Annual report ChariTrak Common Investment Fund For the year ended 5 April 2019 Contents General Information Manager, Registrar and Alternative Investment Fund Manager General Information 2 BlackRock Fund Managers Limited About the Fund 3 12 Throgmorton Avenue, London EC2N 2DL Trustee 3 Member of The Investment Association and authorised and regulated by the Financial Conduct Authority (“FCA”) pursuant to the requirements of The Alternative Investment Fund Managers Regulations 2013. Corporate Governance 3 Common Investment Fund 4 Directors of the Manager G D Bamping* C L Carter (resigned 17 May 2019) M B Cook (appointed 2 May 2018) Charity Trustees’ Investment Responsibilities 4 W I Cullen*­ R A Damm (resigned 31 December 2018) R A R Hayes A M Lawrence Fund Manager 4 L E Watkins (appointed 16 May 2018, resigned 1 March 2019) M T Zemek* Significant Events 4 * Non-executive Director. Investment Objective & Policy 5 Trustee* & Custodian The Bank of New York Mellon (International) Limited Performance Table 6 One Canada Square, London E14 5AL Investment Report 7 Authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Performance Record 8 Regulation Authority. Distribution Tables 10 * On 18 June 2018 the Trustee changed from BNY Mellon Trust & Depositary (UK) Limited to The Bank of New York Mellon (International) Limited. Report on Remuneration 11 Investment Manager Portfolio Statement 17 BlackRock Advisors (UK) Limited 12 Throgmorton Avenue, London EC2N 2DL Statement of Total Return 34 Statement of Change in Net Assets Attributable to Unitholders 34 Authorised and regulated by the FCA. Balance Sheet 35 Auditor Ernst & Young LLP Notes to Financial Statements 36 25 Churchill Place, Canary Wharf, London E14 5EY Statement of Manager’s and Trustee’s Responsibilities 52 Report of the Trustee 53 Independent Auditor’s Report 54 BlackRock’s proxy voting agent is ISS (Institutional Shareholder Services). This Report relates to the packaged products of and is issued by: BlackRock Fund Managers Limited 12 Throgmorton Avenue, London EC2N 2DL Telephone: 020 7743 3000 Charities helpline: 0800 44 55 22 blackrock.co.uk For your protection, telephone calls are usually recorded. 1 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 2 About the Fund Common Investment Fund ChariTrak Common Investment Fund (the “Fund”) is established by The Charity Commission for England The Fund is a Common Investment Fund established and registered with the Commission. Pursuant to the and Wales (the “Commission”) under section 24 of The Charities Act 1993. The Charities Act 1993 was Charities Act 2011 and the Fund’s governing document, the Scheme, charities established in England and superseded by The Charities Act 2011 on 14 March 2012. Wales, and charities established in Scotland and Northern Ireland pursuant to the Charities Act 2006 (as amended from time to time) may invest in the Fund. Subject to any restrictions in the terms of the Scheme, or The Fund was established on 11 August 1999 and its registered charity number is 1077125. The Fund is that may apply to an eligible charity, the trustees of any charity, large or small, may contribute the whole or any administered for the benefit of unitholders under a scheme order of the Commission dated 22 June 2000 (the part of their investment property to it at any time. The Fund should not be regarded as a short–term investment. “Scheme”), as subsequently varied or amended. The Alternative Investment Fund Managers Regulations 2013 Charity Trustees’ Investment Responsibilities BlackRock Fund Managers Limited (the “Manager”) is authorised to manage and market the Fund, which is an alternative investment fund, in accordance with the “AIFMD”. The Commission requires trustees of charities to invest their assets only in investments authorised under the In this document, (other than in the section entitled ‘Report on Remuneration’), the term “AIFMD” means, governing document of their charity or the Trustee Act 2000 if applicable. Trustees are required to invest collectively, Directive 2011/61/EU, as supplemented by Commission Delegated Regulation (EU) No. 231/2013, prudently in order to achieve both income and/or capital growth. Furthermore, trustees are required to seek and as transposed by UK SI 2013/1773 and any other applicable national implementing measures in the regular professional advice regarding their investments. United Kingdom including, without limitation, the rules contained in the FCA handbook of rules and guidance, each as may be amended or updated from time to time. Fund Manager Trustee As at 5 April 2019, the Fund Manager of the Fund is Kieran Doyle. The Trustee of the Fund is The Bank of New York Mellon (International) Limited (the “Trustee”) and is a subsidiary of The Bank of New York Mellon Corporation. It is responsible for certain aspects of the management and Significant Events administration of the Fund and its property (as further detailed in the Scheme) except to the extent that such responsibilities are those of the Manager. Changes in the Directors of the Manager The Trustee acts as the depositary of the Fund and, in doing so, shall comply with the terms of the Scheme M B Cook was appointed as a Director effective 2 May 2018. L E Watkins was appointed as a Director and the provisions of the AIFMD. effective 16 May 2018, and resigned as a Director effective 1 March 2019. R A Damm resigned as a Director effective 31 December 2018. C L Carter resigned as a Director effective 17 May 2019. Corporate Governance Changes to the Trustee On 18 June 2018 the Trustee changed from BNY Mellon Trust & Depositary (UK) Limited to The Bank of New York Mellon (International) Limited. The Manager is responsible for the management and administration of the Fund (as further detailed in the Scheme Particulars) except to the extent that such responsibilities are those of the Trustee. The Manager has delegated certain functions with respect to the portfolio management of the assets of the Fund, the performance of certain risk management functions, and the distribution of units to BlackRock Advisors (UK) Limited (the “Investment Manager”). The Manager and Investment Manager meet quarterly to review the performance of the Fund and to discuss the investment policy and objectives. The Trustee attends these meetings at least annually and submits reports on a quarterly basis. Any matters for decision which are outside the powers delegated to the Manager are discussed by the Manager and the Trustee. 3 ChariTrak Common Investment Fund ChariTrak Common Investment Fund 4 Investment Objective & Policy Performance Table The investment objective of the Fund is to provide tax-exempt charity investors in England, Wales, Scotland For the year For the three years For the five years and Northern Ireland with returns (income and capital growth) of the UK equity market in line with a fixed to 5.4.2019 to 31.3.2019† to 31.3.2019† benchmark, namely the FTSE All-Share Index (the “Benchmark Index”). TOTAL RETURN The Manager may invest the property of the Fund at its discretion in any kind of investment which it could (with net income reinvested) make if it were absolutely entitled to the property of the Fund. Class A Accumulation Units ChariTrak Common Investment Fund +7.6% +30.8% +33.0% The Fund aims to fully replicate the Benchmark Index, holding stocks in the same proportion as they appear in FTSE All-Share Index* +7.6% +30.7% +33.5% the Benchmark Index. However, the Fund may employ optimisation techniques in order to assist it in tracking its benchmark. All Fund figures quoted are based on bid-to-bid dealing prices (the price at which units are sold) and are calculated net of fees. Performance returns are cumulative. All returns are in Sterling. * Figures from Index Vendor. The Fund follows a risk-sensitive, index equity investment strategy, requiring it to hold a broadly diversified † Three and five year data is only available to 31 March 2019. range of stocks, in order to reduce the risk of poor stock selection. The Fund may also invest in collective investment schemes in accordance with the restrictions set out in the Scheme. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and the return of your initial investment amount cannot be guaranteed. Changes in exchange The Fund may invest in securities that are, or could be, subject to stabilisation. Stabilisation is the process by rates may cause the value of an investment to fluctuate. Past performance is not a guide to future performance which the price of a security is temporarily supported during an issue to ensure that the introduction of the and should not be the sole factor of consideration when selecting a product. new security to the market occurs in an orderly fashion. The Fund may invest in securities in which an issue or offer for sale was underwritten, managed or arranged by an associate of the Manager during the preceding twelve months. The Manager may enter into contracts in respect of FTSE 100 futures in the following circumstances: • As a way of managing risk in respect of new money entering the Fund before it is invested in the market. • As a way of managing risk in respect of money exiting the Fund via redemptions of units if the Manager decides it is in the interests of the Fund to sell in the market ahead of the settlement date for the redemption. • As a hedge for income monies received by the Fund prior to being distributed to unitholders. • As a way to efficiently manage constituent changes in the Benchmark Index, allowing the Manager some flexibility in the way that such constituent changes are effected. • For efficient portfolio management.