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Aegon Asset Management UK Investment Portfolios ICVC (Formerly Kames Capital Investment Portfolios ICVC) Interim Report and Financial Statements for the period from 1 April 2020 to 30 September 2020 (unaudited)

Aegon Asset Management UK Investment Portfolios ICVC 1

Aegon Asset Management UK Investment Portfolios ICVC

Contents

Company Information* 2

Report of the Authorised Corporate Director* 3

Statements of Responsibility 4

Authorised Corporate Director's statement* 4

Independent Valuer's Report 5

Aegon Property Income Fund impact of Covid-19 6

Aegon Property Income Fund suspension of dealing 6

Aegon Property Income Fund Financial Statements* 7

Further Information* 19

*Collectively these comprise the Authorised Corporate Directors' Report. Information specific to the Fund is detailed within its respective section.



Company Information

Authorised Corporate Director (ACD), Depositary

Investment Manager Citibank Europe plc, UK Branch

4

Aegon Asset Management UK plc 1, 2, 3

Citigroup Centre

3 Lochside Crescent Canada Square

Edinburgh Canary Wharf

EH12 9SA London

E14 5LB

Directors of the ACD

Custodian

Arnab Banerji (independent non-executive director)5

Jane Daniel Citibank N.A. London Branch 2

Stephen Jones Citigoup Centre

Mary Kerrigan (independent non-executive director)6 Canada Square

Bas NiueweWeme (non-executive director)7 Canary Wharf

David Watson (independent non-executive director) London

E14 5LB

Secretary of the ACD

Gordon Syme Independent Auditors

Registrar PricewaterhouseCoopers LLP

Atria One

Northern Trust Global Services SE UK Branch 2 144 Morrison Street

50 Bank Street Edinburgh

London EH3 8EX

E14 5NT

Property Manager Independent Valuer

Savills (UK) Limited CBRE Limited

33 Margaret Street Henrietta House

London Henrietta Place

W1G 0JD London

W1G 0NB

1 In September 2020 Aegon Asset Management completed a rebranding exercise to align all of its brands, including Kames Capital, and a new governance structure has been put in place.

2 Authorised and regulated by the Financial Conduct Authority.

3 ACD changed from Kames Capital plc to Aegon Asset Management UK plc on 4 September 2020.

4 Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

5 Arnab Banerji resigned as a Director of Aegon Asset Management UK plc on 25 September 2020.

6 Mary Kerrigan was appointed as a Director of Aegon Asset Management UK plc on 24 September 2020.

7 Bas NiueweWeme was appointed as a Director of Aegon Asset Management UK plc on 6 March 2020.



Report of the Authorised Corporate Director

The Company

Aegon Asset Management UK Investment Portfolios ICVC (the "Company") is an Open-Ended Investment Company (OEIC) with variable capital, Non-UCITS

Retail Scheme (NURS), and has Property Authorised Investment Fund (PAIF) status, as defined in Part 4A of the Tax Regulations and the Glossary to the

FCA Handbook, incorporated in England on 26 February 2014. It is governed by the OEIC Regulations, the Collective Investment Schemes sourcebook

(COLL) and its Instrument of Incorporation. The registered number of the Company is IC000988.

The shareholders have no interest in the Scheme Property, and are not liable for the debts of the Company.

The Company is an umbrella company with one sub-fund trading as at 30 September 2020. The number of sub-funds may be increased or decreased in the

future.

Authorised Status

The Company is a Collective Investment Scheme as defined in the Financial Services and Markets Act 2000 which is categorised as a Non-UCITS Retail

Scheme (NURS). The Company was authorised by the Financial Conduct Authority (FCA) on 26 February 2014 and its Instrument of Incorporation was

registered with the Registrar of Companies for England & Wales on 26 February 2014. The Company is an Alternative Investment Fund (AIF) for the purposes

of the FCA Rules. The Company was granted AIF status on 21 July 2014. A unit trust in umbrella form (Aegon Asset Management UK Unit Trust (the "Trust"))

was launched for those investors unable to invest directly in the Aegon Property Income Fund. The unit trust has two sub-funds: Aegon Property Income

Feeder (Income) Fund and Aegon Property Income Feeder (Accumulation) Fund (the "Feeder Funds").

The Financial Statements

We are pleased to present the interim report and financial statements for the period ending 30 September 2020.

As required by the OEIC Regulations, information for Aegon Property Income Fund ("the Fund") has been included in these financial statements. We have

provided a detailed description of the strategy that was adopted during the period under review.

Changes to the Prospectus

● Update to Section 9, UK Taxation, to update the tax-free Dividend Allowance and confirm new annual allowances for capital gains for the period 2020/2021.

● Update Appendix E, Historic performance to include percentage growth figures for the period January 2019 to 31 December 2019.

● Updated to Section 7 Fees and Expenses to include an updated indication of Valuer’s fees calculated as a percentage of the Scheme Property as 0.035%

for the period of April 2019 – March 2020 and to remove reference to PWC as tax consultant.

● An update on page 22 to note that Aegon Asset Management Value Hub B.V, Hungarian Branch, has been engaged to perform Performance

Measurement and Analysis functions together with an explanation that these functions serve to analyse the performance returns of the portfolios and funds

managed by the ACD and provide attribution analysis of these returns.

● Appendix F, Directors of the ACD and their main business activities not connected with the business of the ACD, was updated to reflect current directors

and their main business activities.

● Prospectus and Instrument amended to reflect re-branding and a change of name from Kames Capital to Aegon Asset Management UK on 7 September

2020. For full details please see Significant Events below.

● Prospectus amended to reflect changes required by the FCA’s Policy Statement PS19/24 on Illiquid Assets and Open-Ended Funds (including expanded

disclosures on liquidity risk and clearer and additional information on the tools and arrangements which may be used by the ACD to mitigate liquidity risks)

on 30 September 2020.

Value Statement

The first value statement for the Aegon Asset Management UK ICVC is available as part of a stand-alone composite report on our website

https://www.aegonam.com/en/uk-value-assessment/.

Significant Events

Effective from 4 September 2020 the ACD was renamed:

Effective to 4 September 2020 Effective from 4 September 2020

Kames Capital plc Aegon Asset Management UK plc

Effective from 7 September 2020 the Company and its sub-funds were renamed, as follows:

Effective to 7 September 2020 Effective from 7 September 2020

Kames Capital Investment Portfolios ICVC Aegon Asset Management UK Investment Portfolios ICVC

Kames Property Income Fund Aegon Property Income Fund

http://www.aegonam.com/en/uk-value-assessment/



Statements of Responsibility

Statement of Authorised Corporate Director's (ACD's) Responsibilities

The Rules of the Financial Conduct Authority’s Collective Investment Schemes Sourcebook require the Authorised Corporate Director (ACD) to prepare

financial statements for each accounting year that give a true and fair view of the financial affairs of the Company and of its net revenue and the net capital

losses for the year.

In preparing the financial statements the Authorised Corporate Director is required to:

• comply with the Prospectus and applicable accounting standards, subject to any material departures which are required to be disclosed and explained in the

financial statements;

•

comply with UK accounting standards, including FRS 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland and the Statement

of Recommended Practice for UK Authorised Funds issued by the Investment Management Association (now known as The Investment Association) in May

2014 and amended in June 2017;

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in operation for the

foreseeable future; and

•

take reasonable steps for the prevention and detection of fraud, error, and non-compliance with law or regulations.

The ACD is required to keep proper accounting records and to manage the Company in accordance with the Regulations and the Instrument of Incorporation.

The report has been prepared in accordance with the Financial Conduct Authority’s Collective Investment Schemes Sourcebook.

Statement of the Depositary's Responsibilities in respect of the financial statements of the Scheme

The Depositary is responsible for the safekeeping of all property of the Company (other than tangible moveable property) that is entrusted to it. It is the duty of

the Depositary to take reasonable care to ensure that the Company is managed in accordance with the Regulations, in relation to the pricing of, and dealings in,

shares in the Company, and in relation to the revenue of the Company.

Authorised Corporate Director's Statement

In accordance with the requirements of the Financial Conduct Authority's Collective Investment Schemes sourcebook, we hereby certify the report on behalf of

the Board of Aegon Asset Management UK plc.

Jane Daniel

Stephen Jones

Edinburgh

25 November 2020



Independent Valuer's Report

CBRE Limited, acting in its capacity as appointed standing independent valuer to Aegon Property Income Fund (the "Fund"), has valued the immoveables held

by the Fund as at 30 September 2020 in accordance with the Royal Institution of Chartered Surveyors ("RICS") Global Standards 2017 including the

International Valuation Standards and the RICS Valuation - Professional Standards UK January 2014 (revised April 2015) and in accordance with 8.4.13R of

the Collective Investment Schemes sourcebook. The immoveables have been valued on the basis of Fair Value as defined in the RICS Valuation -

Professional Standards subject to existing leases. Aegon Asset Management UK plc, as Authorised Corporate Director of the Fund, has been provided with a

full valuation certificate dated 30 September 2020.

We have been provided with information from the Fund's property managers including tenancy schedules and, where we have not measured the immoveables

ourselves, floor areas. We have assumed that the Fund's interests in the immoveables are not subject to any onerous restrictions, to the payment of any

unusual outgoings or to any changes, easements or rights of way, other than those to which we have referred in our reports. We rely upon the property

managers to keep us advised of any changes that may occur in the investments. We are not generally instructed to carry out structural surveys or test any of

the service installations. Our valuations therefore have regard only to the general condition of the immoveables evident from our inspections. We have

assumed that no materials have been used in the construction or subsequent alteration of the buildings which are deleterious, hazardous or likely to cause

structural defects. We are not instructed to carry out investigations into environmental contamination which might affect the immoveables and our valuations

assume the immoveables are not adversely affected by any environmental contamination.

In our opinion the aggregate value of the market values of the immoveables owned by the Fund as at 30 September 2020 is £383,850,000. This figure

represents the aggregate of the individual values attributable to the individual immoveables and should not be regarded as a valuation of the portfolio as a

whole in the context of a sale as a single lot.

No allowances are made for any expenses of realisation, or for taxation, which might arise in the event of a disposal. The immoveables are considered as if

free and clear of all mortgages or other charges which may be secured thereon. Valuations are prepared and expressed exclusive of VAT. The 16 March 2016

Budget issued by UK Government and enacted as part of the Finance Act on 15 September 2016 changed the basis of assessing Stamp Duty Land Tax in

England and Wales to a tiered approach and this has been adopted in the valuation as at 30 September 2019. Pending clarity in the market’s response to the

new International Property Measurement Standard (IPMS), we have continued to use floor areas as defined by the RICS Code of Measuring Practice 6th

Edition 2007. This has been discussed and agreed with the Fund Manager.

The pandemic and the measures taken to tackle COVID-19 continue to affect economies and real estate markets globally. Nevertheless, as at the valuation

date some property markets have started to function again, with transaction volumes and other relevant evidence returning to levels where an adequate

quantum of market evidence exists upon which to base opinions of value. Accordingly, and for the avoidance of doubt, our valuation is not reported as being

subject to `material valuation uncertainty` as defined by VPS 3 and VPGA 10 of the RICS Valuation- Global Standards.

For the avoidance of doubt this Explanatory Note has been included to ensure transparency and to provide further insight as to the market context under which

the valuation opinion was prepared. In recognition of the potential for market conditions to move rapidly in response to changes in the control or future spread

of COVID-19 we highlight the importance of the valuation date.

David Tudor MRICS

Senior Director

CBRE Limited

25 November 2020



Aegon Asset Management UK Property Income Fund impact of Covid-19

An outbreak of infectious respiratory illness caused by a novel coronavirus known as Covid-19 was first detected in China in December 2019 and has been

declared a pandemic by the World Health Organization. The impact of Covid-19 could be highly disruptive to economies and markets, adversely impacting

individual companies, sectors, industries, markets, interest and inflation rates, investor sentiment, and other factors affecting the value of a Fund’s

investments. The duration of the Covid-19 pandemic and its effects cannot be determined with certainty, and could prevent the Fund from executing

advantageous investment decisions in a timely manner and negatively impact the Fund’s ability to achieve its investment objective.

Despite the unprecedented market conditions created by Covid-19, we continue to have confidence in CBRE’s ability as Standing Investment Valuer to value

the Fund's portfolio. During this period we have seen the Royal Institution of Chartered Surveyors introduce far greater levels of coordination between valuation

houses to ensure that the details of what limited evidence is available are shared freely between valuers.

As the largest valuer of assets in the MSCI universe we are comfortable that CBRE’s market knowledge is giving them the best possible insight into market

dynamics. Whilst the abnormal market conditions mean there is less certainty attached to their valuations, it does not mean that they aren’t able to provide well

considered professional opinions of value. To support this, we and other managers, have also provided more data around rent collection across our portfolios

to enable CBRE to assess the financial stresses that different occupiers are experiencing.

Aegon Asset Management UK Property Income Fund suspension of dealing

Following a formal review on the 13 October 2020, the Aegon Asset Management UK plc (formerly known as Kames Capital plc) has decided, with agreement

from the Depositary, that it remains in the best interests of investors to continue the temporary suspension of dealing in in Aegon Property Income Fund.

The decision has been taken because we believe it is in the best interests of investors to continue suspension activity within the Fund.

The following information explains why we have taken this decision, and what we plan to do during this period.

It is important to reiterate that the continued suspension of dealing in the Fund remains a temporary measure and we are fully focused on recommencing

dealing as soon as possible. In the meantime, we recognise the significant inconvenience this decision may cause you, and with that in mind we have decided

to temporarily apply a discount to the annual management charge on the Fund of 0.15%, resulting in an annual management charge of 0.60% from 1

November 2020 until the end of the suspension period.

Why have we suspended dealing?

The decision has been taken because we believe it is in the best interests of investors to continue suspension activity within the Fund.

The Fund suspended dealing on 16 March 2020 in accordance with the Funds’ prospectus following the introduction of a Material Uncertainty Clause by the

Fund’s Standing Investment Valuer, CBRE for the valuation of the Fund’s directly held property assets. CBRE have advised that Material Uncertainty Clauses

have been lifted with respect to the Funds’ valuation as at 30 September 2020.

Notwithstanding the lifting of the Material Uncertainty Clause the Fund will remain suspended until its liquidity position is at an acceptable level for the Fund to

reopen. The impact of the Government imposed lockdown in March, the economic downturn and uncertainty caused by the Covid-19 pandemic has created

exceptional conditions for the UK commercial property market. The introduction of Material Uncertainty Clauses has severely restricted the operation of the

investment property market. Transaction volumes are dramatically lower than previous periods and as a result, the pipeline of disposals that the Fund had

arranged in quarter 1 2020 to increase liquidity has been disrupted.

Steps to re-open

It is our intention to lift the Funds’ suspension when we are satisfied that the Fund has sufficient liquidity (having regard to the interests of both remaining

investors and those who wish to redeem). The portfolio is currently holding a cash position below our target liquidity level and therefore disposals are in

progress to raise the cash position to an acceptable level. Property sales can take time and must be done in an orderly manner to ensure we achieve a

reasonable price for our investors and do not compromise the portfolio’s characteristics and future performance prospects.

To ensure we provide you with as much information as possible, we have also prepared a Q&A document, which you can find on our website at

www.aegonam.com.

http://www.aegonam.com/


Aegon Property Income Fund

Fund objective

The investment objective is to provide a combination of income and capital growth over any 7 year period. The investment objective is to carry on Property

Investment Business and to manage cash raised from investors for investment in the Property Investment Business.

Investment policy

The investment policy is to invest at least 60% of the Fund in a diversified portfolio of commercial property in the British Isles. The Fund may invest in any

commercial property sector and may invest in a mix of freehold and leasehold properties.

To the extent that the Fund is not fully invested in the main asset class listed above, the Fund may also invest in other types of property-related assets,

including real estate investment trusts, as well as collective investment schemes (which may include schemes managed by the ACD) and transferable

securities, money market instruments, deposits, and cash and near cash.

The ACD will select investments that offer attractive income returns and asset management potential. The ACD will seek to add value by actively managing

the portfolio of properties to enhance its capital value and rental income.

The Fund is actively managed and the ACD will also seek to achieve diversification across regions in the British Isles and sectors when constructing the

portfolio.

Risk profile

The Fund is designed for retail and institutional investors seeking pooled exposure from investments mainly in commercial property in the British Isles and

who are comfortable with a medium level of investment risk. In most cases, we expect the Fund to be held as part of a diversified portfolio which may include

other assets such as bonds, equities and cash. Property prices will fluctuate and may fall significantly in value. Consequently, it is important to understand that

the Fund should be viewed as a longer term investment.

Investors should be aware of the following risk factors:

• Investment property is not as liquid as other asset classes such as bonds or equities. Investors may not be able to switch or cash-in their Investment when

they want to because property in the Fund may not always be readily saleable.

•

Investment property transaction charges are higher than those which apply in other asset classes. High volumes of transactions would have a material

impact on Fund's returns.

•

The Fund’s Investment portfolio is exposed to market price fluctuations. Property valuations are a matter of the independent valuer’s opinion rather than fa

• The yield from the Investment property may be negatively affected by tenant failure or availability of supply in the sector.

The Fund is actively managed and exposed to a range of risks, which are listed and defined in the Aegon Asset Management UK Investment Portfolios ICVC

Prospectus. The most material risks from this list also appear in our Key Investor Information documents (KIID) where they are summarised in an easy-to-

read format. You can find both of these documents on our website at www.aegonam.com.

Review of Fund activities

The introduction of the Material Uncertainty Clause (MUC) meant the Board took the decision, along with our Depositary and having informed the FCA, to

immediately suspend dealings within the Fund with effect from the Valuation Point at midday on 16 March 2020. This is in line with COLL rules and ensures

that we protected customers by preventing any subscriptions or redemptions from taking place in the Fund at a share price that is based on property values

that are subject to a MUC. Whilst the Fund’s independent valuer, CBRE, lifted the MUC from the valuation at the end of September 2020, the Board have

agreed with the Depositary that the Fund should remain suspended as we believe this is acting in the best interests of investors whilst our liquidity position is

below target and whilst the potential redemptions are being established. We are working to re-open the Fund as quickly as possible and asset disposals will

be required to increase the Fund’s liquidity position. Market conditions for disposals are challenging with low transaction volumes, widespread investor caution

due to the ongoing impact of the Covid-19 pandemic and uncertainty created by the looming Brexit deadline.

The regulator has been clear that the decision to reopen Funds is a matter for each individual Fund manager and should be made on the basis of their own

analysis of cashflow risks taking account of potential redemptions that could arise once the Fund reopens. The FCA are keen to ensure that managers only

open when they are confident of remaining open on a sustainable basis. The FCA have also launched a consultation paper to introduce notice periods for

Funds which own illiquid assets to address the mis-match of daily dealing in Funds holding illiquid assets. The timing of the consultation on notice periods for

open-ended property Funds has created additional uncertainty that needs to be factored into any decision to reopen.

The Fund currently has a liquidity position of 7.5% compared with a minimum target liquidity level of 20%. We do not have visibility on when the Fund will be

able to reopen but with our sales programme we anticipate that it will be in Q1 2021.




Rent collection

Rent collection remains a major focus for our asset management teams throughout the Covid-19 period. We have been working closely with our occupiers,

particularly those whose businesses have been heavily impacted by lockdown measures, to provide support whilst also ensuring that we collect as much of

the rent due as possible. Encouragingly, of the demands issued on the English quarter days we have already collected 89% of the rent due for the March

2020 quarter, and 84% of the rent due for the June 2020 quarter.

The September collection rate at 77% is higher than the equivalent collection rates for March and June, of 67% and 73% respectively, fifteen days after the

quarter day. The September quarter collection rate will increase to 84% once all the payments are received from tenants who are paying rent monthly (on a

temporary basis).

Sector March June September

Offices 94% 90% 78%

Industrial 99% 98% 100%

High Street Retail 83% 72% 75%

Retail Warehousing 96% 100% 78%

Leisure 13% 3% 18%

Other 99% 99% 99%

Total 89% 84% 77%

The table shows that the three sectors accounting for the majority of arrears are Leisure, High Street Retail and Offices. The chart below splits these arrears

by sector and shows the proportion of this debt that is classified as subject to rent deferral agreements, outstanding but expected to be repaid and to be

written off. The Fund has taken a very prudent approach to the distribution of arrears and has made a bad debt provision against almost all rent and service

charge arrears. At this stage we expect to have to write off only 13% of the English Quarter Day rent arrears. The remaining arrears are either subject to

repayment agreements or are being pursued though discussions and lease restructures with our occupiers.

We have adopted a prudent approach and the Fund only distributed rental income received or income that we were very confident of collecting.

We have changed our accounting approach because we can’t be confident about our arrears being paid due to the unprecedented nature of the crisis and the

financial challenges being faced by some occupiers. Our expectation is that some tenants will not be able to repay their arrears in the future and that for

others, the arrears will be written-off by the Fund and treated as a landlord’s incentive in asset management deals to restructure their leases.

It is therefore appropriate to take the accounting impact of treating these arrears as unpaid. It would be unfair for shareholders in the future to take the

performance impact of writing off bad debts so we are protecting all investors by ensuring that the current share price reflects our realistic expectations on

rent and service charge arrears collection. This treatment of the existing arrears will be reviewed on a monthly basis. As we gain greater visibility of the

financial health of the Fund’s occupiers we will be able to form better judgements of their ability to repay the arrears to be distributed in the future and adjust

the accounting treatment of these arrears.

Portfolio activity

Despite the uncertain economic environment, we are pleased to report ongoing success with asset management initiatives across the portfolio. In Cardiff we

have completed office lettings in two buildings, Westgate House and Golate House, achieving record rents in both cases. In Stockton we have let 13,000 sq ft

of office space at Dunedin House to two Government occupiers, Stockton Borough Council and NHS Blood & Transplant. We are pleased to have retained

H&M at our retail asset in the centre of Crawley by renewing their lease that was due to end in January 2021 and have completed the letting of a vacant retail

unit to a local bakery at our retail asset in Plymouth.



Sales update

We are determined to be disciplined in the sales process by only selling assets in accordance with strategy whilst ensuring that the remaining portfolio is

capable of delivering the Fund’s objectives over the long term. Sales will therefore be focused on properties that we expect to underperform the market,

properties where we have completed the business plan and we consider them ex-growth and disposals that will improve the risk profile of the Fund. Our

governance and oversight functions will ensure that we balance the needs of investors intending to remain invested with those seeking to redeem throughout

the process.

We have identified 11 assets, across a range of sectors, for sale in Q4 2020 with a combined value in excess of £90m. Five of these assets, all of which are

leisure or retail properties, are currently under offer for a combined value of £23.3m. Completing these sales will increase the Fund’s liquidity to approximately

13%.

The remaining assets are either available on the market or will be launched for sale in the next few weeks. We will provide regular progress reports in our

monthly updates.

Outlook

Whilst 2020 is expected to see further capital falls and negative returns, with PMA forecasting -10% total returns for 2020 All Property, the PMA forecasts for

2021-2025 are that All Property will deliver 4.9% p.a.

The sector forecasts and our view of the sectors are as follows. Our view is that the pandemic will not radically transform how real estate is used, but that the

market is experiencing acceleration of structural changes.

Performance*

The Fund returned (4.19)% over the six months to 30 September 2020, compared to (3.25)% for the Investment Association UK Direct Property Average. As

a result of new rules and guidance from the FCA following their Asset Management Market Study, we changed the comparison benchmark for the Fund during

the period from a customised peer group to the Investment Association UK Direct Property sector. The Investment Association Sector includes both PAIFs

and Feeders in its calculation.

The Fund’s below benchmark performance over the six months reflects the impact of the global pandemic hitting valuations and hitting the active value sector

of the market more severely than the core sector. The portfolio also has a higher than benchmark void rate which impacts on valuations. The whole property

market saw all valuers put an MUC on valuations from 16 March 2020. This was lifted by sectors starting in June, with all sectors and therefore valuations

being free of a MUC from the September valuation date.

Longer-term performance (ie, over three years) is impacted by the price swing to bid price which happened on 20 December 2018. The Fund pricing was

adjusted from creation basis to cancellation basis, so that the pricing methodology reflects the cost of selling assets; this price swing negatively impacts the

Fund’s performance.

Authorised status

The Fund is a Non-UCITS Retail Scheme and has Property Authorised Investment Fund (PAIF) status, as defined in Part 4A of the Tax Regulations and the

Glossary to the FCA Handbook, in accordance with the classifications of the Collective Investment Schemes sourcebook of the Financial Conduct Authority.

The Fund is an Alternative Investment Fund (AIF) for the purposes of the FCA Rules.

*Source: Lipper, % growth, income re-invested at pay date, NAV-NAV, GBP, net of Basic Rate Tax. Index returns are gross of Basic Rate Tax. Investors are

invited to compare the Fund’s performance against the performance of other funds within Investment Association UK Direct Property Sector. Comparison of

the Fund against this Sector will give investors an indication of how the Fund is performing compared with funds investing in a similar but not identical

investment universe. The above comparison should be performed over at least a 7 year period (or period since inception) to provide the most useful long

term comparison.



Expense ratios

As at 30 September 2020 B Net

Acc

B Net

Inc

B Gross

Acc

B Gross

Inc

F Gross

Acc***

F Gross

Inc***

ACD's periodic charge 0.75% 0.75% 0.75% 0.75% - -

Other Fund operating expenses 0.11% 0.11% 0.11% 0.11% 0.11% 0.11%

Ongoing charges figure (OCF)* 0.86% 0.86% 0.86% 0.86% 0.11% 0.11%

Property expense ratio (PER)** 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%

Real estate expense ratio (OCF + PER) 4.86% 4.86% 4.86% 4.86% 4.11% 4.11%

*The Ongoing Charges Figures (OCF) is calculated as the ratio of the total expenses to the average net asset value of the Fund over the period. The OCF is made up of the ACD's periodic charge and other

operating costs deducted from the assets of the Fund during the period, except for those payments that are explicitly excluded by regulations.

**The Property Expense Ratio (PER) reflects any additional costs associated with the day-to-day operation of the direct property assets and is presented as a percentage of average net assets over the period.

The PER figure is higher than usually reported due to an increase in property void costs and bad debt write off during the first half of the financial year due to current market conditions. Aegon Asset

Management UK plc anticipates that in the second half of the financial year the PER should level off.

***F share classes are only available to the Feeder Funds.

Performance Information

As at 30 September 2020 B Net

Acc

B Net

Inc

B Gross

Acc

B Gross

Inc

F Gross

Acc**

F Gross

Inc**

Closing net asset value (£'000) 56,863 28,179 26,120 63,756 168,608 82,668

Closing number of shares 47,735,164 31,705,356 20,721,947 71,733,791 127,382,062 88,575,345

Net asset value per share 119.12 88.88 126.05 88.88 132.36 93.33

Direct transaction costs* 0.05% 0.05% 0.05% 0.05% 0.05% 0.05%

*In line with the requirements of the 2014 Statement of Recommended Practice for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in

relation to direct transaction costs. These costs might appear positive or negative depending on the timing of investment activity within the Fund. The current negative charge reflects the fact that the Fund has

collected a dilution adjustment but has not yet incurred all costs of fully investing the portfolio.

**F share classes are only available to the Feeder Funds.



Portfolio Statement

The Fund's investments as at 30 September 2020

Location Investment Sector Market value Total net assets

£'000 %

Direct properties (31 March 2020: 94.19%)

Market value over £15,000,000 (31 March 2020: 26.59%)

Manchester The Hive, 47-51 Lever Street Offices

Cheltenham St James House, St James Square Offices

Leeds 2 City Walk, Victoria Road Offices

Orpington Central Court, 1 Knoll Rise Offices

Rawtenstall New Hall Hey Retail Park, New Hall Hey Road Retail Warehouses

Total market value over £15,000,000 102,450 24.04

Market value between £10,000,000 and £15,000,000 (31 March 2020: 24.05%)

Sheffield The Balance, Pinfold Street Offices

Sheffield Fountain Precinct, Balm Green Offices

Birmingham 22 & 35 Gas Street Offices

Newcastle Newburn Riverside Offices, Newburn Offices

Stevenage 40-98 Queensway Retail

Crawley 1-21 The Martletts Retail

Redhill Kingsgate, High Street Offices

Total market value between £10,000,000 and £15,000,000 89,550 21.01

Market value between £5,000,000 and £10,000,000 (31 March 2020: 31.96%)

Newcastle Newburn Riverside Industrial, Newburn Industrial

Cardiff Golate House & Westgate Street Offices

Manchester 39 Deansgate Offices

Slough Keypoint, 17-23 High Street Offices

Preston Premier Inn, Fox Street Leisure

Glasgow 200 Renfield Street Offices

Exeter 252-253 High Street Retail

Cardiff Castle Buildings, Womanby Street Offices

Middlesbrough Jennings Motor Group, Cargo Fleet Lane Other

Cardiff Audi, Cardiff Gate Business Park Other

Bristol Armourers House, 50 Queen Charlotte Street Offices

Chelmsford Chelmer Valley Care Home, Broomfield Hospital Other

Newcastle Nexus House, 33 St James' Boulevard Offices

Glasgow 70-76 Argyle Street & 2-10 Queen Street Retail

Bristol Unum House, Redcliffe Way Offices

Exeter Manor Court, Dix's Field Offices

Wombwell 1 Waterside Park Industrial

Glasgow 120 Buchanan Street Retail

Plymouth 10-44 Cornwall Street and 152-156 Armada Way Retail

Total market value between £5,000,000 and £10,000,000 143,480 33.66



Portfolio Statement (continued)

Location

Investment

Sector

Market value

Total net assets

£'000 %

Market value under £5,000,000 (31 March 2020: 11.72%)

Bromborough Matalan Unit, New Chester Road Retail Warehouses

Warrington Dominion House, Temple Court, Birchwood Offices

Wick Wick Retail Park, South Road Retail Warehouses

Worcester Nuffield Health, Droitwich Road Leisure

Nottingham New Look, 14-20 Lister Gate Retail

London 226 & 227/228 The Strand Retail

Norwich 3-4 Haymarket Retail

Godalming The Refectory, Portsmouth Road, Milford Leisure

Birmingham 44-59 Summer Row Leisure

Stockton-On-Tees Dunedin House, Colombia Drive, Thornaby Offices

Harrogate 6-14 Cambridge Street Retail

Newcastle Norfolk House, 8-12 Shakespeare Street Retail

St Albans Ivy, 1-3 Verulam Road Leisure

Edinburgh 77-79 George Street Retail

Beaconsfield White Horse, 70 London End Leisure

St Albans Loch Fyne, 5-5b Verulam Road Leisure

Cardiff 360 Newport Road Leisure

Reading Zero Degrees, 3-4 Gun Street Leisure

Preston Nationwide, 41/41A Fishergate Retail

Lichfield Walkabout, 13 Bird Street Leisure

Reading Smash & Coalition, 5-6 Gun Street Leisure

Total market value under £5,000,000 58,370 13.70

Total valuation per independent valuer 393,850 92.41

Deductions for the lease incentive adjustment* (4,130) (0.97)

Increase for the finance lease adjustment** 3,055 0.72

Total direct properties after fair value adjustments 392,775 92.16

Portfolio of investments 392,775 92.16

Net other assets 33,419 7.84

Total net assets attributable to shareholders 426,194 100.00

*The fair value of direct properties as at 30 September 2020 is calculated after deductions for the lease incentives amounting to £4,130,000 (31 March 2020: £3,812,000).

**The fair value of direct properties as at 30 September 2020 is calculated after additions for the finance lease amounting to £3,055,000 (31 March 2020: £3,212,000).



Statement of Total Return

for the six months ended 30 September 2020

2020 2019

£'000 £'000 £'000 £'000

Income

Net capital losses

(26,799)

(10,465)

Revenue 19,065

25,544

Expenses (9,669)

(8,684)

Interest payable and similar charges -

(2)

Net revenue before taxation

9,396

16,858

Taxation -

-

Net revenue after taxation

9,396

16,858

Total return before distributions

(17,403)

6,393

Distributions

(10,399)

(19,119)

Change in net assets attributable to shareholders from investment activities

(27,802)

(12,726)

Statement of Change in Net Assets Attributable to Shareholders for the six months ended 30 September 2020

2020 2019

£'000 £'000 £'000 £'000

Opening net assets attributable to shareholders* 449,622 711,348

Amounts receivable on creation of shares -

147,973

Amounts payable on cancellation of shares (1,524) (202,998)

(1,524) (55,025)

Dilution adjustment

16

587

Change in net assets attributable to shareholders from investment activities

(27,802)

(12,726)

Retained distribution on accumulation shares

5,882

10,907

Closing net assets attributable to shareholders

426,194

655,091

*The opening net assets attributable to shareholders for the current period do not equal the closing net assets attributable to shareholders for the comparative period as they are not consecutive periods.



Balance Sheet

as at 30 September 2020

30 September 31 March

2020 2020

£'000 £'000 £'000 £'000

Assets

Fixed assets:

Tangible assets:

Land and buildings 392,775 423,491

392,775 423,491

Current assets:

Debtors 16,824 10,689

Cash and bank balances 34,491 30,514

51,315

41,203

Total assets

444,090

464,694

Liabilities

Creditors

Bank overdrafts - 1,166

Distribution payable 1,028 802

Other creditors 16,868 13,104

Total liabilities

17,896

15,072

Net assets attributable to shareholders

426,194

449,622



Cash Flow Statement

for the six months ended 30 September 2020

30 September 30 September

2020 2019

£'000 £'000

Cash flows from operating activities

Net revenue after taxation 9,396 16,858

Adjustments for:

Interest received (22) (462)

(Increase)/decrease in debtors (6,135) 7,339

Increase in creditors 4,024 4,466

Cash from operations

7,263

28,201

Income taxes paid (379)

(500)

Net cash generated from operating activities 6,884

27,701

Cash flows from investing activities

Proceeds from sale of land and buildings 7,275 14,289

Purchases of land and buildings (3,497) (4,427)

Purchases of investments - (8,918)

Interest received 22 462

Net cash generated from investing activities

3,800

1,406

Cash flows from financing activities

Amounts received on issue of shares - 149,170

Amounts paid on cancellation of shares (1,649) (203,743)

Dilution adjustment 17 583

Distributions paid (3,909) (7,585)

Net cash used in financing activities

(5,541)

(61,575)

Net increase/(decrease) in cash and bank balances

5,143

(32,468)

Cash and bank balances at beginning of period

29,348

132,078

Cash and bank balances at end of period 34,491

99,610



Accounting Policies

1 Accounting policies

These financial statements have been prepared on the same basis as the audited financial statements for the year ended 31 March 2020. The Financial

Statements have been prepared in accordance with FRS102 and the Statement of Recommended Practice (SORP) for Authorised Funds, issued by the

Investment Management Association (now known as the Investment Association) in May 2014.

2

Changes to Accounting Policies

There have been no changes in the accounting policies since the previous financial statements.



Distribution Tables

The Fund pays 12 distributions to its shareholders each year on the last calendar day of each month (“pay date”). Those distributions are based on the

net distributable income for the previous month and are paid to those shareholders on the register on the last day of the previous month (“period end”).

Share Class B Net Accumulation

Period Pay Group Gross Income Net Equalisation* Total 2019 Total

end date Revenue Tax Revenue Payable Paid

30/04/20 31/05/20 Group 1 0.4047 0.0675 0.3372 N/A

0.3372 0.4385 Group 2 0.4047 0.0675 0.3372 0.0000

31/05/20 30/06/20 Group 1 0.4119 0.0642 0.3477 N/A

0.3477 0.4899 Group 2 0.4119 0.0642 0.3477 0.0000

30/06/20 31/07/20 Group 1 0.5374 0.0882 0.4492 N/A

0.4492 0.4380 Group 2 0.5374 0.0882 0.4492 0.0000

31/07/20 31/08/20 Group 1 0.4372 0.0677 0.3695 N/A

0.3695 0.6315 Group 2 0.4372 0.0677 0.3695 0.0000

31/08/20 30/09/20 Group 1 0.5459 0.0894 0.4565 N/A

0.4565 0.5227 Group 2 0.5459 0.0894 0.4565 0.0000

30/09/20 31/10/20 Group 1 0.5557 0.0925 0.4632 N/A

0.4632 0.4694 Group 2 0.5557 0.0925 0.4632 0.0000

Share Class B Net Income



30/04/20 31/05/20 Group 1 0.3044 0.0480 0.2564 N/A

0.2564 0.3493 Group 2 0.3044 0.0480 0.2564 0.0000

31/05/20 30/06/20 Group 1 0.3129 0.0488 0.2641 N/A

0.2641 0.3891 Group 2 0.3129 0.0488 0.2641 0.0000

30/06/20 31/07/20 Group 1 0.4068 0.0668 0.3400 N/A

0.3400 0.3465 Group 2 0.4068 0.0668 0.3400 0.0000

31/07/20 31/08/20 Group 1 0.3297 0.0510 0.2787 N/A

0.2787 0.4979 Group 2 0.3297 0.0510 0.2787 0.0000

31/08/20 30/09/20 Group 1 0.4105 0.0672 0.3433 N/A

0.3433 0.4101 Group 2 0.4105 0.0672 0.3433 0.0000

30/09/20 31/10/20 Group 1 0.4162 0.0693 0.3469 N/A

0.3469 0.3669 Group 2 0.4162 0.0693 0.3469 0.0000

Share Class B Gross Accumulation**



30/04/20 31/05/20 Group 1 0.4270 0.0000 0.4270 N/A

0.4270 0.5464 Group 2 0.4270 0.0000 0.4270 0.0000

31/05/20 30/06/20 Group 1 0.4342 0.0000 0.4342 N/A

0.4342 0.6094 Group 2 0.4342 0.0000 0.4342 0.0000

30/06/20 31/07/20 Group 1 0.5671 0.0000 0.5671 N/A

0.5671 0.5368 Group 2 0.5671 0.0000 0.5671 0.0000

31/07/20 31/08/20 Group 1 0.4616 0.0000 0.4616 N/A

0.4616 0.7760 Group 2 0.4616 0.0000 0.4616 0.0000

31/08/20 30/09/20 Group 1 0.5767 0.0000 0.5767 N/A

0.5767 0.6528 Group 2 0.5767 0.0000 0.5767 0.0000

30/09/20 31/10/20 Group 1 0.5876 0.0000 0.5876 N/A

0.5876 0.5756 Group 2 0.5876 0.0000 0.5876 0.0000

All distributions above are in pence per share unless specifically stated.

*Equalisation applies only to shares purchased during the distribution period (group 2 shares). It is the average amount of revenue included in the purchase price of all group 2 shares and is

refunded to holders of these shares as a return of capital. Being a capital repayment, it is not liable to income tax but must be deducted from the cost of the shares for capital gains tax purposes.

**Gross share classes are only available to investors who are permitted in accordance with UK tax law to receive income from the Fund without deduction of any income tax.



Distribution Tables (continued)

Share Class B Gross Income**



30/04/20 31/05/20 Group 1 0.3080 0.0000 0.3080 N/A

0.3080 0.4164 Group 2 0.3080 0.0000 0.3080 0.0000

31/05/20 30/06/20 Group 1 0.3126 0.0000 0.3126 N/A

0.3126 0.4627 Group 2 0.3126 0.0000 0.3126 0.0000

30/06/20 31/07/20 Group 1 0.4070 0.0000 0.4070 N/A

0.4070 0.4058 Group 2 0.4070 0.0000 0.4070 0.0000

31/07/20 31/08/20 Group 1 0.3299 0.0000 0.3299 N/A

0.3299 0.5843 Group 2 0.3299 0.0000 0.3299 0.0000

31/08/20 30/09/20 Group 1 0.4105 0.0000 0.4105 N/A

0.4105 0.4886 Group 2 0.4105 0.0000 0.4105 0.0000

30/09/20 31/10/20 Group 1 0.4163 0.0000 0.4163 N/A

0.4163 0.4289 Group 2 0.4163 0.0000 0.4163 0.0000

Share Class F Gross Accumulation**†



30/04/20 31/05/20 Group 1 0.4468 0.0000 0.4468 N/A

0.4468 0.5675 Group 2 0.4468 0.0000 0.4468 0.0000

31/05/20 30/06/20 Group 1 0.4547 0.0000 0.4547 N/A

0.4547 0.6333 Group 2 0.4547 0.0000 0.4547 0.0000

30/06/20 31/07/20 Group 1 0.5944 0.0000 0.5944 N/A

0.5944 0.5583 Group 2 0.5944 0.0000 0.5944 0.0000

31/07/20 31/08/20 Group 1 0.4839 0.0000 0.4839 N/A

0.4839 0.8073 Group 2 0.4839 0.0000 0.4839 0.0000

31/08/20 30/09/20 Group 1 0.6051 0.0000 0.6051 N/A

0.6051 0.6798 Group 2 0.6051 0.0000 0.6051 0.0000

30/09/20 31/10/20 Group 1 0.6167 0.0000 0.6167 N/A

0.6167 0.5997 Group 2 0.6167 0.0000 0.6167 0.0000

Share Class F Gross Income**†



30/04/20 31/05/20 Group 1 0.3222 0.0000 0.3222 N/A

0.3222 0.4325 Group 2 0.3222 0.0000 0.3222 0.0000

31/05/20 30/06/20 Group 1 0.3273 0.0000 0.3273 N/A

0.3273 0.4808 Group 2 0.3273 0.0000 0.3273 0.0000

30/06/20 31/07/20 Group 1 0.4267 0.0000 0.4267 N/A

0.4267 0.4221 Group 2 0.4267 0.0000 0.4267 0.0000

31/07/20 31/08/20 Group 1 0.3457 0.0000 0.3457 N/A

0.3457 0.6079 Group 2 0.3457 0.0000 0.3457 0.0000

31/08/20 30/09/20 Group 1 0.4307 0.0000 0.4307 N/A

0.4307 0.5088 Group 2 0.4307 0.0000 0.4307 0.0000

30/09/20 31/10/20 Group 1 0.4370 0.0000 0.4370 N/A

0.4370 0.4468 Group 2 0.4370 0.0000 0.4370 0.0000

All distributions above are in pence per share unless specifically stated.

*Equalisation applies only to shares purchased during the distribution period (group 2 shares). It is the average amount of revenue included in the purchase price of all group 2 shares and is

refunded to holders of these shares as a return of capital. Being a capital repayment, it is not liable to income tax but must be deducted from the cost of the shares for capital gains tax purposes.

**Gross share classes are only available to investors who are permitted in accordance with UK tax law to receive income from the Fund without deduction of any income tax.

†F share classes are only available to the Feeder Funds.



Further Information

Base currency

The Company's base currency is Sterling.

Shares

The Fund may have up to four class types, B, F, Q and S class. Further information on investment limits, management charges, and currency denomination is

available from the ACD on request. The Fund may offer different types of shares within the classes.

Income shares - Investors with this type of share receive income payments from their shareholding periodically.

Accumulation shares - With this type of share all income earned on investments will be reinvested into the Fund.

Valuation point

The valuation point for the Fund is midday on each dealing day. The Fund deals on a forward basis.

Buying and selling shares

Buying

New investors or existing shareholders (in other Aegon Asset Management UK funds) who wish to purchase shares may do so by contacting their IFA,

stockbroker, banker, or solicitor who will provide you with an application form. Once an application form, with completed declarations, has been accepted and

processed, you can telephone our dealing team on 0800 358 3009 to place future orders.

Selling

You can sell your shares back to the Authorised Corporate Director (ACD) at the next quoted price, on the dealing day following receipt of your instructions.

You will then receive your contract note, and within 3 business days of our receipt of the completed statement of renunciation you will receive monies for the

amount due.

Shares may normally be bought or sold on any working day between 8.30am and 5.30pm.

You may also save on a regular basis from as little as £50 a month. Contributions will be made by direct debit.

A share exchange service may, at the ACD's discretion, be available in respect of investment amounts of £250 or more.

Securities Financial Transactions Regulations

The Fund does not currently undertake securities financing transactions (as defined in Article 3 of Regulation (EU) 2015/2365) or uses total return swaps.

Association of Real Estate Funds code of practice

The Fund is a member of the Association of Real Estate Funds (AREF). The aim of the Code of Practice is to achieve high standards of transparency across

the sector and promote consistency of reporting to allow investors to compare different funds.

In accordance with the “Fund Pricing Recommendations” issued by AREF in March 2016, we can confirm that the Accounting NAV presented within these

financial statements equates to the Standard NAV. Property acquisition costs are recovered through the offer price – we operate a mechanism through pricing

to ensure fair allocation of those costs, and monitor this on a regular basis.

Alternative Investment Fund Managers Directive

Leverage

In accordance with the Alternative Investment Funds Management Directive (AIFMD) the Alternative Investment Fund Manager (AIFM) is required to disclose

the leverage of the Alternative Investment Fund (AIF). Leverage is defined as any method by which the Fund increases its exposure through borrowing or the

use of derivatives. The Aegon Property Income Fund was not leveraged during the performance period.

Liquidity

In accordance with the AIFMD the AIFM is required to disclose the percentage of the AIF’s assets that are subject to special arrangements arising from their

illiquid nature. The Aegon Property Income Fund had no such assets during the performance period.

Risk

In accordance with the AIFMD the AIFM is required to disclose the current risk profile of the AIF and the risk management systems employed by the AIFM to

manage those risks. These disclosures have been made within the main body of this document.

64

Who to contact

Investors

[email protected]

0800 358 3009

Our investor helpdesk is open from 8.30am to 5.30pm (Monday to Friday)

To improve customer service, and for training purposes, call may be recorded.

www.aegonam.com

mailto:[email protected]


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