Download CF Canlife Asia Pacific Fund

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