscribed for in sterling and all non dealing related fees and
expenses are paid in sterling.
Financial assets and financial liabilities at fair value through
profit or loss
(a) Classification
The Company classifies its investments in debt and equity securities
as financial assets at fair value through profit or loss. These financial
assets and financial liabilities are designated by the Board of
Directors as fair value through profit or loss at inception.
The Company has adopted euro as its presentational and functional
currency for the Euro High Income Fund as the Shares in the Fund
have been subscribed for in Euros and the majority of non dealing
related fees and expenses are paid in euro.
Financial assets and financial liabilities designated at fair value
through profit or loss at inception are those that are managed and
their performance evaluated on a fair value basis in accordance with
the Company’s documented investment strategy.
Share premium and share capital currency translation
Share premium and share capital transactions are translated into
sterling at the exchange rate ruling at the time of the transaction.
(b) Recognition
The aggregated balance of net assets attributable to holders of
participating redeemable preference Shares is translated at the
appropriate month end exchange rate. Purchases and sales are recognised on the trade date (the date on
which the Company commits to purchase or sell the asset).
(c) Measurement
Segmental reporting
Financial assets and financial liabilities at fair value through profit or
loss are initially recognised at fair value, and transaction costs for all
financial assets and financial liabilities carried at fair value through
profit or loss are expensed in the statement of comprehensive
income as incurred. Subsequent to initial recognition, all financial
assets and financial liabilities at fair value through profit or loss are
measured at fair value.
The Company, at the statement of financial position date is
organised into seven business segments, each focusing on
achieving returns by investing in a range of investments as described
in the Investment Objectives and Policy on page 3.
The Company issues Shares which are allocated to the Fund selected
by the investor. A separate account is maintained for each Fund,
to which proceeds of issue, the income arising from those proceeds
and expenses are allocated. Upon redemption shareholders are
entitled to their proportion of the net assets held in the Fund in
which their Shares have been designated.
Gains and losses arising from changes in the fair value of financial
assets or financial liabilities at fair value through profit or loss are
recognised in the statement of comprehensive income in the year in
which they arise.
A statement of financial position, statement of comprehensive
income, statement of changes in net assets attributable to holders
of participating redeemable preference shares and cash flow
statement have been prepared for each Fund as well as for the
Company as a whole.
Revenue recognition
Investment income is recognised in the statement of comprehensive
income on an ex-dividend basis when the right to receive payment is
established or on a time proportionate basis for all debt instruments
using the Effective Interest Rate method (‘EIR’). This is a method of
calculating the amortised cost of a financial asset or financial liability
and of allocating the interest income or interest expense over the
relevant year.
54
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
3. Summary of Significant Accounting Policies (continued)
Revenue recognition (continued)
Bank interest is recognised in the statement of comprehensive
income on a time proportionate basis using the EIR method. The
effective interest rate is the rate that exactly discounts estimated
future cash payments or receipts throughout the expected life of the
financial asset or liability, or, when appropriate, a shorter period, to
the net carrying amount of the financial asset or financial liability.
Fair value estimation
The fair value of financial instruments traded in active markets (such
as publicly traded derivatives and trading securities) is based on
quoted market prices at the statement of financial position date. The
quoted market price used for financial assets and financial liabilities
held by the Fund is the current mid-market price as required by IFRS
13 financial assets and financial liabilities at fair value at close of
business on the last business day of the accounting year.
(iii)Nominal Shares have been accounted for in accordance
with the Companies (Jersey) Law 1991 and corresponding
amounts have been included in debtors and financial liabilities.
A Nominal Share will be created when a Participating Share
is cancelled. A Nominal Share will be cancelled when a
Participating Share is created until the number of Nominal
Shares falls to zero.
(iv)Both issued Nominal and Participating Shares have a nominal
value of £ 0.01 per Share.
etails of the Company’s Share capital transactions are shown in
D
Note 14.
Share premium
Cash and cash equivalents
The premium on issues and redemptions of Participating Shares is
accounted for within the Share premium account which forms part
of the net assets attributable to holders of participating redeemable
preference Shares. Details are shown in Notes 15 and 17.
Cash and cash equivalents include cash in hand and deposits held at
call with banks.
Share capital
(i)The Founders Shares have been subscribed for by the
Manager and are ‘non-participating’. The holders thereof are
entitled only to income arising on the assets represented by
the Founders Shares. These Shares are classified as Ordinary
Share capital in the statement of financial position.
istributions payable to holders of participating redeemable
D
preference shares
Distributions to holders of Participating Shares are recognised as
finance costs when they are ratified by the Directors.
Accrued income and expenses
Accrued income and expenses are recognised initially at fair value
and subsequently stated at amortised cost using the EIR.
(ii)Unclassified Shares may be issued as either participating
redeemable preference shares (‘Participating Shares’) or
Nominal Shares. Participating Shares are redeemable at the
shareholder’s option and are classified as financial liabilities.
Participating Shares are carried at the redemption amount
that is payable if the holder exercises the right to redeem
Shares at the statement of financial position date.
Participating Shares are issued and redeemed at the holder’s
option at prices based on each Fund’s net asset value per
Share at the time of issue or redemption. Each Fund’s net
asset value per Share is calculated by dividing the net assets
attributable to the holders of participating redeemable
preference shares with the total number of Participating
Shares in issue. In accordance with the provisions of the
Company’s regulations, investments are valued based on the
latest traded market price for the purpose of determining the
net asset value per Share for subscriptions and redemptions.
The Shares are divided into Funds according to the type of
investment in which the proceeds of the issue of Shares in
each Fund are invested. A separate portfolio of investments is
maintained for each Fund.
Each holder of a Participating Share is entitled on a poll, to one vote for each Participating Share held. Participating
Shares have a right to dividends declared. If any dividends
are paid, different amounts of dividends may be payable in
respect of different Funds.
55
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
4. Other Accrued Income and Other Debtors
Company
Euro High
Income
Fund
European
Fund
£
£
€
Year ended 30 September 2016
Accrued Income
Founders Shares
Nominal Shares
Total other accrued income and other debtors
5,892,804
1,000
1,333,160
7,226,964
247,623
—
—
247,623
—
—
—
—
Year ended 30 September 2015
Accrued Income
Founders Shares
Nominal Shares
6,928,533
1,000
1,053,019
218,566
—
—
—
—
—
Total other accrued income and other debtors
7,982,552
218,566
—
5. Distributions
The distributions take account of income received on the creation of shares and income deducted on the cancellation of shares,
and comprise:
Company
Year ended 30 September 2016
31 October 2015
30 November 2015
31 December 2015
31 January 2016
29 February 2016
31 March 2016
30 April 2016
31 May 2016
30 June 2016
31 July 2016
31 August 2016
30 September 2016
Total distributions
Income paid on cancellation of shares
Income received on creation of shares
Net distributions for the year
Fees charged to capital*
Net distributions after taxation
£
1,246,603
1,235,019
1,575,912
1,206,004
1,198,644
1,566,339
1,189,063
1,184,032
1,513,463
1,149,437
1,152,140
1,620,876
15,837,532
(130,522)
5,243
15,712,253
(2,723,403)
12,988,850
* Details can be found in Note 10.
56
Euro High
Income
Fund
€
—
—
116,394
—
—
114,592
—
—
113,288
—
—
105,980
450,254
(4,206)
—
446,048
(152,129)
293,919
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
4. Other Accrued Income and Other Debtors
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
Year ended 30 September 2016
Accrued Income
Founders Shares
Nominal Shares
Total other accrued income and other debtors
5,250,124
—
—
5,250,124
21,506
—
—
21,506
8,745
—
—
8,745
379,433
—
—
379,433
18,771
—
—
18,771
Year ended 30 September 2015
Accrued Income
Founders Shares
Nominal Shares
6,110,661
—
—
28,047
—
—
7,888
—
—
605,122
—
—
15,751
—
—
Total other accrued income and other debtors
6,110,661
28,047
7,888
605,122
15,751
5. Distributions
The distributions take account of income received on the creation of shares and income deducted on the cancellation of shares,
and comprise:
High
Income
Fund
Year ended 30 September 2016
31 October 2015
30 November 2015
31 December 2015
31 January 2016
29 February 2016
31 March 2016
30 April 2016
31 May 2016
30 June 2016
31 July 2016
31 August 2016
30 September 2016
Total distributions
Income paid on cancellation of shares
Income received on creation of shares
Net distributions for the year
Fees charged to capital*
Net distributions after taxation
£
1,246,603
1,235,019
1,227,973
1,206,004
1,198,644
1,198,083
1,189,063
1,184,032
1,144,835
1,149,437
1,152,140
1,123,677
14,255,510
(55,106)
—
14,200,404
(2,576,350)
11,624,054
Sterling
Bond
Fund
UK
Fund
£
£
—
—
262,153
—
—
277,399
—
—
274,482
—
—
194,489
1,008,523
(72,126)
—
936,397
(4,284)
932,113
—
—
—
—
—
—
—
—
—
—
—
211,024
211,024
—
5,243
216,267
(23,794)
192,473
* Details can be found in Note 10.
57
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
5. Distributions (continued)
Company
Year ended 30 September 2015
31 October 2014
30 November 2014
31 December 2014
31 January 2015
28 February 2015
30 September 2015
30 April 2015
31 May 2015
30 June 2015
31 July 2015
31 August 2015
30 September 2015
Total distributions
Income paid on cancellation of shares
Income received on creation of shares
Net distributions for the year
Fees charged to capital*
Net distributions after taxation
£
1,420,083
1,415,089
1,737,465
1,410,863
1,389,323
1,665,544
1,356,172
1,352,489
1,629,125
1,308,777
1,268,460
1,795,564
17,748,954
51,652
(110,675)
17,689,931
(2,974,811)
14,715,120
Euro High
Income
Fund
€
—
—
143,387
—
—
122,955
—
—
122,020
—
—
108,025
496,387
10,485
(5,478)
501,394
(159,182)
342,212
* Details can be found in Note 10.
6. Accrued Expenses and Other Creditors
Company
Euro High
Income
Fund
European
Fund
£
€
£
Year ended 30 September 2016
Due to Manager
Due to Custodian
Other Creditors
410,511
21,676
95,429
18,687
1,280
5,131
26,308
1,660
7,867
Total accrued expenses and other creditors
527,616
25,098
35,835
Year ended 30 September 2015
Due to Manager
Due to Custodian
436,987
23,301
19,134
1,370
26,036
1,607
Other Creditors
146,527
9,373
9,196
Total accrued expenses and other creditors
606,815
29,877
36,839
58
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
5. Distributions (continued)
High
Income
Fund
Year ended 30 September 2015
31 October 2014
30 November 2014
31 December 2014
31 January 2015
28 February 2015
30 September 2015
30 April 2015
31 May 2015
30 June 2015
31 July 2015
31 August 2015
30 September 2015
Total distributions
Income paid on cancellation of shares
Income received on creation of shares
Net distributions for the year
Fees charged to capital*
Net distributions after taxation
£
1,420,083
1,415,089
1,411,327
1,410,863
1,389,323
1,364,054
1,356,172
1,352,489
1,330,900
1,308,777
1,268,460
1,248,508
16,276,045
23,400
(88,656)
16,210,789
(2,835,071)
13,375,718
Sterling
Bond
Fund
UK
Fund
£
£
—
—
214,860
—
—
212,534
—
—
211,778
—
—
264,418
903,590
17,430
(12,346)
908,674
(3,580)
905,094
—
—
—
—
—
—
—
—
—
—
—
203,033
203,033
3,067
(5,621)
200,479
(18,429)
182,050
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
Year ended 30 September 2016
Due to Manager
Due to Custodian
Other Creditors
259,261
12,673
54,967
38,560
1,949
7,604
18,315
1,222
5,676
23,019
1,588
8,208
28,881
1,477
6,668
Total accrued expenses and other creditors
326,901
48,113
25,213
32,815
37,026
Year ended 30 September 2015
Due to Manager
Due to Custodian
280,241
13,873
38,301
1,911
17,843
1,177
30,447
2,145
30,019
1,578
87,897
12,653
8,295
10,447
11,133
382,011
52,865
27,315
43,039
42,730
* Details can be found in Note 10.
6. Accrued Expenses and Other Creditors
Other Creditors
Total accrued expenses and other creditors
59
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
7. Net gain/(loss) on financial assets at fair value through profit or loss
The net gain/(loss) on investments during the year comprise:
Year ended 30 September 2016
Proceeds from sales of investments
during the year
Original cost of investments sold
during the year
Gains/(losses) realised on investments sold
during the year
Company
Euro High
Income
Fund
European
Fund
£
€
£
118,730,474
7,826,335
2,605,966
(110,335,654)
(8,109,793)
(2,462,689)
8,394,820
Realised foreign exchange (losses)/gains
(138,626)
Net realised gains / (losses) for the year
8,256,194
(283,458)
—
(283,458)
143,277
(56,067)
87,210
Net unrealised gains for the year
30,545,189
1,277,484
2,780,708
Net gains on investments
38,801,383
994,026
2,867,918
110,473,753
13,691,414
3,151,496
(104,790,193)
(12,983,230)
(2,872,373)
Year ended 30 September 2015
Proceeds from sales of investments
during the year
Original cost of investments sold
during the year
Gains/(losses) realised on investments sold
during the year
Realised foreign exchange (losses)/gains
Net realised gains/(losses) for the year
5,683,560
(26,888)
5,656,672
708,184
118
708,302
279,123
(18,106)
261,017
Net unrealised losses for the year
(11,699,180)
(1,428,589)
(905,277)
Net (losses)/gains on investments
(6,042,508)
(720,287)
(644,260)
60
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
7. Net gain/(loss) on financial assets at fair value through profit or loss
The net gain/(loss) on investments during the year comprise:
Year ended 30 September 2016
Proceeds from sales of investments
during the year
Original cost of investments sold
during the year
Gains/(losses) realised on investments sold
during the year
Realised foreign exchange (losses)/gains
Net realised gains / (losses) for the year
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
75,993,396
5,719,816
2,716,057
21,028,918
4,545,581
(69,383,745)
(6,387,555)
(2,438,312)
(18,672,456)
(4,648,473)
2,356,462
(102,892)
—
2,162
6,609,651
(667,739)
277,745
—
(65,630)
(19,091)
6,609,651
(733,369)
258,654
2,356,462
(100,730)
Net unrealised gains for the year
16,367,672
5,784,395
2,106,408
511,003
1,995,921
Net gains on investments
22,977,323
5,051,026
2,365,062
2,867,465
1,895,191
71,181,061
6,439,239
2,470,126
13,469,470
3,636,200
(66,871,865)
(6,519,940)
(2,278,339)
(13,160,879)
(3,484,407)
Year ended 30 September 2015
Proceeds from sales of investments
during the year
Original cost of investments sold
during the year
Gains/(losses) realised on investments sold
during the year
Realised foreign exchange (losses)/gains
Net realised gains/(losses) for the year
4,309,196
(80,701)
—
4,309,196
5,170
(75,531)
191,787
(6,690)
308,591
—
185,097
308,591
Net unrealised losses for the year
(5,406,086)
(2,680,844)
(46,750)
(333,360)
Net (losses)/gains on investments
(1,096,890)
(2,756,375)
138,347
(24,769)
61
151,793
(7,351)
144,442
(1,270,278)
(1,125,836)
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
8. Other Income
Company
Euro High
Income
Fund
European
Fund
£
€
£
Year ended 30 September 2016
Bank interest
6,744
54
2
Unclaimed distributions over 10 years old
11,638
210
218
Total
18,382
264
220
7,509
—
292
—
—
—
7,509
—
292
Year ended 30 September 2015
Bank interest
Unclaimed distributions over 10 years old
Total
9. Operating Expenses
Note
Company
Euro High
Income
Fund
European
Fund
£
€
£
Year ended 30 September 2016
Payable to the Manager:
Annual management fees
10
3,694,866
135,897
194,630
Registrar fees
10
188,533
14,384
17,322
Custodian fees
11
258,185
15,408
18,726
Safe custody fees
11
74,795
5,452
5,031
183,579
22,167
10,647
Broker commission, dealing charges
and stamp duty
67,527
1,848
9,449
Audit fee
16,769
600
2,200
4,484,254
195,756
258,005
1.25%
1.92%
Payable to the Custodian:
Other expenses:
Administration expenses*
Total expenses
Total Expense Ratio**
*The Administration expenses includes £5,000 of Director fees (see note 10).
**The Total Expense Ratio, represents the management fee and total operating expenses less the dealing and broker charges, expressed as
an annualised percentage of the average daily net asset values during the year
62
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
8. Other Income
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
Year ended 30 September 2016
Bank interest
5,157
303
5
131
1,103
Unclaimed distributions over 10 years old
5,557
777
—
3,831
1,092
10,714
1,080
5
3,962
2,195
5,867
239
74
299
738
—
—
—
—
—
5,867
239
74
299
738
Total
Year ended 30 September 2015
Bank interest
Unclaimed distributions over 10 years old
Total
9. Operating Expenses
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
Year ended 30 September 2016
£
£
£
£
£
2,479,689
294,351
140,416
254,493
225,006
93,231
23,832
11,701
12,954
18,244
150,470
22,130
14,038
23,264
17,507
47,457
6,563
3,338
6,146
1,996
102,132
13,995
9,211
17,983
12,274
Broker commission, dealing charges
and stamp duty
3,430
19,441
5,684
4,284
23,794
Audit fee
8,100
1,500
1,600
1,200
1,700
2,884,509
381,812
185,988
320,324
300,521
1.02%
1.85%
1.93%
1.09%
1.85%
Payable to the Manager:
Annual management fees
Registrar fees
Payable to the Custodian:
Custodian fees
Safe custody fees
Other expenses:
Administration expenses*
Total expenses
Total Expense Ratio**
*The Administration expenses includes £5,000 of Director fees (see note 10).
**The Total Expense Ratio, represents the management fee and total operating expenses less the dealing and broker charges, expressed as
an annualised percentage of the average daily net asset values during the year
63
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
Note
Company
Euro High
Income
Fund
European
Fund
Annual management fees
10
3,981,268
136,549
205,987
Registrar fees
10
201,189
14,697
18,674
Custodian fees
11
274,879
15,444
19,666
Safe custody fees
11
75,852
4,484
6,053
168,043
17,245
10,111
Broker commission, dealing charges
and stamp duty
76,246
7,936
14,810
Audit fee
26,231
1,800
2,200
4,803,708
198,155
277,501
1.22%
1.91%
9. Operating Expenses
Year ended 30 September 2015
Payable to the Manager:
Payable to the Custodian:
Other expenses:
Administration expenses*
Total expenses
Total Expense Ratio**
*The Administration expenses includes £5,000 of Director fees (see note 10).
**The Total Expense Ratio, represents the management fee and total operating expenses less the dealing and broker charges, expressed as
an annualised percentage of the average daily net asset values during the year
64
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
9. Operating Expenses
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
2,730,239
335,210
143,476
214,612
250,752
101,466
25,711
11,909
13,198
19,361
164,764
24,847
14,344
20,619
19,217
48,721
7,979
2,768
5,647
1,368
97,640
14,436
9,399
9,505
14,198
3,366
24,454
5,737
3,580
18,429
16,000
1,500
1,500
2,200
1,500
3,162,196
434,137
189,133
269,361
324,825
1.01%
1.84%
1.92%
1.08%
1.83%
Year ended 30 September 2015
Payable to the Manager:
Annual management fees
Registrar fees
Payable to the Custodian:
Custodian fees
Safe custody fees
Other expenses:
Administration expenses*
Broker commission, dealing charges
and stamp duty
Audit fee
Total expenses
Total Expense Ratio**
*The Administration expenses includes £5,000 of Director fees (see note 10).
**The Total Expense Ratio, represents the management fee and total operating expenses less the dealing and broker charges, expressed as
an annualised percentage of the average daily net asset values during the year.
65
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
10. Related Party Transactions
(a) Management and Registrar fees
Parties are considered to be related if one party has the ability to
control the other party or exercise influence over the party in making
financial or operating decisions. The following are considered by the
Directors of the Company to be related parties:
The Manager of the Company, Lloyds Investment Fund Managers
Limited, is part of the Lloyds Bank Group of companies. The Manager
is entitled to a daily fee equal at the annual rate set out below by
reference to the net assets of each Fund calculated daily and paid
monthly by the Company.
• The Manager, Lloyds Investment Fund Managers Limited.
• The Investment Manager, Aberdeen Asset Management Limited.
• Key management personnel.
Euro High Income Fund 0.875%
The fees received by the Manager are set out in Note 9. The
Investment Manager is paid by the Manager. Details of amounts
due to the Manager at the end of the year are shown in Note 6.
European Fund 1.500%
High Income Fund 0.875%
All investor share transactions in the Company are facilitated
through the Manager, the aggregate values of which are set out in
the statement of changes in net assets attributable to holders of
participating redeemable preference shares on pages 20 and 21.
International Fund 1.500%
North American Fund 1.500%
Sterling Bond Fund 0.875%
UK Fund 1.500%
At the year end the Manager held Participating Shares in the
Company as follows:
The Directors and the Manager may agree a higher fee for any Fund
subject to a maximum annual rate of 1.5% of the mid market value of
net assets of the Fund. If such a higher fee is agreed, shareholders of
the relevant Fund will be given at least three months written notice
before it comes into effect.
30 September 30 September
2016
2015
Euro High Income Fund
8,001
8,015
European Fund
2,616
2,762
High Income Fund
6,991
7,022
International Fund
2,962
3,026
North American Fund
2,718
2,426
Sterling Bond Fund
4,990
4,981
Details of amounts due to the Manager at the year end are shown in
Note 6.
UK Fund
2,542
2,737
(b) Fees charged to capital
30,820
30,969
The Manager, in its capacity as Registrar, is entitled to a fee payable
by the Company of £12.00 for each shareholding which appears on
the Share Register on the last business day of each annual and half
yearly accounting period. The Manager and the Company may agree
a higher fee.
In order to maximise the income available for distribution to
shareholders, the Directors, in consultation with the Custodian,
have agreed to charge the Management and Registrar fees for
High Income Fund and Euro High Income Fund only, to the capital
of these Funds.
(c) Key management personnel
The following Directors of the Company at 30 September 2016
are employees of Lloyds Banking Group: I.M.J. Hardy, B.C. James,
B. Lysiak and R.D. Willcox. T.J. Herbert is a consultant to Mourant
Ozannes, who are the Jersey legal advisers to the Company and the
Manager.
I.M.J.Hardy, B.C. James and R.D. Willcox are Directors of the
Manager, Lloyds Investment Fund Managers Limited.
(d) Directors’ Fees
Directors who are employees of the Lloyds Banking Group do not
receive Directors’ fees. All other Directors receive a fee of £5,000 per
annum (2015: £5,000 per annum).
66
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
11. Custodian
The fees received by the Custodian are set out in Note 9. Details of
amounts due to the Custodian at the year end are shown in Note 6.
The Custodian is entitled to an annual fee payable monthly by the
Company, in respect of each Fund, at the rates set out in the table
below by reference to the net asset value of each Fund calculated on
a mid-market basis and subject to a minimum overall fee of £20,000
per annum for the Company as a whole.
The Custodian is entitled to reimbursement by each Fund of its
expenses in connection with its duties as Custodian and to make
transaction charges to cover the cost of effecting settlement of
stock and cash.
Custodian Fee Rates
Sterling Funds paid in £
Up to £10m
%
NAV of each Fund
£10m to £25m
%
£25m Plus
%
European Fund
0.150
0.125
0.100
High Income Fund
0.100
0.075
0.050
International Fund
0.125
0.100
0.075
North American Fund
0.150
0.125
0.100
Sterling Bond Fund
0.100
0.075
0.050
UK Fund
0.125
0.100
0.075
Up to €15m
%
NAV of each Fund
€15m to €40m
%
€40m to Plus
%
0.100
0.075
0.050
Euro Fund paid in €
Euro High Income Fund
12. Controlling Party
In the opinion of the Directors, there is no ultimate controlling party
of the Company as defined by International Accounting Standards
(IAS) 24 Related Party Disclosures.
13. Equalisation
The price of a participating share includes an equalisation payment
calculated by dividing the net undistributed income of the Fund
by the number of Shares in issue at the time when the prices are
calculated. The payment of the first distribution after the issue of a
Share includes an amount of equalisation calculated by averaging
the amounts received by way of equalisation during the year to
which the distribution relates.
67
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
14. Share Capital
30 September
2015
30 September
2016
Authorised share Capital:
£
£
1,000 Founders Shares of £1
1,000
1,000
7,500,000
7,500,000
7,501,000
7,501,000
1,000
1,000
750,000,000 Unclassified Shares of 1p
Issued Share Capital:
Founders Shares
Nominal shares:
Balance brought forward
Creations
Redemptions
Balance carried forward
1,053,019
407,950
(127,809)
1,333,160
804,962
443,064
(195,007)
1,053,019
Participating Shares:
Balance brought forward
Creations
Redemptions
Balance carried forward
3,721,035
127,809
(407,950)
3,440,894
3,969,092
195,007
(443,064)
3,721,035
Fund
£
Shares
£
European
High Income
International
North American
Sterling Bond
UK
1,640,323
312,132,511
4,386,747
531,848
13,892,095
2,126,616
16,403
3,121,326
43,867
5,318
138,921
21,266
1,706,523
332,935,361
4,837,797
581,498
20,339,895
2,308,503
17,065
3,329,354
48,378
5,815
203,399
23,085
Total Sterling Funds
334,710,140
3,347,101
362,709,577
3,627,096
Shares
€
Shares
€
9,378,764
138,048
9,393,414
138,194
Shares
£
Shares
£
3,440,894
372,102,991
3,721,035
Fund
Euro High Income
Total Company (Sterling equivalent)
Shares
344,088,904
68
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
15. Share Premium
30 September
2016
30 September
2015
£
£
European
High Income
International
North American
Sterling Bond
UK
—
320,000,386
6,339,798
—
20,689,916
—
—
338,066,552
8,257,516
—
30,957,177
—
Total Sterling Funds
347,030,100
377,281,245
€
€
Fund
Fund
Euro High Income
16,022,883
16,052,573
Total Company (Sterling equivalent)
358,098,319
388,406,683
Balance brought forward
Premium on creations
Premium on redemptions
Transfer from capital reserve
£
388,406,683
13,849,275
(46,788,461)
2,630,822
£
408,869,960
23,448,722
(47,687,455)
3,775,456
Balance carried forward
358,098,319
388,406,683
69
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
16. Capital Reserves
Note
Company
Euro High
Income
Fund
European
Fund
£
€
£
Net realised gains/(losses) on investments b/fwd (Restated)
36,936,407
Transfers to share premium b/fwd
(3,775,455)
Net realised gains/(losses) for the year
—
15,287,723
(1,506,218)
8,256,194
(283,458)
Net realised gains/(losses) on investments c/fwd
41,417,146
94,831
Net unrealised movement on investment b/fwd (Restated)
19,095,337
165,800
30,545,189
1,277,484
2,780,708
Net unrealised movement on investment c/fwd
49,640,526
1,443,284
1,870,927
Total realised/unrealised movement
91,057,672
1,538,115
15,739,642
Net unrealised movement in the year
7
378,289
7
Distributions unclaimed over 10 years old b/fwd
—
—
87,210
13,868,715
(909,781)
—
Net movement in the period
11,639
210
218
Distributions unclaimed over 10 years old c/fwd
11,639
210
218
Fees charged to Capital b/fwd* (Restated)
Net movement in the year
Fees charged to Capital c/fwd*
Transfer to share premium in year
15
As at 30 September 2016
(40,547,178)
(1,213,627)
(808,539)
(2,757,979)
(152,129)
(9,449)
(43,305,157)
(1,365,756)
(817,988)
(2,630,822)
—
(541,424)
45,133,332
172,569
14,380,448
* Details of the fees can be found in Note 10.
Under the Reporting Fund Regime, broker commission, dealing charges and stamp duty are not allowable expenses. The Directors have therefore, transferred
these expenses from the Net undistributed income reserve to a separate broker charges reserve.
70
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
16. Capital Reserves
Net realised gains/(losses) on investments b/fwd
Transfers to share premium b/fwd
Net realised gains/(losses) for the year
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
9,956,294
(1,911,830)
20,135,866
(20,599,482)
13,833,920
—
6,609,651
—
(733,369)
(820,771)
—
258,654
2,356,462
9,394,177
444,632
390,401
1,904,815
(1,448,466)
(100,730)
Net realised gains/(losses) on investments c/fwd
(13,989,831)
13,100,551
Net unrealised movement on investment b/fwd
21,695,960
(2,688,959)
Net unrealised movement in the year
16,367,672
5,784,395
2,106,408
511,003
1,995,921
Net unrealised movement on investment c/fwd
38,063,632
3,095,436
2,496,809
2,415,818
482,389
Total realised/unrealised movement
24,073,801
16,195,987
11,890,986
2,860,450
19,069,059
Distributions unclaimed over 10 years old b/fwd
—
—
—
—
18,586,670
(1,513,532)
—
Net movement in the period
5,557
777
—
3,831
1,092
Distributions unclaimed over 10 years old c/fwd
5,557
777
—
3,831
1,092
Fees charged to Capital b/fwd*
Net movement in the year
Fees charged to Capital c/fwd*
Transfer to share premium in year
As at 30 September 2016
(35,137,675)
(802,596)
(203,499)
(4,572)
(2,608,824)
(2,576,350)
(19,441)
(5,684)
(4,284)
(23,794)
(37,714,025)
(822,037)
(209,183)
(8,856)
(2,632,618)
—
—
(836,894)
—
(1,252,503)
(13,634,667)
15,374,727
71
10,844,909
2,855,425
15,185,030
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
17. Net assets attributable to holders of participating redeemable preference shares
Notes
Company
Euro High
Income
Fund
European
Fund
£
€
£
Year ended 30 September 2016
Share capital
14
3,440,894
138,048
16,403
Share premium
15
358,098,319
16,022,883
—
Capital reserves
16
45,133,332
172,569
14,380,448
290,999
30,772
5,272
(683,189)
46,762
Dilution levies
Undistributed income*
(25,777,791)
Movement in currency translation
As at 30 September 2016
2,841,075
—
—
384,026,828
15,681,083
14,448,885
Year ended 30 September 2015
Share capital
14
3,721,035
138,194
17,065
Share premium
15
388,406,683
16,052,573
—
Capital reserves
16
11,079,989
Dilution levies
Undistributed income*
Movement in currency translation
As at 30 September 2015
248,665
(25,927,076)
(669,538)
12,063,185
30,773
5,272
(643,162)
(5,893)
1,378,769
—
—
378,908,065
14,908,840
12,079,629
* The distributions detailed in Note 5 have been declared by the Directors using a dividend policy based on the accruals method of accounting for income on
debt instruments, as opposed to the EIR method of accounting for investment income which is the basis used for recognition of income on debt instruments
as explained in the accounting policies. Future distributions will continue to be made on the basis of the existing distribution policy. Equity Fund distributions
were declared net of broker fees.
Undistributed income under the accruals method As at 30 September 2016 amounts to £(940,656) (30 September 2015 amounts to£(1,068,829).
72
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
17. Net assets attributable to holders of participating redeemable preference shares
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
3,121,326
43,867
5,318
138,921
21,266
Share premium
320,000,386
6,339,798
—
20,689,916
—
Capital reserves
(13,634,667)
15,374,727
10,844,909
2,855,425
15,185,030
—
7,857
71,476
6,784
Year ended 30 September 2016
Share capital
Dilution levies
Undistributed income*
Movement in currency translation
172,988
(22,548,115)
(266,698)
(775,024)
(1,639,947)
(3,724)
—
—
—
—
—
287,111,918
21,491,694
10,083,060
22,115,791
15,209,356
3,329,354
48,378
5,815
203,399
23,085
Share premium
338,066,552
8,257,516
—
30,957,177
—
Capital reserves
(34,041,197)
10,342,365
9,322,425
—
7,857
As at 30 September 2016
Year ended 30 September 2015
Share capital
Dilution levies
Undistributed income*
Movement in currency translation
As at 30 September 2015
172,989
(22,648,536)
(340,353)
(732,023)
(11,587)
33,086
(1,718,008)
14,565,044
6,784
(8,304)
—
—
—
—
—
284,879,162
18,307,906
8,604,074
29,464,067
14,586,609
73
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
18. Taxation
In accordance with International Accounting Standard (IAS) 12
Income Taxes, investment income is shown gross of withholding tax.
These may include:
• Investments including equity and non-equity Shares, fixed income
securities and floating rate securities
The withholding tax suffered is recorded on the taxation line as set
out below:
30 September
30 September
2016
2015
Foreign tax on income
£251,545
£257,228
for the year
• Cash, liquid resources and short term debtors and creditors that
arise directly from the investment activities
• Hedging instruments, such as forward exchange contracts and
traded options which a Fund may enter into, for the purpose of
managing the risks arising from the Fund’s investment activities.
The Company is liable to be charged at a tax rate of 0% under
Schedule D under the Income Tax (Jersey) Law 1961, as amended
(the ‘Income Tax Law’) in respect of:
Market risk
All securities investments present a risk of loss of capital.
The Manager moderates this risk through a careful selection
of investments within specified limits. The maximum risk
resulting from investments is determined by the fair value
of those investments.
(i) the income or profits of any trade carried on by the Company in
Jersey or elsewhere,
(ii) any interest of money, whether yearly or otherwise, or other
annual payment paid to the Company, whether such payment is
made within or outside of Jersey,
The overall market position and therefore the risk exposure for
each Fund are governed by the Prospectus, the Collective
Investment Funds (Recognized Funds) (Rules) (Jersey) Order
2003 (as amended) and the investment objectives for each Fund.
These positions are monitored on a daily basis by the Manager
and are reviewed on a quarterly basis by the Board of Directors.
(iii) d
ividends and other distributions of a company regarded as
resident in Jersey paid to the Company,
(iv) i ncome arising to the Company from securities outside
of Jersey and
The investments are principally equities, fixed interest securities
and bank deposits, dependent on each Fund’s investment policy.
The value of these is not fixed (other than bank deposits) and may
go down as well as up. This may be the result of a specific factor
affecting the value of an individual stock or be caused by general
market factors (such as interest rates, government policy or the
health of the underlying economy) which could affect the entire
portfolio of a Fund.
(v) a ny other income of the Company that is not derived from the
ownership or disposal of land in Jersey.
It is not expected that the Company will be in receipt of income
charged to tax under any Schedule under Income Tax Law other
than Schedule D. As such the Company is no longer subject to the
payment of tax in Jersey.
Jersey resident individuals should note that any income received
from the Fund(s) will be paid gross and will be taxable under
Schedule D Case III (D3) of the Income Tax (Jersey) Law 1961,
as amended.
The year end portfolios of each Fund are detailed on pages 27 to 46.
The Manager controls this risk on a Fund by Fund basis and
monitors the movements in the equities, bonds and interest rates
against the relevant equity and bond indices and market interest
rates respectively.
19. Financial risk management
Strategy in using financial instruments
The Manager considers that a reasonably possible movement in the
market risk components would be equivalent to a 5% movement in
equity and bond indices and a 1% movement in market interest rates.
The Company’s activities expose it to a variety of financial risks:
market risk (including currency risk, fair value interest rate risk, cash
flow interest rate risk and price risk), liquidity risk, counter-party
risk, capital risk and certain other risks. The Company’s overall
risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects
on the Company’s financial performance. Each Fund is able to use
derivative financial instruments to moderate certain risk exposures.
There were no such exposures as at 30 September 2016.
The table on the following page summarises, for each of the Funds,
the impact of increases / (decreases) in the equity and bond indices,
and market interest rates on the net asset value as at 30 September
2016. The analysis is based on the assumption that the equity and
bond indices increase / (decrease) by 5%, and market interest rates
increase / (decrease) by 1%, with all other variables held constant.
The analysis also assumes that the movement in the portfolios of
each Fund has perfect positive correlation with the equity and bond
indices and market interest rates.
Each Fund’s investment objectives and policy are stated on page
3. To achieve these objectives the Company’s assets and liabilities
comprise financial instruments held in accordance with each Fund’s
investment objectives and policy.
74
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Market risk (continued)
End of
Period/Year
Fund
Value
(base
currency)
Equities
5% Movement
in equity index
Bonds
5% Movement
in bond index
Cash
1% Movement
in interest rate
30.09.16
Euro High Income
15,681,083
—
762,428
3,260
30.09.15
Euro High Income
14,908,840
—
701,535
6,955
30.09.16
European
14,448,885
710,686
—
1,173
30.09.15
European
12,079,629
596,881
—
1,725
30.09.16
High Income
287,111,918
—
13,892,409
57,023
30.09.15
High Income
284,879,162
—
13,899,485
24,531
30.09.16
International
21,491,694
1,060,132
—
3,313
30.09.15
International
18,307,906
911,759
—
910
30.09.16
North American
10,083,060
498,817
—
1,117
30.09.15
North American
8,604,074
427,229
—
789
30.09.16
Sterling Bond
22,115,791
—
1,070,314
5,574
30.09.15
Sterling Bond
29,464,067
—
1,460,754
5,115
30.09.16
UK
15,209,356
759,673
—
2,969
30.09.15
UK
14,586,609
703,736
—
8,094
Interest rate risk
Each Fund receives income from its various investments. For the
Sterling Bond Fund, Euro High Income Fund and High Income Fund,
the income is received from investments in bonds and loan stock. In
accordance with the Funds policy, the Manager monitors the Fund’s
overall interest rate sensitivity on a daily basis, and the Board of
Directors reviews it on a quarterly basis.
The interest bearing financial assets and liabilities held in the Funds
expose them to risks associated with the effects of fluctuations
in the prevailing levels of market interest rates on their financial
position and cash flows.
The table overleaf summarises the effect of interest rate risks on
each Fund. It includes the Fund’s assets and trading liabilities at fair
values, categorised by the earlier of contractual re-pricing or maturity
dates. Other than those financial instruments identified in the table,
each Fund has no significant exposure to interest rate risks.
The income received by each Fund is primarily fixed in nature and
shown in the table on the next page. Income is derived from the
securities held in the portfolio of each Fund which may be varied
from time to time in accordance with its investment objectives
and policy.
75
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Interest rate risk (continued)
The interest rate profile of each Fund’s financial assets at 30 September 2016 was:
Fund
Euro High Income
High Income
Sterling Bond
Fund
Euro High Income
High Income
Sterling Bond
Currency
Euro
Sterling
Sterling
Currency
Euro
Sterling
Sterling
Total
000s
15,681
287,112
22,116
Fixed rate
interest
securities
000s
13,372
228,730
17,733
Floating rate
interest
securities
000s
1,921
51,443
3,777
Interest
Free Assets
000s
248
5,250
379
Weighted average
period for which
the rate is
fixed (years)
16.49
23.69
21.30
Weighted average
effective
interest rate %
Weighted average
coupon rate %
3.95
6.22
5.57
Interest
Free Liablities
000s
141
1,689
227
1.23
2.99
2.81
The interest rate profile of each Fund’s financial assets at 30 September 2015 was:
Fund
Euro High Income
High Income
Sterling Bond
Fund
Euro High Income
High Income
Sterling Bond
Currency
Euro
Sterling
Sterling
Currency
Euro
Sterling
Sterling
Total
000s
14,909
284,879
29,464
Fixed rate
interest
securities
000s
12,280
212,826
23,466
Floating rate
interest
securities
000s
2,446
67,616
6,261
Weighted average
effective
interest rate %
Weighted average
coupon rate %
3.85
6.49
5.80
2.44
3.88
3.60
76
Interest
Free Assets
000s
321
6,287
699
Interest
Free Liablities
000s
138
1,850
962
Weighted average
period for which
the rate is
fixed (years)
22.03
24.42
22.44
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Foreign currency risk
With the exceptions of the Sterling Bond Fund and the UK Fund,
each Fund may purchase securities denominated in a currency other
than its base currency, and hence take a position in other currencies.
The Euro High Income Fund is denominated in euro. All of the other
Funds are denominated in sterling. A portion of the underlying
financial assets of the Funds may be denominated in currencies
other than the base currency with the effect that the statement of
financial position and each Fund’s total return can be significantly
affected by currency movements. An investment in a currency other
than the shareholders’ own base currency will be subject to the
movement of foreign exchange rates, which may cause additional
favourable or unfavourable changes in value. In respect of foreign
currency exposure, derivative instruments will only be utilised where
a forward exchange or currency option is used for the purpose of
reduction of foreign currency risk, in order to hedge this exposure
back to the base currency of the Fund.
The Company is not currently involved in currency hedging
transactions. In accordance with the Company’s policy,
the Manager monitors each Fund’s currency position on a daily
basis, and the Board of Directors reviews it on a quarterly basis.
As at 30 September 2016 the Funds had the following currency exposures:
Fund
Euro High Income
European
North American
UK
Currency
Sterling
Euro
Danish Krone
Norwegian Krona
Swedish Krona
Swiss Franc
US Dollar
Canadian Dollar
Euro
US Dollar
Euro
US Dollar
Foreign
Currency
Assets £ 000’s
Fund
—
6,663
620
371
2,106
4,293
—
365
—
9,538
—
—
International
Currency
Euro
Hong Kong Dollar
Japanese Yen
Korean Won
Singapore Dollar
South African Rand
Swedish Krona
Swiss Franc
US Dollar
Canadian Dollar
Foreign
Currency
Assets £ 000’s
910
972
2,159
550
239
232
392
1,987
10,252
273
As at 30 September 2015 the Funds had the following currency exposures:
Fund
Euro High Income
European
North American
UK
Currency
Sterling
Euro
Danish Krone
Norwegian Krona
Swedish Krona
Swiss Franc
US Dollar
Canadian Dollar
Euro
US Dollar
Euro
US Dollar
Foreign
Currency
Assets £ 000’s
Fund
—
5,445
575
314
1,981
3,629
2
323
—
8,248
9
3
International
77
Currency
Euro
Hong Kong Dollar
Japanese Yen
Korean Won
Singapore Dollar
South African Rand
Swedish Krona
Swiss Franc
US Dollar
Canadian Dollar
Foreign
Currency
Assets £ 000’s
552
599
1,373
484
169
301
822
2,055
8,530
558
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Credit risk
each morning at 10am and represented in the Fund’s daily share
prices; the appropriate quoted market price for financial liabilities
is the current asking price. When the Company holds derivatives
with offsetting market risks, it uses mid-market prices as a basis for
establishing fair values for the offsetting risk positions and applies
this bid or asking price to the net open position, as appropriate. If a
significant movement in fair value occurs subsequent to the close of
trading on the year end date, valuation techniques will be applied to
determine the fair value. There has been no significant movements
in the fair value of any holdings since the year end date.
The Company takes on exposure to credit risk, which is the risk
that a counter-party will be unable to pay amounts in full when
due. Impairment provisions would be provided for losses that have
been incurred by the statement of financial position date. As at 30
September 2016 no impairment provisions were required and there
was no money overdue.
The Company’s main credit risk exposure arises through
investments in debt securities at the Fund level. If any of the
Funds hold any interest bearing instruments, at least 90% of these
instruments must have a credit rating of ‘Investment Grade’ as
provided by Moodys Investor Services Limited, Standard and Poors
or Fitch Ratings Limited. These instruments could include inter alia
money market instruments, bonds, gilts, corporate bonds etc.
A financial instrument is regarded as quoted in an active market if
quoted prices are readily and regularly available from an exchange,
dealer, broker, industry group, pricing service, or regulatory agency,
and those prices represent actual and regularly occurring market
transactions at an arm’s length basis.
In accordance with each Fund’s policy, the Manager monitors the
Fund’s credit position on a daily basis, and the Board of Directors
reviews it on a quarterly basis.
IFRS 13 states the Company to classify fair value measurements
using a fair value hierarchy that reflects the significance of the inputs
used in making the measurements. The fair value hierarchy has the
following levels:
Certain transactions that the Funds enter into expose them to the
risk that the counter-party will not deliver the investment (purchase)
or cash (sale) after the Fund has fulfilled its responsibilities. It
is the policy of the Manager to buy and sell investments only
through approved brokers, or directly with the Fund Manager.
Credit risk exposure is balanced by the regulatory obligation of the
counter parties.
• Quoted prices (unadjusted) in active markets for identical assets
or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable
The risk to Shareholders is that we will not have enough cash to
cover redemptions. To counter this risk each Fund’s cash is managed
to meet its liabilities. Where investments cannot be realised in time
to meet any redemptions of Participating Shares, each Fund may
borrow up to 10% of its value to ensure settlement of its liabilities.
No such borrowings have arisen during the year.
market data (that is, unobservable inputs) (level 3).
The level in the fair value hierarchy within which the fair value
measurement is categorised in its entirety is determined on the
basis of the lowest level input that is significant to the fair value
measurement in its entirety. For this purpose, the significance of an
input is assessed against the fair value measurement in its entirety.
Capital risk
If a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that
measurement is a level 3 measurement. Assessing the significance
of a particular input to the fair value measurement in its entirety
requires judgement, considering factors specific to the asset
or liability.
Where the objective of the underlying Fund seeks to provide high
or good levels of income, the investment policy which supports this
may result in a gradual reduction in the capital value of the underlying
Fund’s Shares, except where bond prices are generally rising.
Capital risk management
The net assets attributable to holders of participating redeemable
preference shares are classified as financial liabilities and therefore,
in the opinion of the Directors, the capital of the Company is only
represented by the Founders Shares. Details of the Founders Shares
are shown in notes 3 and 14.
The determination of what constitutes ‘observable’, requires
significant judgement by the Directors. The Directors consider
observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market. With the exception of the Sterling
Bond Fund all other assets held by the Company at fair value through
profit or loss are all quoted in active markets and therefore fall under
level 1 as defined above. The fair value hierarchy table in respect to
the Sterling Bond Fund is shown overleaf.
Due to the nature and requirement of the Founders’ Shares the
Directors have decided that no active capital risk management
is required.
Fair value estimation
The fair value of financial assets and liabilities traded in active
markets (such as publicly traded derivatives and trading securities)
are based on quoted market prices at the close of trading on the
year end date. The quoted market price used for financial assets
held by the Company is the current mid price, these are updated
78
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Fair value estimation (continued)
Sterling Bond Fund
30 September 2016
Financial assets at fair value through profit and loss
Level 1
£
21,406,272
Level 2
£
—
Level 3
£
—
Totals
£
21,406,272
Bloomberg daily pricing of Mitchells FRN 2032 commenced on 15 January 2016.
30 September 2015
Financial assets at fair value through profit and loss
Level 1
£
Level 2
£
29,089,449
125,625
Level 3
£
—
Totals
£
29,215,074
The value in level 2 is representative of Mitchells FRN 2032. The valuation of this asset is based on a static price as at 8 July 2015 obtained from
Bloomberg.
79
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Fair value estimation (continued)
Liquidity risk
Derivatives
The Company is exposed to daily cash redemptions of Participating
Shares which are redeemed on demand at the holder’s option.
It therefore invests all of its assets in investments that are traded in
an active market and can be readily disposed of. From time to time
assets held could become illiquid due to in-active trading. At 30
September 2016 the percentage of the assets within the portfolios
which are subject to special arrangements arising from their illiquid
nature is 0% (2015: 0.43%). As such each Fund’s financial assets are
considered to be readily realisable for cash.
Derivatives will only be used where they accord with existing
investment objectives and policy. They may not be used for the
purpose of reducing risk independently of investment strategy in
respect of the underlying physical assets or for merely speculative
purposes. Derivatives will only be used for efficient portfolio
management. Derivatives may not be used for the purpose of
gearing or leveraging or for purposes of producing, enhancing or
generating income. No derivative can be traded on an “Over The
Counter” basis, and no uncovered positions are allowed.
The Manager manages each Fund’s cash to meet its liabilities.
Where investments cannot be realised in time to meet any
redemptions of Participating Shares, each Fund may borrow up
to 10% of its value to ensure settlement of its liabilities. No such
borrowings have arisen during the year.
The underlying Funds may hold the following derivatives:
(a) Futures
Futures are contractual obligations to buy or sell financial
instruments on a future date at a specified price established in an
organised market. The futures contracts are collateralised by cash
or marketable securities. Changes in the futures contracts value are
settled daily with the exchange. Interest rate futures are contractual
obligations to receive or pay a net amount based on changes in
interest rates at a future date at a specified price, established in an
organised financial market. Futures are settled on a net basis.
In accordance with the Company’s policy, the Manager monitors
each Fund’s liquidity position on a daily basis, and the Board of
Directors review it on a quarterly basis.
The table on the following pages analyses the Company’s financial
liabilities into relevant maturity groups based on the remaining
period at the statement of financial position date to the contractual
maturity date.
(b) Options
Cross fund liability
An option is a contractual arrangement under which the seller
(writer) grants the purchaser (holder) the right, but not the
obligation, either to buy (a call option) or sell (a put option) at or by
a set date or during a set period, a specific amount of securities or a
financial instrument at a predetermined price.
Shareholders should be aware that in the event of the Company
being unable to meet liabilities attributable to any particular Fund
or share class out of the assets attributable to such Fund or share
class, the excess liabilities may have to be met out of the assets
attributable to the other Funds or share classes.
The seller receives a premium from the purchaser in consideration
for the assumption of future securities prices. Where options are
held by the underlying Funds, they are exchange-traded. The Funds
are exposed to credit risk on purchased options only to the extent of
their carrying amount, which is their fair value. Options are settled on
a gross basis.
The notional amounts of certain types of financial instrument
provide a basis for comparison with instruments recognised on the
statements of financial position, but they do not necessarily indicate
the amounts of future cash flows involved or the current fair value
of the instruments and do not therefore indicate the Company’s
exposure to credit or market price risks. The derivative instruments
become favourable (assets) or unfavourable (liabilities) as a result
of fluctuations in market interest rates or foreign exchange rates
relative to their terms.
The aggregate contractual or notional amount of derivative
financial instruments on hand, the extent to which instruments are
favourable or unfavourable, and thus the aggregate fair values of
derivative financial assets and liabilities can fluctuate significantly
from time to time.
During the year the Company did not enter into any derivative
contracts.
80
Lloyds Investment Funds Limited
81
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Liquidity risk (continued)
Year ended 30 September 2016
Company
Euro High
Income
Fund
European
Fund
£
€
£
385,360,988
15,681,083
14,448,885
269,604
10,032
—
101,334
—
23,447
1,123,677
—
—
497,199
105,980
—
432,187
19,967
27,968
Share Capital
(less than 1 month)
Cancellation payable
(less than 1 month)
Investment purchase payable
(less than 1 month)
Proposed dividend
(less than 1 month)
(1 month to 3 months)
Accrued expenses
(less than 1 month)
(1 month to 3 months)
95,429
5,131
7,867
Total financial liabilities
387,880,418
15,822,193
14,508,167
Company
Euro High
Income
Fund
European
Fund
£
€
£
379,962,084
14,908,840
12,079,629
227,220
—
—
722,885
—
—
1,248,508
—
—
547,056
108,025
—
(less than 1 month)
460,288
20,504
27,643
(1 month to 3 months)
146,527
9,373
9,196
Total financial liabilities
383,314,568
15,046,742
12,116,468
Year ended 30 September 2015
Share Capital
(less than 1 month)
Cancellation payable
(less than 1 month)
Investment purchase payable
(less than 1 month)
Proposed dividend
(less than 1 month)
(1 month to 3 months)
Accrued expenses
82
Lloyds Investment Funds Limited
Notes to the Financial Statements (continued)
For the year ended 30 September 2016
19. Financial risk management (continued)
Liquidity risk (continued)
Year ended 30 September 2016
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
287,111,918
21,491,694
10,083,060
22,115,791
15,209,356
238,139
17,310
1,877
—
3,599
—
—
29,729
—
48,158
1,123,677
—
—
—
—
—
—
—
194,489
211,024
271,934
40,509
19,537
24,607
30,358
Share Capital
(less than 1 month)
Cancellation payable
(less than 1 month)
Investment purchase payable
(less than 1 month)
Proposed dividend
(less than 1 month)
(1 month to 3 months)
Accrued expenses
(less than 1 month)
(1 month to 3 months)
54,967
7,604
5,676
8,208
6,668
Total financial liabilities
288,800,635
21,557,117
10,139,879
22,343,095
15,509,163
High
Income
Fund
International
Fund
North
American
Fund
Sterling
Bond
Fund
UK
Fund
£
£
£
£
£
284,879,162
18,307,906
8,604,074
29,464,067
14,586,609
219,845
—
—
6,420
955
—
—
—
648,105
74,780
1,248,508
—
—
—
—
—
—
—
264,418
203,033
294,114
40,212
19,020
32,592
31,597
(1 month to 3 months)
87,897
12,653
8,295
10,447
11,133
Total financial liabilities
286,729,526
18,360,771
8,631,389
30,426,049
14,908,107
Year ended 30 September 2015
Share Capital
(less than 1 month)
Cancellation payable
(less than 1 month)
Investment purchase payable
(less than 1 month)
Proposed dividend
(less than 1 month)
(1 month to 3 months)
Accrued expenses
(less than 1 month)
20. Events After the Year End Date
There has not arisen in the interval between the end of the financial year and the date of this report, any other item, transaction or event of a
material nature likely in the opinion of the Directors, to affect significantly the operations of the Company, the results of those operations, or
the state of affairs of the Company, in subsequent financial years.
83
Lloyds Investment Funds Limited
Distribution Tables (unaudited)
For the year ended 30 September 2016
Euro High Income Fund
Gross
income
1st Quarter
Group 1
Group 2
2nd Quarter
Group 1
Group 2
3rd Quarter
Group 1
Group 2
4th Quarter
Group 1
Group 2
1st Quarter
Group 1 : Shares purchased prior to 1 October 2015
Group 2 : Shares purchased between 1 October 2015 and 31 December 2015
2nd Quarter
Group 1 : Shares purchased prior to 1 January 2016
Group 2 : Shares purchased between 1 January 2016 and 31 March 2016
3rd Quarter
Group 1 : Shares purchased prior to 1 April 2016
Group 2 : Shares purchased between 1 April 2016 and 30 June 2016
4th Quarter
Group 1 : Shares purchased prior to 1 July 2016
Group 2 : Shares purchased between 1 July 2016 and 30 September 2016
84
Equalisation
payable
Distribution paid
current year
(cents)
Distribution paid
prior year
(cents)
1.200
0.298
—
0.902
1.200
1.200
1.500
1.500
1.200
0.259
—
0.941
1.200
1.200
1.300
1.300
1.180
0.408
—
0.772
1.180
1.180
1.290
1.290
1.130
0.373
—
0.757
1.130
1.130
1.150
1.150
Lloyds Investment Funds Limited
Distribution Tables (unaudited) (continued)
For the year ended 30 September 2016
High Income Fund
Gross
income
31 October 2015
Group 1
Group 2
30 November 2015
Group 1
Group 2
31 December 2015
Group 1
Group 2
31 January 2016
Group 1
Group 2
28 February 2016
Group 1
Group 2
31 March 2016
Group 1
Group 2
30 April 2016
Group 1
Group 2
31 May 2016
Group 1
Group 2
30 June 2016
Group 1
Group 2
31 July 2016
Group 1
Group 2
31 August 2016
Group 1
Group 2
30 September 2016
Group 1
Group 2
31 October 2015
Group 1 : Shares purchased prior to 1 October 2015
Group 2 : Shares purchased between 1 October 2015 and 31 October 2015
30 November 2015
Group 1 : Shares purchased prior to 1 November 2015
Group 2 : Shares purchased between 1 November 2015 and 30 November 2015
31 December 2015
Group 1 : Shares purchased prior to 1 December 2015
Group 2 : Shares purchased between 1 December 2015 and 31 December 2015
31 January 2016
Group 1 : Shares purchased prior to 1 January 2016
Group 2 : Shares purchased between 1 January 2016 and 31 January 2016
29 February 2016
Group 1 : Shares purchased prior to 1 February 2016
Group 2 : Shares purchased between 1 February 2016 and 29 February 2016
31 March 2016
Group 1 : Shares purchased prior to 1 March 2016
Group 2 : Shares purchased between 1 March 2016 and 31 March 2016
85
Equalisation
payable
Distribution paid
current year
(pence)
Distribution paid
prior year
(pence)
0.375
0.176
—
0.199
0.375
0.375
0.395
0.395
0.375
0.207
—
0.168
0.375
0.375
0.395
0.395
0.375
0.270
—
0.105
0.375
0.375
0.395
0.395
0.370
0.198
—
0.172
0.370
0.370
0.395
0.395
0.370
0.153
—
0.217
0.370
0..370
0.390
0..390
0.370
0.144
—
0.226
0.370
0.370
0.385
0.385
0.370
0.157
—
0.213
0.370
0.370
0.385
0.385
0.370
0.199
—
0.171
0.370
0.370
0.385
0.385
0.360
0.166
—
0.194
0.360
0.360
0.385
0.385
0.360
0.159
—
0.201
0.360
0.360
0.385
0.385
0.360
(0.003)
—
0.363
0.360
0.360
0.375
0.375
0.360
0.083
—
0.277
0.360
0.360
0.375
0.375
Lloyds Investment Funds Limited
Distribution Tables (unaudited) (continued)
For the year ended 30 September 2016
High Income Fund (continued)
30 April 2016
Group 1: Shares purchased prior to 1 April 2016
Group 2: Shares purchased between 1 April 2016 and 30 April 2016
31 May 2016
Group 1: Shares purchased prior to 1 May 2016
Group 2: Shares purchased between 1 May 2016 and 31 May 2016
30 June 2016
Group 1: Shares purchased prior to 1 June 2016
Group 2: Shares purchased between 1 June 2016 and 30 June 2016
31 July 2016
Group 1: Shares purchased prior to 1 July 2016
Group 2: Shares purchased between 1 July 2016 and 31 July 2016
31 August 2016
Group 1: Shares purchased prior to 1 August 2016
Group 2: Shares purchased between 1 August 2016 and 31 August 2016
30 September 2016
Group 1: Shares purchased prior to 1 September 2016
Group 2: Shares purchased between 1 September 2016 and 30 September 2016
Sterling Bond Fund
Gross
income
1st Quarter
Group 1
Group 2
2nd Quarter
Group 1
Group 2
3rd Quarter
Group 1
Group 2
4th Quarter
Group 1
Group 2
1st Quarter
Group 1 : Shares purchased prior to 1 October 2015
Group 2 : Shares purchased between 1 October 2015 and 31 December 2015
2nd Quarter
Group 1 : Shares purchased prior to 1 January 2016
Group 2 : Shares purchased between 1 January 2016 and 31 March 2016
3rd Quarter
Group 1 : Shares purchased prior to 1 April 2016
Group 2 : Shares purchased between 1 April 2016 and 30 June 2016
4th Quarter
Group 1 : Shares purchased prior to 1 July 2016
Group 2 : Shares purchased between 1 July 2016 and 30 September 2016
86
Equalisation
payable
Distribution paid
current year
(cents)
Distribution paid
prior year
(cents)
1.300
0.820
—
0.480
1.300
1.300
1.400
1.400
1.400
0.609
—
0.791
1.400
1.400
1.400
1.400
1.400
0.809
—
0.591
1.400
1.400
1.400
1.400
1.400
0.936
—
0.464
1.400
1.400
1.300
1.300
Lloyds Investment Funds Limited
Distribution Tables (unaudited) (continued)
For the year ended 30 September 2016
UK Fund
Gross
income
30 September 2016
Group 1
Group 2
9.923
5.348
30 September 2016
Group 1 : Shares purchased prior to 1 October 2015
Group 2 : Shares purchased between 1 October 2015 and 30 September 2016
87
Equalisation
payable
—
4.575
Distribution paid
current year
(cents)
9.923
9.923
Distribution paid
prior year
(cents)
8.795
8.795
Lloyds Investment Funds Limited
Performance Record (unaudited)
For the year ended 30 September 2016
Euro High Income Fund
Shares in the Fund were first offered to the public in October 2006 at an offer price of 178.90 cents per share.
Calendar Year / Period
Highest
Offer Price
c
Lowest
Bid Price
c
Income
per Share
c
Income per €1,000
Invested at Launch
02/10/06
€
2007
2008
2009
2010
2011
2012
2013
2014
2015
179.50
162.60 xd
156.20
163.70
156.60
167.40
169.10
170.30
173.50
162.20
132.00
120.90
153.20 xd
140.60
144.60
161.70
161.70
159.70
8.41
7.72
7.55
7.52
7.73
7.71
7.45
6.51
3.74
47.01
43.21
42.20
41.98
32.03
43.07
41.64
36.39
20.91
30.09.16
163.90
158.10
3.51
19.62
Income
per Share
p
Income per £1,000
Invested at 31/12/05
£
0.93
6.50
4.60
0.98
3.80
2.51
2.00
14.00
9.91
2.11
8.19
5.39
European Fund
Shares in the Fund were first offered to the public in May 1990 at an offer price of 100p per share.
Calendar Year / Period
Highest
Offer Price
p
Lowest
Bid Price
p
2007
2008
2009
2010
2011
2012
770.40
774.30
656.20 xd
667.80
738.70
682.50
635.40
445.00 xd
411.00
545.00
522.20
559.60
2013
826.90
682.80
—
—
2014
2015
30.09.16
832.20
850.30
772.50
695.70
698.30
687.00
—
—
—
—
—
—
Income
per Share
p
Income per £1,000
Invested at 31/12/05
£
High Income Fund
Shares in the Fund were first offered to the public in June 1995 at an offer price of 100p per share.
Calendar Year / Period
2007
2008
2009
2010
2011
2012
2013
2014
2015
30.09.16
Highest
Offer Price
p
Lowest
Bid Price
p
97.26
91.61 xd
83.53
88.28
85.30
89.19
91.66
89.56
89.79 xd
76.09 xd
69.03 xd
82.15
79.70
81.20
85.23
85.55
5.79
5.70
5.60
5.40
3.89
5.25
4.82
4.78
55.48
54.62
53.61
51.75
37.23
50.26
46.19
45.81
92.53
86.21
85.86
83.74
3.46
3.29
33.16
33.05
88
Lloyds Investment Funds Limited
Performance Record (unaudited) (continued)
For the year ended 30 September 2016
International Fund
Shares in the Fund were first offered to the public in May 1990 at an offer price of 100p per share.
Calendar Year / Period
2007
2008
2009
2010
2011
2012
2013
2014
2015
30.09.16
Highest
Offer Price
p
Lowest
Bid Price
p
346.40
347.90
312.20
341.30
354.70
348.40
439.80
455.10
305.00
228.40 xd
222.80
284.30
278.60
309.50
354.30
412.50
469.40
419.40
369.70
368.90
Income
per Share
p
Income per £1,000
Invested at 31/12/05
£
0.98
—
1.35
1.48
—
—
—
3.42
—
4.71
5.16
—
—
—
—
—
—
—
—
—
Income
per Share
p
Income per £1,000
Invested at 31/12/05
£
—
—
—
1.27
—
—
—
—
—
—
1.55
—
—
—
—
—
—
—
—
—
Income
per Share
p
Income per £1,000
Invested at 31/12/05
£
6.52
6.78
6.95
6.54
6.41
6.27
5.91
5.78
4.10
4.20
41.94
43.62
44.71
42.07
41.24
40.33
38.02
37.18
26.38
27.80
North American Fund
Shares in the Fund were first offered to the public in May 1990 at an offer price of 100p per share.
Calendar Year / Period
Highest
Offer Price
p
Lowest
Bid Price
p
2007
2008
2009
2010
2011
2012
2013
2014
2015
30.09.16
947.50
915.90
887.30
1,016.00
1,048.00
1,140.00
1,429.00
1,617.00
1,734.00
1,641.00
839.90
637.60 xd
609.80
837.20
823.00
1,001.00
1,153.00
1,356.00
1,418.00
1,432.00
Sterling Bond Fund
Shares in the Fund were first offered to the public in July 2001 at an offer price of 148.6p per share.
Calendar Year / Period
2007
2008
2009
2010
2011
2012
2013
2014
2015
30.09.16
Highest
Offer Price
p
Lowest
Bid Price
p
148.20
142.70 xd
130.50
139.00
136.80
147.00
151.60
151.30
156.80
147.50
138.60 xd
116.80 xd
107.60 xd
127.40
128.60
131.20
140.10
140.20
144.70
142.20
89
Lloyds Investment Funds Limited
Performance Record (unaudited) (continued)
For the year ended 30 September 2016
UK Fund
Shares in the Fund were first offered to the public in May 1990 at an offer price of 100p per share.
Calendar Year / Period
2007
2008
2009
2010
2011
2012
2013
2014
2015
30.09.16
Highest
Offer Price
p
Lowest
Bid Price
p
720.40
692.40
572.30
640.00
663.00
637.30
747.60
765.70
763.70
649.40
616.00 xd
391.60
368.90
522.70
527.20
564.00
642.10
643.90
629.20
569.90
90
Income
per Share
p
Income per £1,000
Invested at 31/12/05
£
6.75
11.80
8.50
6.87
4.68
5.75
11.57
10.46
8.80
9.92
14.67
25.65
18.48
14.93
10.17
12.50
25.15
22.74
19.12
16.11
Lloyds Investment Funds Limited
Net Asset Value per Share (unaudited)
For the year ended 30 September 2016
Net Asset Value of Fund
Net Asset Value per Share
No. of Shares in Issue
Euro High Income Fund
30.09.13
30.09.14
30.09.15
30.09.16
€13,095,361
€14,281,016
€14,908,840
15,708,263
161.53c
167.81c
158.72c
167.49c
8,091,144
8,510,164
9,393,414
9,378,764
£16,438,247
£14,196,527
£12,079,629
£14,291,006
782.06p
745.74p
707.85p
871.23p
2,103,073
1,903,673
1,706,523
1,640,323
£324,498,273
£316,214,234
£284,879,162
£288,725,080
86.11p
87.27p
85.57p
92.50p
376,776,611
362,342,611
332,935,361
312,132,511
£25,560,787
£24,279,013
£18,307,906
£21,468,018
414.97p
434.30p
378.43p
489.38p
6,155,467
5,590,367
4,837,797
4,386,747
£8,547,802
£9,329,332
£8,604,074
£10,011,085
1,325.86p
1,476.17p
1,479.64p
1,882.32p
£23,113,065
£22,429,857
£29,464,067
£22,265,948
141.58p
145.49p
144.86p
160.28p
16,324,793
15,417,043
20,339,895
13,892,095
£20,393,311
£17,194,744
£14,586,609
£15,087,064
702.49p
684.29p
631.86p
709.44p
2,903,103
2,512,803
2,308,503
2,126,616
European Fund
30.09.13
30.09.14
30.09.15
30.09.16
High Income Fund
30.09.13
30.09.14
30.09.15
30.09.16
International Fund
30.09.13
30.09.14
30.09.15
30.09.16
North American Fund
30.09.13
30.09.14
30.09.15
30.09.16
645,548
631,998
581,498
531,848
Sterling Bond Fund
30.09.13
30.09.14
30.09.15
30.09.16
UK Fund
30.09.13
30.09.14
30.09.15
30.09.16
91
Lloyds Investment Funds Limited
Notice of Meeting
Notice is hereby given that the 33rd Annual General Meeting of
Lloyds Investment Funds Limited will be held at:
11-12 Esplanade, St. Helier, Jersey, on Tuesday, 7 March 2017
at 10.30 a.m. for the following purposes:
NOTES:
A Member entitled to attend and vote at this Meeting may appoint
one or more Proxies to attend and, on a poll, vote instead of him. A
Proxy need not be a Member of the Company. To be valid, completed
proxy forms must be deposited at the Company’s principal place of
business not less than 48 hours before the appointed time for
holding the meeting, or any adjournment thereof.
Agenda
Ordinary Business
1. To appoint the Chairman of the meeting.
In the case of joint holders the vote of the senior shall be accepted to
the exclusion of the votes of the other joint holder(s).
2. To read the convening notice.
3. RESOLUTION 1.
The quorum requirement is two members present in person or by
proxy. If a quorum is not present, the meeting shall stand adjourned
to Tuesday, 14 March 2017 at 10.30 a.m. at the same venue and at
such adjourned meeting the shareholder’s present in person or by
proxy shall be the quorum.
To receive and if deemed appropriate, adopt the Annual Report and
Audited Financial Statements of the Company for the year ended
30 September 2016.
4. RESOLUTION 2.
By Order of the Board
Lloyds Corporate Services (Jersey) Limited,
Secretary,
PO Box 160, 25 New Street, St. Helier,
Jersey JE4 8RG,
Channel Islands.
To consider, and if deemed appropriate, re-elect Ross Davey Willcox
as a Director of the Company.
5. RESOLUTION 3.
To consider, and if deemed appropriate, re-elect Ian Mark Jeremie
Hardy as a Director of the Company.
16 December 2016
6. RESOLUTION 4.
To consider, and if deemed appropriate, re-elect Timothy Joseph
Herbert as a Director of the Company.
7. RESOLUTION 5.
To consider, and if deemed appropriate, re-elect Brian Charles James
as a Director of the Company.
8. RESOLUTION 6.
To consider, and if deemed appropriate, re-elect
Bronislaw Lysiak as a Director of the Company.
9. RESOLUTION 7.
To re-appoint PricewaterhouseCoopers CI LLP as Auditors of the
Company for the ensuing year and to authorise the Directors to
agree their remuneration.
10. RESOLUTION 8.
To fix the remuneration of each of the Directors at a maximum of
£5,000 per annum.
92
Lloyds Investment Funds Limited
Form of Proxy
BLOCK LETTERS PLEASE.
FULL NAME(S). ...................................................................................................
ADDRESS. .............................................................................................................
I/We being a Member(s) of the above named Company hereby appoint the Chairman of the Meeting ................................................ (see Note 1.)
as my/our proxy to attend and vote for me/us on my/our behalf at the 33rd Annual General Meeting of the Company to be held on Tuesday, 7
March 2017 at 10.30 a.m. and at any adjournment thereof.
I/We direct my/our proxy to vote on the resolutions as follows:
FOR
Ordinary Resolutions:
AGAINST
1. To receive and if deemed appropriate, adopt the Annual Report and Audited Financial
Statements of the Company for the year ended 30 September 2016.
2. To consider, and if deemed appropriate, re-elect Ross Davey Willcox as a Director
of the Company.
3. To consider, and if deemed appropriate, re-elect Ian Mark Jeremie Hardy as a Director
of the Company.
4. To consider, and if deemed appropriate, re-elect Timothy Joseph Herbert as a Director
of the Company.
5. To consider, and if deemed appropriate, re-elect Brian Charles James as a Director
of the Company.
6. To consider, and if deemed appropriate, re-elect Bronislaw Lysiak as a Director
of the Company.
7. To re-appoint PricewaterhouseCoopers CI LLP as Auditors and to authorise the Directors to
agree their remuneration.
8. To fix the remuneration of each of the Directors at a maximum of £5,000 per annum.
NOTES:
1. If you wish to appoint another person to be your proxy instead of the Chairman of the Meeting, you should delete the words
“the Chairman of the Meeting”, and write the name of your proxy in the space provided and initial the alteration.
2. Except as otherwise indicated by you, the proxy will vote, or abstain from voting, at the meeting or any adjournment thereof as
the proxy thinks fit.
3. In the case of a corporation, the form of proxy must be executed under its common seal or under the hand of an officer or attorney
duly authorised in writing.
4. In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the
exclusion of the votes of the joint holders, and for this purpose seniority shall be determined by the order in which the
names stand in the Register of Members.
5. To be valid, forms of proxy must reach the principal place of business of the Company, P.O. Box 311, 11-12 Esplanade, St. Helier,
Jersey JE4 8ZU, Channel Islands, not later than 48 hours before the time appointed for the meeting (or any adjourned meeting).
Any power of attorney or other authority under which the form of proxy is signed must be sent with the form of proxy.
Signature ........................................................................................... Date ..........................................................................................
93
DOCREF 0913
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