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Transcript
CF Canlife Asia Pacific Fund a sub-fund of CF Canada Life Investments Fund ACD’s Annual Short Report for the year ended 15 August 2016 Investment Objective and Policy The investment objective of the CF Canlife Asia Pacific Fund (‘the Fund’) is to provide shareholders with capital growth mainly from investment in shares quoted on markets in the Asia-Pacific region, excluding Japan. The Fund may also invest in collective investment schemes, cash, money market instruments, other transferable securities and derivatives and forward transactions for the purposes of Efficient Portfolio Management. Accounting and Distribution Dates Interim Final CF Canlife Asia Pacific Fund Accounting Distribution 15 February 15 August 15 April 15 October 1 Risk and Reward Profile Comparative Tables Typically lower rewards Lower risk 1 Higher risk 2 15.08.16 (p/share) 15.08.15 (p/share) 15.08.14 (p/share) Opening net asset value per share 809.19 849.45 817.15 Return before operating charges* 108.01 (25.32) 45.88 Operating charges (12.58) (14.94) (13.58) Return after operating charges 95.43 (40.26) 32.30 Distributions (5.66) (3.24) (3.57) 5.66 3.24 3.57 904.62 809.19 849.45 7.20 12.44 14.43 11.79% (4.74)% 3.95% Typically higher rewards 3 4 5 6 7 This indicator shows how much a fund has risen and fallen in the past, and therefore how much a fund’s returns have varied. It is a measure of a fund’s volatility. The higher a fund’s past volatility the higher the number on the scale and the greater the risk that investors in that fund may have made losses as well as gains. The lowest number on the scale does not mean that a fund is risk free. The Fund has been classed as 6 because its volatility has been measured as above average to high. ‘A’ Accumulation shares Change in net assets per share Retained distributions on accumulation shares This indicator is based on historical data and may not be a reliable indication of the future risk profile of this Fund. Closing net asset value per share The risk and reward profile shown is not guaranteed to remain the same and may shift over time. * after direct transaction costs of: Liquidity Risk: Smaller companies’ securities are often traded less frequently than those of larger companies which means they may be more difficult to buy and sell. Their prices may also be subject to short term swings. Counterparty Risk: As the Fund may enter into agreements to purchase warrants, structured products and currency hedging with counterparties; there is a risk that those parties may fail to meet their obligations. This may lead to delays in receiving amounts due to the Fund, receiving less than is due or receiving nothing. Operational Risk: Emerging markets tend to be more susceptible to large short term swings than more established markets. There is also a greater risk of being unable to buy or sell securities or that other parties may default and not meet their obligations, causing loss to the Fund. Currency Risk: As the Fund invests in Asia Pacific assets, movements in exchange rates may, when not hedged, cause the value of your investment to increase or decrease. For full details of the Fund’s risks, please see the Prospectus which may be obtained upon application and can be found on the Manager’s website, www.capitafinancial.com, by following the link ‘Fund Information’. 2 CF Canlife Asia Pacific Fund Performance Return after charges Other Information Closing net asset value (£’000) 3,351 3,302 3,654 370,425 408,019 430,168 Operating charges 1.65% 1.65% 1.67% Direct transaction costs 0.94% 1.38% 1.78% Highest share price 906.02 1,077.16 876.84 Lowest share price 686.24 806.43 774.89 Closing number of shares Prices CF Canlife Asia Pacific Fund 3 Comparative Tables (continued) 15.08.16 (p/share) 15.08.15 (p/share) 15.08.14 (p/share) ‘B’ Accumulation shares ‘B’ Accumulation shares (EUR) Change in net assets per share Change in net assets per share 15.08.15 (€/share) 15.08.14 (€/share) 10.7029 9.6469 Opening net asset value per share 822.10 858.72 821.96 Opening net asset value per share 11.4975 Return before operating charges* 110.50 (26.06) 46.41 Return before operating charges* (0.7000) 0.9355 1.1726 (10.56) (9.65) Operating charges (0.1170) (0.1409) (0.1166) (36.62) 36.76 Return after operating charges (0.8170) 0.7946 1.0560 (7.90) (7.80) Distributions (0.1137) (0.1105) (0.0961) 0.1137 0.1105 0.0961 Operating charges Return after operating charges Distributions Retained distributions on accumulation shares Closing net asset value per share * after direct transaction costs of: (8.94) 101.56 (9.65) Return after charges 7.90 7.80 923.66 822.10 858.72 Closing net asset value per share 10.6805 11.4975 10.7029 7.33 12.60 14.49 * after direct transaction costs of: 0.0962 0.1681 0.1778 (7.11)% 7.42% 10.95% 25,616 20,572 21,457 2,499,524 Performance 12.35% (4.26)% 4.47% Return after charges Other Information Other Information Closing net asset value (£’000) Retained distributions on accumulation shares 9.65 Performance 3,247 3,082 3,508 Closing net asset value (€’000) 351,528 374,871 408,486 2,774,013 2,503,145 Operating charges 1.15% 1.15% 1.17% Operating charges 1.15% 1.15% 1.17% Direct transaction costs 0.94% 1.38% 1.78% Direct transaction costs 0.94% 1.38% 1.78% Closing number of shares Closing number of shares Prices Prices 4 15.08.16 (€/share) Highest share price 925.09 1,092.47 884.48 Highest share price 11.5007 15.1454 10.7256 Lowest share price 698.92 819.25 782.27 Lowest share price 9.0066 10.7512 9.1990 CF Canlife Asia Pacific Fund CF Canlife Asia Pacific Fund 5 Comparative Tables (continued) 15.08.16 (p/share) 15.08.15 (p/share) 15.08.14 (p/share) ‘C’ Accumulation shares ‘C’ Accumulation shares (EUR) Change in net assets per share Change in net assets per share 15.08.15 (€/share) 15.08.14 (€/share) 10.7666 9.6751 Opening net asset value per share 828.71 863.47 824.34 Opening net asset value per share 11.5920 Return before operating charges* 111.77 (26.39) 46.73 Return before operating charges* (0.6999) 0.9384 1.1804 (8.37) (7.60) Operating charges (0.0923) (0.1130) (0.0889) Operating charges (7.06) Return after operating charges 104.71 (34.76) 39.13 Return after operating charges (0.7922) 0.8254 1.0915 Distributions (11.70) (10.32) (9.99) Distributions (0.1381) (0.1384) (0.1268) 0.1381 0.1384 0.1268 Retained distributions on accumulation shares Closing net asset value per share * after direct transaction costs of: Return after charges 10.32 9.99 933.42 828.71 863.47 Closing net asset value per share 10.7998 11.5920 10.7666 7.39 12.76 14.64 * after direct transaction costs of: 0.0963 0.1693 0.1772 (6.83)% 7.67% 11.28% 2 2 2 Performance 12.64% (4.03)% 4.75% Return after charges Other Information Other Information Closing net asset value (£’000) Retained distributions on accumulation shares 11.70 Performance Closing net asset value (€’000) 514 592 428 Closing number of shares 55,074 71,416 49,520 Closing number of shares 250 250 250 Operating charges 0.90% 0.90% 0.92% Operating charges 0.90% 0.90% 0.92% Direct transaction costs 0.94% 1.38% 1.78% Direct transaction costs 0.94% 1.38% 1.78% Prices Prices 6 15.08.16 (€/share) Highest share price 934.87 1,100.33 888.42 Highest share price 11.5954 15.2569 10.7895 Lowest share price 705.41 825.83 786.07 Lowest share price 9.0916 10.7512 9.2265 CF Canlife Asia Pacific Fund CF Canlife Asia Pacific Fund 7 Comparative Tables (continued) Distributions 15.08.16 (p/share) 15.08.15 (p/share) 15.08.14 (p/share) Opening net asset value per share 839.07 870.98 828.41 Return before operating charges* 113.77 (26.99) 47.13 (4.92) (4.56) Share Class ‘G’ Accumulation shares Change in net assets per share Operating charges (4.19) Return after operating charges 109.58 (31.91) 42.57 Distributions (14.86) (13.88) (13.17) 14.86 13.88 13.17 948.65 839.07 870.98 7.51 12.82 14.73 Retained distributions on accumulation shares Closing net asset value per share * after direct transaction costs of: Performance Return after charges – 1.4728 1.9083 2.4622 3.1157 3.9705 – 8.1765 9.4641 9.2417 10.6919 10.8852 Fund Performance to 15 August 2016 (%) CF Canlife Asia Pacific Fund 1 year 3 years Since launch* 12.26 12.25 34.63 * Launch date 26 May 2012. 13.06% (3.66)% 5.14% The performance of the Fund disclosed in the above table may differ from the ‘Return after charges’ disclosed in the Comparative Table due to the above performance being calculated on the latest published price prior to the year end, rather than the year end return after operating charges. 76,782 68,996 76,127 8,093,872 8,223,010 8,740,398 Operating charges 0.53% 0.53% 0.55% Risk Warning Direct transaction costs 0.94% 1.38% 1.78% Please remember that past performance should not be seen as a guide to future performance and that the value of an investment and the income from it can fall as well as rise and may be affected by exchange rate variations. Highest share price 950.12 1,112.65 894.71 Lowest share price 715.56 836.12 792.11 Closing number of shares Prices 8 Final 15.08.16 (p/share) The performance of the Fund is based on the published price per ‘B’ Accumulation share which includes reinvested income. Other Information Closing net asset value (£’000) ’A’ Accumulation (pence) ‘B’ Accumulation (pence) ‘B’ Accumulation (EUR) (€ cents) ‘C’ Accumulation (pence) ‘C’ Accumulation (EUR) (€ cents) ‘G’ Accumulation (pence) Interim 15.02.16 (p/share) CF Canlife Asia Pacific Fund CF Canlife Asia Pacific Fund 9 ACD’S REPORT for the year ended 15 August 2016 Sector Spread of Investments Important Information With effect from 21 July 2016, the address of the registrar has changed to Arlington Business Centre, Millshaw Park Lane, Leeds LS11 0PA, and the address for all correspondences to PO Box 389, Darlington DL1 9UF. Net other assets 1.89% (5.77%) Structured Products 6.42% (9.34%) Australia 11.05% (16.88%) Thailand 9.92% (2.40%) With effect from 16 August 2016, the fund accounting of the Fund has changed from Capita Financial Administrators to The Bank of New York Mellon (International) Limited. Taiwan 8.46% (6.69%) China 25.69% (15.99%) Capita Financial Managers Limited ACD of CF Canlife Asia Pacific Fund 14 December 2016 South Korea 11.07% (26.22%) Singapore 5.46% (5.40%) Philippines 4.05% (1.87%) Malaysia 0.40% (0.79%) Hong Kong 3.79% (2.90%) India 2.80% (4.98%) Indonesia 9.00% (0.77%) The figures in brackets show allocations at 15 August 2015. Major Holdings The top ten holdings at the end of each year are shown below. Holding % of Fund Holding as at 15.08.16 Taiwan Semiconductor Manufacturing Company Commonwealth Bank of Australia Maanshan Iron and Steel Company Westpac Banking Corporation Tencent Holdings Samsung Electronics Company Angang Steel Company Australia & New Zealand Banking Group Anhui Conch Cement Company Morgan Stanley American Style Unitary Call Warrants linked to Axis Bank Apr 2018 10 3.95 2.52 2.36 2.34 2.20 2.09 2.08 2.07 2.03 % of Fund as at 15.08.15 CT Environmental Group Korea Aerospace Industries AeroSpace Technology of Korea AMP Sydney Airport APA Group Samsung Electronics Company Hyundai Livart Furniture Company Morgan Stanley American Style Unitary Call Warrants linked to Axis Bank Apr 2016 Advanced Info Service Public Company 4.92 4.16 4.10 2.51 2.23 2.00 1.80 1.71 1.69 1.65 1.81 CF Canlife Asia Pacific Fund CF Canlife Asia Pacific Fund 11 INVESTMENT MANAGER’S REPORT Investment Manager’s Report (continued) Summary The past 12 months were extremely volatile for the Asian region as a whole. It was a story of two halves, with extremely bearish sentiment in the first half and improving sentiment in the second half. Some yield stocks were also added to the Fund, such as Ascendas Real Estate Investment Trust and Mapletree Industrial Trust. In Hong Kong/China, improving fundamentals led to the addition of Chinese banks China Construction Bank Corporation and Industrial and Commercial Bank of China. These under-owned stocks are attractively priced, offering high yields. Economy and Markets Outlook There have been numerous concerns surrounding China’s economic slowdown. While its services sector has held up well, the manufacturing and construction sectors continued to see contraction. Post the UK referendum, the investment community has finally accepted it will be an environment of ‘lower for longer’, in both rates and growth. Emerging Markets, especially Asia ex Japan, are witnessing renewed investor attention – on the view this region offers both growth and yield. Despite recent inflows, global investors are still very underweight Asia, proving scope for further inflows in the months to come. for the year ended 15 August 2016 The Chinese government is pursuing a two-prong policy. On one hand, it is pushing hard at reforms by aggressively aiming to cut excess capacity in heavy industries – such as coal and steel. The result of this has been numerous closures in loss-making steel mills and coal mines. This gave rise to better profitability in both coal and steel companies. On the other hand, it is pushing through additional infrastructure spending to support growth. As a result, public investment picked up significantly in the second quarter. The People’s Bank of China also encouraged household debt, especially mortgages, with the government relaxing regulations – such as a transaction tax cut and a lowering of required mortgage down payments – in most cities. Property transactions picked up strongly across the country, along with property prices. Despite superior growth momentum compared to developed markets, the region as a whole is still attractive and trades at low historical valuations. Canada Life Asset Management Limited Investment Manager 8 September 2016 The concerns with capital outflows post the renminbi devaluation in August 2015 has calmed down as the government tried to maintain a relatively stable currency. Having implemented the Shanghai-Hong Kong Stock Connect programme, the government has just approved Shenzhen-Hong Kong connection, as part of its ongoing financial reform and deregulation. The latter is likely to be implemented by year end. However, the relationship between China and South Korea took a serious turn for the worse after the latter decided to deploy its Terminal High Altitude Area Defence at North Korea, despite strong opposition from China. This would mean serious economic repercussions for South Korea, as China is its largest trading partner – accounting for no less than 15% of its exports. ASEAN economies continued to recover over the last 12 months and are going from strength to strength. The Philippines held a successful general election, with the appointment of strong president Rodrigo Duterte. He appears to be keen to clean up crime in the country and implement pro-growth measures. President Joko Widodo of Indonesia continued to consolidate his position and has implemented numerous economic stimulus measures. For example, he successfully passed and implemented a tax amnesty bill. Thailand held a successful referendum to the change in parliamentary constitution, paving the way for a general election next year. This bodes well for local sentiment. In addition, Malaysia’s 1MDB saga also appears to have finally quietened down. Fund Activity The Fund repositioned itself after the UK’s surprise referendum vote to exit the European Union in June. Weightings in ASEAN were increased – specifically in Thailand, Indonesia and Philippines – at the expense of Australia. Indonesian banks such as Bank Central Asia and Bank Rakyat Indonesia Persero were purchased, along with Indonesian domestic play Astra International. In Thailand, The Siam Commercial Bank Public Company was added to the portfolio, as well as property stocks such as Land and Houses Public Company and Quality House Public Company. 12 CF Canlife Asia Pacific Fund CF Canlife Asia Pacific Fund 13 Buying and Selling Shares The ACD will accept orders to deal in the shares on normal business days between 8.30am and 5.30pm (London time) and transactions will be effected at prices determined by the following valuation. Instructions to buy or sell shares may be either in writing to: PO Box 389, Darlington DL1 9UF or by telephone on 0345 606 6180. Reports and Accounts This document is a short report of the CF Canlife Asia Pacific Fund for the year ended 15 August 2016. The full Report and Accounts for the Fund is available free of charge upon written request to Capita Financial Managers Limited, 40 Dukes Place, London EC3A 7NH and can be found on the ACD’s website, www.capitafinancial.com, by following the link ‘Fund Information’. Other Information The information in this report is designed to enable you to make an informed judgement on the activities of the Fund during the year it covers and the results of those activities at the end of the year. 14 CF Canlife Asia Pacific Fund 40 Dukes Place, London EC3A 7NH T 0870 607 2555 F 0870 607 2550 www.capitafinancial.com AUTHORISED CORPORATE DIRECTOR (‘ACD’) Capita Financial Managers Limited Head Office: 40 Dukes Place London EC3A 7NH Telephone: 0870 607 2555 Fax: 0870 607 2550 Email: enquiries@capitafinancial.com (Authorised and regulated by the Financial Conduct Authority) DIRECTORS OF THE ACD C. Addenbrooke N. Boyling B. Hammond P. Hugh-Smith K.J. Midl INVESTMENT MANAGER Canada Life Asset Management Limited Canada Life Place High Street Potters Bar Hertfordshire EN6 5BA (Authorised and regulated by the Financial Conduct Authority) DEPOSITARY BNY Mellon Trust & Depositary (UK) Limited The Bank of New York Mellon Centre 160 Queen Victoria Street London EC4V 4LA (Authorised and regulated by the Financial Conduct Authority) 1190 – SF – 15/12/2016 REGISTRAR Capita Financial Administrators Limited Customer Service Centre: Arlington Business Centre Millshaw Park Lane Leeds LS11 0PA Telephone: 0345 922 0044 Fax: 0113 224 6001 (Authorised and regulated by the Financial Conduct Authority) INDEPENDENT AUDITOR Ernst & Young LLP 25 Churchill Place Canary Wharf London E14 5EY