AXA Framlington Managed Income Fund

Interim Long Report and Unaudited Financial Statements Six months ended 15 June 2021

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Issued by AXA Investment Managers UK Ltd authorised and regulated by the Financial Conduct Authority

Contents Page

Fund Objective* ...... 3 Investment Review* ...... 4 Portfolio Changes* ...... 6 Managing Risks* ...... 7 Fund Information ...... 10 Comparative Tables ...... 11 Portfolio Statement* ...... 12 Statement of Total Return ...... 20 Statement of Change in Net Assets Attributable to Unitholders ...... 20 Balance Sheet ...... 21 Notes to the Financial Statements ...... 22 Distribution Tables...... 23 Further Information* ...... 25 Directory* ...... 26

* These collectively comprise the Authorised Fund Manager's ("the Manager's") Report for the Trust.

More detailed information about AXA Investment Managers’ UK funds is available on the Fund Centre of our website where you can find the Prospectus, Key Investor Information Document (KIID), annual reports and monthly fund factsheets at https://retail.axa-im.co.uk/fund-centre

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Fund Objective

The aim of the AXA Framlington Managed Income Fund (“the Fund”) is to produce a high income with potential for long- term growth of capital.

The Fund invests primarily (meaning at least 70% of its assets) in bonds issued by companies (principally UK companies) which the Manager believes will provide above-average income. The Fund may also invest in bonds issued by governments and shares of companies. The Manager selects bonds and shares based upon analysis of a company's financial status, quality of its management, expected profitability and prospects for growth.

This Fund is actively managed without reference to any Benchmark. The IA Sterling Strategic Bond Sector may be used by investors to compare the Fund's performance.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Investment Review

In the first half of the year, the pandemic continued to have a Top Ten Holdings large impact on the global economy. As is normal with viruses, as at 15 June 2021 % there were unhelpful developments of the virus mutating UK Treasury 3.75% 07/09/21 4.16 and, in the process, producing variants that are more Financials infectious. The normal corollary is that the more infectious EnQuest 7% 15/10/23 2.44 variants are also less likely to kill their host. Time will tell if this virus follows the normal path. Energy Direct Line Insurance 4.75% Perpetual 2.19 There have been different approaches by countries with some Financials adapting the policy of operating a moat in an attempt to esure 6.75% 19/12/24 2.12 restrict cases and to keep economies operating. When cases Financials occur, lockdowns are adapted to bring cases back to zero. This NewRiver 3.5% 07/03/28 2.09 is the approach adopted by Australia, New Zealand and Financials various Asian countries. Those countries have had virtually no Dignity Finance 4.6956% 31/12/49 2.08 deaths but are now having to face continued isolation due to Financials the lack of any immunity. Theoretically, these countries could Marston's Issuer 2.63325% 16/07/35 2.07 also follow a second course of trying to inoculate their adult Financials population and get the best of both worlds. In the main these M&G 5.56% 20/07/55 2.07 countries have made limited vaccination progress and face Financials further lockdowns. TP ICAP 5.25% 26/01/24 2.03 Financials Countries that have a land borders would always struggle to Investec Bank 4.25% 24/07/28 2.02 adapt the isolation approach and have largely chosen to Financials establish herd immunity by natural antibodies and vaccination-induced antibodies. These countries had to impose renewed lockdowns to ensure that their health services did not get overwhelmed. These lockdowns were not as severe as those initially imposed and had less of an adverse impact on economic output.

As economies continue to recover from the slump in the early stages of the pandemic, signs of stress in the global supply chain began to appear. The near panic by the government to access sufficient supply of PPE caused containers to be tied up in ports and for containers to be not in the correct location. This dislocation caused shipping costs to soar. The blocking of the Suez Canal when one of the world’s largest container ships - the Ever Given - got wedged across the canal. This giant ship is 400 metres long and has a capacity of 20,000 containers.

The disruption to supply escalated low stock levels held by businesses. In the early stages of the pandemic, businesses reacted by cutting stocks to generate cash to make sure that they could survive the crisis. As economic activity picked up, companies had limited ability to respond instantly due to the lack of stock. In response, they attempted to rebuild stock. This surge in demand gave manufacturers the opportunity to raise prices. Inflation data reflected these rises and also the weak prices a year ago.

The UK economy was in a unique situation as the long drawn-out Brexit process finally led to the UK's exit from the EU. This led to greater paperwork, which caused some delays. On top of this, the combination of the pandemic and Brexit caused many European migrant workers to return home. Businesses found that they were short of workers and vacancy numbers increased to above pre-pandemic numbers. For delivery drivers, there was a perfect storm of increased demand as the economy moved more online, a reduction of overseas workers and a 15-month hiatus in the issue of new HGV licences.

Central bankers have to date viewed that the inflation pressures will be transitionary. It is likely that there is an element of overordering, which will cease once bottlenecks are sorted out and stock levels are rebuilt to normal levels. If wages do not respond to the current tight market, this would mean that the real wages would fall thereby reducing consumer spending.

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Investment Review (Continued)

Offsetting this potential slowdown is the significant rise in consumer savings, particularly at the height of lockdowns. This was a result of government support, combined with the inability for consumers to spend money on hospitality, leisure and travel. These savings have largely been unspent. In the UK, the level of home prices is a key driver to consumer confidence, and these have been very strong over the past year.

For bonds in general, the key driver of prices has been the timing for when central banks would begin to reduce quantitative easing and start the normalisation of interest rate policy. Following a prolonged period of below-target inflation, central banks have been happy to let policy ensure that the recovery is sustained. With the pandemic still having a material impact on economies, this has meant that the policy remains very supportive. US 10-year yields initially moved from below 1% to a peak of around 1.75% in March. As it became clear that there was to be no quick change in policy, the yield fell back to around 1.5% at year-end.

Corporate bonds had conflicting pressures with a rise in government bond yields being countered by an improving trend for corporate profitability as economies partially reopened. The Fund continues to recover from the weakness seen in the early stages of the pandemic. This recovery was most apparent in oil-related bond holdings and some financial bonds. The price of Brent Crude rose by around 50% in the period, thus bolstering cash flow, which, in turn, helped to provide strong rallies in Enquest, Premier Oil and Tullow Oil bonds. Premier Oil merged with Chrysaor to form Harbour Energy. In this process, part of the holding was redeemed at par with the balance being received in Harbour Energy shares of which part was sold. Tullow Oil’s bond was redeemed at par.

The most notable recovery in financial bonds was seen in Amigo Loans bonds despite the underlying company having some major issues. The bonds are secured against their lending book. Good further recoveries were seen in Dignity Finance, International Personal Finance, Marstons and NewRiver Retail bonds. Many of the bond-like equity holdings continued to recover with strong rises being seen in Duke Royalty, PRS Reit, Riverstone Credit Opportunities fund, Tufton Oceanic and VPC specialty lending. APH convertible experienced a good rise as the company agreed a takeover and Intercede convertible was converted as the underlying shares were strong on the back of good trading.

There was limited purchasing activity with a new holding of Santander preference shares being purchased. At the end of the period, cash levels rose from some bond redemptions. This was allocated to short-dated gilts (having less than five years to redemption) on the basis that short-term inflation and wage data could cause a backup in bond yields as detailed at the end of this review. During the period the holdings of AA, Generali and Travis Perkins bonds were redeemed. In addition, the holdings of Aquila Renewable, PRS Reit and SDCL Energy Efficiency were reduced.

The key issue for markets will be whether the current inflationary rise filters through the wage settlements. The current indication from most companies is that there are areas of wage increases. This, in combination with the current price rises, raises the prospect that the Bank of England will stop their bond purchases. Any change such as this is likely to cause some volatility, which should provide some good opportunities.

George Luckraft 15 June 2021

Source of all performance data: AXA Investment Managers, Morningstar to 15 June 2021.

Past performance is not a guide to future performance. All performance figures calculated as follows: Single Priced NAV (Net Asset Value) with net income reinvested, net of fees in GBP, gross of tax. Performance is representative of Z Acc Class.

Stocks are mentioned for illustrative purposes only and do not constitute investment advice or a recommendation.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Changes

For the six months ended 15 June 2021

Total Purchases Cost (£'000) Major Sales Proceeds (£'000) UK Treasury 3.75% 07/09/21 16,214 Premier Oil 6.5% 31/05/21 16,625 Harbour Energy 9,744 Assicurazioni Generali 6.416% Perpetual 7,289 Credit Agricole 7.5% Perpetual 5,313 AA Bond 5.5% 31/07/22 7,000 Santander UK Preferred 10.375% Perpetual 3,340 Travis Perkins 4.375% 15/09/21 6,174 Active Energy 1,400 Tullow Oil 6.25% 15/04/22 6,061 Intercede 500 Close Brothers 4.25% 24/01/27 5,957 EnQuest 7% 15/10/23 342 Credit Agricole 7.5% Perpetual 5,317 Amigo Luxembourg 7.625% 15/01/24 3,302 Phoenix Life 7.25% Perpetual 2,650 Burford Capital Finance 6.125% 12/08/25 2,034

Other sales 27,040

Total purchases for the period 36,853 Total sales for the period 89,449

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Managing Risks

Past performance is not a guide to future performance. The price of units and the revenue from them can go down as well as up and investors may not get back the amount originally invested. An initial charge is usually made when you purchase units. Changes in exchange rates will affect the value of Fund investments overseas. Investment in smaller companies and newer markets offers the possibility of higher returns but may also involve a higher degree of risk.

The Fund is managed in accordance with the objective set out on page 3. By investing in financial markets there are associated risks and the following explains the Manager’s approach to managing those risks.

RISK PROFILE

The Fund invests principally in bonds issued by companies (predominantly UK companies) which the Manager believes will provide above-average income. The Fund may also invest in bonds issued by governments and shares of companies. The Manager selects bonds and shares based upon analysis of a company's financial status, quality of its management, expected profitability and prospects for growth.

CREDIT RISK

All bonds have a potential credit risk, in that the issuer could default on its obligations to pay income and/or capital. An issuer default would likely result in a large drop in the value of that bond. The value of a bond will also be affected by the perceived credit risk of the issuer, including changes to credit ratings and the general level of aversion to credit risk in the market. Generally, an increased level of perceived credit risk leads to a fall in the value of the bond, and vice versa. Credit risk can be measured by ratings assigned to issuers of bonds by third party credit rating agencies. The largest credit rating agencies are Moody’s, Standard & Poor’s and Fitch Ratings. Each credit rating agency uses different designations. The highest designation (Aaa (Moody’s), AAA (Standard & Poor’s and Fitch Ratings)) are intended to represent a lower probability of default of the issuer. The credit rating agencies designate “investment grade” bonds as Baa3 or above (Moody’s) or BBB- or above (Standard & Poor’s or Fitch Ratings). See further below under “High yield bonds risk”.

Internal investment guidelines are set, if necessary, to ensure credit risk is maintained within a range deemed suitable based on the Fund’s investment objectives and investment policy. These guidelines could include credit quality indicators, measures of sensitivity to credit spread moves and diversification measures.

HIGH YIELD BONDS RISK

High yield bonds (also known as sub-investment grade bonds) are fixed interest securities issued by companies with lower credit ratings (Ba1 and below (Moody’s) or BB+ and below (Standard & Poor’s and Fitch Ratings)). They are potentially more risky than investment grade bonds which have higher ratings. The issuers of high yield bonds will be at greater risk of default or ratings downgrades. The capital value of the Fund’s investment in high yield bonds and the level of income it receives may fall as a result of such issuers ceasing to trade. The Fund will endeavour to mitigate the risks associated with high yield bonds, by diversifying their holdings by issuer, industry and credit quality.

This is an inherent risk for funds invested within high yield bonds. Internal investment guidelines (which may include measures of credit quality, measures of sensitivity to credit spread moves and diversification measures), scenario testing as well as other regular monitoring seek to ensure the level of risk is aligned with each individual fund’s investment objectives and investment policy.

CONVERTIBLE BONDS RISK

Certain Funds may invest in convertible bonds which are fixed interest securities issued by companies which may be converted either at a stated price or stated rate for shares in the issuing company at specified times during the life of the convertible bonds. Although to a lesser extent than with fixed interest securities generally, the market value of convertible securities tends to decline as interest rates rise. Because of the conversion feature, the market value of convertible securities also tends to vary with fluctuations in the market value of the underlying shares. Convertible bonds may also

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

have call provisions and other features which may give rise to the issuing company forcibly converting them to shares. The value and performance of the Fund may also be adversely affected as a result.

Investments in convertible bonds are subject to the same interest rate, credit and prepayment risks associated with comparable conventional corporate bonds. The Net Asset Value of the Fund may be adversely affected as a result of such risks.

This is an inherent risk for funds invested within convertible bonds. Internal investment guidelines, scenario testing as well as other regular monitoring seek to ensure the level of risk is aligned with each individual fund’s investment objectives and investment policy.

EQUITY RISK

The value of shares in which the Fund invests fluctuate pursuant to market expectations. The value of such shares will go up and down and equity markets have historically been more volatile than fixed interest markets. Should the price of shares in which the Fund has invested fall, the Net Asset Value of the Fund will also fall.

Funds investing in shares are generally more volatile than funds investing in bonds or a combination of shares and bonds, but may also achieve greater returns.

Internal investment guidelines are set, if necessary, to ensure equity risk is maintained within a range deemed suitable based on the Fund’s investment objectives and investment policy.

INTEREST RATE RISK

Interest rate risk is the risk that the market value of bonds held by the Fund could fall as a result of higher market rates (yields). Yields can change as a result of, among other things, the economic and inflation outlook which also affects supply and demand as well as future interest rate expectations, without necessarily a change in official central bank short term interest rates. Higher yields result in a decline in the value of bonds. Conversely, lower yields tend to increase the value of bonds. Duration (a measure based on the coupon and maturity payments schedule of a bond) is an important concept in understanding how the price of that bond might change for a 1% move in its redemption yield. A bond with a longer duration is more sensitive to a change in yields and, generally speaking, will experience greater volatility in its market value than bonds with shorter durations.

Internal investment guidelines are set if necessary to ensure interest rate risk is maintained within a range deemed suitable based on the Fund’s investment objectives and investment policy. These guidelines could include measures of sensitivity to changes of interest rates.

PREPAYMENT AND EXTENSION RISK

Prepayment risk is the risk associated with the early unscheduled return of capital (i.e., repayment of the debt) by the issuer on a bond. Prepayment generally occurs in a declining interest rate environment. When capital is returned early, no future interest payments will be paid on that part of the capital. If the bond was purchased at a premium (i.e., at a price greater than the value of the capital), the return on the bond will be less than what was estimated at the time of purchase.

The opposite of prepayment risk is extension risk which is the risk of a bond’s expected maturity lengthening in duration due to a slowdown in prepayments of capital. Extension risk is mainly the result of rising interest rates. If the bond was purchased in anticipation of an early repayment of capital, an extension of the maturity could impact the price of the bond.

The portfolio tends to hold a mixture of callable and non-callable positions.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

RISK AND REWARD PROFILE

Lower Risk Higher Risk

Potentially lower reward Potentially higher reward 1 2 3 4 5 6 7

The risk category is calculated using historical performance data and may not be a reliable indicator of the Fund's future risk profile. The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free. There has been no change from prior year.

WHY IS THIS FUND IN THIS CATEGORY?

The capital of the Fund is not guaranteed. The Fund is invested in financial markets and uses techniques and instruments which are subject to some levels of variation, which may result in gains or losses.

ADDITIONAL RISKS

Liquidity risk: Under certain market conditions, it may be difficult to buy or sell investments for the Fund. For example, smaller company shares may trade infrequently and in small volumes and corporate and emerging market bonds may be affected by the demand in the market for such securities carrying credit risk, particularly in times of significant market stress. As a result, it may not be possible to buy or sell such investments at a preferred time, close to the last market price quoted or in the volume desired. The Manager may be forced to buy or sell such investments as a consequence of Unitholders buying or selling Units in the Fund. Depending on market conditions at the time, this could lead to a significant drop in the Fund’s value.

Monthly monitoring is conducted, using an in-house liquidity tool, to ensure a high degree of confidence that Fund liquidity will meet the Fund’s expected liquidity requirements. Any concerns indicated by the tool are analysed by the Manager’s risk team who may also discuss the results with portfolio management staff, or other senior professionals within the firm, as needed, to ensure an appropriate scrutiny.

Based on the analysis, the Manager believes that the liquidity profile of the Fund is appropriate.

Further explanation of the risks associated with an investment in this Fund can be found in the prospectus.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Fund Information

FIVE YEAR PERFORMANCE

In the five years to 15 June 2021, the price of Z Accumulation units, with net income reinvested rose by +35.29%. The IA Sterling Strategic Bond Index (Net Return) increased by +23.77% over the same time period. During the same period, the price of Z Income units, with zero income reinvested, rose by +34.17% (source: AXA Investment Managers and Morningstar) (Prices in GBP).

FIVE YEAR DISCRETE PERFORMANCE (DISCRETE YEARS TO LATEST REPORTING DATE)

Date AXA Framlington Managed Income Z Acc IA Sterling Strategic Bond (NR) 15 Jun 2016 - 15 Jun 2017 +12.94% +7.38% 15 Jun 2017 - 15 Jun 2018 +3.24% +0.26% 15 Jun 2018 - 15 Jun 2019 +2.54% +3.96% 15 Jun 2019 - 15 Jun 2020 -2.37% +3.51% 15 Jun 2020 - 15 Jun 2021 +15.90% +6.85%

Source: AXA Investment Managers & Morningstar. Basis: Single Price NAV, with net revenue reinvested, net of fees in GBP.

Past performance is not a guide to future performance.

YIELD

R Inc Gross 5.06% R Acc Gross 4.83% Z Inc Gross 5.04% Z Acc Gross 4.81%

CHARGES

Initial Charge Annual Management Charge+ R Nil 1.00% Z Nil 0.50%

+ Charged to capital. Note that while this will increase the amount of income (which may be taxable) available for distribution to Unitholders in the Fund, it may constrain capital growth or even result in capital erosion over time.

ONGOING CHARGES*

R Inc Gross 1.10% R Acc Gross 1.10% Z Inc Gross 0.59% Z Acc Gross 0.59%

* For more information on AXA’s fund charges and costs please use the following link https://retail.axa-im.co.uk/fund-charges-and-costs

UNIT TRUST INDIVIDUAL SAVINGS ACCOUNTS

The AXA Framlington Managed Income Fund is available as a Stocks and Shares ISA through the AXA Investment Managers Stocks and shares ISA.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Comparative Tables

R Inc Gross R Acc Gross 15/06/2021 15/12/2020 15/12/2019 15/06/2021 15/12/2020 15/12/2019 Closing net asset value per unit (p)† 108.32 102.91 107.40 191.25 177.74 175.52 Closing net asset value† (£’000) 4,431 4,303 5,230 25,828 26,802 34,161 Closing number of units 4,090,175 4,181,304 4,870,077 13,504,584 15,079,579 19,462,528 Operating charges^ 1.10% 1.09% 1.09% 1.10% 1.09% 1.09%

Z Inc Gross Z Acc Gross 15/06/2021 15/12/2020 15/12/2019 15/06/2021 15/12/2020 15/12/2019 Closing net asset value per unit (p)† 117.18 111.06 115.31 194.42 180.23 177.11 Closing net asset value† (£’000) 81,020 89,939 126,978 252,283 275,636 422,966 Closing number of units 69,140,073 80,984,592 110,114,371 129,761,274 152,937,939 238,815,995 Operating charges^ 0.59% 0.59% 0.59% 0.59% 0.59% 0.59%

† Valued at bid-market prices.

^ Operating charges include indirect costs incurred in the maintenance and running of the Fund, as disclosed in expenses within the Statement of Total Return. The figures used within the table have been calculated against the average Net Asset Value for the accounting period.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Statement

The AXA Framlington Managed Income Fund portfolio as at 15 June 2021 consisted of the following investments, which are ordinary shares unless otherwise stated.

Holding Market value Total net £'000 assets (%)

UNITED KINGDOM: 81.61% (15/12/2020: 82.47%*)

CONSUMER DISCRETIONARY: 0.01% (15/12/2020: 0.01%*)

General Retailers: 0.01% (15/12/2020: 0.01%) £5,000,000 Debenhams 5.25% 15/07/21 50 0.01 50 0.01

Media: 0.00% (15/12/2020: 0.00%*) £4,750,000 Johnston Press 8.625% 01/06/191 - - - -

CONSUMER SERVICES: 0.00% (15/12/2020: 0.00%*)

Travel & Leisure: 0.00% (15/12/2020: 0.00%)

CONSUMER STAPLES: 3.76% (15/12/2020: 3.87%*)

Food Producers: 1.96% (15/12/2020: 1.88%) £7,000,000 Premier Foods Finance 6.25% 15/10/23 7,114 1.96 257,143 Sorbic International1 - - 7,114 1.96

Tobacco: 1.80% (15/12/2020: 1.99%) £9,000,000 BAT International Finance 2.25% 09/09/52 6,557 1.80 6,557 1.80

ENERGY: 5.14% (15/12/2020: 7.00%*)

Alternative Energy: 0.27% (15/12/2020: 0.00%) 164,914,300 Active Energy 989 0.27 989 0.27

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Statement (Continued)

Holding Market value Total net £'000 assets (%)

Oil, Gas & Coal: 4.87% (15/12/2020: 7.00%*) £7,000,000 Energia 4.75% 15/09/24 7,063 1.94 £9,103,928 EnQuest 7% 15/10/23 8,874 2.44 8,500,000 Harbour Energy 1,790 0.49 17,727 4.87

FINANCIALS: 65.67% (15/12/2020: 63.08%*)

Banks: 8.22% (15/12/2020: 8.03%*) £6,250,000 Barclays 5.875% Perpetual 6,715 1.85 £7,000,000 Investec Bank 4.25% 24/07/28 7,349 2.02 £1,312,000 Lloyds Banking 7.625% Perpetual 1,430 0.39 £1,162,000 Lloyds Banking 7.875% Perpetual 1,476 0.41 £4,540,000 OneSavings Bank 9.125% Perpetual 4,716 1.30 £4,500,000 Santander UK 7.375% Perpetual 4,757 1.31 £2,000,000 Santander UK Preferred 10.375% Perpetual 3,434 0.94 29,877 8.22

Closed End Investments: 4.78% (15/12/2020: 5.52%*) 1,100,000 Aquila European Renewables Income Fund 1,031 0.28 2,600,000 BioPharma Credit 1,787 0.49 380,000 Chelverton UK Dividend Trust 889 0.24 1,450,000 Gore Street Energy Storage Fund 1,595 0.44 178,404 Honeycomb Investment Trust 1,677 0.46 2,400,000 M&G Credit Income Investment Trust 2,328 0.64 3,000,000 Riverstone Credit Opportunities Income 1,778 0.49 3,501,922 RM Secured Direct Lending 3,082 0.85 750,000 Sdcl Energy Efficiency Income Trust 863 0.24 2,500,000 Secured Income Fund 1,000 0.28 1,900,000 US Solar Fund 1,349 0.37 17,379 4.78

Diversified Financials: 2.03% (15/12/2020: 3.50%) £6,750,000 TP ICAP 5.25% 26/01/24 7,390 2.03 7,390 2.03

Finance & Credit Services: 0.81% (15/12/2020: 0.65%) 3,500,000 VPC Specialty Lending Investments 2,933 0.81 2,933 0.81

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Statement (Continued)

Holding Market value Total net £'000 assets (%)

Financial Services: 11.35% (15/12/2020: 11.61%*) £1,800,000 AFH Financial 4% 30/07/24 1,440 0.40 £5,823,400 International Personal Finance 7.75% 14/12/23 5,968 1.64 £2,500,000 Ladbrokes Group Finance 5.125% 16/09/22 2,603 0.72 £2,500,000 Ladbrokes Group Finance 5.125% 08/09/23 2,638 0.73 £1,000,000 Lendinvest Secured Income 5.375% 06/10/23 1,010 0.28 £6,250,000 NGG Finance 5.625% 18/06/73 6,992 1.92 £7,000,000 Provident Financial 8.25% 04/06/23 7,023 1.93 £2,000,000 Scottish Widows 5.5% 16/06/23 2,175 0.60 £2,750,000 Scottish Widows 7% 16/06/43 4,119 1.13 £6,750,000 Yorkshire Building Society 3.375% 13/09/28 7,270 2.00 41,238 11.35

General Financials: 22.98% (15/12/2020: 18.97%*) £7,000,000 Arrow Global Finance 5.125% 15/09/24 7,061 1.94 £5,000,000 Burford Capital 5% 01/12/26 5,050 1.39 £1,000,000 Burford Capital 6.5% 19/08/22 1,027 0.28 £6,000,000 Centrica 5.25% 10/04/75 6,476 1.78 £380,000 Coventry Building Society 12.125% Perpetual 783 0.21 £8,000,000 Dignity Finance 4.6956% 31/12/49 7,558 2.08 £1,000,000 First Hydro Finance 9% 31/07/21 1,009 0.28 £6,000,000 Friends Life 8.25% 21/04/22 6,389 1.76 £4,000,000 Imperial Brands Finance 4.875% 07/06/32 4,697 1.29 £3,000,000 Intermediate Capital 5% 24/03/23 3,165 0.87 € 4,250,000 International Personal Finance 9.75% 12/11/25 3,914 1.08 £2,328,000 Lendinvest Secured Income 5.25% 10/08/22 2,319 0.64 £6,250,000 M&G 5.56% 20/07/55 7,516 2.07 £9,773,000 Marston's Issuer 2.63325% 16/07/35 7,542 2.07 £1,000,000 Nationwide Building Society 6.25% Perpetual 1,100 0.30 £2,750,000 Paragon Banking 6.125% 30/01/22 2,825 0.78 £15,000,000 UK Treasury 3.75% 07/09/21 15,125 4.16 83,556 22.98

Insurance: 8.58% (15/12/2020: 8.48%*) £2,500,000 Brit Insurance 3.661% 09/12/30 2,400 0.66 £1,293,303 Delamare Finance 5.5457% 19/02/29 1,489 0.41 £7,750,000 Direct Line Insurance 4.75% Perpetual 7,945 2.19 £6,800,000 esure 6.75% 19/12/24 7,702 2.12 £6,000,000 Liverpool Victoria Friendly Society 6.5% 22/05/43 6,516 1.79 £4,250,000 Phoenix 6.625% 18/12/25 5,140 1.41 31,192 8.58

Investment Banking & Brokerage: 0.00% (15/12/2020: 0.00%*) 91,174 Claremont Partners1 - - - -

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Statement (Continued)

Holding Market value Total net £'000 assets (%)

Non-Life Insurance: 1.05% (15/12/2020: 0.93%) £750,000 Ecclesiastical Insurance Preference Shares 8.625% Perpetual 1,230 0.34 £2,000,000 RSA Insurance Preference Shares 7.375% Perpetual 2,590 0.71 3,820 1.05

Open End & Miscellaneous Investment: 0.00% (15/12/2020: 0.00%) £230,000 Sorbic International 10% 31/12/14 0% 1 - - - -

Real Estate: 5.87% (15/12/2020: 5.39%*) £1,750,000 A2D Funding 4.75% 18/10/22 1,826 0.50 £3,000,000 Bruntwood Investments 6% 25/02/25 3,034 0.84 £7,250,000 NewRiver 3.5% 07/03/28 7,583 2.09 £1,618,400 Peterborough Progress Health 5.58% 02/10/42 1,929 0.53 £5,220,675 Tesco Property Finance 3 5.744% 13/04/40 6,954 1.91 21,326 5.87

INDUSTRIALS: 2.14% (15/12/2020: 3.83%*)

Aerospace & Defense: 0.00% (15/12/2020: 0.00%*)

Construction & Materials: 0.00% (15/12/2020: 1.56%)

Industrial Engineering: 0.16% (15/12/2020: 0.15%) £575,000 Six Hundred 8% 14/02/22 590 0.16 £2,875,000 Six Hundred Warrants 14/02/221 - - 590 0.16

Industrial Transportation: 1.98% (15/12/2020: 1.99%*) £7,000,000 Go-Ahead 2.5% 06/07/24 7,183 1.98 7,183 1.98

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Statement (Continued)

Holding Market value Total net £'000 assets (%)

Support Services: 0.00% (15/12/2020: 0.13%)

REAL ESTATE: 2.52% (15/12/2020: 2.17%*)

Real Estate Investment & Services: 0.00% (15/12/2020: 0.00%*)

Real Estate Investment Trusts: 2.52% (15/12/2020: 2.17%*) 1,500,000 Ediston Property Investment 1,011 0.28 1,600,000 Impact Healthcare 1,779 0.49 1,300,000 NewRiver 1,167 0.32 5,000,000 PRS 5,200 1.43 9,157 2.52

TECHNOLOGY: 0.21% (15/12/2020: 0.00%)

Software & Computer Services: 0.21% (15/12/2020: 0.00%) 726,612 Intercede 756 0.21 £414,054 Nektan Warrants 29/04/201 - - 756 0.21

TELECOMMUNICATIONS: 1.95% (15/12/2020: 1.99%)

Fixed Line Telecommunications: 1.95% (15/12/2020: 1.99%) £6,500,000 Vodafone 4.875% 03/10/78 7,078 1.95 7,078 1.95

Mobile Telecommunications: 0.00% (15/12/2020: 0.00%) 33,639,545 Avanti Communications 18 - 18 -

UTILITIES: 0.21% (15/12/2020: 0.52%)

Electricity: 0.21% (15/12/2020: 0.19%) £750,000 Aggregated Micro Power Infrastructure 8% 17/10/36 759 0.21 759 0.21

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Statement (Continued)

Holding Market value Total net £'000 assets (%)

Independent Power & Renewable Energy: 0.00% (15/12/2020: 0.33%)

EUROPE (excluding UK): 13.56% (15/12/2020: 12.68%*)

France: 3.47% (15/12/2020: 1.92%*) £4,500,000 Credit Agricole 7.5% Perpetual 5,353 1.47 £6,500,000 Electricite de France 6% Perpetual 7,267 2.00 12,620 3.47

Gibraltar: 0.00% (15/12/2020: 0.00%*) 23,515,741 Nektan1 - - - -

Guernsey: 6.27% (15/12/2020: 5.30%*) 1,367,636 Amedeo Air Four Plus 315 0.08 £1,200,000 APQ Global 3.5% 30/09/24 1,044 0.29 2,300,000 Axiom European Financial Debt Fund 2,139 0.59 2,175,000 DP Aircraft I 42 0.01 1,000,000 Duet Real Estate Finance1 - - 3,608,714 Duke Royalty 1,299 0.36 2,181,773 Fair Oaks Income 1,007 0.28 1,650,000 Hipgnosis Songs Fund 2,043 0.56 1,500,000 KKV Secured Loan Fund 252 0.07 £1,300,000 Raven Property Preference Shares 12% Perpetual 1,456 0.40 1,850,000 Real Estate Credit Investments 2,673 0.73 £4,750,000 Regional 4.5% 06/08/24 4,752 1.31 1,100,000 Regional^ 959 0.26 £1,285,000 Rothschild Continuation Finance 9% Perpetual 1,488 0.41 3,500,000 Sancus Lending 105 0.03 544,818 SME Credit Realisation Fund 396 0.11 3,600,000 Tufton Oceanic Assets 2,837 0.78 22,807 6.27

Ireland: 0.58% (15/12/2020: 0.51%*) £1,000,000 Bank of Ireland 13.375% Perpetual 2,120 0.58 £1,500,000 Lambay Capital Securities 6.25% Perpetual 1 - - 2,120 0.58

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio Statement (Continued)

Holding Market value Total net £'000 assets (%)

Isle Of Man: 0.65% (15/12/2020: 0.61%*) £2,600,000 Eros STX Global 6.5% 15/10/21 2,345 0.65 2,345 0.65

Jersey: 0.62% (15/12/2020: 0.52%*) £532,548 B15 Finco 9% 15/05/23 80 0.02 1,000,000 Blackstone Loan Financing 671 0.19 1,500,000 GCP Asset Backed Income Fund 1,500 0.41 2,251 0.62

Luxembourg: 1.58% (15/12/2020: 1.69%*) £6,750,000 Amigo Luxembourg 7.625% 15/01/24 5,757 1.58 5,757 1.58

Turkey: 0.39% (15/12/2020: 0.29%*) $2,000,000 Global Liman Isletmeleri 8.125% 14/11/21 1,411 0.39 1,411 0.39

UNITED STATES: 0.20% (15/12/2020: 0.68%*) $1,000,000 Burford Capital Finance 6.125% 12/08/25 740 0.20 740 0.20

Investments as shown in the balance sheet 346,740 95.37 Net current assets 16,822 4.63 Total net assets 363,562 100.00

* Since the previous report, the portfolio classifications of prior year comparative figures have been updated to reflect the recent changes in the Industry and country classification.

˄ Real Estate Investment Trust (REIT).

1 Nil valued/delisted/suspended securities not approved securities within the meaning of the Collective Investment Schemes Sourcebook. The regulations permit a maximum of 10% of the Fund to be invested in unapproved securities. Securities classed as unapproved are those which are not admitted to an official listing in a member state or traded on under the rules of an eligible securities market, as laid down in the Prospectus.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Portfolio breakdown 15 June 2021 15 December 2020 Market Value % Market Value % £'000s £'000s Bonds 288,770 79.44 327,549 82.57 Collective Investment Schemes 32,967 9.07 33,874 8.55 Equities 25,003 6.86 18,701 4.71 Total value of Investment 346,740 95.37 380,124 95.83

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Statement of Total Return

For the six months ended 15 June

2021 2020 £'000 £'000 £'000 £'000 Income Net capital gains/(losses) 20,462 (46,655) Revenue 9,488 14,285 Expenses (1,182) (1,661) Interest payable and similar charges - - Net revenue before taxation 8,306 12,624 Taxation (43) (34) Net revenue after taxation 8,263 12,590 Total return before distributions 28,725 (34,065) Distributions (7,857) (12,236) Change in net assets attributable to unitholders from investment activities 20,868 (46,301)

Statement of Change in Net Assets Attributable to Unitholders

For the six months ended 15 June

2021 2020 £'000 £'000 £'000 £'000

Opening net assets attributable to unitholders 396,680 589,335 Amounts receivable on creation of units 10,645 11,080 Amounts payable on cancellation of units (70,161) (106,598) (59,516) (95,518)

Change in net assets attributable to unitholders from investment activities 20,868 (46,301) Retained distribution on accumulation units 5,529 8,374 Unclaimed distribution 1 1 Closing net assets attributable to unitholders 363,562 455,891

The above statement shows the comparative closing net assets at 15 June 2020 whereas the current accounting period commenced 16 December 2020.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Balance Sheet

As at

15 June 2021 15 December 2020 £'000 £'000 ASSETS Fixed assets Investments 346,740 380,124 Current assets Debtors 5,547 7,469 Cash and bank balances 14,015 14,914 Total assets 366,302 402,507

LIABILITIES Provisions for liabilities 23 4 Creditors Distribution payable 948 1,801 Other creditors 1,769 4,022 Total liabilities 2,740 5,827 Net assets attributable to unitholders 363,562 396,680

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Notes to the Financial Statements

Accounting policies

The Financial Statements have been prepared on a historical cost basis, as modified by the revaluation of investments, and in accordance with Financial Reporting Standard 102 ("FRS 102") and the Statement of Recommended Practice for Authorised Funds issued by the Investment Management Association ("IMA") in May 2014, and amended in June 2017. The Financial Statements have been prepared on a going concern basis. The Financial Statements are prepared in accordance with the Trust Deed and the Financial Conduct Authority’s Collective Investment Schemes Sourcebook (“COLL”).

The accounting policies applied are consistent with those of the annual financial statements for the year ended 15 December 2020 and are described in those annual financial statements.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Distribution Tables

For the six months ended 15 June 2021

Net Equalisation Distribution payable/paid revenue Current year Prior year R Inc Gross 1st Interim Group 1 1.200 - 1.200 1.200 Group 2 0.546 0.654 1.200 1.200 2nd Interim Group 1 1.200 - 1.200 1.200 Group 2 0.388 0.812 1.200 1.200

R Acc Gross 1st Interim Group 1 1.900 - 1.900 1.900 Group 2 0.519 1.381 1.900 1.900 2nd Interim Group 1 1.900 - 1.900 1.900 Group 2 0.124 1.776 1.900 1.900

Z Inc Gross 1st Interim Group 1 1.300 - 1.300 1.300 Group 2 0.485 0.815 1.300 1.300 2nd Interim Group 1 1.300 - 1.300 1.300 Group 2 0.431 0.869 1.300 1.300

Z Acc Gross 1st Interim Group 1 1.900 - 1.900 1.900 Group 2 0.728 1.172 1.900 1.900 2nd Interim Group 1 1.900 - 1.900 1.900 Group 2 0.389 1.511 1.900 1.900

(All figures shown in pence per unit)

Units are classified as Group 2 for the following periods in which they were acquired, thereafter they rank as Group 1 units.

Equalisation is the average amount of income included in the purchase price of Group 2 units and is refundable to holders of these units as a return of capital. Being a capital item it is not liable to income tax, but must be deducted from the cost of units for capital gains tax purposes.

The relevant periods for Group 2 units and the payment/transfer dates are shown below:

Group 2 units Group 1 & 2 units from to paid/transferred 1st Interim 16.12.20 15.03.21 14.05.21 2nd Interim 16.03.21 15.06.21 13.08.21

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DIRECTORS’ APPROVAL

In accordance with the requirements of the Financial Conduct Authority's Collective Investment Schemes Sourcebook ("COLL"), the contents of this report have been approved on behalf of AXA Investment Managers UK Limited by:

John Stainsby Amanda Prince Director Director 10th August 2021 10th August 2021

AXA IM - RESTRICTED AXA Framlington Managed Income Fund

Further Information

THE SECURITIES FINANCING TRANSACTIONS REGULATION

The Securities Financing Transactions Regulation, as published by the European Securities and Markets Authority, aims to improve the transparency of the securities financing markets. Disclosures regarding exposure to Securities Financing Transactions (SFTs) or total return swaps will be required on all reports & accounts published after 13 January 2017. During the period to 15 June 2021 and at the balance sheet date, the Fund did not use SFTs or total return swaps, as such no disclosure is required.

AXA IM - RESTRICTED AXA Framlington Managed Income Fund