MFM Slater OEIC

Interim Report For the six month period ended 31st October 2016 (Unaudited) MFM SLATER OEIC

Registered Office

Marlborough House 59 Chorley New Road Bolton BL1 4QP

Authorised Corporate Director and Registrar

Marlborough Fund Managers Ltd Marlborough House 59 Chorley New Road Bolton BL1 4QP

Investor Support: (0808) 145 2500 (FREEPHONE)

Authorised and regulated by the Financial Conduct Authority.

Depositary

HSBC Bank plc 8 Canada Square E14 5HQ

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

Investment Adviser

MFM Slater Income Fund Slater Investments Limited Nicholas House 3 Laurence Pountney Hill London EC4R 0EU

Telephone: (020) 7 2209460 Fax: (020) 7 2209469

Authorised and regulated by the Financial Conduct Authority.

Auditor

Barlow Andrews LLP Carlyle House 78 Chorley New Road Bolton BL1 4BY

MFM SLATER OEIC

CONTENTS PAGE

AUTHORISED STATUS AND GENERAL INFORMATION 1

AUTHORISED CORPORATE DIRECTOR’S STATEMENT 2

MFM SLATER INCOME FUND

AUTHORISED INVESTMENT ADVISER’S REPORT 3

FUND INFORMATION

Price and distribution record 7

Number of shares in issue/Net asset value per share 8

Ongoing charges 8

Synthetic risk and reward indicator 8

Portfolio statement 9

Portfolio transactions 11

INTERIM FINANCIAL STATEMENTS

Statement of total return 12

Statement of change in net assets attributable to shareholders 12

Balance sheet 13

Notes to the interim financial statements 13

MFM SLATER OEIC

AUTHORISED STATUS AND GENERAL INFORMATION

Authorised status

MFM Slater OEIC is an investment company with variable capital (ICVC) incorporated under the Open Ended Investment Company (OEIC) Regulations 2001. It is a UCITS scheme as defined in the Collective Investment Schemes Sourcebook (COLL) and is an umbrella company for the purposes of the OEIC Regulations. The Company is incorporated in England and Wales with the registration number IC000910 and is authorised and regulated by the Financial Conduct Authority with effect from 22 August 2011. The shareholders are not liable for the debts of the Company.

The sub-funds of the Company are segregated by law under the Protected Cell Regime. In the event that one sub-fund in the Company is unable to meet its liabilities, the assets of another sub-fund within the Company will not be used to settle these liabilities.

The Company currently has one sub-fund, the MFM Slater Income Fund.

Investment objectives

MFM Slater Income Fund

The investment objective of the Fund is to produce an attractive and increasing level of income while additionally seeking long term capital growth by investing predominantly in the shares of UK listed companies across the full range of market capitalisations, including those listed on the Alternative Investment Market (AIM). From time to time the Fund may also hold the shares of companies listed overseas as well as cash, money market instruments, the units of collective investment schemes, bonds and warrants as permitted by the rules applicable to UCITS schemes and the Prospectus.

It is intended that the assets of the Fund will be managed so that it is eligible for quotation in the Investment Association’s UK Equity Income sector.

The Fund has powers to borrow as specified in the FCA Collective Investment Schemes Sourcebook and may use derivatives for hedging and efficient portfolio management purposes only.

Rights and terms attaching to each share class

Each share of each class represents a proportional entitlement to the assets of the Fund. The allocation of income and taxation and the rights of each share in the event the Fund is wound up are on the same proportional basis.

Change in prospectus

No changes have been made since the last report.

Up to date key investor information documents, the full prospectus and reports and accounts for any fund can be requested by the investor at any time.

1 MFM SLATER OEIC

AUTHORISED CORPORATE DIRECTOR’S STATEMENT

This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued and amended by the Financial Conduct Authority.

ALLAN HAMER JOINT MANAGING DIRECTOR

WAYNE D GREEN JOINT MANAGING DIRECTOR

MARLBOROUGH FUND MANAGERS LTD 14 December 2016

2 MFM SLATER OEIC MFM SLATER INCOME FUND

AUTHORISED INVESTMENT ADVISER’S REPORT

For the six month period ended 31 October 2016

Percentage change and sector position to 31 October 2016

Six Months 1 year 3 years 5 years Since launch* MFM Slater Income Fund 1.58% -4.12% 21.53% 84.66% 91.80% Quartile Ranking** 4 4 2 1 1 * 19 September 2011 ** Based on ranking within The Investment Association’s UK Equity Income Sector External Source of Economic Data: Morningstar (Class P inc - mid to mid, net income reinvested)

During the period, the MFM Slater Income Fund gained +1.58% compared with a rise in the benchmark of +7.61%.

In the six months to the end of October the stockmarket experienced some violent ‘ups’ and ‘downs’, the dominant factor during this unsettled period being the EU referendum.

Markets in May and June, in the main, were influenced by investor sentiment and polls tracking the referendum. Nevertheless, the performance of the Fund through to 23 June was positive, set against a relatively benign economic backdrop, underpinned by the consensus view that the UK would vote to remain in the EU.

However, if a ‘week is a long time in politics’, then twenty four hours can be a lifetime on the financial markets. On the 24 June, following the unexpected vote to leave the EU, shockwaves reverberated around global stock markets. The uncertainty that this generated hit the most economically sensitive sectors in the UK the hardest, such as banks, housebuilding, construction, real estate and recruitment. In particular, some of the Fund’s more cyclical, interest rate sensitive, small to mid-cap holdings registered significant share price falls, which, for example, in the case of housebuilders factored in significantly lower house sales that did not materialise.

The sharp fall in the UK stockmarket was then immediately followed by a violent rally in the largest FTSE 100 constituents. The thirty or so largest FTSE 100 companies, which effectively determine the index’s performance, were marked up aggressively to reflect currency movements. In many cases the uplift was 15-20%. Our experience is that we rarely participate meaningfully in such vertical upwards movements in indices over very short periods. Typically, we catch up over time and then outperform.

Consequently, we were not surprised by the initial lag in the performance of the Fund immediately following the EU referendum followed by its subsequent strong outperformance against its benchmark in the third quarter of the calendar year, especially given that most UK economic data surprised on the upside.

We believe that we are still in a period of catch-up with further recovery to come. This is evidenced by the value still to be found from many high yielding income stocks that were a challenge to find a year ago, but much easier to find today.

It is worth recapping the Fund’s objective and the way in which the portfolio has been invested. The Fund aims to provide investors with at least 110% of the FTSE All-Share’s average dividend yield. The index currently yields 3.52%, making our target 3.87%. The Fund’s equity investments are currently yielding 4.80%, with 5.12% in prospect in twelve months. The dividends paid during the financial year are set out on page 5.

The MFM Slater Income Fund invests across the market cap spectrum in companies that offer the prospect of attractive and growing dividends as well as capital growth upside. With 90% of the high yield universe outside the FTSE 100, we see no logic in restricting ourselves to large cap high yielders as many income funds choose to do. So long as we can achieve reasonable aggregate liquidity, we prefer to invest on the basis of value, not size. At the period end, the portfolio was 29.97% invested in FTSE 100 companies, 27.90% in the Mid 250, 17.34% in the Small Cap index, 0.45% in Fledgling companies, 16.73% in AIM companies, 6.15% in other categories including overseas companies and 1.46% in cash.

In earlier reports we have explained that the portfolio seeks to achieve a consistent performance by broadly dividing the Fund into three complementary categories: growth companies with attractive yields; dividend stalwarts with earnings pointing upwards; and high yielders with more cyclical upside whose earnings have at least reached a degree of stability.

The first category, growth companies with attractive yields, continued to post some good gains. These businesses are typically growing their earnings at an above average rate and often boast attractive PEG (Price / Earnings Growth) ratios as well. Their earnings growth rates are steady and reliable as opposed to dynamic, usually in the 8-12% per annum range.

During the period M&A activity added to returns generated by the Fund. The standout performer in the growth category was commercial radio operator Wireless Group (+0.94% contribution). The strategic radio assets of the company were acquired by News Corp, a new entrant into commercial radio, following a recommended offer of 315p cash per share, representing a 70% share price premium immediately prior to the offer date. The takeover of Wireless Group illustrates the potential latent, unrealized value of many of the small to mid-cap stocks held by the Fund.

3 MFM SLATER OEIC MFM SLATER INCOME FUND

AUTHORISED INVESTMENT ADVISER’S REPORT (CONTINUED)

Other contributors of note (+0.30% and above) included Stobart Group (+0.62% contribution). The group signed heads of terms with CityJet, which potentially doubles the routes at Southend airport from April 2017 onwards and should lead to sustainable air passenger growth. The company also announced a doubling of its dividend to 12 pence p.a. representing a distribution to shareholders of over 7% supported by the realization of assets, including planned property disposals. The Biomass energy business, meanwhile, looks set to deliver its targeted two million tonnes in 2018 with long-term contracts in place. XLMedia contributed +0.51%. The company posted record half-yearly performance and reiterated its profit guidance for FY16. Its high margin publishing business was the star of the show, benefiting from long term recurring revenues based on lifetime revenue share agreements. With net cash on its balance sheet and strong free cash flow generation the company can continue to make earnings enhancing bolt-on acquisitions. Despite a strong run-up in the share price the company still offers a 5% prospective dividend yield.

City of London Investment Group contributed +0.43%. Assets under management increased 10% on the back of a rise in the MSCI Emerging Markets index. Sterling weakness led to an increase in earnings before interest and tax (EBIT) in July and August. The company offers a prospective yield of over 7%. Lok'nStore contributed +0.38%. The company reported a 28% increase in Net Asset Value driven by strong trading in existing stores, the strength of the self-storage market, and, the opening of three new stores in Chichester, Bristol and Southampton. The development pipeline is also strong with four new sites acquired, which will add 14% to trading space. Like-for-like revenue in its core self-storage business was up 5.2% driven by rising occupancy and prices. The company is conservatively run with a loan to value ratio of 20.8%, down from 25.8% in the 2015. Amino Technologies contributed +0.37%. The company issued an update leading to broker upgrades confirming that trading was ahead of expectations driven by record orders in August. As a result of the strength of the order book, management expects revenue for the full year to be slightly ahead of market expectations. Coupled with favourable foreign exchange exposure this led to broker upgrades. Following acquisitions in 2015 the company is now well positioned to address the rapidly growing TV market over the Internet and the cloud.

During the period there were only two detractors of note in excess of -0.30%. ITV contributed -0.73%. The company has reported Q3 net advertising revenue (NAR) down by 4.4% against consensus of -2.5%. Negative organic growth from Studios was also higher than H1. However, the company noted that EPS would be broadly flat for the full year. NAR in Q4 is forecast to be down by 7% as a result of the EU referendum vote, which has adversely impacted advertising demand. Against this, ITV remains a potential takeover target and sports a prospective yield of 5% supported by prodigious cash flows. Fairpoint contributed -0.59% following a profit warning.

The standout performer in the second half in the dividend stalwarts category was AstraZeneca (+0.39% contribution). During the period, a number of FTSE 100 companies with foreign currency exposure in the Fund have proven to be Brexit beneficiaries because of the fall in Sterling against the dollar. AstraZeneca, part of the less cyclical, big pharma world, generates the bulk of its revenues outside the UK. Brokers forecast a resumption of growth in earnings from 2018 onwards driven by the company’s promising drug pipeline. Following the sector de-rating prior to the US elections, the election of Donald Trump could potentially be positive for margins given lower likelihood of a crack-down on future US drug tariffs.

Detractors of note (-0.30% and above) included Lloyds Banking Group (-0.31% contribution). Commercial real estate values have taken a hit as have the shares of banks, such as Lloyds, which have loan exposure to this asset class. Tight regulations around capital adequacy and the amount of capital Lloyds will need to keep on its balance sheet is likely to moderate earning’s growth. However, the fully covered, attractive 7% prospective yield is one of the highest in the sector.

The third category saw a number of companies making meaningful gains. These high yielding companies have more cyclical upside potential with the important caveat that we believe their earnings have reached a degree of stability. These are not aggressive recovery plays. Instead, they are solid businesses that offer the prospect of significant earnings growth when the tide turns and a healthy yield while we wait.

The standout performer in the period in this category was Rio Tinto (+0.61% contribution), which also benefited from foreign currency exposure. The company is adjusting to lower commodity prices by re-aligning its capital allocation priorities, reducing capital expenditure and seeking to raise productivity. A further $5bn target of potential productivity and cost-savings over the next five years has been announced. Further divestments in coal, alumina and aluminium are possible, which would continue to deleverage the balance sheet, potentially increasing returns to shareholders. The company, however, remains bullish about copper.

Other contributors of note (+0.30% contribution and above) included Royal Dutch Shell (+0.53% contribution). The company’s Q3 earnings of $2.8bn beat consensus forecasts and cash generation at $8.5bn was above capital expenditure of $7.7bn. Reflecting the subdued oil price environment, combined Shell/BG operating expenses are still expected to be 20% or $9bn below the 2014 level and a programme of $30bn of divestment is on-going. The company has also announced a capital investment programme for 2017 at the low end of the range. Ocean Wilsons (+0.35% contribution) has a strategic, well-invested transportation and marine services portfolio in Brazil. Given high operational gearing any recovery should convert disproportionately into higher earnings, particularly at its container terminal operation. Despite the rally in the share price, the stock still represents good value on a Price/net asset value (NAV) discount of 34% against an historical average of 27% coupled with a 5% dividend yield. The company has just reported Q3 earnings slightly ahead of forecasts and also announced a 25-year concession extension for one of its container terminals.

4 MFM SLATER OEIC MFM SLATER INCOME FUND

AUTHORISED INVESTMENT ADVISER’S REPORT (CONTINUED)

Detractors of note (-0.30% and above) included Cenkos Securities (-0.52% contribution). The company experienced a significant fall in revenues reflecting quieter equity markets against the backdrop of the referendum and wider European macro-economic uncertainty.

During the period new investments were established in , Lloyds Banking Group and Morgan Sindall. The Fund also added to its investments in a range of companies including , Cenkos Securities, Centaur Media, ITV, John Laing Environmental Assets Group, Kier Group, Liontrust, Marston's, Mortgage Advice Bureau, Phoenix Group (rights issue), Randall & Quilter, Redde, Redefine International, S&U, Stobart Group, and Tritax Big Box REIT.

Five holdings were either sold in their entirety or eliminated due to corporate action. These were Booker, Interserve, P2P Global Investments, Polar Capital and Wireless Group. The Fund reduced its positions in Gattaca, Hansard Global, Laura Ashley, McKay Securities, Netplay TV, NewRiver REIT, Town Centre Securities REIT.

The Fund has performed well since inception and, following the post-referendum volatility, continues to offer a compelling and growing dividend yield, which is near historic highs. In addition, there is scope for medium term capital appreciation.

As discussed above, we believe that there is further scope for recovery. This is evidenced by the value evident in the market as measured by some of the very high yields on offer from a significant number of UK income stocks.

Slater Investments Limited. 1 December 2016

This report contains FTSE data. Source: FTSE International Limited (“FTSE”) © FTSE 2016. “FTSE®” is a trade mark of the Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Distributions (pence per share)

Year 2016 Year 2015 Year 2014 Year 2013 Class A Income Net income paid 31 March 0.9911 0.7721 0.8401 0.9279 Net income paid 30 June 2.5361 2.2730 1.8321 1.3677 Net income paid 30 September 1.4346 1.1607 1.2345 1.5660 Net income paid 31 December 2.3841 2.0952 1.9128 1.7934 Class A Accumulation Net income paid 31 March 0.9899 N/A N/A N/A Net income paid 30 June 2.5528 N/A N/A N/A Net income paid 30 September 1.4683 N/A N/A N/A Net income paid 31 December 2.4640 N/A N/A N/A Class B Income Net income paid 31 March 1.0101 0.7840 0.8489 0.9329 Net income paid 30 June 2.5922 2.3117 1.8539 1.3798 Net income paid 30 September 1.4675 1.1815 1.2504 1.5782 Net income paid 31 December 2.4426 2.1360 1.9381 1.7980 Class B Accumulation Net income paid 31 March 1.0100 N/A N/A N/A Net income paid 30 June 2.6089 N/A N/A N/A Net income paid 30 September 1.5019 N/A N/A N/A Net income paid 31 December 2.5240 N/A N/A N/A Class P Income Net income paid 31 March 1.0118 0.7835 0.8463 0.9200 Net income paid 30 June 2.5987 2.3118 1.8493 1.3654 Net income paid 30 September 1.4719 1.1820 1.2591 1.5714 Net income paid 31 December 2.4516 2.1386 1.9510 1.7944 Class P Accumulation Net income paid 31 March 1.0118 N/A N/A N/A Net income paid 30 June 2.6153 N/A N/A N/A Net income paid 30 September 1.5063 N/A N/A N/A Net income paid 31 December 2.5331 N/A N/A N/A

5 MFM SLATER OEIC MFM SLATER INCOME FUND

AUTHORISED INVESTMENT ADVISER’S REPORT (CONTINUED)

Material portfolio changes

For the six month period ended 31 October 2016

Major Purchases Cost (£) Major Sales Proceeds (£)

Centrica 2,489,287 Wireless Group 2,523,320 Lloyds Banking Group 2,275,529 Interserve 1,657,985 1,473,723 P2P Global Investments 1,321,374 Tritax Big Box REIT 823,495 Booker Group 1,308,045 ITV 696,910 Polar Capital Holdings 877,716 Stobart Group 632,521 Tritax Big Box REIT 782,748 Brewin Dolphin Holdings 593,467 Town Centre Securities 169,854 Kier Group 591,212 NewRiver REIT 85,647 Cenkos Securities 460,055 NetPlay TV 78,415 S & U 306,504 Ashley (Laura) Holdings 73,810 Redde 215,204 Randall & Quilter Investment Holdings 51,870 John Laing Environmental Assets Group 195,500 Hansard Global 49,134 Centaur Media 183,070 McKay Securities 20,672 Marston's 154,322 Gattaca 17,473 Redefine International 105,925 Telford Homes 98,300 Randall & Quilter Investment Holdings 91,513 Mortgage Advice Bureau Holdings 39,347 Liontrust Asset Management 30,117

Total purchases for the period 11,456,001 Total sales for the period 9,018,063

6 MFM SLATER OEIC MFM SLATER INCOME FUND

FUND INFORMATION

Price and distribution record

Income shares (Class A and B) were first offered at 100p on 19 September 2011. On 31 December 2012 Class P shares became available for purchase. Accumulation shares (Class A, B, and P) became available for purchase on 30 November 2015.

Financial year to Highest price Lowest price Net income per share

Class A Income 30 April 2014 149.97p 122.06p 6.0316p 30 April 2015 160.98p 139.04p 6.1924p 30 April 2016 167.58p 144.97p 6.7831p 30 April 2017** 156.95p 133.28p 3.8187p Class A Accumulation 30 April 2016* 164.18p 145.93p 3.5427p 30 April 2017** 162.21p 136.43p 3.9323p Class B Income 30 April 2014 151.78p 123.05p 6.0790p 30 April 2015 163.76p 141.09p 6.2842p 30 April 2016 170.92p 148.09p 6.9198p 30 April 2017** 160.83p 136.41p 3.9101p Class B Accumulation 30 April 2016* 167.54p 149.04p 3.6189p 30 April 2017** 166.19p 139.60p 4.0259p Class P Income 30 April 2014 151.43p 122.53p 6.0614p 30 April 2015 163.79p 140.93p 6.3054p 30 April 2016 171.17p 148.41p 6.9311p 30 April 2017** 161.44p 136.84p 3.9235p Class P Accumulation 30 April 2016* 167.83p 149.37p 3.6271p 30 April 2017** 166.81p 140.03p 4.0394p * period from 30 November 2015 to 30 April 2016 ** six month period to 31 October 2016

7 MFM SLATER OEIC MFM SLATER INCOME FUND

FUND INFORMATION (CONTINUED)

Number of shares in issue/Net asset value per share

Net asset value Number of Net asset value of scheme property shares in issue per share Class A Income 30 April 2014 £6,969,468 4,744,777 146.89p 30 April 2015 £7,221,395 4,638,749 155.68p 30 April 2016 £3,547,170 2,356,864 150.50p 31 October 2016 £3,068,727 2,068,163 148.38p Class A Accumulation 30 April 2016 £426,090 276,583 154.05p 31 October 2016 £443,412 284,571 155.82p Class B Income 30 April 2014 £32,077,770 21,571,077 148.71p 30 April 2015 £31,540,667 19,912,709 158.39p 30 April 2016 £21,347,230 13,870,211 153.91p 31 October 2016 £19,283,637 12,678,047 152.10p Class B Accumulation 30 April 2016 £8,425,127 5,348,943 157.51p 31 October 2016 £8,562,850 5,361,902 159.70p Class P Income 30 April 2014 £7,117,975 4,797,048 148.38p 30 April 2015 £25,886,283 16,338,568 158.44p 30 April 2016 £70,971,178 45,986,655 154.33p 31 October 2016 £70,555,034 46,204,050 152.70p Class P Accumulation 30 April 2016 £8,511,678 5,389,342 157.94p 31 October 2016 £10,130,726 6,319,120 160.32p

Ongoing charges

Class A Class B Class P 30 April 2016 1.56% 1.06% 0.81% 31 October 2016 1.55% 1.05% 0.80%

The ongoing charge figure is based on expenses for the year. This figure may vary from year to year. It excludes:  Performance fees  Portfolio transaction costs, except in the case of an entry/exit charge paid by the Fund when buying or selling units in another collective investment scheme.

Synthetic risk and reward indicator

Lower risk Higher risk

Typically lower rewards Typically higher rewards 1 2 3 4 5 6 7

The risk and reward indicator above aims to provide you with an indication of the overall risk and reward profile of the Fund. It is calculated based on the volatility of the Fund using weekly historic returns over the last five years. If five years data is not available for a fund, the returns of a representative portfolio are used.

This Fund has been measured as 4 because it has experienced moderate volatility historically.

8 MFM SLATER OEIC MFM SLATER INCOME FUND

Portfolio statement as at 31 October 2016

Holding or Bid Percentage of nominal value value total net assets as at 31 Oct 16 £% BANKS (1.69%, Apr 2016 - Nil) 3,300,000 Lloyds Banking Group 1,892,220 1.69 Total Banks 1,892,220 1.69

CONSTRUCTION & MATERIALS (3.38%, Apr 2016 - 1.39%) 175,000 Kier Group 2,353,750 2.10 200,000 Morgan Sindall Group 1,429,000 1.28 Total Construction & Materials 3,782,750 3.38

EQUITY INVESTMENT INSTRUMENTS (1.13%, Apr 2016 - 1.32%) 1,200,000 John Laing Environmental Assets Group 1,266,000 1.13 Total Equity Investment Instruments 1,266,000 1.13

FINANCIAL SERVICES (11.87%, Apr 2016 - 12.71%) 950,000 Brewin Dolphin Holdings 2,473,800 2.21 901,356 Cenkos Securities 676,017 0.60 625,000 City of London Investment Group 2,284,375 2.04 126,000 1,651,860 1.47 1,070,000 Fairpoint Group 695,500 0.62 32,780 Liontrust Asset Management 101,618 0.09 363,182 Mortgage Advice Bureau Holdings 1,180,342 1.05 760,000 Redde 1,356,600 1.21 813,538 River and Mercantile Group 1,765,377 1.58 47,500 S & U 1,116,250 1.00 Total Financial Services 13,301,739 11.87

FOOD & DRUG RETAILERS (Nil, Apr 2016 - 1.13%) Total Food & Drug Retailers 0 0.00

GAS, WATER & MULTIUTILITIES (4.72%, Apr 2016 - 2.47%) 1,050,000 Centrica 2,242,800 2.00 287,000 National Grid 3,043,635 2.72 Total Gas, Water & Multiutilities 5,286,435 4.72

GENERAL RETAILERS (0.46%, Apr 2016 - 0.64%) 2,667,925 Ashley (Laura) Holdings 520,245 0.46 Total General Retailers 520,245 0.46

HOUSEHOLD GOODS & HOME CONSTRUCTION (8.52%, Apr 2016 - 9.29%) 190,000 853,290 0.76 93,000 2,205,030 1.97 230,000 Bovis Homes Group 1,735,350 1.55 195,000 Galliford Try 2,377,050 2.12 640,000 897,920 0.80 500,000 Telford Homes 1,477,500 1.32 Total Household Goods & Home Construction 9,546,140 8.52

INDUSTRIAL TRANSPORTATION (6.65%, Apr 2016 - 5.15%) 240,000 Ocean Wilsons Holdings 2,268,000 2.02 585,000 Royal Mail 2,861,820 2.55 1,438,773 Stobart Group 2,330,812 2.08 Total Industrial Transportation 7,460,632 6.65

9 MFM SLATER OEIC MFM SLATER INCOME FUND

Portfolio statement as at 31 October 2016

Holding or Bid Percentage of nominal value value total net assets as at 31 Oct 16 £% LEISURE GOODS (1.69%, Apr 2016 - 1.86%) 1,250,000 Photo-Me International 1,890,625 1.69 Total Leisure Goods 1,890,625 1.69

LIFE INSURANCE (10.12%, Apr 2016 - 10.11%) 1,020,000 Chesnara 3,246,150 2.90 1,373,928 Hansard Global 1,463,233 1.31 1,550,000 Legal & General Group 3,256,550 2.91 390,000 Phoenix Group Holdings 2,852,850 2.55 227,500 Phoenix Group Holdings Nil Paid Rights 507,325 0.45 Total Life Insurance 11,326,108 10.12

MINING (3.16%, Apr 2016 - 2.53%) 125,000 Rio Tinto 3,545,000 3.16 Total Mining 3,545,000 3.16

MEDIA (7.32%, Apr 2016 - 8.28%) 2,595,128 Centaur Media 1,096,442 0.98 1,835,828 ITV 3,153,952 2.81 925,628 NAHL Group 2,175,226 1.94 1,758,847 XLMedia 1,776,435 1.59 Total Media 8,202,055 7.32

NONLIFE INSURANCE (0.78%, Apr 2016 - 0.60%) 692,495 Randall & Quilter Investment Holdings 879,469 0.78 Total Nonlife Insurance 879,469 0.78

OIL & GAS PRODUCERS (2.93%, Apr 2016 - 2.47%) 155,000 Royal Dutch Shell 'B' 3,287,550 2.93 Total Oil & Gas Producers 3,287,550 2.93

PHARMACEUTICALS & BIOTECHNOLOGY (2.59%, Apr 2016 - 2.21%) 63,000 AstraZeneca 2,899,890 2.59 Total Pharmaceuticals & Biotechnology 2,899,890 2.59

REAL ESTATE INVESTMENT & SERVICES (2.65%, Apr 2016 - 2.21%) 368,000 Lok'nStore Group 1,656,000 1.48 374,000 Palace Capital 1,309,000 1.17 Total Real Estate Investment & Services 2,965,000 2.65

REAL ESTATE INVESTMENT TRUSTS (12.15%, Apr 2016 - 12.51%) 4,437,039 Assura Group 2,640,038 2.36 778,000 828,570 0.74 160,000 Land Securities Group 1,572,800 1.40 234,564 McKay Securities 446,258 0.40 921,987 NewRiver REIT 2,858,160 2.55 2,750,000 Redefine International 1,150,050 1.03 265,000 1,149,305 1.03 258,076 Town Centre Securities 705,838 0.63 1,661,293 Tritax Big Box REIT 2,249,391 2.01 Total Real Estate Investment Trusts 13,600,410 12.15

10 MFM SLATER OEIC MFM SLATER INCOME FUND

Portfolio statement as at 31 October 2016

Holding or Bid Percentage of nominal value value total net assets as at 31 Oct 16 £% SOFTWARE & COMPUTER SERVICES (0.99%, Apr 2016 - 1.23%) 740,000 Redcentric 1,111,850 0.99 Total Software & Computer Services 1,111,850 0.99

SUPPORT SERVICES (6.04%, Apr 2016 - 8.38%) 1,775,000 Communisis 630,125 0.56 235,000 Gattaca 787,250 0.70 1,665,000 Lakehouse 499,500 0.45 325,627 Maintel Holdings 2,702,704 2.41 1,280,000 RPS Group 2,150,400 1.92 Total Support Services 6,769,979 6.04

TECHNOLOGY HARDWARE & EQUIPMENT (1.28%, Apr 2016 - 0.89%) 945,000 Amino Technologies 1,436,400 1.28 Total Technology Hardware & Equipment 1,436,400 1.28

TOBACCO (3.65%, Apr 2016 - 3.37%) 103,000 Imperial Brands 4,094,765 3.65 Total Tobacco 4,094,765 3.65

TRAVEL & LEISURE (4.77%, Apr 2016 - 5.22%) 273,000 Greene King 1,981,980 1.77 2,342,484 Marston's 3,129,559 2.79 3,187,806 NetPlay TV 231,116 0.21 Total Travel & Leisure 5,342,655 4.77

Portfolio of investments 110,407,917 98.54 Net current assets on capital account 1,636,469 1.46 Net assets 112,044,386 100.00

The investments of the Fund have been valued using bid market values ruling on international stock exchanges at 12 noon noon on 31 October 2016, being the last valuation point of the period. Market value is defined by the SORP as fair value which is generally the bid value of each security. Where applicable investments are valued to exclude accrued income. Where a stock is unlisted or where there is an illiquid market, a valuation for this stock has been obtained from market makers where possible, and suspended stocks are normally valued at their suspension price. However, where the ACD believes that these prices do not reflect a fair value, or where no reliable price exists for a security, it is valued at a price which in the opinion of the ACD reflects a fair and reasonable price for that investment.

Portfolio transactions for the six months ended 31 October 2016 £

Total purchases, including transaction charges 11,456,001

Total sales proceeds, net of transaction charges 9,018,063

11 MFM SLATER OEIC MFM SLATER INCOME FUND

INTERIM FINANCIAL STATEMENTS (unaudited) For the six months ended 31 October 2016

Statement of total return 31 October 2016 31 October 2015 ££££

Income: Net capital gains/(losses) (693,259) 4,292,097 Revenue 2,971,040 1,708,855 Expenses (509,582) (393,836) Net revenue/(expense) before taxation 2,461,458 1,315,019

Taxation 0 1,020

Net revenue/(expense) after taxation 2,461,458 1,316,039

Total return before distributions 1,768,199 5,608,136

Distributions (2,893,356) (1,666,550)

Change in net assets attributable to shareholders from investment activities (1,125,157) 3,941,586

Statement of change in net assets attributable to shareholders

31 October 2016 31 October 2015 ££££

Opening net assets attributable to shareholders * 113,228,472 64,648,345

Amounts receivable on issue of shares 6,803,348 37,222,454 Amounts payable on cancellation of shares (7,341,945) (1,798,112) Amounts receivable on share class conversions 12 (538,596) 35,424,344

Change in net assets attributable to shareholders from investment activities (1,125,157) 3,941,586

Retained distribution on accumulation shares 479,667 0

Closing net assets attributable to shareholders 112,044,386 * 104,014,275

* These figures are not the same as the comparatives are taken from the preceding interim period and not the last final accounts.

12 MFM SLATER OEIC MFM SLATER INCOME FUND

INTERIM FINANCIAL STATEMENTS (unaudited) as at 31 October 2016

Balance sheet

31 October 2016 30 April 2016

££ Assets: Fixed Assets: Investments 110,407,917 108,660,848

Current Assets: Debtors 829,261 1,597,303 Cash and bank balances 2,856,482 5,959,778 Total assets 114,093,660 116,217,929

Liabilities: Creditors: Distribution payable 1,491,726 1,614,393 Other creditors 557,548 1,375,064 Total liabilities 2,049,274 2,989,457

Net assets attributable to shareholders 112,044,386 113,228,472

Notes to the interim financial statements

Basis for preparation The interim financial statements have been prepared in compliance with FRS102 and in accordance with the Statement of Recommended Practice for UK Authorised Funds issued by The Investment Association in May 2014.

The financial statements are prepared in sterling, which is the functional currency of the Fund. Monetary amounts in these financial statements are rounded to the nearest pound.

The financial statements have been prepared on the historical cost convention, modified to include the revaluation of investments and certain financial instruments at fair value.

Accounting policies The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 April 2016 and are described in those annual financial statements.

13 Marlborough Fund Managers Ltd Marlborough House 59 Chorley New Road Bolton BL1 4QP

Investor Support: (0808) 145 2500 (FREEPHONE) Dealing: (0808) 145 2501 (FREEPHONE) Fax: (01204) 533 045 Email: [email protected] Website: www.marlboroughfunds.com

Marlborough Fund Managers Ltd Registered in England No. 2061177 Authorised and regulated by the Financial Conduct Authority and a member of The Investment Association.