charles stanley investment funds - maitland group · 9/30/2018 · mi charles stanley investment...

MI Charles Stanley Investment Funds

Interim Report 30 September 2018

Contents Page

Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Basis of Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Certification of the Interim Report by the Authorised Corporate Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

MI Charles Stanley Multi Asset 1 Defensive FundInvestment Objective and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Investment Manager’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Portfolio Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Comparative Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Statement of Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Statement of Change in Net Assets Attributable to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Distribution Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

MI Charles Stanley Multi Asset 2 Cautious FundInvestment Objective and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Investment Manager’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Portfolio Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Comparative Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Statement of Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Statement of Change in Net Assets Attributable to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Distribution Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

MI Charles Stanley Multi Asset 3 Moderate FundInvestment Objective and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Investment Manager’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Portfolio Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Comparative Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Statement of Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Statement of Change in Net Assets Attributable to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Distribution Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

MI Charles Stanley Multi Asset 4 Growth FundInvestment Objective and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Investment Manager’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Portfolio Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Comparative Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Statement of Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Statement of Change in Net Assets Attributable to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Distribution Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41


Contents Pagecontinued

MI Charles Stanley Multi Asset 5 Adventurous FundInvestment Objective and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Investment Manager’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Portfolio Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Comparative Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Statement of Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Statement of Change in Net Assets Attributable to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Distribution Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52


Directory

Authorised Corporate Director (ACD) & RegistrarMaitland Institutional Services LtdSpringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PWTelephone: 01245 398950Fax: 01245 398951Website: www.maitlandgroup.com(Authorised and regulated by the Financial Conduct Authority)

Customer Service CentreSpringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PWTelephone: 0345 308 1456Fax: 0845 280 1815E-mail: [email protected](Authorised and regulated by the Financial Conduct Authority)

Directors of the Authorised Corporate DirectorR. AckermannJ. ClarkP.J. Foley-BrickleyS. GeorgalaD. JonesG. Kok

Investment ManagerCharles Stanley & Co Ltd55 Bishopsgate, London, EC2N 3AS(Authorised and regulated by the Financial Conduct Authority)

DepositaryNorthern Trust Global Services SE50 Bank Street, Canary Wharf, London E14 5NT(Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the PrudentialRegulation Authority)

Independent AuditorKPMG LLP, Statutory AuditorChartered Accountants15 Canada Square, Canary Wharf, London E14 5GL

MI Charles Stanley Investment Funds 1


Basis of Accounting

The interim financial statements have been prepared under the historical cost basis, as modified by revaluation of investmentsand in accordance with FRS102 and the Statement of Recommended Practice (SORP) for the Financial Statements of UKAuthorised Funds issued by the Investment Association (IA) in May 2014.

The interim financial statements have been prepared on the same basis as the audited financial statements for the year ended31 March 2018.

The financial statements have been prepared on the going concern basis.

Certification of the Interim Report by the Authorised Corporate DirectorThis report has been prepared in accordance with the requirements of the Financial Conduct Authority’s CollectiveInvestment Schemes Sourcebook (“the COLL sourcebook”) and the Statement of Recommended Practice issued by theInvestment Association.

R. AckermannD. Jones

DirectorsMaitland Institutional Services Ltd27 November 2018

2 MI Charles Stanley Investment Funds


Danielle

Danielle Jones

Investment Objective and Policyfor the period ended 30 September 2018

Investment objectiveThe Sub-fund will aim to achieve a combination of capital growth and income by investing in a range of bond and equityinvestments. The exposure to risk assets like equities versus defensive assets like bonds will be adjusted according to themarket conditions and diversified by taking a global approach.

Investment policyThe Sub-fund will combine a range of asset classes, predominantly those regarded as lower risk, with the aim of offering adefensive and cautious investment approach.

The Sub-fund will invest in a mixture of index-tracking instruments and other collective investment schemes and directholdings in government and corporate bonds. The Investment Manager has developed a dynamic asset allocation processwhich enables investment across a broad range of asset classes and sub-classes in the EU and worldwide. Cash and equivalentinvestments will be used from time to time to protect the value of the Sub-fund, especially in times of market uncertainty.The Sub-fund may invest in overseas securities and currency exposure may be hedged from time to time. The Sub-fund mayalso invest at the Investment Manager’s discretion in other transferable securities, money market instruments, depositaryreceipts, derivative instruments and forward transactions.

The Sub-fund may invest in derivatives for the purposes of hedging with the aim of reducing the risk profile of the Sub-fundin accordance with the principles of Efficient Portfolio Management. Derivatives can expose the Scheme Property to a higherdegree of risk.

Although the Company permits the use of derivatives for investment purposes by the Sub-fund, this policy is not currentlyapplied and may not be applied without giving the required 60 day notice to Shareholders. If derivatives are used for thepurpose of meeting the investment objective of the Sub-fund this can affect the risk profile of the Sub-fund.

Investment Manager’s Reportfor the period ended 30 September 2018

General Market CommentaryCompanies reported good earnings growth on both sides of the Atlantic in the second-quarter reporting season, providingsome reassurance to investors concerned about the impact of Donald Trump’s trade policies on global output. However,disputes rumble on.

The US administration continues to accelerate its trade and technology transfer dispute with China, which it accuses of havingunfair practices. In September, Donald Trump’s government put tariffs on an additional $200bn of Chinese imports, resultingin more than half of goods from the Asian nation coming into the US being subject to such duties. There was a tit-for-tatresponse by the Asian nation in terms of trade barriers, but it also cut tariffs on non-US goods to try and limit the impact ofincreased prices on its citizens and encourage the purchase of non-US goods. As a result, Chinese equities have been weak,with falls a result of both trade tensions and moves by Chinese authorities to rein in excessive lending. US markets continueto hit new record highs, boosted by President Trump’s tax cuts, solid earnings and strong economic growth.

A trade agreement has now been agreed between the US and Mexico, easing some of the concerns that the situation couldescalate dramatically and damage global growth. It is hoped an agreement between the US and Canada can be reached soon.Although discussions between the European Union and President Trump eased some trade fears on this front, as there wassome talk of a move to zero tariffs, no agreement has been made on German car exports. This remains an important issue forthe White House and this dispute may therefore take time to be resolved.

Political risk has also increased in the Eurozone following the election of populist parties in Italy on an anti-migrant and anti-austerity platform. The coalition government wants to spend and borrow more than euro membership rules allow, creatingtension with France and Germany. Indeed, when the new coalition presented its budget the potential deficit in 2019 was higherthan the market had expected, so uncertainty has now increased in the single-currency bloc.

The UK government’s Brexit bill passed through Parliament after Prime Minister Theresa May saw off a revolt by Tory MPs. Peersaccepted the amendment to the EU (Withdrawal) Bill sent to them from the House of Commons, and it has now become law.

MI Charles Stanley Multi Asset 1 Defensive Fund 3

MI Charles Stanley Multi Asset 1 Defensive Fund

Investment Manager’s Reportcontinued

General Market Commentary (continued)Discussions over the final details of the withdrawal continue and the UK government is attempting to construct a deal that canbe passed through parliament. There is disagreement over the details and a “no deal” exit remains possible. UK consumerconfidence remains subdued ahead of more clarity on the relationship between the UK and EU from 29 March next year, theformal leaving date set out in Article 50.

UK GDP growth in the first quarter of 2018 was weak, falling to just 0.2% year-on-year as a period of snow in March hit theeconomy. However, growth accelerated to 0.4% in the second quarter. The Bank of England increased interest rates at itsAugust meeting and Mark Carney, the Bank’s governor, said there would be further "gradual" and "limited" rate rises to come.The blue-chip FTSE 100 reached another all-time high in May, helped by a rising oil price and weak sterling, as many UKcompanies earn a substantial amount of money abroad. However, it has lagged US indices where the technology sector remainsa main driver of gains.

US interest rates were raised by 25 basis points in March, June and September, with at least one more increase expected thisyear. Central bank officials continue to see the economy as strong, with US second-quarter GDP revised higher at its secondreading to 4.2%. This is the strongest growth seen in the US for almost four years. Despite the prospect of interest rate risesin a number of Western economies, inflation remains reasonably low in developed nations.

Market sentiment is now more fragile, but most of this is being driven by geopolitical issues. The outlook for equities remainsrelatively positive, although a sustained period of dollar strength has hit emerging markets. Any serious escalation of the tradedispute would be a major negative for equity markets globally.

Against this mixed backdrop of macroeconomic and geopolitical news flow markets have diverged over the six month periodto 30th September 2018. In Developed Markets the US and Japan have been the standout performers on a local currency basiswith total returns of 11.4% and 15.0% respectively for the S&P 500 and Nikkei 225 indices. This compares to the UK andEuropean markets which posted positive but lower total returns of 8.8% and 3.7% respectively for the FTSE 100 and EuroSTOXX indices. Emerging Markets however were however the laggards with the MSCI Emerging Market Index posting a negative1.8% total return for the six month period, having been hindered by Trade War worries and US Dollar Strength.

Overview & OutlookThe Sub-fund reported a total return of 1.4% over the last six months. Over the same period the UK Consumer Price Indexreturned 1.5%. (Source: Financial Express Analytics as at 30th September 2018, pounds sterling, net income re-invested).

The Sub-fund remains predominantly exposure to short dated UK corporate bonds with allocations to sovereign bonds, indexlinked bonds and global equities. UK government bond yields were quite volatile over the six month period but ended theperiod up over 0.2%. Sterling corporate bond total returns were slightly negative given the move up in yields but only saw asmall increase in credit spreads which does not concern us given the all-time lows we were moving up from. Whilst weanticipate a slow move higher in interest rates the Sub-fund has a relatively low interest rate sensitivity and is positioned tocapture any further outperformance in short dated corporate credit.

4 MI Charles Stanley Multi Asset 1 Defensive Fund


Portfolio Statementas at 30 September 2018

Market % of total value net assets

Holding Security £ 30.09.18

Alternatives 6.97% (5.08%)43,000 International Public Partnerships 65,016 1.9954,041 Invesco Perpetual Global Target Return - Z Accumulation* 128,476 3.9220,267 Merian Global Equity Absolute Return - R GBP Hedged Accumulation* 34,543 1.06

228,035 6.97

Asia ex Japan Equities 2.80% (2.35%)23,000 Fidelity Asian Values 91,540 2.80

Emerging Market Equities 2.97% (0.00%)70,000 BlackRock Frontiers Investment Trust 97,300 2.97

European Equities 2.09% (1.66%)40,099 BlackRock European Dynamic - Income GBP* 68,248 2.09

Government Bonds 20.31% (18.00%)£200,000 Treasury 2% 22.07.20 204,212 6.24£250,000 Treasury 4% 07.03.22 275,620 8.42£175,000 Treasury 4.75% 07.03.20 184,837 5.65

664,669 20.31

High Yield Corporate Bonds 3.34% (2.94%)112,821 Kames High Yield Bond - B Income GBP* 109,391 3.34

Inflation-Linked Bonds 16.65% (26.13%)$335,000 US Treasury 0.125% Index-Linked 15.04.21 267,526 8.17$365,000 US Treasury 0.125% Index-Linked 15.07.26 277,402 8.48

544,928 16.65

Investment Grade Corporate Bonds 24.10% (20.58%)96,899 Axa Sterling Credit Short Duration Bond - Z (Net) Income GBP* 99,709 3.043,240 iShares £ Corporate Bond 0-5yr UCITS ETF - GBP Distribution 337,673 10.323,500 iShares Ultrashort Bond UCITS ETF - GBP Distribution 351,435 10.74

788,817 24.10

Japanese Equities 2.07% (1.69%)500 Lyxor JPX-Nikkei 400 UCITS ETF - C EUR 67,915 2.07

UK Equities 3.71% (4.21%)3,652 Vanguard FTSE 100 UCITS ETF 121,520 3.71

US Equities 9.14% (8.86%)6,100 Xtrackers S&P 500 UCITS ETF - 2C (GBP Hedged) 299,022 9.14

DERIVATIVES 0.00% (0.20%) Forward Currency Contracts^ 0.00% (0.20%)

527,203 Sold $690,000 Bought £527,203 (12.12.18) (146) 0.00

Investment assets 3,081,239 94.15 Net other assets 191,481 5.85

Net assets 3,272,720 100.00



Portfolio Statementcontinued

All investments are ordinary shares or stock units on a regulated securities market unless otherwise stated. The percentagesin brackets show the equivalent % holdings as at 31.03.18.

* Collective Investment Schemes permitted under COLL, not listed on any exchange.

^ At the balance sheet date, all forward currency contracts were executed with one counterparty, Northern Trust Corporationfor the purpose of Effective Portfolio Management. Collateral obligations on losses or gains for each transaction would bemet using cash held by the Custodian.

Total purchases for the period: £251,964Total sales for the period: £677,280


Analysis of bonds by credit rating £ 30.09.18

AAA credit rated bonds 544,928 16.65 Aa2u credit rated bonds 664,669 20.31

1,209,597 36.96



Comparative TablesChange in net assets per share A Income 30.09.18 31.03.18 p p

Opening net asset value per share 98.26 100.00†

Return before operating charges^ 2.28 0.90Operating charges -1.09 -1.07Return after operating charges^ 1.19 -0.17Distributions -0.53 -1.57Closing net asset value per share 98.92 98.26^After direct transaction costs of -0.02 -0.13PerformanceReturn after charges 1.21% -0.17%Other informationClosing net asset value £12,514 £20,299Closing number of shares 12,650 20,657Operating charges 1.10% 1.07%Direct transaction costs 0.02% 0.13%PricesHighest share price 99.99 100.94Lowest share price 98.06 98.29

† A Income share class launched on 03 April 2017.

A Accumulation 30.09.18 31.03.18 p p


Return before operating charges^ 2.31 0.86Operating charges -1.11 -1.08Return after operating charges^ 1.20 -0.22Distributions -0.53 -1.57Retained distributions on accumulation shares 0.53 1.57Closing net asset value per share 100.98 99.78^After direct transaction costs of -0.02 -0.13PerformanceReturn after charges 1.20% -0.22%Other informationClosing net asset value £155,465 £141,663Closing number of shares 153,959 141,976Operating charges 1.10% 1.07%Direct transaction costs 0.02% 0.13%PricesHighest share price 101.74 101.84Lowest share price 99.57 99.42

† A Accumulation share class launched on 03 April 2017.



Comparative Tablescontinued

Change in net assets per share (continued) B Accumulation 30.09.18 31.03.18 31.03.17 31.03.16 p p p p

Opening net asset value per share 111.21 110.90 105.11 105.69Return before operating charges^ 2.38 1.11 6.48 0.10Operating charges -0.84 -0.80 -0.69 -0.68Return after operating charges^ 1.54 0.31 5.79 -0.58Distributions -0.79 -2.10 -1.70 2.03Retained distributions on accumulation shares 0.79 2.10 1.70 -2.03Closing net asset value per share 112.75 111.21 110.90 105.11^After direct transaction costs of -0.02 -0.15 0.00 0.00PerformanceReturn after charges 1.38% 0.28% 5.51% -0.55%Other informationClosing net asset value £1,409,663 £1,713,535 £2,127,871 £2,513,819Closing number of shares 1,250,250 1,540,743 1,918,711 2,391,720Operating charges 0.75% 0.72% 0.64% 0.65%Direct transaction costs 0.02% 0.13% 0.00% 0.00%PricesHighest share price 113.55 113.44 111.23 106.22Lowest share price 110.98 110.81 105.24 103.11

C Income 30.09.18 31.03.18 31.03.17 31.03.16 p p p p

Opening net asset value per share 105.65 107.35 103.35 105.97Return before operating charges^ 2.28 1.09 6.33 0.01Operating charges -0.80 -0.77 -0.68 -0.67Return after operating charges^ 1.48 0.32 5.65 -0.66Distributions -0.78 -2.02 -1.65 -1.96Closing net asset value per share 106.35 105.65 107.35 103.35^After direct transaction costs of -0.02 -0.14 0.00 0.00PerformanceReturn after charges 1.40% 0.30% 5.47% -0.63%Other informationClosing net asset value £89,594 £88,999 £126,610 £240,317Closing number of shares 84,242 84,242 117,936 232,537Operating charges 0.75% 0.72% 0.64% 0.65%Direct transaction costs 0.02% 0.13% 0.00% 0.00%PricesHighest share price 107.54 108.62 107.93 106.50Lowest share price 105.43 105.76 103.53 101.95




Change in net assets per share (continued) Z Income 30.09.18 31.03.18 31.03.17 31.03.16 p p p p

Opening net asset value per share 101.53 103.17 99.31 101.83Return before operating charges^ 1.97 0.93 6.03 -0.06Operating charges -0.36 -0.33 -0.24 -0.25Return after operating charges^ 1.61 0.60 5.79 -0.31Distributions -0.93 -2.24 -1.93 -2.21Closing net asset value per share 102.21 101.53 103.17 99.31^After direct transaction costs of -0.02 -0.13 0.00 0.00PerformanceReturn after charges 1.59% 0.58% 5.83% -0.30%Other informationClosing net asset value £1,605,484 £1,778,571 £16,769,443 £18,237,341Closing number of shares 1,570,750 1,751,732 16,254,883 18,363,949Operating charges 0.35% 0.32% 0.24% 0.25%Direct transaction costs 0.02% 0.13% 0.00% 0.00%PricesHighest share price 103.40 104.48 103.79 102.35Lowest share price 101.33 101.74 99.49 98.01

The Investment Manager currently rebates the Sub-fund’s operating charges, excluding the Investment Manager’s fee andsynthetic ongoing charges, in order for them not to exceed 0.20% of the Net Asset Values (NAV) of the Sub-fund.

Operating charges include indirect costs incurred in the maintenance and running of the Sub-fund, as disclosed (but notlimited to) the detailed expenses within the Statement of Total Return. The figures used within this table have been calculatedby annualising the expenses incurred against the average Net Asset Value for the accounting period.

The return after charges is calculated as the closing net asset value per share plus the distributions on income shares minusthe opening net asset value per share as a % of the opening net asset value per share.

The Sub-fund invests in Collective Investment Schemes; the expenses incurred by these schemes in relation to the Sub-fund(synthetic ongoing charge) are included within the operating charges.

Direct transaction costs include fees, commissions, transfer taxes and duties in the purchasing and selling of investments,which are offset (where applicable) against any dilution levies charged within the accounting period. The figures used withinthe tables have been calculated against the average Net Asset Value for the accounting period.




Risk and reward profileThe risk and reward indicator table demonstrates where the Sub-fund ranks in terms of its potential risk and reward. Thehigher the rank the greater the potential reward but the greater the risk of losing money. It is based on past data, may changeover time and may not be a reliable indication of the future risk profile of the Sub-fund. The shaded area in the table belowshows the Sub-fund’s ranking on the risk and reward indicator.

Typically lower rewards, Typically higher rewards,lower risk higher risk

The Sub-fund is ranked at 3 because funds of this type have experienced low to medium rises and falls in value in the past.Please note that even the lowest risk class can lose you money and that extreme market circumstances can mean you suffersevere losses in all cases. The indicator does not take into account the following risks of investing in this Sub-fund:

• The Sub-fund may invest in cash and cash equivalent securities to try to protect its value in times of market uncertaintybut this may not always be successful.

• Changes in exchange rates may cause the value of investments to decrease or increase.

• Investing in other funds may expose you to increased risk due to restrictions on withdrawals, less strict regulations anduse of derivatives.

• Investing in fixed income securities offers you income generation and sometimes a gain on your capital. Nevertheless,there is a risk that the organisation which issued the security will fail, which would result in a loss of income to the Sub-fund, along with its initial investment. Fixed income values are likely to fall if interest rates rise.

• Investment grade securities, as determined by international ratings agencies, potentially produce a lower level of incomethan noninvestment grade securities, but they are also considered to be of lower risk.

• Emerging markets or less developed countries may face more political, economic or structural challenges than developedcountries. Coupled with less developed regulation, this means your money is at greater risk.

• The Sub-fund title is not related to the risk rating that appears on the 1-7 scale above, which is based solely on past data.

• For further risk information please see the prospectus.

Risk warningAn investment in an Investment Company with Variable Capital should be regarded as a medium to long-term investment.Investors should be aware that the price of shares and the revenue from them can fall as well as rise and investors may notreceive back the full amount invested. Past performance is not a guide to future performance. Investments denominated incurrencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable.



1 2 3 4 5 6 7

Statement of Total Returnfor the period ended 30 September 2018

30.09.18 30.09.17 £ £ £ £Income

Net capital gains/(losses) 26,284 (57,141)Revenue 31,795 240,902

Expenses (5,988) (19,818)

Interest payable and similar charges – –

Net revenue before taxation 25,807 221,084

Taxation 1,469 –

Net revenue after taxation 27,276 221,084

Total return before distributions 53,560 163,943

Distributions (27,277) (221,078)

Change in net assets attributable toShareholders from investment activities 26,283 (57,135)

Statement of Change in Net Assets Attributable to Shareholdersfor the period ended 30 September 2018

30.09.18 30.09.17 £ £ £ £Opening net assets attributableto Shareholders 3,743,067 19,023,924

Amounts receivable on issue of shares 149,846 2,171,506

Less: Amounts payable on cancellation of shares (657,646) (4,113,989)

(507,800) (1,942,483)

Dilution levy – 2,800

Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) 26,283 (57,135)

Retained distributions on accumulation shares 11,170 21,236

Closing net assets attributable to Shareholders 3,272,720 17,048,342

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



Balance Sheetas at 30 September 2018

30.09.18 31.03.18 £ £ £ £ASSETS

Fixed AssetsInvestments 3,081,385 3,432,408

Current AssetsDebtors 28,461 43,778Cash and bank balances 194,880 470,477

Total current assets 223,341 514,255

Total assets 3,304,726 3,946,663

LIABILITIESInvestment liabilities (146) –

CreditorsDistribution payable (8,616) (10,811)Other creditors (23,244) (192,785)

Total creditors (31,860) (203,596)

Total liabilities (32,006) (203,596)

Net assets attributable to Shareholders 3,272,720 3,743,067



Distribution Tablesfor the period ended 30 September 2018

Income share distributions

Share class Distribution Shares Net Equalisation Distribution Distribution revenue paid/payable paid 2018 2017 p p p p

A First interim^ Group 1 0.2130 – 0.2130 0.3921 Group 2 – – – 0.3921

Second interim^ Group 1 0.3166 – 0.3166 0.4553 Group 2 – – – 0.4553

C First interim^ Group 1 0.3458 – 0.3458 0.5245 Group 2 – – – 0.5245

Second interim^ Group 1 0.4359 – 0.4359 0.5796 Group 2 – – – 0.5796

Z First interim Group 1 0.4024 – 0.4024 0.6075 Group 2 0.2437 0.1587 0.4024 0.6075

Second interim Group 1 0.5226 – 0.5226 0.6609 Group 2 0.2840 0.2386 0.5226 0.6609

^ No group 2 shares were held at these distributions.

Accumulation share distributions

Share class Distribution Shares Net Equalisation Amount Amount revenue reinvested reinvested 2018 2017 p p p p

A First interim Group 1 0.2074 – 0.2074 0.3881 Group 2 0.1736 0.0338 0.2074 0.3881


B First interim Group 1 0.3305 – 0.3305 0.5419 Group 2 0.2682 0.0623 0.3305 0.5419


First interim period: 01.04.18 - 30.06.18Second interim period: 01.07.18 - 30.09.18

Group 1: Shares purchased prior to a distribution periodGroup 2: Shares purchased during a distribution period

EqualisationEqualisation applies only to shares purchased during the distribution period (Group 2 shares). It represents accrued revenueincluded in the purchase price of the shares. After averaging, it is returned with the distribution as a capital repayment. It isnot liable to income tax but must be deducted from the cost of the shares for capital gains tax purposes.




Investment objectiveThe Sub-fund will aim to achieve a combination of capital growth and income over the medium to long term.

The Sub-fund will aim for gross returns over an entire market cycle (5 years) in excess of 1% + inflation (as currently measuredby the Consumer Price Index). There is no guarantee that this return will be achieved over that, or any, time period, andinvestors should note that capital is at risk.

Investment policyThe Sub-fund will adopt a global multi asset approach which is neither constrained by a formal benchmark nor by geographicregion and will be constructed with diversified exposure to various asset classes selected from the following: equities, fixedincome, real estate, alternatives, currencies, commodities, passive investments and actively managed funds. The Sub-fundmay also invest in other transferable securities, cash, near cash, deposits and money market funds. Derivatives can also beused for both investment purposes and efficient portfolio management.

The risk profile of the Sub-fund is moderately defensive and as such the Sub-fund will have an exposure to equities of <60%.

Performance will be measured over an entire market cycle (5 years).






The UK government’s Brexit bill passed through Parliament after Prime Minister Theresa May saw off a revolt by Tory MPs.Peers accepted the amendment to the EU (Withdrawal) Bill sent to them from the House of Commons, and it has now becomelaw. Discussions over the final details of the withdrawal continue and the UK government is attempting to construct a deal thatcan be passed through parliament. There is disagreement over the details and a “no deal” exit remains possible. UK consumerconfidence remains subdued ahead of more clarity on the relationship between the UK and EU from 29 March next year, theformal leaving date set out in Article 50.

14 MI Charles Stanley Multi Asset 2 Cautious Fund

MI Charles Stanley Multi Asset 2 Cautious Fund


General Market Commentary (continued)UK GDP growth in the first quarter of 2018 was weak, falling to just 0.2% year-on-year as a period of snow in March hit theeconomy. However, growth accelerated to 0.4% in the second quarter. The Bank of England increased interest rates at itsAugust meeting and Mark Carney, the Bank’s governor, said there would be further "gradual" and "limited" rate rises to come.The blue-chip FTSE 100 reached another all-time high in May, helped by a rising oil price and weak sterling, as many UKcompanies earn a substantial amount of money abroad. However, it has lagged US indices where the technology sector remainsa main driver of gains.




Overview & OutlookThe Sub-fund reported a total return of 3.7% over the last six months. Over the same period the UK Consumer Price Index+1% returned 2.0%. (Source: Financial Express Analytics as at 30th September 2018, pounds sterling, net income re-invested).

We exited out position in the Jupiter Absolute Return Fund over the period. Our preference in our Alternative asset classallocation is for Janus Henderson UK Absolute Return Fund, Merian Global Equity Absolute Returns Fund and InvescoPerpetual Global Targeted Returns Fund. This retains exposure to this diversifying and hopefully less correlated asset classbut with a more concentrated implementation.

We reduced our exposure to UK equities during the period where we feel there are better opportunities to be had overseas,particularly in the United States when looking to allocate our Developed Market equity exposure. As part of this reduction wesold our holding in the Man GLG Undervalued Assets Fund but maintained exposure to both large and mid-cap UK equities.

The Sub-fund remains in a position to benefit from an environment where we see gradually rising interest rates, containedinflation and above trend global economic growth. While cognisant of the risks facing Emerging Markets and Asia Pacificregion equities we believe that a lot of the sell-off seen in these markets on the back of trade war rhetoric is overdone sowe maintain selective exposure to these regions and will look for an attractive entry point to add to these holdings shouldone materialise.

MI Charles Stanley Multi Asset 2 Cautious Fund 15





Alternatives 13.54% (15.04%)17,923 HICL Infrastructure 27,458 1.2721,233 International Public Partnerships 32,104 1.4830,976 Invesco Perpetual Global Target Return - Z Accumulation* 73,642 3.4051,083 Janus Henderson UK Absolute Return - I Accumulation* 84,900 3.9144,320 Merian Global Equity Absolute Return - R GBP Hedged Accumulation* 75,539 3.48

293,643 13.54

Asia ex Japan Equities 3.65% (3.23%)13,225 Fidelity Asian Values 52,636 2.437,596 Schroder Asian Total Return Investment Trust 26,434 1.22

79,070 3.65

Emerging Market Equities 3.08% (4.49%)20,200 BlackRock Frontiers Investment Trust 28,078 1.292,917 Goldman Sachs India Equity Portfolio - I Income GBP* 38,733 1.79

66,811 3.08

European Equities 5.44% (6.18%)39,367 BlackRock European Dynamic - Income GBP* 67,002 3.0934,407 Neptune European Opportunities - C Income GBP* 50,888 2.35

117,890 5.44

Government Bonds 8.98% (2.09%)1,273 Xtrackers II Global Sovereign UCITS ETF 33,340 1.54

£53,000 Treasury 1.75% 07.09.22 54,432 2.51£45,000 Treasury 3.75% 07.09.21 48,690 2.24£53,000 Treasury 4% 07.03.22 58,431 2.69

194,893 8.98

High Yield Corporate Bonds 5.99% (6.19%)134,098 Kames High Yield Bond - B Income GBP* 130,021 5.99

Inflation-Linked Bonds 9.64% (9.18%)118,502 Legal & General Global Inflation-Linked Bond Index - C Distribution* 61,289 2.83$60,000 US Treasury 0.125% Index-Linked 15.04.21 47,915 2.21$45,000 US Treasury 0.125% Index-Linked 15.04.22 34,740 1.60$85,700 US Treasury 0.125% Index-Linked 15.07.26 65,133 3.00

209,077 9.64


14,750 Man GLG Japan CoreAlpha Professional - Income D* 37,981 1.75

160,228 7.39

Property 2.02% (1.29%)71,008 Legal & General Global Real Estate Dividend Index - C Distribution* 43,912 2.02






UK Equities 6.56% (9.11%)13,869 iShares Core FTSE 100 UCITS ETF - GBP Distribution 102,811 4.7426,546 Man UK ICVC - Undervalued Assets D Income* 39,395 1.82

142,206 6.56

Investment Grade Corporate Bonds 14.73% (15.87%)91,041 AXA Sterling Credit Short Duration Bond - Z (Net) Income GBP* 93,681 4.321,771 iShares £ Corporate Bond 0-5yr UCITS ETF - GBP Distribution 184,574 8.51

410 iShares £ Ultrashort Bond UCITS ETF - GBP Distribution 41,168 1.90

319,423 14.73

US Equities 14.29% (13.55%)7,824 iShares S&P 500 Financials Sector UCITS ETF - USD Accumulation 43,580 2.011,680 SPDR Russell 2000 US Small Cap UCITS ETF 59,186 2.73

10,576 UBS (Ireland) - MSCI USA UCITS ETF (hedged GBP) - A Distribution 128,128 5.911,863 Vanguard S&P 500 UCITS ETF 79,056 3.64

309,950 14.29

DERIVATIVES 0.00% (0.03%) Forward Currency Contracts^ 0.00% (0.03%) Sold $180,000 Bought £137,531 (12.12.18) (38) 0.00


Net assets 2,168,854 100.00




Total purchases for the period: £819,320Total sales for the period: £302,408





Return before operating charges^ 4.74 1.86Operating charges -1.33 -1.33Return after operating charges^ 3.41 0.53Distributions -0.45 -1.29Closing net asset value per share 102.20 99.24^After direct transaction costs of -0.01 -0.04PerformanceReturn after charges 3.43% 0.53%Other informationClosing net asset value £927,647 £827,550Closing number of shares 907,645 833,880Operating charges 1.30% 1.31%Direct transaction costs 0.01% 0.04%PricesHighest share price 103.75 103.79Lowest share price 98.93 97.20


A Accumulation C Accumulation 30.09.18 31.03.18 30.09.18 p p p

Opening net asset value per share 100.42 100.00† 100.00††

Return before operating charges^ 4.78 1.75 1.05Operating charges -1.34 -1.33 -0.85Return after operating charges^ 3.44 0.42 0.20Distributions -0.45 -1.28 -0.13Retained distributions on accumulation shares 0.45 1.28 0.13Closing net asset value per share 103.86 100.42 100.20^After direct transaction costs of -0.01 -0.04 -0.01PerformanceReturn after charges 3.43% 0.42% 0.20%Other informationClosing net asset value £1,111,312 £798,587 £129,895Closing number of shares 1,069,991 795,230 129,641Operating charges 1.30% 1.31% 0.85%Direct transaction costs 0.01% 0.04% 0.01%PricesHighest share price 105.23 104.75 100.43Lowest share price 100.09 97.20 99.87


†† C Accumulation share class launched on 07 September 2018.

The Investment Manager currently rebates the Sub-fund’s operating charges, excluding Investment Manager’s fee and syntheticongoing charges, in order for them not to exceed 0.20% of the Net Asset Values (NAV) of the Sub-fund.






Change in net assets per share (continued)The Sub-fund invests in Collective Investment Schemes; the expenses incurred by these schemes in relation to the Sub-fund(synthetic ongoing charge) are included within the operating charges.




The Sub-fund is ranked at 3 because funds of this type have experienced average rises and falls in value in the past. Pleasenote that even the lowest risk class can lose you money and that extreme market circumstances can mean you suffer severelosses in all cases. The indicator does not take into account the following risks of investing in this Sub-fund:




• Investing in bonds offers you income generation and sometimes a gain on your capital. Nevertheless, there is a risk thatthe organisation which issued the security will fail, which would result in a loss of income to the Sub-fund, along with itsinitial investment. Fixed income values are likely to fall if interest rates rise.

• There may be cases where the organisation from which we buy an asset (usually a financial institution such as a bank)fails to carry out its obligations, which could cause losses to the Sub-fund.

• Investment grade bonds, as determined by international ratings agencies, potentially produce a lower level of income thannoninvestment grade securities, but they are also considered to be of lower risk.

• This Sub-fund can use derivatives in order to meet its investment objectives. This may result in gains or losses that aregreater than the original amount invested.

• Emerging markets are prone to more political, economic and structural challenges and disclosure standards can be lessstringent than those of developed economies. This means your money could be at greater risk.






1 2 3 4 5 6 7


01.04.18 to 03.04.17 to 30.09.18 30.09.17 £ £ £ £Income

Net capital gains 50,620 2,484Revenue 17,622 6,757

Expenses (7,549) 3,539

Interest payable and similar charges – (47)


Taxation (300) (1,269)




Change in net assets attributable toShareholders from investment activities 52,251 2,486


01.04.18 to 03.04.17 to 30.09.18 30.09.17 £ £ £ £Opening net assets attributableto Shareholders 1,626,137 –


Less: Amounts payable on cancellation of shares (213,970) (355,227)

485,788 1,139,957

Change in net assets attributable to Shareholders from investment activities (see Statement of Total Return above) 52,251 2,486







30.09.18 31.03.18 £ £ £ £ASSETS




Total assets 2,238,078 1,711,087

















C First interim Group 1 n/a n/a n/a n/a Group 2 n/a n/a n/a n/a

Second interim Group 1 0.1270 – 0.1270 n/a Group 2 – 0.1270 0.1270 n/a










The risk profile of the Sub-fund is moderate and as such the Sub-fund will have an exposure to equities of <75%.








MI Charles Stanley Multi Asset 3 Moderate Fund 23

MI Charles Stanley Multi Asset 3 Moderate Fund








We reduced our exposure to UK equities during the period where we feel there are better opportunities to be had overseas,particularly in the United States when looking to allocate our Developed Market equity exposure. As part of this reduction wesold our holding in the Man GLG Undervalued Assets Fund but maintained exposure to both large and mid-cap UK equities.This reduction primarily funded an increased exposure to US equities but we also added to our Japanese equity positions onan unhedged basis.

Within our fixed income allocation we added an unhedged position in the UST 2.25% 2027 bond to act as a risk-off hedgeagainst our equity holdings from both a fixed income and currency perspective.

The Sub-fund remains in a position to benefit from an environment where we see gradually rising interest rates, containedinflation and above trend global economic growth. While cognisant of the risks facing Emerging Markets and Asia Pacific regionequities we believe that a lot of the sell-off seen in these markets on the back of trade war rhetoric is overdone so we maintainselective exposure to these regions and will look for an attractive entry point to add to these holdings should one materialise.

24 MI Charles Stanley Multi Asset 3 Moderate Fund






2,401,922 12.20

Asia ex Japan Equities 4.66% (4.90%)115,900 Fidelity Asian Values 461,282 2.34131,139 Schroder Asian Total Return Investment Trust 456,364 2.32

917,646 4.66


929,395 4.72


1,378,156 7.00

Government Bonds 4.75% (2.66%)£73,170 Treasury 1.5% 22.07.26 73,818 0.38

£263,357 Treasury 4.25% 07.12.27 326,781 1.66$743,000 US Treasury 2.25% 15.11.27 533,332 2.71

933,931 4.75

High Yield Corporate Bonds 6.08% (6.19%)1,234,634 Kames High Yield Bond - B Income GBP* 1,197,101 6.08

Inflation-Linked Bonds 8.75% (10.84%)1,166,681 Legal & General Global Inflation-Linked Bond Index - C Distribution* 603,407 3.06$714,800 US Treasury 0.125% Index-Linked 15.04.21 570,828 2.90$722,300 US Treasury 0.125% Index-Linked 15.07.26 548,953 2.79

1,723,188 8.75

Investment Grade Corporate Bonds 5.21% (4.58%)414,611 Axa Sterling Credit Short Duration Bond - Z (Net) Income GBP* 426,635 2.17

5,744 iShares £ Corporate Bond 0-5yr UCITS ETF - GBP Distribution 598,640 3.04

1,025,275 5.21

Japanese Equities 8.71% (7.02%)5,300 Lyxor JPX-Nikkei 400 UCITS ETF - C EUR 719,899 3.66

386,118 Man GLG Japan CoreAlpha Professional - Income D* 994,253 5.05

1,714,152 8.71







UK Equities 6.50% (14.92%)121,902 iShares Core FTSE 100 UCITS ETF - GBP Distribution 903,660 4.59675,773 Legal & General UK Mid Cap Index Income* 376,136 1.91

1,279,796 6.50

US Equities 23.19% (17.45%)13,021 db X-trackers MSCI USA Index UCITS ETF - 1C 779,828 3.9696,839 iShares S&P 500 Financials Sector UCITS ETF - USD Accumulation 539,393 2.7415,460 SPDR Russell 2000 US Small Cap UCITS ETF 544,656 2.77

113,108 UBS (Ireland) MSCI USA UCITS ETF (hedged GBP) - A Distribution 1,370,303 6.9631,368 Vanguard S&P 500 UCITS ETF 1,331,101 6.76

4,565,281 23.19

DERIVATIVES 0.00% (0.04%)

Forward Currency Contracts^ 0.00% (0.04%) Sold $1,800,000 Bought £1,375,311 (12.12.18) (382) 0.00

Investment assets 18,422,815 93.59 Net other assets 1,262,163 6.41

Net assets 19,684,978 100.00




Total purchases for the period: £5,542,277Total sales for the period: £1,835,798



AAA credit rated bonds 1,653,113 8.40 Aa2u credit rated bonds 400,599 2.04

2,053,712 10.44





Return before operating charges^ 5.72 2.51Operating charges -1.35 -1.30Return after operating charges^ 4.37 1.21Distributions -0.50 -0.77Closing net asset value per share 104.31 100.44^After direct transaction costs of -0.01 -0.07PerformanceReturn after charges 4.35% 1.21%Other informationClosing net asset value £8,508,650 £6,816,043Closing number of shares 8,157,013 6,785,791Operating charges 1.30% 1.27%Direct transaction costs 0.01% 0.07%PricesHighest share price 106.29 106.27Lowest share price 99.94 98.77


A Accumulation C Accumulation 30.09.18 31.03.18 30.09.18 p p p

Opening net asset value per share 101.21 100.00† 100.00††

Return before operating charges^ 5.77 2.51 1.27Operating charges -1.37 -1.30 -0.85Return after operating charges^ 4.40 1.21 0.42Distributions -0.50 -0.78 -0.13Retained distributions on accumulation shares 0.50 0.78 0.13Closing net asset value per share 105.61 101.21 100.42^After direct transaction costs of -0.01 -0.07 -0.01PerformanceReturn after charges 4.35% 1.21% 0.42%Other informationClosing net asset value £11,146,203 8,500,251 £30,125Closing number of shares 10,553,797 8,398,418 30,000Operating charges 1.30% 1.27% 0.85%Direct transaction costs 0.01% 0.07% 0.01%PricesHighest share price 107.36 106.88 100.70Lowest share price 100.70 98.77 99.82









Change in net assets per share (continued)The Sub-fund Invests in Collective Investment Schemes; the expenses incurred by these schemes in relation to the Sub-fund(synthetic ongoing charge) are included within the operating charges.




The Sub-fund is ranked 4 because funds of this type have experienced average rises and falls in value in the past. Please notethat even the lowest risk class can lose you money and that extreme market circumstances can mean you suffer severe lossesin all cases. The indicator does not take into account the following risks of investing in this Sub-fund:














1 2 3 4 5 6 7


01.04.18 to 03.04.17 to 30.09.18 30.09.17 £ £ £ £Income


Expenses (81,209) (18,349)

Interest payable and similar charges (31) (16)


Taxation – (160)







Amounts receivable on issue of shares 5,586,079 12,069,649

Less: Amounts payable on cancellation of shares (1,863,327) (527,122)

3,722,752 11,542,527




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




30.09.18 31.03.18 £ £ £ £ASSETS


Current AssetsDebtors 367,652 131,032Cash and bank balances 1,023,562 1,212,872

Total current assets 1,391,214 1,343,904

Total assets 19,814,411 15,394,332










Share class Distribution Shares Net Equalisation Distribution Distribution revenue paid/ payable paid 2018 2017 p p p p







C First interim Group 1 NA NA NA NA Group 2 NA NA NA NA

Second interim Group 1 0.1343 – 0.1343 NA Group 2 – – – NA










The risk profile of the Sub-fund is moderately aggressive and as such the Sub-fund will have an exposure to equities of <85%.








32 MI Charles Stanley Multi Asset 4 Growth Fund

MI Charles Stanley Multi Asset 4 Growth Fund








We reduced our exposure to UK equities during the period where we feel there are better opportunities to be had overseas,particularly in the United States when looking to allocate our Developed Market equity exposure. As part of this reduction wesold our holding in the Man GLG Undervalued Assets Fund but maintained exposure to large, mid and small-cap UK equities.We also increased our top level equity exposure over the period with this being funded primarily from our Inflation LinkedBond allocation. We continue to have a preference for US inflation linked exposure rather than UK with the bulk of thisallocation being in short dated US Treasury Inflation Protected Securities on a hedged basis.



MI Charles Stanley Multi Asset 4 Growth Fund 33






2,953,275 11.11

Asia ex Japan Equities 8.40% (8.67%)353,538 BlackRock Asia Special Situations - D Accumulation* 640,612 2.41268,600 Fidelity Asian Values 1,069,028 4.02150,397 Schroder Asian Total Return Investment Trust 523,382 1.97

2,233,022 8.40


310,904 Hermes Global Emerging Markets - F GBP Distribution* 442,447 1.67

1,410,767 5.31

European Equities 7.68% (6.14%)568,961 BlackRock European Dynamic - Income GBP* 968,372 3.64725,237 Neptune European Opportunities - C Income GBP* 1,072,626 4.04

2,040,998 7.68

Government Bonds 4.76% (3.36%)£152,100 Treasury 1.5% 22.07.26 153,446 0.58£328,475 Treasury 4.25% 07.12.27 407,582 1.53£191,384 Treasury 4.75% 07.03.20 202,142 0.76$700,000 US Treasury 2.25% 15.11.27 502,466 1.89

1,265,636 4.76

Inflation-Linked Bonds 9.17% (15.57%)$1,306,100 US Treasury 0.125% Index-Linked 15.04.21 1,043,030 3.92

$780,000 US Treasury 0.125% Index-Linked 15.04.22 602,152 2.27$1,042,800 US Treasury 0.125% Index-Linked 15.07.26 792,535 2.98

2,437,717 9.17

Investment Grade Corporate Bonds 4.12% (1.42%)10,518 iShares £ Corporate Bond 0-5yr UCITS ETF - GBP Distribution 1,096,186 4.12

Japanese Equities 7.60% (8.23%)4,965 Lyxor JPX-Nikkei 400 UCITS ETF - C EUR 674,396 2.54

522,716 Man GLG Japan CoreAlpha Professional - Income D* 1,345,992 5.06

2,020,388 7.60







UK Equities 8.47% (16.49%)35,300 BlackRock Smaller Companies Trust 506,555 1.90

129,777 iShares Core FTSE 100 UCITS ETF - GBP Distribution 962,037 3.621,407,190 Legal & General UK Mid Cap Index Income* 783,242 2.95

2,251,834 8.47

US Equities 28.84% (16.67%)6,650 iShares Core S&P 500 UCITS ETF - USD Accumulation 1,448,370 5.45

146,021 iShares S&P 500 Financials Sector UCITS ETF - USD Accumulation 813,337 3.0622,000 SPDR Russell 2000 US Small Cap UCITS ETF 775,060 2.9292,532 UBS (Ireland) MSCI USA UCITS ETF (hedged GBP) - A Distribution 1,121,025 4.2235,561 Vanguard S&P 500 UCITS ETF 1,509,031 5.6833,335 Xtrackers MSCI USA Index UCITS ETF - 1C 1,996,253 7.51

7,663,076 28.84

DERIVATIVES 0.00% (0.06%)

Forward Currency Contracts^ 0.00% (0.06%) Sold $2,960,000 Bought £2,261,622 (12.12.18) (628) 0.00


Net assets 26,579,210 100.00




Total purchases for the period: £7,013,828Total sales for the period: £4,590,833



AAA credit rated bonds 2,940,183 11.06 Aa2u credit rated bonds 763,170 2.87

3,703,353 13.93





Return before operating charges^ 5.97 3.44Operating charges -1.33 -1.30Return after operating charges^ 4.64 2.14Distributions -0.50 -0.79Closing net asset value per share 105.49 101.35^After direct transaction costs of 0.00 -0.02PerformanceReturn after charges 4.58% 2.14%Other informationClosing net asset value £3,755,392 £2,816,370Closing number of shares 3,559,836 2,778,872Operating charges 1.26% 1.26%Direct transaction costs 0.00% 0.02%PricesHighest share price 107.93 107.89Lowest share price 100.89 98.61


A Accumulation 30.09.18 31.03.18 31.03.17 p p p

Opening net asset value per share 103.09 100.94 100.00†

Return before operating charges^ 6.07 3.47 2.10Operating charges -1.35 -1.32 -1.16Return after operating charges^ 4.72 2.15 0.94Distributions -0.50 -0.80 0.00Retained distributions on accumulation shares 0.50 0.80 0.00Closing net asset value per share 107.81 103.09 100.94^After direct transaction costs of 0.00 -0.02 0.04PerformanceReturn after charges 4.58% 2.13% 0.94%Other informationClosing net asset value £15,158,731 £12,416,450 £6,056Closing number of shares 14,059,981 12,044,315 6,000Operating charges 1.26% 1.26% 1.16%Direct transaction costs 0.00% 0.02% -0.04%PricesHighest share price 110.05 109.64 100.97Lowest share price 102.60 99.53 100.35

† A Accumulation share class launched on 27 March 2017.




Change in net assets per share (continued) B Accumulation 30.09.18 31.03.18 31.03.17 31.03.16 p p p p

Opening net asset value per share 135.13 131.84 116.35 123.24Return before operating charges^ 7.72 4.53 16.50 -5.90Operating charges -1.28 -1.24 -1.01 -0.99Return after operating charges^ 6.44 3.29 15.49 -6.89Distributions -0.88 -1.50 -1.71 -1.51Retained distributions on accumulation shares 0.88 1.50 1.71 1.51Closing net asset value per share 141.57 135.13 131.84 116.35^After direct transaction costs of 0.00 -0.03 0.05 0.00PerformanceReturn after charges 4.77% 2.50% 13.31% -5.59%Other informationClosing net asset value £7,599,610 £7,850,312 £9,550,697 £18,863,487Closing number of shares 5,368,076 5,809,450 7,243,991 16,212,524Operating charges 0.91% 0.91% 0.81% 0.84%Direct transaction costs 0.00% 0.02% -0.04% 0.00%PricesHighest share price 144.42 143.60 133.26 126.99Lowest share price 134.49 130.03 114.48 107.89

C Accumulation 30.09.18 p

Opening net asset value per share 100.00††

Return before operating charges^ 1.19Operating charges -0.81Return after operating charges^ 0.38Distributions -0.14Retained distributions on accumulation shares 0.14Closing net asset value per share 100.38^After direct transaction costs of 0.00PerformanceReturn after charges 0.38%Other informationClosing net asset value £65,477Closing number of shares 65,228Operating charges 0.81%Direct transaction costs 0.00%PricesHighest share price 100.68Lowest share price 99.76








Change in net assets per share (continued)The Sub-fund invests in Collective Investment Schemes; the expenses incurred by these schemes in relation to the Sub-fund(synthetic ongoing charge) are included within the operating charges.


















1 2 3 4 5 6 7


30.09.18 30.09.17 £ £ £ £Income


Expenses (106,000) (51,146)

Interest payable and similar charges (596) (1)


Taxation 3,255 –


Total return before distributions 1,107,657 371,623

Distributions (132,841) (135,129)



30.09.18 30.09.17 £ £ £ £Opening net assets attributableto Shareholders 23,083,132 9,556,753

Amounts receivable on issue of shares 4,903,318 12,395,394

Less: Amounts payable on cancellation of shares (2,499,476) (1,278,400)

2,403,842 11,116,994

Dilution levy – 12,582








30.09.18 31.03.18 £ £ £ £ASSETS



Total current assets 951,121 1,134,235

Total assets 26,671,538 23,269,257


CreditorsBank overdrafts – (1,239)Distribution payable (8,900) (2,696)Other creditors (82,800) (182,190)















B First interim Group 1 0.4100 – 0.4100 0.5022 Group 2 0.2486 0.1614 0.4100 0.5022


C First interim Group 1 N/A N/A N/A N/A Group 2 N/A N/A N/A N/A

Second interim Group 1 0.1436 – 0.1436 N/A Group 2 0.0788 0.0648 0.1436 N/A










The risk profile of the Sub-fund is aggressive and as such the Sub-fund will have an exposure to equities of up to 100%.








42 MI Charles Stanley Multi Asset 5 Adventurous Fund

MI Charles Stanley Multi Asset 5 Adventurous Fund








We reduced our exposure to UK equities during the period where we feel there are better opportunities to be had overseas,particularly in the United States when looking to allocate our Developed Market equity exposure. As part of this reductionwe sold our holding in the Man GLG Undervalued Assets Fund but maintained exposure to both large, mid and small-capUK equities.



MI Charles Stanley Multi Asset 5 Adventurous Fund 43





Alternatives 6.06% (6.11%)12,220 HICL Infrastructure 18,721 0.7530,622 International Public Partnerships 46,300 1.8615,634 Invesco Perpetual Global Target Return - Z Accumulation* 37,169 1.5028,491 Merian Global Equity Absolute Return - R GBP Hedged Accumulation* 48,560 1.95

150,750 6.06

Asia ex Japan Equities 13.91% (14.31%)56,362 BlackRock Asia Special Situations - D Accumulation* 102,128 4.1136,390 Fidelity Asian Values 144,832 5.8228,455 Schroder Asian Total Return Investment Trust 99,023 3.98

345,983 13.91


35,134 Hermes Global Emerging Markets - F GBP Distribution* 49,999 2.01

243,336 9.78


192,871 7.75

Investment Grade Corporate Bonds 0.00% (2.28%)

Inflation-Linked Bonds 3.92% (0.00%)$136,000 US Treasury 2.25% Index-Linked 15.11.27 97,622 3.92


19,868 Man GLG Japan CoreAlpha Professional - D Income* 51,160 2.06

155,477 6.25

Property 4.22% (5.30%)1,786 iShares US Property Yield UCITS ETF - USD Distribution 38,113 1.53

108,042 Legal & General Global Real Estate Dividend Index - C Distribution* 66,813 2.69

104,926 4.22

UK Equities 5.84% (15.26%)3,350 BlackRock Smaller Companies Trust 48,073 1.936,547 iShares Core FTSE 100 UCITS ETF - GBP Distribution 48,533 1.95

87,403 Legal & General UK Mid Cap Index - C Distribution* 48,648 1.96

145,254 5.84






US Equities 37.17% (25.40%)809 iShares Core S&P 500 UCITS ETF - USD Accumulation 176,200 7.08

22,690 iShares S&P 500 Financials Sector UCITS ETF - USD Accumulation 126,383 5.083,760 SPDR Russell 2000 US Small Cap UCITS ETF 132,465 5.32

11,427 UBS (Ireland) MSCI USA UCITS ETF (hedged GBP) - A Distribution 138,438 5.573,524 Vanguard S&P 500 UCITS ETF 149,541 6.013,370 Xtrackers MSCI USA Index UCITS ETF - 1C 201,829 8.11

924,856 37.17


Net assets 2,487,978 100.00



Total purchases for the period: £1,046,495Total sales for the period: £412,548





Return before operating charges^ 6.64 5.46Operating charges -1.35 -1.36Return after operating charges^ 5.29 4.10Distributions -0.40 -0.95Closing net asset value per share 108.04 103.15^After direct transaction costs of -0.03 -0.12PerformanceReturn after charges 5.13% 4.10%Other informationClosing net asset value £390,196 £232,664Closing number of shares 361,172 225,556Operating charges 1.25% 1.30%Direct transaction costs 0.03% 0.11%PricesHighest share price 111.76 110.85Lowest share price 102.50 97.73


A Accumulation 30.09.18 31.03.18 p p


Return before operating charges^ 6.67 5.49Operating charges -1.36 -1.36Return after operating charges^ 5.31 4.13Distributions -0.40 -0.96Retained distributions on accumulation shares 0.40 0.96Closing net asset value per share 109.44 104.13^After direct transaction costs of -0.03 -0.12PerformanceReturn after charges 5.10% 4.13%Other informationClosing net asset value £2,067,784 £1,530,349Closing number of shares 1,889,435 1,469,672Operating charges 1.25% 1.30%Direct transaction costs 0.03% 0.11%PricesHighest share price 113.00 111.73Lowest share price 103.43 97.73





Change in net assets per share (continued) C Accumulation 30.09.18 p

Opening net asset value per share 100.00††

Return before operating charges^ 0.79Operating charges -0.80Return after operating charges^ -0.01Distributions -0.10Retained distributions on accumulation shares 0.10Closing net asset value per share 99.99^After direct transaction costs of -0.03PerformanceReturn after charges -0.01%Other informationClosing net asset value £29,998Closing number of shares 30,000Operating charges 0.80%Direct transaction costs 0.03%PricesHighest share price 100.49Lowest share price 99.51





The Sub-fund invests in Collective Investment Schemes; the expenses incurred by these schemes in relation to the Sub-fund(synthetic ongoing charge) are included within the operating charges.





















1 2 3 4 5 6 7


01.04.18 to 03.04.17 to 30.09.18 30.09.17 £ £ £ £Income


Expenses (8,992) 2,036

Interest payable and similar charges – –


Taxation – (441)








Less: Amounts payable on cancellation of shares (371,743) (5,538)

626,129 1,118,514




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




30.09.18 31.03.18 £ £ £ £ASSETS




Total assets 2,534,746 1,883,820

LIABILITIESInvestment liabilities – –

CreditorsBank overdrafts (14,393) –Distribution payable (722) (302)Other creditors (31,653) (120,504)










Second interim Group 1 0.2000 – 0.2000 0.7036 Group 2 0.0447 0.1553 0.2000 –^

^ No group 2 shares were held at this distribution.





C Second interim^ Group 1 – – – n/a Group 2 0.1037 – 0.1037 n/a

^ No group 1 shares were held at these distributions.






General Information

Authorised StatusMI Charles Stanley Investment Fund (the “Company”) is structured as an Investment Company with Variable Capital (“ICVC”),under regulation 12 (Authorisation) of the OEIC Regulations (Open-Ended Investment Companies Regulations 2001 (SI2001/1228)).

The Company does not intend to have an interest in immovable property.

The Company is authorised and regulated in the UK by the Financial Conduct Authority (“FCA”) as a UCITS Retail Schemeand “Umbrella Company” under the COLL Sourcebook.

The Company was incorporated in England and Wales on 17 February 2010 under registration number IC000813. TheShareholders are not liable for the debts of the Company.

The Company currently has 5 Sub-funds, which are detailed below:

MI Charles Stanley Multi Asset 1 Defensive FundMI Charles Stanley Multi Asset 2 Cautious FundMI Charles Stanley Multi Asset 3 Moderate FundMI Charles Stanley Multi Asset 4 Growth FundMI Charles Stanley Multi Asset 5 Adventurous Fund

Head OfficeSpringfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PW

Address for ServiceThe Head Office is the address in the United Kingdom for service on the Company of notices or other documents requiredor authorised to be served on it.

Base CurrencyThe base currency of the Company is Pounds Sterling.

Share CapitalThe minimum share capital of the Company is £1 and the maximum is £100,000,000,000. Shares in the Company have nopar value. The share capital of the Company at all times equals the sum of the net asset value of the Sub-funds.

Classes of SharesThe Instrument of Incorporation allows each Fund to issue different classes of shares in respect of any Sub-fund.

The Company currently has the following classes of shares available for investment:

Share Class

Sub-fund A Acc A Inc B Acc C Acc C Inc Z Inc

MI Charles Stanley Multi Asset 1 Defensive Fund ✔ ✔ ✔ – ✔ ✔

MI Charles Stanley Multi Asset 2 Cautious Fund ✔ ✔ – ✔ – –

MI Charles Stanley Multi Asset 3 Moderate Fund ✔ ✔ – ✔ – –

MI Charles Stanley Multi Asset 4 Growth Fund ✔ ✔ ✔ ✔ – –

MI Charles Stanley Multi Asset 5 Adventurous Fund ✔ ✔ – ✔ – –

The Company may issue both Income and Accumulation shares.

Holders of Income shares are entitled to be paid the revenue attributable to such shares in respect of each annual accountingperiod in the currency of the relevant share class.

Holders of Accumulation shares are not entitled to be paid the revenue attributable to such shares, but that revenue is retainedand accumulated for the benefit of shareholders and is reflected in the price of shares.

52 MI Charles Stanley Investment Funds


General Informationcontinued

Valuation PointThe scheme property of the Company and each Sub-fund will normally be valued at 12:00 on each dealing day for the purposeof calculating the price at which shares in the Company may be issued, sold, repurchased or redeemed.

For the purpose of the pricing of units, a business day is defined as a day on which the dealing office of the ACD is open forthe buying and selling of shares. The ACD may at any time during a business day carry out an additional valuation of theproperty of the Fund if the ACD considers it desirable to do so, with the Depositary’s approval.

Buying, Redeeming and Switching of SharesThe ACD will accept orders for the purchase, sale and switching of shares on normal business days between 08:30 and 16:30.Instructions to buy or sell shares may either be in writing to:

PO Box Springfield Lodge, Colchester Road, Chelmsford, Essex CM2 5PWOr by telephone to:0345 308 1456

The ACD has the right to establish facilities for recording telephone calls made or received on this telephone line.

A contract note giving details of the shares purchased will be issued no later than the next business day after the businessday on which an application to purchase shares is received and instrumented by the ACD. Certificates will not be issued inrespect of shares. Ownership of shares will be evidenced by an entry on the register of Shareholders.

Pricing BasisThere is a single price for buying, selling and switching shares in a Sub-fund which represents the Net Asset Value of theSub-fund concerned. The share price is calculated on a forward pricing basis, that is at the next Valuation Point after thepurchase or redemption is deemed to be accepted by the ACD.

The prices of shares are published daily on www.maitlandgroup.com. Neither the Company nor the Company can be heldresponsible for any errors in the publication of the prices. The shares in the Company will be issued and redeemed on aforward pricing basis which means that the price will not necessarily be the same as the published price.

Other InformationThe Instrument of Incorporation, Prospectus, Key Investor Information Document and the most recent interim and annualreports may be inspected at the office of the Company which is also the Head Office of the Company. Copies may be obtainedfree of charge upon application. They are also available from the website of the Company, the details of which are given in thedirectory of this report.

Shareholders who have complaints about the operation of the Company should in the first instance contact the ACD, or,following that, may make their complaint direct to the Financial Ombudsman Service, Exchange Tower, London E14 9SR.

Risk WarningAn investment in an Investment Company with Variable Capital should be regarded as a medium to long-term investment.Investors should be aware that the price of shares and the revenue from them can fall as well as rise and investors may notreceive back the full amount invested. Past performance is not a guide to future performance. Investments denominated incurrencies other than the base currency are subject to fluctuation in exchange rates, which can be favourable or unfavourable.

MI Charles Stanley Investment Funds 53


Registered in England No 6252939. Authorised and regulated by the Financial Conduct Authority.

charles stanley investment funds - maitland group · 9/30/2018 · mi charles stanley investment...

Documents