Liontrust Global Funds plc
Liontrust GF European Strategic Equity Fund Liontrust GF Global Strategic Bond Fund Liontrust GF Special Situations Fund Liontrust GF Macro Equity Income Fund Liontrust GF Global Income Fund Liontrust GF UK Growth Fund Liontrust GF Asia Income Fund (Launched 15 May 2015) Liontrust GF Global Strategic Equity Fund (Launched 16 July 2015)
(An open-ended umbrella type investment company, established under the laws of Ireland)
Annual Report & Audited Financial Statements
For the year ended 31 December 2015
Contents Page
Investment Advisers’ Reports: Liontrust GF European Strategic Equity Fund 2 Liontrust GF Global Strategic Bond Fund 5 Liontrust GF Special Situations Fund 7 Liontrust GF Macro Equity Income Fund 11 Liontrust GF Global Income Fund 15 Liontrust GF UK Growth Fund 18 Liontrust GF Asia Income Fund 21 Liontrust GF Global Strategic Equity Fund 23 Report of the Directors 25 Custodian’s report 29 Independent auditor’s report 30 Portfolio statements: Liontrust GF European Strategic Equity Fund 32 Liontrust GF Global Strategic Bond Fund 39 Liontrust GF Special Situations Fund 43 Liontrust GF Macro Equity Income Fund 46 Liontrust GF Global Income Fund 47 Liontrust GF UK Growth Fund 48 Liontrust GF Asia Income Fund 49 Liontrust GF Global Strategic Equity Fund 53 Balance sheet 58 Profit and Loss Account 62 Statements of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares 66 Notes to the Financial Statements 68 Unaudited schedule of significant portfolio movements Liontrust GF European Strategic Equity Fund 107 Liontrust GF Global Strategic Bond Fund 108 Liontrust GF Special Situations Fund 109 Liontrust GF Macro Equity Income Fund 109 Liontrust GF Global Income Fund 110 Liontrust GF UK Growth Fund 110 Liontrust GF Asia Income Fund 111 Liontrust GF Global Strategic Equity Fund 112 Company Information 113 Notice of Annual General Meeting 114 Form of Proxy 115
Liontrust Global Funds plc 1 Annual report and audited Financial Statements
Liontrust GF European Strategic Equity Fund Investment Adviser’s report
For the year ended 31 December 2015
Market Environment
The MSCI Europe index returned 8.2% in euro terms in the 12 months to 31 December 2015.
The European Central Bank’s (ECB) January announcement of quantitative easing (QE) drove a rise in European equity markets and a depreciation of the euro at the start of the year. Anti-austerity party Syriza won the Greek general election in January which led to a sell-off in Greek assets, and began months of debt bailout re-negotiations, but this failed to disrupt the QE feel-good factor in other European markets.
As the year progressed, concerns of a more global nature increasingly began to have an impact on European markets. These included the prospect of interest rate rises in the US, and the potential impact on already- slowing Chinese (and therefore global) economic growth from the remarkable volatility seen in Chinese equity markets. The Chinese government’s increasing determination to intervene only served to further accentuate share price falls. The weakness in Chinese markets was transmitted globally, resulting in a sell-off whose epicentre on 24 August was labelled ‘Black Monday’. The decision to devalue the yuan, although only by a few percent, seemed to be the catalyst for the spike in nervousness.
Given the global importance of China’s economy, the focus on its slowdown raised question marks about the timing of impending rate rises in the US and UK. The US Federal Reserve subsequently chose not to enact interest rate ‘lift-off’ at its September meeting, but did eventually – after much speculation – announce a rise at its December meeting. Meanwhile, Mario Draghi stated that the ECB stood ready to adjust the “size, duration and composition” of QE but the measures subsequently announced in December fell short of many investors’ expectations.
Throughout 2015, commodity-related stocks and sectors found themselves under pressure as they bore the brunt of global growth worries. The Materials and Energy sectors of the MSCI Europe were hit particularly hard, down 8.9% and 7.4% respectively in euro terms.
Analysis of Portfolio Return
The fund returned 6.1% (A4 euro share class) in the 12 months to 31 December 2015. Whilst this was slightly less than the return of the European market it was achieved with an average net exposure to the market of 46% and realised volatility of 9%, comparing favourably with the MSCI Europe’s 20% volatility. The relative performance of the fund improved significantly in the second half of the year, returning 2.0% compared with a European market total return of -4.0% (at the interim stage the fund had returned 4.0% while the European market had risen 12.8%).
Entering 2015 we had positioned the portfolio based on the investment regime identified by our process’ proprietary market signal: one which appeared to be evolving into a growth-oriented market characterised by narrow valuation dispersion. However, the ECB’s January announcement of a substantial liquidity injection stoked ‘risk on’ sentiment and led the European equity market higher. The fund’s return over the first six months of 2015 reflected a long book which participated in the market rally, tempered by a negative return from the short book in an environment of widespread gains for equities.
During the portfolio’s annual restructuring we maintained the positioning of the portfolio’s long book in high quality growth companies, and this profile subsequently paid off as the market’s momentum died down, and showed signs of entering what we refer to as the ‘show me’ phase, where investors demand greater evidence of financial recovery and strength in results. Several factors contributed towards the change in market conditions, not least the concerns over China’s economic slowdown and the impact of the impending increase in US interest rates.
Aside from a sharp momentum reversion during a rally in October, in which contrarian value strategies dominated gains, the second half of the year was much kinder to our short book, which produced a positive return in gross terms over the six months. While ECB President Mario Draghi’s hint at further stimulus threatened to reinvigorate indiscriminate buying of equities, the Bank’s eventual announcement of a rate cut and QE extension in early December disappointed relative to the market’s expectations.
Liontrust Global Funds plc 2 Annual report and audited Financial Statements
Liontrust GF European Strategic Equity Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Analysis of Portfolio Return (continued)
The return profile achieved in 2015 underscores the benefits of the adoption of a long/short approach with a variable net long position (rather than a market neutral position), as well as the introduction of ‘secondary cash flow’ scores to supplement our well-established quantitative screening measures. Since these measures were introduced as part of the fund’s objective change in April 2014, the fund has returned 12.9% - the same return as the MSCI Europe Index but with substantially less volatility. From the European market’s peak on 15 April 2015 through to year-end, a period in which the market fell 11.0%, the fund restricted its fall to only 0.6%.
Within the portfolio’s long book, the best performing positions were: Wessanen (+60.0% in euro terms), APG (+54.5%) and Nemetschek (+47.4%).
Dutch consumer goods company Wessanen focuses on organic, fair trade and vegetarian food products. The company believes that a shift from ‘Big Food’ – dominated by multinational consumer food & drinks brands - to healthy, sustainable food is driving secular growth in demand for its products. In its third quarter results, it reported 19% revenue growth of which 7.7% was organic and the remainder due to acquisitions and other one- off effects.
The majority of APG’s share price gain came following the release of first quarter results. The Swiss billboard advertising company increased sales by 2.2% in 2014 as growth in its domestic market compensated for a contraction in its small international operations. It generated strong operating cash flow, which boosted net cash to a level where the company felt comfortable raising its dividend payout ratio from 60% to 70% of net profit as well implementing a large increase in its special dividend.
Nemetschek provides software to the construction industry and, following a fourth quarter of 2014 which it described as “extremely positive” it released full year results that beat expectations on revenue and profits. Following a very strong investment return, the position was closed during the portfolio’s restructuring.
The weakest positions in the long book included: Evraz (-62.0%), Rio Tinto (-31.2%) and Hewlett Packard (- 10.9%).
The fall in the share prices of both Evraz and Rio Tinto reflected industry rather than stock-specific factors as concerns over slowing growth in China and other emerging markets weighed on the demand outlook for commodities (and industrial metals such as steel in Evraz’s case). Outlook comments within Hewlett Packard’s first quarter 2015 results disappointed; the company highlighted the impact that dollar strength was having on its 2015 forecast. It said that the scale of this impact was expected to be ‘significantly greater’ than it anticipated in November 2014. Later in the year, it announced its division into two separately-listed companies: HP Inc and Hewlett Packard Enterprise Company. Following the split, we disposed of the fund’s holding in the latter.
Portfolio Activity
Our investment process involves the forensic analysis of historic cash flows and balance sheet developments as presented in companies’ annual report and accounts. Before embarking on in-depth qualitative analysis, we apply a simple quantitative screen using two measures of cash flow. We combine these measures to create a composite ranking of the European universe of companies, with only the top 20% - the top quintile – of this list qualifying for further qualitative analysis. In 2014 we supplemented this process with ‘secondary’ quantitative screening measures which we believe increases the efficacy of the review by further filtering the universe of European stocks, highlighting the best opportunities on the long and short side. The secondary scores rank companies on four types of cash flow characteristic: growth, cash return, recovering value or contrarian.
During the year under review, we restructured the fund to reflect the outcomes of the 2015 review of companies’ report and accounts. Following the restructuring, the fund’s net market exposure remained broadly unchanged at 50%. This included a short book of just over 50% of NAV. The size of the short book is determined by the incidence of aggressive corporate investment which, whilst rising in 2015, remained moderate relative to history. For the long book, our market signal was benign resulting in a long book that remained c.100% of NAV.
Liontrust Global Funds plc 3 Annual report and audited Financial Statements
Liontrust GF European Strategic Equity Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Portfolio Activity (continued)
As a result of our review the long book became slightly more diversified with the inclusion of 44 stocks. A high proportion of these selections, about 80%, were what we call ‘intersection stocks’ – those stocks that score highly in at least two of our secondary scores criteria. This year there was a clear bias in our selections towards growth and cash return stocks which was in keeping with the growth oriented investment regime we had identified.
There remained a significant bias to the consumer discretionary sector in the long book, although this sector accounts for a wide variety of companies comprising industries such as food & general retail, housing and media. The largest country exposure in the long book was the UK. We also deliberately shifted the emphasis of the fund further down the market capitalisation scale, where we were able to find more intersection stocks.
The short book remained more diversified than the long book, comprising 82 stocks. This year we introduced a new cash flow growth measure which we believe is an effective alternative way to target short selections to supplement our current approach and bring greater diversity to the short book. This measure was developed through analysis of bad growth characteristics within companies showing signs of cash flow weakness.
Outlook
Despite the absence of exuberance among both investors and corporate managers, the European equity market has – at the time of writing – breached the technical levels we use to classify a downtrend. Valuation dispersion in Europe remains low but is rising rapidly as investors become increasingly discriminating. We do not yet see widespread evidence of investor anxiety concerning a slowing of economic activity. Historically, this lack of anxiety combined with a downtrend signal has resulted in disappointing outcomes for equity markets in subsequent six month periods. In the US market, valuation dispersion has now widened to very wide levels suggestive of a growing opportunity for contrarian value styles. But in Europe dispersion remain low and is widening – suggesting that venturing into contrarian stocks at this stage is hazardous.
In these conditions, the ability to adjust the fund’s gross and net exposure to reflect changing conditions is likely to prove very valuable. Volatility in downtrends is high and it is quite possible that we see some recovery from the very poor start to 2016, especially if the ECB chooses to provide some support. However, the market recovery would need to be somewhat dramatic for the classification of a downtrend regime to change.
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 4 Annual report and audited Financial Statements
Liontrust GF Global Strategic Bond Fund Investment Adviser’s report
For the year ended 31 December 2015
Market Environment
The GF Global Strategic Bond Fund's B4 US dollar accumulation share class returned 5.6% in the 12 months to 31 December 2015.
The fund’s US dollar B1 distributing share class declared four interim dividends totalling US$0.185, equivalent to a 2015 yield of 2.2% based on the ‘clean’ share price on 31 December 2014.
In 2015, the fund performed particularly well during periods when volatility increased: in the second quarter of the year and – more sharply – in August. On August 11, China opted to devalue its currency and shift to a more market-determined exchange rate. Though the devaluation itself was modest – the yuan closed the month just over 3.5% weaker against the US dollar – this represents a major change in policy by the world’s second largest economy and a significant shock to the global economic system.
Our investment process was designed to operate well in the more challenging conditions of the type that developed in 2015 and the fund’s performance was indeed strong over the year under review. Some of the fund’s best performing areas were the result of contrarian positions.
The following have been the main drivers of performance, in broad order of magnitude:
Emerging market government bonds: +4.2% performance contribution. Emerging market exposure, particularly local currency bonds (+3.3%), was a strong contributor over the period. We built a position in Russian bonds between September 2014 and January 2015, with the fund’s weighting reaching a target of 20% of NAV. Prices of Russian US dollar and rouble bonds had collapsed in the last quarter of 2014 as a sharp drop in the oil price added to the pressures already exerting themselves on the economy as a result of the Ukrainian crisis. However, we had high conviction that Russia’s fundamentals were sound and that the price action represented panic selling. These bonds subsequently recovered strongly, generating strong performance for the fund, and we were able to reduce some of the exposure.
We began to step up the fund’s weighting to Brazil in September as its political crisis intensified. The opportunity was not identical to that in Russia in the fourth quarter of 2014: Brazil has fiscal and political problems that are genuine and to some extent chronic. Nevertheless, as in the case of Russia, external creditworthiness was not really at issue at the time – so at the right price, Brazil’s hard currency debt was attractive. This position became one of the biggest contributors to 2015 performance.
Currencies: +1.8% Volatility in currency markets rose, partly as a result of central banks’ efforts to suppress volatility in equity and bond markets. The biggest contribution (+1.1%) came from the fund’s Russian Rouble exposure. At the start of the year the fund was long of the Russian rouble, accounting for about 10% of fund NAV. This was a volatile position, but one which did well for the fund by rallying significantly. As the rate hit 50 roubles to the dollar we then switched to a short position and this decision paid off during its subsequent depreciation.
Short positions in sterling (+0.4%) and the Brazilian real (+0.4%) also performed well. The biggest detractors were long positions in the Mexican peso (-0.9%) and South African rand (-0.7%).
China’s surprise devaluation also played well for the fund via a long term put option on the yuan purchased against just such an outcome.
Developed market government bonds: +0.2% A decision to increase US Treasury duration in August initially paid off as the Federal Reserve in September declined to enact rate ‘lift-off’ but this positive performance was subsequently eroded as the Fed focused firmly on a December hike.
Positions in German bunds were the strongest area (+0.4%). We initiated a significant short position in German bunds in April after the 10 year yield dropped as low as 0.05%. We felt that both economic fundamentals and extreme market positioning implied a strong likelihood of a sell-off. This position benefited the fund significantly when bund yields subsequently sold off towards 1.0%.
Liontrust Global Funds plc 5 Annual report and audited Financial Statements
Liontrust GF Global Strategic Bond Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Corporate bonds: -0.4% The long-held short position in high yield corporate bonds generated a relatively limited drag on performance over the period. After touching multi-year lows in March and April, corporate credit spreads began to widen through the rest of the year – interrupted briefly by a sharp rally alongside equities in September. The contribution of the fund’s short position waned and waxed with these moves; though its participation in the sell- off was constrained by a gap that opened up between widening high yield credit spreads and the related credit default swaps (via which we expressed our negative view), which have proved less sensitive – so far.
We continue to view the liquidity risks of high yield bonds as mispriced, and investors in December received a warning of the potential pitfalls of holding such illiquid assets in daily-dealing, open-ended funds: New York- based Third Avenue Management was forced to gate and liquidate its Focused Credit Fund. This fund appears to have been an extreme example (it held very illiquid assets), but the problem is generic.
The Liontrust GF Global Strategic Bond Fund terminated on 29 January 2016.
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 6 Annual report and audited Financial Statements
Liontrust GF Special Situations Fund Investment Adviser’s report
For the year ended 31 December 2015
The Market
The FTSE All-Share Index returned 1.0% in the twelve months to 31 December 2015.
The European Central Bank in January announced that it would begin a quantitative easing (QE) programme in March. The scale of intended purchases under the programme was larger than expected at €60bn/month until at least September 2016. This stoked sentiment and gave equity markets impetus which outweighed the nervousness resulting from the January Greek election result in which anti-austerity party Syriza gained power.
Greece’s new government spent much of the subsequent months negotiating with creditors over bailout conditions, a process which generated plenty of news but had relatively limited market impact as investors and commentators seemed to reach consensus that financial contagion risks from a potential Greek eurozone exit were lower than in previous instances of eurozone periphery crises. Nor did the uncertainty associated with a close run UK General Election in May appear to cause undue nervousness.
The UK equity market rose to reach an all-time high, with the FTSE All-Share Index hitting 3,834 points on 27 April, but market volatility increased over the summer and sharp market corrections were experienced in June and August. The latter in particular seemed to be driven by uncertainties over the resilience of global growth in the face of the Chinese slowdown (accentuated by instability in its equity markets) and prospective US interest rate rises. The Chinese devaluation of the yuan was identified as a catalyst to a sharp drop in Chinese and global equity markets on 24 August, “Black Monday”. Volatility spiked (the VIX Index of US equity volatility jumped from 12% at the start of June to an August peak of over 50%) and the FTSE All-Share and MSCI World Index both fell 5.3%.
As the year progressed, speculation intensified concerning the timing of the first US interest rate rise since 2006. Due to emerging markets’ perceived reliance on cheap dollar funding, the prospect of US rate increases and a stronger US dollar weighed heavily on assets in these regions. At its September meeting the US Federal Reserve chose not to tighten policy, but it did finally enact rate ‘lift-off’ at its December meeting, announcing a 25bps hike to a 0.25% - 0.50% range. With the European Central Bank flagging an extension of its Quantitative Easing programme in the same month, the US rise raised the prospect of monetary policy divergence between key economies in 2016.
Growth concerns weighed heavily on commodities throughout the year, and had a knock-on impact on the basic materials (mainly mining) and oil & gas sectors of the UK market which fell 39% and 17% respectively. The returns to different size segments of the UK market were also affected. The large-cap FTSE 100’s high weighting to the aforementioned resource sectors, combined with its more international profile (and therefore higher exposure to emerging market concerns) weighed on it relative to its smaller counterparts. The FTSE100 Index returned -1.3% over the twelve months, compared with rises of 11.2% and 13.0% respectively from the FTSE250 and FTSE Small Cap (ex investment trust) indices.
The Fund
The Fund returned 11.4% (C1 share class) in the twelve months to 31 December 2015, ahead of both the index return and the 4.9% average return from funds in the IA UK All Companies sector.
Although factors such as the pace of Chinese economic slowdown and the path of US interest rates had a large bearing on equity market trends over the period, we continue to adhere to an investment process which does not require us to forecast these variables. In our view, the prediction of the development of economic (or stock market) cycles is not a prerequisite to the selection of companies capable of outperforming over the cycle.
The success of this approach was borne out over the review period by a strong return from stock selection, in addition to some beneficial sector exposures relative to the index. For example, we avoid investment in the miners or banks and both were significant areas of market weakness over the year. The Fund’s financial sector positioning overall was a positive, with no holdings in a banks sub-sector which lagged the market, but stocks owned within the financial services sub-sector – including Hargreaves Lansdown (+53.4%), Brooks Macdonald (+49.8%), Tullett Prebon (+37.9%) and ICAP (+18.4%) - which made a solid positive contribution. In November, the inter-dealer brokers ICAP and Tullett Prebon announcing that they planned to combine their businesses.
Liontrust Global Funds plc 7 Annual report and audited Financial Statements
Liontrust GF Special Situations Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
The Fund (continued)
The Fund’s higher exposure towards small-cap stocks and corresponding lower exposure towards large companies relative to the FTSE All-Share Index, and its stock selection in large caps, also boosted relative returns.
Over the twelve months the best performing portfolio holdings included: Rightmove (+85.6%), Gamma Communications (+83.1%), Sanne Group (+83.1%), Domino’s Pizza Group (+53.6%) and NCC Group (+49.0%).
Rightmove is a great example of a stock where our conviction in the strength of its barriers to competition has been rewarded in the face of investor nervousness. The evidence so far suggests that Rightmove’s market leading position has not been dented, and may even have been bolstered by the early-2015 launch of OnTheMarket, the website owned by Agents’ Mutual. Its 2015 interim results beat consensus expectations at both the revenue and operating profit level, driven by ongoing market share gains. Under the “one other portal” rule on its rival’s site, it appears that customers are indeed opting to stay with Rightmove rather than use competitors such as Zoopla. This is borne out by statistics: Rightmove saw a 10% increase in UK residential property listings in the first half of 2015 to 1.1m (50% more than any other portal); the company’s share of traffic through to the top four UK property websites increased to 82% (from 77% a year ago); and it experienced record monthly website visits and page impressions over the half year (up 17% and 13% respectively from the first half of last year). Gamma Communications provides telecoms services to the UK business sector. It saw revenues increase 11% year-on-year in the first half of 2015 following growth in both its direct sales and those via channel partners. The company joined the AIM market in October of 2014 and highlighted the positive effect that its increased profile has had on direct sale contract wins, which included large customers such as Taylor Wimpey and MoneySupermarket. In November, the company released a full year trading update in which it upgraded its profit guidance on the basis of strong trading and also gave notice of a £5.5m exceptional gain it expects to book (as a result of higher-than-expected settlement payments from fixed line operators). Fund administration group Sanne was added to the Fund as part of its March 2015 Initial Public Offering (IPO). Shares in the company performed very strongly through the remainder of the year. Its maiden interim results as a listed company showed that revenues grew 26% to £21m in the first half of 2015 and, although it made an operating loss, this was the result of one-off IPO costs. On an adjusted basis, operating profit rose 49% to £6.2m. The company also displayed its confidence in its balance sheet and outlook through the announcement of an interim dividend of 1.4p per share. Interim results and a third quarter trading statement from Domino’s Pizza both gave compelling evidence of strong ongoing growth. The company’s online and physical distribution network gives it a big advantage over new entrants to the pizza delivery market. Not only does Domino’s dominate its market – with more delivery stores than Pizza Hut and Papa Johns combined – it is growing its network significantly, further entrenching its advantage; in the first nine months of 2015 it opened 33 stores in the UK, taking its domestic total to just shy of 850. In its existing stores, like-for-like sales growth of 15% in the third quarter was very encouraging, even allowing for a temporary boost from poor weather. In December the company also announced the initiation of a German Joint Venture into which it will transfer 15 of its 20 stores. It has a one-third stake in the JV which plans to acquire 212 ‘Joey’s Pizza’ stores for a consideration of €45m, rising to €79m if earn-out targets are met. Domino’s Pizza’s German store network was early in its development, and had to-date failed to yield the same impressive returns the company generates from its mature stores in the UK. This deal should immediately take the German network to critical mass. Software escrow and verification provider NCC Group announced strong results relating to the year to 31 May 2015. It grew revenue by 21% to £134m and stated that it had visibility on over £60m of next year’s revenue in the form of its order book and renewals. Shares in the company were further lifted by a trading update covering the first four months of its new financial year: revenues increased 48% year-on-year (+17% organically) and the company stated it was on course to meet its targets for the year to May 2016. The company also announced the proposed acquisition of Dutch cyber security company Fox-IT Holding for €133m. The deal strengthens NCC’s presence in Europe and adds a complementary client base which provides substantial cross-selling opportunities for NCC’s Software escrow and verification services. In December, NCC completed a placing and open offer which raised the majority of the purchase consideration.
Liontrust Global Funds plc 8 Annual report and audited Financial Statements
Liontrust GF Special Situations Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
The Fund (continued)
The worst performing portfolio holdings were: UK Mail (-45.0%), Weir Group (-44.4%), Aggreko (-37.9%), Rotork (-19.5%) and Smart Metering Systems (-15.7%).
A profit warning from UK Mail stated that this year’s profit before tax would be well below its previous expectations. The shortfall results from its investment in a new facility designed to use higher levels of automation in parcel handling, thereby increasing the efficiency of its operations and improving standards of service. It was overambitious with opening assumptions on parcel handling capacity, a mistake which was compounded by the business having to deal with increased parcel volumes as a result of CityLink going out of business last year. In November its shares took another leg lower after it said that the resolution of these operational challenges may take longer than it had originally thought, meaning that its expectations for next year “have softened slightly”. The oil price rout has had an impact on activity levels for Weir Group given its sizeable exposure to clients in the oil & gas industry. It cut its 2015 guidance in the first half of the year, but a trading update released in November stated that the challenges in its end markets had intensified in September and October. The company is cutting costs aggressively and still expects to meet revised consensus for full year earnings. The weak oil price environment also triggered a profit warning from temporary power provider Aggreko. It cited weakening volumes and pricing in its shale oil and offshore oil & gas businesses. It also believes that extensions to its power project contracts in Bangladesh will be completed on less favourable terms than it had previously expected. As a result, the company lowered its full year profit before tax guidance by around 10%. In December, Aggreko announced its decision to pull out of the bidding for the 2016 Olympics in Rio de Janeiro due to the organisers’ decision to award the power provision contracts in parts, but to exclude Aggreko from the first tranche. Rotork is an actuator manufacturer whose clients include companies in the oil & gas industry. It issued a profit warning in September, referring to challenging conditions in most of its markets which have resulted in project cancellation or deferrals. Although it is on track to deliver cost cuts highlighted at its interim stage, it does not expect this to offset the sales pressure and therefore reduced its full year operating profit guidance to 20% below last year’s level. Shares in Smart Metering Systems had enjoyed a strong run in 2014 but showed some signs of investor profit-taking at the start of 2015: solid updates from the company were met by a sliding share price. The company owns and manages gas and electricity meters on behalf of utility providers. Its revenues increased by 25% in organic terms in 2014, and by 40% including the impact of acquisitions. In the first half of 2015, it expanded its total gas meter portfolio by 9% to 661,000, boosted by strong growth from industrial and commercial clients. In 2014 it acquired Utility Partnership Limited and at the 2015 interim stage Smart Metering Systems stated that it was already seeing cross-selling benefits between the two client bases and product ranges.
Portfolio Changes
The only sales from the fund’s portfolio over the twelve months were the result of takeovers. Advanced Computer Software received a takeover bid in November 2014 and the deal completed in March 2015, triggering its exit from the portfolio. Domino Printing Sciences was the subject of an offer from Japan’s Brother Industries in March 2015 which its board recommended, and the deal completed in June 2015.
Three companies were added to the fund. We took part in the initial public offering of fund administrator Sanne Group onto AIM. The company has Economic Advantage characteristics through both a good distribution network and high recurring revenues (c.90%). We initiated a position in Sepura, a supplier of TETRA digital radios to customers including the military and emergency services which is increasingly expanding into commercial sectors which are not reliant on public sector budgets. We also added a holding in IMImobile, a provider of cloud-based software services, which is looking to use acquisitions to accelerate its growth.
Liontrust Global Funds plc 9 Annual report and audited Financial Statements
Liontrust GF Special Situations Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Outlook
Against a weak economic backdrop, our process continues to emphasis growth and ‘quality’ factors over ‘value’. In 2015 there was evidence that quality companies – those with high returns (on equity, or capital) and strong balance sheets or solvency – are back in favour. Following a sustained period of ultra-loose central bank policy stretching back to the Global Financial Crisis which has had a huge influence on asset prices, we would welcome any further reassertion of fundamentals on company valuations.
The state of the global economy remains fragile and we think that companies with good structural growth prospects and pricing power could now increasingly attract premium ratings at the expense of lower-quality companies that lack the ability to drive their businesses forward when external conditions are not benign. We believe the secret to successful long-term investing is to identify companies with a durable competitive advantage that allows them to defy industry competition and sustain high profit levels. We only invest in UK companies with distinctive, intangible strengths that competitors struggle to reproduce. In our experience, the hardest characteristics to replicate are three types of intangible asset: intellectual property (IP), strong distribution networks and significant recurring business (at least 70% of sales).
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 10 Annual report and audited Financial Statements
Liontrust GF Macro Equity Income Fund Investment Adviser’s report
For the year ended 31 December 2015
The investment objective of the GF Macro Equity Income Fund (“the Fund”) is to invest at least 85% of its assets in the UK-domiciled Liontrust Macro Equity Income Fund (“the Master Fund”), the investment objective of which is to provide unitholders with a rising level of income, together with capital growth over a medium to long-term investment horizon. In aiming to provide an above average level of income, particular attention will be paid to capital security and maintenance. There is no restriction on the economic sectors or geographical areas in which the Fund may invest, however, the investments will be predominantly in ordinary shares of UK companies.
Market Review
The FTSE All-Share returned 1.0% in the twelve months to 31 December 2015.
January provided a dramatic and volatile opening to 2015 as the late-2014 capitulation in crude oil aligned with record-low government bond yields to imply a gathering deflationary threat. Investors also struggled to digest the combination of the prospective outcome of the January European Central Bank (ECB) policy decision and the likelihood of a Syriza win in the Greek elections, with the accompanying risks for the eurozone. The ECB duly delivered the expected monetary stimulus in the form of quantitative easing, pledging an open-ended asset purchase programme of €60bn per month.
The ongoing Greek debt debacle failed to elicit any concrete sign of investor angst and UK markets also showed a remarkable lack of sensitivity to the prospect of a close election in May. Nor did they display much of a reaction when it became clear the Conservative party had claimed an unexpected majority. However, this indifference was only temporary and June saw significant equity market weakness as the Greek crisis intensified and bond market turbulence continued.
This was followed up by emphatic market losses in August. In search of pre-canned explanations, financial commentators latched upon China as the underlying cause of the market’s instability. Its devaluation of the renminbi, the largest in two decades, was seen as indicative of economic conditions that were grimmer than painted by official data and as the latest escalation in an incipient and toxically-deflationary currency war.
In the second half of 2015, investor attention was gripped by the prospect of decelerating Emerging Market growth and the inevitability of the US Federal Reserve’s interest rate Lift-Off. At its September meeting the Fed chose to defer policy tightening, stating that “recent global economic and financial developments” could “restrain economic activity” and exert “downward pressure on inflation”. However, in December it raised US interest rates for the first time since 2006.
Fund Review
In the twelve months to 31 December 2015 the Fund (C1 sterling share class) returned 4.0%.
In keeping with prevailing patterns of the post-global financial crisis (GFC) bull market, investor demand for equities seemed largely a function of inferred central bank bias. Nevertheless, the market environment was fairly benign for the portfolio’s thematic exposures.
In relative terms, the Master Fund found some protection from its underweights in mining and oil & gas sectors which bore the brunt of concerns over Chinese equity market volatility, economic growth rates and the knock-on effect on commodity prices. Some of this relative benefit was offset by our low exposure to some putatively defensive industries (e.g. tobacco, consumer staples) which were supported by investors searching for havens in the wake of August’s market capitulation. We also retained our longstanding zero weighting in the incumbent UK banks on account of their unresolved legacy issues; a decision which paid off due to the sector’s weak performance over the year.
Liontrust Global Funds plc 11 Annual report and audited Financial Statements Liontrust GF Macro Equity Income Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Fund Review (continued)
Portfolio returns have also been enhanced by a selection of our key thematic overweights with the large, long- established Global Healthcare and Global Telecoms positions making material positive contributions. The three active themes that sit within the financials sector – in combination with our banks underweight – led to a strong stock-picking return to the Master Fund from this area of the market. As well as avoiding incumbent banks being a core relative position, the Master Fund also has large absolute sector positions through (i) Challenger Banks, (ii) Asset Managers, Wealth Managers and Pension Providers, and (iii) Liquidity Migration (real estate and construction). The likes of Virgin Money, Shawbrook and Secure Trust Bank within Challenger Banks registered strong gains while the Master Fund’s top performing holding over the period was MoneySupermarket. Jupiter Fund Management was the next strongest holding, while other thematic constituents such as Standard Life and Legal & General also experienced share price rises. The unexpected conservative majority in May’s general election led to some strength in sectors such as construction/housebuilding (where portfolio exposure includes Galliford Try, Kier Group and Telford Homes) within the Liquidity Migration theme.
The main disappointments were stock specific rather than thematic in nature. For example, shares in Interior Services Group – a component of Liquidity Migration – had a fairly torrid time in the first quarter of 2015 after announcing provisions against underperforming contracts. At the end of the year, it released another profit warning which prompted us to exit the position. DX Group was another of the poorest performers. It issued a trading update in November which highlighted a range of concerns for investors, including volume declines and cost rises in its document delivery business and slow conversion of new business in its parcels division. The outcome is a 5% fall in revenues year-on-year and the company warned that profits would suffer a significant fall this year. The stock was part of a smaller theme designed to capture the migration in retail spending from the high street to online. However, DX Group has failed to execute on its growth strategy and we substantially reduced our position in the stock, completing the exit shortly after the period end.
Portfolio Changes
At the start of the review period, we viewed the outlook for the UK consumer as improving due to a return of real wage growth. We therefore initiated a new Leisure & Entertainment theme: the Master Fund already owned Merlin Entertainments, an operator of leisure attractions including Madame Tussauds, and we added to the theme with three new consumer-focused companies with strong brands: Cineworld, Restaurant Group (Frankie & Benny’s, Chiquito, Garfunkels) and Whitbread (Costa Coffee, Premier Inn and Beefeater). Towards the end of the year, we felt that the outlook for the theme was weakening slightly due to the bottom-line pressure implied by the National Living Wage and the elevated ratings which some of the constituents had risen to. We sold the positions in Restaurant Group and Merlin Entertainments. We also sold MoneySupermarket – one of the best performing and earliest constituents (as a proxy) within the Challenger Banks theme – in order to take advantage of a valuation we viewed as full.
The Challenger Banks exposure was increased through participation in the IPOs of Virgin Money, whose model offers scalability and the prospect of material growth from a low-base, and Shawbrook, which is free of the political, economic and operational taint that afflicts the incumbent UK banks while its small and medium-sized enterprise (SME) focus positions business to service a niche characterised by a post-global financial crisis credit dearth.
We added Aviva to the Asset Managers, Wealth Managers and Pension Providers theme. It is well positioned to benefit from the demographic imperative of an ageing populace with inadequate pension and savings provision. We also bought shares in Chesnara, a cash generative life insurer specialising in the consolidation and servicing of closed-life books.
PureTech Health was bought, in keeping with the Global Healthcare theme. The company is a healthcare IP commercialisation business possessing a portfolio of innovative, early stage healthcare businesses in unsatisfied treatment areas. Finally, we added a position in BG Group following the receipt of a bid from Royal Dutch Shell which we felt gave BG special situation utility with its shares trading at a 10% discount to the implied takeout price.
Liontrust Global Funds plc 12 Annual report and audited Financial Statements Liontrust GF Macro Equity Income Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Portfolio Changes (continued)
The following stocks were sold from the Master Fund’s portfolio: Ashmore (sold after repeat disappointments as ongoing US dollar strength created significant sentiment and operating headwind given its emerging market focus), BP (Rosneft exposure merited caution in a period of ongoing geopolitical tension), City of London Investment Group (rump position sold; poor track-record of AUM progression), Henderson Group (richly-rated versus its UK-quoted peer group with high prominence of performance fees making for less sustainable earnings), ISG (the December profit warning undermined credibility and cemented reputation as a business prone to disappointment), Old Mutual (share price strength was giving insufficient recognition to the earnings risk inherent in its South African/emerging market bias) and Roche (its earnings visibility has been impaired by the advent of biosimilar substitutes for its key cancer drugs)
The Macro-Themes
In this section we outline some of the most prominent themes currently active within the Master Fund. This list is not exhaustive; at any given time we tend to have a number of smaller themes within the portfolio, while many of the themes are also inter-connected.
- Global Healthcare: Investor appetite for pharma pipeline potential has been increasing, many companies have successfully negotiated the ‘patent cliff’ and the industry has shed its low risk ‘comfort blanket’ of consumer health and is once more focused on R&D of new and innovative pharmaceuticals. Following something of a ‘lost decade’ we think that there is the potential for a substantial rerating of the pharmaceuticals sector as it returns to its core activities. - Asset Managers, Wealth Managers and Life Insurers: It is well documented that the UK, along with most developed countries, is aging as healthcare innovations increase longevity and contraception curtails births. In recognition of this trend and the associated cost of providing for an expanding elderly cohort, both business and government have sought to mitigate their obligation by shifting responsibility to the individual. Savings and pensions providers have a fantastic opportunity to gather sticky, remunerative, long-term assets through product innovation and partnerships. - Challenger Banks: As the incumbents have retrenched and rebuilt in the post-GFC years, the challengers have been able to pick-and-choose the most profitable underserved niches to target. A number of our holdings have a bias towards SME (small & medium-sized enterprises) lending which has been a growth area. - Liquidity Migration: The central London property market stands at the confluence of several powerful macro trends, chief of them 'liquidity migration’ as institutional portfolios shift part of their fixed interest exposure to ‘real assets’ such as real estate, infrastructure, and equities. Capital values and rental growth in the commercial sector are underpinned by scarcity of supply and the significant lead times required for planning permission and construction. Cyclical factors are increasingly supportive, with the UK and European economies showing signs of life after several years of painful re-adjustment. - Global Telecoms: We believe that the sector is on the cusp of transitioning from ‘value’ to ‘growth’ and undergoing a material re-rating in the process. It is clear that a multi-play offering is key to enhancing customer loyalty and reducing churn rates. The growing importance of TV content has shifted the telecoms and media landscape from one of ‘triple-play’ in the noughties to ‘quad-play’ now. We take the view that this content push will be key in enabling operators to leverage unprecedented rates of data consumption and convert it to top line growth, which, we infer, will translate into increased operating cashflow and dividends. Whilst this has proven elusive for the best part of a decade, with many companies reliant on cost-cuts and acquisition synergies as the only means of augmenting free cash flow, we hold that genuine earnings growth will soon feed through - Avoiding Utilities: Our concerns over the political vulnerability inherent in renewables subsidies have proven well-founded, as subsidies for onshore wind farms were eliminated and a range of projects abandoned. - Avoiding Incumbent Banks: The incumbent banks are beset by sizeable legacy issues which, to our minds, underline the poverty of their prospects relative to their Challenger Bank counterparts. Politically, the government is seeking to reduce the systemic risk of the incumbents and sate the public’s hunger for credit-crunch recriminations. On a regulatory level, they are burdened by the imperative to rebuild capital buffers, so as to satisfy capital requirements. Operationally, they are hamstrung by ad hoc and creaking IT infrastructure that speaks more broadly of an outmoded and costly business model. We have a zero weighting in the UK large-cap high street banks sector and prefer to own a selection of smaller Challenger Banks, which we believe offer strong earnings growth based on modern technology platforms that permit scalability and tight cost control. Liontrust Global Funds plc 13 Annual report and audited Financial Statements Liontrust GF Macro Equity Income Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
The Macro-Themes (continued)
- Avoiding Tobacco: Tobacco is unique in being one of the only businesses where sales growth is inversely correlated with the longevity of its customers. Accordingly, developing markets are now following the lead of developed markets in legislating to curtail the industry’s activities and contain its manifold economic externalities, which include escalating healthcare costs. Volume growth is minimal and industry cash flow growth is, at present, predominantly a function of merger synergies and growth in pricing. But there is only limited scope for the former, whilst the acceptance of plain packaging as a necessity in protecting public health will remove a large chunk of brand value and pricing power with it. We also believe vaping is a false hope, with limited substitutability for smokers quitting cigarettes. The tobacco stocks are bond proxies in our view, which offer minimal prospects of dividend growth in the medium to long term.
Outlook
In terms of the economy, it seems safe to assume that monetary policy and the inferred trajectory of interest rates will continue to dominate the agenda. In keeping with the psychology of the post-crisis era, markets remain conditioned to respond to the tone and inflection of central bank narrative, as much as the substance of policy action. It is unlikely, as some have suggested, that this reaction function fails to persist in the wake of the Fed’s inaugural, December hike, as investors attention will simply shift to the inferred timing of subsequent hikes and the policy bias of other central banks. Correspondingly, the tenor of macro-economic data and reactive central bank commentary will continue to determine episodic short-term market volatility.
On several levels we think that 2016 will be defined by divergence. The dynamics behind emerging market (read China) slowdown and developed world recovery are well documented, as are the opposing directions of monetary policy in the US and eurozone. But we also view the prospects for different sectors of the market as currently more polarised than at any stage since the global financial crisis. There is likely to be considerable variation in performance across industries and markets and, as a result, we see both investment opportunities and dangers. For this reason, we do not think that ‘buying the market’ is a viable option, particularly for income investors.
That said, we continue to see opportunity where companies and sectors remain unimpaired by Macro-Thematic headwinds. We see value in equities relative to the alternatives and find empirical proof of our outlook in the gathering appetite for M&A transactions; 2015’s record global M&A volume ($4.68bn, Dealogic), connoting a broad impression of value and bearing no clear and consistent mechanical connection to any subsequent market top.
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 14 Annual report and audited Financial Statements Liontrust GF Global Income Fund Investment Adviser’s report
For the year ended 31 December 2015
The investment objective of the GF Global Income Fund (“the Fund”) is to invest at least 85% of its assets in the UK-domiciled Liontrust Global Income Fund (“the Master Fund”), the investment objective of which is to provide investors with a high level of income with capital values keeping pace with inflation over a medium to long-term investment horizon. The Master Fund invests primarily in listed securities of global companies and may also invest in transferable securities, money market instruments, warrants, cash and near cash and deposits. The Master Fund may also invest up to 10% of its property in units or shares in collective investment schemes and is permitted to use derivatives for efficient portfolio management and investment purposes.
Market Environment
The MSCI World Index total return in 2015 was 4.9%.
In January 2015, the European Central Bank (ECB) announced a larger than expected quantitative easing (QE) programme, which buoyed equity markets. It stated it would buy €60bn of assets a month from March 2015 until at least September 2016 and longer if necessary to affect a ‘sustained adjustment’ in inflation.
However, as the year progressed, global growth concerns mounted, resulting in market corrections of more than 5% (as measured by the MSCI World Index) in both June and August. Efforts by Chinese authorities to manipulate their domestic financial markets were one of the main sources of concern. In August, Chinese authorities effected a small depreciation of the yuan, which sparked concern that the economy may be weaker than official statements suggested. The subsequent weakness in Chinese markets was transmitted globally, resulting in a sell-off whose epicentre on 24 August was labelled ‘Black Monday’.
The outlook for monetary policy was once again the catalyst which allowed markets to recover from this wobble. The US Federal Reserve reacted to the market volatility by postponing its much-anticipated rate hike – the first in nine years – from September to December, while ECB President Mario Draghi stated that it stood ready to adjust the “size, duration and composition” of QE and that the programme would be re-examined at its December meeting. It subsequently announced a cut to interest rates and a six month extension of the programme to at least March 2017.
The prospect of monetary policy divergence led to some marked currency moves over the year, particularly during the second half. The expectation of tightening in US and loosening in Europe in December – as well as indications from the Bank of England that it may keep rates low for some time – led to strength in the US dollar relative to both the euro and sterling. The US dollar appreciated more than 6% against sterling in the second half of the year.
With the Chinese economy slowing, and the outlook for other emerging markets affected by the prospect of higher US interest rates, commodity prices weakened over the course of 2015. The oil price fell 30%, reflecting a combination of this softening demand outlook and high supply – in December Opec failed to reach agreement to cooperate on output. The Energy (-18.0% in sterling terms) and Materials (-10.0%) sectors were by far the weakest in the MSCI World Index.
Analysis of portfolio return
The GF Global Income Fund’s sterling C1 share class returned -5.6% compared with the 1.5% average return from funds in the IA Global Equity Income sector.
The underperformance predominantly derives from two factors: the Master Fund’s low US exposure and the weaker investment returns from high yield strategies over the period.
The US market has been largely excluded from our investment opportunity set owing to its high valuation and lack of companies with the cash flow characteristics we seek in order to provide the requisite yield for the Master Fund. At over 5% the dividend yield of the Master Fund is at the very high end of the range of yields on offer from peer funds in the sector. On through-the-cycle measures, the US has been one of the most expensive markets in the world over the last few years. However, the US market comprises c.59% of the MSCI World Index (as at 31 December 2015) and performed strongly in 2015, boosted by the appreciation of the dollar. In 2015, the MSCI USA index returned 6.5% in sterling terms, outperforming the MSCI World-ex US index by 4%. We believe that several competitor funds in the IA sector have been able to benefit from this US strength due to their lower yield targets.
Liontrust Global Funds plc 15 Annual report and audited Financial Statements Liontrust GF Global Income Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Analysis of portfolio return (continued)
The Master Fund’s high yield requirement in itself has presented a relative performance challenge given investors’ preference for lower yielding strategies over the year. In 2015, the MSCI ACWI High Dividend Yield Index returned only 0.1% in sterling terms. To place this performance in further perspective it should be remembered that the MSCI ACWI High Dividend Yield Index offers a gross yield of 4.1% (as at 31 December 2015) relative to the Master Fund’s historic yield of c.5.5% (as at 31 December 2015).
It is clear that in the short term the high yield of the Master Fund has held back its capital performance. However, it should be remembered that in the medium to longer term a high yield strategy has a twofold benefit. Firstly, unitholders are able to enjoy a significant yield relative to peer funds in an environment of low interest rates. Secondly, the high yield obliges us to seek investment opportunities in regions that offer the most attractive valuations. Reviewing the empirical evidence it is clear that valuations have a strong influence on market returns over the medium to long term. Valuations are a poor short term predictor of regional performance but an excellent long term predictor. Unitholders therefore benefit from exposure to markets that offer the best value and, in our opinion, the best medium to long term return potential.
Of the Master Fund’s holdings, the biggest individual detractors from performance were all affected by the commodity market rout: Fred Olsen Energy (-55.3%), Potash Corporation of Saskatchewan (-46.0%) and BHP Billiton (-36.9%).
The best stock contributions came from Micro Focus International (+53.3%), SATS (+30.5%) and Sky (+28.0%). Software provider Micro Focus International completed a merger with TAG in November 2014 and in its interim results for the six months to 31 October 2015 revealed that revenues and profits were at the top end of management expectations, driven by the realisation of substantial integration cost synergies. SATS, formerly Singapore Airport Terminal Services, recorded interims in which good cost control allowed it to record a 22% rise in earnings per share, and the company’s shares also benefited from their addition to Singapore’s Straits Times Index. Sky was able to maintain its dominant position during the latest Premier League football rights auction, despite a significant increase in the price bid, and full year results announced in July beat consensus expectations after it added almost a million customers, up 45% on the previous year.
Portfolio Activity
There were a number of changes to Master Fund’s portfolio of holdings in 2015 following the yearly review of companies’ annual report and accounts. Prior to this year, the Master Fund’s UK weighting had fallen to 45% from around 74% when it joined the IA Global Equity Income sector in August 2013. During 2015, the UK weighting was further reduced to 28%, reflecting the Master Fund’s transition to a global universe.
The Master Fund’s cash flow screens, together with its strict yield requirement, create natural geographic and sector biases. With scarce high yield opportunities in North America, the Master Fund’s exposure to this region, as expected, remains low. However, it has increased modestly (from c.8% to c.14%) following the addition of two new holdings in Canada – Chorus Aviation and Potash Corporation of Saskatchewan – and two in the US, Las Vegas Sands and National CineMedia. We have also added significantly to Asian exposure during 2015 and this now stands at c.18%.
The portfolio continues to have substantial weightings to the consumer discretionary and telecoms sectors as both scored well on our cash flow screens. The financials exposure remains high, reflecting holdings in asset management, insurance and real estate. The Master Fund owns only one bank (Banque Cantonale Vaudois) as very few qualified for the top quintile of our global high yield cash flow screen due to the continuing challenges in some business segments and the onerous regulatory capital backdrop.
The weighting in the energy and basic materials sectors has increased. The share prices of companies in these sectors have been penalised significantly in many cases due to weakness in commodity prices. However, we have found that – even at these lower commodity price levels – many of these companies still have significant ability to generate free cash flow. When combined with share price falls this means that there are opportunities to invest in companies with attractive dividends.
Liontrust Global Funds plc 16 Annual report and audited Financial Statements Liontrust GF Global Income Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Portfolio Activity (continued)
The Master Fund’s new holdings consist of: BP, Rio Tinto and Michael Page (UK); Banque Cantonale Vaudois and Swiss Re (Switzerland); Chunghwa Telecom, Cleanaway and Pegatron (Taiwan); Giordano International and Man Wah Holdings (Hong Kong); Las Vegas Sands and National CineMedia (US); Potash Corp of Saskatchewan and Chorus Aviation (Canada); Munich Re (Germany); M6 Metropole (France); JB Hi-Fi (Australia); Gjensidige Forsikring (Norway); SATS (Singapore); and Severstal (Russia). Three REITS were also added: Champion, Fortune (both Hong Kong) and Mapletree (Singapore).
The following positions were sold: AstraZeneca, Go-Ahead Group, GlaxoSmithKline and Vodafone (UK); Banco Santander and Enagas (Spain); and Orange (France). The position in the US REIT Hatteras Financial was also disposed of.
Outlook
One of the natural biases of the strict yield and cash flow requirements that we apply to the Master Fund is that we must invest in regions that offer the most attractive long-term valuations. This has meant that the Master Fund – which yields over 5% - has not fully participated in the ongoing rally in the US, a market that has for some time looked stretched on the valuation measures we employ.
Investment styles go through clear cycles of performance and whilst in the short term we are frustrated with the Fund’s returns, we are comfortable that the bias of the portfolio to companies with strong cash flows generating high yields and to some of the cheapest regions of the globe should ultimately prove very rewarding.
Our analysis of the long-term evidence suggests that high yield strategies have a tendency to mean revert after a period of underperformance. It is also worthwhile noting that analysis of historical returns to a high yield investment strategy in differing Federal Reserve rate environments shows that relative returns have been best in falling and rising rate backdrops and weakest in a flat rate environment. Following seven years of a flat US interest rate and the December 2015 rise, a more positive backdrop for a high yield strategy may be beginning to emerge.
At the time of writing, global equity markets have entered a downtrend. The contrarian value high yield bias of the fund should help relative performance in a more challenging stock market environment. The Master Fund’s limited exposure to the US should also help as other regions such as Europe appear more reasonably valued. We monitor valuation dispersion closely. While this generally remains quite narrow to neutral for global developed markets, dispersion is now very wide in the energy and materials sectors, suggesting potential attractive value opportunities. The Master Fund is overweight in both these sectors relative to the MSCI World index.
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 17 Annual report and audited Financial Statements Liontrust GF UK Growth Fund Investment Adviser’s report
For the year ended 31 December 2015
The investment objective of the GF UK Growth Fund (“the Fund”) is to invest at least 85% of its assets in the UK- domiciled Liontrust UK Growth Fund (“the Master Fund”), the investment objective of which is to provide long- term capital growth through a portfolio of mainly United Kingdom equities but with the option of investing part of the portfolio overseas. Although the Master Fund may invest in all economic sectors in all parts of the world, it is intended that it will currently invest primarily in securities in companies listed on the International Stock Exchange of the UK and Ireland. The Master Fund may also invest in shares issued by companies incorporated in any European Economic Area (EEA) Member State other than the UK which are listed on a recognised stock exchange of an EEA Member State.
The Market
The UK market rallied strongly at the start of the year, rising to an all-time high in April before giving up ground throughout the rest of the year. While the FTSE All Share lost 89 points over the year to finish at 3,444, the impact of dividends boosted its total return to 1.0%.
One of the catalysts for the strong start to the year was the European Central Bank’s (ECB) January announcement that it would begin a Quantitative Easing programme in March. The scale of intended purchases was larger than expected at €60bn/month until at least September 2016. This stoked sentiment and gave equity markets impetus which outweighed the nervousness resulting from the election victory for Greek anti-austerity party Syriza and the subsequent negotiations over the country’s debt bailout conditions. On 27 April 2015, the FTSE All-Share and FTSE 100 indices reached respective all-time highs of 3,834 and 7,103.
As the year progressed, concerns regarding China’s economic slowdown began to mount, and culminated with a spike in volatility and a correction in global equity markets in August, which included a large fall on the 24th – referred to as ‘Black Monday’. In addition, speculation was rife concerning the timing of the first US interest rate increase in several years, which had a negative impact on sentiment towards investment in emerging markets given their perceived reliance on cheap dollar funding. Worries over the global economic growth outlook translated to large price falls for many commodities in 2015: the oil price, for example, slid by around 30%.
Uncertainty over the global economy appeared to contribute to the US Federal Reserve’s (‘the Fed’) decision in September to delay raising interest rates. Meanwhile, ECB president Mario Draghi hinted heavily that European stimulus measures would be increased at the December meeting. Both central banks adjusted policy in December: the ECB’s actions (extending QE until at least March 2017 and cutting rates by 10bps) were less aggressive than many had hoped for and equity markets eased off; but the Fed’s rate rise later in the month (to a 0.25%-0.50% range) was not accompanied by overly hawkish language, prompting a recovery in the market’s level.
The Fund
The Fund returned 8.2% (C1 share class) in the twelve months to 31 December 2015 outperforming the 1.0% FTSE All-Share Index return and the 4.9% average return from funds in the IA UK All Companies sector.
At the interim stage we reported that the Fund had returned 6.3% in the six months to 30 June 2015, outperforming the 3.0% index return; in the second half of the year the Fund outperformed a falling market, returning 1.7% against -2.0% for the index.
As bottom-up stockpickers, we would primarily look to individual stock selection to explain this outperformance. Simply put, in 2015 we picked more winners than losers in the Master Fund by a ratio of 2:1; 33 stocks beat the benchmark return, while just 15 lagged.
Furthermore, our winners were bigger winners than our losers were losers: our top-performer, Rightmove, rose 86% whereas our worst-performer, Amec Foster Wheeler, fell by 46%. Altogether, 10 stocks rose by more than 30% with five of these achieving gains of 50% or more, whereas only four fell by more than 30%.
Liontrust Global Funds plc 18 Annual report and audited Financial Statements Liontrust GF UK Growth Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
The Fund (continued)
Rightmove is a great example of a stock where our conviction in the strength of its barriers to competition has been rewarded in the face of investor nervousness. The evidence so far suggests that Rightmove’s market leading position has not been dented, and may even have been bolstered by the early-2015 launch of OnTheMarket, the website owned by Agents’ Mutual. Its 2015 interim results beat consensus expectations at both the revenue and operating profit level, driven by ongoing market share gains. Under the “one other portal” rule on its rival’s site, it appears that customers are indeed opting to stay with Rightmove rather than use competitors such as Zoopla. This is borne out by statistics: Rightmove saw a 10% increase in UK residential property listings in the first half of 2015 to 1.1m (50% more than any other portal); the company’s share of traffic through to the top four UK property websites increased to 82% (from 77% a year ago); and it experienced record monthly website visits and page impressions over the half year (up 17% and 13% respectively from the first half of last year).
A further factor explaining the Master Fund’s good performance is that ‘quality’ as a style factor – companies with high returns (on equity, or capital) and strong balance sheets or solvency – is back in favour and performing well again. Since adopting the ‘Economic Advantage’ process in 2009, the Master Fund has consistently exhibited a tilt towards quality, reflecting the underlying elements of the investment process.
A final factor in explaining the outperformance is the Master Fund’s underweight position in the very largest stockmarket companies (c.-23%) – combined with strong stock selection of those large-caps that it does own – and overweight positioning in midcaps and smaller companies (c.+11% each): during 2015 the FTSE100 fell by 1.3% whilst the FTSE 250 Index rose by 11.2% and the FTSE Smallcap (ex IT) index rose by 13%.
The Master Fund’s lack of exposure to the mining sector was beneficial in relative terms as it fell 45.7% in 2015. Stock selection within financials was another area where value was added. We hold no banks, and the sector lost 9.2%. Stocks the portfolio owns within the financial services sub-sector – including Hargreaves Lansdown (+53.4%), Brooks Macdonald (+49.8%), Tullett Prebon (+37.9%) and ICAP (+18.4%) made a solid positive contribution. In November, inter-dealer brokers ICAP and Tullett Prebon announced a planned combination of their businesses
Aside from the aforementioned stocks the portfolio’s strongest performing holdings included Next Fifteen Communications (+65.4%), Domino’s Pizza Group (+53.6%), EMIS Group (+33.8%) and WH Smith (+34.7%).
The portfolio’s weakest holdings – Amec Foster Wheeler (-46.0%), Weir Group (-44.4%), Aggreko (-37.9%) and Rotork (-19.5%) – are linked by their varying degrees of exposure to oil & gas or basic materials (largely mining), the two worst-performing industry sectors of 2015 with returns of -17% and -39% respectively.
Compared with the FTSE All-Share Index, the Master Fund is modestly overweight in the oil & gas sector. However, good stock selection – including outperformance from Petrofac (+18.5%), Wood Group (+6.1%) and BG Group (+16.0%) – more than offset this overweight position in a weak sector, such that the Master Fund’s exposure actually made a net positive contribution to relative performance. Similarly the losses from Weir Group, Aggreko and Rotork, companies which all sit within the Industrials sector, were more than offset by other holdings within the sector such that this too generated an overall positive contribution.
Portfolio Changes
The only changes to the portfolio in 2015 were the result of takeovers of Master Fund holdings. Advanced Computer Software received a takeover bid in November 2014 and the deal completed in March 2015, triggering its exit from the portfolio. Domino Printing Sciences was the subject of an offer from Japan’s Brother Industries in March 2015 which its board recommended, and the deal completed in June 2015.
Liontrust Global Funds plc 19 Annual report and audited Financial Statements Liontrust GF UK Growth Fund Investment Adviser’s report (continued)
For the year ended 31 December 2015
Outlook
The main headwinds to performance for UK equities are increasing geopolitical tensions and low levels of global growth, particularly now that interest rates in the U.S have started to rise. Despite the apparent recovery in profits and earnings since 2012/13, [cash flow] returns on capital have continued to fall inexorably.
The main tailwinds to performance for the Fund remain the fact that – perhaps because of this environment – ‘quality’ as an investment style appears to be back in favour. We believe that our distinctive ‘Economic Advantage’ investment process should cope well with a difficult macroeconomic environment. Companies with strong barriers to competition should retain pricing power for their products and services. As 2015 demonstrated, however difficult the general economic backdrop, there are always individual companies which are able to buck the trend.
We believe the secret to successful long-term investing is to identify companies with a durable competitive advantage that allows them to defy industry competition and sustain high profit levels. We only invest in UK companies with distinctive, intangible strengths that competitors struggle to reproduce. In our experience, the hardest characteristics to replicate are three types of intangible asset: intellectual property (IP), strong distribution networks and significant recurring business (at least 70% of sales).
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 20 Annual report and audited Financial Statements Liontrust GF Asia Income Fund Investment Adviser’s report
For the period 15 May 2015 to 31 December 2015
The Liontrust GF Asia Income Fund B4 share class returned -16.0% in US dollar terms between its launch on 23 June 2015 and 31 December 2015. The A1 share class returned -15.7% in euro terms between its launch on 14 May 2015 and 31 December 2015.
The review period was tumultuous and characterised by significant equity market divergence between developed markets (MSCI World Index returned -6.8% in US dollar terms between 14 May and 31 December) and emerging markets (MSCI Emerging Markets Index returned -21.9% ). The performance of emerging market equities was exacerbated by weak currencies, collapsing commodity prices and – in the case of Brazil, where the real fell by 24% against the US dollar – a corruption scandal involving state-owned Petrobras, which paralysed spending and deepened the recession. In the face of such turmoil, Asia Pacific equities fared relatively well: the MSCI Asia Pacific ex Japan index returned -17.0% in US dollar terms while the MSCI Asia ex Japan index returned -17.7%.
While not wilfully ignoring the rest of the region, we primarily address Chinese events here as – alongside the prospect of rising US interest rates – these were among prominent global concerns. International attention is accentuated by our naturally high interest in the country due to the Fund’s significant exposure to equities in China and Hong Kong (c.40%+ of the portfolio). China saw three major individual, although connected, events: decelerating growth; the Chinese government initiating a cack-handed attempt to determine stock-market levels; and the government then shifting its currency policy.
We will address each of these in turn, starting with the economic deceleration. Some data points disappointed relative to expectations, but, due to the economic rebalancing that is occurring, growth proxies that were used in more industrial times are now not necessarily as significant. If we look at more service-oriented data, there are signs of ongoing growth. Beyond this, there is government stimulus in infrastructure development, the housing market, bank lending, and interest rate and reserve ratio cuts. We continue to think that the area of most significant impact on economic growth will be infrastructure spending, and it is this which we monitor closely moving into 2016. Overall we think that this slowdown is a necessary part of the rebalancing process, necessary for more sustainable, long-term growth.
The Chinese government’s misguided market interventions came in a number of forms – encouraging stock market investment, creating funds to invest in equities, diverting government funds to support markets, attacking short-sellers legally and verbally, and allowing companies to suspend their shares. It did not succeed in quelling market volatility and, more significantly, it reduced our longer term confidence in the government. However, while we disapprove of the interventions, they should be viewed in the context of what has happened over the prior three years. Over that period, China has done a very good job of managing its economic transition while trying to make complex interwoven changes. The fact that this appears to have been only the first serious policy error was a remarkable achievement. As the process continues there must be more, and we will have to monitor their impact, but so far we see this as a step back rather than a change of direction.
The most important influence on markets was the ongoing impact of China’s unexpected August change in currency policy. We believe initial depreciation of the yuan against the US dollar was primarily designed to appease the IMF and in itself is of minimal importance - the yuan actually appreciated against most Asian currencies in 2015. Of far greater significance is the depletion of China’s foreign reserves. This has accelerated recently: of the US$513bn outflow in 2015, US$183bn came in Q4 and US$108bn in December alone. For us to remain positive on China such flows must decelerate again. We believe this will happen, with outflows slowing, and the yuan settling at a lower level – perhaps 10% weaker by the end of 2016.
If, however, outflows tend to be more aggressive and speculative, and China’s attempts to tighten its grip on the closed capital account fail, then we would see this as a significant negative and would reassess our positive investment view for China. Currently, with US$3.3tn of reserves remaining, and valuations of the HSCEI at 6.5x forward PE (effectively already at crisis levels), we do not think it is time to throw in the towel. Instead we retain our view that the companies we own, more reflective of the services part of the Chinese economy which continues to grow strongly, should give investors both dividends and longer term capital growth. Opportunity remains greater than risk.
Liontrust Global Funds plc 21 Annual report and audited Financial Statements Liontrust GF Asia Income Fund Investment Adviser’s report (continued)
For the period 15 May 2015 to 31 December 2015
The rest of the region continues along the same path as before. Low commodity prices hurt some (Australia, Malaysia and Indonesia), but with low inflation and the ability to lower rates further the overall impact to the region should be positive. We prefer companies more exposed to domestic demand, and our overall exposure remains skewed towards consumption stocks. Our three main countries of exposure in South East Asia have individual economic strengths – Singapore through financial services, Thailand with tourism and the Philippines with its business process outsourcing and trade-related services. Domestic demand is likely to remain the main driver for growth in these economies in a weak global environment (particularly with slowing import demand from China) but will require support from ongoing policy reforms, stimulus or public spending. Even in the face of rising US rates, Asia Pacific governments retain the ability to further loosen monetary policy. China led the region with 6 rate cuts since November 2014 totalling 1.65%. All other countries (bar Singapore which instead has widened its currency trading band, and Hong Kong) have also lowered rates.
The one country where there may be some impact from the rise in US$ rates is Hong Kong, with its pegged currency. Following the US, the Hong Kong Monetary Authority has already raised its base rate by 25bp to 0.75%, which appears to be leading to a fall in housing prices. Although we have a significant exposure to Hong Kong-listed companies, these are Chinese companies that have listed there and our exposure to the companies functioning in Hong Kong itself remains minimal.
Over the review period, changes to the fund’s portfolio of holdings were modest. As valuations contracted to very appealing levels during the market turmoil, we found ourselves very positive on Chinese exposure, albeit only in certain specific areas. We added to a couple of our preferred holdings, but with almost 40% of the portfolio already in Hong Kong and China did not want to be overly aggressive.
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 22 Annual report and audited Financial Statements Liontrust GF Global Strategic Equity Fund Investment Adviser’s report
For the period 16 July 2015 to 31 December 2015
From its launch through to 31 December 2015, the Liontrust GF Global Strategic Equity Fund institutional B5 share class returned -7.5% in US dollar terms and the B4 retail class -7.7%. This compares with the -14.9% and -5.9% returns from the MSCI Emerging Markets Index and MSCI World Index respectively.
The fund’s launch coincided with significant volatility in global equity markets, which was amplified within emerging markets in particular, due to fears of a Chinese crash. Emerging markets as an asset class are prone to suffering from periodic bouts of risk-aversion as investors liquidate positions at short notice and repatriate assets. During these periods, correlations rise, fundamentals take a back seat, and investors sell the asset class indiscriminately. The weeks following the fund launch were one such period and we responded by swiftly reducing the 55% net long position at launch to a more cautious stance. This move proved timely, given the increasingly challenging environment for emerging market equities that subsequently developed. We then further reduced the net exposure to a low of 10% in August, in response to the bout of renminbi weakness that the Chinese authorities now seemed to be tolerating, following years of steady appreciation. A weak renminbi is deflationary for the rest of the world which is already heavily burdened by high debt, the relative size of which grows as nominal GDP falls.
However, we then increased the net exposure back up to 60% as sentiment towards emerging market equities started to hit extreme negative readings, suggesting the asset class was nearing capitulation. With investor positioning at extreme negatives, yet Chinese growth stabilising and companies in our long book delivering strong earnings growth at very attractive valuations, it was time to put some risk back on. Subsequent market moves showed the decision to increase exposure to be a little premature. However, we continue to maintain a substantial net long as we see pockets of extreme value within our investment universe.
In a weak and volatile market, the fund’s short book was unsurprisingly a source of positive performance for the portfolio. The biggest individual contributor from the short book was a position in a Taiwanese semiconductor manufacturer which has suffered from a change in the competitive structure of the smartphone application processor market. It went from a previously high-margin oligopolistic structure to a more mature landscape, with several competitors. More broadly, the weakness in the commodities complex provided a tailwind for our short positions in energy and coal.
In the long book, a position in Chinese internet search engine Baidu was one of the success stories. The company revealed a significant planned investment into the competitive ‘online to offline’ (O2O) market, which was initially greeted with apprehension by investors. However, we viewed this negative reaction as a classic case of investor myopia, which we could exploit. Baidu’s core internet search business remains resilient to macro weakness and the company operates a near monopoly in mobile search, enabling it to deliver strong top-line growth and generate significant free cash flow. The deployment of this capital to O2O has huge potential return, even if in the short term earnings may come under pressure. Investors initially focused on the short term hit to earnings and let the stock trade down to a steep discount to the value of its high quality search business. We bought the stock and subsequently benefitted from a significant recovery in Baidu’s share price in the fourth quarter of 2015.
One of the hardest hit areas was our long energy exposure – particularly LNG-related stocks such as Golar. We firmly believe that this stock has been unfairly caught up in the energy malaise and unduly punished by fast money. The disruptive power of Golar’s Floating Liquefied Natural Gas (FLNG) technology is huge, and the stock remains one of the highest conviction positions in our long book. We are willing to tolerate short term volatility in the stock given the extremely attractive risk/reward profile of potentially multiple returns, which should be to the portfolio’s benefit as energy markets recover and dispersion picks up again.
Outlook
We currently hold a positive tactical view on emerging market equities based on attractive valuations, depressed sentiment towards the asset class and improving economic momentum, which in turn is driven by stabilisation in Chinese growth. Low valuations and lack of investor appetite towards the asset class in recent years is not a new story. However, the fact that the EM Economic Surprise Index turned positive in November, and that this trend continued in December without EM stock prices following suit, signals major dislocation.
Liontrust Global Funds plc 23 Annual report and audited Financial Statements Liontrust GF Global Strategic Equity Fund Investment Adviser’s report (continued)
For the period 16 July 2015 to 31 December 2015
Outlook (continued)
A large contributory factor behind the stabilisation of economic indicators has been China, where Industrial Production, Fixed Asset Investment and Retail Sales are all pointing towards a reacceleration in 4Q vs. 3Q GDP.
We acknowledge that US monetary policy is likely to drive increased dispersion in equity market returns over the initial months of 2016. Many emerging market economies have accumulated sizeable imbalances over the past decade, including high current, capital and fiscal account deficits, as well as rapid growth in financial leverage. However, emerging market economies are not a homogeneous asset class and it is odd that countries of very diverse political, cultural and geographic roots are treated as one. It is for this reason that we think a long/short structure is the ideal vehicle to exploit the multi-faceted dynamics of change in emerging markets.
We are currently constructive on China, India, Indonesia, and Korea:
- Economic growth in China will likely face persistent downward pressure going into 2016, but the ability to stimulate the economy through fiscal and monetary measures is significant. The intention to use both was very clearly communicated at the Central Economic Working Conference in late December. The portfolio is well positioned to benefit from Chinese monetary support with exposure to a number of interest rate sensitive names. - The current account deficit in India has already narrowed from a high of c.5% GDP in late 2012 to 1.1% in 3Q15, thanks partly to lower oil prices, but also due to structural reforms around fuel subsidies, FDI and taxes. - In Indonesia, the current account remains high at c.2% GDP and is set to widen as government-led infrastructure investment picks up. However, a series of reform packages has been unveiled after a cabinet re-shuffle in August, aimed at improving tax collection, subsidy reduction, attracting tourism, and thereby reducing the reliance on foreign capital. - Korean economic growth is also likely to remain sluggish for the time being due to the country’s reliance on global trade, but envious of formerly sleepy Japanese rivals now gaining back export market share, corporate reforms are now being implemented in Korea by the Ministry of Strategy and Finance (MOSF).
We continue to avoid or actively short Turkey, South Africa, Brazil and Thailand.
- Turkey suffers from a combination of high current account deficit at c.5% GDP, low national savings and an utter lack of willingness to reform the economy. Following the re-election of Recep Tayyip Erdogan’s Justice and Development (AK) Party in November, reform is now even less likely. The repatriation of money back into the US in response to rising interest rates will therefore put Turkey in a vulnerable position due to its heavy reliance on foreign capital flows. - The same goes for South Africa, where reliance on external funding is also high. The current account deficit is at c.4% GDP, pay and perks for civil servants keep going up, and President Zuma’s scandalous ANC rule is likely to remain in place until elections in 2019. Although the political and economic landscape in both countries is sufficiently dire to keep us away from these markets, valuations are distressed enough to stop us from initiating short positions at the current time. - This is not the case in Thailand, where an ageing population with a fertility rate of 1.4 has been living beyond its means on borrowed money, whilst the country’s economic competitiveness has been gradually eroding (especially in autos and HDDs), and the price of its commodity exports (rubber, rice) has fallen. We have been short this market via both the index and single stock consumer names where the headwinds of slowdown are likely to be the greatest. - Our stance on Brazil has been ranging from neutral to net short. Whilst the economy is likely to deteriorate further amidst continuing political uncertainty, the market is both cheap and widely hated by investors. Deep-rooted reforms of pensions and welfare would be needed to help reduce the c.10% fiscal deficit, but are unlikely to take place under the current coalition government of Ms Dilma Rousseff. Her party is currently mired in a bribery scandal and she is facing impeachment proceedings in Congress.
Liontrust Investment Partners LLP February 2016
Liontrust Global Funds plc 24 Annual report and audited Financial Statements Report of the Directors For the year ended 31 December 2015
The Directors of Liontrust Global Funds plc (the “Company”) have pleasure in presenting the Annual Report and audited Financial Statements of the Company for the year ended 31 December 2015.
Statement of Directors' responsibilities The Directors’ are responsible for preparing the Directors’ report and the financial statements in accordance with the Companies Act, 2014 and the applicable regulations.
Irish company law requires the Directors to prepare financial statements for each financial year. Under the law, the Directors have elected to prepare the financial statements in accordance with Financial Reporting Standard 102 (“FRS 102”), the Financial Reporting Standard applicable in the UK and Republic of Ireland issued by the Financial Reporting Council and published by the Institute of Chartered Accountants in Ireland. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Company as at the financial year end date and of the profit or loss of the Company for the financial year and otherwise comply with the Companies Act, 2014.
In preparing those financial statements, the Directors are required to
select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether the financial statements have been prepared in accordance with the applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and prepare the Financials Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors confirm that they have complied with the above requirements in preparing the Financial Statements.
The Directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements are prepared in accordance with generally accepted accounting practice in Ireland and comply with the Companies Act, 2014 and with the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (“the UCITS Regulations”) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48 (1)) (Undertakings for Collective Investment in Transferrable Securities) Regulations 2015 (the “Central Bank UCITS Regulations”) and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the Company and in fulfilment of this responsibility, they have entrusted the assets of the Company to a Custodian for safekeeping in accordance with the Memorandum and Articles of Association. The Directors are responsible to correctly record and explain the transactions of the company. The Directors are responsible for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Basis of presentation The format and certain wording of the Financial Statements has been adapted from those contained in the Companies Act, 2014, to one that, in the opinion of the Directors, more appropriately reflects the nature of the Company’s business as an investment fund.
Review of business and future developments The Liontrust GF Asia Income Fund was launched on 15 May 2015.
The Liontrust GF Global Strategic Equity Fund was launched on 16 July 2015.
Liontrust Global Funds plc 25 Annual report and audited Financial Statements Report of the Directors (continued) For the year ended 31 December 2015
Review of business and future developments (continued) A new prospectus was issued on 15 July 2015. The following changes were made to the prospectus:
A change in language for the operating expenses cap. Reference to the closure of subscriptions on Liontrust GF Pan European fund. An update on the calculation of the NAV from 2 to 4 decimal places. A correction to the initial offer period on the GF Global Income fund which stated January 2014 which should have been January 2015. A reference added to clarify that any charges incurred in making telegraphic transfers to pay redemptions to shareholders will be payable by the Shareholder.
Please refer to the Investment Adviser’s report for more information.
Risk management objectives and policies The principal risks and uncertainties faced by the Company are the investment risks associated with the portfolio of investments held for the account of each Sub-fund and the operational risks associated with their management and administration. Further information on risk is included in note 7.
Directors’ statement on accounting records The measures taken by Directors to secure compliance with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to the keeping of accounting records are the use of appropriate systems and procedures and employment of competent persons. The accounting records of the Company are maintained by Northern Trust International Fund Administration Services (Ireland) Limited, at Georges Court, 54-62 Townsend Street, Dublin 2, Ireland.
Directors’ Interests in shares of the company No Director, nor the Company Secretary, had any beneficial interest in the shares of the Company throughout the year, other than those set out in Note 9 to the Financial Statements.
Transactions involving Directors There were no contracts or agreements of any significance in relation to the business of the Company in which the Directors had any interest as defined in the Companies Act 2014 at any time during the year, other than those set out in Note 9 to the Financial Statements.
Revenue The results of operations for the year ended 31 December 2015 are set out in the Profit and Loss Account.
Distributions There were distributions declared on the Liontrust GF Global Strategic Bond Fund, Liontrust GF Macro Equity Income Fund, Liontrust GF Global Income Fund, Liontrust GF UK Growth Fund and Liontrust GF Asia Income Fund during the year. Please refer to Note 16. There were no distributions declared during the year on any of the other Sub-funds.
Independent auditors The independent auditors, PricewaterhouseCoopers, have indicated their willingness to continue in office in accordance with Section 283 (2) of the Companies Act, 2014.
Directors There were no appointments or resignations during the year. The Directors of the Company at 31 December 2015 are stated on page 113.
Liontrust Global Funds plc 26 Annual report and audited Financial Statements Report of the Directors (continued) For the year ended 31 December 2015
Connected Persons Any transaction carried out with a UCITS by a management company or depositary to the UCITS, the delegates or sub-delegates of the management company or depositary, and any associated or group of such a management company, depositary, delegate or sub-delegate (“connected persons”) must be carried out as if negotiated at arm’s length. Transactions must be in the best interests of the shareholders.
The board of directors are satisfied that there are arrangements (evidenced by written procedures) in place, to ensure that the obligations set out in Regulation 41(1) of the Central Bank UCITS Regulations are applied to all transactions with connected persons, and are satisfied that transactions with connected persons entered into during the year complied with the obligations set out in Regulation 41(1) of the Central Bank UCITS Regulations.
Subsequent events The Liontrust GF Global Water and Agriculture Fund launched on 27 January 2016.
The Liontrust GF Global Strategic Bond Fund terminated on 29 January 2016.
There have been no other events subsequent to the year end, which, in the opinion of the Directors of the Company, may have a material impact on the financial statements for the year ending 31 December 2015.
Corporate Governance Statement The Board of Directors in 2013 voluntarily adopted the Corporate Governance Code for Irish Domiciled Collective Investment Schemes as published by the Irish Funds Industry Association (“Irish Funds”). The text of the Code is available from the Irish Funds website at irishfunds.ie/publications. The Board of Directors has assessed the measures included in the Irish Funds Code as being consistent with its corporate governance practices and procedures for the financial year.
The Board of Directors is responsible for establishing and maintaining adequate internal control and risk management systems of the Company in relation to the financial reporting process by way of delegating to third parties, namely the Administrator and Investment Adviser. The Board of Directors understands the controls within the Administrator are in line with best practice. Such systems are designed to manage rather than eliminate the risk of error or fraud in achieving the Company’s financial reporting objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Board of Directors has procedures in place to ensure all relevant accounting records are properly maintained and are readily available, including production of annual and half-yearly financial statements. The annual financial statements of the Company are required to be approved by the Board of Directors and the annual and half yearly financial statements of the Company are required to be filed with the Central Bank. The statutory financial statements are required to be audited by independent auditors who report annually to the board on their findings.
The board evaluates and discusses significant accounting and reporting issues as the need arises.
The convening and conduct of shareholders’ meetings are governed by the Articles of Association of the Company and the Companies Act, 2014. Although the Directors may convene an extraordinary general meeting of the Company at any time, the Directors are required to convene an annual general meeting of the Company within eighteen months of incorporation and fifteen months of the date of the previous annual general meeting thereafter. Shareholders representing not less than one-tenth of the paid up share capital of the Company may also request the Directors to convene a shareholders’ meeting. Not less than twenty one days notice of every annual general meeting and any meeting convened for the passing of a special resolution must be given to shareholders and fourteen days’ notice must be given in the case of any other general meeting unless the auditors of the Company and all the shareholders of the Company entitled to attend and vote agree to shorter notice.
Two members present either in person or by proxy constitutes a quorum at a general meeting provided that the quorum for a general meeting convened to consider any alteration to the class rights of shares is two shareholders holding or representing by proxy at least one third of the issued shares of the relevant Sub-fund or class.
Liontrust Global Funds plc 27 Annual report and audited Financial Statements
Independent auditors’ report to the members of Liontrust Global Funds plc Report on the financial statements
Our opinion In our opinion, Liontrust Global Fund plc’s financial statements (the “financial statements”): give a true and fair view of the company’s and sub-funds’ assets, liabilities and financial position as at 31 December 2015 and of their results for the year then ended; have been properly prepared in accordance with Generally Accepted Accounting Practice in Ireland; and have been properly prepared in accordance with the requirements of the Companies Act 2014 and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (as amended).
What we have audited The financial statements comprise: the balance sheet as at 31 December 2015; the profit and loss account for the year then ended; the statement of changes in net assets attributable to holders of redeemable participating shares for the year then ended; the portfolio statements for each of the sub-funds as at 31 December 2015; and the notes to the financial statements for the company and for each of its sub-funds which include a summary of significant accounting policies and other explanatory information. The financial reporting framework that has been applied in the preparation of the financial statements is Irish law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland). In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
Matters on which we are required to report by the Companies Act 2014
We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited. The financial statements are in agreement with the accounting records. In our opinion the information given in the Report of the Directors is consistent with the financial statements.
Matter on which we are required to report by exception
Directors’ remuneration and transactions Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions to report arising from this responsibility.
Liontrust Global Funds plc 30 Annual report and audited Financial Statements
Responsibilities for the financial statements and the audit
As explained more fully in the Statement of Directors' Responsibilities set out on page 25, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: • whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; • the reasonableness of significant accounting estimates made by the directors; and • the overall presentation of the financial statements. We primarily focus our work in these areas by assessing the directors' judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements. We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Qlian Lowth for and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm Dublin, Ireland 31 March 2o16
Liontrust Global Funds plc 31 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF European Strategic Equity Fund Fair Value % of Holdings Financial assets at fair value through profit or loss € Net Assets
Government Bonds: 82.13% (2014: 72.83%)
France: 29.27% (2014: 22.00%) 5,500,000 France Treasury Bill BTF 0% 17/02/2016 5,503,003 22.05 1,800,000 France Treasury Bill BTF 0% 09/03/2016 1,801,599 7.22 Total France 7,304,602 29.27
Germany: 28.89% (2014: 21.50%) 7,200,000 German Treasury Bill 0% 16/03/2016 7,210,040 28.89 Total Germany 7,210,040 28.89
United Kingdom: 0.00% (2014: 29.33%)
United States: 23.97% (2014: 0.00%) 6,500,000 United States Treasury Bill 0% 28/01/2016 5,983,120 23.97 Total United States 5,983,120 23.97
Total Government Bonds 20,497,762 82.13
Equities: 4.82% (2014: 12.16%)
Canada: 2.16% (2014: 2.91%) 10,882 Linamar 538,915 2.16 Total Canada 538,915 2.16
Greece: 0.00% (2014: 3.37%)
Switzerland: 0.00% (2014: 2.55%)
United States: 2.66% (2014: 3.33%) 6,476 Domino's Pizza 663,219 2.66 Total United States 663,219 2.66
Total Equities 1,202,134 4.82
Liontrust Global Funds plc 32 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF European Strategic Equity Fund (continued) Unrealised % of Holdings Financial assets at fair value through profit or loss Gain € Net Assets
Financial Derivative Instruments: 3.09% (2014: 6.23%)
*Equity Swaps: 3.08% (2014: 4.19%)
(19,350) Allied Minds 3,781 0.02 43,169 AMG Advanced 26,205 0.10 307,903 Amino Technologies 8,355 0.03 1,352 APG SGA 1,865 0.01 (11,904) Atresmedia Corporacion de Medios de Comunicacion 13,810 0.06 (1,955) Beiersdorf 782 - 21,222 Beter Bed 12,734 0.05 15,698 BHP Billiton 15,571 0.06 (104,846) Castle Brands 2,896 0.01 65,212 Caverion 16,956 0.07 101,048 Cellavision 46,894 0.19 38,357 Concentric 23,037 0.09 16,675 easyJet 9,955 0.04 305,157 Enterprise Inns 19,461 0.08 (431) Eurofins Scientific 388 - 12,498 Euronext 31,121 0.12 207,573 Evraz 30,981 0.12 32,154 Experian 20,506 0.08 (4,055) Fenix Outdoor International 3,099 0.01 (3,754) FireEye 1,659 0.01 12,189 FUCHS PETROLUB 4,632 0.02 (736) Genmab 197 - 32,205 Greggs 14,421 0.06 (9,559) Hoegh LNG 4,971 0.02 (37,642) Horizon Discovery 2,554 0.01 (43,284) Imagination Technologies 7,341 0.03 52,546 Inchcape 21,389 0.09 9,559 Ipsen 16,920 0.07 144,975 ITV 20,852 0.08 (7,129) Kate Spade 328 - (494) KWS Saat 4,347 0.02 (31,412) M&C Saatchi 5,008 0.02 201,354 Man Group 44,532 0.18 (35,943) MobileIron 7,610 0.03 (40,927) Mothercare 4,581 0.02 49,803 NAHL 9,376 0.04 (2,604) Newron Pharmaceuticals 6,107 0.02
Liontrust Global Funds plc 33 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF European Strategic Equity Fund (continued) Unrealised % of Holdings Financial assets at fair value through profit or loss Gain € Net Assets
Financial Derivative Instruments: 3.09% (2014: 6.23%) (continued)
*Equity Swaps: 3.08% (2014: 4.19%) (continued)
(27,639) Nordic Nanovector 719 - 9,786 Novo Nordisk 20,326 0.08 (2,814) Numericable-SFR 5,431 0.02 7,023 Pandora 32,468 0.13 25,563 Persimmon 19,771 0.08 (38,418) Radiant Logistics 12,379 0.05 11,785 Rightmove 26,864 0.11 15,181 Rio Tinto 20,599 0.08 (1,690) Rosenbauer International 3,127 0.01 (26,303) Scatec Solar 1,368 0.01 (3,815) Schibsted 397 - 49,172 Soco International 7,839 0.03 18,750 Software 5,906 0.02 (53,726) Stanley Gibbons 350 - (23,773) SThree 1,290 0.01 (2,466) Store Electronic 1,726 0.01 28,479 Takkt 18,228 0.07 (21,618) Talgo 6,811 0.03 (1,537) Tod's 2,229 0.01 36,530 Tullow Oil 2,875 0.01 (4,893) Twitter 3,648 0.01 47,856 Valmet 7,657 0.03 (2,114) Vilmorin & Cie 4,017 0.02 (2,421) Wereldhave Reits 48 - 96,248 Wessanen 76,326 0.31 207,219 WM Morrison 3,093 0.01 25,462 Worldline 16,806 0.07 (28,138) Zotefoams 3,054 0.01
Total Equity Swaps - Unrealised Gains 770,574 3.08
Liontrust Global Funds plc 34 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF European Strategic Equity Fund (continued)
Holdings Financial assets at fair value through profit or loss
Financial Derivative Instruments: 3.09% (2014: 6.23%) (continued)
Forward Currency Contracts: 0.01% (2014: 2.04%)
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Gain € Net Assets
Northern Trust USD 178,178 EUR 161,455 0.9061 19/01/2016 2,523 0.01 Northern Trust USD 11,310 EUR 10,249 0.9061 19/01/2016 160 - Total Forward Currency Contracts 2,683 0.01
Total Financial Derivative Instruments 773,257 3.09
Total Financial assets at fair value through profit or loss 22,473,153 90.04
Financial liabilities at fair value through profit or loss
Financial Derivative Instruments: (3.26)% (2014: (2.82)%)
*Equity Swaps: (2.53)% (2014: (2.43)%) Unrealised % of Loss € Net Assets (4,974) Ablynx (9,972) (0.04) (11,916) ADLER Real Estate (10,723) (0.04) (11,265) Airopack Technology (4,662) (0.02) (1,069) ASML (919) - (27,876) Avanti Communications (7,754) (0.03) 57,996 Avon Rubber (45,639) (0.18) 46,836 Axfood (6,136) (0.02) (11,410) Babcock International (4,467) (0.02) (151) Barry Callebaut (1,944) (0.01) (748) Basilea (2,648) (0.01) (3,528) BasWare (16,122) (0.07) (1,238) Bayer (2,971) (0.01) (48,483) Benchmark (329) - (35,632) Brewin Dolphin (9,088) (0.04) (8,139) British Sky Broadcasting (2,650) (0.01) (8,989) Brunello Cucinelli (5,034) (0.02) (7,484) Bureau Veritas (2,170) (0.01) 114,566 Card Factory (30,000) (0.12) (27,429) Castlight Health (7,069) (0.03) (1,626) Celyad (6,714) (0.03)
Liontrust Global Funds plc 35 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF European Strategic Equity Fund (continued) Unrealised % of Holdings Financial liabilities at fair value through profit or loss Loss € Net Assets
Financial Derivative Instruments: (3.26)% (2014: (2.82)%) (continued)
*Equity Swaps: (2.53)% (2014: (2.43)%) (continued)
(1,176) Cie Financiere Richemont (1,243) - (7,303) Clariant (4,567) (0.02) (13,150) CVS (10,258) (0.04) (25,927) D CarnegieAB (4,954) (0.02) (1,030) DBV Technologies (2,359) (0.01) (23,055) DHX Media (7,334) (0.03) 11,691 DiaSorin (5,495) (0.02) (1,498) DOAG (10,874) (0.04) (75,000) Eckoh (2,544) (0.01) (15,533) Econocom (3,355) (0.01) (1,100) Essilor International (165) - (8,390) Euronav (9,606) (0.04) (61,384) Evolva (6,774) (0.03) (30,188) Evotec (2,989) (0.01) (9,647) Exmar (3,676) (0.02) (23,206) FACC (232) - (3,719) FARO Technologies (5,237) (0.02) 41,291 Fred Olsen Energy (5,711) (0.02) (11,000) Freshpet (6,886) (0.03) (166,886) Futuren (5,007) (0.02) 458,344 Giordano International (7,077) (0.03) (3,580) GoPro (329) - (9,554) Groupe Eurotunnel (2,006) (0.01) (7,326) H&E Equipment Services (8,766) (0.04) (6,236) Haulotte (5,238) (0.02) (4,107) Hexagon (1,300) (0.01) 33,554 HP (11,431) (0.05) (698) Iliad (3,839) (0.02) (4,754) Innate Pharma (2,092) (0.01) (21,399) Just Eat (11,787) (0.05) (2,437) Jyske Bank (4,441) (0.02) (17,964) Meyer Burger Technology (9,416) (0.04) (101) MSCI Pan-Euro Index (2,017) (0.01) 5,031 Next (14,754) (0.06) (6,918) Nexus (13,247) (0.05) (6,757) OHB (2,872) (0.01) (6,590) Parrot (50,340) (0.20) (28,847) Paysafe (12,915) (0.05)
Liontrust Global Funds plc 36 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF European Strategic Equity Fund (continued) Unrealised % of Holdings Financial liabilities at fair value through profit or loss Loss € Net Assets
Financial Derivative Instruments: (3.26)% (2014: (2.82)%) (continued)
*Equity Swaps: (2.53)% (2014: (2.43)%) (continued)
(14,411) Pennon (5,866) (0.02) (33,697) Prosegur Cia de Seguridad (337) - 158,429 QinetiQ (1,074) - (10,963) RaySearch Laboratories (7,182) (0.03) (2,791) Remy Cointreau (7,032) (0.03) (2,691) Rentrak (7,704) (0.03) (35,413) Restore (3,383) (0.01) (9,388) Rubicon Project (11,580) (0.05) (701) Santhera Pharmaceutical (967) - (45,458) Scapa (2,159) (0.01) (8,020) SLM Solutions (2,687) (0.01) (4,745) Swedish Orphan Biovitrum (1,451) (0.01) (2,143) Symrise (814) - (11,964) Systemair (1,960) (0.01) (572) Tesla Motors (9,962) (0.04) 52,102 Tethys Oil (1,422) (0.01) (219,732) Thin Film Electronics (22,852) (0.09) (36,895) Tomorrow Focus (3,690) (0.02) 980 TOTAL (1,000) - (4,951) Travis Perkins (2,217) (0.01) (10,016) TrueCar (12,355) (0.05) (12,300) TubeMogul (10,982) (0.04) (17,036) UBM (6,124) (0.02) (54,053) Vectura (2,934) (0.01) (306) Virbac (9,486) (0.04) (19,880) Vitec Software (11,721) (0.05) (28,002) WANdisco (2,850) (0.01) 25,436 WH Smith (345) - (3,332) Wirecard (3,732) (0.01) (5,725) Yelp (10,170) (0.04) (5,310) Yoox (5,151) (0.02) (27,032) Zignago Vetro (15,948) (0.06) (678) Zooplus (4,136) (0.02)
Total Equity Swaps - Unrealised Losses (631,417) (2.53)
Liontrust Global Funds plc 37 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF European Strategic Equity Fund (continued) Fair Value % of Financial liabilities at fair value through profit or loss € Net Assets
Financial Derivative Instruments: (3.26)% (2014: (2.82)%) (continued)
Forward Currency Contracts: (0.73)% (2014: (0.39)%)
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Loss € Net Assets
Northern Trust GBP 11,431 EUR 15,705 1.3738 19/01/2016 (198) - Northern Trust GBP 1,182,555 EUR 1,624,612 1.3738 19/01/2016 (20,497) (0.08) Northern Trust GBP 1,992,708 EUR 2,737,613 1.3738 19/01/2016 (34,540) (0.14) Northern Trust EUR 6,497,614 USD 7,200,000 0.9024 29/01/2016 (126,961) (0.51) Total Forward Currency Contracts (182,196) (0.73)
Total Financial Derivative Instruments (813,613) (3.26)
Total Financial liabilities at fair value through profit or loss (813,613) (3.26)
Net Financial Assets at Fair Value through profit or loss 21,659,540 86.78 (Cost: € 21,565,146) (2014: 88.40%)
Cash and cash held for collateral (2014: 10.32%) 3,364,699 13.48
Other Net Liabilities (2014: 1.28%) (65,321) (0.26)
Net Assets Attributable to Holders of Redeemable Participating Shares 24,958,918 100.00
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 83.84 OTC Derivatives 2.99 Cash and cash held for collateral 13.00 Other assets 0.17 100.00
*The counterparty for equity swaps is Goldman Sachs.
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 38 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Bond Fund Fair Value % of Holdings Financial assets at fair value through profit or loss US$ Net Assets
Time Deposits: 6.71% (2014: 9.30%)
3,361,923 Lloyds 0.15% 3,361,923 6.71 Total Time Deposits 3,361,923 6.71
Government Bonds: 61.75% (2014: 64.39%)
Bosnia & Herzegovina: 0.00% (2014: 3.14%) - -
Brazil: 10.66% (2014: 8.99%) 2,180,000 Brazil Notas do Tesouro Nacional Serie F 10% 01/01/2023 4,133,711 8.25 1,500,000 Brazilian Government International Bond 4.25% 07/01/2025 1,209,375 2.41 Total Brazil 5,343,086 10.66
Cayman Islands 0.00% (2014: 4.59%) - -
Colombia: 2.85% (2014: 2.74%) 1,500,000 Colombia Government International Bond 4% 26/02/2024 1,432,500 2.85 Total Colombia 1,432,500 2.85
Mexico: 9.02% (2014: 6.55%) 81,000,000 Mexican Bonos 5.75% 05/03/2026 4,519,325 9.02 Total Mexico 4,519,325 9.02
Russian Federation: 16.67% (2014: 14.57%) 280,000,000 Russian Federal Bond - OFZ 7.4% 19/04/2017 3,718,477 7.42 350,000,000 Russian Federal Bond - OFZ 7.4% 14/06/2017 4,635,822 9.25 Total Russian Federation 8,354,299 16.67
South Africa: 11.60% (2014: 0.00%) 85,000,000 South Africa Government Bond 10.5% 21/12/2026 5,816,165 11.60 Total South Africa 5,816,165 11.60
United States: 10.95% (2014: 23.81%) 5,500,000 United States Treasury Note/Bond 2.25% 15/11/2025 5,488,291 10.95 Total United States 5,488,291 10.95
Total Government Bonds 30,953,666 61.75
Liontrust Global Funds plc 39 Annual report and audited Financial Statements
Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Bond Fund (continued) Fair Value % of Financial assets at fair value through profit or loss US$ Net Assets
Financial Derivative Instruments: 2.43% (2014: 1.03%)
Forward Currency Contracts: 2.07% (2014: 0.80%)
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Gain US$ Net Assets
Northern Trust EUR 6,000,000 GBP 4,217,250 1.0654 13/01/2016 304,760 0.61 Northern Trust USD 4,657,972 BRL 17,500,000 0.2662 15/01/2016 252,250 0.50 Northern Trust USD 4,646,490 MXN 77,000,000 0.0603 13/01/2016 181,698 0.36 Northern Trust USD 2,640,427 KRW 3,000,000,000 0.0009 28/01/2016 88,339 0.18 Citigroup USD 2,585,551 CNH 17,000,000 0.1521 12/09/2016 64,499 0.13 Northern Trust USD 3,699,992 TWD 120,000,000 0.0308 28/01/2016 62,443 0.12 Citigroup USD 2,557,930 CNH 17,000,000 0.1505 12/09/2016 36,878 0.07 Northern Trust USD 7,889,492 TRY 23,000,000 0.3430 13/01/2016 24,059 0.05 Northern Trust PHP 80,000,000 USD 1,686,874 0.0211 28/01/2016 13,409 0.03 Northern Trust BRL 9,000,000 USD 2,257,336 0.2508 15/01/2016 8,463 0.02 Northern Trust USD 1,603 EUR 1,473 1.0884 19/01/2016 2 - Total Forward Currency Contracts 1,036,800 2.07
Options Purchased: 0.03% (2014: 0.00%)
Counterparty Description Base Strike No. of Maturity Fair Value % of Currency Price Contracts Date US$ Net Assets
Goldman Sachs US 10Yr Note Mar16 USD 128.5 80 19/02/2016 13,750 0.03 Total United States 13,750 0.03
Total Options Purchased 13,750 0.03
Currency Options Purchased: 0.33% (2014: 0.23%)
Counterparty Description Base Strike No. of Maturity Fair Value % of Currency Price Contracts Date US$ Net Assets
Goldman Sachs FX GBP USD Put GBP 1.51 3,000,000 10/02/2016 119,054 0.24 Goldman Sachs FX GBP USD Put GBP 1.45 3,000,000 23/03/2016 45,168 0.09 Total Currency Options Purchased 164,222 0.33
Total Financial Derivatives Instruments 1,214,772 2.43
Total Financial assets at Fair value through profit or loss 35,530,361 70.89
Liontrust Global Funds plc 40 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Bond Fund (continued) Fair Value % of Financial liabilities at fair value through profit or loss US$ Net Assets
Financial Derivative Instruments: (3.65)% (2014: (6.30)%)
Credit Default Swaps: Pay Fixed (Buy Protection): (1.33)% (2014: (3.18)%)
Counterparty Holdings Goldman Sachs 5,940,000 Goldman Sachs International 5% 20/06/2020 (221,626) (0.44) Goldman Sachs 5,000,000 iTraxx Europe Crossover series 5% 20/12/2020 (445,017) (0.89) Total Credit Default Swaps: Pay Fixed (Buy Protection) (666,643) (1.33)
Forward Currency Contracts: (2.31)% (2014: (2.78)%)
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Loss US$ Net Assets
Northern Trust EUR 49,307 USD 54,414 1.1036 19/01/2016 (809) - Northern Trust EUR 513,677 USD 562,929 1.0959 19/01/2016 (4,477) (0.01) Northern Trust GBP 109,574 USD 166,130 1.5161 19/01/2016 (4,589) (0.01) Northern Trust USD 1,692,370 PHP 80,000,000 0.0212 28/01/2016 (7,913) (0.02) Northern Trust KRW 3,000,000,000 USD 2,561,913 0.0009 28/01/2016 (9,825) (0.02) Citigroup UYU 50,000,000 USD 1,639,882 0.0328 15/03/2016 (15,094) (0.03) Citigroup USD 1,926,164 UYU 60,000,000 0.0321 15/03/2016 (23,582) (0.05) Citigroup UYU 90,000,000 USD 2,953,725 0.0328 15/03/2016 (29,107) (0.06) Northern Trust GBP 827,814 USD 1,255,086 1.5161 19/01/2016 (34,669) (0.07) Northern Trust TWD 120,000,000 USD 3,675,907 0.0306 28/01/2016 (38,358) (0.07) Citigroup USD 2,557,545 UYU 80,000,000 0.032 15/03/2016 (42,116) (0.08) Northern Trust EUR 4,051,327 USD 4,470,944 1.1036 19/01/2016 (66,482) (0.13) Northern Trust EUR 18,073,462 USD 19,945,421 1.1036 19/01/2016 (296,586) (0.59) Northern Trust GBP 13,951,435 USD 21,152,399 1.5161 19/01/2016 (584,286) (1.17) Total Forward Currency Contracts (1,157,893) (2.31)
Liontrust Global Funds plc 41 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Bond Fund (continued) Fair Value % of Financial liabilities at fair value through profit or loss US$ Net Assets
Financial Derivative Instruments: (3.65)% (2014: (6.30)%) (continued)
Futures Contracts: (0.01)% (2014: (0.34)%)
Counterparty Description Notional Currency No. of Unrealised % of Contracts Loss US$ Net Assets
Japan: (0.01)% (2014: (0.06)%) Osaka Stock Exchange 10 year Goldman Sachs JGB March 2016 (4,959,940) JPY (4) (4,326) (0.01) Total Japan (4,326) (0.01)
Total Futures Contracts - Unrealised Losses (4,326) (0.01)
Total Financial Derivative Instruments (1,828,862) (3.65)
Total Financial Liabilities at Fair value through profit or loss (1,828,862) (3.65)
Net Financial Assets at Fair value through profit or loss 33,701,499 67.24 (Cost: US$ 35,475,793) (2014: 68.41%)
Cash and cash held as collateral (2014: 30.30%) 15,936,207 31.80
Other Net Assets (2014: 1.29%) 481,835 0.96
Net Assets Attributable to Holders of Redeemable Participating Shares 50,119,541 100.00
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 66.05 OTC Derivatives 2.02 Cash and cash held as collateral 30.67 Other assets 1.26 100.00
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 42 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Special Situations Fund Fair Value % of Holdings Financial assets at fair value through profit or loss £ Net Assets
Equities: 91.17% (2014: 94.39%)
United Kingdom: 91.17% (2014: 94.39%)
197,487 AA 620,110 2.27 17,816 Aggreko 162,838 0.60 20,411 AstraZeneca 942,274 3.44 94,131 Bango 94,131 0.34 30,589 BG 301,302 1.10 53,650 Bond International Software 51,504 0.19 226,538 BP 801,945 2.93 21,445 Brooks Macdonald 437,478 1.60 89,220 Compass 1,048,335 3.83 138,204 Concurrent Technologies 80,711 0.30 42,580 Craneware 339,576 1.24 55,605 Diageo 1,032,307 3.77 71,305 Domino's Pizza 750,129 2.74 97,097 EMIS 1,104,964 4.04 25,244 Fidessa 505,637 1.85 127,799 Gamma Communications 549,855 2.01 68,923 GlaxoSmithKline 946,313 3.46 9,505 Hargreaves Lansdown 143,145 0.52 97,720 ICAP 497,883 1.82 564,889 IDOX 292,330 1.07 17,584 IMImobile 26,288 0.10 21,944 Intertek 609,385 2.23 169,640 iomart 461,421 1.69 59,569 John Wood 364,860 1.33 93,508 Michael Page International 452,859 1.66 316,217 NCC 948,651 3.47 86,191 Next Fifteen Communications 209,444 0.77 58,076 PayPoint 535,170 1.96 126,412 Plexus 214,268 0.78 123,067 Progressive Digital Media 319,974 1.17 88,508 Reed Elsevier 1,059,441 3.87 26,995 Renishaw 507,506 1.86 20,453 Rightmove 843,686 3.08 268,415 Rotork 490,394 1.79 36,319 Royal Dutch Shell 560,402 2.05 267,996 RWS 563,462 2.06 184,796 Sanne 673,581 2.46 66,590 Savills 589,987 2.16 100,047 Sepura 183,086 0.67 12,219 Shire 574,049 2.10 128,840 Smart Metering Systems 425,172 1.55
Liontrust Global Funds plc 43 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Special Situations Fund (continued) Fair Value % of Holdings Financial assets at fair value through profit or loss £ Net Assets
Equities: 91.17% (2014: 94.39%) (continued)
United Kingdom: 91.17% (2014: 94.39%) (continued)
29,989 Spectris 540,402 1.98 19,362 Spirax-Sarco Engineering 635,654 2.32 106,676 Spirent Communications 76,273 0.28 108,496 StatPro 82,457 0.30 160,244 Tullett Prebon 596,268 2.18 38,481 UK Mail 96,203 0.35 36,279 Unilever 1,061,705 3.88 16,569 Weir Group 165,690 0.61 131,925 Wilmington 347,457 1.27 11,136 World Careers Network 18,653 0.07
Total United Kingdom 24,936,615 91.17
Total Equities 24,936,615 91.17
Financial Derivative Instruments: 0.01% (2014: (0.02)%)
Forward Currency Contracts: 0.01% (2014: (0.02)%)
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Gain £ Net Assets
Northern Trust EUR 175,857 GBP 128,007 0.7279 19/01/2016 1,636 0.01 Northern Trust EUR 5,595 GBP 4,104 0.7336 19/01/2016 20 -
Total Forward Currency Contracts 1,656 0.01
Total Financial Derivative Instruments 1,656 0.01
Total Financial assets at fair value through profit or loss 24,938,271 91.18
Net Financial assets at fair value through profit or loss 24,938,271 91.18 (Cost: £ 22,709,465) (2014: 94.34%)
Cash (2014: 5.98%) 2,590,994 9.47
Other Net Liabilities (31 Dec 2014: (0.32)%) (178,316) (0.65)
Net Assets Attributable to Holders of Redeemable Participating Shares 27,350,949 100.00
Liontrust Global Funds plc 44 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Special Situations Fund (continued)
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 90.46 Cash 9.40 Other assets 0.14 100.00
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 45 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Macro Equity Income Fund Fair Value % of Holdings Financial assets at fair value through profit or loss £ Net Assets
Collective Investment Schemes: 99.42% (2014: 100.41%)
United Kingdom: 99.42% (2014: 100.41%) 11,786,235 Liontrust Macro Equity Income Fund 23,069,787 99.42 Total United Kingdom 23,069,787 99.42
Total Collective Investment Schemes 23,069,787 99.42
Financial Derivative Instruments: 0.00% (2014: 0.00%)
Forward Currency Contracts: 0.00% (2014: 0.00%)
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Gain £ Net Assets Northern Trust USD 15,072 GBP 9,941 0.6596 19/01/2016 230 - Northern Trust USD 14,928 GBP 9,846 0.6596 19/01/2016 227 - Northern Trust EUR 10,085 GBP 7,341 0.7279 19/01/2016 75 -
Total Forward Currency Contracts 532 -
Total Financial Derivatives Instruments 532 -
Total Financial assets at Fair value through profit or loss 23,070,319 99.42
Net Financial assets at Fair value through profit or loss 23,070,319 99.42 (Cost: £ 23,352,482) (2014: 100.41%)
Cash (2014: (0.31)%) 43,970 0.19
Other Net Assets (2014: (0.10)%) 89,494 0.39
Net Assets Attributable to Holders of Redeemable Participating Shares 23,203,783 100.00
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 99.09 Cash 0.19 Other assets 0.72 100.00
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 46 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Income Fund Fair Value % of Holdings Financial assets at fair value through profit or loss £ Net Assets
Collective Investment Schemes: 94.86% (2014: 100.33%)
United Kingdom: 94.86% (2014: 100.33%) 849,593 Liontrust Global Income Fund 1,115,983 94.86 Total United Kingdom 1,115,983 94.86
Total Collective Investment Schemes 1,115,983 94.86
Net financial Assets at Fair Value through profit or loss 1,115,983 94.86 (Cost: £ 1,265,119) (2014: 100.33%)
Bank Overdraft (2014: 0.32%) (3,157) (0.27)
Other Net Assets (2014: (0.65)%) 63,629 5.41
Net Assets Attributable to Holders of Redeemable Participating Shares 1,176,455 100.00
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 94.41 Cash - Other assets 5.59 100.00
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 47 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF UK Growth Fund Fair Value % of Holdings Financial assets at fair value through profit or loss £ Net Assets
Collective Investment Schemes: 99.27% (2014: 100.07%)
United Kingdom: 99.27% (2014: 100.07%) 4,781,457 Liontrust UK Growth Fund 16,209,379 99.27 Total United Kingdom 16,209,379 99.27
Total Collective Investment Schemes 16,209,379 99.27
Net Financial Assets as Fair Value through profit or loss 16,209,379 99.27 (Cost: £ 15,520,071) (2014: 100.07%)
Bank Overdraft (2014: 0.01%) (6,639) (0.04)
Other Net Assets (2014: (0.08)%) 125,767 0.77
Net Assets Attributable to Holders of Redeemable Participating Shares 16,328,507 100.00
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 98.58 Cash - Other assets 1.42 100.00
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 48 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Asia Income Fund Fair Value % of Holdings Financial assets at fair value through profit or loss US$ Net Assets
Equities: 95.05%
Australia: 14.57% 611 Amcor 6,005 1.03 1,539 AMP 6,561 1.13 347 Australia & New Zealand Bank 7,087 1.22 1,500 Challenger 9,564 1.65 11,229 DUET 18,719 3.22 7,276 G8 Education 18,992 3.27 1,526 Transurban 11,683 2.01 85 Transurban 638 0.11 2,617 Vicinity Centres 5,358 0.93 Total Australia 84,607 14.57
Bermuda: 3.42% 8,000 First Pacific 5,305 0.91 13,360 Silverlake Axis 6,238 1.07 8,000 Texwinca 8,371 1.44 Total Bermuda 19,914 3.42
Cayman Islands: 22.58% 920 Cheung Kong Property 5,982 1.03 19,000 China Hongqiao 11,301 1.95 920 CK Hutchison 12,416 2.14 29,000 Country Garden 11,898 2.05 14,500 Kingboard Laminates 6,585 1.13 6,000 Minth 11,921 2.05 12,000 Pacific Textiles 18,516 3.19 1,600 Sands China 5,481 0.94 24,000 SITC International 12,726 2.19 16,000 Wasion 16,679 2.87 30,000 Xinyi Glass 17,649 3.04 Total Cayman Islands 131,154 22.58
Hong Kong: 5.16% 1,000 China Mobile 11,289 1.94 10,000 Far East Horizon 9,302 1.60 19,000 Sunlight REIT 9,389 1.62 Total Hong Kong 29,980 5.16
Malaysia: 0.76% 8,840 Berjaya Auto 4,406 0.76 Total Malaysia 4,406 0.76
Liontrust Global Funds plc 49 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Asia Income Fund (continued) Fair Value % of Holdings Financial assets at fair value through profit or loss US$ Net Assets
Equities: 95.05% (continued)
New Zealand: 3.39% 1,894 Fletcher Building 9,527 1.64 4,498 Spark New Zealand 10,158 1.75 Total New Zealand 19,685 3.39
People's Republic of China: 13.63% 26,000 Bank of China 11,606 2.00 7,000 China Communications Construction 7,153 1.23 21,939 China Communications Services 8,237 1.42 13,000 China Machinery Engineering 9,543 1.64 12,000 Great Wall Motor 13,980 2.41 22,000 Industrial & Commercial Bank of China 13,284 2.29 6,000 Jiangsu Expressway 8,097 1.39 15,354 Qinhuangdao Port 7,250 1.25 Total People's Republic of China 79,150 13.63
Philippines: 1.09% 18,400 Alliance Global 6,296 1.09 Total Philippines 6,296 1.09
Republic of South Korea: 1.11% 6 Samsung Electronics 6,447 1.11 Total Republic of South Korea 6,447 1.11
Singapore: 5.43% 12,500 Hutchison Port Trust 6,625 1.14 1,100 Keppel 5,066 0.87 19,400 Religare Health 13,724 2.36 5,600 Suntec REIT 6,140 1.06 Total Singapore 31,555 5.43
Taiwan: 12.87% 9,000 Advanced Semiconductor Engineering 10,412 1.79 12,000 Gigabyte Technology 13,316 2.29 15,000 King Yuan Electronics 9,841 1.70 19,300 Lite-On Technology 18,714 3.22 2,000 Lotes 7,459 1.29 4,000 Radiant Opto-Electronics 9,182 1.58 7,000 Taiwan Cement 5,818 1.00 Total Taiwan 74,742 12.87
Liontrust Global Funds plc 50 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Asia Income Fund (continued) Fair Value % of Holdings Financial assets at fair value through profit or loss US$ Net Assets
Equities: 95.05% (continued)
Thailand: 10.57% 6,800 Intouch 9,826 1.69 61,978 Jasmine Broadband Internet Infrastructure 15,759 2.71 14,200 Krung Thai Bank 6,590 1.14 5,400 Ratchaburi Electricity Generating 7,128 1.23 17,700 Supalai 8,952 1.55 38,000 TRUE Telecommunication Growth Infrastructure 13,094 2.25 Total Thailand 61,349 10.57
United Kingdom: 0.47% 245 BHP Billiton 2,740 0.47 Total United Kingdom 2,740 0.47
Total Equities 552,025 95.05
Total Financial assets at fair value through profit or loss 552,025 95.05
Financial liabilities at fair value through profit or loss
Financial Derivative Instruments: (0.19)%
Futures Contracts: 0.00%
Description Notional Country Currency No. of Unrealised % of Contracts Loss US$ Net Assets
FUT JAN 16 SGX SP CNX NIF 15,896 SG USD 1 (10) - Total Singapore (10) -
Total Futures Contracts (10) -
Forward Currency Contracts: (0.19%)
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Loss US$ Net Assets
Northern Trust EUR 78,271 USD 86,378 1.1036 19/01/2016 (1,089) (0.19) Total Forward Currency Contracts (1,089) (0.19)
Total Financial Derivative Instruments (1,099) (0.19)
Total Financial liabilities at fair value through profit or loss (1,099) (0.19)
Liontrust Global Funds plc 51 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Asia Income Fund (continued) Fair Value % of Financial assets at fair value through profit or loss US$ Net Assets
Net Financial Assets at Fair value Through Profit or Loss 550,926 94.86 (Cost: US$ 664,894)
Cash 31,934 5.50
Other Net Liabilities (2,109) (0.36)
Net Assets Attributable to Holders of Redeemable Participating Shares 580,751 100.00
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 94.19 Cash 5.45 Other assets 0.36 100.00
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 52 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Equity Fund Fair Value % of Holdings Financial assets at fair value through profit or loss US$ Net Assets
Equities: 70.16%
Bermuda: 10.58% 695,027 China Singyes Solar Technologies 499,461 3.71 60,323 Golar LNG 925,355 6.87 Total Bermuda 1,424,816 10.58
Brazil: 3.35% 50,110 Telefonica Brasil 451,491 3.35 Total Brazil 451,491 3.35
Cayman Islands: 22.25% 3,458 Baidu 664,386 4.93 739,288 China Lesso 516,007 3.83 4,077,285 GCL-Poly Energy 610,203 4.53 615,457 GCL-Poly Energy Rights Issue 3,176 0.02 300,000 Wasion 312,736 2.32 2,179,744 Xinyi Solar 891,476 6.62 Total Cayman Islands 2,997,984 22.25
Hong Kong: 8.69% 182,375 China Overseas Land & Investment 639,999 4.75 130,000 Techtronic Industries 530,000 3.94 Total Hong Kong 1,169,999 8.69
India: 12.70% 10,514 HDFC Bank 642,511 4.77 137,300 ICICI Bank 1,068,194 7.93 Total India 1,710,705 12.70
People's Republic of China: 3.63% 1,706,826 Huadian Fuxin Energy 488,863 3.63 Total People's Republic of China 488,863 3.63
United States: 8.96% 18,898 Cheniere Energy 688,454 5.11 3,628 Thermo Fisher Scientific 518,296 3.85 Total United States 1,206,750 8.96
Total Equities 9,450,608 70.16
Liontrust Global Funds plc 53 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Equity Fund (continued) Unrealised Gain % of Holdings Financial assets at fair value through profit or loss US$ Net Assets
Financial Derivative Instruments: 1.07%
Contracts for Difference: 0.93%
India: 0.02% (10,073) Infosys 201 - 78,752 IRB Infrastructure Developers 2,541 0.02 Total India 2,742 0.02
Indonesia: 0.06% 650,000 Bank Mandiri Persero 7,905 0.06 Total Indonesia 7,905 0.06
Norway: 0.03% (7,392) Yara International 4,283 0.03 Total Norway 4,283 0.03
People's Republic of China: 0.07% (775,000) China Coal Energy 10,026 0.07 Total People's Republic of China 10,026 0.07
Republic of South Korea: 0.27% (1,750) Amorepacific 812 0.01 2,818 Amorepacific 8,243 0.06 (5,600) Hotel Shilla 11,465 0.09 (5,946) Hyundai Motor 1,906 0.01 1,000 Samsung Elect 13,043 0.10 Total Republic of South Korea 35,469 0.27
Taiwan: 0.08% (205,000) HTC 10,072 0.08 (55,196) MediaTek 602 - Total Taiwan 10,674 0.08
United States: 0.40% (5,000) Helmerich & Payne 6,580 0.05 (51,195) iShares MSCI Brazil Capped ETF 47,611 0.35 Total United States 54,191 0.40
Total Contracts for Difference 125,290 0.93
Liontrust Global Funds plc 54 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Equity Fund (continued) Unrealised Gain/Loss % of Holdings Financial assets at fair value through profit or loss US$ Net Assets
Financial Derivative Instruments: 1.07% (continued)
Futures Contracts: 0.02%
Description Notional Country Currency No. of Unrealised % of Contracts Gain Net Assets
Hcf6 Jan 16 1,252,105 HK HKD 20 2,193 0.02 Total Hong Kong 2,193 0.02
Total Futures Contracts 2,193 0.02
Forward Currency Contracts: 0.12%
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Gain US$ Net Assets
Goldman Sachs USD 1,264,000 KRW 1,472,370,400 0.0009 29/02/2016 14,277 0.11 Northern Trust USD 399,339 EUR 365,216 1.0934 19/01/2016 1,378 0.01 Northern Trust USD 85,408 GBP 57,290 1.4908 19/01/2016 509 - Northern Trust EUR 27,744 USD 30,113 1.0854 19/01/2016 119 - Northern Trust USD 18,230 GBP 12,235 1.4899 19/01/2016 98 - Total Forward Currency Contracts 16,381 0.12
Total Financial Derivative Instruments 143,864 1.07
Total Financial assets at fair value through profit or loss 9,594,472 71.23
Financial liabilities at fair value through profit or loss
Financial Derivative Instruments: (1.01)%
Contracts for Difference : (0.11)%
Brazil: (0.05)% 80,683 Estacio Participacoes (6,906) (0.05) Total Brazil (6,906) (0.05)
Cayman Islands: (0.01)% (33,834) Sands China (863) (0.01) Total Cayman Islands (863) (0.01)
Liontrust Global Funds plc 55 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Equity Fund (continued)
Unrealised Loss % of Holdings Financial liabilities at fair value through profit or loss US$ Net Assets
Financial Derivative Instruments: (1.01)% (continued)
Contracts for Difference : (0.11)% (continued)
Indonesia: (0.04)% 483,314 Matahari Department Store (5,647) (0.04) Total Indonesia (5,647) (0.04)
Republic of South Korea: (0.01)% 8,089 Hyundai Motor (1,827) (0.01) Total Republic of South Korea (1,827) (0.01)
Thailand: (0.03)% (100) DC Cfd Fut. Set50 Mar16 (3,688) (0.03) (3,688) (0.03)
Total Contracts for Difference (18,931) (0.14)
Forward Currency Contracts: (0.87)%
Counterparty Currency Currency Currency Maturity Unrealised % of Buys Sells Rate Date Loss US$ Net Assets
Northern Trust GBP 1,792 USD 2,670 1.4904 19/01/2016 (15) - Northern Trust GBP 9,322 USD 14,133 1.5161 19/01/2016 (319) - Northern Trust GBP 9,340 USD 14,162 1.5161 19/01/2016 (320) - Northern Trust EUR 93,717 USD 103,424 1.1036 19/01/2016 (1,304) (0.01) Northern Trust EUR 374,414 USD 413,194 1.1036 19/01/2016 (5,210) (0.04) Northern Trust GBP 1,563,582 USD 2,370,618 1.5161 19/01/2016 (53,529) (0.40) Northern Trust EUR 4,040,924 USD 4,459,462 1.1036 19/01/2016 (56,229) (0.42) Total Forward Currency Contracts (116,926) (0.87)
Total Financial Derivative Instruments (135,857) (1.01)
Total Financial liabilities at fair value through profit or loss (135,857) (1.01)
Liontrust Global Funds plc 56 Annual report and audited Financial Statements Portfolio Statement As at 31 December 2015
Liontrust GF Global Strategic Equity Fund (continued)
Fair Value % of Financial assets at fair value through profit or loss US$ Net Assets
Net Financial Assets at Fair Value through profit or loss 9,458,615 70.22 (Cost: US$ 11,287,852)
Cash 4,123,994 30.62
Other Net Liabilities (113,760) (0.84)
Net Assets Attributable to Holders of Redeemable Participating Shares 13,468,849 100.00
% of Total Assets** 2015 Transferable securities admitted to official stock exchange listing or traded on a regular market 68.42 OTC Derivatives 1.04 Cash and cash held for collateral 29.86 Other assets 0.68 100.00
**The percentage of Total Assets table is unaudited.
Liontrust Global Funds plc 57 Annual report and audited Financial Statements Balance sheet As at 31 December 2015
Liontrust Liontrust Liontrust ** Liontrust GF European GF Global Liontrust GF Macro Liontrust Liontrust * Liontrust GF Global Strategic Strategic GF Special Equity GF Global GF UK GF Asia Strategic Equity Bond Situations Income Income Growth Income Equity Fund Fund Fund Fund Fund Fund Fund Fund Total As at As at As at As at As at As at As at As at As at 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 Notes € US$ £ £ £ £ US$ US$ € Current assets Financial assets at fair value through profit or loss 2 22,473,153 35,530,361 24,938,271 23,070,319 1,115,983 16,209,379 552,025 9,594,472 153,166,865 Debtors: amounts falling due within one year 3 44,106 651,194 39,674 882,174 66,046 232,863 2,134 94,146 2,388,530 Cash 4 3,364,699 13,454,995 2,590,994 43,970 - - 30,234 4,123,994 23,150,114 Cash held for collateral 4 - 2,481,212 - - - - 1,700 - 2,285,660 Total current assets 25,881,958 52,117,762 27,568,939 23,996,463 1,182,029 16,442,242 586,093 13,812,612 180,991,169
Current liabilities Financial liabilities at fair value through profit or loss 2 (813,613) (1,828,862) - - - - (1,099) (135,857) (2,623,259) Creditors: amounts falling due within one year 5 (109,427) (173,367) (220,563) (797,169) (2,417) (100,465) (5,425) (237,401) (2,013,014) Bank overdraft 4 - - - - (3,157) (6,639) - - (13,291) Total liabilities (923,040) (2,002,229) (220,563) (797,169) (5,574) (107,104) (6,524) (373,258) (4,649,564)
Net assets attributable to holders of redeemable participating shares 24,958,918 50,115,533 27,348,376 23,199,294 1,176,455 16,335,138 579,569 13,439,354 176,341,605
Adjustments for preliminary expenses 2 - 4,008 2,573 4,489 - (6,631) 1,182 29,495 32,515
Net assets attributable to holders of redeemable participating shares at market value, in accordance with dealing valuation 24,958,918 50,119,541 27,350,949 23,203,783 1,176,455 16,328,507 580,751 13,468,849 176,374,120
*Liontrust GF Asia Income Fund was launched on 15 May 2015. **Liontrust GF Global Strategic Equity Fund was launched on 16 July 2015.
The accompanying notes form an integral part of these Financial Statements. Liontrust Global Funds plc 58 Annual report and audited Financial Statements
Balance sheet As at 31 December 2014 * Liontrust Liontrust GF European GF Global ** Liontrust Liontrust *** Liontrust **** Liontrust **** Liontrust Strategic Strategic GF Pan GF Special GF Macro GF Global GF UK Equity Bond European Situations Equity Income Growth Fund Fund Fund Fund Fund Fund Fund Total As at As at As at As at As at As at As at As at 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 Notes € US$ € £ £ £ £ € Current assets Financial assets at fair value through profit or loss 2 1,803,969 40,299,918 - 15,413,318 12,115,208 2,209,836 14,325,536 91,888,288 Debtors: amounts falling due within one year 3 59,254 830,836 764 13,256 20,257 - 26,589 824,077 Cash 4 204,070 13,082,022 1,426 973,774 - 6,995 733 12,281,382 Cash held for collateral 4 - 3,233,628 - - - - - 2,672,309 Total current assets 2,067,293 57,446,404 2,190 16,400,348 12,135,465 2,216,831 14,352,858 107,666,056
Current liabilities Financial liabilities at fair value through profit or loss 2 (55,854) (3,391,778) - (3,755) (12) - - (2,863,714) Creditors: amounts falling due within one year 5 (33,864) (144,859) (2,190) (69,620) (42,034) (14,305) (37,596) (366,521) Bank overdraft 4 - - - - (37,451) - - (48,259) Total liabilities (89,718) (3,536,637) (2,190) (73,375) (79,497) (14,305) (37,596) (3,278,494)
Net assets attributable to holders of redeemable participating shares at bid market prices 1,977,575 53,909,767 - 16,326,973 12,055,968 2,202,526 14,315,262 104,387,562
Adjustments for preliminary expenses 2 - 7,067 - 4,985 9,490 - - 24,492 Net assets attributable to holders of redeemable participating shares at market value, in accordance with dealing valuation 1,977,575 53,916,834 - 16,331,958 12,065,458 2,202,526 14,315,262 104,412,054
* Effective 22 April 2014, the Liontrust GF European Absolute Alpha Fund was renamed as the Liontrust GF European Strategic Equity Fund. ** Liontrust GF Pan European Fund terminated on 15 October 2014. *** Liontrust GF Macro Equity Fund launched on 4 April 2014. ****Liontrust GF Global Income Fund and Liontrust GF UK Growth Fund were launched on 2 September 2014.
The accompanying notes form an integral part of these Financial Statements. Liontrust Global Funds plc 60 Annual report and audited Financial Statements Balance sheet (continued) As at 31 December 2014
Liontrust Liontrust Liontrust Liontrust Liontrust Liontrust Liontrust GF European GF Global GF Pan GF Special GF Macro GF Global GF UK Strategic Equity Strategic Bond European Situations Equity Income Income Growth Fund Fund Fund Fund Fund Fund Fund As at As at As at As at As at As at As at 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 Notes Redeemable participating shares outstanding 6 A Class EUR 39,338 A1 Class EUR 461,382 A Class EUR - A1 Class EUR 50,307 A4 Class EUR 1,000 C1 Class GBP 223,690 C1 Class GBP 1,000 B Class USD 18,689 A3 Class EUR 5,130 B Class USD - A2 Class EUR 14,506 A5 Class EUR 1,000 C3 Class GBP 1,000 C3 Class GBP 1,000 C Class GBP 126,484 A4 Class EUR 2,383,209 C Class GBP - C1 Class GBP 47,914 B4 Class USD 2,000 C6 Class GBP 1,000 C6 Class GBP 1,461,066 A4 Class EUR 1,000 A5 Class EUR - C3 Class GBP 1,256,040 C1 Class GBP 1,024 C7 Class GBP 1,000 C7 Class GBP 1,000 B4 Class USD 1,000 B1 Class USD 148,756 C6 Class GBP 1,000 C3 Class GBP 1,170,612 C3 Class GBP 1,000 B4 Class USD 405,360 C7 Class GBP 1,000 C4 Class GBP 1,000 C4 Class GBP 1,000 C1 Class GBP 33,318 C5 Class GBP 27,520 C3 Class GBP 1,349,440 C6 Class GBP 28,051 C4 Class GBP 84,435 C7 Class GBP 1,000 B1 Class USD 1,500 B2 Class USD 1,500 B5 Class USD 1,500
Net asset value per redeemable participating share 12 A Class EUR € 8.78 A1 Class EUR €8.32 A Class EUR - A1 Class EUR €12.11 A4 Class EUR €10.24 C1 Class GBP £9.71 C1 Class GBP £9.74 B Class USD $8.81 A3 Class EUR €8.88 B Class USD - A2 Class EUR €11.71 A5 Class EUR €10.04 C3 Class GBP £11.03 C3 Class GBP £9.76 C Class GBP £8.89 A4 Class EUR €8.68 C Class GBP - C1 Class GBP £11.79 B4 Class USD $9.22 C6 Class GBP £9.85 C6 Class GBP £9.78 A4 Class EUR € 10.64 A5 Class EUR - C3 Class GBP £12.06 C1 Class GBP £9.71 C7 Class GBP £9.85 C7 Class GBP £9.78 B4 Class USD $10.62 B1 Class USD $8.35 C6 Class GBP £10.12 C3 Class GBP £9.76 C3 Class GBP £10.69 B4 Class USD $8.68 C7 Class GBP £10.12 C4 Class GBP £10.06 C4 Class GBP £10.65 C1 Class GBP £8.39 C5 Class GBP £10.00 C3 Class GBP £8.48 C6 Class GBP £9.90 C4 Class GBP £8.75 C7 Class GBP £10.13 B1 Class USD $9.41 B2 Class USD $9.90 B5 Class USD $9.90
The accompanying notes form an integral part of these Financial Statements. Liontrust Global Funds plc 61 Annual report and audited Financial Statements Profit and Loss Account For the year ended 31 December 2015
Liontrust Liontrust Liontrust GF European GF Global Liontrust GF Macro Liontrust Liontrust * Liontrust ** Liontrust Strategic Strategic GF Special Equity GF Global GF UK GF Asia GF Global Equity Bond Situations Income Income Growth Income Strategic Equity Fund Fund Fund Fund Fund Fund Fund Fund Total For the For the For the For the For the For the For the For the For the year ended year ended year ended year ended year ended year ended period ended period ended year ended 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 Notes € US$ £ £ £ £ US$ US$ € Investment income 2 Dividend income 433,314 - 587,164 761,014 99,826 339,244 112,198 53,677 3,044,687 Deposit interest income - 20,239 20 - - - 25 - 18,296 Bond interest income - 2,120,954 ------1,912,076 Net fair value gain/(loss) on financial assets and liabilities at fair value through profit or loss 923,694 (2,170,084) 2,182,552 (105,494) (124,737) 1,053,034 (848,493) (989,254) 1,450,273 Total investment income gain/(loss) 1,357,008 (28,891) 2,769,736 655,520 (24,911) 1,392,278 (736,270) (935,577) 6,425,332
Expenses 10 Investment advisory fee (278,811) (519,341) (164,678) (108,587) (22,662) (111,836) (19,332) (53,181) (1,374,048) Administration fee (57,641) (70,520) (34,389) (58,441) (27,273) (27,273) (29,458) (31,167) (378,873) Dividend/Swap expense (183,302) (987,368) - - - - - (46,773) (1,115,598) Performance fee (80,659) ------(60) (80,713) Custodian's fees (19,922) (26,988) (15,062) (25,154) (14,320) (19,013) (34,036) (5,491) (181,196) Preliminary expenses ------(6,298) (31,006) (33,630) Operating expenses (85,271) (255,585) (106,142) (92,470) (25,389) (72,812) (10,914) (69,228) (796,777) Audit fee (12,202) (25,809) (11,604) (7,995) (1,422) (5,178) (191) (4,703) (75,969) Directors’ fees (2,923) (18,135) (3,997) (2,572) (290) (2,834) (349) (1,223) (34,041) Operating expense cap and Rebate on fees 18 32,591 143,107 20,438 215,816 83,468 230,052 65,491 65,729 1,037,184
Total operating expenses (688,140) (1,760,639) (315,434) (79,403) (7,888) (8,894) (35,087) (177,103) (3,033,661)
Net profit/(loss) before finance costs 668,868 (1,789,530) 2,454,302 576,117 (32,799) 1,383,384 (771,357) (1,112,680) 3,391,671
The accompanying notes form an integral part of these Financial Statements.
Liontrust Global Funds plc 62 Annual report and audited Financial Statements Profit and Loss Account (continued) For the year ended 31 December 2015
Liontrust Liontrust Liontrust GF European GF Global Liontrust GF Macro Liontrust Liontrust * Liontrust ** Liontrust Strategic Strategic GF Special Equity GF Global GF UK GF Asia GF Global Equity Bond Situations Income Income Growth Income Strategic Equity Fund Fund Fund Fund Fund Fund Fund Fund Total For the For the For the For the For the For the For the For the For the year ended year ended year ended year ended year ended year ended period ended period ended year ended 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 Notes € US$ £ £ £ £ US$ US$ € Finance costs Bank interest expense (304,232) (5,505) (352) (49) (11) (98) (122) (54,393) (359,044) Distribution 16 - (441,847) - (659,862) (89,349) (304,692) (332) - (1,850,324) Net income equalisation - (159,514) 102,827 439,512 - - (73,836) - 536,672 Total finance costs (304,232) (606,866) 102,475 (220,399) (89,360) (304,790) (74,290) (54,393) (1,672,696) Profit/(Loss) for the financial period before tax 364,636 (2,396,396) 2,556,777 355,718 (122,159) 1,078,594 (845,647) (1,167,073) 1,718,975 Withholding tax (17,219) - (58,349) (76,101) (9,983) (33,924) (13,114) 1,477 (273,387)
Profit/(Loss)/for the financial period after tax 347,417 (2,396,396) 2,498,428 279,617 (132,142) 1,044,670 (858,761) (1,165,596) 1,445,588
Adjustment for preliminary expenses 2 - 4,008 2,573 4,489 - (6,631) 1,182 29,495 31,863
Increase/(Decrease) in net assets for the year attributable to holders of redeemable participating shares from operations at dealing value 347,417 (2,392,388) 2,501,001 284,106 (132,142) 1,038,039 (857,579) (1,136,101) 1,477,451
* Liontrust GF Asia Income was launched on 15 May 2015. ** Liontrust GF Global Strategic Equity Fund was launched on 16 July 2015.
Gains and losses arose solely from continuing operations. There were no gains or losses other than those dealt with through the Profit and Loss Account.
The accompanying notes form an integral part of these Financial Statements. Liontrust Global Funds plc 63 Annual report and audited Financial Statements Profit and Loss Account For the year ended 31 December 2014
Liontrust Liontrust Liontrust Liontrust Liontrust Liontrust Liontrust GF European GF Global GF Pan GF Special GF Macro GF Global GF UK Strategic Equity Strategic Bond European Situations Equity Income Income Growth Fund Fund Fund Fund Fund Fund Fund Total For the For the For the For the For the For the For the For the year ended year ended year ended period ended period ended period ended period ended year ended 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 Notes € US$ € £ £ £ £ € Investment income 2 Dividend income 50,499 - 71,390 394,581 252,832 - - 925,235 Deposit interest income - 199,763 - - - - - 150,618 Bond interest income - 4,620,136 - - - - - 3,483,509 Net fair value gain/(loss) on financial assets and liabilities at fair value through profit or loss 244,176 (15,255,243) 127,948 (7,749) (122,648) (41,066) (324,622) (11,745,660) Total investment income gain/(loss) 294,675 (10,435,344) 199,338 386,832 130,184 (41,066) (324,622) (7,186,298)
Expenses 10 Investment advisory fee (24,423) (1,197,041) (24,708) (126,470) (50,198) (2,913) 27,645 (1,140,211) Administration fee (39,422) (79,043) (20,959) (25,309) (3,670) (561) (2,324) (159,517) Dividend/Swap expense (15,445) (2,044,120) - - - - - (1,556,679) Performance fee (403) ------(403) Custodian's fees (12,134) (54,597) (13,117) (16,259) (6,355) (462) (1,245) (96,595) Preliminary expenses - - - - (13,204) (1,630) (1,630) (20,429) Operating expenses (23,132) (180,842) (12,649) (50,081) (32,389) (9,910) (20,848) (312,633) Audit fee 2,359 (95,773) 11,591 (3,449) - (5,383) (6,176) (76,884) Directors’ fees (306) (15,460) (383) (1,047) - (196) (1,196) (15,372) Rebate on fees 18 58,574 - 19,053 - 63,002 10,952 - 169,393
Total operating expenses (54,332) (3,666,876) (41,172) (222,615) (42,814) (10,103) (5,774) (3,209,330)
Net profit/(loss) before finance costs 240,343 (14,102,220) 158,166 164,217 87,370 (51,169) (330,396) (10,395,628)
The accompanying notes form an integral part of these Financial Statements.
Liontrust Global Funds plc 64 Annual report and audited Financial Statements Profit and Loss Account (continued) For the year ended 31 December 2014
* Liontrust Liontrust ** Liontrust Liontrust *** Liontrust **** Liontrust **** Liontrust GF European GF Global GF Pan GF Special GF Macro GF Global GF UK Strategic Equity Strategic Bond European Situations Equity Income Income Growth Fund Fund Fund Fund Fund Fund Fund Total For the For the For the For the For the For the For the For the year ended year ended year ended period ended period ended period ended period ended year ended 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 Notes € US$ € £ £ £ £ € Finance costs Bank interest expense (17,953) (13,895) (86) (62) (841) - (3) (29,640) Distribution 16 - (4,028,423) - - (218,068) - - (3,307,957) Net income equalisation - (1,254,349) (18,793) 32,110 (2,015) - - (927,209) Total finance costs (17,953) (5,296,667) (18,879) 32,048 (220,924) - (3) (4,264,806) Profit/(Loss) for the financial period before tax 222,390 (19,398,887) 139,287 196,265 (133,554) (51,169) (330,399) (14,660,434) Withholding tax (4,003) - (11,316) (37,977) (25,283) - - (93,816) Profit/(Loss)/for the financial period after tax 218,387 (19,398,887) 127,971 158,288 (158,837) (51,169) (330,399) (14,754,250)
Adjustment for preliminary expenses 2 - (3,059) - 4,985 9,490 - - 15,655 Increase/(Decrease) in net assets for the year attributable to holders of redeemable participating shares from operations at dealing value 218,387 (19,401,946) 127,971 163,273 (149,347) (51,169) (330,399) (14,738,595)
* Effective 22 April 2014, the Liontrust GF European Absolute Alpha Fund was renamed as the Liontrust GF European Strategic Equity Fund. ** Liontrust GF Pan European Fund was terminated on 15 October 2014. *** Liontrust GF Macro Equity Fund was launched on 4 April 2014. ****Liontrust GF Global Income Fund and Liontrust GF UK Growth Fund were launched on 2 September 2014.
The accompanying notes form an integral part of these Financial Statements. Liontrust Global Funds plc 65 Annual report and audited Financial Statements Statement of changes in net assets attributable to holders of redeemable participating shares For the year ended 31 December 2015
Liontrust Liontrust Liontrust GF European GF Global Liontrust GF Macro Liontrust Liontrust * Liontrust ** Liontrust Strategic Strategic GF Special Equity GF Global GF UK GF Asia GF Global Equity Bond Situations Income Income Growth Income Strategic Equity Fund Fund Fund Fund Fund Fund Fund Fund Total For the For the For the For the For the For the For the For the For the year ended year ended year ended year ended year ended year ended period ended period ended year ended 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 € US$ £ £ £ £ US$ US$ €
Net assets attributable to holders of redeemable participating shares at the beginning of the period 1,977,575 53,916,834 16,331,958 12,065,458 2,202,526 14,315,262 - - 104,412,054
Redeemable participating share transactions Issue of redeemable participating shares for the period 27,580,121 25,004,229 16,028,674 13,637,207 52,539 2,505,793 3,435,676 16,707,899 112,668,682 Redemption of redeemable participating shares for the period (4,946,195) (26,409,134) (7,510,684) (2,782,988) (946,468) (1,530,587) (1,997,346) (2,102,949) (50,041,927) Net (decrease)/increase in net assets from redeemable participating share transactions 22,633,926 (1,404,905) 8,517,990 10,854,219 (893,929) 975,206 1,438,330 14,604,950 62,626,755
Net increase/(decrease) for the year attributable to holders of redeemable participating shares from operations 347,417 (2,392,388) 2,501,001 284,106 (132,142) 1,038,039 (857,579) (1,136,101) 1,477,451
Notional currency adjustment from US Dollar and GBP to Euro ------7,857,860
Net assets attributable to holders of redeemable participating shares at end of period 24,958,918 50,119,541 27,350,949 23,203,783 1,176,455 16,328,507 580,751 13,468,849 176,374,120
* Liontrust GF Asia Income Fund was launched on 15 May 2015. ** Liontrust GF Global Strategic Equity Fund was launched on 16 July 2015.
The accompanying notes form an integral part of these Financial Statements.
Liontrust Global Funds plc 66 Annual report and audited Financial Statements Statement of changes in net assets attributable to holders of redeemable participating shares For the year ended 31 December 2014
* Liontrust Liontrust ** Liontrust Liontrust *** Liontrust **** Liontrust **** Liontrust GF European GF Global GF Pan GF Special GF Macro GF Global GF UK Strategic Strategic European Situations Equity Income Growth Equity Fund Bond Fund Fund Fund Income Fund Fund Fund Total For the For the For the For the For the For the For the For the year ended year ended year ended year ended Period Ended Period Ended Period Ended year ended 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 € US$ € £ £ £ £ € Net assets attributable to holders of redeemable participating shares at the beginning of the year 1,142,209 457,499,478 2,219,781 12,536,315 - - - 350,444,457
Redeemable participating share transactions Issue of redeemable participating shares for the year 709,323 23,741,918 - 6,859,153 13,437,694 5,722,333 15,067,925 69,593,528 Redemption of redeemable participating shares for the year (92,344) (407,922,616) (2,347,752) (3,226,783) (1,222,889) (3,468,638) (422,264) (320,356,673) Net (decrease)/increase in net assets from redeemable participating share transactions 616,979 (384,180,698) (2,347,752) 3,632,370 12,214,805 2,253,695 14,645,661 (250,763,145)
Net increase/(decrease) for the year attributable to holders of redeemable participating shares from operations 218,387 (19,401,946) 127,971 163,273 (149,347) (51,169) (330,399) (14,738,595)
Notional currency adjustment from US Dollar and GBP to Euro ------19,469,337
Net assets attributable to holders of redeemable participating shares at end of year 1,977,575 53,916,834 - 16,331,958 12,065,458 2,202,526 14,315,262 104,412,054
* Effective 22 April 2014, the Liontrust GF European Absolute Alpha Fund was renamed as the Liontrust GF European Strategic Equity Fund. ** Liontrust GF Pan European Fund was terminated on 15 October 2014. *** Liontrust GF Macro Equity Fund was launched on 4 April 2014. ****Liontrust GF Global Income Fund and Liontrust GF UK Growth Fund were launched on 2 September 2014.
The accompanying notes form an integral part of these Financial Statements.
Liontrust Global Funds plc 67 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015
1. General
Liontrust Global Funds plc (the “Company”) was incorporated on 20 June 2008 under the laws of the Republic of Ireland as an open-ended umbrella type investment company with variable capital and limited liability in which different Sub-funds may be created from time to time. The Company is authorised by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (“the UCITS Regulations”).
During the year there were eight sub-funds active in the company, Liontrust GF European Strategic Equity Fund, Liontrust GF Global Strategic Bond Fund, Liontrust GF Special Situations Fund, Liontrust GF Macro Equity Income Fund, Liontrust GF Global Income Fund, Liontrust GF UK Growth Fund, Liontrust GF Asia Income Fund and Liontrust GF Global Strategic Equity Fund (the “Sub-funds”).
Liontrust GF Pan European Fund terminated on 15 October 2014 and was revoked by the Central Bank of Ireland on 23 September 2015.
Liontrust GF European Strategic Equity Fund commenced operations on 15 February 2012. Liontrust GF Special Situations Fund commenced operations on 8 November 2012. Liontrust GF Global Strategic Bond Fund commenced operations on 6 February 2013. Liontrust GF Macro Equity Income Fund commenced operations on 4 April 2014. Liontrust GF Global Income Fund and Liontrust GF UK Growth Fund commenced operations on 2 September 2014. Liontrust GF Asia Income Fund commenced operations on 15 May 2015. Liontrust GF Global Strategic Equity Fund commenced operations on 16 July 2015. Liontrust GF Global Strategic Bond Fund was terminated on 29 January 2016.
Liontrust GF European Strategic Equity Fund - The investment objective of the Sub-fund is to achieve a positive absolute return over the long term for investors through a portfolio of long, synthetic long and synthetic short investments primarily in European equities and equity related derivatives.
Liontrust GF Special Situations Fund – The investment objective of the Sub-fund is to provide long-term capital growth by investing in equities of companies in a special situation, by virtue of their special characteristics that are difficult to replicate.
Liontrust GF Global Strategic Bond Fund - The investment objective of the Sub-fund is to maximise total returns over the medium to long term through a combination of income and capital. The Sub-fund will invest in bond, credit and currency markets worldwide (including developed and emerging markets).
Liontrust GF Macro Equity Income Fund – The investment objective of the Sub-fund is to invest at least 85% of its assets in the Master Fund, Liontrust Macro Equity Income Fund, a UK UCITS Authorised Unit Trust, the investment objective of which is to provide investors with a rising level of income, together with capital growth, over a medium to long term investment horizon.
Liontrust GF Global Income Fund – The investment objective of the Sub-fund is to invest at least 85% of its assets in the Master Fund, Liontrust Global Income Fund, a UK UCITS Authorised Unit Trust, the investment objective of which is to provide investors with a high level of income with capital values keeping pace with inflation over a medium to long term investment horizon.
Liontrust GF UK Growth Fund - The investment objective of the Sub-fund is to invest at least 85% of its assets in the Master Fund, Liontrust UK Growth Fund, a UK UCITS Authorised Unit Trust, the investment objective of which is to provide long term capital growth through a portfolio of mainly United Kingdom equities but with the option of investing part of the portfolio overseas.
Liontrust GF Asia Income Fund – The investment objective of the Sub-fund is to provide investors with a high level of income with long term capital appreciation.
Liontrust GF Global Strategic Equity Fund – The investment objective of the Sub-fund is to achieve long term capital growth through a portfolio of long, synthetic long and synthetic short investments primarily in global equities.
Liontrust Global Funds plc 68 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
1. General (continued) Base Currency Fund of Fund Currency of denomination of shares Liontrust GF European Strategic Equity Fund Euro Euro, US dollar, Pound Sterling Liontrust GF Special Situations Fund Pound Sterling Euro, Pound Sterling Liontrust GF Global Strategic Bond Fund US dollar Euro, US dollar, Pound Sterling Liontrust GF Macro Equity Income Fund Pound Sterling Euro, US dollar, Pound Sterling Liontrust GF Global Income Fund Pound Sterling Pound Sterling Liontrust GF UK Growth Fund Pound Sterling Pound Sterling Liontrust GF Asia Income Fund US dollar Euro, US dollar, Pound Sterling Liontrust GF Global Strategic Equity Fund US dollar Euro, US dollar, Pound Sterling
2. Reporting financial performance
The principal accounting policies applied in the preparation of these Financial Statements are set out below.
Basis of preparation In preparing the financial statements for the financial year end 31 December 2015, the Company has applied Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (‘FRS 102’) for the first time and these financial statements comply with that standard. The transition to FRS 102 has resulted in no changes to the reported financial position or financial performance compared to that presented previously.
On transition to FRS 102 the Company has chosen to apply the recognition and measurement provisions of International Accounting Standard (“IAS”) 39 Financial Instruments: Recognition and Measurement, and the disclosure and presentation requirements of FRS 102 to account for its financial instruments. In accordance with IAS 39, Fund securities and other assets are valued at the mid market price to determine the Net Assets Attributable to Redeemable Participating Shareholders (“Net Assets”).
The application of IAS 39 has resulted in the removal of the bid adjustment resulting in an increase of financial assets at fair value through profit and loss of €134,303 on the Balance Sheet as at 31 December 2014 and a decrease in net fair value gain/loss on financial assets and liabilities at fair value through profit or loss of €701,242 on the Profit & Loss for the year ended 31 December 2014.
Liontrust GF Global Strategic Bond Fund terminated on 29 January 2016 and is being prepared on a termination basis.
In accordance with the Prospectus, the valuation points of the Sub-funds are as follows: Sub-fund name Valuation Point Liontrust GF European Strategic Equity Fund Midnight Liontrust GF Global Strategic Bond Fund Midnight Liontrust GF Special Situations Fund Midnight Liontrust GF Macro Equity Income Fund Midday Liontrust GF Global Income Fund Midday Liontrust GF UK Growth Fund Midday Liontrust GF Asia Income Fund Midday Liontrust GF Global Strategic Equity Fund Midday
Cash Flow Statement The Company has availed of the exemption available to investment funds under section 7 of FRS 102 not to prepare a Cash Flow Statement.
Historical cost convention The Financial Statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities held at fair value through profit or loss.
Foreign exchange translation Items included in the Company’s Financial Statements are measured using currencies of the primary economic environment in which the Sub-funds each operate (the “functional currencies”). Liontrust Global Funds plc 69 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
2. Reporting financial performance (continued)
Fair Value Measurement On initial application of FRS 102, in accounting for its financial instruments a reporting entity is required to apply either a) the full requirements of FRS 102 relating to Basic Financial Instruments and Other Financial Instruments, b) the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement and only the disclosure requirements of FRS 102 relating to Basic Financial Instruments and Other Financial Instruments, or c) the recognition and measurement provisions of IFRS 9 Financial Instruments and only the disclosure requirements of FRS 102 relating to Basic Financial Instruments and Other Financial Instruments. The Company has chosen to implement the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement and only the disclosure requirements of FRS 102 relating to Basic Financial Instruments and Other Financial Instruments.
Fair Value Disclosures The requirement for the Company to measure financial instruments at fair value has not changed with the adoption of FRS 102. However the levels in the fair value hierarchy into which the fair value measurements are categorised for disclosure purposes have changed from that previously disclosed by the Company. However, The Fund has changed the price it uses to value its investments. In the prior year the fund used Bid Prices to value its investments, please refer to the Fair Value Estimation note on page 71 for the prices used in the current year. See note 7 for further details.
Financial assets and liabilities at fair value through profit or loss
(a) Functional currency The functional currency of the Liontrust GF European Strategic Equity Fund is the Euro (“€”) as the majority of its investments are denominated in €. The functional currency of the Liontrust Global Strategic Bond Fund is the US Dollar (“US$”) as the majority of the Sub-fund’s share dealing transactions is carried out in US$ and a corresponding portion of its investments are denominated in US$. The functional currency of the Liontrust GF Special Situations Fund is the Pound Sterling (“£”) as the majority of its investments are denominated in £ and a corresponding proportion of its share dealing transactions are carried out in £. The functional currency of the Liontrust GF Macro Equity Income Fund is the Pound Sterling (“£”) as the majority of its investments are denominated in £ and a corresponding proportion of its share dealing transactions are carried out in £. The functional currency of the Liontrust GF Global Income Fund is the Pound Sterling (“£”) as the majority of its investments are denominated in £ and a corresponding proportion of its share dealing transactions are carried out in £. The functional currency of the Liontrust GF UK Growth Fund is the Pound Sterling (“£”) as the majority of its investments are denominated in £ and a corresponding proportion of its share dealing transactions are carried out in £. The functional currency of the Liontrust GF Asia Income Fund is the US Dollar (“US$”) as the majority of the Sub-Fund’s share dealing transactions is carried out in US$ and a corresponding portion of its investments are denominated in US$. The functional currency of the Liontrust GF Global Strategic Equity Fund is the US Dollar (“US$”) as the majority of the Sub-Fund’s share dealing transactions is carried out in US$ and a corresponding portion of its investments are denominated in US$. The presentation currency of the Company is €.
(b) Transactions and balances - foreign currency Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit and Loss Account. Proceeds from subscriptions and amounts paid on redemption of redeemable participating shares are translated at actual rates.
(c) Classification The Sub-funds classify their investments into equity securities, bonds and collective investment schemes as financial assets or financial liabilities at fair value through profit or loss at inception and classify their investment in derivatives as financial assets and financial liabilities held for trading. These financial assets and financial liabilities are classified as held for trading or designated by the Board of Directors.
Financial assets or financial liabilities held for trading are those acquired or incurred principally for the purposes of selling or repurchasing in the short term. Financial assets and financial liabilities designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Company’s documented investment strategy. The Company’s policy is for the Investment Adviser and the Board of Directors to evaluate the information about these financial assets on a fair value basis together with other related financial information. Liontrust Global Funds plc 70 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
2. Reporting financial performance (continued)
(d) Recognition/derecognition Regular-way purchases and sales of investments are recognised on the trade date – the date on which the Sub-funds commit to purchase or sell the investment. Investments are derecognised when the rights to receive cash flows from the investments have expired or the Sub-funds have transferred substantially all risks and rewards of ownership.
(e) Measurement Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed in the Profit and Loss Account. Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the ‘financial assets or financial liabilities at fair value through profit or loss’ category are presented in the Profit and Loss Account in the period in which they arise.
(f) Fair value estimation Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As a result of the Company's decision to implement the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement, the fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading on the reporting date. Bonds are valued at a mid evaluation. Prior to 1 January 2015 the quoted market price used for financial assets held by the Company for financial reporting purposes was the current bid price; the quoted market price for financial liabilities was the current asking price. The Company changed its fair valuation input for financial reporting purposes to bring it into line with the pricing used for dealing purposes, which is to use the last traded market price for both financial assets and financial liabilities where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid- ask spread, management will determine the point within the bid-ask spread that is most representative of fair value.
Forward foreign currency transactions are valued based on the closing forward contract rates on the relevant foreign exchange market on a daily basis. Realised gains and losses and movements in unrealised gains and losses are reported in the Company’s Profit and Loss Account.
For open futures contracts, changes in the fair value of the contract are recognised as unrealised gains or losses by “marking-to-market” the value of the contract at the Balance Sheet date and are included in the net gain/(loss) on financial assets and liabilities at fair value through profit or loss in the Profit and Loss Account. When the contract is closed, the difference between the proceeds from (or cost of) the closing transactions and the original transaction is recorded as a realised gain or loss. The margins paid on open futures have been disclosed separately in the Balance Sheet.
Contracts for difference are agreements between the Sub-funds and third parties, which allow the Sub-funds to acquire an exposure to the price movement of specific securities without actually purchasing the securities. Contracts for differences (CFDs) which do not reset are valued at fair value with reference to the close of business market price of the underlying stock. All other CFDs are valued as the difference between the close of business market price at year end and the reset price. Margin is paid at each fair value point to/from the broker thereby determining the new reset price.
Equity swaps are agreements between the Sub-funds and third parties, which allow the Sub-funds to acquire an exposure to the price movement of specific securities without actually purchasing the securities. The changes in contract values are recorded as unrealised gains or losses and the Sub-funds recognise a realised gain or loss when the contract is closed. Unrealised gains and losses on equity swaps are recognised in the Profit and Loss Account.
Credit default swaps are OTC contracts in which a Sub-fund pays or receives an interest flow in return for the counterparty accepting all or part of the risk of default or failure to pay off a reference entity on which the swap return is written. Where the Sub-fund has bought protection the maximum potential loss is the value of the interest flows the Sub-fund is contracted to pay until maturity of the contract. The credit default swaps are marked to market at each valuation point by a third party vendor and the change, if any, is recorded as a movement in unrealised gain or loss. Payments received or made as a result of a credit event or termination of the contract are recognised, net of a proportional amount of the upfront payment, as realised gains or losses. Liontrust Global Funds plc 71 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
2. Reporting financial performance (continued)
(f) Fair value estimation (continued) The fair value of investments in collective investment schemes are valued on the basis of the latest available unaudited net asset value provided by the Administrators of the collective investment schemes. The underlying collective investment schemes value securities and other financial instruments on a fair value basis of accounting.
Options are contracts through which a seller gives a buyer the right, but not the obligation, to buy or sell a specified number of shares at a predetermined price within a set time period. Options paid and written are valued using quoted settlement prices established by the exchange on which they trade. Realised gains or losses and changes in unrealised gains or losses are recognised as net gains/losses on financial assets and financial liabilities at fair value through profit or loss in the Profit and Loss Account.
The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives) is determined by using valuation techniques. The Sub-funds use a variety of methods and makes assumptions that are based on market conditions existing at each Balance Sheet date. Valuation techniques used include the use of comparable recent arm’s length transactions, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants. There were no investments valued in this way as at 31 December 2015 (2014: Nil).
Investment transactions Investment transactions are accounted for on a trade date basis. Profits and losses on the disposal of investments are calculated by reference to the net proceeds received on disposal and the average cost attributable to those investments, and are included in the Profit and Loss Account.
Income from investments Income arising on investments is accounted for on an ex-dividend basis. Dividend income is shown gross of any withholding taxes which are disclosed separately in the Profit and Loss Account and net of any tax credits. Deposit interest income in the Company’s bank accounts is accounted for on an effective interest basis.
Cash and cash held as collateral Cash comprises cash on hand and cash on deposits. Cash equivalents are short term highly liquid investments that are readily convertible to known amount of cash and are subject to insignificant changes in value with original maturities of three months, or less.
Cash and cash equivalents are valued at their face value with interest accrued, where applicable, as at close of business at 31st December 2015.
Receivables Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Receivables are recognised initially at fair value plus transaction costs that are directly attributable to their acquisition origination.
Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
Redeemable participating shares The Company issues redeemable shares, which are redeemable at the holder’s option and are classified as financial liabilities. Redeemable shares can be put back to the Company at any time for cash equal to a proportionate share of the Company’s net asset value. The redeemable shares are carried at the redemption amount that is payable at the Balance Sheet date if the holder exercises the right to put the share back to the Company.
Redeemable shares are issued and redeemed at the holder’s option at prices based on the Company’s net asset value per share at the time of issue or redemption. The Company’s net asset value per share is calculated by dividing the net assets attributable to the holders of redeemable shares with the total number of outstanding redeemable shares. In accordance with the provisions of the Company, investment positions are valued based on the last traded market price for the purpose of determining the net asset value per share for subscriptions and redemptions. Liontrust Global Funds plc 72 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
2. Reporting financial performance (continued)
Redeemable participating shares (continued) All issued redeemable shares are fully paid. The Company’s capital is represented by these redeemable shares with no par value and with each carrying one vote. They are entitled to dividends and to payment of a proportionate share based on the Company’s net asset value per share on the redemption date. The Company has no restrictions or specific capital requirements on the subscriptions and redemptions of shares. The relevant movements are shown on the statement of changes in net assets attributable to participating shares.
Operating expenses The Company is responsible for all normal operating expenses including audit fees, stamp and other duties and charges incurred on the acquisition and realisation of investments. The Company applies an Operating expense cap, please refer to Note 18 for details of the Company’s Operating Expense Cap.
Distributions Proposed distributions to holders of redeemable participating shares are classified as finance costs and accounted for in the Profit and Loss Account when they are ratified by the Board of Directors. Distributions on the Liontrust GF Global Strategic Bond Fund, Liontrust GF Macro Equity Income Fund, Liontrust GF Global Income Fund, Liontrust GF UK Growth Fund and Liontrust GF Asia Income Fund are disclosed in Note 16. No other distributions on the other Sub-funds have been proposed or paid during the year.
Income equalisation Income equalisation is accrued income included in the price of redeemable participating shares purchased and redeemed during the accounting year. The subscription price of redeemable participating shares is deemed to include an equalisation payment calculated by reference to the accrued income of the relevant Sub-fund and the first distribution in respect of any redeemable participating share will include a payment of capital usually equal to the amount of such equalisation payment. The redemption price of each redeemable participating share will also include an equalisation payment in respect of the accrued income of the relevant Sub-fund up to the date of redemption.
Adjustments re FRS 102 In accordance with Financial Reporting Standards, unamortised preliminary expenses were written off in the first year of trading of each Sub-fund. In accordance with the Company’s prospectus the net asset value reported each month reflects these preliminary expenses written off over a period of five years. Amounts unamortised and included in these monthly net asset values for Liontrust GF European Strategic Equity Fund of €Nil (2014: €Nil), Liontrust GF Global Strategic Bond Fund of US$4,008 (2014: US$7,067), Liontrust GF Special Situations Fund of £2,573 (2014: £4,985), Liontrust GF Macro Equity Income Fund of £4,489 (2014: £9,490), Liontrust Global Income Fund of £Nil (2014: £Nil), Liontrust GF UK Growth Fund of (£6,631) (2014: £Nil), Liontrust GF Asia Income Fund of US$1,182 and Liontrust GF Global Strategic Equity Fund of US$29,495 have been adjusted in the financial statements.
Transaction Costs Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument. Transaction costs for the year have been included in the Profit and Loss Account.
Liontrust Global Funds plc 73 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
3. Debtors
Liontrust Liontrust Liontrust Liontrust Liontrust GF European GF Global GF GF Macro Liontrust Liontrust Liontrust GF Global Strategic Strategic Special Equity GF Global GF UK GF Asia Strategic Equity Bond Situations Income Income Growth Income Equity Fund Fund Fund Fund Fund Fund Fund Fund Total 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 € US$ £ £ £ £ US$ US$ € Amounts falling due within one year: Receivable for securities sold - 5,022 990 11,157 10,000 105,000 - - 177,137 Subscriptions receivable - - 1,533 714,339 - - - 971,300 Dividends receivable 10,396 - 15,409 - - - 2,134 28,417 59,427 Bond interest receivable - 503,064 ------463,099 Other receivables 33,710 143,108 21,742 156,678 56,046 127,863 - 65,729 717,567 44,106 651,194 39,674 882,174 66,046 232,863 2,134 94,146 2,388,530
Liontrust Liontrust Liontrust GF European GF Global Liontrust Liontrust GF Macro Liontrust Liontrust Strategic Strategic GF Pan GF Special Equity GF Global GF UK Equity Bond European Situations Income Income Growth Fund Fund Fund Fund Fund Fund Fund Total 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 € US$ € £ £ £ £ € Amounts falling due within one year: Subscriptions receivable - - - - 12,357 - 26,589 50,185 Dividends receivable 500 - - 8,405 - - - 11,331 Bond interest receivable - 830,815 - - - - - 686,595 Other receivables 58,754 21 764 4,851 7,900 - - 75,966 59,254 830,836 764 13,256 20,257 - 26,589 824,077
4. Cash at Bank and Sub-Custodian
The Custodian to the Company is Northern Trust Fiduciary Services (Ireland) Limited, an indirect wholly- owned subsidiary of Northern Trust Corporation ("NTC"). NTC is publicly traded and a constituent of the S&P 500. Please refer to the Credit Risk disclosure disclosed in note 7 for details of credit risk and segregation of assets.
Cash at Bank Cash at Bank and Cash held for Collateral is held with Northern Trust Company London Branch, Goldman Sachs International and BNP Paribas.
As at the 31 December 2015 the cash amounts held were as follows:
Liontrust Liontrust Liontrust GF European Liontrust Liontrust GF Macro Liontrust Liontrust Liontrust GF Global Strategic GF Global GF Special Equity GF Global GF UK GF Asia Strategic Equity Strategic Situations Income Income Growth Income Equity Fund Bond Fund Fund Fund Fund Fund Fund Fund Total 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 Cash € US$ £ £ £ £ US$ US$ €
BNP Paribas - 3,900,000 ------3,590,168 Goldman Sachs International 415,777 415,777 Northern Trust, London Branch 2,948,922 9,554,995 2,590,994 43,970 (3,157) (6,639) 30,234 4,123,994 19,130,878 3,364,699 13,454,995 2,590,994 43,970 (3,157) (6,639) 30,234 4,123,994 23,136,823
Cash held for collateral Goldman Sachs International - 2,481,212 - - - - 1,700 - 2,285,660 - 2,481,212 - - - - 1,700 - 2,285,660
Liontrust Global Funds plc 74 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
4. Cash at Bank and Sub-Custodian (continued)
Liontrust Liontrust Liontrust GF European GF Global Liontrust Liontrust GF Macro Liontrust Liontrust Strategic Strategic GF Pan GF Special Equity GF Global GF UK Equity Bond European Situations Income Income Growth Fund Fund Fund Fund Fund Fund Fund Total 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 Cash € US$ € £ £ £ £ € Lloyds - 5,004,162 - - - - - 4,135,499 Northern Trust, London Branch 204,070 8,077,860 1,426 973,774 (37,451) 6,995 733 8,097,624 204,070 13,082,022 1,426 973,774 (37,451) 6,995 733 12,233,123
Cash held for collateral Goldman Sachs International - 3,233,628 - - - - - 2,672,309 - 3,233,628 - - - - - 2,672,309
5. Creditors
Liontrust Liontrust Liontrust Liontrust GF European GF Global Liontrust GF Macro Liontrust Liontrust Liontrust GF Global Strategic Strategic GF Special Equity GF Global GF UK GF Asia Strategic Equity Bond Situations Income Income Growth Income Equity Fund Fund Fund Fund Fund Fund Fund Fund Total 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 31-Dec-15 € US$ £ £ £ £ US$ US$ € Amounts falling due Iithin one year: Dividend expense payable 12,456 17,377 ------28,453 Securities Purchased Payable - - - 757,392 - - - 150,010 1,165,728 Payable for shares redeemed - 5,672 148,689 18,059 - 85,625 - - 347,643 Sundry creditors 37,221 78,180 40,649 (5,684) (1,410) (3,798) (581) 51,000 195,979 Investment Adviser fee payable 30,258 45,901 18,443 14,353 - 10,261 719 9,971 140,773 Administration fee payable 4,810 6,115 3,046 5,077 2,369 2,369 4,077 6,115 37,271 Audit fee payable 8,210 17,899 8,955 7,295 781 5,331 191 4,703 59,533 Bank interest payable 15,510 1,204 - - - - 14,583 30,043 Custodian fee payable 962 1,019 781 677 677 677 1,019 1,019 7,591 109,427 173,367 220,563 797,169 2,417 100,465 5,425 237,401 2,013,014
Liontrust Liontrust Liontrust GF European GF Global Liontrust Liontrust GF Macro Liontrust Liontrust Strategic Strategic GF Pan GF Special Equity GF Global GF UK Equity Bond European Situations Income Income Growth Fund Fund Fund Fund Fund Fund Fund Total 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 31-Dec-14 € US$ € £ £ £ £ € Amounts falling due within one year: Dividend expense payable 415 39,334 - - - - - 32,921 Securities Purchased Payable - - - 19,334 - - - 24,913 Payable for shares redeemed - 159 (1,016) - - - 26,648 33,453 Sundry creditors 3,805 8,848 667 18,642 11,138 (5,257) 11,188 57,801 Investment Adviser fee payable 2,655 57,795 - 12,081 22,804 13,445 (9,928) 99,902 Administration fee payable 12,029 16,636 1,168 6,582 1,441 414 1,781 40,112 Audit fee payable 11,416 19,678 944 9,902 5,324 5,383 6,177 63,138 Bank interest payable 973 3,050 - 30 12 - - 3,548 Custodian fee payable 2,432 3,025 391 1,881 432 124 534 9,151 Directors fees payable 139 (3,666) 36 1,168 883 196 1,196 1,582 33,864 144,859 2,190 69,620 42,034 14,305 37,596 366,521
6. Share Capital
The authorised share capital of the Company is €300,000, divided into 300,000 redeemable Management Shares of €1.00 each and 500,000,000,000 Shares of no par value. Management Shares do not entitle the holders to any dividend and on a winding-up entitle the holder to receive the amount paid up thereon but not otherwise to participate in the assets of the Company.
Liontrust Global Funds plc 75 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
6. Share Capital (continued)
The movement in the number of redeemable participating shares was as follows:
Liontrust GF European Strategic Equity Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 A Class EUR 39,338 - - 39,338 B Class USD 18,689 - - 18,689 C Class GBP 126,484 - - 126,484 A4 Class EUR 1,000 2,216,732 (436,904) 1,780,828 B4 Class USD 1,000 - - 1,000 C3 Class GBP 1,000 171,994 (1,000) 171,994 C4 Class GBP 1,000 - - 1,000
31 December 2014 A Class EUR 40,423 - (1,085) 39,338 B Class USD 18,689 - - 18,689 C Class GBP 68,117 66,345 (7,978) 126,484 A4 Class EUR - 1,000 - 1,000 B4 Class USD - 1,000 - 1,000 C3 Class GBP - 1,000 - 1,000 C4 Class GBP - 1,000 - 1,000
Liontrust GF Global Strategic Bond Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 A1 Class EUR 461,382 193,276 (125,185) 529,473 A3 Class EUR 5,130 81 - 5,211 A4 Class EUR 2,383,209 1,299,265 (1,898,078) 1,784,396 B1 Class USD 148,756 35,279 (118,926) 65,109 B3 Class USD - 278,963 - 278,963 B4 Class USD 405,360 321,500 (452,235) 274,625 C1 Class GBP 33,318 34 (20,800) 12,552 C3 Class GBP 1,349,440 310,954 (116,245) 1,544,149 C4 Class GBP 84,435 8,284 (4,303) 88,416
31 December 2014 A1 Class EUR 820,815 132,818 (492,251) 461,382 A3 Class EUR 5,015 115 - 5,130 A4 Class EUR 2,350,041 338,043 (304,875) 2,383,209 A5 Class EUR 3,162,918 - (3,162,918) - B1 Class USD 36,859,198 8,384 (36,718,826) 148,756 B4 Class USD 415,194 6,566 (16,400) 405,360 C1 Class GBP 40,203 333 (7,218) 33,318 C3 Class GBP 2,554,805 1,250,535 (2,455,900) 1,349,440 C4 Class GBP 82,178 8,227 (5,970) 84,435
Liontrust Global Funds plc 76 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
6. Share Capital (continued)
Liontrust GF Special Situations Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 A1 Class EUR 50,307 11,385 - 61,692 A2 Class EUR 14,506 - (500) 14,006 C1 Class GBP 47,914 - (2,767) 45,147 C3 Class GBP 1,256,040 577,675 (375,992) 1,457,723 C6 Class GBP 1,000 538,757 (238,451) 301,306 C7 Class GBP 1,000 243,545 (5,630) 238,915
31 December 2014 A1 Class EUR 143,662 8,478 (101,833) 50,307 A2 Class EUR 9,953 16,535 (11,982) 14,506 C1 Class GBP 46,594 4,221 (2,901) 47,914 C3 Class GBP 886,476 547,180 (177,616) 1,256,040 C6 Class GBP - 1,000 - 1,000 C7 Class GBP - 1,000 - 1,000
Liontrust GF Macro Equity Income Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 A4 Class EUR 1,000 2,652 - 3,652 A5 Class EUR 1,000 - - 1,000 B4 Class USD 2,000 - - 2,000 C1 Class GBP 1,024 57 - 1,081 C3 Class GBP 1,170,612 797,076 (259,424) 1,708,264 C4 Class GBP 1,000 18,898 (1,000) 18,898 C5 Class GBP 27,520 543,376 (9,287) 561,609 C6 Class GBP 28,051 19 (1,043) 27,027 C7 Class GBP 1,000 18,332 (1,482) 17,850 B1 Class USD 1,500 86 - 1,586 B2 Class USD 1,500 84 - 1,584 B5 Class USD 1,500 - - 1,500
31 December 2014 A4 Class EUR - 1,000 - 1,000 A5 Class EUR - 1,000 - 1,000 B4 Class USD - 2,000 - 2,000 C1 Class GBP - 1,024 - 1,024 C3 Class GBP - 1,277,787 (107,175) 1,170,612 C4 Class GBP - 1,000 - 1,000 C5 Class GBP - 44,370 (16,850) 27,520 C6 Class GBP - 28,051 - 28,051 C7 Class GBP - 1,000 - 1,000 B1 Class USD - 1,500 - 1,500 B2 Class USD - 1,500 - 1,500 B5 Class USD - 1,500 - 1,500
Liontrust Global Funds plc 77 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
6. Share Capital (continued)
Liontrust GF Global Income Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 C1 Class GBP 223,690 519 (96,637) 127,572 C3 Class GBP 1,000 51 - 1,051 C6 Class GBP 1,000 5,146 (1,131) 5,015 C7 Class GBP 1,000 - - 1,000
31 December 2014 C1 Class GBP - 402,911 (179,221) 223,690 C3 Class GBP - 177,589 (176,589) 1,000 C6 Class GBP - 1,000 - 1,000 C7 Class GBP - 1,000 - 1,000
Liontrust GF UK Growth Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 C1 Class GBP 1,000 - - 1,000 C3 Class GBP 1,000 - - 1,000 C6 Class GBP 1,461,066 241,426 (146,325) 1,556,167 C7 Class GBP 1,000 - - 1,000
31 December 2014 C1 Class GBP - 1,000 - 1,000 C3 Class GBP - 1,000 - 1,000 C6 Class GBP - 1,504,489 (43,423) 1,461,066 C7 Class GBP - 1,000 - 1,000
Liontrust GF Asia Income Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 A Class EUR - 50,000 - 50,000 A2 Class EUR - 250,000 (240,000) 10,000 B4 Class USD - 1,000 - 1,000 C6 Class GBP - 1,026 - 1,026 C7 Class GBP - 1,000 - 1,000
Liontrust GF Global Strategic Equity Fund Shares Issued Shares redeemed Opening Shares during the year during the year Closing shares 31 December 2015 A2 Class EUR - 40,099 - 40,099 A4 Class EUR - 161,000 (151,000) 10,000 A5 Class EUR - 439,267 (43,200) 396,067 B2 Class USD - 682,689 - 682,689 B4 Class USD - 1,000 - 1,000 B5 Class USD - 40,200 (1,000) 39,200 C2 Class GBP - 169,042 (3,384) 165,658 C4 Class GBP - 1,000 - 1,000 C5 Class GBP - 1,000 - 1,000
Liontrust Global Funds plc 78 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management
Strategy in using financial instruments The Sub-funds are exposed to a variety of financial risks in pursuing their stated investment objectives and policies. These risks are defined in FRS 102 as including credit risk, liquidity risk and market risk (which in turn includes currency risk, interest rate risk and other price risk). The Sub-funds take exposure to certain of these risks to generate investment returns on their portfolios, although these risks can also potentially result in a reduction in the Sub-funds’ assets. The Investment Adviser will use its best endeavours to minimise the potentially adverse effects of these risks on the Sub-funds’ performance where it can do so while still managing the investments of the Sub-funds in ways that are consistent with each Sub-fund’s investment objectives and policies.
The risks, and the measures adopted by the Company for managing these risks, are detailed on pages 79 - 92. There is also a more general discussion of a number of risk factors in the Company's prospectus.
Market price risk Market price risk is defined in FRS 102 as the risk that the fair value of a financial instrument or its future cash flows will fluctuate because of changes in market prices.
Depending on the Sub-fund, the Sub-fund’s assets may consist principally of equities, bonds, credit instruments, futures and options, equity swaps, contracts for difference, credit default swaps or forward foreign currency contracts.
The values of these instruments are determined by market forces and there is accordingly a risk that market prices can change in a way that is adverse to a Sub-fund’s performance.
The Company has adopted a number of investment restrictions which are set out in the individual Sub-fund supplements to the Company’s prospectus and which limit the exposure of the Sub-funds to adverse changes in the price of any individual financial asset. In accordance with the Company’s policy, the Investment Adviser monitors the Sub-funds’ positions on a daily basis and reports regularly to the Board of Directors. The Board reviews the information on each Sub-fund’s overall market exposure provided by the Investment Adviser at its periodic meetings.
In addition, the Investment Adviser manages the exposure of the portfolios to the risk of adverse changes in the general level of market prices through adhering to its formal risk management process, which includes the use of systems and technology to monitor overall market and position risk on a daily basis.
The maximum risk arising from an investment in a financial instrument is determined by the fair value of the financial instruments, or in the case of certain derivatives, the nominal value of the underlying assets, except for short positions in derivatives and securities where the loss may potentially be unlimited.
As at 31 December 2015 and 31 December 2014 the overall market exposure for each Sub-fund was as shown in the Portfolio Statement, other than for derivatives and short positions where the exposure could be greater.
At 31 December 2015, market price risks defined by FRS 102 applying to each Sub-fund are affected by two main components: changes in market prices and currency exchange rates.
Market price and currency exchange rate movements primarily affect the fair values of equity securities and related instruments held on account for each Sub-fund.
The following table is included in accordance with the requirements of Section 34 FRS 102 to show the sensitivity of each Sub-fund to market price risk, assuming a change in the market value of underlying securities of 15% for all sub-Funds. These percentage movements are based on the Investment Adviser’s estimate of reasonably possible market movements over the course of the year. In relation to Liontrust GF European Strategic Equity Fund please refer to the VaR information on page 81.
Liontrust Global Funds plc 79 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Market price risk (continued)
As at 31 December 2015 Market Value % Increase / Effect of Effect of 31.12.15 (decrease) Increase Decrease
Liontrust GF European Strategic Equity Fund €21,659,540 15% + €3,248,931 - €3,248,931 Liontrust GF Global Strategic Bond Fund $33,701,499 15% + $5,055,225 - $5,055,225 Liontrust GF Special Situations Fund £24,938,271 15% + £3,740,741 - £3,740,741 Liontrust GF Macro Equity Income Fund £23,070,319 15% + £3,460,548 - £3,460,548 Liontrust GF Global Income Fund £1,115,983 15% + £167,397 - £167,397 Liontrust GF UK Growth Fund £16,209,379 15% + £2,431,407 - £2,431,407 Liontrust GF Asia Income Fund $550,926 15% + $82,639 - $82,639 Liontrust GF Global Strategic Equity Fund $9,458,615 15% + $1,418,792 - $1,418,792
As at 31 December 2014 Market Value % Increase / Effect of Effect of 31.12.2014 (decrease) Increase Decrease
Liontrust GF European Strategic Equity Fund €1,748,115 15% + €262,217 - €262,217 Liontrust GF Global Strategic Bond Fund $36,908,140 15% + $5,536,221 - $5,536,221 Liontrust GF Special Situations Fund £15,409,563 15% + £2,311,434 - £2,311,434 Liontrust GF Macro Equity Income Fund £12,115,196 15% + £1,817,279 - £1,817,279 Liontrust GF Global Income Fund £2,209,836 15% + £331,475 - £331,475 Liontrust GF UK Growth Fund £14,325,536 15% + £2,148,830 - £2,148,830
Some limitations of sensitivity analysis are;
markets and levels of market liquidity in conditions of market stress may bear no relation to historical patterns; the market price risk information is a relative estimate of risk rather than a precise and accurate number; the market price information represents a hypothetical outcome and is not intended to be predictive; and future market conditions could vary significantly from those experienced in the past.
The Sub-funds are required to calculate their exposure to derivatives on a daily basis using one of two alternate methods, the Commitment Approach or Value at Risk (VaR). The table below details the approach each Sub-fund takes. Sub-fund Name Approach Liontrust GF European Strategic Equity Fund VaR Liontrust GF Global Strategic Bond Fund Commitment Approach Liontrust GF Special Situations Fund Commitment Approach Liontrust GF Macro Equity Income Fund Commitment Approach Liontrust GF Global Income Fund Commitment Approach Liontrust GF UK Growth Fund Commitment Approach Liontrust GF Asia Income Fund Commitment Approach Liontrust GF Global Strategic Equity Fund Commitment Approach
The commitment conversion methodology for standard derivatives is the market value of the equivalent position in the underlying asset. This may be replaced by the notional value or the price of the futures contract where this is more conservative. Please refer to the relevant portfolio statements for the notional value of the futures contract.
VaR is a method of estimating potential loss due to market risk, rather than a statement of leverage, using a given confidence level, or probability, over a specific time period and assuming normal market conditions. The VaR is calculated using a Historical Simulation model carried out in accordance with regulatory guidelines.
Liontrust Global Funds plc 80 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Market price risk (continued)
Value at Risk (VaR) The below table provides an analysis of the VaR measures and leverage levels for the Liontrust GF European Strategic Equity Fund, the only Sub-fund to use the VaR approach. The maximum VaR the Sub-fund is allowed to use under the UCITS Regulations is 20%.
Fund Risk Characteristics 31-Dec-15 31-Dec-14 Notes VaR as at the year end 4.41% 4.67% Lowest leverage level employed during the year 117.96% 156.58% Highest leverage level employed during the year 226.29% 293.57% Average leverage level employed during the year 192.45% 213.28% Lowest VaR utilized during the year 2.87% 2.14% Lowest actual VaR Highest VaR utilized during the year 5.99% 4.97% Highest actual VaR Average VaR utilized during the year 4.85% 4.04% Average actual VaR
VaR Parameters Value VaR Approach: Absolute Simulation Methodology: Historical Confidence Level: 99% Reporting Time Horizon: 1 Month Historical Window: 1 Years Fund Type: Absolute Return
Some limitations of this VaR analysis are listed below:
The models are based on historical data and cannot take account of the fact that the future market price movements, correlation between markets and levels of market liquidity in conditions of market stress may bear no relation to historical patterns; The market price information is a relative estimate of risk rather than a precise and accurate number; The market price information represents a hypothetical outcome and is not intended to be predictive (in the case of the probability-based methods, such as VaR, profits and losses are almost certain to exceed the reported amount with a frequency depending on the confidence interval chosen); and Future market conditions could vary significantly from those experienced in the past.
*The leverage has been calculated using the sum of the notionals of the derivatives used.
Liontrust Global Funds plc 81 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Currency risk Currency risk is defined in FRS 102 as the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Sub-funds are exposed to currency risk as the assets and liabilities of the Sub-funds may be denominated in a currency other than the functional currency of the Sub-funds, which is the US dollar for the Liontrust GF Global Strategic Bond Fund, the Liontrust GF Asia Income Fund and the Liontrust GF Global Strategic Equity Fund, the Euro for the Liontrust European Strategic Equity Fund and the Pound Sterling for the Liontrust GF Special Situations Fund, Liontrust GF Macro Equity Income Fund, Liontrust GF Global Income Fund and Liontrust GF UK Growth Fund.
The fluctuations in the rate of exchange between the currency in which the asset or liability is denominated and the functional currency could result in an appreciation or depreciation in the fair value of that asset. The Investment Adviser may attempt to mitigate these risks through the use of financial derivative instruments.
In accordance with Company policy, the Investment Adviser monitors the Sub-funds’ currency exposures on a daily basis and reports regularly to the Board of Directors, which reviews the information provided by the Investment Adviser on any significant exposures at its periodic meetings.
At 31 December 2015 and 31 December 2014 each Sub-fund’s currency exposure was as follows, the below tables exclude the hedging at the individual class level of the Sub-fund:
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2015 €’000 €’000 €’000 €'000 Liontrust GF European Strategic Equity Fund Pound Sterling 140 15 4,323 4,478 Canadian Dollar 532 - - 532 Danish Kroner 48 - - 48 Norwegian Kroner (22) (1) - (23) Swedish Kronor 36 - - 36 Swiss Franc (26) - - (26) United States Dollar (74) (3) 196 119 Honk Kong Dollar (7) - - (7) 627 11 4,519 5,157
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2014 €’000 €’000 €’000 €'000 Liontrust GF European Strategic Equity Fund Pound Sterling 594 (2) (580) 12 Canadian Dollar 58 - - 58 Danish Kroner 4 - - 4 Norwegian Kroner 4 (1) - 3 Swedish Kronor 2 - - 2 Swiss Franc 50 - - 50 United States Dollar 3 - 66 69 715 (3) (514) 198
Liontrust Global Funds plc 82 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Currency risk (continued)
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2015 US$’000 US$’000 US$’000 US$’000 Liontrust GF Global Strategic Bond Fund Brazil Real 4,401 1 (2,140) 2,262 Pound Sterling 164 22 15,733 15,919 United States Dollar 11,855 6,179 (29,889) (11,855) Mexican Peso 4,599 - - 4,599 Euro (455) 1,056 29,087 29,688 Japanese Yen (4) 8,153 - 8,149 Russian Ruble 8,426 - - 8,426 South African Rand 5,834 4 - 5,838 Turkish Lira - - (7,865) (7,865) Chinese Yuan - - (5,042) (5,042) Swiss Franc - 34,820 15,415 (116) 50,119
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2014 US$’000 US$’000 US$’000 US$’000 Liontrust GF Global Strategic Bond Fund Brazil Real 5,106 - - 5,106 Pound Sterling 2,623 7 (2,663) (33) Colombia Peso 1,549 - 1,682 3,231 Deutsche Mark 1,727 - - 1,727 Euro (650) 2,110 - 1,460 Japanese Yen (34) - - (34) Russian Ruble 2,176 - 1,731 3,907 South African Rand - 7 - 7 Turkish Lira - - (2,991) (2,991) 12,497 2,124 (2,241) 12,380
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2015 £’000 £’000 £’000 £’000 Liontrust GF Special Situations Fund Euro - - 134 134 - - 134 134
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2014 £’000 £’000 £’000 £’000 Liontrust GF Special Situations Fund Euro (15) (1) 131 115 (15) (1) 131 115
Liontrust Global Funds plc 83 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Currency risk (continued)
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2015 £’000 £’000 £’000 £’000 Liontrust GF Macro Equity Income Fund Euro - - 8 8 United States Dollar - - 20 20 - - 28 28
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2014 £’000 £’000 £’000 £’000 Liontrust GF Macro Equity Income Fund Euro - 8 - 8 United States Dollar - - 19 19 - 8 19 27
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2015 £’000 £’000 £’000 £’000 Liontrust GF Asia Income Fund Australian dollar 86 - - 86 Hong Kong dollar 255 - - 255 Korean won 7 - - 7 Malaysian dollar 4 - - 4 New Zealand dollar 20 - - 20 Philippine peso 6 - - 6 Pound Sterling 3 - - 3 Singapore dollar 31 - - 31 Thai bahts 61 - - 61 Taiwan dollar 75 - - 75 Euro - - 85 85 United States Dollar 2 32 (86) (52) 550 32 (1) 581
Net Non- monetary Net Monetary assets assets Hedging Net assets 31 December 2015 $’000 $’000 $’000 $’000 Liontrust GF Global Strategic Equity Fund Euro - (402) 4,944 4,542 Hong Kong dollar 4,344 (77) 150 4,417 Korean won - - (1,250) (1,250) Pound Sterling - - 2,244 2,244 4,344 (479) 6,088 9,953
As at 31 December 2015 Liontrust GF Global Income Fund and Liontrust GF UK Growth Fund, all holdings are in functional currency and hence no exposure occurs.
Liontrust Global Funds plc 84 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Currency risk (continued) If the exchange rate at 31 December 2015 and 31 December 2014 between the functional currency and all other currencies had increased or decreased by 10% with all other variables held constant, this would have increased or decreased net assets attributable to holders of redeemable participating shares of the other Sub- funds by approximately:
As at 31 December 2015 Net Assets % Increase/ Effect of 31-Dec-15 (decrease) Increase/decrease Liontrust GF European Strategic Equity Fund € 5,157,000 10% +/- €515,700 Liontrust GF Global Strategic Bond Fund $50,119,000 10% +/- $5,011,900 Liontrust GF Special Situations Fund € 134,000 10% +/- €13,400 Liontrust Macro Equity Income Fund £28,000 10% +/-£2,800 Liontrust GF Asia Income Fund $581,000 10% +/- $58,100 Liontrust GF Global Strategic Equity Fund $9,953,000 10% +/- $995,300
As at 31 December 2014 Net Assets % Increase/ Effect of 31-Dec-14 (decrease) Increase/decrease Liontrust GF European Strategic Equity Fund € 198,000 10% +/- €19,800 Liontrust GF Global Strategic Bond Fund $12,380,000 10% +/- $1,238,000 Liontrust GF Special Situations Fund £115,000 10% +/-£11,500 Liontrust Macro Equity Income Fund £27,000 10% +/-£2,700
Interest rate risk The majority of the Sub-funds’ financial assets and liabilities are non-interest bearing and any excess cash and cash equivalents are invested at short term market interest rates, with the exception of Liontrust GF Global Strategic Bond Fund and Liontrust GF European Strategic Equity Fund. As a result, the other Sub- funds are not subject to significant amounts of risk due to fluctuations in the prevailing level of market interest rates. Therefore, no interest rate sensitivity analysis has been prepared for these.
The Liontrust GF Global Strategic Bond Fund and Liontrust GF European Strategic Equity Fund have interest- bearing financial assets and liabilities. As a result, these Sub-funds are subject to the risk of potentially adverse movements in the prevailing levels of market interest rates. The Investment Adviser may from time to time enter into contracts on behalf of the Sub-funds that seek to mitigate the effects of these movements.
In accordance with the Sub-funds’ policy, the Investment Adviser monitors the Sub-fund’s interest rate exposures on a daily basis and reports regularly to the Board of Directors, which reviews the information provided by the Investment Adviser on significant exposures at its periodic meetings. The Investment Adviser has systems in place to review the interest rate risk through modified duration calculations. As at 31 December 2015 the Sub-fund’s interest rate exposures were as follows:
Liontrust Global Funds plc 85 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Interest rate risk (continued)
Liontrust GF Global Strategic Bond Fund Non Up to 1-5 Over interest Total 1 year years 5 years bearing 31 December 2015 Assets US$ US$ US$ US$ US$ Financial assets 3,361,923 8,354,299 22,599,367 1,214,772 35,530,361 Cash at bank & cash held as collateral 15,936,207 - - - 15,936,207 Bond interest and other receivables - - - 651,194 651,194 Total Assets 19,298,130 8,354,299 22,599,367 1,865,966 52,117,762 Liabilities Financial liabilities - - - (1,828,862) (1,828,862) Payables and accrued expenses - - - (173,367) (173,367) Total Liabilities - - - (2,002,229) (2,002,229)
Interest sensitivity gap for Balance Sheet 19,298,130 8,354,299 22,599,367
Liontrust GF European Strategic Equity Fund Non Up to 1-5 Over interest Total 1 year years 5 years bearing 31 December 2015 Assets € € € € €
Financial assets 20,497,762 - 1,975,391 22,473,153 Cash at bank & cash held as collateral 3,364,699 - - - 3,364,699 Bond interest and other receivables - - - 44,106 44,106 Total Assets 23,862,461 - - 2,019,497 25,881,958 Liabilities Financial liabilities - - - (813,613) (813,613) Payables and accrued expenses - - - (109,427) (109,427) Total Liabilities - - - (923,040) (923,040)
Interest sensitivity gap for Balance Sheet 23,862,461 - - At 31 December 2015, if interest rates had strengthened/weakened by 1% with all other variables held constant this would have increased/decreased the net assets attributable to holders of redeemable participating shares of Liontrust GF Global Strategic Bond Fund by approximately +/- US$502,518 and Liontrust GF European Strategic Equity Fund by approximately +/- €238,625.
Liontrust Global Funds plc 86 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Interest rate risk (continued) As at 31 December 2014, the Sub-funds’ interest rate exposures were as follows:
Liontrust GF Global Strategic Bond Fund Non Up to 1-5 Over interest Total 1 year years 5 years bearing 31 December 2014 Assets US$ US$ US$ US$ US$ Financial assets - 14,528,119 25,215,140 556,659 40,299,918 Cash at bank & cash held as collateral 16,315,650 - - - 16,315,650 Bond interest and other receivables - - - 830,836 830,836 Total Assets 16,315,650 14,528,119 25,215,140 1,387,495 57,446,404 Liabilities Financial liabilities - - - (3,391,778) (3,391,778) Payables and accrued expenses - - - (144,859) (144,859) Total Liabilities - - - (3,536,637) (3,536,637)
Interest sensitivity gap for Balance Sheet 16,315,650 14,528,119 25,215,140
Liontrust GF European Strategic Equity Fund Non Up to 1-5 Over interest Total 1 year years 5 years bearing 31 December 2014 Assets € € € € €
Financial assets - 1,439,946 - 364,023 1,803,969 Cash at bank & cash held as collateral 204,070 - - - 204,070 Bond interest and other receivables - - - 59,254 59,254 Total Assets 204,070 1,439,946 - 423,277 2,067,293 Liabilities Financial liabilities - - - (55,854) (55,854) Payables and accrued expenses - - - (33,864) (33,864) Total Liabilities - - - (89,718) (89,718)
Interest sensitivity gap for Balance Sheet 204,070 1,439,946 -
At 31 December 2014, if interest rates had strengthened/weakened by 1% with all other variables held constant this would have increased/decreased the net assets attributable to holders of redeemable participating shares of Liontrust GF Global Strategic Bond Fund by approximately +/- US$560,589 and Liontrust GF European Strategic Equity Fund by approximately +/- €16,440.
Liontrust Global Funds plc 87 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Credit risk Credit risk is defined in FRS 102 as the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
Transactions in securities are generally settled or paid for on delivery, or cleared through the appropriate clearing system for the market on which the securities are traded. The risk of default is not considered to be material, as delivery of securities sold is only made once the Custodian has received confirmation of payment. Payment is also only made on a purchase once confirmation of delivery of the securities has been received by the Custodian. The trade will fail if either party fails to deliver the required confirmations.
At 31 December 2015 none of the Sub-funds’ financial assets were past due or impaired. At 31 December 2014 none of the Sub-funds’ financial assets were past due or impaired.
Cash assets are held with Goldman Sachs International Plc, BNP Paribas and Northern Trust Company, London Branch.
Substantially all of the cash assets are held with the Northern Trust Company, London Branch (“NTC”). Cash deposited with NTC is deposited as banker and is held on its Balance Sheet. Accordingly, in accordance with usual banking practice, NTC liability to the Sub-funds in respect of such cash deposits shall be that of debtor and the Sub-funds will rank as a general creditor of NTC.
The financial assets are held with the Custodian, Northern Trust Fiduciary Services (Ireland) Limited. These assets are held distinct and separately from the proprietary assets of the Custodian. Securities are clearly recorded to ensure they are held on behalf of the Sub-funds. Bankruptcy or insolvency of the Custodian and or one of its agents or affiliates may cause the Sub-fund’s rights with respect to the securities held by the Custodian to be delayed.
Both Northern Trust Fiduciary Services (Ireland) Limited and the Northern Trust Company, London Branch are wholly owned subsidiaries of Northern Trust Corporation. As at 31 December 2015 Northern Trust Corporation had a long term rating from Standard & Poor’s of A+.
Goldman Sachs International Plc has a credit rating of A from Standard & Poors. Goldman Sachs International Plc is the counterparty for the Contracts for Difference held on the Liontrust GF European Strategic Equity Fund (Formerly Liontrust GF European Absolute Alpha Fund), the Credit Default Swaps and acts as the broker for Futures held on Liontrust GF Global Strategic Bond Fund.
BNP Paribas has a credit rating of A+ from Standard & Poors. BNP Paribas is the counterparty for Liontrust GF Global Strategic Bond Fund.
Citigroup Global Markets Ltd has a credit rating of A from Standard & Poors. Citigroup Global Markets Ltd is the counterparty for Liontrust GF Global Strategic Bond Fund.
In accordance with the Company’s policy, the Investment Adviser monitors each Sub-fund’s credit exposure on a daily basis and reports quarterly to the Board of Directors, which reviews the information provided by the Investment Adviser on significant exposures at its periodic meetings.
To mitigate the risks the Sub-funds are exposed to from the use of counterparties, the Investment Adviser employs appropriate procedures to ensure that the counterparties are reputable institutions and that the credit risk is acceptable to the Sub-fund. The Sub-fund only transacts with counterparties that are regulated entities subject to prudential supervision, or with high credit-ratings assigned by international credit-rating agencies.
Liontrust Global Funds plc 88 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Credit risk (continued) The value of financial assets, debtors and cash exposed to credit risk at year end were as follows:
2015 2014 € € Liontrust GF European Strategic Equity Fund 25,881,958 2,067,293
US$ US$ Liontrust GF Global Strategic Bond Fund 52,117,762 57,446,404
Liontrust GF Asia Income Fund 586,093 -
Liontrust GF Global Strategic Equity Fund 13,810,419 -
£ £ Liontrust GF Special Situations Fund 27,568,939 16,400,348
Liontrust GF Macro Equity Income Fund 23,996,463 12,135,465
Liontrust GF Global Income Fund 1,182,029 2,216,831
Liontrust GF UK Growth Fund 16,442,242 14,352,858
The Liontrust GF Global Strategic Bond Fund also holds a time deposit with Lloyds Bank, rated by S&P as A. The Sub-fund only invests in investment grade rated securities for time deposits.
The analysis below summarises the credit quality of the Liontrust GF Global Strategic Bond Fund debt portfolio as at 31 December 2015 and 31 December 2014:
2015 %
AA 15.99 A 9.80 BBB 58.64 BB 15.57
100.00
2014 %
AA 32.32 A 12.61 BBB 50.80 B 4.27
100.00
Liontrust Global Funds plc 89 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Credit risk (continued) The analysis below summarises the credit quality of the Liontrust GF European Strategic Equity Fund debt portfolio as at 31 December 2015 and 31 December 2014:
2015 %
AA 35.64 AAA 35.17 AA+ 29.19
100.00
2014 %
AA1 70.48 AAA 29.52
100.00
Liquidity risk Liquidity risk is defined in FRS 102 as the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
The Sub-funds are exposed to daily cash redemptions of redeemable participating shares. The Sub-funds invest the majority of their assets in securities and other instruments that are traded on an active market and which are considered to be liquid as under normal market conditions they can be readily disposed of in the event that cash needs to be raised to meet redemptions or to pay expenses.
In accordance with Company policy, the Investment Adviser monitors the Sub-funds’ liquidity on a daily basis and reports regularly to the Board of Directors, which reviews the information provided by the Sub-Investment Adviser on significant exposures at its periodic meetings.
Fair Value Estimations The Company has elected to early adopt Amendments to FRS 102 – Fair Value Hierarchy Disclosures issued by the FRC in March 2016 for the accounting period ending 31 December 2015. These amendments require the Company to classify financial instruments measured at fair value into the following hierarchy:
Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly. Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
See table below for a break-down of levels on the Sub-funds.
Liontrust Global Funds plc 90 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Fair Value Estimations (continued)
31 December 2015 Level 1 Level 2 Level 3 Total
Liontrust GF European Strategic Equity Fund € € € € Government Bonds - 20,497,762 - 20,497,762 Equities 1,202,134 - - 1,202,134 Equity Swaps gains - 770,574 - 770,574 Forward Currency Contracts gains - 2,683 - 2,683 Equity Swaps losses - (631,417) - (631,417) Forward Currency Contracts losses - (182,196) - (182,196) 1,202,134 20,457,406 - 21,659,540
Liontrust GF Global Strategic Bond Fund US$ US$ US$ US$ Equities 30,953,666 - - 30,953,666 Time Deposits 3,361,923 - - 3,361,923 Forward Currency Contract gains - 1,036,800 - 1,036,800 Options - 177,972 - 177,972 Future losses (4,326) - - (4,326) Credit Default Swaps losses - (666,643) - (666,643) Forward Currency Contract losses - (1,157,893) - (1,157,893) 34,311,263 (609,764) - 33,701,499
Liontrust GF Special Situations Fund £ £ £ £ Equities 24,936,615 - - 24,936,615 Forward Currency Contract gains - 1,656 - 1,656 24,936,615 1,656 - 24,938,271
Liontrust GF Macro Equity Income Fund £ £ £ £ Investment in Master Fund 23,069,787 - - 23,069,787 Forward Currency Contract losses - 532 - 532 23,069,787 532 - 23,070,319
Liontrust GF Global Income Fund £ £ £ £ Investment in Master Fund 1,115,983 - - 1,115,983
Liontrust GF UK Growth Fund £ £ £ £ Investment in Master Fund 16,209,379 - - 16,209,379
Liontrust GF Asia Income Fund US$ US$ US$ US$ Equities 552,025 - - 552,025 Future losses (10) - - (10) Forward Currency Contract losses - (1,089) - (1,089) 552,015 (1,089) - 550,926
Liontrust Global Funds plc 91 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
7. Financial risk management (continued)
Fair Value Estimations (continued)
31 December 2015 Level 1 Level 2 Level 3 Total
Liontrust GF Global Strategic Equity Fund US$ US$ US$ US$ Equities 9,450,608 - - 9,450,608 Forward Currency Contract gains - 16,381 - 16,381 Future gains 2,193 - - 2,193 Contract For Difference gains - 125,290 - 125,290 Forward Currency Contract losses - (116,926) - (116,926) Future losses (3,688) - - (3,688) Contract For Difference losses - (15,243) - (15,243) 9,449,113 9,502 - 9,458,615
31 December 2014 Level 1 Level 2 Level 3 Total
Liontrust GF European Strategic Equity Fund € € € € Government Bonds - 1,439,946 - 1,439,946 Equities 240,905 - - 240,905 Equity Swaps gains - 82,756 - 82,756 Forward Currency Contracts gains - 40,362 - 40,362 Equity Swaps losses - (48,149) - (48,149) Forward Currency Contracts losses - (7,705) - (7,705) 240,905 1,507,210 - 1,748,115
Liontrust GF Global Strategic Bond Fund US$ US$ US$ US$ Time Deposits 5,004,161 - - 5,004,161 Government Bonds - 34,739,098 - 34,739,098 Forward Currency Contract gains - 431,464 - 431,464 Currency Options - 125,195 - 125,195 Future losses (184,344) - - (184,344) Credit Default Swaps losses - (1,709,881) - (1,709,881) Forward Currency Contract losses - (1,497,553) - (1,497,553) 4,819,817 32,088,323 - 36,908,140
Liontrust GF Special Situations Fund £ £ £ £ Equities 15,412,946 - - 15,412,946 Forward Currency Contract gains - 372 - 372 Forward Currency Contract losses - (3,755) - (3,755) 15,412,946 (3,383) - 15,409,563
Liontrust GF Macro Equity Income Fund £ £ £ £ Investment in Master Fund 12,115,193 - - 12,115,193 Forward Currency Contract gains - 15 - 15 Forward Currency Contract losses - (12) - (12) 12,115,193 3 - 12,115,196
Liontrust GF Global Income Fund £ £ £ £ Investment in Master Fund 2,209,836 - - 2,209,836
Liontrust GF UK Growth Fund £ £ £ £ Investment in Master Fund 14,325,536 - - 14,325,536
Liontrust Global Funds plc 92 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
8. Soft Commission
There were no soft commission arrangements in place during the year.
9. Related party disclosures
The Company operates under an Investment Advisory Agreement with Liontrust Investment Partners LLP. Details of fees are set out in Note 10.
As at 31 December 2015, Edward Catton, a director of the Company was also a partner of the Investment Adviser and he and persons connected with him together held 33,989 shares in Liontrust GF European Strategic Equity Fund Class A Shares (31 December 2014: 33,989) and 10,083 shares in Liontrust GF European Strategic Equity Fund Class B Shares (31 December 2014: 10,083). No other director had any interest in the redeemable participating shares of the Company during the year.
The following table details the number of redeemable participating shares held by Liontrust Investment Partners LLP at the period end:
Liontrust GF European Strategic Equity Fund 31-Dec-15 31-Dec-14
B4 Class USD 1,000 1,000 C4 Class GBP 1,000 1,000
Liontrust GF Global Strategic Bond Fund 31-Dec-15 31-Dec-14
A3 Class EUR 5,211 5,130
Liontrust GF Macro Equity Income Fund 31-Dec-15 31-Dec-14
A4 Class EUR 1,000 1,000 A5 Class EUR 1,000 1,000 B4 Class USD 2,000 2,000 B1 Class USD 1,586 1,500 B2 Class USD 1,584 1,500 B5 Class USD 1,500 1,500 C1 Class GBP 1,081 1,024
Liontrust GF Global Income Fund 31-Dec-15 31-Dec-14
C3 Class GBP 1,051 1,000 C6 Class GBP 1,051 1,000 C7 Class GBP 1,000 1,000
Liontrust GF UK Growth Fund 31-Dec-15 31-Dec-14
C1 Class GBP 1,000 1,000 C3 Class GBP 1,000 1,000 C7 Class GBP 1,000 1,000
Liontrust GF Asia Income Fund 31-Dec-15 31-Dec-14
C6 Class GBP 1,026 - C7 Class GBP 1,000 - B4 Class USD 1,000 -
Liontrust GF Global Strategic Equity Fund 31-Dec-15 31-Dec-14
C4 Class GBP 1,000 - C5 Class GBP 1,000 - B4 Class USD 1,000 - Liontrust Global Funds plc 93 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
9. Related party disclosures (continued)
The Directors, the Investment Adviser, the Administrator and the Custodian and their respective affiliates, officers, directors and shareholders, employees and agents (collectively the "Parties") are or may be involved in other financial, investment and professional activities which may on occasion cause a conflict of interest with the management of the Company and/or their respective roles with respect to the Company.
These activities may include managing or advising other funds (including other collective investment schemes), purchases and sales of securities, banking and investment management services, brokerage services, valuation of unlisted securities (in circumstances in which fees payable to the entity valuing such securities may increase as the value of assets increases) and serving as directors, officers, advisers or agents of other funds or companies, including funds or companies in which the Company may invest. In particular, other companies within the Investment Adviser group may be involved in advising or managing other investment funds (including other collective investment schemes) or other real estate portfolios which have similar or overlapping investment objectives to or with the Company or Funds. Each of the Parties will use its reasonable endeavours to ensure that the performance of their respective duties will not be impaired by any such involvement they may have and that any conflicts which may arise will be resolved fairly and in the best interests of Shareholders.
Directors’ Remuneration The Company shall pay to the Directors such annual remuneration for acting as Directors of the Company as the Directors may from time to time agree, provided however that the annual remuneration of each Director shall not exceed €25,000 plus expenses. Such fees shall be paid quarterly in arrears and shall be apportioned equally among the Sub-funds. No other remuneration will be payable by the Company to the Directors except for out-of-pocket expenses reasonably incurred by them. Edward Catton is not entitled to receive a fee from the Company due to his position with the Investment Adviser. Directors’ fees for the year in total were US$30,000 (2014: US$30,000).
10. Fees & other expenses
Investment Advisory fees The Investment Adviser is entitled to receive a monthly Investment Advisory Fee.
The specified annual Investment Advisory Fee percentage in respect of Classes A, A4, B, B4, C and C4 is 1.50% per annum and for Class C3 is 1.00% per annum of the Net Asset Value of the Liontrust GF European Strategic Equity Fund attributable to each Class.
The specified annual Investment Advisory Fee percentage in respect of Classes A1, A2, and C1 is 1.75% per annum and for Class C3, C6 and C7 is 0.75% per annum of the Net Asset Value of the Liontrust GF Special Situations Fund attributable to each Class.
The specified annual Investment Advisory Fee percentage in respect of Classes A1, A4, B1, B4, C1 and C4 is 1.25% per annum and for Class A3, A5, B3, B5, C3 and C5 is 0.75% per annum of the Net Asset Value of the Liontrust GF Global Strategic Bond Fund attributable to each Class.
The specified annual Investment Advisory Fee percentage in respect of Classes A4, A5, B1, B2, B4, B5, C1 and C4 is 1.50% per annum and for Class C3, C5, C6 and C7 is 0.75% per annum of the Net Asset Value of the Liontrust GF Macro Equity Income Fund attributable to each Class.
The specified annual Investment Advisory Fee percentage in respect of Classes A1, A2 and C1 is 1.50% per annum and for Class C3, C6 and C7 is 0.75% per annum of the Net Asset Value of the Liontrust GF Global Income Fund attributable to each Class.
The specified annual Investment Advisory Fee percentage in respect of Classes A1, A2 and C1 is 1.50% per annum and for Class C3, C6 and C7 is 0.75% per annum of the Net Asset Value of the Liontrust GF UK Growth Fund attributable to each Class.
Liontrust Global Funds plc 94 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
10. Fees & other expenses (continued)
The specified annual Investment Advisory Fee percentage in respect of Classes A1, A2, B4 and C1 is 1.50% per annum and for Classes B5, C3, C6 and C7 is 0.75% per annum of the Net Asset Value of the Liontrust GF Asia Income Fund attributable to each Class.
The specified annual Investment Advisory Fee percentage in respect of Classes A1, A4, B1, B4, C1 and C4 is 1.50% per annum, for Classes A3, A5, B3, B5, C3 and C5 is 1.00% per annum and for Classes A2, B2 and C2 is 0.75% per annum of the Net Asset Value of the Liontrust GF Global Strategic Equity attributable to each class.
Performance fees Liontrust GF European Strategic Equity Fund The Investment Adviser is entitled to receive a Performance Fee from the Liontrust GF European Strategic Equity Fund in respect of the Shares. The performance periods of the Sub-fund comprise successive quarterly periods ending on the last Business Day in each calendar quarter (the “Performance Period”).
Performance Fee – Classes A, B and C For Classes A, B and C the Performance Fee shall be equal in aggregate to 20% of the amount by which the Net Asset Value of each Class exceeds the Adjusted Prior Net Asset Value of the relevant Class as at the Payment Date, plus any Performance Fee accrued in relation to the Class in respect of redemptions during the Performance Period.
Performance Fee - Classes A4, B4, C3 and C4 For Classes A4, B4, C3 and C4 the Performance Fee shall be equal in aggregate to 20% of the amount by which the Net Asset Value of each Class exceeds the Hurdle Rate (defined below) and the Adjusted Prior Net Asset Value of the relevant Class as at the Payment Date, plus any Performance Fee accrued in relation to the Class in respect of redemptions during the Performance Period.
The hurdle rate for Classes A4, B4, C3 and C4 is 1% of the Net Asset Value of each Class per calendar quarter and will be applied to these classes effective from the launch date of these classes.
The Adjusted Prior Net Asset Value of a Fund class is the Net Asset Value of the class as at the beginning of the Performance Period increased or decreased on each Dealing Day by the value of any net subscriptions or redemptions dealt on the previous Dealing Day. For the first Performance Period in which Shares in the Fund class are first issued, the Initial Offer Price is taken as the starting point for the calculation of the Performance Fee. For the purposes of the Performance Fee calculation, the Net Asset Value shall be calculated before the deduction of any accrual for Performance Fee for that Performance Period, other than Performance Fee accrued in relation to the class in respect of redemptions during the Performance Period but not yet paid.
If the performance per Share of the Fund class in respect of a Performance Period is less than zero, such underperformance, will be carried forward. No Performance Fee will be payable with respect to a Fund class in any Performance Period unless such class has recovered any accumulated underperformance for previous Performance Periods i.e. where there is a High Water Mark or a Hurdle Rate, any performance fees are only payable on the positive difference between the NAV and the HWM and Hurdle.
The Performance Fee will accrue and be taken into account in the calculation of the Net Asset Value per Share of each currency class on each Dealing Day. In the event that the Fund suffers a redemption of Shares on a Dealing Day within a Performance Period, the Investment Adviser shall be entitled to receive the Performance Fee per Share accrued in respect of such redemption. Any such entitlement to Performance Fees in respect of redemptions of Shares will not be repayable although such entitlement will be taken into account in calculating the Performance Fee entitlement, if any, in respect of the Performance Period as a whole.
If the Investment Advisory Agreement is terminated during a Performance Period, the Performance Fee in respect of the then current Performance Period will be calculated and paid as though the date of termination were the end of the relevant Performance Period.
Liontrust Global Funds plc 95 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
10. Fees & other expenses (continued)
Performance fees (continued) Liontrust GF Global Strategic Equity Fund The Investment Adviser is entitled to receive a Performance Fee from the Liontrust GF Global Strategic Equity Fund in respect of the Shares. The performance periods of the Sub-fund comprise successive quarterly periods ending on the last Business Day in each calendar quarter (the “Performance Period”).
For all classes, the Performance Fee shall be equal in aggregate to 20% of the amount by which the Net Asset Value of each class exceeds the Adjusted Prior Net Asset Value of the relevant class as at the Payment Date, plus any Performance Fee accrued in relation to the class in respect of redemptions during the Performance Period.
The Adjusted Prior Net Asset Value of a Fund class is (subject to losses being carried forward) the Net Asset Value of the class as at the beginning of the Performance Period increased on each Dealing Day by the value of any net subscriptions dealt on the previous Dealing Day and decreased pro rata by the value of any net redemptions dealt on the previous dealing day. For the first Performance Period in which Shares in the Fund class are first issued, the Initial Offer Price is taken as the starting point for the calculation of the Performance Fee. For the purposes of the Performance Fee calculation, the Net Asset Value shall be calculated before the deduction of any accrual for Performance Fee for that Performance Period, other than Performance Fee accrued in relation to the class in respect of redemptions during the Performance Period but not yet paid.
If the performance of the Fund class in respect of a Performance Period is less than zero, such losses, will be carried forward. No Performance Fee will be payable with respect to a Fund class in any Performance Period unless such class has recovered any accumulated underperformance for previous Performance Periods i.e. where there is an Adjusted Prior Net Asset Value, any performance fees are only payable on the positive difference between the NAV and the Adjusted Prior Net Asset Value.
The Performance Fee will accrue and be taken into account in the calculation of the Net Asset Value per Share of each currency class on each Dealing Day. In the event that the Fund suffers a redemption of Shares on a Dealing Day within a Performance Period, the Investment Adviser shall be entitled to receive the Performance Fee per Share accrued in respect of such redemption. Any such entitlement to Performance Fees in respect of redemptions of Shares will not be repayable although such entitlement will be taken into account in calculating the Performance Fee entitlement, if any, in respect of the Performance Period as a whole.
If the Investment Advisory Agreement is terminated during a Performance Period, the Performance Fee in respect of the then current Performance Period will be calculated and paid as though the date of termination were the end of the relevant Performance Period.
There were no performance fees on any other Sub-Funds for the period.
The Administrator The Administrator is entitled to receive out of the assets of the Company an annual fee, accrued daily, and payable monthly in arrears, of 0.05% on the first US$200 million of the Net Asset Value of each Sub-fund. The administration fee will be on a sliding scale, based on the Net Asset Value of the Sub-funds. A reduced charge will apply to assets in excess of US$200 million on a sliding scale basis.
The Administrator’s fee is subject to a monthly minimum fee of US$3,000 per Sub-fund (to include 3 Share/Currency Classes) and US$500 per additional Share/Currency Class per Sub-fund. Fees are exclusive of VAT, if any. The fees in respect of each Sub-fund shall be calculated in the Base Currency of the Sub-fund. The Administrator shall also be entitled to be repaid out of the assets of the Company all its reasonable out-of- pocket expenses incurred on behalf of the Company.
If the Company requests the Administrator to provide any additional services, the Administrator will be entitled to charge such additional fees as may be agreed in writing with the Company.
The Custodian The Custodian shall be entitled to receive out of the assets of the Company an annual fee, accrued daily and payable monthly in arrears, of 0.015% on the first US$200 million of the Net Asset Value of the Fund. The custodian fee will be on a sliding scale, based on the Net Asset Value of the Sub-funds. A reduced charge will apply to assets in excess of US$200 million on a sliding scale basis. The Custodian fee is subject to a monthly minimum fee of US$1,000 per Sub-fund. Fees are exclusive of VAT, if any.
Liontrust Global Funds plc 96 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
10. Fees & other expenses (continued)
The Custodian (continued) The fees in respect of each Sub-fund shall be calculated in the Base Currency of the Sub-fund but shall be payable in Sterling at the exchange rate agreed between the Custodian and the Company on the date of payment. The Custodian shall also be entitled to be repaid out of the assets of the Company all of its reasonable out-of-pocket expenses incurred on behalf of the Company.
ISDA Counterparties Liontrust GF European Strategic Equity Fund has appointed Goldman Sachs International as a counterparty under an International Swaps and Derivatives Association (“ISDA”) agreement and fees payable under the ISDA agreement will be paid out of the assets of the Sub-fund at normal commercial rates. Liontrust GF Global Strategic Bond Fund has appointed Goldman Sachs International, CitiBank and BNP Paribas as ISDA Counterparties and fees payable under the ISDA agreements will be paid out of the assets of the Sub-fund at normal commercial rates.
Bridge Consulting Bridge Consulting received a fee of €27,500 for each of the years ended 31 December 2015 and 31 December 2014.
General Expenses In addition, each Sub-fund will pay the costs and expenses incurred in its operation, including, without limitation, taxes, duties, expenses for legal, auditing, consulting, printing and other professional services, promotional expenses, translation costs, registration fees, to include all fees in connection with obtaining advance treaty clearances from tax authorities in any jurisdiction for a Sub-fund and other expenses due to supervisory authorities in various jurisdictions, insurance, interest, brokerage costs and all professional fees and expenses incurred in connection therewith and the cost of the publication of the Net Asset Value and Net Asset Value per Share of each Sub-fund.
Each Sub-fund will also pay the issue costs, charges and expenses (including the fees of the Legal Advisors), in relation to the preparation of the Prospectus, relevant Supplement and all other documents and matters relating to or concerning the issue and any other fees, charges and expenses on the creation and issue of Shares. In the event that a listing is sought, a Sub-fund will pay the cost of obtaining and maintaining a listing of its Shares on any stock exchange.
Operating Expense Cap Please refer to Note 18 for details of the Company’s Operating Expense Cap.
Remuneration for Audit, Audit Related and non-Audit Work In addition to the statutory audit fees of €83,920 (excl. VAT) (2014: €75,200) PricewaterhouseCoopers Dublin has received non-audit fees of €25,000 (excl. VAT) for taxation services during the year (2014: €15,000).
11. Taxation
Under current law and practice the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997 as amended (the “TCA”). On that basis it is not chargeable to Irish Tax on its income or gains.
However, Irish tax may arise on the occurrence of a "chargeable event". A chargeable event includes any distribution payments to shareholders or any encashment, redemption, transfer or cancellation of shares and any deemed disposal of shares for Irish tax purposes arising as a result of holding shares in the Company for a period of eight years or more.
No Irish tax will arise in respect of chargeable events in respect of a shareholder who is an Exempt Irish Investor (as defined in Section 739D of the TCA) or who is neither Irish resident nor ordinarily resident in Ireland for tax purposes at the time of the chargeable event, provided, in each case, that an appropriate valid declaration in accordance with Schedule 2B of the TCA is held by the Company or where the Company has been authorised by Irish Revenue to make gross payments in absence of appropriate declarations.
Distributions, interest and capital gains (if any) received on investments made by the Company may be subject to withholding taxes imposed by the country of origin and such taxes may not be recoverable by the Company or its shareholders.
Liontrust Global Funds plc 97 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
12. Comparative Statistics
Liontrust GF European Strategic Equity Fund 31-Dec-15 31-Dec-14 31-Dec-13 € € € Total Net Asset Value 24,958,918 1,977,575 1,142,209
Net asset value per redeemable participating share A Class EUR €9.38 €8.78 €8.35 B Class USD $9.44 $8.81 $8.39 C Class GBP £9.41 £8.89 £8.44 A4 Class EUR €11.29 €10.64 - B4 Class USD $11.26 $10.62 - C3 Class GBP £11.51 £10.69 - C4 Class GBP £11.29 £10.65 -
Liontrust GF Global Strategic Bond Fund 31-Dec-15 31-Dec-14 31-Dec-13 US$ US$ US$ Total Net Asset Value 50,119,541 53,916,834 457,499,478
Net asset value per redeemable participating share A1 Class EUR €8.55 €8.32 €8.99 A3 Class EUR €9.21 €8.88 €9.54 A4 Class EUR €9.07 €8.68 €9.14 A5 Class EUR - - €9.58 B1 Class USD $8.67 $8.35 $9.01 B3 Class USD $10.59 - - B4 Class USD $9.16 $8.68 $9.15 C1 Class GBP £8.71 £8.39 £9.04 C3 Class GBP £8.85 £8.48 £9.08 C4 Class GBP £9.24 £8.75 £9.18
Liontrust GF Special Situations Fund 31-Dec-15 31-Dec-14 31-Dec-13 £ £ £ Total Net Asset Value 27,350,949 16,331,958 12,536,315
Net asset value per redeemable participating share A1 Class EUR €14.20 €12.11 €11.26 A2 Class EUR €13.01 €11.71 €11.69 C1 Class GBP £13.14 £11.79 £11.75 C3 Class GBP £13.57 £12.06 £11.90 C6 Class GBP £11.48 £10.12 - C7 Class GBP £11.48 £10.12 -
Liontrust Global Funds plc 98 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
12. Comparative Statistics (continued)
Liontrust GF Macro Equity Income Fund 31-Dec-15 31-Dec-14 31-Dec-13 £ £ £ Total Net Asset Value 23,203,783 12,065,458 -
Net asset value per redeemable participating share A4 Class EUR €11.29 €7.98 - A5 Class EUR €10.42 €7.82 - B4 Class USD $9.10 $5.91 - C1 Class GBP £9.57 £9.71 - C3 Class GBP £9.70 £9.76 - C4 Class GBP £10.47 £10.06 - C5 Class GBP £10.48 £10.00 - C6 Class GBP £9.87 £9.90 - C7 Class GBP £10.66 £10.13 - B1 Class USD $8.81 - - B2 Class USD $9.74 $6.34 - B5 Class USD $10.27 $6.34 -
Liontrust GF Global Income Fund 31-Dec-15 31-Dec-14 31-Dec-13 £ £ £ Total Net Asset Value 1,176,455 2,202,526 -
Net asset value per redeemable participating share C1 Class GBP £8.72 £9.71 - C3 Class GBP £9.95 £11.03 - C6 Class GBP £8.90 £9.85 - C7 Class GBP £9.39 £9.85 -
Liontrust GF UK Growth Fund 31-Dec-15 31-Dec-14 31-Dec-13 £ £ £ Total Net Asset Value 16,328,507 14,315,262 -
Net asset value per redeemable participating share C1 Class GBP £10.54 £9.74 - C3 Class GBP £10.64 £9.76 - C6 Class GBP £10.47 £9.78 - C7 Class GBP £10.70 £9.78 -
Liontrust GF Asia Income Fund 31-Dec-15 31-Dec-14 31-Dec-13 US$ US$ US$ Total Net Asset Value 580,751 - - Net asset value per redeemable participating share Class A EUR €8.44 - - Class A2 EUR €8.04 - - Class B4 USD $8.40 - - Class C6 GBP £8.35 - - Class C7 GBP £8.56 - -
Liontrust Global Funds plc 99 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
12. Comparative Statistics (continued)
Liontrust GF Global Strategic Equity Fund 31-Dec-15 31-Dec-14 31-Dec-13 US$ US$ US$ Total Net Asset Value 13,468,849 - - Net asset value per redeemable participating share A2 Class EUR €9.24 - - A4 Class EUR €9.21 - - A5 Class EUR €9.24 - - B2 Class USD $9.26 - - B4 Class USD $9.23 - - B5 Class USD $9.25 - - C2 Class GBP £9.21 - - C4 Class GBP £9.22 - - C5 Class GBP £9.24 - -
13. Exchange rates
The year end exchange rates were as follows:
Exchange Rate Exchange Rate Exchange Rate Exchange Rate 31-Dec-15 31-Dec-15 31-Dec-14 31-Dec-14 US$ € US$ € Australian Dollar 1.3745 1.4931 - 1.4786 Brazil Real 3.9562 4.2977 2.6582 - Canadian Dollar 1.3891 1.5090 1.1583 1.4015 Chinese Yuan 6.4936 7.0540 - - Colombia Peso 3174.5024 3448.4542 2376.5000 - Danish Kroner 6.8698 7.4627 6.1538 7.4463 Euro 0.9206 1.0000 0.8264 1.0000 Hong Kong Dollar 7.7501 8.4190 - - Japanese Yen 120.2950 130.6765 119.8950 - Malaysian Dollar 4.2935 4.6640 - - Mexican Peso 17.2712 18.7617 - - New Zealand Dollar 1.4607 1.5868 - - Norwegian Kroner 8.8514 9.6152 - 9.0724 Philippine Peso 47.0550 51.1158 - - Russian Ruble 73.0350 79.3379 60.0000 - South African Rand 15.4955 16.8328 11.5688 - South Korean Won 1172.5501 1,273.7409 - - Pound Sterling 0.6785 0.7370 0.6413 0.7760 Singapore Dollar 1.4187 1.5411 - - Swedish Kroner 8.4306 9.1582 - 9.4726 Swiss Franc 1.0010 1.0874 - 1.2024 Taiwan Dollar 32.8470 35.6817 - - Thai Baht 35.9850 39.0905 - - Turkish Lira 2.9188 3.1707 2.3378 - US Dollar 1.0000 1.0863 1.0000 1.2101 Indonesian Rupiah 13785.0000 14974.6458 - - Indian Rupee 66.1563 71.8655 - -
14. UK reporting status
All Sub-funds have been accepted as reporting funds by the UK HMRC.
Liontrust Global Funds plc 100 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
15. Financial Derivative Instruments and Efficient Portfolio Management
The Company may, on behalf of each Sub-fund, employ investment techniques and Financial Derivative Instruments for efficient portfolio management purposes and for currency hedging purposes subject to the conditions and within the limits laid down by the Central Bank. The Company may only invest in Financial Derivative Instruments as described in the prospectus such as futures, put options, call options, interest rate futures and forward foreign currency contracts.
During the year the Sub-funds used credit default swaps, equity swaps, contracts for difference, futures and options instruments as allowed under the prospectus. As at the year end there were a number of open equity swaps positions, contracts for difference, credit default swaps and futures which are disclosed on the respective Sub-funds’ Portfolio Statements. Gains and losses realised during the year are accounted for in the Profit and Loss Account.
16. Distributions
Distributions paid during the year were as follows:
Liontrust GF Global Strategic Bond Fund:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local US$ Relevant Period
A1 Class EUR Dist Hgd 0.02 02/01/2015 30/01/2015 9,228 10,413 01/10/2014-31/12/2014 A3 Class EUR Dist Hgd 0.02 02/01/2015 30/01/2015 103 116 01/10/2014-31/12/2014 B1 Class USD Dist 0.02 02/01/2015 30/01/2015 2,975 2,975 01/10/2014-31/12/2014 C1 Class GBP Dist Hgd 0.02 02/01/2015 30/01/2015 666 1,001 01/10/2014-31/12/2014 C3 Class GBP Dist Hgd 0.02 02/01/2015 30/01/2015 26,989 40,534 01/10/2014-31/12/2014
A1 Class EUR Dist Hgd 0.045 01/04/2015 30/04/2015 19,700 21,973 01/01/2015-31/03/2015 A3 Class EUR Dist Hgd 0.045 01/04/2015 30/04/2015 231 258 01/01/2015-31/03/2015 B1 Class USD Dist 0.045 01/04/2015 30/04/2015 1,344 1,344 01/01/2015-31/03/2015 B3 Class USD Dist Inst 0.036 01/04/2015 30/04/2015 2,160 2,160 01/01/2015-31/03/2015 C1 Class GBP Dist Hgd 0.045 01/04/2015 30/04/2015 653 991 01/01/2015-31/03/2015 C3 Class GBP Dist Hgd 0.045 01/04/2015 30/04/2015 63,450 96,315 01/01/2015-31/03/2015
A1 Class EUR Dist Hgd 0.045 01/07/2015 31/07/2015 21,060 23,216 01/04/2015-30/06/2015 B1 Class USD Dist 0.045 01/07/2015 31/07/2015 1,349 1,349 01/04/2015-30/06/2015 C1 Class GBP Dist Hgd 0.045 01/07/2015 31/07/2015 653 1,011 01/04/2015-30/06/2015 C3 Class GBP Dist Hgd 0.045 01/07/2015 31/07/2015 71,401 111,184 01/04/2015-30/06/2015 A3 Class EUR Dist Hgd 0.045 01/07/2015 31/07/2015 233 251 01/04/2015-30/06/2015 B3 Class USD Dist Inst 0.045 01/07/2015 31/07/2015 11,912 11,912 01/04/2015-30/06/2015
A1 Class EUR Dist Hgd 0.035 01/10/2015 30/10/2015 16,590 18,284 01/07/2015-30/09/2015 B1 Class USD Dist 0.035 01/10/2015 30/10/2015 2,276 2,276 01/07/2015-30/09/2015 C1 Class GBP Dist Hgd 0.035 01/10/2015 30/10/2015 439 672 01/07/2015-30/09/2015 C3 Class GBP Dist Hgd 0.035 01/10/2015 30/10/2015 54,328 83,730 01/07/2015-30/09/2015 A3 Class EUR Dist Hgd 0.035 01/10/2015 30/10/2015 182 195 01/07/2015-30/09/2015 B3 Class US Dist Inst 0.035 01/10/2015 30/10/2015 9,687 9,687 01/07/2015-30/09/2015
441,847
Liontrust Global Funds plc 101 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
16. Distributions (continued)
Liontrust GF Macro Equity Income Fund:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local £ Relevant Period
B1 Class USD Dist 0.18 02/02/2015 31/03/2015 274 182 04/04/2014-31/12/2014 B2 Class USD Dist 0.20 02/02/2015 31/03/2015 298 198 04/04/2014-31/12/2014 C1 Class GBP Dist 0.20 02/02/2015 31/03/2015 200 200 04/04/2014-31/12/2014 C3 Class GBP Dist 0.20 02/02/2015 31/03/2015 242,295 242,295 04/04/2014-31/12/2014 C6 Class GBP Dist 0.20 02/02/2015 31/03/2015 5,602 5,602 04/04/2014-31/12/2014
C1 Class GBP Dist 0.22 04/08/2015 30/09/2015 235 235 01/05/2015-31/07/2015 C3 Class GBP Dist 0.23 04/08/2015 30/09/2015 264,681 264,681 01/05/2015-31/07/2015 C6 Class GBP Dist 0.23 04/08/2015 30/09/2015 6,239 6,239 01/05/2015-31/07/2015 B1 Class USD Dist 0.22 04/08/2015 30/09/2015 334 214 01/05/2015-31/07/2015 B2 Class USD Dist 0.23 04/08/2015 30/09/2015 352 225 01/05/2015-31/07/2015
C1 Class GBP Dist 0.11 02/11/2015 31/12/2015 115 115 01/07/2015-30/09/2015 C3 Class GBP Dist 0.11 02/11/2015 31/12/2015 136,458 136,458 01/07/2015-30/09/2015 C6 Class GBP Dist 0.11 02/11/2015 31/12/2015 2,999 2,999 01/07/2015-30/09/2015 B1 Class USD Dist 0.10 02/11/2015 31/12/2015 161 106 01/07/2015-30/09/2015 B2 Class USD Dist 0.11 02/11/2015 31/12/2015 172 113 01/07/2015-30/09/2015
659,862
Liontrust GF Global Income Fund
Distribution Date Date Amount Amount Class Per Share Declared Paid Local £ Relevant Period C1 Class GBP Dist 0.24 02/01/2015 27/02/2015 53,900 53,900 02/09/2014-31/12/2014 C3 Class GBP Dist Inst 0.27 02/01/2015 27/02/2015 274 274 02/09/2014-31/12/2014 C6 Class GBP Dist Inst 0.24 02/01/2015 27/02/2015 244 244 02/09/2014-31/12/2014
C1 Class GBP Dist 0.23 01/07/2015 31/08/2015 34,415 34,415 02/03/2015-30/06/2015 C3 Class GBP Dist Inst 0.27 01/07/2015 31/08/2015 272 272 02/03/2015-30/06/2015 C6 Class GBP Dist Inst 0.24 01/07/2015 31/08/2015 244 244 02/03/2015-30/06/2015
89,349
Liontrust GF UK Growth Fund
Distribution Date Date Amount Amount Class Per Share Declared Paid Local £ Relevant Period
C6 Class GBP Dist Inst 0.21 02/01/2015 27/02/2015 304,692 304,692 02/09/2014-31/12/2014
304,692
Liontrust Global Funds plc 102 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
16. Distributions (continued)
Liontrust GF Asia Income Fund
Distribution Date Date Amount Amount Class Per Share Declared Paid Local US$ Relevant Period C6 Class GBP Dist 0.084 01/07/2015 31/08/2015 84 133 01/04/2015-30/06/2015
C6 Class GBP Dist 0.13 01/10/2015 30/11/2015 131 199 01/07/2015-30/09/2015
332
Distributions paid during the previous year were as follows:
Liontrust GF Global Strategic Bond Fund:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local US$ Relevant Period
A1 Class EUR Dist Hgd 0.08 02/01/2014 31/01/2014 65,665 90,336 01/10/2013-31/12/2013 A3 Class EUR Dist Hgd 0.08 02/01/2014 31/01/2014 401 552 01/10/2013-31/12/2013 B1 Class USD Dist 0.08 02/01/2014 31/01/2014 2,948,736 2,948,736 01/10/2013-31/12/2013 C1 Class GBP Dist Hgd 0.08 02/01/2014 31/01/2014 3,216 5,326 01/10/2013-31/12/2013 C3 Class GBP Dist Hgd 0.08 02/01/2014 31/01/2014 204,384 338,451 01/10/2013-31/12/2013
A1 Class EUR Dist Hgd 0.075 01/04/2014 30/04/2014 35,528 47,121 01/01/2014-31/03/2014 A3 Class EUR Dist Hgd 0.075 01/04/2014 30/04/2014 379 503 01/01/2014-31/03/2014 B1 Class USD Dist 0.075 01/04/2014 30/04/2014 11,886 11,886 01/01/2014-31/03/2014 C1 Class GBP Dist Hgd 0.075 01/04/2014 30/04/2014 2,957 4,869 01/01/2014-31/03/2014 C3 Class GBP Dist Hgd 0.075 01/04/2014 30/04/2014 181,376 298,595 01/01/2014-31/03/2014
A1 Class EUR Dist Hgd 0.045 01/07/2014 31/07/2014 21,635 28,694 01/04/2014-30/06/2014 A3 Class EUR Dist Hgd 0.045 01/07/2014 31/07/2014 229 304 01/04/2014-30/06/2014 B1 Class USD Dist 0.045 01/07/2014 31/07/2014 7,139 7,139 01/04/2014-30/06/2014 C1 Class GBP Dist Hgd 0.045 01/07/2014 31/07/2014 1,780 2,930 01/04/2014-30/06/2014 C3 Class GBP Dist Hgd 0.045 01/07/2014 31/07/2014 107,914 177,656 01/04/2014-30/06/2014
A1 Class EUR Dist Hgd 0.013 01/10/2014 31/10/2014 6,856 9,093 01/07/2014-30/09/2014 A3 Class EUR Dist Hgd 0.013 01/10/2014 31/10/2014 67 88 01/07/2014-30/09/2014 B1 Class USD Dist 0.013 01/10/2014 31/10/2014 2,063 2,063 01/07/2014-30/09/2014 C1 Class GBP Dist Hgd 0.013 01/10/2014 31/10/2014 473 779 01/07/2014-30/09/2014 C3 Class GBP Dist Hgd 0.013 01/10/2014 31/10/2014 35,580 58,575 01/07/2014-30/09/2014
4,033,696
Liontrust GF Macro Equity Income Fund
Distribution Date Date Amount Amount Class Per Share Declared Paid Local £ Relevant Period
C1 Class GBP Dist 0.08 01/08/2014 30/09/2014 225 225 30/04/2014-31/07/2014 C3 Class GBP Dist 0.08 01/08/2014 30/09/2014 217,615 217,615 30/04/2014-31/07/2014 C6 Class GBP Dist Inst 0.08 01/08/2014 30/09/2014 228 228 30/04/2014-31/07/2014
218,068
Liontrust Global Funds plc 103 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
17. Transaction Costs
Transaction costs are incremental costs that are attributable to the acquisition, issue or disposal of a financial asset or financial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument.
Transaction costs are incorporated in the Profit and Loss Account within Net fair value gain/(loss) on financial assets and liabilities at fair value through profit or loss.
For the year ended 31 December 2015, the Liontrust GF European Strategic Equity Fund incurred transaction costs of €1,660. (2014: €123) The transaction costs include €1,579 (2014: €35) of commissions and €81 (2014: €88) of brokerage charges.
For the year ended 31 December 2015, the Liontrust GF Global Strategic Bond Fund incurred transaction costs of US$305. (2014: US$Nil) The transaction costs include US$305 (2014: US$Nil) of commissions and US$Nil (2014: US$Nil) of brokerage charges.
For the year ended 31 December 2015, the Liontrust GF Special Situations Fund incurred transaction costs of £55,213 (2014: £19,561). The transaction costs include £11,553 (2014: £3,773) of commissions and £43,660 (2014: £15,788) of brokerage charges.
For the year ended 31 December 2015, the Liontrust GF Macro Equity Income Fund incurred transaction costs of US$Nil (2014: US$Nil).
For the year ended 31 December 2015, the Liontrust GF Global Income Fund incurred transaction costs of US$Nil (2014: US$Nil)
For the year ended 31 December 2015, the Liontrust GF UK Growth Fund incurred transaction costs of US$Nil (2014: US$Nil).
For the year ended 31 December 2015, the Liontrust GF Asia Income Fund incurred transaction costs of US$12,324. The transaction costs include US$7,213 of commissions and US$5,111 of brokerage charges.
For the year ended 31 December 2015, the Liontrust GF Global Strategic Equity Fund incurred transaction costs of US$17,904. The transaction costs include US$12,017 of commissions and US$5,887 of brokerage charges.
18. Operating expense cap and Rebate on fees a) Operating Expense Cap Liontrust has implemented voluntary expenses caps on the sub-funds which limits the Administration, Custody, Registrar Charges, Directors Remuneration and General Expenses (“Operating Expenses”) on each fund (“Operating Expenses Cap”). Should the Operating Expenses exceed the Operating Expenses Cap limit then the amount of Operating Expenses in excess of the Operating Expenses Cap will be accrued against the Investment Adviser as per the prospectus.
On the Liontrust GF European Strategic Equity Fund there is a voluntary Operating Expense Cap of 0.75%.
On the Liontrust GF Special Situations Fund Classes A1, A2, C1 and C3 there is a voluntary Operating Expense Cap of 1%. For Classes C6 and C7 there is a voluntary Operating Expense Cap of 0.075%.
On the Liontrust GF Global Strategic Bond Fund there is a voluntary Operating Expense Cap of 0.5%.
On the Liontrust GF Macro Equity Income Fund Classes A4, A5, B1, B2, B4, B5, C1, C3, C4 and C5 there is a voluntary Operating Expense Cap of 0.5%. For Classes C6 and C7 there is a voluntary Operating Expense Cap of 0.075%.
On the Liontrust GF Global Income Fund Classes A1, A2, C1 and C3 there is a voluntary Operating Expense Cap of 0.5%. For Classes C6 and C7 there is a voluntary Operating Expense Cap of 0.075%.
On the Liontrust GF UK Growth Fund Classes A1, A2, C1 and C3 there is a voluntary Operating Expense Cap of 0.5%. For Classes C6 and C7 there is a voluntary Operating Expense Cap of 0.075%.
On the Liontrust GF Asia Income Fund Classes A1, A2, B4, B5, C1 and C3 there is a voluntary Operating Expense Cap of 1.00%. For Classes C6 and C7 there is a voluntary Operating Expense Cap of 0.075%.
Liontrust Global Funds plc 104 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
18. Operating expense cap and Rebate on fees (continued) a) Operating Expense Cap (continued) On the Liontrust GF Global Strategic Equity Fund there is a voluntary Operating Expense Cap of 0.75%. b) Rebate From Collective Investment Schemes The Liontrust GF Macro Equity Fund, Liontrust GF UK Growth Fund and Liontrust GF Global Income Fund (“the Feeder Funds”) hold investments in other Collective Investment Schemes (“the Master Funds”) which were managed by Liontrust Fund Partners LLP during the financial year. Investment Advisory fees are charged on an individual fund basis to the Feeder Funds and the Master Funds in accordance with their offering documents. The Investment Advisory fees charged on the Master Funds that relate to an investment made by the Feeder Funds are reimbursed to the Feeder Funds. This results in the Liontrust group of companies which includes the manager of the Master Funds and the Investment Adviser of the Feeder Funds only receiving fees once on each individual investment.
19. Significant events during the period
The Liontrust GF Asia Income Fund was launched on 15 May 2015.
A new prospectus was issued 15 July 2015. For further detail please see the Report of the Directors.
The Liontrust GF Global Strategic Equity Fund was launched on 16 July 2015.
20. Subsequent events
The following distributions were declared on the Liontrust GF Global Strategic Bond Fund on 4 January 2016:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local US$ Relevant Period A1 Class EUR Dist Hgd 0.06 04/01/2016 29/01/2016 31,768 34,510 01/10/2015-31/12/2015 B1 Class USD Dist 0.06 04/01/2016 29/01/2016 3,907 3,907 01/10/2015-31/12/2015 C1 Class GBP Dist Hgd 0.06 04/01/2016 29/01/2016 753 1,110 01/10/2015-31/12/2015 C3 Class GBP Dist Hgd 0.06 04/01/2016 29/01/2016 92,649 136,555 01/10/2015-31/12/2015 A3 Class EUR Dist Hgd 0.06 04/01/2016 29/01/2016 313 340 01/10/2015-31/12/2015 B3 Class USD Dist Inst 0.06 04/01/2016 29/01/2016 16,738 16,738 01/10/2015-31/12/2015
193,160
The following distributions were declared on the Liontrust GF Special Situations Fund on 4 January 2016:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local £ Relevant Period C6 Class GBP Dist Inst 0.112518 04/01/2016 29/01/2016 33,899 33,899 01/10/2015-31/12/2015
33,899
Liontrust Global Funds plc 105 Annual report and audited Financial Statements Notes to the Financial Statements For the year ended 31 December 2015 (continued)
20. Subsequent events (continued)
The following distributions were declared on the Liontrust GF Global Income Fund on 4 January 2016:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local £ Relevant Period C1 Class GBP Dist 0.226441 04/01/2016 29/02/2016 28,636 28,636 01/10/2015-31/12/2015 C3 Class GBP Dist 0.258566 04/01/2016 29/02/2016 272 272 01/10/2015-31/12/2015 C6 Class GBP Dist 0.231227 04/01/2016 29/02/2016 1,160 1,160 01/10/2015-31/12/2015
30,068
The following distributions were declared on the Liontrust GF UK Growth Fund on 4 January 2016:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local £ Relevant Period C6 Class GBP Dist 0.243117 04/01/2016 29/02/2016 378,330 378,330 01/10/2015-31/12/2015
378,330
The following distributions were declared on the Liontrust GF UK Growth Fund on 4 January 2016:
Distribution Date Date Amount Amount Class Per Share Declared Paid Local US$ Relevant Period C6 Class GBP Dist 0.13598 04/01/2016 29/02/2016 140 206 01/10/2015-31/12/2015
206
The Liontrust GF Global Water and Agriculture Fund launched on 27 January 2016.
The Liontrust GF Global Strategic Bond Fund terminated on 29 January 2016.
There have been no other events subsequent to the period end which, in the opinion of the Directors of the Company, may have a material impact on the financial statements for the year ending 31 December 2015.
21. Approval of Financial Statements
The Financial Statements were approved by the Board of Directors on 31 March 2016.
Liontrust Global Funds plc 106 Annual report and audited Financial Statements Unaudited schedule of significant portfolio movements For the year ended 31 December 2015
In accordance with the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (“the UCITS Regulations”) and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48 (1)) (Undertakings for Collective Investments in Transferrable Securities) Regulations 2015 (the “Central Bank UCITS Regulations”), a statement of the largest changes in the composition of the Portfolio Statements during the reporting period is provided to ensure that shareholders can identify changes in the investments held by the Sub-funds.
Liontrust GF European Strategic Equity Fund
Cost Proceeds Purchases €'000 Sales €'000 Belgium Treasury Bill 0% 17/09/2015 7,503 Belgium Treasury Bill 0% 17/09/2015 7,501 German Treasury Bill 0% 16/03/2016 7,210 Belgium (Kingdom of) 0% 16/07/2015 6,000 Belgium (Kingdom of) 0% 16/07/2015 6,003 United States Treasury Bill 0% 29/10/2015 5,930 United States Treasury Bill 0% 29/10/2015 5,891 German Treasury Bill 0% 30/09/2015 5,400 United States Treasury Bill 0% 28/01/2016 5,874 Germany Treasury Bill 0% 09/12/15 5,400 France Treasury Bill BTF 0% 17/02/2016 5,504 France Treasury Bill BTF 0% 18/11/2015 5,000 Germany Treasury Bill 0% 09/12/15 5,405 US Treasury Bill 0% 30/07/2015 4,577 German Treasury Bill 0% 30/09/2015 5,404 France Treasury Bill BTF 0% 25/06/2015 4,500 France Treasury Bill BTF 0% 18/11/2015 5,003 United Kingdom Treasury Bill 0% 05/05/2015 3,381 France Treasury Bill BTF 0% 25/06/2015 4,502 France (Govt of) 0% 20/08/2015 2,850 US Treasury Bill 0% 30/07/2015 4,455 Belgium Treasury Bill 0% 17/12/2015 EUR250000 2,500 United Kingdom Treasury Bill 0% 05/05/2015 3,424 German Treasury Bill 0% 15/07/2015 2,000 France (Govt of) 0% 20/08/2015 2,851 German Treasury Bill 0% 24/06/2015 1,500 Belgium Treasury Bill 0% 17/12/2015 EUR250000 2,501 United Kingdom Treasury Bill 0% 27/04/2015 1,304 German Treasury Bill 0% 15/07/2015 2,003 German Treasury Bill 0% 20/05/2015 850 France Treasury Bill BTF 0% 09/03/2016 1,801 France Treasury Bill BTF 0% 13/05/2015 700 German Treasury Bill 0% 24/06/2015 1,502 United Kingdom Treasury Bill 0% 05/01/2015 574 United Kingdom Treasury Bill 0% 27/04/2015 1,222 France Treasury Bill 0% 05/02/2015 435 German Treasury Bill 0% 20/05/2015 851 German Treasury Bill 0% 25/02/2014 425 France Treasury Bill BTF 0% 13/05/2015 700 Coltene 176 Domino's Pizza 587 Amino Technologies 137 Linamar 543 Nokia 133 Amino Technologies 139 Rignet 132 Nokia 133 Motor Oil Hellas Corinth Refineries 77 Rignet 131 OPAP 72 Coltene 95 Domino's Pizza 61 Motor Oil Hellas Corinth Refineries 41 OPAP 40
The above represents aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the period or aggregate disposals greater than 1 per cent of the total value of sales. If there were fewer than 20 purchases/sales that exceed 1 per cent during the period the largest 20 purchases/sales are disclosed.
Liontrust Global Funds plc 107 Annual report and audited Financial Statements Unaudited schedule of significant portfolio movements For the year ended 31 December 2015
Liontrust GF Global Strategic Bond Fund Cost Purchases US$'000 Lloyds 0.15% 18,859 United States Treasury Note/Bond 1.375% 29/02/2020 9,931 South Africa Government Bond 8.25% 15/09/2017 6,828 United States Treasury Note/Bond 2.875% 15/08/2045 6,053 South Africa Government Bond 10.5% 21/12/2026 5,640 Russian Federal Bond - OFZ 7.4% 14/06/2017 5,549 United States Treasury Note/Bond 2.25% 15/11/2025 5,473 Mexican Bonos 8.00% 17/12/2015 5,205 Brazil Notas do Tesouro Nacional Serie F 10.00% 01/01/2017 5,104 United States Treasury Note/Bond 2.125% 15/05/2025 4,955 Mexican Bonos 5.75% 05/03/2026 4,507 Brazil Notas do Tesouro Nacional Serie F 10% 01/01/2023 4,169 United States Treasury Note/Bond 2.25% 15/11/2024 4,012 Russian Federal Bond - OFZ 7.4% 19/04/2017 3,942 United States Treasury Note/Bond 2% 15/08/2025 2,504 United States Treasury Note/Bond 2.5% 15/02/2045 2,441 Colombia Government International Bond 4% 26/02/2024 1,460 Brazilian Government International Bond 4.25% 07/01/2025 1,241 Russian Federal Bond - OFZ 7.05% 1/19/2028 955
CDS BRAZIL 1% 20/09/2020 514
Proceeds Sales US$'000 Lloyds 0.15% 20,501 United States Treasury Note/Bond 1.375% 29/02/2020 9,869 United States Treasury Note 2.75% 15/02/2019 7,414 Russian Foreign Bond - Eurobond FRN 31/03/2030 7,032 United States Treasury Note/Bond 2.875% 15/08/2045 5,959 United States Treasury Note 3.625% 15/08/2019 5,491 South Africa Government Bond 8.25% 15/09/2017 5,452 United States Treasury Note/Bond 2.125% 15/05/2025 4,996 Mexican Bonos 8.00% 17/12/2015 4,403 Brazil Notas do Tesouro Nacional Serie F 10.00% 01/01/2017 4,222 Brazil Notas do Tesouro Nacional Serie F 10% 01/01/2023 4,104 United States Treasury Note/Bond 2.25% 15/11/2024 4,048 Russian Federal Bond - OFZ 7.05% 1/19/2028 4,018 United States Treasury Note/Bond 2% 15/08/2025 2,469 United Mexican States 5.625% 3/19/2114 2,453 United States Treasury Note/Bond 2.5% 15/02/2045 2,358 Brazil Minas SPE via State of Minas Gerais 5.333% 2/15/2028 2,050 Bosnia & Herzegovina Government International Bond FRN 12/11/2017 1,596 Colombia Government International Bond 4.375% 3/21/2023 1,428 Mexico Government International Bond 3.6% 1/30/2025 1,012
The above represents aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the period or aggregate disposals greater than 1 per cent of the total value of sales. If there were fewer than 20 purchases/sales that exceed 1 per cent during the period the largest 20 purchases/sales are disclosed.
Liontrust Global Funds plc 108 Annual report and audited Financial Statements Unaudited schedule of significant portfolio movements For the year ended 31 December 2015
Liontrust GF Special Situations Fund
Cost Proceeds Purchases £'000 Sales £'000 Diageo 583 Advanced Computer Software 668 Unilever 540 Domino Printing Sciences 561 GlaxoSmithKline 536 BG 273 BP 475 Savills 171 Reed Elsevier 454 Domino's Pizza 171 Sanne Group 434 Renishaw 165 Compass 411 Rightmove 157 AstraZeneca 404 NCC 145 AA 388 EMIS 117 Spectris 377 Spirent Communications 106 Tullett Prebon 352 Compass 91 Shire 332 Reed Elsevier 70 EMIS 326 Fidessa 55 Intertek 319 AstraZeneca 54 Rightmove 303 Unilever 52 ROTORK 281 Spirax-Sarco Eng. 51 Renishaw 278 GlaxoSmithKline 48 Royal Dutch Shell 274 Diageo 46 ICAP 255 BP 46 Domino's Pizza 255 Royal Dutch Shell 46 PayPoint 252 ROTORK 45 Spirax-Sarco Eng. 250 AA 45 Fidessa 247 ICAP 39 NCC 232 Michael Page International 37 Savills 230 Michael Page International 188 SEPURA 167 John Wood 139 Smart Metering Systems 124 BG 121 iomart 114
The above represents aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the period or aggregate disposals greater than 1 per cent of the total value of sales. If there were fewer than 20 purchases/sales that exceed 1 per cent during the period the largest 20 purchases/sales are disclosed.
Liontrust GF Macro Equity Income Fund
Cost Proceeds Purchases £'000 Sales £'000 Liontrust Macro Equity Income Fund 13,581 Liontrust Macro Equity Income Fund 2,530
The above represents all purchases and sales in the period.
Liontrust Global Funds plc 109 Annual report and audited Financial Statements Unaudited schedule of significant portfolio movements For the year ended 31 December 2015
Liontrust GF Global Income Fund
Cost Proceeds Purchases £'000 Sales £'000
Liontrust Global Income Fund 51 Liontrust Global Income Fund 1,020
The above represents all purchases and sales in the period.
Liontrust GF UK Growth Fund
Cost Proceeds Purchases £'000 Sales £'000 Liontrust UK Growth Fund 2,331 Liontrust UK Growth Fund 1,501
The above represents all purchases and sales in the period.
Liontrust Global Funds plc 110 Annual report and audited Financial Statements Unaudited schedule of significant portfolio movements For the year ended 31 December 2015
Liontrust GF Asia Income Fund Cost Proceeds Purchases US$'000 Sales US$'000 China Hongqiao 118 China Communications Construction 78 China Machinery Engineering 105 DUET 70 G8 Education 104 Major Cineplex 69 China Communications Construction 104 Pacific Textiles 66 Bank of China 103 Xinyi Glass 62 Great Wall Motor 99 Harvey Norman 60 Lite-On Technology 98 Bank of China 60 SITC International 95 Lite-On Technology 59 Xinyi Glass 92 China Machinery Engineering 59 Industrial & Commercial Bank of China 92 SITC International 58 Wasion 89 G8 Education 56 Advanced Semiconductor Engineering 85 Wasion 55 DUET 85 China Mobile 54 Pacific Textiles 84 Advanced Semiconductor Engineering 53 Major Cineplex 81 Industrial & Commercial Bank of China 53 Minth 80 Transurban 51 Harvey Norman 79 Gigabyte Technology 51 Country Garden 78 TTW 51 Gigabyte Technology 77 Religare Health 50 King Yuan Electronics 77 TRUE Telecommunication Growth Infrastructure 49 China Mobile 75 China Hongqiao 49 Religare Health 73 Intouch 48 Radiant Opto-Electronics 73 Minth 47 Hutchison Whampoa 71 Radiant Opto-Electronics 46 Transurban 70 Great Wall Motor 46 Intouch 70 Sunlight REIT 46 TRUE Telecommunication Growth Infrastructure 66 Country Garden 46 China Communications Services 64 Jasmine Broadband Internet Infrastructure 46 Jasmine Broadband Internet Infrastructure 63 Jiangsu Expressway 45 Fletcher Building 59 Guangzhou R&F Properties 45 Sunlight REIT 58 King Yuan Electronics 44 Jiangsu Expressway 56 Spark New Zealand 41 Alliance Global 56 Langham Hospitality 41 TTW 56 Hutchison Port Trust 39 Hutchison Port Trust 54 CK Hutchison 38 Krung Thai Bank 54 China Communications Services 37 Australia & New Zealand Bank 53 Krung Thai Bank 36 Taiwan Cement 53 Supalai 36 Spark New Zealand 53 Ratchaburi Electricity Generating 33 Langham Hospitality 51 Suntec REIT 33 Ratchaburi Electricity Generating 49 Australia & New Zealand Bank 32 Guangzhou R&F Properties 48 Fletcher Building 32 Suntec REIT 48 Amcor 31 AMP 47 AMP 31 Texwinca 45 Taiwan Cement 31 Silverlake Axis 44 Alliance Global 31 Berjaya Auto 44 Aurora 28 Amcor 43 Texwinca 27 Supalai 43 Federation Centres 27 Samsung Electronics 41 Ticon Industrial Connection 27 Keppel 41 The above represents aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the period or aggregate disposals greater than 1 per cent of the total value of sales. If there were fewer than 20 purchases/sales that exceed 1 per cent during the period the largest 20 purchases/sales are disclosed. Liontrust Global Funds plc 111 Annual report and audited Financial Statements Unaudited schedule of significant portfolio movements For the year ended 31 December 2015
Liontrust GF Global Strategic Equity Fund
Cost Proceeds Purchases US$'000 Sales US$'000 Golar LNG 1,936 Micron Tech 825 ICICI Bank 1,879 ICICI Bank 599 Cheniere Energy 1,170 Baidu 391 Baidu 929 AO Smith 314 GCL-Poly Energy 927 Thermo Fisher Scientific 208 Xinyi Solar 888 HDFC Bank 190 Micron Tech 852 GCL-Poly Energy 166 HDFC Bank 833 China Overseas Land & Investment 158 Huadian Fuxin Energy 738 Whiting Petroleum 114 China Overseas Land & Investment 680 Golar LNG 99 Thermo Fisher Scientific 679 China Lesso 50 China Singyes Solar Technologies 650 Xinyi Solar 50 China Lesso 641 China Overseas Property Holdings 8 Telefonica Brasil 504 Techtronic Industries 496 Wasion 333 AO Smith 266 Whiting Petroleum 107
The above represents all purchases and sales in the period.
Liontrust Global Funds plc 112 Annual report and audited Financial Statements Company Information
Company’s Registered Office Georges Court, 54-62 Townsend Street, Dublin 2, Ireland
Directors* David James Hammond (Chairman)** Edward Catton Simon O’Sullivan**
Investment Adviser Liontrust Investment Partners LLP 2 Savoy Court, London WC2R 0EZ United Kingdom
Distributor(s) Liontrust Fund Partners LLP 2 Savoy Court, London WC2R 0EZ United Kingdom
Liontrust Investment Partners LLP (Luxembourg Branch) Vega Centre Parc d’activitiés, 75 L-8308 Capellen Grand Duchy of Luxembourg
Administrator, Registrar and Secretary Northern Trust International Fund Administration Services (Ireland) Limited Georges Court, 54-62 Townsend Street, Dublin 2, Ireland
Custodian Northern Trust Fiduciary Services (Ireland) Limited, Georges Court, 54-62 Townsend Street, Dublin 2, Ireland
Independent Auditors PricewaterhouseCoopers, Chartered Accountants & Registered Auditors, One Spencer Dock, North Wall Quay, Dublin 1, Ireland
Legal Advisors On English and US law MacFarlanes LLP, 220 Cursitor Street, London EC4AM 1LT, United Kingdom
On Irish law Dillon Eustace, 33 Sir John Rogerson’s Quay, Dublin 2, Ireland
Irish Tax Advisors Dillon Eustace 33 Sir John Rogerson’s Quay, Dublin 2, Ireland
Governance Services Bridge Consulting Limited 33 Sir John Rogerson’s Quay, Dublin 2, Ireland
* All directors act in a non-executive capacity ** Directors independent of the Investment Adviser Liontrust Global Funds plc 113 Annual report and audited Financial Statements NOTICE OF ANNUAL GENERAL MEETING
To: The Shareholders of Liontrust Global Funds plc: -
NOTICE is hereby given that the Annual General Meeting of the Shareholders of Liontrust Global Funds plc (the “Company”) will be held at Georges Court, 54-62 Townsend Street, Dublin 2 on Wednesday, 25 May 2016 at 10.00 a.m.
AGENDA
Ordinary Business
1. Annual Report and Accounts To receive and consider the Annual Report and Audited Financial Statements of the Company for the period ended 31 December 2015.
2. Re-appointment of Auditors To approve the re-appointment of PricewaterhouseCoopers as the Auditors of the Company.
3. Auditors’ Remuneration To authorise the Directors to fix the Auditor’s remuneration.
By Order of the Board
______For and on behalf of Northern Trust International Fund Administration Services (Ireland) Limited as Secretary
Registered Office: George’s Court 54-62 Townsend Street Dublin 2
Dated this 15th day of April 2016
NOTE A member entitled to attend and vote may appoint a proxy to attend, speak and vote on his behalf. A proxy need not be a member of the Company.
Liontrust Global Funds plc 114 Annual report and audited Financial Statements LIONTRUST GLOBAL FUNDS PLC
FORM OF PROXY
I/We, ______of ______being Members of the above Company hereby appoint ______or failing him/her, the Chairman of the Meeting, or failing him/her Mr Paul Wymes of Northern Trust International Fund Administration Services (Ireland) Limited, or failing him, Ms Laura Gleeson of Northern Trust International Fund Administration Services (Ireland) Limited as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on Wednesday, 25 May 2016 at 10.00 a.m., and at any adjournment thereof.
Please indicate with an X in the spaces below how you wish your vote(s) to be cast. Unless otherwise instructed, the proxy will vote as he/she thinks fit.
Resolution: For Against
1. Annual Report and Accounts To receive and consider the Annual Report and Audited Financial Statements of the Company for the period ended 31 December 2015.
2. Re-appointment of Auditors To approve the re-appointment of PricewaterhouseCoopers as the Company’s Auditors.
3. Auditors’ Remuneration To authorise the Directors to fix the Auditors’ remuneration.
Signed:______Date:______
Please return to: Northern Trust International Fund Administration Services (Ireland) Limited. Georges Court 54-62 Townsend Street Dublin 2 Ireland Attention: Mr Paul Wymes
Liontrust Global Funds plc 115 Annual report and audited Financial Statements NOTES:
1. This instrument of proxy, to be valid, must be sent by post so as to arrive, or be lodged, at the address printed below, not later than Monday, 23 May 2016 at 10.00 a.m., being 48 hours prior to the commencement of the meeting.
2. In the case of a corporate shareholder, this instrument may be either under its Common Seal or under the hand of an officer or attorney authorised in that behalf.
3. If you wish to appoint a proxy other than the Chairman of the meeting, please insert his/her name and address and delete "the Chairman of the meeting"
4. If this instrument is signed and returned without any indication of how the person appointed proxy shall vote, he will exercise his discretion as to how he votes and whether or not he abstains from voting.
5. In the case of joint holders, the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority should be determined by the order in which the names stand in the register of members in respect of the joint holding.
6. The address to which the proxy forms should be returned is:-
Northern Trust International Fund Administration Services (Ireland) Limited. Georges Court 54-62 Townsend Street Dublin 2 Ireland Attention: Mr Paul Wymes
7. Proxy forms may be returned in the first instance by fax to +353 (0) 1 434 5273, or email to [email protected] but the original should be forwarded by mail to the address shown at 6 above.
Liontrust Global Funds plc 116 Annual report and audited Financial Statements