Investec Funds Series iii Annual Report and Accounts · 2016. 6. 10. · REPORT AND ACCOUNTS...

OEIC | REPORT AND ACCOUNTS INVESTEC FUNDS SERIES III

Investec Funds Series iiiAnnual Reportand Accounts For the year ended 29 February 2016

REPORT AND ACCOUNTS

Investec Funds Series iii 1

Registered addressWoolgate Exchange,

25 Basinghall Street

London EC2V 5HA

Correspondence address Investec Fund Managers Limited

PO Box 9042

Chelmsford

CM99 2XL

Report and accounts

For the year ended 29 February 2016

Investec Funds Series iii Report & Accounts

Emerging Markets Local Currency Debt Fund* 2- 4

Global Bond Fund* 5- 7

Global Dynamic Fund* 8- 10

Global Equity Fund* 11- 13

Global Gold Fund* 14- 16

Portfolio statements per Fund* 17- 33

Authorised Corporate Director’s report* 34- 35

Statement of Authorised Corporate Director’s responsibilities 36

Statement of Depositary’s responsibilities and report to shareholders 37

Independent Auditor’s report 38- 39

Comparative table 40- 52

Financial statements 53- 100

Glossary 101-106

Other information 107- 113

* The above information collectively forms the Authorised Corporate Director’s report

REPORT AND ACCOUNTS

Investec Funds Series iii2

Emerging Markets Local Currency Debt Fund

Summary of the Fund’s investment objective and policy

The Fund aims to provide an income and grow the value of your investment over the long term.

The Fund invests primarily in bonds (contracts to repay borrowed money which typically pay interest at fi xed times) and in

related derivatives (fi nancial contracts whose value is linked to the price of an underlying asset).

The bonds are issued by governments, institutions or companies in emerging markets (countries that are in economic terms

less developed than the major Western countries). These bonds are predominantly issued in the currency of the issuing country.

The Investment Manager is free to choose how the Fund is invested. However, the JPMorgan GBI-EM Global Diversifi ed GBP

Index is currently taken into account when the Fund’s investments are selected.

Performance record

Investec Emerging Market Local Currency Debt Fund ‘A’ accumulation shares -6.65%*

Performance comparison index -2.97%**

Peer group Not applicable**

Total deemed income distributions per ‘A’ accumulation share

12 months to 29 February 2016 5.98 pence


The Fund underperformed its comparative index over the period. Our overall underweight exposure to emerging market (EM)

currencies and some of the Fund’s bond holdings detracted from returns; however, exposure to certain currencies was

positive.

Factors hindering performance

Over the period, one of the most signifi cant factors hindering performance was an underweight position in the Peruvian new

sol, which we held because of our concerns about the currency’s unsustainably high value given the economy’s reliance on

commodity exports. Nonetheless, we initially underestimated the ambition of the country’s central bank to intervene in

defending the value of its currency and eventually decided to exit this trade to protect the Fund from potential further losses.

From a bond perspective, we held an Israeli derivative position that was designed to benefi t from a rise in interest rates,

which weighed on our relative performance, as lower infl ation helped keep interest rates supressed. Similarly, we typically

maintained an underweight position in Czech bonds for the year which weighed on returns as stimulus measures were

announced by the European Central Bank (ECB), thus supporting European bond prices.

Factors helping performance

We maintained an overweight allocation to the Indonesian rupiah over the 12-month period, which made a positive

contribution to returns. The rupiah outperformed during the review period, with the country’s relatively high interest rate

helping to stabilise the currency and positive government reforms further encouraging investor infl ows. Similarly, our position

in defensive currencies – such as the Chinese renminbi and Egyptian pound – also outperformed, given they have

historically been managed in a tight range relative to the US dollar. From a bond perspective, our underweight exposure to

Turkey added to returns as concerns over the central bank’s independence and rising infl ation weighed on the country’s

bond prices.

REPORT AND ACCOUNTS


Signifi cant purchases during the year:

Poland Government Bond 3.25% 25/07/2025, Mexican Bonos 7.75% 29/05/2031, Russian Federal Bond 6.7% 15/05/2019,

South Africa Government Bond 7.25% 15/01/2020, Mexican Bonos 10% 05/12/2024.

Signifi cant sales during the year:

Poland Government Bond 3.25% 25/07/2025, Thailand Government Bond 3.65% 17/12/2021, Investec GSF Emerging

Markets Blended Debt Fund, Singapore Government Bond 3% 01/09/2024, Brazil Notas do Tesouro Nacional 10%

01/01/2021.

Outlook

We expect that emerging markets with close ties to China, or those that rely heavily on commodity markets, will continue to

face a challenging environment over the medium term. However, we believe that EM assets in general have adjusted to the

current economic environment of low growth and further increases in US interest rates. We believe these challenges will

taper off in time, and so the prospects for local currency EM debt should improve over the next one to fi ve years.

With US economic data releases over February somewhat more positive, the market has arguably not re-adjusted to the

relatively strong US growth story. If markets reprice for interest rate rises earlier in the year, there may be some short-term

volatility, but we believe the impact on EM debt this year should be modest compared with previous years, and we maintain

our view that the US Federal Reserve will be reluctant to increase rates quickly and threaten the fragile economic recovery.

In China, at the annual National People’s Congress in early March, authorities reiterated their commitment to supporting

growth, setting a target of 6.5–7.0% for 2016. We therefore expect a continuation of stimulatory policies by the Chinese

central bank and government, as evidenced recently by the further lowering of banks’ reserve requirements and a widening

of the budget defi cit to 3.0%, from 2.3% last year. After a shaky start to 2016, China’s authorities have succeeded in

stabilising the country’s currency and equity markets for now. However, given the need to ease monetary policy to support

growth, it may be diffi cult to stem depreciation over the longer term without further restricting capital outfl ows. Over the

medium term, we believe that risks remain from a growth perspective, given the overcapacity in the industrial sector and the

over-indebtedness of some sectors of the economy. This means that headwinds are likely to persist for EMs linked closely to

the Chinese economy, particularly those countries that are overly reliant on commodity exports. However, the growth outlook

is more positive in select EMs, such as India, Mexico, and central and eastern Europe.

While various factors have impacted local currency EM debt over the last few years, we feel that these are now better priced

into global markets. In particular, we believe that EM assets have largely adjusted to the prospect of higher US interest rates.

After an extensive period of challenging conditions, we believe the prospects for the asset class could improve over the next

one to fi ve years, helped by higher yields and the potential for both EM growth and trade to improve.

*Source: Morningstar, total return, income reinvested net of UK basic rate tax, no initial charge, accumulation share class (acc), net of fees

in GBP. Past performance should not be taken as a guide to the future and there is no guarantee that this investment will make profi ts.

**Index (the JP Morgan GBI-EM Global Diversifi ed Index) shown for performance comparison purposes only. For this Fund, there is no

relevant peer group sector against which to measure Fund performance.

The opinions expressed herein are as at end of February 2016.

REPORT AND ACCOUNTS


Risk and Reward profi le*

Lower risk Higher risk

Potentially lower rewards Potentially higher rewards

This indicator is based on historical data and may not be a reliable indication of the future risk profi le of the Fund. The risk

and reward category shown is not guaranteed to remain unchanged and may shift over time. The lowest category does not

mean ‘risk free’.

The value of your investment and any income from it can fall as well as rise and you are not certain of making profi ts; losses

may be made.

The Fund appears towards the middle of the Risk and Reward Indicator scale. This is because it invests in bonds whose

returns tend to fl uctuate more than those of cash funds but less than those of funds which invest in the shares of companies.

The following risks may not be fully captured by the Risk and Reward Indicator:

Currency exchange: Changes in the relative values of different currencies may adversely affect the value of the Fund’s

investments and any related income.

Default: There is a risk that the issuers of fi xed income investments (e.g. bonds) may not be able to meet interest payments

nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and

therefore investment loss.

Derivative counterparty: A counterparty to a derivative transaction may fail to meet its obligations to the Fund thereby

leading to fi nancial loss.

Derivatives: The use of derivatives may increase the overall risk in the Fund by multiplying the effect of both gains and

losses. This may lead to large changes in the value of the Fund and potentially large fi nancial loss.

Developing market: Some of the countries in which the Fund invests may have less developed legal, political, economic

and/or other systems. These markets carry a higher risk of fi nancial loss than those in countries generally regarded as being

more developed.

Interest rate: The value of fi xed income investments (e.g. bonds) tends to decrease when interest rates and/or infl ation

rises.

Investing in China: Investment in mainland China may involve a higher risk of fi nancial loss when compared with

countries generally regarded as being more developed.

Liquidity: There may be insuffi cient buyers or sellers of particular investments giving rise to delays in trading and being

able to make settlements from the Fund and/or large fl uctuations in the value of the Fund which may lead to larger fi nancial

losses than might be anticipated.

Third party operational: The Fund’s operations depend on third parties. Investors in the Fund may suffer disruption or

fi nancial loss in the event of third-party operational failure.

*The Risk and Reward profi le is taken from the Key Investor Information Document. Please note that, the Risk and Reward profi le section is

based on Sterling “A” Class Accumulation shares.

The full list of the Fund’s risks are contained in Appendix VII of the Investec Funds Series iii prospectus.

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REPORT AND ACCOUNTS


Global Bond Fund


The Fund aims to provide an income and grow the value of your investment over the long term.

The Fund invests around the world in bonds (contracts to repay borrowed money which typically pay interest at fi xed times)

and related derivatives (fi nancial contracts whose value is linked to the price of an underlying asset).

The bonds held are issued by governments, institutions and companies and are primarily of investment grade (high quality)

as rated by the credit rating agencies (companies that rate the ability of the issuers of bonds to repay borrowed money).

The Investment Manager is free to choose how the Fund is invested. However, the Barclays Global Aggregate Bond Index is

currently taken into account when the Fund’s investments are selected.

Performance record

Investec Global Bond Fund ‘A’ income shares 9.43%*

Performance comparison index 11.82%**

Peer group 2.46%**

Total income distributions per ‘A’ income share



The Fund underperformed the performance comparison index, with our lower exposure to government bonds in the US

and Japan adversely impacting relative returns. However, later in the year, the Fund increased its exposure to Japanese

government bonds, which offset these losses somewhat. Other detractors included our overweight positions in European

bonds, emerging market (EM) debt and US infl ation-linked bonds. More positively, the Fund signifi cantly outperformed its

peer group during the review period, with corporate bond exposure contributing to returns.


The underperformance was largely due to our lower exposure to developed market government bonds relative to the index,

particularly in the US and Japan. The former continued to perform well, as market participants lowered their expectations

for interest-rate rises, based on the more dovish stance of the US Federal Reserve (Fed) and deteriorating global data.

Meanwhile, Japanese government bonds continued to rally as the Bank of Japan added a new dimension, negative interest

rates, to its monetary policy framework.

Our overweight position in US infl ation-linked bonds also detracted from returns as global commodity prices came under

pressure during 2015, before falling further at the beginning of 2016. Consequently, this position in the Fund was sold.

The performance in the second half of the period was affected by our overweight exposure to European bonds.

The European Central Bank failed to live up to the market’s expectations in its December meeting, when it announced

a weaker-than-expected stimulus package. This meant that euro-zone bond yields did not fall as far as we had anticipated.

The Fund’s active currency exposure also had a negative impact on returns. Elsewhere, our EM debt exposure detracted

from relative returns in what proved to be a diffi cult period for the asset class, and EM assets in general.


The Fund signifi cantly outperformed its peers over the 12-month period. Our corporate bond exposure added to returns,

helped by favourable security selection, in spite of the global economic headwinds from China, the Fed’s interest-rate hike

and the fall in prices of commodities, particularly oil.

Also, in December 2015, the Fund substantially increased its Japanese government bond exposure. Yields continued to fall,

which helped partially offset the negative returns from our lower exposure earlier in the year.

REPORT AND ACCOUNTS



Norway Government Bond 3% 14/03/2024, United States Treasury Infl ation Indexed Bond 0.125% 15/04/2019, Mexican

Bonos 4.75% 14/06/2018, Bundesobligation 0.25% 16/10/2020, United States Treasury Infl ation Indexed Bond 0.125%

15/04/2020, Poland Government Bond 2.5% 25/07/2018, Deutsche Bundesrepublik Infl ation Linked Bond 1.75% 15/04/2020,

Bundesobligation 0% 09/04/2021, Israel Government Bond 2.25% 31/05/2019, United States Treasury Note 2.125%

15/08/2021, United States Treasury Note 0.75% 30/06/2017, Sweden Government Bond 5% 01/12/2020, Hungary

Government Bond 2.5% 27/10/2021, United States Treasury Infl ation Indexed Bond 0.375% 15/07/2025, United Kingdom

Gilt 2% 22/07/2020, Sweden Government Bond 2.5% 12/05/2025, Western Australian Treasury 5% 23/07/2025, Queensland

Treasury 4.75% 21/07/2025, Israel Government Bond 6% 28/02/2019, Bundesrepublik Deutschland 0.5% 15/02/2025,

Czech Republic Government Bond 2.4% 17/09/2025


United States Treasury Infl ation Indexed Bond 0.125% 15/04/2019, Mexican Bonos 4.75% 14/06/2018, United States Treasury

Infl ation Indexed Bond 0.125% 15/04/2020, Norway Government Bond 3% 14/03/2024, Poland Government Bond 2.5%

25/07/2018, Deutsche Bundesrepublik Infl ation Linked Bond 1.75% 15/04/2020, Bundesschatzanweisungen 0% 16/12/2016,

Bundesrepublik Deutschland 6.25% 04/01/2024, United States Treasury Note 3.125% 15/05/2019, United States Treasury

Note 2.125% 15/08/2021, United States Treasury Note 0.75% 30/06/2017, Bundesobligation 1% 12/10/2018, United Kingdom

Treasury 2.25% 07/09/2023, Sweden Government Bond 5% 01/12/2020, United States Treasury Infl ation Indexed Bond

0.375% 15/07/2025, Israel Government Bond 2.25% 31/05/2019, United Kingdom Gilt 2% 22/07/2020, Sweden Government

Bond 2.5% 12/05/2025, United States Treasury Note 2.75% 15/11/2023, United States Treasury Note 4.625% 15/02/2040,

Investec GSF Emerging Markets Local Currency Dynamic Debt Fund (GBP), Investec GSF Emerging Markets Local Currency

Dynamic Debt Fund (USD), Israel Government Bond 4.25% 31/03/2023, Bundesrepublik Deutschland 0.5% 15/02/2025

Outlook

Recent economic data releases suggest that global growth is not as fragile as investors had feared. However, the challenges

China faces appear likely to persist in the medium term. We have a cautious bias towards growth assets and remain vigilant

when investing in high yield corporate and EM bond markets. We believe that commodity-producing countries’ exchange

rates could strengthen, although the US dollar’s rally is far from over.

In February, economic data, from the US in particular, reinforced our view that growth is reasonably well underpinned.

Any further recovery in oil and other commodity prices will help in this regard. Meanwhile, there are signs that the reduction

in supply of certain commodities may have gone far enough to reduce the risk of prices falling further. Overall, we believe

that the global economy is not as weak as markets were beginning to suggest at the start of 2016.

Of course, there are still risks. We continue to worry about the structural challenges facing China and what these could

mean for demand, and the renminbi exchange rate, in the medium term. However, Chinese policy has been focused on

near-term stability and may lessen these pressures temporarily. Other concerns around ‘Brexit’ and the US election may

cause some volatility, which will need to be managed. For now, we retain a modest positive bias towards growth assets and

remain vigilant when investing in high yield corporate bond markets and EM bonds, while retaining exposure to attractive

defensive positions. In currency markets, we believe that there is scope for the exchange rates of commodity-producing

countries to strengthen, but on a limited basis. While this strengthening may come at the expense of the US dollar,

we believe that it is too soon to claim that the dollar’s rally is over given the Fed’s scope to hike interest rates further.

*Source: Morningstar, total return, income reinvested net of UK basic rate tax, no initial charge, income share class (inc), net of fees in GBP.

Past performance should not be taken as a guide to the future and there is no guarantee that this investment will make profi ts.

**Index (the Barclay’s Capital Global Aggregate Index) and sector (the Investment Association Global Bonds sector) shown for performance

comparison purposes only.


REPORT AND ACCOUNTS








The value of your investment and any income from it can fall as well as rise and you are not certain of making profi ts;

losses may be made.

The Fund appears towards the middle of the Risk and Reward Indicator scale. This is because it invests in bonds whose

returns tend to fl uctuate more than those of cash funds but less than those of funds which invest in the shares of companies.




Default: There is a risk that the issuers of fi xed income investments (e.g. bonds) may not be able to meet interest payments

nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and

therefore investment loss.

Derivative counterparty: A counterparty to a derivative transaction may fail to meet its obligations to the Fund thereby

leading to fi nancial loss.

Derivatives: The use of derivatives may increase the overall risk in the Fund by multiplying the effect of both gains and

losses. This may lead to large changes in the value of the Fund and potentially large fi nancial loss.



more developed.

Interest rate: The value of fi xed income investments (e.g. bonds) tends to decrease when interest rates and/or infl ation

rises.




based on Sterling “A” Class Income shares.


1 765432

REPORT AND ACCOUNTS


Global Dynamic Fund


The Fund aims to grow the value of your investment over the long term.

The Fund invests around the world primarily in a focussed selection of company shares and in related derivatives (fi nancial

contracts whose value is linked to the price of an underlying asset).

The Investment Manager is free to choose how the Fund is invested and does not manage it with reference to an index.

Performance recordInvestec Global Dynamic Fund ‘A’ accumulation shares -3.75%*


Peer group -3.72%**

The Fund underperformed both its performance comparison index and peer group during the period under review.

Detractors included Valeant Pharmaceuticals International; Anhui Conch Cement, and Rio Tinto, given the commodity-price

slump. On the positive side, technology companies Vantiv, Activision Blizzard, Fiserv, Broadcom, Amdocs and PayPal added

robust relative returns, as did healthcare holdings Cigna and Mylan.


Valeant Pharmaceuticals International encountered criticism over its pricing model, along with industry peers, after US

politicians voiced their concerns about excess profi teering in the sector. The Canadian-based pharmaceuticals company

was also forced to sever ties with speciality pharmacy Philidor in October, amid allegations of aggressive sales practices.

While investors welcomed the news that Valeant had signed a new distribution deal with US drug retail chain Walgreens,

the stock was hit by more negative headlines towards the end of the period.

Anhui Conch Cement, China’s second-largest cement company, fell as slowing domestic growth adversely impacted cement

demand. We have since sold the stock. There were also negative contributions from miners Rio Tinto and Grupo Mexico. Despite

good production performance and strong ongoing cost-cutting measures, Rio Tinto’s share price fell as oversupply in its key

commodity markets of iron ore, copper and coal led to notable price declines, exacerbated by slowing demand from China,

the world’s largest consumer of commodities. We believe Rio is one of the best placed miners (and resource companies) to not

only survive the current price environment, but is able to maintain its fi nancial strength while delivering some modest growth.

Elsewhere, the likes of Regal Beloit, Hess, Woodside Petroleum and Cobham were negatively impacted by low prices

because of their exposure to the oil and gas industries. We continue to hold Woodside and Cobham but have sold our

positions in Regal Beloit and Hess.

Meanwhile, exposure to Brazilian bank Itau Unibanco hurt performance after the stock lost value, along with Brazil’s fi nancial

markets, as the country continued to face political and economic headwinds. While Jones Lang LaSalle’s (JLL) share price

held up for most of the period, investors reacted negatively to the unexpected fourth-quarter 2015 earnings miss from the

US real estate and brokerage company. Similarly, holding Citigroup, the multinational investment banking and fi nancial

services company, hurt returns after it delivered a weak set of fourth-quarter earnings, with cost effi ciency an area of major

disappointment. Our investment case for JLL continues to hold, with 2015 underlining the company’s ability to gain market

share and generate above-market growth. We also continue to hold Citigroup in view of its cheap valuation and strength of

its capital base relative to banking peers.

In addition, not holding large index constituents Google (which has been renamed as Alphabet), Amazon, Facebook and

General Electric weighed on relative returns, as these stocks performed well.


Vantiv, the US payment-processing company, gained as its results showed an acceleration in growth, while Activision

Blizzard, the US gaming company, found support from consistently strong results together with the stock’s promotion to the

S&P 500 Index at the end of August. The company also continued to see growth in its key franchises, particularly sales of its

REPORT AND ACCOUNTS


Destiny and Call of Duty games, while the acquisition of King Digital Entertainment, the creator of Candy Crush, was well

received by investors. There were also positive contributions from other information technology companies held by the Fund,

including Fiserv, Broadcom, Amdocs and PayPal.

There was a positive contribution from Nippon Telegraph & Telephone (NTT), the Japanese fi xed-line and mobile telephone

operator, which continued to deliver good results over the period. US healthcare company Cigna found support on healthy

earnings and positive merger and acquisition news, while shares in global pharmaceuticals company Mylan rebounded after

the collapse of its potentially hostile takeover of over-the-counter drugmaker Perrigo, which had not been well received by

the market.

ServiceMaster Global, Philip Morris International and Johnson & Johnson were also among the biggest contributors to

returns over the period. More recently, ServiceMaster Global, a provider of residential and commercial services, performed

well after management raised its guidance for full-year earnings.


eBay, Regal Beloit, Anhui Conch Cement, Voya Financial, Tokio Marine, Citigroup, Comcast, Ally Financial, Priceline


Mylan, Goldman Sachs, Broadcom, Mondi, Anheuser Busch Inbev

Outlook

Market participants are currently speculating whether an investor migration towards value stocks is occurring. Given that the

recent market dips were based on negative sentiment rather than hard data, there could well be scope for a rebound in the

most oversold sectors. We believe consumers will continue to benefi t fi nancially from lower commodity prices, and that any

resultant boost in purchasing power is good for both growth and global stock markets.

Out-of-favour ‘value’ stocks have performed well recently, and investors are busy questioning whether a more sustainable

move towards value stocks is now underway. We have seen a narrowing of market breadth (where there are more stocks

that have declined in value than stocks that have risen in value) since August 2015, which usually signals that some sort of

change in market direction or leadership is imminent. That said, it is diffi cult to be convinced when the other value-rich

sector, fi nancials, has underperformed on the back of concerns about the credit market and bad debt.

There is certainly good reason for a bounce in the heavily oversold areas of the market, as we believe the recent sell-off

seems to have been based more on sentiment than evidence. That said, the fourth-quarter earnings season has not been

particularly strong, and guidance for 2016 has been broadly disappointing – to the extent that growth in corporate profi ts is

expected to stall this year.

However, we still believe consumers will benefi t fi nancially from lower commodity prices. Any boost in purchasing power

of this degree is never a smooth transition, but with consumer spending and employment numbers beating expectations,

the evidence suggests that the weak start to 2016 for global stock markets has not derailed the process. We believe that

this broad transition is ultimately good for growth and will help to underpin the world’s stock markets in future.

The outlook statement refl ects the views of the output from our 4Factor Equities team and is therefore similar to that of the Investec Global

Equity Fund.



**Index (MSCI*** All Countries World Index) and peer group (Investment Association Global) shown for performance comparison purposes

only.

***Source: MSCI. The MSCI data is comprised of a custom index calculated by MSCI for, and as requested by, Investec Asset Management

Limited. The MSCI data is for internal use only and may not be redistributed or used in connection with creating or offering any securities,

fi nancial products or indices. Neither MSCI nor any other third party involved in or related to compiling, computing or creating the MSCI

data (the “MSCI Parties’) makes any express or implied warranties or representations with respect to such data (or the results to be

obtained by the use thereof), and the MSCI Parties hereby expressly disclaim all warranties of originality, accuracy, completeness,

merchantability or fi tness for a particular purpose with respect to such data. Without limiting any of the foregoing, in no event shall any

of the MSCI Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profi ts)

even if notifi ed of the possibility of such damages.


REPORT AND ACCOUNTS









may be made.

The Fund appears towards the middle of the Risk and Reward Indicator scale. This is because it invests in the shares of

companies, whose values tend to fl uctuate more widely.


Concentration: Investments may be primarily concentrated in specifi c areas (e.g. countries/geographical regions and/or

industry sectors), in terms of investment style (e.g. income or growth), in individual holdings and/or in a number of other

ways. This may mean the value of the Fund may decrease whilst more broadly invested funds might grow.



Derivatives: The use of derivatives is not intended to increase the overall level of risk in the Fund. However, the use of

derivatives may still lead to large changes in the value of the Fund and includes the potential for large fi nancial loss.



more developed.

Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company

profi ts and future prospects as well as more general market factors. In the event of a company default (e.g. bankruptcy), the

owners of their equity rank last in terms of any fi nancial payment from that company.








1 765432

REPORT AND ACCOUNTS


Global Equity Fund



The Fund invests primarily in the shares of companies in the larger, more liquid (easier to deal in) markets of the USA,

continental Europe, UK and Japan, and in related derivatives (fi nancial contracts whose value is linked to the price of an

underlying asset).

The Investment Manager is free to choose how the Fund is invested. However, the MSCI All Countries World Net Return

Index is currently taken into account when the Fund’s investments are selected.

Performance record

Investec Global Equity Fund ‘A’ accumulation shares -5.66%*


Peer group -3.72%**

The Fund underperformed both its performance comparison index and peer group during the period under review.

Detractors included Valeant Pharmaceuticals International; Marathon Oil and Hess; and Rock-Tenn and Anhui Conch

Cement. On the positive side, technology stocks Vantiv and Activision Blizzard helped relative returns, as did Tyson Foods

and healthcare holding Cigna.


Valeant Pharmaceuticals International encountered criticism over its pricing model, along with industry peers, after US

politicians voiced their concerns about excess profi teering in the sector. The Canadian-based pharmaceuticals company

was also forced to sever ties with speciality pharmacy Philidor in October, amid allegations of aggressive sales practices.

While investors welcomed the news that Valeant had signed a new distribution deal with US drug retail chain Walgreens,

the stock was hit by more negative headlines towards the end of the period.

While there are signs of a recovery in global oil markets, as prices rebounded from a 12-month low in January, US oil

companies Marathon Oil and Hess were negatively impacted by generally low commodity prices. Shares in WestRock

(previously known as Rock-Tenn), the US paper and packaging company, dropped sharply, along with other names in the

underperforming materials sector including Anhui Conch Cement, China’s second-largest cement company, which fell as

slowing domestic growth affected cement demand. We have subsequently sold out of Marathon Oil and Anhui Conch

Cement, but we continue to hold both WestRock and Hess. In our view, WestRock has sold off too heavily and we believe

Hess is better placed than most other oil companies to limit the production declines while massively cutting spending, with

strong opportunities if oil prices recover.

Shares in German auto manufacturer Volkswagen (VW) were down after revelations that it had manipulated emissions-test

data on its diesel vehicles in the US and Europe. We sold out of VW during the period. In addition, not holding large index

constituents Google (which has been renamed as Alphabet), Amazon, Facebook and General Electric weighed on relative

returns, as these stocks performed well.

Meanwhile, exposure to Brazilian bank Itau Unibanco hurt performance after the stock lost value, along with Brazilian

fi nancial markets, as the country continued to face political and economic headwinds.


Shares in Tyson Foods, the US meat-processing and marketing company, gained on strong results and optimistic

commentary from management on the outlook for earnings. Exposure to tobacco companies Japan Tobacco, Philip Morris

International and Imperial Brands also helped. Japan Tobacco performed well as it continued to benefi t from international

cigarette demand, improving domestic market volumes and favourable pricing trends.

REPORT AND ACCOUNTS


In Japan, telecommunication services companies Nippon Telegraph & Telephone (NTT) and KDDI contributed positively.

NTT, the fi xed-line and mobile telephone operator, continued to deliver good results over the period, which supported its

share price.

Vantiv, the US payment-processing company, gained as its results showed an acceleration in growth, while Activision

Blizzard, the US gaming company, found support from consistently strong results together with the stock’s promotion to the

S&P 500 index at the end of August. The company also continued to see growth in its key franchises, particularly sales of its

Destiny and Call of Duty games, while the acquisition of King Digital Entertainment, the creator of Candy Crush, was well

received by investors. There were also positive contributions from other information technology companies held by the Fund,

including Fiserv and Amdocs.

US healthcare company Cigna found support on healthy earnings and positive merger and acquisition news, while Alaska Air

and Japan Airlines benefi ted from low jet fuel prices.


Philip Morris International, eBay, Comcast, AT&T, Voya Financial


Microsoft, Novartis, Goldman Sachs, Anheuser-Busch Inbev, Allianz

Outlook

Market participants are currently speculating whether an investor migration towards value stocks is occurring. Given that the

recent market dips were based on negative sentiment rather than hard data, there could well be scope for a rebound in the

most oversold sectors. We believe consumers will continue benefi t fi nancially from lower commodity prices, and that any

resultant boost in purchasing power is good for both growth and global stock markets.

Out-of-favour ‘value’ stocks have performed well recently, and investors are busy questioning whether a more sustainable

move towards value stocks is now underway. We have seen a narrowing of market breadth (where there are more stocks

that have declined in value than stocks that have risen in value) since August 2015, which usually signals that some sort of

change in market direction or leadership is imminent. That said, it is diffi cult to be convinced when the other value-rich

sector, fi nancials, has underperformed on the back of concerns about the credit market and bad debt.

There is certainly good reason for a bounce in the heavily oversold areas of the market, as we believe the recent sell-off

seems to have been based more on sentiment than evidence. That said, we concede that the fourth-quarter earnings

season has not been particularly strong, and guidance for 2016 has been broadly disappointing – to the extent that growth

in corporate profi ts is expected to stall this year.

However, we still believe consumers will benefi t fi nancially from lower commodity prices. Any boost in purchasing power of

this degree is never a smooth transition, but with consumer spending and employment numbers beating expectations, the

evidence suggests that the weak start to 2016 for global stock markets has not derailed the process. We believe that this

broad transition is ultimately good for growth and will help to underpin the world’s stock markets in future.

The outlook statement refl ects the views of the output from our 4Factor Equities team and is therefore similar to that of the Investec Global

Dynamic Fund.



**Index (MSCI*** All Countries World Index) and peer group (Investment Association Global sector) shown for performance comparison

purposes only.

***Source: MSCI. The MSCI data is comprised of a custom index calculated by MSCI for, and as requested by, Investec Asset Management

Limited. The MSCI data is for internal use only and may not be redistributed or used in connection with creating or offering any securities,

fi nancial products or indices. Neither MSCI nor any other third party involved in or related to compiling, computing or creating the MSCI

data (the “MSCI Parties”) makes any express or implied warranties or representations with respect to such data (or the results to be

obtained by the use thereof), and the MSCI Parties hereby expressly disclaim all warranties of originality, accuracy, completeness,

merchantability or fi tness for a particular purpose with respect to such data. Without limiting any of the foregoing, in no event shall any

of the MSCI Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profi ts)

even if notifi ed of the possibility of such damages.


REPORT AND ACCOUNTS







mean ’risk free’.


may be made.

The Fund appears towards the middle of the Risk and Reward Indicator scale. This is because it invests in the shares of

companies, whose values tend to fl uctuate more widely.







profi ts and future prospects as well as more general market factors. In the event of a company default (e.g. bankruptcy),

the owners of their equity rank last in terms of any fi nancial payment from that company.








1 765432

REPORT AND ACCOUNTS


Global Gold Fund



The Fund invests around the world primarily in the shares of companies involved in gold mining and in related derivatives

(fi nancial contracts whose value is linked to the price of an underlying asset).

The Fund may also invest up to one-third of its value in the shares of companies involved in the mining of other precious

metals, minerals and non-precious metals.

The Investment Manager is free to choose how the Fund is invested and does not manage it with reference to an index.

Performance Record

Investec Global Gold Fund ‘A’ accumulation shares 7.95%*

Performance comparison index 8.26%**

Peer group Not applicable**

The Fund underperformed its comparison index. The underweight holdings in Newmont Mining and Barrick Gold were the

chief detractors from the Fund’s relative returns. However, our overall stock picks in gold companies were positive for

performance.

At the beginning of the period under review, the gold price traded around US$1,200 per ounce (oz), remaining within a US$80

range of this price for the fi rst four months. Its performance appeared closely linked to sentiment around the US economy

and the infl uence that this might have on the timing and path of the rate hikes by the US Federal Reserve (Fed). However,

gold prices fell dramatically in mid-July 2015, recording their biggest monthly drop in two years, to sub-US$1,100/oz – levels

last seen in 2010. It is not clear whether the People’s Bank of China’s (PBOC) disclosure of its gold holdings triggered the

event, but the gold price subsequently collapsed in what some described as a ‘speculative attack’.

While movements in the gold price have been closely related to the possibility of the Fed raising interest rates, this was

particularly prevalent over the last few months of 2015. In November, gold posted another large monthly price drop, refl ecting

the market’s belief that the Fed would raise interest rates at its December meeting. The decision to raise rates was indeed

made in December, but the tentative tone with which the Fed alluded to the likelihood of further rate hikes in 2017 has since

been positive for the yellow metal. Gold climbed 16% in the fi rst two months of 2016 as market participants considered more

rate hikes to be less likely in the year ahead. The appeal of gold as a safe haven has also increased since the turn of the year

amid concerns about global economic growth and tensions in the Middle East.


The Fund’s underweight exposures to Newmont Mining and Barrick Gold, two of the largest companies in the index

(combined weighting of 21%), were among the biggest detractors from relative returns. Both companies have signifi cant

leverage to the gold price and participated strongly in the recent gold price recovery, hurting our underweight positions.

Exposure to platinum producers was also a drag on performance. Platinum prices fell sharply over the period as automobile

sales, which is a key end market for platinum, decreased. This affected our positions in Stillwater Mining, Anglo American

Platinum and Lonmin, all of which were sold during the period.

REPORT AND ACCOUNTS



The Fund’s selective exposure to gold-mining companies was the largest contributor to overall performance. We were

particularly overweight Australian and South African producers which, due to the falling Australian Dollar and South African

Rand, benefi ted from reduced overall costs and higher local currency gold prices (when converted back from US dollar).

Australian company Evolution Mining was the top contributor to relative returns over the period with Northern Star Resources

and Sibanye also strongly adding to returns.

The Fund’s overweight exposure to low-cost producers with a strong production-growth outlook, such as Randgold

Resources, also contributed positively to performance.


Newmont Mining, Barrick Gold, Newcrest Mining, Gold Fields, AngloGold Ashanti, Agnico Eagle Mines, Randgold

Resources, Goldcorp, Detour Gold, Evolution Mining, Sibanye Gold, Franco-Nevada, Eldorado Gold, Silver Wheaton,

Yamana Gold, Northern Star Resources, Royal Gold, Fresnillo, Stillwater Mining, Guyana Goldfi elds, Source Physical Gold

P-ETC, Alamos Gold Class ‘A’


Randgold Resources, Franco-Nevada, Royal Gold, Goldcorp, ETFS Physical Palladium, Silver Wheaton, Barrick Gold,

Source Physical Markets Palladium P-ETC, Detour Gold, AngloGold Ashanti, Acacia Mining, ETFS Physical Platinum,

B2Gold, Newmont Mining, Evolution Mining, db Physical Gold ETC, Eldorado Gold, Sibanye Gold, Agnico Eagle Mines,

Northern Star Resources, Pan African Resources, Source Physical Gold P-ETC, Gold Fields, Polyus Gold International

Outlook

We believe the gold price will continue to be driven by expectations about the Fed’s timing of US interest-rate rises.

Meanwhile, uncertainty around global growth and geopolitical risk should provide support for gold, given the effects of low

oil prices on key oil-producing countries.

With the Fed fi nally increasing interest rates in December 2015, we expect it will be the pace and timing of further hikes that

will have the greatest impact on future gold prices swings, along with concerns over global economic growth and political

stability. We expect the Fed to be more cautious when introducing further rate rises, which should lend support to the gold

price. In its commentary discussing the fi rst interest rate increase, the Fed used a more dovish tone, signalling an increased

awareness of the defl ationary impact of weak oil prices and a strong US dollar.

Meanwhile, Indian and Chinese consumers are price-sensitive buyers and we expect them to increase their consumption at

current lower prices. Central bank purchases are also set to continue for a ninth consecutive year, with China in particular

expected to increase the allocation to gold in its foreign-currency reserves. On the supply side, we anticipate gold-mine

output from major producers to stabilise and contract marginally this year and in 2017. This is a result of years of under-

investment, as gold companies have progressively slashed their exploration and growth capital expenditure since the 2011

gold-price peak.

We believe uncertainty around global growth expectations and ongoing geopolitical risk will provide a further element of

support to the gold price. The impact of lower oil prices continues to weigh on the economic growth and social stability of

several oil-producing countries. The Japanese and euro-zone economies remain fractured, while there are increasing

concerns over the ability of China to manage a ‘soft landing’ as its economic growth moderates from above-trend levels.



**Index (the Euromoney Global Gold Index) shown for performance comparison purposes only. For this Fund, there is no relevant peer

group sector against which to measure fund performance.


REPORT AND ACCOUNTS









may be made.

The Fund appears towards the higher end of the Risk and Reward Indicator scale. This is because it invests in the shares of

companies whose values tend to fl uctuate more widely.


Concentration: Investments may be primarily concentrated in specifi c areas (e.g. countries/geographical regions and/or

industry sectors), in terms of investment style (e.g. income or growth), in individual holdings and/or in a number of other

ways. This may mean the value of the Fund may decrease whilst more broadly invested funds might grow.






profi ts and future prospects as well as more general market factors. In the event of a company default (e.g. bankruptcy),

the owners of their equity rank last in terms of any fi nancial payment from that company.

Liquidity: There may be insuffi cient buyers or sellers of particular investments giving rise to delays in trading and being

able to make settlements from the Fund and/or large fl uctuations in the value of the Fund which may lead to larger fi nancial

losses than might be anticipated.






1 765432

17Investec Funds Series iii

REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS

ASSET HOLDING (£’000) (%)

COLLECTIVE INVESTMENT SCHEMES 4.39% (28.02.15: 3.24%)

Investec GSF Emerging Markets Investment Grade Corporate Debt Fund † 682,153 9,484 1.79

Investec Emerging Markets Blended Debt Fund † 5,346,786 5,541 1.05

Investec GSF Onshore Renminbi Bond Fund † 339,972 4,800 0.91

Investec GSF Emerging Markets Corporate Debt Fund † 193,456 3,438 0.64 –––––––––––––––––––––––––––––––––––––––––––

23,263 4.39 ––––––––––––––––––––––––––––––––––––––––––

CORPORATE BONDS 7.35% (28.02.15: 3.58%)

Inter-American Development Bank 7.35% 12/09/2018 IDR 150,270,000,000 7,814 1.47

Petroleos Mexicanos 7.19% 12/09/2024 MXN 209,150,000 7,091 1.34

European Investment Bank 8.5% 17/09/2024 ZAR 138,450,000 5,914 1.12

America Movil 7.125% 09/12/2024 MXN 106,940,000 3,976 0.75

Transnet 9.5% 13/05/2021 ZAR 87,920,000 3,583 0.68

Morgan Stanley 11.5% 22/10/2020 BRL 14,460,000 2,590 0.49

European Investment Bank 6.95% 06/02/2020 IDR 42,380,000,000 2,145 0.40

Absa Bank 10.28% 03/05/2022 ZAR 45,000,000 2,032 0.38

European Bank for Reconstruction & Development 6.75% 12/05/2017 RUB 210,400,000 1,940 0.37

Financiera de Desarrollo Territorial 7.875% 12/08/2024 COP 10,933,000,000 1,878 0.35 –––––––––––––––––––––––––––––––––––––––––––

38,963 7.35 ––––––––––––––––––––––––––––––––––––––––––

GOVERNMENT BONDS 72.53% (28.02.15: 83.31%)

Brazil Notas do Tesouro Nacional 10% 01/01/2017 BRL 167,071,000 29,229 5.52


Russian Federal Bond 7.4% 19/04/2017 RUB 1,372,672,000 12,753 2.40

Hungary Government International Bond 6.375% 29/03/2021 USD 14,830,000 12,141 2.29

Turkey Government Bond 9% 08/03/2017 TRY 48,272,000 11,566 2.18

Turkey Government Bond 8.3% 20/06/2018 TRY 49,695,926 11,533 2.18

Thailand Government Bond 4.875% 22/06/2029 THB 403,741,000 10,477 1.98

Mexican Bonos 7.75% 23/11/2034 MXN 232,760,000 10,226 1.93


Poland Government Bond 5.5% 25/10/2019 PLN 39,139,000 8,000 1.51

Colombian TES 10% 24/07/2024 COP 34,528,900,000 7,977 1.50


Malaysia Government Bond 4.181% 15/07/2024 MYR 41,505,000 7,232 1.36

Mexican Udibonos Infl ation Linked 4.5% 04/12/2025 MXN 28,820,000 6,898 1.30


Russian Federal Bond 7% 25/01/2023 RUB 794,110,000 6,590 1.24

South Africa Government Bond 7.25% 15/01/2020 ZAR 151,807,000 6,435 1.21

Russian Federal Bond 6.2% 31/01/2018 RUB 712,407,000 6,382 1.20

Hungary Government Bond 2.5% 22/06/2018 HUF 2,448,480,000 6,319 1.19


Hungary Government Bond 7% 24/06/2022 HUF 1,929,970,000 6,129 1.16



Colombian TES 7.5% 26/08/2026 COP 28,292,800,000 5,493 1.04





Indonesia Treasury Bond 8.375% 15/03/2034 IDR 93,068,000,000 4,829 0.91

Romania Government Bond 5.85% 26/04/2023 RON 23,370,000 4,818 0.91


Russian Federal Bond 7% 16/08/2023 RUB 544,746,000 4,483 0.85

Poland Government Bond 2% 25/04/2021 PLN 24,367,000 4,357 0.82





Portfolio Statement

As at 29 February 2016


REPORT AND ACCOUNTS

18 Investec Funds Series iii

Portfolio Statement continued

As at 29 February 2016 MARKET PERCENTAGE

VALUE OF NET ASSETS


GOVERNMENT BONDS 72.53% (28.02.15: 83.31%) continued



Poland Government Bond 4% 25/10/2023 PLN 19,735,000 3,895 0.73


Romania Government Bond 4.75% 24/02/2025 RON 18,770,000 3,623 0.68



Mexican Bonos 10% 20/11/2036 MXN 64,677,500 3,477 0.66

Indonesia Treasury Bond 9% 15/03/2029 IDR 62,813,000,000 3,464 0.65

Peruvian Government International Bond 5.7% 12/08/2024 PEN 18,359,000 3,423 0.65





Hungary Government Bond 6% 24/11/2023 HUF 957,030,000 2,956 0.56


Thailand Government Infl ation Linked Bond 1.25% 12/03/2028 THB 154,300,000 2,888 0.54

Hungary Government Bond 5.5% 24/06/2025 HUF 907,860,000 2,750 0.52


Turkey Government Bond 9% 24/07/2024 TRY 11,520,452 2,592 0.49

Brazilian Government International Bond 12.5% 05/01/2022 BRL 13,500,000 2,455 0.46

Indonesia Treasury Bond 8.375% 15/03/2024 IDR 45,247,000,000 2,435 0.46



Bonos del Banco Central de Chile en Pesos 6% 01/05/2018 CLP 2,000,000,000 2,155 0.41



Colombian TES 7.75% 18/09/2030 COP 10,377,700,000 1,956 0.37



Hungary Government Bond 3% 26/06/2024 HUF 647,300,000 1,638 0.31




Philippine Government International Bond 6.25% 14/01/2036 PHP 46,000,000 751 0.14

Brazil Notas do Tesouro Nacional 10% 01/01/2018 BRL 4,330,000 730 0.14

South Africa Government Bond 8.25% 31/03/2032 ZAR 17,439,456 674 0.13

Indonesia Treasury Bond 10% 15/02/2028 IDR 11,268,000,000 666 0.13

Poland Government Bond 2.5% 25/07/2026 PLN 3,611,000 627 0.12

South Africa Government Bond 13.5% 15/09/2016 ZAR 11,982,000 555 0.10

Thailand Government Bond 4.675% 29/06/2044 THB 16,004,000 420 0.08

Russian Federal Bond 7.5% 15/03/2018 RUB 38,200,000 350 0.07

Indonesia Treasury Bond 10.25% 15/07/2027 IDR 5,700,000,000 343 0.06

Romania Government Bond 4.75% 24/06/2019 RON 1,490,000 286 0.05

Colombia Government International Bond 9.85% 28/06/2027 COP 1,110,000,000 256 0.05

Indonesia Treasury Bond 9.5% 15/07/2031 IDR 4,179,000,000 239 0.05

Colombian TES 11.25% 24/10/2018 COP 890,100,000 207 0.04

Thailand Government Bond 3.58% 17/12/2027 THB 5,000,000 115 0.02

Indonesia Treasury Bond 7% 15/05/2027 IDR 1,725,000,000 82 0.02

South Africa Government Bond 8% 31/01/2030 ZAR 1,387,582 54 0.01

Malaysia Government Bond 4.012% 15/09/2017 MYR 77,000 13 –

Russian Federal Bond 8.15% 03/02/2027 RUB 479,000 4 – –––––––––––––––––––––––––––––––––––––––––––

384,329 72.53 ––––––––––––––––––––––––––––––––––––––––––

GOVERNMENT TREASURY BILLS 1.89% (28.02.15: 0.44%)

Brazil Letras do Tesouro Nacional 01/07/2016 BRL 55,000,000 9,493 1.79

Brazil Letras do Tesouro Nacional 01/01/2018 BRL 3,610,000 507 0.10 –––––––––––––––––––––––––––––––––––––––––––

10,000 1.89 ––––––––––––––––––––––––––––––––––––––––––

CASH COLLATERAL 0.46% (28.02.15: 0.26%)

Citibank GBP 2,460,000 2,460 0.46 ––––––––––––––––––––––––––––––––––––––––––

DERIVATIVES - FUTURES 0.14% (28.02.15: (0.30%))

South African R2037 Bond Futures May 2016 3,058 223 0.04




South Korea 10 Year Bond Futures March 2016 151 82 0.02


REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS


DERIVATIVES - FUTURES 0.14% (28.02.15: (0.30%))

South Korea 3 Year Bond Futures March 2016 486 45 0.01

United States Treasury Notes 10 Year Futures June 2016 (190) 20 –

United States Treasury Notes 5 Year Futures June 2016 (74) 8 –

United States Treasury Notes 2 Year Futures June 2016 (11) 2 – –––––––––––––––––––––––––––––––––––––––––––

732 0.14 ––––––––––––––––––––––––––––––––––––––––––

DERIVATIVES - INTEREST RATE SWAPS (0.38%) (28.02.15: (0.26%))

Goldman Sachs Interest Rate Swap receive 15.705% 02/01/2019 103,119,841 346 0.07


Deutsche Bank Interest Rate Swap receive 5.75% 01/05/2018 8,000,000 191 0.04

Citibank Interest Rate Swap pay 4.4% 22/10/2020 36,650,143 172 0.03

Citibank Interest Rate Swap receive 1.44% 27/01/2019 8,460,098,853 162 0.03




Citibank Interest Rate Swap receive 1.45% 26/01/2019 3,835,253,000 76 0.01

Citibank Interest Rate Swap pay 15.72% 02/01/2019 4,670,146 16 –

Citibank Interest Rate Swap receive 1.5% 25/02/2021 703,569,444 8 –

Goldman Sachs Interest Rate Swap pay 1.155% 24/02/2021 15,137,000 (3) –

Citibank Interest Rate Swap receive 15.56% 04/01/2021 11,751,633 (13) –

Goldman Sachs Interest Rate Swap pay 15.55% 04/01/2021 31,627,087 (32) (0.01)






Citibank Interest Rate Swap receive 15.25% 03/01/2017 68,396,876 (145) (0.03)


Citibank Interest Rate Swap pay 1.245% 09/07/2020 149,230,000 (947) (0.18)

Citibank Interest Rate Swap receive 8.59% 02/01/2018 42,568,248 (1,702) (0.32) –––––––––––––––––––––––––––––––––––––––––––

(1,988) (0.38) ––––––––––––––––––––––––––––––––––––––––––

DERIVATIVES - TOTAL RETURN SWAPS 6.18% (28.02.15: 5.69%)

Indonesian Government 10.5% 15/08/2030 170,000,000,000 10,480 1.97


Indonesian Government 11% 15/09/2025 65,000,000,000 4,053 0.76

Indonesian Government 10% 15/02/2028 65,000,000,000 3,844 0.73




Indonesian Government 11.75% 15/08/2023 15,000,000,000 953 0.18 –––––––––––––––––––––––––––––––––––––––––––

32,788 6.18 ––––––––––––––––––––––––––––––––––––––––––

FORWARD FOREIGN EXCHANGE CONTRACTS 0.92% (28.02.15: (0.36%))

FORWARD CROSS CURRENCY CONTRACTS

Buy ARS 141,630,000 for USD (11,261,309) (1,567) (0.30)

Buy BRL 153,450,000 for USD (38,551,579) (140) (0.03)

Buy CLP 33,704,806,000 for USD (46,882,966) 1,143 0.22

Buy CNH 512,192,263 for USD (78,136,506) (29) (0.01)

Buy COP 122,689,816,784 for USD (38,401,037) (1,269) (0.24)

Buy CZK 525,575,000 for USD (21,377,003) (161) (0.03)

Buy EGP 38,995,000 for USD (3,795,252) 19 0.01

Buy EUR 12,439,924 for PLN (54,829,000) (116) (0.02)

Buy EUR 31,688,000 for USD (34,509,339) (3) -

Buy GHS 76,010,000 for USD (18,154,882) 478 0.09

Buy HUF 3,229,400,000 for EUR (10,249,787) 110 0.02

Buy HUF 13,179,910,000 for USD (45,697,823) 341 0.06

Buy IDR 751,284,601,750 for USD (54,095,928) 1,439 0.27

Buy ILS 74,220,000 for USD (18,974,504) 12 -

Buy INR 3,637,574,000 for USD (53,856,962) (602) (0.11)

Buy KES 3,386,396,000 for USD (31,711,053) 793 0.15

Buy KRW 82,719,095,852 for USD (69,544,853) (2,010) (0.38)

Buy MXN 1,057,358,000 for USD (61,408,018) (2,506) (0.47)

Buy MYR 194,191,877 for USD (44,561,861) 1,099 0.21

Buy NGN 5,716,175,544 for USD (23,923,673) (345) (0.07)

Buy PEN 245,589,742 for USD (71,432,053) (1,327) (0.25)

Buy PHP 1,571,979,000 for USD (33,150,816) (52) (0.01)

Buy PLN 53,479,000 for EUR (11,921,519) 280 0.05

REPORT AND ACCOUNTS




VALUE OF NET ASSETS


FORWARD FOREIGN EXCHANGE CONTRACTS 0.92% (28.02.15: (0.36%)) continued

FORWARD CROSS CURRENCY CONTRACTS continued

Buy PLN 350,181,041 for USD (87,513,992) 24 0.01

Buy RON 183,340,000 for USD (44,314,222) 196 0.04

Buy RUB 5,692,541,050 for USD (75,883,341) (847) (0.16)

Buy SGD 40,719,000 for USD (28,555,812) 279 0.05

Buy THB 1,665,347,733 for USD (46,226,972) 358 0.07

Buy TRY 355,930,000 for USD (118,259,633) 979 0.18

Buy TWD 892,529,000 for USD (26,817,976) (32) (0.01)

Buy UGX 40,332,633,000 for USD (11,115,771) 265 0.05

Buy USD 8,900,268 for ARS (141,630,001) (332) (0.06)

Buy USD 79,380,647 for BRL (318,049,954) 526 0.10

Buy USD 48,635,709 for CLP (35,249,703,000) (1,482) (0.28)

Buy USD 117,467,717 for CNH (778,483,000) (96) (0.02)

Buy USD 5,451,435 for CNY (35,050,000) 75 0.02

Buy USD 37,569,191 for COP (127,196,043,000) (303) (0.06)

Buy USD 21,519,306 for CZK (530,768,557) 113 0.02

Buy USD 14,317,743 for EUR (13,195,000) (37) (0.01)

Buy USD 16,842,175 for GHS (82,300,000) (2,288) (0.43)

Buy USD 57,808,474 for HUF (16,603,249,984) (256) (0.05)

Buy USD 38,253,899 for IDR (534,702,234,000) (1,202) (0.23)

Buy USD 51,468,508 for ILS (199,175,000) 364 0.07

Buy USD 53,091,474 for INR (3,639,587,000) 28 0.01

Buy USD 31,186,711 for KES (3,541,260,944) (1,518) (0.29)

Buy USD 75,747,085 for KRW (88,831,765,000) 2,926 0.55

Buy USD 34,924,551 for MXN (617,688,000) 779 0.15

Buy USD 28,995,634 for MYR (123,349,726) (200) (0.04)

Buy USD 17,787,995 for NGN (4,349,841,428) (584) (0.11)

Buy USD 88,221,445 for PEN (304,893,315) 1,316 0.25

Buy USD 29,485,515 for PHP (1,421,393,000) (307) (0.06)

Buy USD 56,288,242 for PLN (223,575,000) 284 0.06

Buy USD 33,879,247 for RON (138,963,000) 62 0.01

Buy USD 132,957,424 for RUB (9,516,234,537) 5,864 1.11

Buy USD 29,278,329 for SGD (41,199,000) (4) -

Buy USD 15,883,643 for THB (573,976,000) (159) (0.03)

Buy USD 116,374,362 for TRY (350,125,649) (932) (0.18)

Buy USD 66,995,194 for TWD (2,248,100,000) (319) (0.06)

Buy USD 2,196,282 for UGX (8,334,890,000) (128) (0.02)

Buy USD 71,331,110 for ZAR (1,097,911,000) 2,269 0.43

Buy USD 12,117,741 for ZMW (158,600,000) (822) (0.16)

Buy ZAR 1,600,807,000 for USD (95,636,150) 2,733 0.52

Buy ZMW 156,943,127 for USD (10,801,991) 1,672 0.32 –––––––––––––––––––––––––––––––––––––––––––

4,851 0.92 ––––––––––––––––––––––––––––––––––––––––––

Portfolio of investments^ 495,398 93.48

Net other assets 34,553 6.52 –––––––––––––––––––––––––––––––––––––––––––

Net assets 529,951 100.00 ––––––––––––––––––––––––––––––––––––––––––

Unless otherwise stated the above securities are ordinary shares or common stock and admitted to offi cial stock exchange listings.

The collective investment schemes investments, cash collateral, total return swaps, interest rate swaps, and forward foreign exchange contracts are not listed.

^ Including derivative liabilities.

† A related party to the Fund.

Derivatives can be exchange traded or Over the Counter (OTC) contracts.


REPORT AND ACCOUNTS

29.02.2016 28.02.2015

MARKET % OF MARKET % OF

VALUE NET VALUE NET

ASSET (£’000) ASSETS (£’000) ASSETS

Bonds 423,292 79.88 1,135,876 86.89

Cash Collateral 2,460 0.46 3,400 0.26

Collective Investment Schemes 23,263 4.39 42,447 3.24

Derivatives 31,532 5.94 67,254 5.13

Forward Foreign Exchange Contracts 4,851 0.92 (4,728) (0.36)

Government Treasury Bills 10,000 1.89 5,662 0.44

Net other assets 34,553 6.52 57,572 4.40

Net assets 529,951 100.00 1,307,483 100.00

29.02.2016 28.02.2015


VALUE NET VALUE NET

CREDIT BREAKDOWN* (£’000) ASSETS (£’000) ASSETS

AAA 17,813 3.36 53,918 4,12

AA 2,155 0.41 9,710 0.74

A 112,264 21.19 378,840 28.97

BBB 130,708 24.65 487,632 37.33

BB 160,352 30.27 200,554 15.33

B – – 5,222 0.40

Total bonds 423,292 79 .88 1,135,876 86.89

*Bond ratings are Investec approximations.

Portfolio Analysis


REPORT AND ACCOUNTS


MARKET PERCENTAGE

VALUE OF NET ASSETS


COLLECTIVE INVESTEMENT SCHEMES 0.00% (28.02.15: 4.76%)

CORPORATE BONDS 16.12% (28.02.15: 13.95%)

Enel Finance International 5.125% 07/10/2019 USD 395,000 310 0.39

GE Capital UK Funding 5.875% 04/11/2020 GBP 240,000 282 0.35

Wal-Mart Stores 1.9% 08/04/2022 EUR 331,000 282 0.35

Deutsche Bahn Finance 4.875% 12/03/2019 EUR 300,000 271 0.34

Sanofi 0.875% 22/09/2021 EUR 300,000 243 0.31

Daimler 2.375% 16/12/2021 GBP 240,000 241 0.30

Statoil 3.7% 01/03/2024 USD 330,000 238 0.30

Ooredoo International Finance 5% 19/10/2025 USD 300,000 234 0.30

AA Bond 4.2487% 31/07/2043 GBP 220,000 225 0.28

Medtronic 2.75% 01/04/2023 USD 309,000 224 0.28

Hutchison Whampoa International 12 II 2% 08/11/2017 USD 310,000 224 0.28

Comision Federal de Electricidad 4.875% 26/05/2021 USD 300,000 222 0.28

Wellcome Trust 1.125% 21/01/2027 EUR 270,000 211 0.26

Swisscom via Lunar Funding V 1.75% 15/09/2025 EUR 250,000 208 0.26

Imperial Tobacco Finance 7.75% 24/06/2019 GBP 174,000 204 0.26

WPP 6% 04/04/2017 GBP 195,000 204 0.26

UBS Group Funding Jersey 2.125% 04/03/2024 EUR 260,000 203 0.25

CPUK Finance 2.666% 28/02/2042 GBP 200,000 200 0.25

ITV 2.125% 21/09/2022 EUR 248,000 199 0.25

Time Warner Entertainment 8.375% 15/03/2023 USD 220,000 195 0.24

Toyota Motor Credit 1.8% 23/07/2020 EUR 233,000 195 0.25

Anheuser-Busch InBev Worldwide 8.2% 15/01/2039 USD 180,000 191 0.24

Johnson & Johnson 5.5% 06/11/2024 GBP 150,000 189 0.24

Orange 3.125% 09/01/2024 EUR 200,000 181 0.23

Deutsche Telekom International Finance 2.75% 24/10/2024 EUR 200,000 181 0.23

United Technologies 6.125% 15/07/2038 USD 200,000 180 0.23

BPCE 2.875% 16/01/2024 EUR 200,000 178 0.23

Telenor 2.625% 06/12/2024 EUR 200,000 177 0.22

Telekom Finanzmanagement 3.125% 03/12/2021 EUR 190,000 166 0.21

Siemens Financieringsmaatschappij 6.125% 14/09/2066 GBP 165,000 166 0.21

Iberdrola International 1.75% 17/09/2023 EUR 200,000 163 0.20

Kraft Heinz Foods 2% 30/06/2023 EUR 200,000 161 0.20

Danone 1.25% 30/05/2024 EUR 200,000 160 0.20

LYB International Finance II 1.875% 02/03/2022 EUR 200,000 157 0.20

Bank of America 3.875% 01/08/2025 USD 210,000 156 0.20

Mizuho Financial Group Cayman 2 4.2% 18/07/2022 USD 200,000 150 0.19

Bunge Ltd Finance 3.5% 24/11/2020 USD 205,000 149 0.19

CRH America 3.875% 18/05/2025 USD 200,000 147 0.18

Tencent 3.8% 11/02/2025 USD 200,000 146 0.18

McDonald’s 3.625% 20/05/2021 USD 190,000 145 0.18

Harvest Operations 2.125% 14/05/2018 USD 200,000 145 0.18

Swedbank 2.2% 04/03/2020 USD 200,000 143 0.18

Alibaba 3.6% 28/11/2024 USD 200,000 142 0.18

Praxair 1.2% 12/02/2024 EUR 175,000 140 0.18

DIRECTV 3.8% 15/03/2022 USD 190,000 139 0.18

Apple 2.4% 03/05/2023 USD 195,000 139 0.18

Teva Pharmaceutical Finance 3.65% 10/11/2021 USD 188,000 138 0.17

Vodafone 1.75% 25/08/2023 EUR 170,000 135 0.17

Pfi zer 3.4% 15/05/2024 USD 175,000 133 0.17

International Business Machines 3.375% 01/08/2023 USD 175,000 131 0.16

Amgen 4.375% 05/12/2018 EUR 150,000 130 0.16

EMD Finance 3.25% 19/03/2025 USD 185,000 130 0.16

Pepsi Bottling 7% 01/03/2029 USD 131,000 130 0.16

ISS Global 1.125% 07/01/2021 EUR 165,000 130 0.16

Portfolio Statement


Global Bond Fund


REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS


CORPORATE BONDS 16.12% (28.02.15: 13.95%) continued

Verizon Communications 7.75% 01/12/2030 USD 134,000 127 0.16

Omnicom 3.625% 01/05/2022 USD 175,000 127 0.16

JPMorgan Chase 4.95% 25/03/2020 USD 161,000 127 0.16

Morgan Stanley 7.3% 13/05/2019 USD 150,000 124 0.16

Procter & Gamble 2.7% 02/02/2026 USD 165,000 121 0.15

Walt Disney 3% 13/02/2026 USD 160,000 120 0.15

Westpac Banking 2.625% 14/12/2022 GBP 120,000 119 0.15

Shell International Finance 6.375% 15/12/2038 USD 138,000 114 0.14

Express Scripts 3.3% 25/02/2021 USD 155,000 112 0.14

HSBC Bank Capital Funding Sterling 1 5.844% Perpetual GBP 110,000 112 0.14

Goldman Sachs 3.5% 23/01/2025 USD 150,000 107 0.13

Amgen 4% 13/09/2029 GBP 100,000 102 0.13

America Movil 6.375% 01/03/2035 USD 120,000 97 0.12

Alliander 2.875% 14/06/2024 EUR 100,000 91 0.11

Eandis 2.875% 07/05/2029 EUR 100,000 90 0.11

Enbw International Finance 2.5% 04/06/2026 EUR 100,000 85 0.11

Acea 2.625% 15/07/2024 EUR 100,000 84 0.11

Fortum 2.25% 06/09/2022 EUR 100,000 83 0.10

Nationwide Building Society 4.125% 20/03/2023 EUR 100,000 81 0.10

Unilever 1% 03/06/2023 (London listing) EUR 100,000 81 0.10

Svenska Handelsbanken 2.656% 15/01/2024 EUR 100,000 81 0.10

Unilever 1% 03/06/2023 (Berlin listing) EUR 100,000 81 0.10

CRH Funding 1.875% 09/01/2024 EUR 100,000 81 0.10

DS Smith 2.25% 16/09/2022 EUR 100,000 80 0.10

Telefonica Emisiones 1.477% 14/09/2021 EUR 100,000 79 0.10

Solvay 1.625% 02/12/2022 EUR 100,000 79 0.10

Anheuser-Busch InBev Finance 3.3% 01/02/2023 USD 100,000 74 0.09

Harley-Davidson Financial Services 2.85% 15/01/2021 USD 100,000 73 0.09

AT&T 3% 30/06/2022 USD 90,000 64 0.08

Cooperatieve Rabobank 11% Perpetual USD 75,000 64 0.08

Carnival 3.95% 15/10/2020 USD 80,000 61 0.08

BMW US Capital 1.125% 18/09/2021 EUR 40,000 32 0.04

Kellogg 3.25% 01/04/2026 USD 44,000 32 0.04

–––––––––––––––––––––––––––––––––––––––––––

12,848 16.12 ––––––––––––––––––––––––––––––––––––––––––

GOVERNMENT BONDS 72.39% (28.02.15: 68.80%)

United States Treasury Note 4.625% 15/02/2040 USD 6,754,000 6,830 8.57

Norway Government Bond 3% 14/03/2024 NOK 67,348,000 6,375 8.00

United States Treasury Note 2.125% 15/08/2021 USD 7,616,000 5,718 7.17

Bundesobligation 0% 09/04/2021 EUR 6,760,000 5,420 6.80

Bundesobligation 0.25% 16/10/2020 EUR 6,625,000 5,373 6.74


Province of Quebec Canada 4.25% 01/12/2021 CAD 5,643,000 3,439 4.31

Bundesrepublik Deutschland 4.75% 04/07/2034 EUR 2,386,000 3,238 4.06

Czech Republic Government Bond 2.4% 17/09/2025 CZK 67,360,000 2,334 2.93

Israel Government Bond 2.25% 31/05/2019 ILS 10,805,000 2,108 2.64

Queensland Treasury 4.75% 21/07/2025 AUD 3,417,000 2,030 2.56

Western Australian Treasury 5% 23/07/2025 AUD 3,333,000 2,003 2.51

Development Bank of Japan 1.7% 20/09/2022 JPY 215,000,000 1,539 1.93

Israel Government Bond 6% 28/02/2019 ILS 5,470,000 1,179 1.48

Bundesrepublik Deutschland 4% 04/01/2037 EUR 685,000 885 1.11

France Government Bond 4% 25/10/2038 EUR 723,000 869 1.09

United Kingdom Treasury 4.25% 07/06/2032 GBP 652,000 860 1.08

Development Bank of Japan 2.3% 19/03/2026 JPY 100,000,000 784 0.98

Switzerland Government Bond 2% 25/05/2022 CHF 700,000 594 0.75

Sweden Government Bond 5% 01/12/2020 SEK 4,845,000 509 0.64

United States Treasury Note 2.75% 15/11/2023 USD 576,000 451 0.57

Norway Government Bond 1.75% 13/03/2025 NOK 4,900,000 423 0.53

REPORT AND ACCOUNTS




VALUE OF NET ASSETS


GOVERNMENT BONDS 72.39% (28.02.15: 68.80%) continued

United States Treasury Note 2.5% 15/02/2045 USD 489,000 344 0.43

United Kingdom Treasury 2% 07/09/2025 GBP 261,000 276 0.35

Australia Government Bond 2.75% 21/06/2035 AUD 430,000 215 0.27

Turkey Government Bond 9.4% 08/07/2020 TRY 6,834 2 –

–––––––––––––––––––––––––––––––––––––––––––

57,695 72.39 ––––––––––––––––––––––––––––––––––––––––––

CASH COLLATERAL 0.00% (28.02.15: 0.12%)

DERIVATIVES - CREDIT DEFAULT SWAPS 0.00% (28.02.15: (0.13%))

DERIVATIVES - FUTURES (0.13%) (28.02.15: 0.19%)

Japan 10 Year Bond March 2016 10 89 0.11

Euro-Bund Futures March 2016 34 81 0.10

Euro-BOBL Futures March 2016 49 31 0.04

South Korea 10 Year Futures Bond March 2016 107 31 0.04

South Korea 3 Year Futures Bond March 2016 104 10 0.01

Sterling 90 Day Futures September 2016 (310) 3 –

Australia 3 Year Bond March 2016 28 – –

US Long Bond Futures June 2016 2 (1) –

US Treasury Note 5 Year Futures June 2016 41 (4) (0.01)

UK Long Gilt Bond Futures June 2016 (85) (8) (0.01)

US Treasury Note 2 Year Futures June 2016 50 (9) (0.01)

Canada 10 Year Bond June 2016 97 (13) (0.02)

Bank Accept Futures December 2017 158 (17) (0.02)

Euro-Schatz Futures March 2016 (198) (46) (0.06)

Euro-Buxl Futures March 2016 (5) (63) (0.08)

Australia 10 Year Bond March 2016 (95) (179) (0.22)

–––––––––––––––––––––––––––––––––––––––––––

(95) (0.13) ––––––––––––––––––––––––––––––––––––––––––

FORWARD FOREIGN EXCHANGE CONTRACTS 2.82% (28.02.15: 0.75%)

Forward Currency Contracts

Euro

Buy EUR 3,454,040 for GBP (2,603,583) 111 0.14

Sell EUR (1,212,623) for GBP 900,967 (52) (0.07)

Indian Rupee

Buy IDR 2,548,000,000 for GBP (116,774) 21 0.03

US Dollar

Buy USD 38,127,271 for GBP (26,025,783) 1,497 1.88

Sell USD (29,941,646) for GBP 20,642,000 (972) (1.22)

–––––––––––––––––––––––––––––––––––––––––––

605 0.76 ––––––––––––––––––––––––––––––––––––––––––

Forward Cross Currency Contracts

Buy AUD 17,790,000 for USD (12,592,950) 81 0.10

Buy BRL 23,365,430 for USD (5,857,186) (21) (0.03)

Buy CAD 776,000 for MXN (9,946,355) 20 0.03

Buy CAD 3,890,248 for USD (2,827,957) 30 0.04

Buy CHF 1,369,000 for JPY (169,634,159) (97) (0.12)

Buy CHF 10,278,000 for USD (10,315,258) (36) (0.04)

Buy CLP 1,001,307,636 for USD (1,387,525) 38 0.05

Buy CNH 24,511,000 for USD (3,706,471) 22 0.03

Buy COP 3,456,052,212 for USD (1,089,765) (42) (0.05)

Buy CZK 208,477,000 for USD (8,422,002) (22) (0.03)

Buy EUR 1,940,147 for HUF (604,932,000) (5) (0.01)

Buy EUR 564,791 for NOK (5,481,000) (10) (0.01)

Buy EUR 1,329,518 for PLN (5,894,095) (19) (0.02)

Buy EUR 25,781,988 for USD (28,098,844) (13) (0.02)

Buy HUF 1,156,606,349 for USD (4,057,258) (4) (0.01)

Buy IDR 22,304,610,000 for USD (1,588,987) 55 0.07

Buy ILS 25,162,000 for USD (6,467,792) (21) (0.03)

Buy INR 201,097,543 for USD (2,977,380) (33) (0.04)

Buy JPY 3,598,740,107 for USD (30,039,530) 1,319 1.65

Buy KRW 5,485,729,085 for USD (4,673,490) (178) (0.22)

Buy MXN 309,270,593 for USD (17,022,962) (55) (0.07)

Buy MXN 54,914,857 for ZAR (46,700,000) 78 0.10

Buy MYR 18,013,000 for USD (4,201,428) 53 0.07

Buy NOK 4,932,000 for MXN (9,916,279) 16 0.02

Buy NOK 64,057,000 for USD (7,286,112) 43 0.05


REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS

ASSET HOLDING (£’000) (%

FORWARD FOREIGN EXCHANGE CONTRACTS 2.82% (28.02.15: 0.75%) continued

Forward Cross Currency Contracts

Buy NZD 6,685,000 for USD (4,415,164) (6) (0.01)

Buy PEN 11,057,000 for USD (3,238,675) (76) (0.10)

Buy PHP 57,570,000 for USD (1,215,711) (3) –

Buy PLN 20,693,000 for EUR (4,773,989) 2 –

Buy PLN 85,024,000 for USD (21,038,383) 158 0.20

Buy RON 870,000 for USD (210,679) 1 –

Buy SEK 41,223,697 for EUR (4,365,000) 47 0.06

Buy SEK 117,192,914 for USD (13,838,262) (102) (0.13)

Buy SGD 1,407,000 for USD (983,834) 12 0.02

Buy THB 6,067,000 for USD (167,538) 2 –

Buy TWD 153,161,000 for USD (4,654,860) (44) (0.06)

Buy USD 8,960,780 for AUD (12,437,366) 57 0.07

Buy USD 5,944,112 for BRL (23,435,736) 71 0.09

Buy USD 7,836,341 for CAD (10,920,000) (159) (0.20)

Buy USD 17,747,546 for CHF (17,708,626) 43 0.06

Buy USD 1,496,129 for CLP (1,066,740,000) (27) (0.03)

Buy USD 3,762,370 for CNH (24,527,000) 17 0.02

Buy USD 1,083,357 for COP (3,464,684,000) 35 0.04

Buy USD 6,133,778 for CZK (152,039,000) 11 0.01

Buy USD 37,022,922 for EUR (33,651,883) 270 0.34

Buy USD 5,736,022 for HUF (1,607,877,000) 75 0.09

Buy USD 1,759,950 for IDR (24,929,685,000) (73) (0.09)

Buy USD 11,068,294 for ILS (43,213,000) 8 0.01

Buy USD 2,924,919 for INR (198,134,000) 27 0.03

Buy USD 14,164,902 for JPY (1,692,680,000) (595) (0.74)

Buy USD 7,197,225 for KRW (8,672,398,000) 143 0.18

Buy USD 14,477,194 for MXN (252,084,000) 480 0.60

Buy USD 5,750,001 for MYR (24,361,178) (23) (0.03)

Buy USD 22,037,987 for NOK (191,289,664) 73 0.09

Buy USD 4,385,933 for NZD (6,668,000) (7) (0.01)

Buy USD 3,131,332 for PEN (11,032,016) 23 0.03

Buy USD 1,199,287 for PHP (57,170,000) (3) –

Buy USD 20,891,182 for PLN (83,041,917) 94 0.12

Buy USD 222,859 for RON (918,000) – –

Buy USD 15,184,387 for SEK (129,041,773) 74 0.09

Buy USD 2,491,618 for SGD (3,523,053) (9) (0.01)

Buy USD 169,472 for THB (6,082,802) (1) –

Buy USD 6,092,208 for TWD (203,187,984) (2) –

Buy USD 2,545,434 for ZAR (38,367,070) 117 0.15

Buy ZAR 46,700,000 for MXN (56,173,609) (128) (0.16)

Buy ZAR 32,220,140 for USD (2,194,399) (140) (0.18)

–––––––––––––––––––––––––––––––––––––––––––

1,641 2.06

––––––––––––––––––––––––––––––––––––––––––

Portfolio of investments^ 72,694 91.20

Net other assets 7,010 8.80

–––––––––––––––––––––––––––––––––––––––––––

Net assets 79,704 100.00

––––––––––––––––––––––––––––––––––––––––––

Unless otherwise stated the above securities are admitted to offi cial stock exchange listings.

The collective investment schemes investments, cash collateral and the forward foreign exchange contracts are not listed.

Derivatives can be exchange traded or Over the Counter (OTC) contracts.

^ Including derivative liabilities.

REPORT AND ACCOUNTS


Portfolio Analysis

As at 29 February 2016 29.02.2016 28.02.2015


VALUE NET VALUE NET

ASSET (£’000) ASSETS (£’000) ASSETS

Bonds 70,543 88.51 88,148 82.75

Cash Collateral – – 120 0.12

Collective Investment Schemes – – 5,076 4.76

Derivatives (95) (0.13) 74 0.06

Forward Foreign Exchange Contracts 2,246 2.82 802 0.75

Net other assets 7,010 8.80 12,316 11.56

Net assets 79,704 100.00 106,536 100.00

29.02.2016 28.02.2015


VALUE NET VALUE NET

CREDIT BREAKDOWN* (£’000) ASSETS (£’000) ASSETS

AAA 23,432 29.40 26,561 24.93

AA 27,199 34.13 39,677 37.25

A 10,079 12.64 11,364 10.65

BBB 5,733 7.20 9,928 9.33

BB 3,897 4.89 618 0.59

NR 203 0.25 – –

Total bonds 70,543 88.51 88,148 82.75

*Bond ratings are Investec approximations.


REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS


AUSTRALIA 1.77% (28.02.15: 2.86%)

Woodside Petroleum 862,283 11,275 1.77 ––––––––––––––––––––––––––––––––––––––––––

BELGIUM 0.00% (28.02.15: 1.95%)

BRAZIL 1.85% (28.02.15: 1.41%)

Itau Unibanco ADR 2,581,223 11,739 1.85 ––––––––––––––––––––––––––––––––––––––––––

CANADA 0.90% (28.02.15: 2.63%)

Valeant Pharmaceuticals International 120,257 5,712 0.90 ––––––––––––––––––––––––––––––––––––––––––

CAYMAN ISLANDS 2.01% (28.02.15: 0.00%)

CK Hutchison 1,464,287 12,775 2.01 ––––––––––––––––––––––––––––––––––––––––––

CHINA 0.00% (28.02.15: 1.33%)

FRANCE 1.98% (28.02.15: 1.60%)

Cap Gemini 210,321 12,591 1.98 ––––––––––––––––––––––––––––––––––––––––––

GERMANY 0.00% (28.02.15: 1.59%)

GUERNSEY 2.19% (28.02.15: 0.00%)

Amdocs 335,349 13,925 2.19 ––––––––––––––––––––––––––––––––––––––––––

HONG KONG 3.70% (28.02.15: 4.76%)

AIA 3,537,000 12,990 2.04

BOC Hong Kong 5,649,074 10,570 1.66 –––––––––––––––––––––––––––––––––––––––––––

23,560 3.70 ––––––––––––––––––––––––––––––––––––––––––

IRELAND 2.30% (28.02.15: 2.15%)

Medtronic 262,462 14,642 2.30 ––––––––––––––––––––––––––––––––––––––––––

ISRAEL 3.87% (28.02.15: 1.78%)

Check Point Software Technologies 248,851 14,844 2.33

Teva Pharmaceutical Industries ADR 244,110 9,798 1.54 –––––––––––––––––––––––––––––––––––––––––––

24,642 3.87 ––––––––––––––––––––––––––––––––––––––––––

JAPAN 5.90% (28.02.15: 6.46%)

Nippon Telegraph & Telephone 506,100 15,538 2.44

Tokio Marine 493,900 12,422 1.95

Sumitomo Mitsui Financial 476,700 9,629 1.51 –––––––––––––––––––––––––––––––––––––––––––

37,589 5.90 ––––––––––––––––––––––––––––––––––––––––––

MEXICO 1.87% (28.02.15: 1.46%

Grupo Mexico 7,897,790 11,869 1.87 ––––––––––––––––––––––––––––––––––––––––––

NETHERLANDS 1.81% (28.02.15: 2.03%)

NXP Semiconductors 220,338 11,486 1.81 ––––––––––––––––––––––––––––––––––––––––––

NORWAY 0.00% (28.02.15: 1.67%)

SPAIN 4.16% (28.02.15: 3.36%)

Red Electrica 234,913 13,383 2.10

Amadeus IT 449,322 13,099 2.06 –––––––––––––––––––––––––––––––––––––––––––

2 6,482 4.1 6 ––––––––––––––––––––––––––––––––––––––––––

Portfolio Statement


Global Dynamic Fund

REPORT AND ACCOUNTS




MARKET PERCENTAGE

VALUE OF NET ASSETS


SWITZERLAND 2.00% (28.02.15: 2.92%)

Roche 68,636 12,731 2.00 ––––––––––––––––––––––––––––––––––––––––––

TAIWAN 0.00% (28.02.15: 1.88%)

THAILAND 0.00% (28.02.15: 1.67%)

UNITED KINGDOM 5.46% (28.02.15: 5.17%)

British American Tobacco 332,624 12,979 2.04

Cobham 4,395,147 11,296 1.78

Rio Tinto 548,977 10,436 1.64

–––––––––––––––––––––––––––––––––––––––––––

34,711 5.46 ––––––––––––––––––––––––––––––––––––––––––

UNITED STATES 55.35% (28.02.15: 47.23%)

Fiserv 228,571 15,779 2.48

Philip Morris International 237,524 15,609 2.45

Vantiv 410,232 15,411 2.42

Johnson & Johnson 200,510 15,229 2.39

Paypal 551,411 15,182 2.39

Priceline 15,865 14,490 2.28

Comcast 342,017 14,253 2.24

AT&T 528,273 14,091 2.22

Cisco Systems 738,801 13,963 2.19

Cardinal Health 235,658 13,899 2.18

ServiceMaster Global 504,658 13,818 2.17

Cigna 137,072 13,815 2.17

Valero Energy 318,037 13,794 2.17

Western Union 1,046,156 13,790 2.17

Activision Blizzard 596,276 13,632 2.14

CVS Health 191,940 13,463 2.12

MEDNAX 270,168 13,075 2.07

eBay 746,498 12,826 2.02

Gilead Sciences 189,050 11,907 1.87

American International 326,805 11,843 1.86

Alliance Data Systems 75,302 11,423 1.80

Ally Financial 892,995 11,333 1.78

St Jude Medical 280,195 10,860 1.71

Citigroup 369,726 10,369 1.63

Voya Financial 463,203 9,816 1.54

Thor Industries 231,444 9,253 1.45

Jones Lang LaSalle 124,691 9,188 1.44

–––––––––––––––––––––––––––––––––––––––––––

352,111 55.35 ––––––––––––––––––––––––––––––––––––––––––

Portfolio of investments 617,840 97.12

Net other assets 18,305 2.88

–––––––––––––––––––––––––––––––––––––––––––

NET ASSETS 636,145 100.00 ––––––––––––––––––––––––––––––––––––––––––


Stocks shown as ADR’s represent American Depositary Receipts.


REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS


AUSTRALIA 0.00% (28.02.15: 1.06%)

AUSTRIA 0.00% (28.02.15: 0.34%)

BELGIUM 0.84% (28.02.15: 2.02%)

KBC 65,029 2,473 0.84 ––––––––––––––––––––––––––––––––––––––––––

BERMUDA 0.55% (28.02.15: 0.60%)

Hongkong Land 381,000 1,615 0.55 ––––––––––––––––––––––––––––––––––––––––––

BRAZIL 0.00% (28.02.15: 0.81%)

CANADA 2.56% (28.02.15: 2.45%)

Canadian Imperial Bank of Commerce 57,313 2,746 0.93

Alimentation Couche-Tard 81,801 2,667 0.90

Canadian Natural Resources 81,406 1,226 0.42

Valeant Pharmaceuticals International 19,087 907 0.31 –––––––––––––––––––––––––––––––––––––––––––

7,546 2.56 ––––––––––––––––––––––––––––––––––––––––––

CAYMAN ISLANDS 1.55% (28.02.15: 0.00%)

CK Hutchison 229,819 2,005 0.68

Cheung Kong Property 436,242 1,608 0.55

ANTA Sports Products 579,000 946 0.32 –––––––––––––––––––––––––––––––––––––––––––

4,559 1.55 ––––––––––––––––––––––––––––––––––––––––––

CHINA 3.48% (28.02.15: 3.52%)

China Construction Bank 5,722,782 2,407 0.82

Kweichow Moutai 83,830 1,985 0.67

PICC Property & Casualty 1,618,261 1,761 0.60

Ping An Insurance 552,000 1,692 0.57

Zhengzhou Yutong Bus 590,356 1,231 0.42

Jiangsu Expressway 1,422,900 1,193 0.40 –––––––––––––––––––––––––––––––––––––––––––

10,269 3.48 ––––––––––––––––––––––––––––––––––––––––––

FRANCE 2.68% (28.02.15: 1.38%)

Pernod Ricard 31,112 2,381 0.81

Publicis 43,378 1,924 0.65

BNP Paribas 57,616 1,912 0.65

Cap Gemini 28,198 1,688 0.57 –––––––––––––––––––––––––––––––––––––––––––

7,905 2.68 ––––––––––––––––––––––––––––––––––––––––––

GERMANY 3.03% (28.02.15: 2.72%)

SAP 54,886 2,994 1.02

Continental 17,818 2,554 0.87

ProSiebenSat.1 Media 54,817 2,011 0.68

Evonik Industries 62,620 1,364 0.46 –––––––––––––––––––––––––––––––––––––––––––

8,923 3.03 ––––––––––––––––––––––––––––––––––––––––––

GUERNSEY 0.92% (28.02.15: 0.94%)

Amdocs 65,274 2,710 0.92 ––––––––––––––––––––––––––––––––––––––––––

HONG KONG 2.06% (28.02.15: 3.62%)

AIA 782,800 2,875 0.97

BOC Hong Kong 921,926 1,725 0.58

CNOOC 2,045,436 1,508 0.51 –––––––––––––––––––––––––––––––––––––––––––

6,108 2.06 ––––––––––––––––––––––––––––––––––––––––––

Portfolio Statement


Global Equity Fund

REPORT AND ACCOUNTS




VALUE OF NET ASSETS


IRELAND 1.09% (28.02.15: 0.50%)

Willis Towers Watson 24,324 1,979 0.67

Jazz Pharmaceuticals 13,717 1,238 0.42 –––––––––––––––––––––––––––––––––––––––––––

3,217 1.09 ––––––––––––––––––––––––––––––––––––––––––

ISRAEL 2.77% (28.02.15: 1.51%)

Teva Pharmaceutical Industries ADR 66,083 2,652 0.90

Check Point Software Technologies 38,995 2,326 0.79

Nice Systems ADR 37,199 1,609 0.55

Mellanox Technologies 42,583 1,552 0.53 –––––––––––––––––––––––––––––––––––––––––––

8,139 2.77 ––––––––––––––––––––––––––––––––––––––––––

ITALY 0.00% (28.02.15: 0.42%)

JAPAN 10.24% (28.02.15: 7.99%)

Nippon Telegraph & Telephone 113,400 3,482 1.18

KDDI 186,000 3,419 1.16

Sompo Japan Nipponkoa 126,100 2,619 0.89

Japan Tobacco 89,200 2,559 0.87

Sumitomo Mitsui Financial 123,400 2,492 0.85

Japan Airlines 89,700 2,315 0.79

Tokio Marine 83,900 2,110 0.72

Sekisui House 175,900 2,067 0.70

Fuji Heavy Industries 79,100 1,868 0.63

Komatsu 151,000 1,658 0.56

Nitto Denko 42,900 1,638 0.56

Fuji Electric 503,000 1,244 0.42

Tosoh 450,000 1,234 0.42

Sumitomo Chemical 314,000 989 0.34

Resona 176,500 445 0.15 –––––––––––––––––––––––––––––––––––––––––––

30,139 10.24 ––––––––––––––––––––––––––––––––––––––––––

JERSEY 0.85% (28.02.15: 1.10%)

Shire 64,884 2,497 0.85 ––––––––––––––––––––––––––––––––––––––––––

MALAYSIA 0.00% (28.02.15: 0.75%)

NETHERLANDS 3.25% (28.02.15: 1.81%)

Mylan 78,778 2,680 0.90

ING 268,381 2,278 0.77

NXP Semiconductors 33,367 1,740 0.59

NN 74,289 1,656 0.56

ASM International 41,974 1,276 0.43 –––––––––––––––––––––––––––––––––––––––––––

9,630 3.25 ––––––––––––––––––––––––––––––––––––––––––

NORWAY 0.50% (28.02.15: 2.00%)

Yara International 52,151 1,463 0.50 ––––––––––––––––––––––––––––––––––––––––––

PUERTO RICO 0.00% (28.02.15: 0.57%)

SINGAPORE 0.88% (28.02.15: 0.00%)

Broadcom 27,031 2,597 0.88 ––––––––––––––––––––––––––––––––––––––––––

SOUTH KOREA 0.91% (28.02.15: 1.01%)

Samsung Electronics 3,906 2,686 0.91 ––––––––––––––––––––––––––––––––––––––––––

SPAIN 1.46% (28.02.15: 1.30%)

Red Electrica 45,389 2,586 0.88

Amadeus IT 58,234 1,698 0.58 –––––––––––––––––––––––––––––––––––––––––––

4,284 1.46 ––––––––––––––––––––––––––––––––––––––––––

SWITZERLAND 3.08% (28.02.15: 5.58%)

Nestlé 80,093 4,028 1.37

Roche 18,971 3,519 1.19

Adecco 36,492 1,523 0.52 –––––––––––––––––––––––––––––––––––––––––––

9,070 3.08 ––––––––––––––––––––––––––––––––––––––––––


REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS


TAIWAN 1.70% (28.02.15: 1.54%)

Taiwan Semiconductor Manufacturing 1,109,000 3,577 1.21

Novatek Microelectronics 491,000 1,445 0.49 –––––––––––––––––––––––––––––––––––––––––––

5,022 1.70 ––––––––––––––––––––––––––––––––––––––––––

THAILAND 0.00% (28.02.15: 0.64%)

UNITED KINGDOM 5.40% (28.02.15: 4.11%)

BT 899,899 4,369 1.48

Imperial Tobacco 87,066 3,256 1.10

National Grid 323,621 3,111 1.05

Barratt Developments 492,029 2,876 0.98

Rio Tinto 66,508 1,264 0.43

ARRIS International 63,070 1,077 0.36 –––––––––––––––––––––––––––––––––––––––––––

15,953 5.40 ––––––––––––––––––––––––––––––––––––––––––

UNITED STATES 48.95% (28.02.15: 47.04%)

AT&T 190,957 5,094 1.73

PepsiCo 70,737 4,995 1.69

Pfi zer 212,195 4,545 1.54

Comcast 101,330 4,223 1.43

UnitedHealth 47,223 4,060 1.38

Cisco Systems 195,985 3,704 1.26

Citigroup 128,254 3,597 1.22

Thermo Fisher Scientifi c 37,556 3,503 1.19

Gilead Sciences 52,734 3,321 1.13

Tyson Foods 68,164 3,186 1.07

CVS Health 44,402 3,115 1.06

Valero Energy 71,743 3,112 1.06

American International 84,759 3,072 1.04

Philip Morris International 46,111 3,030 1.03

Zimmer Biomet 41,900 2,928 0.99

Apple 41,594 2,903 0.98

Paypal 104,386 2,874 0.97

Honeywell International 38,763 2,836 0.96

Vantiv 75,008 2,818 0.95

AmerisourceBergen 42,476 2,656 0.90

Cigna 26,253 2,646 0.90

Public Service Enterprise 84,589 2,605 0.88

Activision Blizzard 113,155 2,587 0.88

Afl ac 59,942 2,576 0.87

Occidental Petroleum 51,352 2,551 0.87

IDEX 46,829 2,541 0.86

EMC 129,930 2,451 0.83

CBS 69,244 2,418 0.82

Priceline 2,609 2,383 0.81

Marathon Petroleum 88,708 2,193 0.74

St Jude Medical 56,548 2,192 0.74

Alliance Data Systems 14,130 2,143 0.73

Southwest Airlines 70,577 2,137 0.72

Fiserv 30,846 2,129 0.72

Hess 65,393 2,058 0.70

SunTrust Banks 85,265 2,042 0.69

Western Union 154,660 2,039 0.69

Alaska Air 37,342 1,992 0.68

Morgan Stanley 110,185 1,965 0.66

American Financial 39,109 1,894 0.64

Generac 75,249 1,887 0.64

eBay 106,752 1,834 0.62

Voya Financial 82,825 1,755 0. 59

Quest Diagnostics 36,219 1,740 0.59

Foot Locker 36,459 1,645 0.56

Celanese 37,103 1,616 0.55

AMC Networks 32,903 1,557 0.53

Ally Financial 122,165 1,550 0.53

Lear 20,551 1,504 0.51

Synaptics 24,094 1,413 0.48

Prestige Brands 39,659 1,400 0.4 7

REPORT AND ACCOUNTS




VALUE OF NET ASSETS


UNITED STATES 48.95% (28.02.15: 47.04%) (continued)

Hewlett-Packard Enterprise 145,861 1,397 0.47

WestRock 57,302 1,397 0.47

Big Lots 44,952 1,313 0.45

Jones Lang LaSalle 17,541 1,292 0.44

Regal Beloit 32,190 1,268 0.43

Starz 66,271 1,205 0.41

ServiceMaster Global 43,688 1,196 0.41

Thor Industries 29,325 1,172 0.40

Helmerich & Payne 30,165 1,153 0.39 –––––––––––––––––––––––––––––––––––––––––––

144,408 48.95 ––––––––––––––––––––––––––––––––––––––––––


Net other assets 3,673 1.25 –––––––––––––––––––––––––––––––––––––––––––

NET ASSETS 294,886 100.00 ––––––––––––––––––––––––––––––––––––––––––


Stocks shown as ADR’s represent American Depositary Receipts.


REPORT AND ACCOUNTS

MARKET PERCENTAGE

VALUE OF NET ASSETS


AUSTRALIA 17.56% (28.02.15: 3.30%)

Newcrest Mining 668,473 6,024 9.54

Northern Star Resources 1,044,292 2,101 3.33

Evolution Mining 2,160,435 1,945 3.08

Independence 431,619 568 0.90

St Barbara 468,398 449 0.71 –––––––––––––––––––––––––––––––––––––––––––

11,087 17.56 ––––––––––––––––––––––––––––––––––––––––––

BERMUDA 0.00% (28.02.15: 2.05%)

CANADA 47.24% (28.02.15: 49.30%)

Barrick Gold 618,239 6,199 9.82

Agnico Eagle Mines 160,311 4,065 6.44

Franco-Nevada 69,960 3,009 4.76

Goldcorp 263,119 2,729 4.32

Detour Gold 169,751 1,926 3.05

Yamana Gold 790,038 1,614 2.56

Eldorado Gold 663,268 1,432 2.27

SEMAFO 552,334 1,412 2.24

Alamos Gold Class ‘A’ 397,409 1,312 2.08

Silver Wheaton 105,502 1,201 1.90

Tahoe Resources 163,918 1,092 1.73

Osisko Gold Royalties 94,581 704 1.11

Pretium Resources 199,366 671 1.06

Guyana Goldfi elds 285,416 661 1.05

Centerra Gold 163,455 648 1.03

Roxgold 968,500 428 0.68

OceanaGold 191,398 381 0.59

Lake Shore Gold 359,734 349 0.55 –––––––––––––––––––––––––––––––––––––––––––

29,833 47.24 ––––––––––––––––––––––––––––––––––––––––––

IRELAND 0.00% (28.02.15: 4.37%)

JERSEY 6.19% (28.02.15: 20.11%)

Randgold Resources 42,728 2,822 4.47

Centamin 1,177,439 1,086 1.72 –––––––––––––––––––––––––––––––––––––––––––

3,908 6.19 ––––––––––––––––––––––––––––––––––––––––––

MEXICO 2.60% (28.02.15: 2.74%)

Fresnillo 161,336 1,642 2.60 ––––––––––––––––––––––––––––––––––––––––––

RUSSIA 0.00% (28.02.15: 1.56%)

SOUTH AFRICA 13.72% (28.02.15: 4.67%)

Sibanye Gold 1,189,107 3,079 4.88

Gold Fields 942,465 2,845 4.50

AngloGold Ashanti 303,811 2,739 4.34 –––––––––––––––––––––––––––––––––––––––––––

8,663 13.72 ––––––––––––––––––––––––––––––––––––––––––

UNITED KINGDOM 0.00% (28.02.15: 6.12%)

UNITED STATES 11.61% (28.02.15: 4.51%)

Newmont Mining 324,111 6,044 9.57

Royal Gold 38,437 1,287 2.04 –––––––––––––––––––––––––––––––––––––––––––

7,331 11.61 ––––––––––––––––––––––––––––––––––––––––––


Net other assets 682 1.08 –––––––––––––––––––––––––––––––––––––––––––

NET ASSETS 63,146 100.00 ––––––––––––––––––––––––––––––––––––––––––


Portfolio Statement


Global Gold Fund

REPORT AND ACCOUNTS


Authorised Corporate Director’s report

The Authorised Corporate Director (“ACD”) of Investec Funds Series iii (the “Company”) is Investec Fund Managers Limited.

The ACD is the sole director of the Company.

Authorised status

The Company is an investment company with variable capital incorporated in England and Wales under registered number

IC13 and authorised by the Financial Conduct Authority (“FCA”) (formerly the Financial Services Authority) with effect from 6

August 1998.

The Company is structured as an umbrella company, in that different sub-funds (the “Funds”) may be established from time

to time by the ACD with the approval of the FCA. The Company currently comprises of fi ve Funds.

The Company (and therefore the Funds) has been certifi ed by the FCA as complying with the conditions necessary for it to

enjoy rights conferred by the EC Directive on Undertakings for Collective Investment in Transferable Securities (“UCITS”). The

Company has an unlimited duration.

The assets of each Fund will be treated as separate from those of every other Fund and will be invested in accordance with

the investment objective and policy applicable to that Fund. Investment of the assets of each of the Funds must comply with

the FCA Collective Investment Scheme (“COLL”) Sourcebook and the investment objective and policy of the relevant Fund.

Under English law, the Funds are segregated portfolios of assets and the assets of a Fund belong exclusively to that Fund.

The assets of a Fund shall not be used or made available to discharge (directly or indirectly) the liabilities of, or claims against, any

other person or body, including the Company and any other Fund and shall not be available for any such purpose.

Subject to the above, each Fund will be charged with the liabilities, expenses, costs and charges of the Company

attributable to that Fund, and within each Fund charges will be allocated between share classes in accordance with their

terms of issue. Any assets, liabilities, expenses, costs or charges not attributable to a particular Fund may be allocated by

the ACD in a manner which it believes is fair to the shareholders generally. This will normally be pro rata to the net asset

value of the relevant Funds. Shareholders are not liable for the debts of the Company.

Accounting period covered by these accounts

The accounting period covered in these accounts is from 1 March 2015 to 29 February 2016.

Changes during the accounting period

Changes made following required notice:

After consultation with the Depositary and in accordance with the requirements of Section 4.3 of the COLL, shareholders

were given notice of the following:

(1) On 30 January 2015 of the change of the current income share classes name from “income” (“Inc”) to “income 2”

(“Inc-2”) on Emerging Markets Local Currency Debt Fund effective 6 April 2015. Although the name of the share class

changed, there is no change to the way in which the charges and expenses of the share class are being charged

against the capital value of the share class. For current “accumulation” (“Acc”) shareholders, effective 6 April 2015,

charges and expenses are paid for in the fi rst instance out of income earned rather than the capital value of the share

class. Should there be insuffi cient income, then the remainder will be paid out of the capital value of the share class.

The expenses on this fund are now charged at share class level rather than at fund level.

(2) On 30 July 2015 of the increase in the limits that certain Funds were able to invest in. The Funds in the Company were

previously limited to investing only 5% of their assets in other Funds. Effective 5 October 2015, this limit was increased

to 10% to bring these Funds in line with the others in the Investec OEIC Fund range; and

(3) On 30 July 2015, of the decrease in the initial charge on all share classes of the Funds in the Company to 0% effective

from 5 October 2015.

REPORT AND ACCOUNTS


The following share class was launched

Global Dynamic Fund, I, Accumulation, Net, EUR (launched 07 April 2015)

Other changes

In accordance with the Client Assets Sourcebook (“CASS”) rules issued by the FCA, the ACD will operate under the Delivery

versus Payment Exemption (“DvP Exemption”) in relation to subscriptions and redemptions with effect from 18 May 2015.

The DvP Exemption allows the ACD two small periods of time during which the ACD can process a Shareholder’s money

without holding it in a client money account (as detailed in CASS, an account designed to protect a Shareholder’s rights to

money). In summary, these exceptions are:

(1) for subscriptions of Shares into the Funds, where money is provided to the ACD from the Shareholder earlier than the

relevant settlement date for the Shares, the money will be held in the ACD’s corporate bank account and transferred to

a client money account or to the relevant Fund at the latest by the end of the business day after the ACD received the

money from the Shareholder; or

(2) for redemptions of Shares in the Funds, where money is received from the Fund by the ACD to pay the Shareholder for

the redemption, this money may be held in a corporate bank account prior to payment to the Shareholder and if not

paid by the ACD to the Shareholder at the latest by the end of the business day after receipt from the Fund, the money

will be transferred to a client money account. Typically the ACD would only not have paid the money to the Shareholder

within this period after immediately on receipt from the Fund if the ACD had not received completed redemption

documentation from the Shareholder.

The auditor of the Company changed from KPMG Audit plc to KPMG LLP effective April 2015.

Anne Gallagher, Domenico Ferrini and John Green resigned as directors of the ACD effective May 2015

Adam Fletcher and John McNab were appointed as directors of the ACD effective May 2015.

There have been no fundamental changes to the Company or the Funds that required shareholder approval or any other

signifi cant changes to the operation of the Company or Funds requiring pre-notifi cation not set out in this report.

K. McFarland D. Aird

Director of the ACD Director of the ACD

22 April 2016

REPORT AND ACCOUNTS


Statement of Authorised Corporate Director’s (ACD) responsibilities

The ACD is responsible for the management of the Company in accordance with its Instrument of Incorporation, Prospectus

and the Regulations. The Financial Conduct Authority’s (formerly the Financial Services Authority) Collective Investment

Schemes Sourcebook requires the ACD to prepare Report and Accounts for each annual accounting period that give a true

and fair view of the state of affairs of the Company and of its income and expenditure, and gains/losses for the period.

The ACD confi rms that suitable accounting policies have been used and applied consistently, and reasonable and prudent

judgements and estimates have been made in the preparation of the Report and Accounts for the year ended 29 February

2016. The Report and Accounts comply with the disclosure requirements of the Statement of Recommended Practice for

Authorised Funds issued by the IMA. The ACD also confi rms that applicable accounting standards have been followed and

that the Report and Accounts have been prepared on a going concern basis, with the exception of the Global Bond Fund.

The Fund has seen its assets decline signifi cantly and the Investment Manager does not expect signifi cant demand for the

Fund in the foreseeable future. The lack of new investment into the Fund and the reduction in assets will further reduce the

investment opportunities available to the Fund. The Investment Manager therefore believes it to be in the interest of all

shareholders to close the Fund in accordance with the Financial Conduct Authority (the “FCA”) rules. Consequently the Fund

is not a going concern and the fi nancial statements have been prepared on a break up basis. There is no impact on the

fi nancial statements or disclosure notes of the Fund on the basis that the assets and liabilities on the balance sheet are

valued at fair value and costs relating to the disposal of assets and settlement of liabilities are deemed to be not material.

The ACD is responsible for keeping proper accounting records, for safeguarding the assets of the Company and hence for

taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Report and Accounts are published on the www.investecassetmanagement.com website, which is a website maintained

by Investec Asset Management Limited (“Investec”). The maintenance and integrity of the website maintained by Investec or

any of its subsidiaries is, so far as it relates to the Company, the responsibility of Investec. The work carried out by the

auditors does not involve consideration of the maintenance and integrity of this website and accordingly, the auditors accept

no responsibility for any changes that have occurred to the fi nancial statements since they were initially presented on the

website. Visitors to the website need to be aware that legislation in the United Kingdom governing the preparation and

dissemination of the accounts may differ from legislation in their jurisdiction.

REPORT AND ACCOUNTS


Statement of Depositary’s Responsibilities

Statement of Depositary’s responsibilities in respect of the Company and Report of the

Depositary to the shareholders of Investec Funds Series iii for the year ended

29 February 2016

The Depositary is responsible for the safekeeping of all of the property of the Company (other than tangible moveable

property) which is entrusted to it. It is the duty of the Depositary to take reasonable care to ensure that the Company is

managed in accordance with the Financial Conduct Authority’s Collective Investment Scheme Sourcebook (COLL), the

Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) (the OEIC Regulations) and the Company’s Instrument

of Incorporation, in relation to the pricing of, and dealings in, shares in the Company; the application of income of the

Company; and the investment and borrowing powers of the Company.

Having carried out such procedures as we consider necessary to discharge our responsibilities as Depositary of the

Company, it is our opinion, based on the information available to us and the explanations provided, that in all material

respects the Company, acting through the Authorised Corporate Director:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Company’s shares and

the application of the Company’s income in accordance with the COLL and, where applicable, the OEIC Regulations

and the Instrument of Incorporation of the Company; and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Company.

State Street Trustees LimitedLondon

22 April 2016

Statement of Depositary’s responsibilities in respect of the Company and Report of the

Depositary to the shareholders of Investec Funds Series iii for the year ended

29 February 2016

The Depositary is responsible for the safekeeping of all of the property of the Company (other than tangible moveable

property) which is entrusted to it. It is the duty of the Depositary to take reasonable care to ensure that the Company is

managed in accordance with the Financial Conduct Authority’s Collective Investment Scheme Sourcebook (COLL), the

Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) (the OEIC Regulations) and the Company’s Instrument

of Incorporation, in relation to the pricing of, and dealings in, shares in the Company; the application of income of the

Company; and the investment and borrowing powers of the Company.

Having carried out such procedures as we consider necessary to discharge our responsibilities as Depositary of the

Company, it is our opinion, based on the information available to us and the explanations provided, that in all material

respects the Company, acting through the Authorised Corporate Director:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Company’s shares and

the application of the Company’s income in accordance with the COLL and, where applicable, the OEIC Regulations

and the Instrument of Incorporation of the Company; and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Company.

State Street Trustees LimitedLondon

22 April 2016

REPORT AND ACCOUNTS


Independent auditor’s report to the shareholders of Investec Series iii (‘the Company’)

We have audited the fi nancial statements of the Company for the year ended 29 February 2016 which comprise the

Statements of Total Return, the Statements of Changes in Net Assets Attributable to Shareholders, the Balance Sheets, the

Related Notes and Distribution Tables for each of the Company’s sub-funds listed on page 1 and the accounting policies set

out on page 53. The fi nancial reporting framework that has been applied in their preparation is applicable law and United

Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 The Financial

Reporting Standard applicable in the UK and Republic of Ireland.

This report is made solely to the Company’s shareholders, as a body, in accordance with Rule 4.5.12 of the Collective

Investment Schemes sourcebook (‘the COLL Rules’) issued by the Financial Conduct Authority under the Open-Ended

Investment Companies Regulations 2001. Our audit work has been undertaken so that we might state to the Company’s

shareholders those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s

shareholders as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Authorised Corporate Director (‘the ACD’) Investec Fund Managers

Limited and auditor

As explained more fully in the Statement of ACD’s Responsibilities set out on page 36 the ACD is responsible for the

preparation of fi nancial statements which give a true and fair view. Our responsibility is to audit, and express an opinion on,

the fi nancial statements in accordance with applicable 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.

Scope of the audit of the fi nancial statements

A description of the scope of an audit of fi nancial statements is provided on the Financial Reporting Council’s website at

www.frc.org.uk/auditscopeukprivate.

Opinion on fi nancial statements

In our opinion the fi nancial statements:

• give a true and fair view, in accordance with UK Generally Accepted Accounting Practice, of the fi nancial position of

each of the sub-funds as at 29 February 2016 and of the net revenue/losses and the net capital gains/losses on the

property of each of the sub-funds for the year then ended; and

• have been properly prepared in accordance with the Instrument of Incorporation, the Statement of Recommended

Practice relating to Authorised Funds, and the COLL Rules.

Emphasis of Matter – non-going concern basis of preparation

In forming our opinion on the fi nancial statements, which is not modifi ed, we have considered the adequacy of the disclosure

made in Note 1 to the fi nancial statements which explains that the fi nancial statements have been prepared on the going

concern basis, with the exception of the Global Bond Fund which has now been prepared on a break up basis.

Opinion on other matters prescribed by the COLL Rules

In our opinion the information given in the Authorised Corporate Director’s Report is consistent with the fi nancial statements.

We have received all the information and explanations which we consider necessary for the purposes of our audit.

Independent Auditor’s Report

REPORT AND ACCOUNTS


Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where under the COLL Rules we are required to report to you if,

in our opinion:

• proper accounting records for the Company have not been kept; or

• the fi nancial statements are not in agreement with the accounting records.

Ravi Lamba for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants

15 Canada Square

London

E14 5GL

22 April 2016

REPORT AND ACCOUNTS


Comparative table


Emerging Markets Local Currency Debt

‘A’ Net Class (Accumulation shares) ‘A’ Gross Class (Accumulation shares)

2016 2015 2014 2016 2015 2014

Financial year (p) (p) (p) (p) (p) (p)

Change in net assets per share

Opening net asset value per share 159. 56 159.94 202.85 175.40 173.67 217.65

Return before operating charges* (9. 37) 2.36 (39.86) ((8.71) 4.71 (40.77)

Operating charges (2.45) (2.70) (3.05) (2.68) (2.98) (3.21)

Return after operating charges* (11.8 2) (0.34) (42.91) (11.39) 1.73 (43.98)

Closing net asset value per share 147.74 159.56 159.94 164.01 175.40 173.67

Retained distributions on accumulation shares* 5.98 8.30 8.64 8.26 11.29 11.60

*after direct transaction costs of: 0.02 – 0.01 0.02 0.01 0.01

Performance

Return after changes (7.4 1%) (0.21%) (21.15%) (6.49%) 1.00% (20.21%)

Other information

Closing net asset value (£’000) 14,269 36,977 71,042 39,123 111,041 83,755

Closing number of shares 9,658,359 23,174,507 44,416,553 23,853,786 63,308,707 48,225,256

Operating charges 1.65% 1.64% 1.66% 1.65% 1.64% 1.66%

Direct transaction costs‡ 0.01% 0.01% 0.00% 0.01% 0.01% 0.00%

Prices

Highest share price 167.04 174.71 206.35 183.80 190.93 221.50

Lowest share price 133.25 154.84 155.47 147.56 169.74 168.70

‘A’ Gross Class (USD Accumulation shares) ‘A’ Net Class (Income-2 shares)(3)

2016 2015 2014 2016 2015 2014

Financial year (US cent) (US cent) (US cent) (p) (p) (p)


Opening net asset value per share 270.79 289.99 330.87 100.89 106.34 141.87

Return before operating charges* (39.33) (14.35) (35.72) (6. 30) 1.75 (27.49)

Operating charges (4.09) (4.85) (5.16) (1.5 2) (1.78) (2.12)

Return after operating charges* (43.42) (19.20) (40.88) (7. 82) (0.03) (29.61)

Distributions on income shares – – – (4. 79) (5.42) (5.92)

Closing net asset value per share 227.37 270.79 289.99 88. 28 100.89 106.34

Retained distributions on accumulation shares* 12.24 18.22 18.56 – – –

*after direct transaction costs of: 0.02 0.01 0.01 0.01 0.01 0.01

Performance

Return after charges (16.03%) (6.62%) (12.36%) (7.7 5%) (0.03%) (20.87%)

Other information

Closing net asset value (US$’000) 2,144 10,399 17,647 8,817 28,271 45,411

Closing number of shares 942,799 3,840,195 6,085,486 9,986,936 28,023,042 42,704,147



Prices




REPORT AND ACCOUNTS

Comparative table


‘A’ Gross Class (Income-2 shares)(3) ‘I’ Net Class (Accumulation shares)

2016 2015 2014 2016 2015 2014




Return before operating charges* (5. 15) 3.10 (26.22) (5.48) 1.31 (17.61)

Operating charges (1.5 3) (1.79) (2.10) (0.75) (0.84) (0.89)

Return after operating charges* (6. 68) 1.31 (28.32) (6.23) 0.47 (18.50)

Distributions on income shares (6.0 4) (6.80) (7.45) – – –

Closing net asset value per share 88.8 2 101.54 107.03 84.45 90.68 90.21

Retained distributions on accumulation shares* – – – 3.87 4.69 4.94

*after direct transaction costs of: – 0.01 0.01 0.01 0.01 –

Performance

Return after charges (6. 58%) 1.22% (19.83%) (6.87%) 0.52% (16.28%)

Other information





Prices



‘I’ Gross Class

‘I’ Gross Class (Accumulation shares) (USD Accumulation shares)

2016 2015 2014 2016 2015 2014

Financial year (p) (p) (p) (US cent) (US cent) (US cent)



Return before operating charges* (9.09) 4.79 (42.47) (41.27) (15.04) (36.71)


Return after operating charges* (10.60) 3.10 (44.32) (43.61) (17.79) (39.67)




Performance

Return after charges (5.79%) 1.72% (19.75%) (15.41%) (5.91%) (11.65%)

Other information





Prices



REPORT AND ACCOUNTS

42

Comparative table


Investec Funds Series iii

‘I’ Net Class (Income-2 shares)(3) ‘I’ Gross Class (Income-2 shares)(2)(3)

2016 2015 2014 2016 2015 2014



Opening net asset value per share 82. 76 86.56 114.61 94.50 100.00 _

Return before operating charges* (5. 18) 1.4 1 (2 2. 34) (4.84) (3.84) _

Operating charges (0.68) (0. 79) (0.92) (0.75) (0.20) _

Return after operating charges* (5. 86) 0.6 2 (2 3. 26) (5.59) (4.04) _

Distributions on income shares (3.95) (4.4 2) 4.79 (5.63) (1.46) _

Closing net asset value per share 72.95 82. 76 86.56 83.28 94.50 _

*after direct transaction costs of: 0.01 0.01 0.01 0.01 – _

Performance

Return after charges (7. 08%) 0.7 2% (2 0. 29%) (5.92%) (4.04%) _

Other information

Closing net asset value (£’000) 61,459 129,717 154,938 – – _

Closing number of shares 84,249,839 156,744,599 179,001,314 242,747 6,250 _

Operating charges 0.90% 0.89% 0.91% 0.91% 0.90% _

Direct transaction costs‡ 0.01% 0.01% 0.00% 0.01% 0.01% _

Prices

Highest share price 86.69 92.61 116.64 99.12 102.12 _

Lowest share price 66.74 81.23 85.42 76.23 92.73 _

‘R’ Net Class (Accumulation shares) ‘R’ Net Class (Income-2 shares)(3)

2016 2015 2014 2016 2015 2014




Return before operating charges* (5.10) 1.23 (21.12) (4.77) 2.27 (20.98)


Return after operating charges* (6.00) 0.22 (22.23) (5.56) 1.34 (22.05)

Distributions on income shares – – – (3.62) (4.86) (3.97)



*after direct transaction costs of: 0.01 0.01 – 0.01 0.01 –

Performance

Return after charges (7.07%) 0.26% (20.80%) (7.32%) 1.69% (20.91%)

Other information

Closing net asset value (£’000) 49 64 46 4 5 20

Closing number of shares 62,104 75,696 53,763 6,655 6,250 25,774



Prices




REPORT AND ACCOUNTS

Comparative table


‘S’ Gross Class (Accumulation shares) ‘S’ Gross Class (Income shares) (1)

2016 2015 2014 2016 2015 2014

Financial year (p) (p) (p) (p) (p)) (p)


Opening net asset value per share 172.54 168.30 207.78 – –– 107.97

Return before operating charges* (8.51) 4.49 (39.18) – –– (11.30)

Operating charges (0.25) (0.25) (0.30) –– –– (0.13)

Return after operating charges* (8.76) 4.24 (39.48) – –– (11.43)

Distributions on income shares – – – –– –– (2.89)

Return to shareholder as a result of class closure – – – –– –– (93.65)

Closing net asset value per share 163.78 172.54 168.30 –– –– –

Retained distributions on accumulation shares* 10.36 11.03 11.16 – –– –

*after direct transaction costs of: 0.02 0.01 0.01 – –– –

Performance

Return after charges (5.08%) 2.52% (19.00%) –– –– (10.59%)

Other information

Closing net asset value (£’000) 107,532 364,265 400,939 –– –– –

Closing number of shares 65,658,179 211,113,316 238,231,635 –– –– –

Operating charges 0.15% 0.14% 0.16% – –– 0.20%

Direct transaction costs‡ 0.01% 0.01% 0.00% –– –– 0.00%

Prices

Highest share price 181.12 186.49 211.59 –– –– 109.99

Lowest share price 146.87 166.47 163.29 – –– 88.20

(1) Closed 21 October 2013

(2) Launched 5 December 2014

(3) Share class names changed effective 6 April 2015 (previously ‘Income’ classes)

High and low prices are quoted at Mid valuation.

Portfolio transaction costs

Portfolio transaction costs are incurred by funds when buying and selling investments. These costs vary depending on the types of investment, their market

capitalisation, country of exchange, method of execution and the quality of research provided. They are made up of direct and indirect portfolio transaction costs:

‡ Direct portfolio transaction costs: Broker execution commission, taxes, and costs of research from brokers and other research providers.

Indirect portfolio transaction costs: ‘Dealing spread’ – the difference between the buying and selling prices of the fund’s investments; some types of investment, such

as fi xed interest securities, have no direct transaction costs and only the dealing spread is paid. Details of the dealing spread is shown in note 5 of the ‘Notes to the

fi nancial statements’ for each of the individual funds.

REPORT AND ACCOUNTS


Comparative table


Net Asset Value and Ongoing Charges Figure

‘A’ Net Class (Accumulation shares) ‘A’ Net Class (Income shares)

2016 2015 2014 2016 2015 2014




Return before operating charges* 11.88 6.53 (12.61) 9.36 5.19 (10.18)


Return after operating charges* 10.64 5.32 (13.86) 8.39 4.23 (11.20)




*after direct transaction costs of: 0.02 – 0.02 0.02 – 0.02

Performance

Return after charges 9.48% 4.97% (11.47%) 9.43% 4.93% (11.43%)

Other information




Direct transaction costs‡ 0.02% –% 0.02% 0.02% –% 0.02%

Prices



‘A’ Gross Class (Income shares) ‘A’ Net Class (USD Income shares)

2016 2015 2014 2016 2015 2014

Financial year (p) (p) (p) (US Cent) (US Cent) (US Cent)



Return before operating charges* 9.52 5.47 (9.90) (0.73) (2.63) (3.12)


Return after operating charges* 8.55 4.50 (10.92) (2.23) (4.20) (4.72)

Distributions on income shares (0.85) (1.30) (1.30) (1.14) (1.63) (1.19)



Performance

Return after charges 9.63% 5.26% (11.16%) (1.63%) (2.94%) (3.17%)

Other information

Closing net asset value (£’000) 804 1,156 934 53 476 536

Closing number of shares 833,090 1,301,971 1,090,442 39,288 347,151 374,773



Prices



Global Bond Fund


REPORT AND ACCOUNTS

Comparative table


‘I’ Net Class (Accumulation shares) ‘I’ Net Class (Income shares)

2016 2015 2014 2016 2015 2014



Opening net asset value per share 99.49 94.44 106.24 925.40 892.03 1,019.48





Closing net asset value per share 109.35 99.49 94.44 1,005.79 925.40 892.03

Retained distributions on accumulation shares* 1.15 1.52 – – – –


Performance


Other information


Closing number of shares 4,462,173 1,761,446 1,339,216 414,036 436,410 471,819



Prices

Highest share price 109.78 103.81 107.23 1,015.03 973.62 1,029.17


‘I’ Gross Class (Income shares) ‘R’ Net Class (Accumulation shares)

2016 2015 2014 2016 2015 2014



Opening net asset value per share 948.86 914.64 1,045.33 98.84 93.91 105.60




Distributions on income shares (13.80) (18.53) (18.79) – – –

Closing net asset value per share 1,031.33 948.86 914.64 108.45 98.84 93.91

Retained distributions on accumulation shares* – – – 0.98 1.41 1.62


Performance


Other information

Closing net asset value (£’000) 483 664 1,008 7 6 6

Closing number of shares 46,846 69,985 110,202 6,258 6,250 6,250

Operating charges 0.61% 0.60% 0.60% 0.8 6% 0.85% 0.85%


Prices

Highest share price 1,042.31 999.49 1,055.17 108.88 103.13 106.56


REPORT AND ACCOUNTS


Comparative table


‘S’ Net Class (Income shares) (1) ‘S’ Gross Class (Income shares)

2016 2015 2014 2016 2015 2014



Opening net asset value per share – 83.92 95.90 88.87 85.67 97.92

Return before operating charges* – 0.03 (10.22) 9.59 5.47 (9.94)

Operating charges – (0.05) (0.09) (0.10) (0.09) (0.09)

Return after operating charges* – (0.02) (10.31) 9.49 5.38 (10.03)

Distributions on income shares – – (1.67) (1.74) (2.18) (2.22)

Return to shareholder as a result of class closure – (83.90) – – – –

Closing net asset value per share – – 83.92 96.62 88.87 85.67

*after direct transaction costs of: – – 0.02 0.02 – 0.02

Performance

Return after charges – (0.02%) (10.75%) 10.68% 6.28% (10.24%)

Other information

Closing net asset value (£’000) – – 2 48,554 73,837 102,832

Closing number of shares – – 2,286 50,254,471 83,082,345 120,039,045

Operating charges – 0.10% 0.10% 0.11% 0.10% 0.10%

Direct transaction costs‡ – –% 0.02% 0.02% –% 0.02%

Prices

Highest share price – 84.71 96.80 97.86 93.82 98.84

Lowest share price – 83.41 84.45 84.20 84.68 86.36

(1) Closed 7 April 2014









REPORT AND ACCOUNTS

Comparative table


‘A’ Net Class

‘A’ Net Class (Accumulation shares) (USD Accumulation shares)

2016 2015 2014 2016 2015 2014




Return before operating charges* ( 3.20) 16.23 11.11 (2 2.24) 12.68 32.18

Operating charges (1. 79) (1.66) (1.54) (2.7 4) (2.71) (2.43)

Return after operating charges* (4. 99 ) 14.57 9.57 (24. 98 ) 9.97 29.75

Closing net asset value per share 109. 30 114.29 99.72 15 1.74 176.72 166.75



Performance

Return after charges ( 4.37%) 14.61% 10.62% (1 4.14%) 5.98% 21.72%

Other information

Closing net asset value (£’000) 3,0 79 1,259 1,255 1,1 33 1,405 1,405


Operating charges 1.6 0% 1.61% 1.62% 1.6 0% 1.61% 1.62%


Prices



‘B’ Class (Accumulation shares) (1) ‘I’ Net Class (Accumulation shares)

2016 2015 2014 2016 2015 2014



Opening net asset value per share 112.65 100.00 – 188.76 163.45 146.34

Return before operating charges* (3. 15 ) 13.09 – ( 5.28) 26.81 20.12

Operating charges (0. 67 ) (0. 43) – (1.5 8) (1.50) (1.36)

Performance fee (0.19) (0.01) – – – –

Return after operating charges* ( 4.01) 12.65 – ( 6.86) 25.31 18.76

Closing net asset value per share 10 8.64 112.65 – 18 1.90 188.76 163.45

Retained distributions on accumulation shares* 1.05 0.20 – 1.62 1.58 –

*after direct transaction costs of: 0.12 0.02 – 0.20 0.10 0.23

Performance

Return after charges ( 3.56%) 12.65% – (3. 63%) 15.48% 12.82%

Other information

Closing net asset value (£’000) 158,349 163,208 – 186,206 74,903 629

Closing number of shares 144,886,366 144,886,366 – 101,750,915 39,682,042 384,923

Operating charges 0.6 0% 0.61% – 0.8 5% 0.86% 0.87%

Performance fee 0.17% 0.01% – – – –

Direct transaction costs‡ 0.11% 0.06% – 0.11% 0.06% 0.15%

Prices

Highest share price 121.22 112.68 – 203.09 188.82 165.91

Lowest share price 97.70 93.86 – 163.60 157.39 141.93

Global Dynamic

REPORT AND ACCOUNTS


Comparative table


‘I’ Net Class (EUR Accumulation shares) (2) ‘R’ Net Class (Accumulation shares)

2016 2015 2014 2016 2015 2014

Financial year (Euro cent) (Euro cent) (Euro cent) (p) (p) (p)


Opening net asset value per share 100.00 – – 142.38 123.62 110.91

Return before operating charges* (1 3.24) – – (3. 97) 20.18 14.07

Operating charges (0.70) – – (1.5 5) (1.42) (1.36)

Return after operating charges* (13. 94) – – ( 5.52) 18.76 12.71

Closing net asset value per share 86. 06 – – 13 6.86 142.38 123.62

Retained distributions on accumulation shares* 0.64 – – 0.86 0.86 1.05

*after direct transaction costs of: 0.06 – – 0.15 0.07 0.17

Performance

Return after charges (13. 94%) – – (3. 88 %) 15.18% 11.46%

Other information

Closing net asset value (Euro’000) 27 5 – – 11 5 120 105

Closing number of shares 320,119 – – 84,225 84,225 84,850

Operating charges 0.86% – – 1.1 0% 1.11% 1.12%

Direct transaction costs‡ 0.10% – – 0.11% 0.06% 0.14%

Prices

Highest share price 104.63 – – 153.15 142.43 125.50

Lowest share price 77.34 – – 123.11 118.84 107.48

‘S’ Net Class (Accumulation shares)

2016 2015 2014

Financial year (p) (p) (p)


Opening net asset value per share 200.10 171.99 152.89

Return before operating charges* ( 5.61) 28.31 19.30

Operating charges (0.2 0) (0.20) (0.20)

Return after operating charges* ( 5.81) 28.11 19.10

Closing net asset value per share 19 4.29 200.10 171.99

Retained distributions on accumulation 3.21 2.99 2.95

*after direct transaction costs of: 0.21 0.10 0.25

Performance

Return after charges (2. 90%) 16.34% 12.49%

Other information

Closing net asset value (£’000) 289,431 502,113 637,930

Closing number of shares 148,971,725 250,933,247 370,903,535

Operating charges 0.1 0% 0.11% 0.12%

Direct transaction costs‡ 0.11% 0.06% 0.15%

Prices

Highest share price 215.50 200.16 174.43

Lowest share price 174.68 166.04 148.59

(1) Launched 30 September 2014

(2) Launched 7 April 2015










REPORT AND ACCOUNTS

Comparative table


‘A’ Net Class


2016 2015 2014 2016 2015 2014



Opening net asset value per share 117.99 103.3 1 94.02 182.04 172.35 142.93

Return before operating charges* ( 5.33) 16.4 2 10.89 (25. 74) 12.56 31.87


Return after operating charges* ( 7.21) 14.6 8 9.28 (2 8.58) 9.69 29.42

Closing net asset value per share 110.78 117.99 103.3 1 15 3.46 182.04 172.35



Performance

Return after charges ( 6.11%) 14.2 1% 9.87% (15. 70%) 5.62% 20.58%

Other information

Closing net asset value (£’000) 3,3 78 4,703 8,243 6,2 22 7,183 5,972




Prices



‘I’ Net Class

‘I’ Net Class (Accumulation shares) (USD Accumulation shares) (1)

2016 2015 2014 2016 2015 2014



Opening net asset value per share 1,643.71 1,428.26 1,290.16 120.46 113.20 100.00

Return before operating charges* ( 74.71) 228.71 165.49 (1 7.13) 8.27 13.74


Return after operating charges* (88 .66) 215.45 153.81 (1 8.15) 7.26 13.20

Closing net asset value per share 1,5 55.05 1,643.71 1,428.26 102. 31 120.46 113.20

Retained distributions on accumulation shares* 17.88 15.49 – 1.17 1.13 0.49


Performance

Return after charges ( 5.39%) 15.08% 11.92% (1 5.07%) 6.41% 13.20%

Other information

Closing net asset value (£’000) 14 8,954 67,264 19,831 30, 759 65,806 75,930




Prices

Highest share price 1,764.97 1,646.12 1,458.12 126.99 121.02 113.25

Lowest share price 1,410.22 1,392.02 1,258.34 96.60 106.03 97.88

Global Equity

REPORT AND ACCOUNTS


Comparative table


‘R’ Net Class (Accumulation shares) ‘S’ Net Class (Accumulation shares)

2016 2015 2014 2016 2015 2014




Return before operating charges* ( 6.41) 19.82 12.95 (5. 79) 17.65 11.49


Return after operating charges* (7. 97) 18.30 11.65 (5. 96) 17.51 11.37

Closing net asset value per share 13 3.41 141.38 123.08 121. 34 127.30 109.79



Performance

Return after charges (5. 64%) 14.87% 10.45% (4. 68%) 15.95% 11.55%

Other information

Closing net asset value (£’000) 50 53 1 11 1,781 334,395 398,806

Closing number of shares 37,293 37,293 625 92,124,557 262,689,307 363,260,879



Prices



‘S’ Net Class (Income shares)

2016 2015 2014




Return before operating charges* ( 5.23) 16.18 10.72

Operating charges (0.15) (0.13) (0.12)

Return after operating charges* ( 5.38) 16.05 10.60

Distributions on income shares (2.10) (1.89) (1.86)

Closing net asset value per share 107. 29 114.77 100.61


Performance

Return after charges (4. 69%) 15.95% 11.54%

Other information

Closing net asset value (£’000) 4,0 27 23,630 26,036

Closing number of shares 3,753,537 20,590,024 25,877,864

Operating charges 0.13% 0.12% 0.12%


Prices



(1) Launched 30 July 2013










REPORT AND ACCOUNTS

Comparative table


‘A’ Net Class


2016 2015 2014 2016 2015 2014



Opening net asset value per share 96.21 106.79 153.41 148.41 178.13 233. 05

Return before operating charges* 10.75 (8.95) (44.77) ( 0. 18 ) (27.09) (5 1. 87)


Return after operating charges* 9.41 (10.58) (46.62) ( 2. 20 ) (29.72) (5 4. 92)

Closing net asset value per share 10 5. 62 96.21 106.79 14 6.21 148.41 178.13

Retained distributions on accumulation – – – – – –


Performance

Return after charges 9. 78 % (9.91%) (30.39%) ( 1. 48%) (16.68%) (23. 57%)

Other information

Closing net asset value (£’000) 18, 913 20,523 60,516 15 9` 208 204




Prices



‘I’ Net Class (Accumulation shares) ‘R’ Net Class (Accumulation shares)

2016 2015 2014 2016 2015 2014




Return before operating charges* 10.43 (8.49) (4 2. 02 ) 6. 50 (5.31) (26.37)


Return after operating charges* 9. 72 (9.30) (42.25) 5. 94 (5.97) (27.11)

Closing net asset value per share 10 1.29 91.57 100.87 6 3.18 57.24 63.21

Retained distributions on accumulation 0.09 0.24 0.71 – – 0.34


Performance

Return after charges 10. 61 % (9.22%) (29.37%) 10.38% (9.44%) (30.02%)

Other information

Closing net asset value (£’000) 4 4,072 20,573 10,353 15 63 16




Prices



Global Gold

REPORT AND ACCOUNTS


Comparative table


‘S’ Net Class (Accumulation shares)

2016 2015 2014




Return before operating charges* 1 1.33 (9.01) (44.25)

Operating charges (0.13) (0.12) (0.13)

Return after operating charges* 1 1.20 (9.13) (44.38)

Closing net asset value per share 10 8. 88 97.68 106.81

Retained distributions on accumulation 0.71 1.01 1.53


Performance

Return after charges 1 1.47% (8.55%) (29.35%)

Other information

Closing net asset value (£’000) 31 2,002 841

Closing number of shares 28,633 2,050,008 787,691

Operating charges 0.15% 0.12% 0.12%


Prices












REPORT AND ACCOUNTS

Notes to the Financial Statements of the CompanyFor the year ended 29 February 2016

1. Accounting policies

a) Basis of accounting

The fi nancial statements on pages 53-100 have been prepared under the historical cost basis, as modifi ed by the revaluation of investments, and in accordance with

the revised Statement of Recommended Practice (SORP) for Authorised Funds issued by the IMA in May 2014.

The fi nancial statements have been prepared on the going concern basis, with the exception of the Global Bond Fund. The Fund has seen its assets decline

signifi cantly and the Investment Manager does not expect signifi cant demand for the Fund in the foreseeable future. The lack of new investment into the Fund and the

reduction in assets will further reduce the investment opportunities available to the Fund. The Investment Manager therefore believes it to be in the interest of all

shareholders to close the Fund in accordance with the Financial Conduct Authority (the “FCA”) rules. Consequently the Fund is not a going concern and the fi nancial

statements have been prepared on a break up basis. There is no impact on the fi nancial statements or disclosure notes of the Fund on the basis that the assets and

liabilities on the balance sheet are valued at fair value and costs relating to the disposal of assets and settlement of liabilities are deemed to be not material.

Adoption of the IMA SORP 2014

Changes in accounting policies

There have been no changes to the accounting policies as detailed in the audited fi nancial statements for the year ended 29 February 2016.

Changes in presentation

The presentation of these fi nancial statements has been changed from the previous period to comply with the requirements of the IMA SORP 2014. These changes

include:

• The removal of the aggregated fi nancial statements;

• The inclusion of details on any cross holdings within the ICVC;

• Amendments to labelling of line items within the Financial Statements;

• The performance record has been replaced by a comparative table;

• New disclosures included to show share class movements, detailed portfolio transaction cost breakdown and a fair value hierarchy breakdown of the portfolio.

b) Valuation of investments

The investments of the Funds have been valued at market value at noon on 29 February 2016 net of any accrued interest. For any US and Canadian listed equity

investments held by the Funds a closing market price has been used from 29 February 2016. This was due to signifi cant price movements experienced once trading

commenced in both markets after the Fund’s valuation point on that day. Suspended securities are valued at the last traded price or at the Fund Manager’s best

estimate of fair value based on market information and particular circumstances that led to the suspension subject to agreement from the ACD’s valuation committee.

Market value is defi ned by the SORP as fair value which is generally the bid value.

Open Forward Currency Contracts are shown in the Portfolio Statement and are valued using contracted forward rates. The net gains/(losses) are refl ected in

“Forward currency contracts” in Net capital gains/(losses).

Open Futures Contracts are shown in the Portfolio Statement and are valued using broker prices. The net gains/(losses) are refl ected in “Derivative contracts” in Net

capital gains/(losses).

Open Swap Contracts are shown in the Portfolio Statement and at fair value. The net gains/(losses) are refl ected in “Derivative contracts” in Net capital gains/(losses).

c) Exchange rates

Assets and liabilities held in overseas currencies have been translated into sterling at the exchange rates ruling at noon on 29 February 2016. Transactions during the

year are translated at the rate ruling on the transaction date.

d) Recognition of revenue

Income encompasses both revenue and capital gains/(losses). Revenue generally includes items such as dividends, interest and other similar items that were

previously referred to as ‘income’. Capital is the return from holding investments other than part of the return that is revenue.

All dividends and scrip (stock) dividends on equities are recognised when the securities are quoted ex-dividend net of any attributable tax credits. Bank interest,

interest on investments and other receivables are accrued up to the accounting date.

Accumulation of revenue relating to accumulation units or shares held in collective investment schemes is recognised as revenue and included in the amount

available for distribution. Equalisation received from distributions or accumulations on units or shares in collective investment schemes is treated as capital and

deducted from the cost of the investment.

Revenue from debt securities is accounted for on an effective interest basis.

Underwriting commission is taken to revenue and recognised when the issue takes place, unless the Funds are required to take up all or some of the underwritten

shares. In this case the commission is used to reduce the cost of those shares.

Special dividends are treated as revenue or capital depending on the facts of each particular case.

Stocklending revenue is accounted for on an accruals basis. Fees earned from stock lending are included in revenue on a gross basis.

Where derivatives are used to protect or enhance revenue, any gains or losses are treated as revenue of the Fund. Where derivatives are used to protect or enhance

capital, depending on the motives and circumstances, any gains or losses are treated as capital property of the Funds.

e) Expenses

Expenses are accounted for on an accruals basis.

f) Taxation

Provision is made for corporation tax at current rates on the excess of taxable revenue over allowable expenses. Stamp duty reserve tax (SDRT) suffered on the

surrender and reissue of shares has been charged against the net assets of the Fund through the Statement of Change in Net Assets Attributable to Shareholders.

g) Deferred taxation

Where applicable, a provision is made on all material timing differences between the recognition of revenue in the fi nancial statements and its recognition in the

Funds’ annual tax returns. Deferred tax liabilities are recognised to the extent that it is possible that an actual liability will crystallise and deferred tax assets are

recognised where it is more than likely that an asset is recoverable.

No deferred tax assets have been recognised as there is uncertainty over future net revenues to utilise such assets.

REPORT AND ACCOUNTS


Notes to the Financial Statements of the Company continuedFor the year ended 29 February 2016

2. Distribution policies

a) Basis of distribution

If at the end of the distribution period, revenue exceeds expense borne by revenue for distribution purposes, the net revenue after taxation of that Fund is available to

be distributed to its shareholders. In order to conduct a controlled dividend fl ow to shareholders, interim distributions will be at the ACD’s discretion, up to a

maximum of the distributable revenue available for the period. At the end of the year, all remaining net revenue is distributed.

Emerging Markets Local Currency Debt Fund will distribute revenue on a quarterly basis. Global Bond Fund will distribute revenue on a semi annual basis.

Global Dynamic Fund, Global Equity Fund and Global Gold Fund will distribute annually by reference to net revenue arising during the year ended 2 9 February 201 6.

Any defi cit of revenue after taxation will reduce the capital of the Fund.

Distributions on accumulation shares are retained by the Fund and increase the value of the accumulation shares.

b) Apportionment to multiple share classes

The allocation of revenue and non class specifi c expenses is based upon the proportion of the Funds’ assets attributable to each share class, on the day the revenue

is earned or expense is suffered.

c) Stock dividends

Ordinary scrip dividends are treated as revenue and will form part of any distribution. A transfer is made from capital to revenue to compensate for the amount of

revenue foregone. In the case of enhanced scrip dividends, any enhancement is taken to capital.

d) Interest from debt securities

As noted in note 1d above, revenue from fi xed interest securities is accounted for on an effective interest basis, where applicable, UK interest distributions are also

based on an effective interest basis.

e) Expenses

Management expenses including the General Administration Charge (GAC) and custody are charged against revenue unless otherwise stated in the Prospectus. The

only exception is the Emerging Markets Local Currency Debt Fund, where expenses are borne by capital for distribution.

f) Equalisation

Equalisation takes account of the distributable revenue in the share price that is received on the creation of shares and paid on cancellation of shares and is allocated

to the distribution account to equalise the distribution payable to Shareholders.

g) Aggregate distribution

The aggregate distribution for the company is based on the individual funds’ net revenue after taxation. Where there is a signifi cant difference between net revenue

after taxation and the amounts available for distribution, a reconciliation has been provided.

3. Risk management policies

Any investment in stock market funds involves risk. Some of these risks are general, which means that they apply to all funds. Others are specifi c, which means that

they apply to individual funds only.

We monitor our Funds’ portfolios against certain parameters, seeking to ensure that they meet an acceptable risk: reward profi le.

Risk management process

The stock selection and asset allocation of the portfolios are reviewed at periodic fund review meetings. Consideration is given to whether the risk associated with

the exposure to particular investment categories or stocks is prudent in the context of the investment objective. The Investment Manager has responsibility for

monitoring the existing portfolios in accordance with an overall investment category deviation parameter and seeks to ensure that the portfolios as a whole meet an

acceptable risk: reward profi le. Monthly market risk reviews are conducted on core funds, investigating levels and trends in risk exposures and the overall diversity of

risk contributors. For certain forms of derivative intensive funds, daily predicted Value at Risk levels are also monitored.

Listed below are the specifi c risks applicable to the Funds. Investors should refer to Clause 5, Appendix 1 (for specifi c risks) and Appendix vii of the prospectus for a

detailed explanation of each of the risks highlighted below.


Active Management

China Risk

Concentration

Emerging Markets

Equity Investment

Exchange Rate

Loss

Market Action

Past Performance

Political

Pricing and Liquidity

Settlement and Custody

Stock Connect

Global Bond Fund

Counterparty

Credit

Emerging Markets

Exchange Rates

Interest Rate

Loss

Market Action

Past Performance

Short Exposure

Yield

REPORT AND ACCOUNTS



3. Risk management policies continued

Global Dynamic Fund

China Risk

Concentration

Emerging Markets

Equity Investment

Exchange Rate

Loss

Market Action

Past Performance

Stock Connect

Global Equity Fund

China Risk

Equity Investment

Exchange Rates

Loss

Market Action

Past Performance

Stock Connect

Global Gold Fund

Concentration

Equity Investment

Exchange Rate

Loss

Market Action

Past Performance


Active Management

The Investment Manager either has greater than typical freedom to vary the proportion of the Fund invested in different types of asset, or the Investment Manager

has greater than typical freedom to deviate away from the benchmark, creating a higher than usual risk that the Fund will not participate in a general upward move in

markets and that it may decline even while markets generally are rising.

China Risk

Investments in China are particularly exposed to China’s economic, social and political system, which may behave differently to other markets, and investments in

China may be harder to assess for suitability or risk. China has enjoyed signifi cant economic prosperity in recent years but continued growth cannot be assumed and

a decline in China’s economic performance may affect the Fund’s investment.

Investments in China are subject to State-imposed restrictions, including the operation of trading quotas and currency management; while other State and regulatory

intervention may be more unpredictable or intrusive than in other markets. China’s laws and regulations relating to securities (including surrounding taxation) are new

and evolving, their application is subject to uncertainty, and they may be subject to change in the future. Investments in China may be subject to greater or more

frequent rises and falls in value than other markets and may be harder or impossible to buy or sell.

Accounting and auditing standards in China may also be less rigorous than their international equivalents and this could result in investments being overvalued.

Investments held by Chinese brokers may be mixed with other investors’ assets or subject to lower safekeeping standards than investments held domestically, which

could lead to delays in payment or losses should the broker become insolvent. Chinese investments are denominated in Renminbi and its value may fl uctuate widely

from other international currencies.

Other applicable risks:

Investors should also note the following risk factors, which may be applicable to the Fund, each of which is described in more detail in this Appendix: Accounting,

Emerging Markets, Equity Investment, Exchange Rates, Market Action, Market Closure, Political, Settlement and Custody and Tax.

Concentration

Some Funds invest in a narrow range of investments in particular geographical locations or specialised sectors. This focus may result in higher risk if there are

problems in that sector or country when compared to a Fund that has spread or diversifi ed its investments more broadly.

Counterparty

The risk of loss if a counterparty in a OTC derivative, stock lending or repo transaction fails to perform its fi nancial obligations to a Fund. It arises any time that Funds

are extended, committed, invested or otherwise exposed through actual or implied contractual agreements. The counterparties will be reputable fi nancial institutions

specialised in this type of transaction. Where provided for as a term of the relevant contractual arrangement, collateral may be held by the Fund to reduce its

exposure to counterparty risk.

Credit

Where the value of an investment depends on a party (which could be a company, government or other institution) fulfi lling an obligation to pay, there exists a risk that

that obligation will not be satisfi ed. This risk is greater where the fi nancial strength of the party is weaker. The Net Asset Value of a Fund could be affected by any

actual or feared breach of the party’s obligations, while the income of the Fund would be affected only by an actual failure to pay, which is known as a default.

Emerging Markets

Emerging Markets investments may be more volatile and less liquid than investments in developed markets and the investments of the Funds in such markets may be

considered speculative and subject to signifi cant delays in settlement. In addition, there may be a higher than usual risk of exchange rate, political, economic, social

and religious instability and of adverse changes in government regulations. Some of these markets may not be subject to accounting, auditing and fi nancial reporting

standards and practices comparable to those of more developed countries and the securities markets of such markets may be subject to unexpected closure.

In addition, there may be less government supervision, legal regulation and less well defi ned tax laws and procedures than in countries with more developed

securities markets.

REPORT AND ACCOUNTS




Equity Investment

The value of equities and equity-related investments may vary according to company profi ts and future prospects as well as more general market factors. In the event

of a company default, the owners of their equity rank last in terms of any fi nancial payment from that company.

Exchange Rate

If a Fund is invested in overseas markets or holds currencies other than sterling, then currency exchange rate movements may cause the value of your investment to

fall as well as rise. Even UK centric Funds may have the ability to invest overseas or in UK companies which invest or carry out a signifi cant proportion of their

business overseas.

Interest Rate

The earnings or market value of a Fund may be affected by changes in interest rates. This risk can be particularly relevant for Funds holding fi xed-rate debt securities

(such as bonds), since their values may fall if interest rates rise. Furthermore, Funds holding fi xed-rate debt securities with a long time until maturity may be more

sensitive to changes in interest rates than shorter-dated debt securities, for example a small rise in long-term interest rates may result in a more than proportionate

fall in the price of a long-dated debt security.

Loss

The value of investments and the income derived from them may fall as well as rise and investors may not recoup the original amount they invest in the Shares of a Fund.

Market Action

Losses may be made due to adverse movements in equity, bond, commodity, currency and other market prices, and to changes in the volatility of any of these. The

key factors driving changes in these market prices are economic growth and infl ation, both of which themselves depend to a greater or lesser extent on offi cial

economic and interest rate policy.

Past Performance

The past performance of a Fund should not be taken as a guide to its future performance. A Fund that has performed well in the past may perform poorly in the

future and a Fund that has performed poorly in the past may perform well in the future.

Political

Expropriation by the state, social or political instability, or other restrictions on the freedom of the fund to deal in its investments, may all lead to investment losses.


The risk that the price at which an asset is valued may not be realisable in the event of sale. This could be due to a mis-estimation of the asset’s value or due to a lack

of liquidity in the relevant market.

Settlement and Custody

There may be delays in settlement and/or uncertainty in relation to the ownership of a Fund’s investments which could affect the Fund’s liquidity and which may lead

to investment losses.

Short Exposure

If a Fund uses derivatives to create short exposure, while there is the potential for a gain to be made when the underlying securities are falling in value there is also the

risk of loss when the underlying is rising in value.

Stock Connect

To the extent that the Funds’ investments in China are dealt via Hong Kong Shanghai Stock Connect (“Stock Connect”), such dealing will be subject to additional risk

factors.

Stock Connect is a new trading programme, therefore the relevant rules and regulations are untested and subject to change. Since investments through Stock

Connect are subject to certain restrictions (including trading day restrictions, pre-trade checking, eligibility of stock, quota limits and daily trade quotas), investments

may be subject to greater or more frequent rises and falls in value and may be harder to buy or sell.

Under Stock Connect, overseas investors such as the investing Funds may invest directly in certain China A shares listed on the Shanghai Stock Exchange (“SSE

shares”). The Funds trade SSE Shares through a broker who is affi liated to the Hong Kong sub-custodian appointed by the Depositary.

SSE Shares purchased through Stock Connect are uncertifi ed and held in accounts in the Hong Kong Central Clearing and Settlement System maintained by the

Hong Kong Securities and Clearing Corporation Limited (“HKSCC”), the central securities depositary in Hong Kong. HKSCC in turn holds the legal title to the SSE

Shares of all its participants through a nominee omnibus securities account in its name, registered with ChinaClear, the central securities depositary in China.

A failure or delay by the HKSCC in the performance of its obligations may result in a failure of settlement, or the loss, of SSE shares and/or monies in connection with

them and the Funds may suffer losses as a result.

Foreign investors like the Funds investing through the Stock Connect remain benefi cial owners of the SSE Shares and are only eligible to exercise their rights to the

SSE Shares in China through the HKSCC nominee.

In the event of a default of ChinaClear, HKSCC through its nominee is likely to seek to recover any outstanding SSE Shares on behalf of the Funds from ChinaClear

through available legal channels but it is not obligated to do so. If HKSCC does not enforce claims against ChinaClear the Fund may not be able to recover all of its

SSE Shares.

Trading under Stock Connect will not be covered by Hong Kong’s Investor Compensation Fund nor the China Securities Investor Protection Fund.

Investors should also consider the China Risk detailed in this note which applies to investment in China.

Yield

The level of any yield for a Fund may be subject to fl uctuations and is not guaranteed.


REPORT AND ACCOUNTS



Sensitivity analysis

The table below shows the fund’s beta; this is a historical measure of the funds’ sensitivity to movements in well known markets. A beta of 1.0 would suggest that a

fund had experienced a close relationship to the volatility of the market index against which it was being measured, rising when the market rises and falling when it

falls in a one to one manner. A beta of 1.5 would suggest that a fund had experienced movements of 1.5 times the index i.e. the fund was more volatile than the

market. A beta of 0.5 would suggest that a fund had experienced movements in values of half of the index’s movement i.e. the fund was less volatile than the market.

Broadly speaking, if a fund has a beta of ‘B’ to an index, it means that if the index value changes by ‘X’% we could expect the fund value to change by ‘B’ multiplied

by ‘X’%. Of course, this is only an expectation, but it is a good indicator of the risk currently faced by particular funds.

Citigroup World

FTSE MSCI Government Bond

2016† All-Share Index World Index Index

Emerging Markets Local Currecny Debt Fund n/a n/a 0.35

Global Bond Fund n/a n/a 0.65

Global Dynamic Fund 0.53 0.54 n/a

Global Equity Fund 0.52 0.54 n/a

Global Gold Fund† 0.21 0.06 n/a

† Source: Lipper 01.03.13 – 29.02.16 using daily sub-periods for class ‘A’ income shares for Global Bond Fund and class ‘A’ accumulation shares for all other Funds.

Citigroup World

FTSE MSCI Government Bond

2015†† All-Share Index World Index Index

Emerging Markets Local

Currency Debt Fund n/a n/a 0.29

Global Bond Fund n/a n/a 0.61

Global Dynamic Fund 0.40 0.46 n/a

Global Equity Fund 0.39 0.45 n/a

Global Gold Fund 0.41 0.22 n/a

†† Source: Lipper 01.03.12 – 28.02.15 using daily sub-periods for class ‘A’ income shares for Global Bond Fund and class ‘A’ accumulation shares for all other Funds.

Past performance is not a guide to future performance.

4. Dilution adjustment

A dilution adjustment may be applied at the ACD’s discretion to all purchases, sales and switches of shares where the impact of the net deals is believed to have a

material effect.

A dilution adjustment or levy is a method to ensure fair treatment between investors joining, leaving or remaining in a Fund. We reserve the right to levy a dilution

adjustment on any or all deals. The price of the shares of a Fund may be adjusted to protect its value from being reduced in the case of larger scale movements into

or out of the Fund.

Full details on the ACD policy for dilution adjustment can be found in the Prospectus.

We hereby certify the Annual Report and Accounts on behalf of the Directors of Investec Fund Managers Limited

K. McFarland

Director of the ACD

24 February 2016

D. Aird

Director of the ACD

REPORT AND ACCOUNTS


Statement of Total ReturnFor the year ended 29 February 2016

29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

Income

Net capital losses 4 (151,862) (57,700)

Revenue 6 61,202 91,215

Expenses 7 (8,179) (11,545)

Interest payable and similar charges 9 (99) (78)

Net revenue before taxation 52,924 79,592

Taxation 8 (419) (1,720)

Net revenue after taxation 52,505 77,872

Total return before distributions (99,357) 20,172

Distribution 9 (54,268) (89,244)

Change in net assets attributable to

shareholders from investment activities (153,625) (69,072)

Statement of Change in Net Assets Attributable to ShareholdersFor the year ended 29 February 2016

29.02.16 28.02.15

£’000 £’000 £’000 £’000

Opening net assets attributable to shareholders 1,307,483 1,154,879

Amounts receivable on creation of shares 61,872 500,658

Amounts payable on cancellation of shares (728,289) (357,457)

(666,417) 143,201

Dilution adjustment 200 301


shareholders from investment activities (153,625) (69,072)

Retained distribution on accumulation shares 42,310 78,174

Closing net assets attributable to shareholders 529,951 1,307,483

Notes to the fi nancial statements are on pages 59 to 66.

Balance SheetAs at 29 February 2016

29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

ASSETS

Investment assets 520,941 1,307,651

Current assets

Debtors 10 9,280 48,481

Cash and bank balances 11 30,491 35,264

Total other assets 39,771 83,745

Total assets 560,712 1,391,396

LIABILITIES

Investment liabilities 25,543 57,740

Creditors

Bank overdrafts 2,447 3,029

Distribution payable 1,882 3,619

Other creditors 12 889 19,525

Total other liabilities 5,218 26,173

Total liabilities 30,761 83,913

Net assets attributable to shareholders 529,951 1,307,483



REPORT AND ACCOUNTS



The Accounting policies for the Fund are disclosed in the notes to the fi nancial statements on page 53.


The Distribution policies for the Fund are disclosed in the notes to the fi nancial statements on page 54.


The Risk management policies for the Fund are disclosed in the notes to the fi nancial statements on page 54-57.

4. Net capital losses

The net capital losses during the year comprise:

29.02.16 28.02.15

£’000 £’000

Non-derivative securities (119,073) (80,184)

Derivative contracts (16,068) (155)

Forward currency contracts 7,275 18,514

(Losses)/gains on foreign exchange (23,980) 4,148

Transaction charges (16) (23)

Net capital losses (151,862) (57,700)

5. Purchases, sales and transaction costs

There were no transactions costs incurred during the year to 29 February 2016.

Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

£’000 £’000 £’000 £’000

Bonds 442,816 1,269,363 1,034,476 1,025,236

Collective Investment Schemes 10,089 12,138 29,611 14,788

Futures* – – – –

Swaps 1,537,153 313,610 1,569,909 312,776

Treasury Bills 8,326 23,107 5,186 51,768

Cash Collateral 18,440 7,470 19,380 5,550

Trades excluding transaction costs 2,016,824 1,625,688 2,658,562 1,410,118

Commissions

Bonds – – – –

Collective Investment Schemes – – – –


Swaps – – – –

Treasury Bills – – – –

Cash Collateral – – – –

Taxes

Bonds – – – –



Swaps – – – –



Total costs – – – –

Net trades in the year after transaction costs 2,016,824 1,625,688 2,658,562 1,410,118

* Purchases and/or sales of future contracts do not incur transaction costs and have been included at the value of their exposure.

Notes to the Financial StatementsFor the year ended 29 February 2016

REPORT AND ACCOUNTS


Total transaction cost expressed as a percentage of asset type cost.

Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

% % % %

Commissions

Bonds – – – –



Swaps – – – –



tba 5 – – – –

Taxes

Bonds – – – –



Options – – – –

Swaps – – – –



Total transaction cost expressed as a percentage of average net asset value.

29.02.16 28.02.15

% %

Commissions – –

Taxes – –

Total costs – –

Average portfolio dealing spread

The average portfolio dealing spread at the balance sheet was 0.42% (28.02.15: 0.45%).

6. Revenue

29.02.16 28.02.15

£’000 £’000

Interest on debt securities 55,003 81,838

Interest on total return swaps 4,024 6,671

Offshore distribution taxable from collective investment schemes 1,860 2,385

Bank interest 94 95

Margin interest 206 188

Stocklending income 14 38

Trial Commission 1 –

Total revenue 61,202 91,215

7. Expenses

29.02.16 28.02.15

£’000 £’000

Payable to the ACD or associates of the ACD, and agents of either of them:

ACD fee 6,651 9,316

General administration charge (GAC) 755 1,148

7,406 10,464

Payable to the Depositary or associates of the Depositary, and agents of either of them:

Safe custody fee 733 1,070

733 1,070

Other expenses:

Stock lending fee 2 5

VAT refund (22) (17)

DTC fees – 23

FPI fees 2 –

Out of pocket expenses 58 –

40 11

Total expenses 8,179 11,545

Please refer to the Prospectus for a full description of expenses covered by the GAC.

The audit fee for the year is £11,000 (28.02.15: £11,000).

VAT is currently recovered in respect of certain expenses paid under the GAC.

Notes to the Financial Statements continuedFor the year ended 29 February 2016

REPORT AND ACCOUNTS


8. Taxation

a) Analysis of the tax charge in the year:

29.02.16 28.02.15

£’000 £’000

Irrecoverable income tax 419 1,731

Adjustments in respect of prior years – (11)

Current tax charge (note 8(b)) 419 1,720

Deferred tax charge (note 8(c)) – –

Total tax charge 419 1,720

b) Factors affecting current tax charge for the year:

The tax assessed for the year is lower than the standard rate of corporation tax in the UK for an authorised OEIC (20%) (28.02.15: 20%). The differences are explained

below:

29.02.16 28.02.15

£’000 £’000


Corporation tax of 20% 10,585 15,918

Effects of:

Revenue not subject to taxation – (19)

Overseas tax expensed – (346)

Tax deductible interest distributions (10,585) (15,553)

Income tax prior year adjustment – (11)

Irrecoverable income tax 419 1,731

Current tax charge (note 8(a)) 419 1,720

c) Provision for deferred taxation:

There is no provision required for deferred taxation at the Balance Sheet date in the current or prior year.

9. Finance costs

Distributions and interest

The Distributions take account of equalisation received on the creation of shares and deducted on the cancellation of shares, and comprises:

29.02.16 28.02.15

£’000 £’000

First quarter 16,393 21,922

Second quarter 11,946 22,638

Third quarter 10,849 23,189

Final 8,554 19,963

Income tax deducted at source 2,079 3,548

49,821 91,260

Add: Equalisation deducted on cancellation of shares 4,812 2,298

Less: Equalisation received on creation of shares (365) (4,314)

Finance costs: Distribution 54,268 89,244

Finance cost: Interest 82 66

Finance cost: Margin interest 17 12

99 78

Total fi nance costs 54,367 89,322

The net distribution for the year is represented by:

29.02.16 28.02.15

£’000 £’000


Amounts charged to capital:

ACD fee 1,611 9,316

General administration charge 170 1,148

Safe custody fee 150 1,070

Equalisation on conversion shares (168) (162)


REPORT AND ACCOUNTS


10. Debtors

29.02.16 28.02.15

£’000 £’000

Amounts receivable for creation of shares 77 146

Sales awaiting settlement 232 23,568

Accrued bond interest 8,570 23,823

Accrued total return swaps 401 908

Dilution adjustment – 36

9,280 48,481

11. Cash and bank balances

29.02.16 28.02.15

£’000 £’000

Cash and bank balances 22,610 25,409

Amounts held at futures clearing houses and brokers 7,881 9,855

30,491 35,264

12. Creditors

29.02.16 28.02.15

£’000 £’000

Amounts payable for cancellation of shares 385 970

Purchases awaiting settlement – 17,588

Accrued ACD fee 307 674

Accrued general administration charge 35 83

Accrued safe custody fee 157 207

Accrued transaction charges 5 3

889 19,525

13. Capital commitments and contingent liabilities

The Fund had no contingent liabilities or capital commitments at the year end date. (28.02.15: Nil).

14. Related party transactions

Investec Fund Managers Limited, as Authorised Corporate Director (ACD), is a related party, and acts as a principal in respect of all transactions of shares in the

Company. The aggregate monies received through issues and paid on cancellation of shares are disclosed in the Statement of Change in Shareholders’ Net Assets.

In accordance with the prospectus the ACD collects from the Fund, a general administration charge (GAC), ACD fees and safe custody fees. Please refer to notes 7,

12 and 16 for further details.

Any amounts due to/from Investec Fund Managers Limited at the end of the accounting year are disclosed in notes 10 and 12.

At the year end date nil% of the Fund’s shares (by net asset value) were held by other Funds managed by the ACD (28.02.15: 1.97%).


Please refer to note 4 of the notes to the fi nancial statements of the company for a detailed description of dilution adjustment.

16. ACD fees and charges

The different level of ACD fees payable per annum as at 29 February 2016 for each share class is detailed below:

A Shares 1.50%

I Shares 0.75%

R Shares 1.00%

S Shares 0.00%

The GAC is charged at 0.08% of the Net Asset Value of each share class.

All shares within the sub-fund have the same rights on winding up.


REPORT AND ACCOUNTS


Reconciliation of the shares movement in the year

28.02.15 29.02.16

Opening Closing

shares in Shares shares in

issue Creations Cancellations converted issue

‘A’ Net Class (Accumulation shares) 23,174,507 219,947 (8,677,682) (5,058,413) 9,658,359

‘A’ Gross Class (Accumulation shares) 63,308,707 5,282,498 (44,666,625) (70,794) 23,853,786

‘A’ Gross Class (USD Accumulation shares) 3,840,195 – (2,897,396) – 942,799

‘A’ Net Class (Income-2 shares) 28,023,04 1 92,021 (14,969,642) (3,158,484) 9,986,936

‘A’ Gross Class (Income-2 shares) 4,750,164 104,533 (1,583,809) (198,290) 3,072,598

‘I’ Net Class (Accumulation shares) 49,408,678 3,622,764 (23,980,741) 15,052,078 44,102,779

‘I’ Gross Class (Accumulation shares) 39,555,100 7,512,680 (83,676,623) 94,902,504 58,293,661

‘I’ Gross Class (USD Accumulation shares) 277,083,603 10,784,34 3 (197,411,725) – 90,456,221

‘I’ Net Class (Income-2 shares) 156,744,599 16,346,724 (92,776,258) 3,934,774 84,249,839

‘I’ Gross Class (Income-2 shares) 6,250 119,764 (18,538) 135,271 242,747

‘R’ Net Class (Accumulation shares) 75,696 217 (13,809) – 62,104

‘R’ Net Class (Income-2 shares) 6,250 405 – – 6,655

‘S’ Gross Class (Accumulation shares) 211,113,316 3,435,609 (45,238,804) (103,651,942) 65,658,179

17. Risk considerations

Please refer to note 3 of the notes to the fi nancial statements of the company for a detailed description of the risk considerations. There are no further specifi c risks

for this Fund.

The Fund’s currency exposure as at 29 February 2016 was:

Currency exposure

Total Total

29.02.16 28.02.15

Currency £’000 £’000

Argentine Peso 1 –

Brazilian Real 36,231 127,098

Chilean Peso 516 33,490

Chinese Yuan (3,860) –

Chinese Yuan (Offshore) (28,435) 74,094

Colombian Peso 30,792 56,142

Czech Koruna (151) 465

Egyptian Pound 2,752 27,249

Euro 4,541 (12,864)

Ghanaian Cedi (862) –

Hungarian Forint 27,853 68,498

Indian Rupee (20) 23,464

Indonesian Rupiah 67,513 167,921

Israeli Shekel (24,027) (49,441)

Kenyan Shilling (325) (16,005)

Malaysian Ringgit 38,558 135,032

Mexican Peso 62,210 176,552

Nigerian Naira 3,495 (13,241)

Peruvian Nuevo Sol (3,253) (36,636)

Philippine Peso 3,043 52,862

Polish Zloty 54,700 128,329

Romanian Leu 16,887 32,239

Russian Ruble 22,473 58,698

Serbian Dinar (5) 6,644

Singapore Dollar (246) (58,808)

South African Rand 47,010 130,595

South Korean Won (36) (30,219)

Sterling 5,484 (1,863)

Taiwan Dollar (29,354) (73,172)

Thai Baht 49,868 42,524

Turkish Lira 52,725 149,935

Uganda Shilling 6,579 13,290

Ukraine Hryvnia – 6,733

Uruguayan Peso – 3,700

US Dollar 87,394 84,178

Zambian Kwacha (100) –

Total 529,951 1,307,483

REPORT AND ACCOUNTS


Interest rate risk profi le of fi nancial assets and liabilities as at 29 February 2016 was as follows:

Financial

Floating rate Fixed rate assets not

fi nancial fi nancial carrying

assets assets interest Total

29.02.16 29.02.16 29.02.16 29.02.16

Currency £’000 £’000 £’000 £’000

Argentine Peso – – 1 1

Brazilian Real – 65,696 1,108 66,804

Chilean Peso – 2,155 41 2,196

Colombian Peso 13 30,311 1,440 31,764

Egyptian Pound – – 2,752 2,752

Euro – – 6,888 6,888

Hungarian Forint – 27,490 854 28,344

Indian Rupee – – 1 1

Indonesian Rupiah – 22,017 45,502 67,519

Malaysian Ringgit – 25,710 12,848 38,558

Mexican Peso 57 44,045 18,108 62,210

Nigerian Naira – – 3,495 3,495

Peruvian Nuevo Sol – 8,794 84 8,878

Philippine Peso – 751 2,293 3,044

Polish Zloty 1 31,125 23,574 54,700

Romanian Leu 157 8,727 8,003 16,887

Russian Ruble 181 57,497 978 58,656

Serbian Dinar – – 1 1

South African Rand 4,483 19,247 23,291 47,021

South Korean Won 3,399 – 126 3,525

Sterling 179 – 8,076 8,255

Thai Baht 9 27,567 22,292 49,868

Turkish Lira 198 50,019 2,508 52,725

Uganda Shilling 5 – 6,574 6,579

US Dollar 21,807 12,141 53,548 87,496

Total 30,489 433,292 244,386 708,167

Financials

Floating rate liabilities not

fi nancial carrying

liabilities interest Total

29.02.16 29.02.16 29.02.16

Currency £’000 £’000 £’000

Brazilian Real – 30,573 30,573

Chilean Peso – 1,680 1,680

Chinese Yuan – 3,860 3,860

Chinese Yuan (Offshore) – 28,435 28,435

Colombian Peso – 972 972

Czech Koruna – 151 151

Euro 2,347 – 2,347

Ghanaian Cedi – 862 862

Hungarian Forint – 491 491

Indian Rupee – 21 21

Indonesian Rupiah – 6 6

Israeli Shekel – 24,027 24,027

Kenyan Shilling – 325 325

Peruvian Nuevo Sol – 12,131 12,131

Philippine Peso – 1 1

Russian Ruble – 36,183 36,183

Serbian Dinar – 6 6

Singapore Dollar – 246 246

South African Rand – 11 11

South Korean Won – 3,561 3,561

Sterling – 2,771 2,771

Taiwan Dollar – 29,354 29,354

US Dollar 100 2 102

Zambian Kwacha – 100 100

Total 2,447 175,769 178,216


REPORT AND ACCOUNTS



Financial




28.02.15 28.02.15 28.02.15 28.02.15

Currency £’000 £’000 £’000 £’000

Brazilian Real – 148,272 2,567 150,839

Chilean Peso – 2,239 31,251 33,490

Chinese Yuan (Offshore) – – 74,094 74,094

Colombian Peso 6 94,087 3,858 97,951

Czech Koruna 90 – 1,437 1,527

Egyptian Pound – – 27,249 27,249

Hungarian Forint 251 72,384 21,233 93,868

Indian Rupee – – 23,464 23,464

Indonesian Rupiah – 59,004 108,920 167,924

Israeli Shekel 845 – – 845

Malaysian Ringgit – 145,003 1,559 146,562

Mexican Peso – 100,403 76,149 176,552

Nigerian Naira – 19,815 545 20,360

Peruvian Nuevo Sol 2 28,271 144 28,417


Polish Zloty – 105,163 24,105 129,268

Romanian Leu – 38,655 1,575 40,230

Russian Ruble 78 64,921 1,194 66,193

Serbian Dinar 1,240 6,362 229 7,831

Singapore Dollar – 41,905 514 42,419

South African Rand 6,222 61,813 65,993 134,028

South Korean Won 1,578 – – 1,578

Sterling 3,406 – 182 3,588

Thai Baht – 54,325 381 54,706

Turkish Lira 3 98,129 55,046 153,178

Uganda Shilling – – 13,290 13,290

Ukraine Hryvnia – – 6,733 6,733

Uruguayan Peso – – 3,700 3,700

US Dollar 24,944 – 59,341 84,285

Total 38,665 1,141,538 656,829 1,837,032

Financials


fi nancial carrying


28.02.15 28.02.15 28.02.15

Currency £’000 £’000 £’000


Colombian Peso – 41,809 41,809

Czech Koruna – 1,062 1,062

Euro 2,161 10,703 12,864

Hungarian Forint – 25,370 25,370



Kenyan Shilling – 16,005 16,005

Malaysian Ringgit – 11,530 11,530

Nigerian Naira – 33,601 33,601


Philippine Peso – 1 1

Polish Zloty – 939 939

Romanian Leu 868 7,123 7,991

Russian Ruble – 7,495 7,495

Serbian Dinar – 1,187 1,187

Singapore Dollar – 101,227 101,227

South African Rand – 3,433 3,433


Sterling – 5,451 5,451


Thai Baht – 12,182 12,182

Turkish Lira – 3,243 3,243

US Dollar – 107 107

Total 3,029 526,520 529,549

REPORT AND ACCOUNTS


18. Effi cient portfolio management techniques risk exposure

The exposure obtained through effi cient portfolio management techniques and identity of counterparties as at 29 February 2016 was as follows:

a) Stock lending

The aggregate value of securities on loan at 29 February 2016 is £nil (28.02.15: £28,911,000). The identities of these counterparties are listed in the counterparties

table below. Securities on loan are included in the portfolio statement and no account is taken of any collateral held. The aggregate value of collateral held at

29 February 2016 is £nil (28.02.15: £29,950,000). This collateral is listed in the collateral held table below.

The gross earnings and fees paid for the year are £nil (28.02.15: £nil) and £nil (28.02.15: £nil).

29.02.16 28.02.15

Value of stock on loan by counterparty £’000 £’000

Goldman Sachs – 12,238

JPMorgan – 16,673

Total – 28,911

29.02.16 28.02.15

Collateral held £’000 £’000

Cash – 29,950

b) Swap

Value of Value of

collateral collateral

29.02.16 28.02.15

Counterparty £’000 £’000

Citibank 2,460 3,400

Total 2,460 3,400

c) Forwards

Market value Market value

29.02.16 28.02.15


Barclays Bank 3,650 77

Citibank 932 (3,898)

Deutsche Bank 1,706 (480)

Goldman Sachs 2,030 4,056

HSBC (216) (87)

JPMorgan (1,583) 740

Standard Chartered Bank (831) (5,136)

State Street Bank (359) –

UBS (478) –

Total 4,851 (4,728)

d) Futures

Value of

Market value exposure

29.02.16 29.02.16


Goldman Sachs 732 125,052

Total 732 125,052

Futures

Value of


28.02.15 28.02.15


Goldman Sachs (3,845) 190,876

Total (3,845) 190,876

19. Fair value

29.02.16 28.02.15

Assets Liabilities Assets Liabilities

Valuation technique £000 £000 £000 £000

Quoted prices for identical instruments in an active market 732 – 105 (3,950)

Prices of recent transactions for identical instruments 23,263 – 42,447 –

Valuation techniques using observable market data 496,946 (25,543) 1,265,099 (53,790)

Total fair value 520,941 (25,543) 1,307,651 (57,740)


REPORT AND ACCOUNTS



Distribution TableFor the year ended 29 February 2016

Interim distribution paid 31 July 2015

Group 1 – shares purchased before 1 March 2015

Group 2 – shares purchased between 1 March 2015 and 31 May 2015

Distribution Distribution

Gross Income Net paid paid

Income Tax @20% Income Equalisation 31-Jul-15 31-Jul-14

pence pence pence pence pence pence

Share Class A Net – Accumulation

Group 1 2.0549 0.4110 1.6439 – 1.6439 2.0772

Group 2 0.9448 0.1890 0.7558 0.8881 1.6439 2.0772

Share Class A Gross – Accumulation

Group 1 2.2701 – 2.2701 – 2.2701 2.8258

Group 2 0.8592 – 0.8592 1.4109 2.2701 2.8258

Share Class A Net – Income-2

Group 1 1.5618 0.3124 1.2494 – 1.2494 1.3822

Group 2 0.6455 0.1291 0.5164 0.7330 1.2494 1.3822

Share Class A Gross – Income-2

Group 1 1.5883 – 1.5883 – 1.5883 1.7418

Group 2 0.8171 – 0.8171 0.7712 1.5883 1.7418

Share Class I Net – Accumulation

Group 1 1.2854 0.2571 1.0283 – 1.0283 1.1741

Group 2 0.6170 0.1234 0.4936 0.5347 1.0283 1.1741

Share Class I Gross – Accumulation

Group 1 2.5979 – 2.5979 – 2.5979 2.9416

Group 2 0.9076 – 0.9076 1.6903 2.5979 2.9416

Share Class I Net – Income-2

Group 1 1.2935 0.2587 1.0348 – 1.0348 1.1264

Group 2 0.7001 0.1400 0.5601 0.4747 1.0348 1.1264

Share Class I Gross – Income-2

Group 1 1.4743 – 1.4743 – 1.4743 n/a

Group 2 0.3863 – 0.3863 1.0880 1.4743 n/a

Share Class R Net – Accumulation

Group 1 1.1648 0.2330 0.9318 – 0.9318 1.1007

Group 2 0.3021 0.0604 0.2417 0.6901 0.9318 1.1007

Share Class R Net – Income-2

Group 1 1.1718 0.2344 0.9374 – 0.9374 1.0315

Group 2 0.1864 0.0373 0.1491 0.7883 0.9374 1.0315

Share Class S Gross – Accumulation

Group 1 2.6575 – 2.6575 – 2.6575 2.7427

Group 2 1.3467 – 1.3467 1.3108 2.6575 2.7427



Income Tax @20% Income Equalisation 31-Jul-15 31-Jul-14

US cent US cent US cent US cent US cent US cent

Share Class A USD Gross – Accumulation

Group 1 3.4701 – 3.4701 – 3.4701 4.7351

Group 2 3.4701 – 3.4701 – 3.4701 4.7351

Share Class I USD Gross – Accumulation

Group 1 3.9630 – 3.9630 – 3.9630 4.8979

Group 2 2.5727 – 2.5727 1.3903 3.9630 4.8979

REPORT AND ACCOUNTS


Distribution Table continuedFor the year ended 29 February 2016

Interim distribution paid 31 October 2015

Group 1 – shares purchased before 1 June 2015

Group 2 – shares purchased between 1 June 2015 and 31 August 2015



Income Tax @20% Income Equalisation 31-Oct-15 31-Oct-14



Group 1 1.5438 0.3088 1.2350 – 1.2350 2.0563

Group 2 0.9778 0.1956 0.7822 0.4528 1.2350 2.0563


Group 1 1.7033 – 1.7033 – 1.7033 2.7952

Group 2 0.8984 – 0.8984 0.8049 1.7033 2.7952


Group 1 1.3496 0.2699 1.0797 – 1.0797 1.3606

Group 2 0.7819 0.1564 0.6255 0.4542 1.0797 1.3606


Group 1 1.3563 – 1.3563 – 1.3563 1.6972

Group 2 0.5483 – 0.5483 0.8080 1.3563 1.6972


Group 1 1.0389 0.2078 0.8311 – 0.8311 1.1603

Group 2 0.5041 0.1008 0.4033 0.4278 0.8311 1.1603


Group 1 2.1201 – 2.1201 – 2.1201 2.9075

Group 2 1.1618 – 1.1618 0.9583 2.1201 2.9075


Group 1 1.1091 0.2218 0.8873 – 0.8873 1.1062

Group 2 0.7111 0.1422 0.5689 0.3184 0.8873 1.1062


Group 1 1.2624 – 1.2624 – 1.2624 n/a

Group 2 0.7685 – 0.7685 0.4939 1.2624 n/a


Group 1 0.9250 0.1850 0.7400 – 0.7400 1.0861

Group 2 0.2838 0.0568 0.2270 0.5130 0.7400 1.0861


Group 1 1.0368 0.2074 0.8294 – 0.8294 1.9549

Group 2 0.3249 0.0650 0.2599 0.5695 0.8294 1.9549


Group 1 2.2872 – 2.2872 – 2.2872 2.7257

Group 2 0.7345 – 0.7345 1.5527 2.2872 2.7257






Group 1 2.6235 – 2.6235 – 2.6235 4.6414

Group 2 2.6235 – 2.6235 – 2.6235 4.6414


Group 1 3.2427 – 3.2427 – 3.2427 4.8282

Group 2 2.9951 – 2.9951 0.2476 3.2427 4.8282

Emerging Markets Local Currency Debt Fund continued

REPORT AND ACCOUNTS



Interim distribution paid 31 January 2016

Group 1 – shares purchased before 1 September 2015

Group 2 – shares purchased between 1 September 2015 and 30 November 2015



Income Tax @20% Income Equalisation 31-Jan-16 31-Jan-15



Group 1 1.7001 0.3400 1.3601 – 1.3601 2.1253

Group 2 0.9591 0.1918 0.7673 0.5928 1.3601 2.1253


Group 1 1.8821 – 1.8821 – 1.8821 2.8953

Group 2 1.0845 – 1.0845 0.7976 1.8821 2.8953


Group 1 1.4030 0.2806 1.1224 – 1.1224 1.3709

Group 2 0.6604 0.1321 0.5283 0.5941 1.1224 1.3709


Group 1 1.4129 – 1.4129 – 1.4129 1.7324

Group 2 1.0002 – 1.0002 0.4127 1.4129 1.7324


Group 1 1.1190 0.2238 0.8952 – 0.8952 1.2043

Group 2 0.7150 0.1430 0.5720 0.3232 0.8952 1.2043


Group 1 2.2772 – 2.2772 – 2.2772 3.0052

Group 2 1.7285 – 1.7285 0.5487 2.2772 3.0052


Group 1 1.1565 0.2313 0.9252 – 0.9252 1.1221

Group 2 0.6843 0.1369 0.5474 0.3778 0.9252 1.1221


Group 1 1.3208 – 1.3208 – 1.3208 n/a

Group 2 0.7315 – 0.7315 0.5893 1.3208 n/a


Group 1 1.0035 0.2007 0.8028 – 0.8028 1.1259

Group 2 0.3431 0.0686 0.2745 0.5283 0.8028 1.1259


Group 1 1.0519 0.2104 0.8415 – 0.8415 0.8033

Group 2 0.3548 0.0710 0.2838 0.5577 0.8415 0.8033


Group 1 2.4395 – 2.4395 – 2.4395 2.8371

Group 2 1.3948 – 1.3948 1.0447 2.4395 2.8371



Income Tax @20% Income Equalisation 31-Jan-16 31-Jan-15



Group 1 2.8237 – 2.8237 – 2.8237 4.5591

Group 2 2.8237 – 2.8237 – 2.8237 4.5591


Group 1 3.4154 – 3.4154 – 3.4154 4.7465

Group 2 3.4154 – 3.4154 – 3.4154 4.7465

REPORT AND ACCOUNTS



Final distribution payable 30 April 2016

Group 1 – shares purchased before 1 December 2015

Group 2 – shares purchased between 1 December 2015 and 29 February 2016


Gross Income Net payable paid

Income Tax @20% Income Equalisation 30-Apr-16 30-Apr-15



Group 1 2.1789 0.4358 1.7431 – 1.7431 2.0364

Group 2 1.1076 0.2215 0.8861 0.8570 1.7431 2.0364


Group 1 2.4012 – 2.4012 – 2.4012 2.7769

Group 2 0.9921 – 0.9921 1.4091 2.4012 2.7769


Group 1 1.6779 0.3356 1.3423 – 1.3423 1.3034

Group 2 0.6081 0.1216 0.4865 0.8558 1.3423 1.3034


Group 1 1.6860 – 1.6860 – 1.6860 1.6328

Group 2 1.0536 – 1.0536 0.6324 1.6860 1.6328


Group 1 1.3950 0.2790 1.1160 – 1.1160 1.1543

Group 2 0.7568 0.1514 0.6054 0.5106 1.1160 1.1543


Group 1 2.8345 – 2.8345 – 2.8345 2.8990

Group 2 1.3307 – 1.3307 1.5038 2.8345 2.8990


Group 1 1.3836 0.2767 1.1069 – 1.1069 1.0668

Group 2 0.7339 0.1468 0.5871 0.5198 1.1069 1.0668


Group 1 1.5765 – 1.5765 – 1.5765 1.4582

Group 2 0.5080 – 0.5080 1.0685 1.5765 1.4582


Group 1 1.2514 0.2503 1.0011 – 1.0011 1.0792

Group 2 0.3988 0.0798 0.3190 0.6821 1.0011 1.0792


Group 1 1.2680 0.2536 1.0144 – 1.0144 1.0656

Group 2 0.4020 0.0804 0.3216 0.6928 1.0144 1.0656


Group 1 2.9792 – 2.9792 – 2.9792 2.7270

Group 2 2.9792 – 2.9792 – 2.9792 2.7270






Group 1 3.3192 – 3.3192 – 3.3192 4.2869

Group 2 3.3192 – 3.3192 – 3.3192 4.2869


Group 1 3.9320 – 3.9320 – 3.9320 4.4749

Group 2 2.4722 – 2.4722 1.4598 3.9320 4.4749

Equalisation

Equalisation applies only to shares purchased during the distribution period (Group 2 shares). It is the average amount of income included in the purchase price of

all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital, it is not liable to income tax but must be deducted from the cost of

shares for capital gains tax purposes.

Emerging Markets Local Currency Debt Fund continued

REPORT AND ACCOUNTS



29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

Income

Net capital gains 4 4,983 3,961

Revenue 6 1,748 2,921

Expenses 7 (341) (427)



Taxation 8 – –


Total return before distribution 6,312 6,389

Distribution 9 (1,331) (2,431)


shareholders from investment activities 4,981 3,958


29.02.16 28.02.15

£’000 £’000 £’000 £’000

Opening net assets attributable to shareholders 106,536 141,655



(31,990) (39,373)

Dilution adjustment – 26


shareholders from investment activities 4,981 3,958

Retained distribution on accumulation shares 177 270

Closing net assets attributable to shareholders 79,704 106,536



29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

ASSETS

Investment assets 76,012 100,506

Current assets

Debtors 10 1,323 1,005



Total assets 95,167 124,620

LIABILITIES

Investment liabilities 3,318 6,286

Creditors

Bank overdrafts 11,162 10,242

Distribution payable 495 1,094

Other creditors 12 488 462

Total other liabilities 12,145 11,798

Total liabilities 15,463 18,084

Net assets attributable to shareholders 79,704 106,536


Global Bond Fund

REPORT AND ACCOUNTS









4. Net capital gains

The net capital gains during the year comprise:

29.02.16 28.02.15

£’000 £’000

Non-derivative securities 2,937 2,538

Derivative contracts 596 (1,700)

Forward currency contracts 1,766 3,452

Losses on foreign exchange (307) (320)


Net capital gains 4,983 3,961


There were no transactions costs incurred during the year to 29 February 2016.

Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

£’000 £’000 £’000 £’000

Bonds 131,912 91,772 152,445 135,002

Collective Investment Schemes – – 4,585 3,933


Options – 11 – 5

Swaps 4,731 14,787 4,639 14,328

Cash collateral – – 120 290

Trades excluding transaction costs 136,6 43 106,570 161,78 9 153,558

Commissions

Bonds – – – –




Swaps – – – –

Cash collateral – – – –

Taxes

Bonds – – – –




Swaps – – – –


Total costs – – – –

Net trades in the year after transaction costs 136,651 106,570 161,780 153,558

* Purchases and/or sales of future contracts do not incur transaction costs and have been included at the value of their exposure.

REPORT AND ACCOUNTS


Total transaction cost expressed as a percentage of asset type cost

Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

% % % %

Commissions

Bonds – – – –


Futures – – – –


Swaps – – – –

In-specie transfers – – – –

Taxes

Bonds – – – –


Futures – – – –


Swaps – – – –


Total transaction cost expressed as a percentage of average net asset value

29.02.16 28.02.15

% %

Commissions – –

Taxes – –

Total costs – –



6. Revenue

29.02.16 28.02.15

£’000 £’000

Overseas dividends 6 –

Interest on debt securities 1,710 2,581

Offshore distribution taxable from collective investment schemes (3) 296

Bank interest 7 5

Margin interest 17 13

Stocklending income* 11 26


7. Expenses

29.02.16 28.02.15

£’000 £’000


ACD fee 264 321

General administration charge (GAC) 64 89

328 410


Safe custody fee 14 21

14 21

Other expenses:


VAT refund (2) (7)

(1) (4)

Total expenses 341 427




REPORT AND ACCOUNTS



8. Taxation


29.02.16 28.02.15

£’000 £’000

Overseas tax 1 –

Adjustments in respect of prior years (1) –

Current tax charge (note 8(b)) – –


Total tax charge – –



below:

29.02.16 28.02.15

£’000 £’000


Corporation tax of 20% 266 486

Effects of:

Tax deductible interest distributions (266) (486)

Adjustments in respect of prior years (1) –

Overseas tax 1 –

Current tax charge (note 8(a)) – –



9. Finance costs

Distributions and Interest


29.02.16 28.02.15

£’000 £’000

Interim 546 1,049

Final 560 1,185

Income tax deducted at source 59 103

1,165 2,337

Add: Equalisation deducted on cancellation of shares 228 102

Less: Equalisation received on creation of shares (62) (8)



Finance cost: Margin interest 74 64

78 66



29.02.16 28.02.15

£’000 £’000


Equalisation on conversion shares 2 3


10. Debtors

29.02.16 28.02.15

£’000 £’000


Sales awaiting settlement 130 –

Accrued bond interest 620 944

Income tax recoverable 5 5

Overseas tax recoverable 3 –

1,323 1,005

REPORT AND ACCOUNTS



29.02.16 28.02.15

£’000 £’000


Amounts held at futures clearing houses and brokers 12,290 11,184

17,832 23,109

12. Creditors

29.02.16 28.02.15

£’000 £’000


Purchases awaiting settlement 391 394





488 462














A Shares 1.00%

I Shares 0.50%

R Shares 0.75%

S Shares 0.00%




28.02.15 29/02/16

Opening Closing



‘A’ Net Class (Accumulation shares) 18,367,208 1,235,708 (3,545,094) (204,786) 15,853,036

‘A’ Net Class (Income shares) 4,666,984 64,824 (1,206,337) (2,192,284) 1,333,187

‘A’ Gross Class (Income shares) 1,301,971 23,110 (486,797) (5,194) 833,090

‘A’ Net Class (USD Income shares) 347,151 2,383 (310,246) – 39,288

‘I’ Net Class (Accumulation shares) 1,761,44 5 3,256,124 (785,813) 230,417 4,462,173

‘I’ Net Class (Income shares) 436,4 09 23,253 (256,083) 210,457 414,036

‘I’ Gross Class (Income shares) 69,985 5,890 (29,514) 485 46,846

‘R’ Net Class (Accumulation shares) 6,250 8 – – 6,258

‘S’ Gross Class (Income shares) 83,082,345 6,642,804 (39,470,678) – 50,254,471

REPORT AND ACCOUNTS





for this Fund.


Currency exposure

Total Total

29.02.16 28.02.15


Australian Dollar 7,618 (17)

Brazilian Real (3) (449)

Canadian Dollar (779) (1,603)

Chilean Peso (68) 1,175

Chinese Yuan – 157

Chinese Yuan (Offshore) 8 3,909

Colombian Peso (2) (2,218)

Czech Koruna 3,995 139

Danish Krone – (21)

Euro 14,526 29,121

Hong Kong Dollar – 158

Hungarian Forint 1,239 (8)

Indian Rupee 31 1,964

Indonesian Rupiah (4) 3,676

Israeli Shekel 41 (5,543)

Japanese Yen 14,980 14,618

Malaysian Ringgit (1,088) 155


New Zealand Dollar 8 (2,600)

Norwegian Krone (3,611) (362)

Peruvian Nuevo Sol 25 (2,934)

Philippine Peso 6 2,593

Polish Zloty 3,051 (1,328)

Romanian Leu (4) 38

Singapore Dollar (1,082) (3,442)

South African Rand (212) (828)

South Korean Won (1,565) (2,670)

Sterling 3,177 6,790

Swedish Krona 2,992 1,684

Swiss Franc (4,082) (1,102)

Taiwan Dollar (1,082) (3,853)

Thai Baht – (3,145)

Turkish Lira 3 1,329

US Dollar 40,159 66,385

Total 79,704 106,536

REPORT AND ACCOUNTS



Financial




29.02.16 29.02.16 29.02.16 29.02.16

Currency £’000 £’000 £’000 £’000

Australian Dollar 771 4,248 2,778 7,797

Brazilian Real 10 – – 10

Canadian Dollar 5 3,439 31 3,475

Chinese Yuan (Offshore) 10 – – 10

Czech Koruna – 2,334 1,661 3,995

Euro 2,590 20,764 126 23,480

Hungarian Forint – 3,897 13 3,910

Indian Rupee – – 31 31

Israeli Shekel – 3,287 88 3,375

Japanese Yen 1,451 2,323 11,206 14,980

Mexican Peso – – 1,427 1,427

New Zealand Dollar – – 8 8

Norwegian Krone 1 6,798 168 6,967

Peruvian Nuevo Sol – – 25 25

Philippine Peso – – 6 6

Polish Zloty 2 – 3,049 3,051

Romanian Leu 4 – – 4

Singapore Dollar 3 – 1 4

South African Rand 63 – 1 64

South Korean Won 251 – 41 292

Sterling 7,182 3,180 616 10,978

Swedish Krona – 509 2,483 2,992

Swiss Franc – 594 8 602

Taiwan Dollar – – 1 1

Turkish Lira 1 2 – 3

US Dollar 5,495 19,168 25,504 50,167

Total 17,839 70,543 49,272 137,654

Financials


fi nancial carrying


29.02.16 29.02.16 29.02.16

Currency £’000 £’000 £’000

Australian Dollar – 179 179

Brazilian Real – 13 13

Canadian Dollar 894 3,360 4,254

Chilean Peso – 68 68

Chinese Yuan (Offshore) – 2 2

Colombian Peso – 2 2

Euro – 8,954 8,954

Hungarian Forint – 2,671 2,671



Malaysian Ringgit – 1,088 1,088

Norwegian Krone – 10,578 10,578

Romanian Leu – 8 8


South African Rand – 276 276


Sterling – 7,801 7,801

Swiss Franc 313 4,371 4,684


US Dollar 9,962 46 10,008

Total 11,169 46,781 57,950

REPORT AND ACCOUNTS




Financial




28.02.15 28.02.15 28.02.15 28.02.15

Currency £’000 £’000 £’000 £’000

Australian Dollar 720 – 100 820

Brazilian Real – 610 9 619

Canadian Dollar – 4,686 45 4,731

Chilean Peso – 946 229 1,175

Chinese Yuan – – 157 157

Chinese Yuan (Offshore) – – 3,909 3,909

Colombian Peso – 766 47 813

Czech Koruna – – 139 139

Danish Krone – 595 4 599

Euro 1,641 28,175 213 30,029

Hong Kong Dollar – – 158 158

Hungarian Forint – 230 9 239

Indian Rupee – – 1,964 1,964

Indonesian Rupiah – 265 3,411 3,676

Israeli Shekel – 2,217 71 2,288

Japanese Yen 1,047 2,489 11,082 14,618

Malaysian Ringgit – – 155 155

Mexican Peso 35 1,025 3,708 4,768

New Zealand Dollar 2 – – 2

Norwegian Krone 1 1,232 32 1,265

Peruvian Nuevo Sol – 390 1 391


Polish Zloty 1 299 9 309

Romanian Leu – 244 6 250

South African Rand 199 1,333 19 1,551

South Korean Won 251 – 36 287

Sterling 7,450 11,864 2,818 22,132

Swedish Krona – – 1,684 1,684

Turkish Lira – – 1,329 1,329

US Dollar 11,880 30,530 33,320 75,730

Total 23,227 88,148 67,005 178,380

Financials


fi nancial carrying


28.02.15 28.02.15 28.02.15

Currency £’000 £’000 £’000

Australian Dollar – 837 837


Canadian Dollar 997 5,337 6,334

Colombian Peso – 3,031 3,031

Danish Krone – 620 620

Euro – 908 908

Hungarian Forint – 247 247


New Zealand Dollar – 2,602 2,602

Norwegian Krone – 1,627 1,627


Polish Zloty – 1,637 1,637

Romanian Leu – 212 212


South African Rand – 2,379 2,379


Sterling – 15,342 15,342

Swiss Franc 295 807 1,102


Thai Baht – 3,145 3,145

US Dollar 8,950 395 9,345

Total 10,242 61,602 71,844

REPORT AND ACCOUNTS




a) Stock lending


table below. Securities on loan are included in the portfolio statement and no account is taken of any collateral held. The aggregate value of collateral held at 29

February 2016 is £nil (28.02.15: £14,004,000). This collateral is listed in the collateral held table below.

29.02.16 28.02.15


Barclays – 330

BNP Paribas – 6,100

Citigroup – 6,463

Credit Suisse – 269

Goldman Sachs – 255

HSBC – 248

JPMorgan – 72

Total – 13,737

29.02.16 28.02.15


Cash – 14,004

b) Swap

Value of Value of

collateral collateral

29.02.16 28.02.15


Citigroup – 70

Morgan Stanley – 50

Total – 120

c) Forwards

Market value Market value

29.02.16 28.02.15


Barclays Bank 524 –

Citibank 1,973 334

Deutsche Bank 34 266

Goldman Sachs (27) 43

HSBC (74) 210

JPMorgan (118) 89

Royal Bank of Scotland – (1)

Standard Chartered Bank (55) –

State Street Bank (11) (139)

Total 2,246 802

d) Futures

Value of


29.02.16 29.02.16


Goldman Sachs (95) 139,415

Total (95) 139,415

Futures

Value of


28.02.15 28.02.15


Goldman Sachs 209 82,022

Total 209 82,022

REPORT AND ACCOUNTS



18. Fair value

29.02.16 28.02.15


Valuation technique £’000 £’000 £’000 £’000

Quoted prices for identical instruments in an active market 36,271 (340) 295 (86)

Prices of recent transactions for identical instruments – – 5,076 –

Valuation techniques using observable market data 39,741 (2,978) 95,135 (6,200)

Total fair value 76,012 (3,318) 100,506 (6,286)

REPORT AND ACCOUNTS


Global Bond Fund


Interim distribution paid 31 October 2015

Group 1 – shares purchased before 1 March 2015

Group 2 – shares purchased between 1 March 2015 and 31 August 2015






Group 1 0.5443 0.1089 0.4354 – 0.4354 0.5880

Group 2 0.2426 0.0485 0.1941 0.2413 0.4354 0.5880

Share Class A Net – Income

Group 1 0.4270 0.0854 0.3416 – 0.3416 0.4582

Group 2 0.2688 0.0538 0.2150 0.1266 0.3416 0.4582

Share Class A Gross – Income

Group 1 0.4309 – 0.4309 – 0.4309 0.5881

Group 2 0.2250 – 0.2250 0.2059 0.4309 0.5881


Group 1 0.7300 0.1460 0.5840 – 0.5840 0.7027

Group 2 0.3249 0.0650 0.2599 0.3241 0.5840 0.7027

Share Class I Net – Income

Group 1 6.7689 1.3538 5.4151 – 5.4151 6.6777

Group 2 4.1548 0.8310 3.3238 2.0913 5.4151 6.6777

Share Class I Gross – Income

Group 1 6.9517 – 6.9517 – 6.9517 8.5800

Group 2 3.0382 – 3.0382 3.9135 6.9517 8.5800


Group 1 0.6248 0.1250 0.4998 – 0.4998 0.6660

Group 2 0.6248 0.1250 0.4998 – 0.4998 0.6660

Share Class S Gross – Income

Group 1 0.8728 – 0.8728 – 0.8728 1.0218

Group 2 0.5152 – 0.5152 0.3576 0.8728 1.0218




U S cent U S cent U S cent U S cent U S cent U S cent

Share Class A USD Net – Income

Group 1 0.8361 0.1672 0.6689 – 0.6689 0.7803

Group 2 0.6470 0.1294 0.5176 0.1513 0.6689 0.7803

REPORT AND ACCOUNTS




Group 1 – shares purchased before 1 September 2015

Group 2 – shares purchased between 1 September 2015 and 29 February 2016






Group 1 0.5328 0.1066 0.4262 – 0.4262 0.7125

Group 2 0.3343 0.0669 0.2674 0.1588 0.4262 0.7125

Share Class A Net – Income

Group 1 0.4179 0.0836 0.3343 – 0.3343 0.5703

Group 2 0.2121 0.0424 0.1697 0.1646 0.3343 0.5703

Share Class A Gross – Income

Group 1 0.4183 – 0.4183 – 0.4183 0.7077

Group 2 0.2530 – 0.2530 0.1653 0.4183 0.7077


Group 1 0.7119 0.1424 0.5695 – 0.5695 0.8144

Group 2 0.1273 0.0255 0.1018 0.4677 0.5695 0.8144

Share Class I Net – Income

Group 1 6.5621 1.3124 5.2497 – 5.2497 7.7459

Group 2 2.0631 0.4126 1.6505 3.5992 5.2497 7.7459

Share Class I Gross – Income

Group 1 6.8494 – 6.8494 – 6.8494 9.9545

Group 2 1.5139 – 1.5139 5.3355 6.8494 9.9545


Group 1 0.6014 0.1203 0.4811 – 0.4811 0.7396

Group 2 0.4205 0.0841 0.3364 0.1447 0.4811 0.7396

Share Class S Gross – Income

Group 1 0.8641 – 0.8641 – 0.8641 1.1567

Group 2 0.1956 – 0.1956 0.6685 0.8641 1.1567




U S cent U S cent U S cent U S cent U S cent U S cent

Share Class A USD Net – Income

Group 1 0.5913 0.1183 0.4730 – 0.4730 0.8499

Group 2 0.4255 0.0851 0.3404 0.1326 0.4730 0.8499

Equalisation


all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital, it is not liable to income tax but must be deducted from the cost

of shares for capital gains tax purposes.

Global Bond Fund continued

REPORT AND ACCOUNTS



29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

Income

Net capital (losses)/gains 4 ( 31,226) 92,103

Revenue 6 13,166 12,817

Expenses 7 (3,073) (1,277)



Taxation 8 (1,071) (1,005)


Total return before distributions ( 22,207) 102,637



shareholders from investment activities ( 31,018) 94,066


29.02.16 28.02.15

£’000 £’000 £’000 £’000




(83,317) (738)


shareholders from investment activities ( 31,018) 94,066


Closing net assets attributable to shareholders 63 6,145 742,513



29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

ASSETS

Investment assets 6 17,840 712,127

Current assets

Debtors 10 1,872 1,883



Total assets 6 36,397 742,699

LIABILITIES

Creditors


Total liabilities 252 186

Net assets attributable to shareholders 63 6,145 742,513


Global Dynamic Fund

REPORT AND ACCOUNTS



The Accounting policies for the Fund are disclosed in the notes to the fi nancial statements on page 53 .





4. Net capital (losses)/gains

The net capital (losses)/gains during the year comprise:

29.02.16 28.02.15

£’000 £’000

Non-derivative securities ( 30,785) 92,471

Losses on foreign exchange (40 0) (345)


Net capital (losses)/gains ( 31,226) 92,103


Analysis of total trade costs.

Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

£’000 £’000 £’000 £’000

Equities 443,152 232,562 507,180 225,527

Commissions

Equities 236 158 (254) (130)

Taxes

Equities 198 50 (55) (44)

Total costs 434 208 (309) (174)



Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

% % % %

Commissions

Equities 0.05 0.07 0.05 0.06

Taxes

Equities 0.04 0.02 0.01 0.02



6. Revenue

29.02.16 28.02.15

£’000 £’000

UK dividends 1,622 1,324

Overseas dividends 11,480 11,408

Bank interest 63 72

Stocklending income – 11

Interest on foreign tax reclaims amounts 1 2



REPORT AND ACCOUNTS


7. Expenses

29.02.16 28.02.15

£’000 £’000


ACD fee 2,076 574


Performance fee 274 19

2,911 1,123



148 146

Other expenses:

Stock lending fee – 1


DTC fees – 1

ADR issuance fees 23 19


HSBC renewal fees 3 –

14 8





8. Taxation


29.02.16 28.02.15

£’000 £’000

Overseas tax 1,071 1,000

Indian capital gains tax – 5

Current tax charge (note 8(b)) 1,071 1,005


Total tax charge 1,071 1,005


The tax assessed for the year is lower than the standard rate of corporation tax in the UK for an authorised OEIC (20%) (28.02.15: 20%). The differences are

explained below:

29.02.16 28.02.15

£’000 £’000



Effects of:

Revenue not subject to taxation (2,596) (2,490)

Overseas tax expensed (8) (11)

Movement in excess management expenses 586 193

Overseas tax 1,071 1,000


Current tax charge (note 8(a)) 1,071 1,005



d) Factors affecting future tax charge:

The Fund has surplus management expenses that have resulted in an unrecognised deferred asset of £847,000 (28.02.15: £261,000). This asset has not been

recognised in the fi nancial statements due to the inherent uncertainty of the Fund to generate suffi cient taxable net revenue.

REPORT AND ACCOUNTS



9. Finance costs



29.02.16 28.02.15

£’000 £’000

Final 7,967 8,424

7,967 8,424

Add: Equalisation deducted on cancellation of shares 1,149 311






29.02.16 28.02.15

£’000 £’000


Equalisation on conversion shares (208) (1,968)



10. Debtors

29.02.16 28.02.15

£’000 £’000


Accrued dividends and bank interest 1,353 1,427

Overseas tax recoverable 516 445

1,872 1,883


29.02.16 28.02.15

£’000 £’000


16,685 28,689

12. Creditors

29.02.16 28.02.15

£’000 £’000




Accrued performance fee – 8


252 186









At the year end date 1.08% of the Fund’s shares (by net asset value) were held by other Funds managed by the ACD (28.02.15: 14.98%).



REPORT AND ACCOUNTS




A Shares 1.50%

B Shares 0.50%

I Shares 0.75%

R Shares 1.00%

S Shares 0.00%




28.02.15 29.02.16

Opening Closing



‘A’ Net Class (Accumulation shares) 1,101,333 4,029,960 (2,132,727) (181,710) 2,816,856

‘A’ Net Class (USD Accumulation shares) 795,021 – (48,207) – 746,814

‘B’ Class (Accumulation shares) 144,886,366 – – – 144,886,366

‘I’ Gross Class (Accumulation shares) 39,682,042 21,337,032 (22,563,960) 63,295,801 101,750,915

‘I’ Net Class (EUR Accumulation shares) – 320,739 (620) – 320,119

‘R’ Net Class (Accumulation shares) 84,225 – – – 84,225

‘S’ Gross Class (Accumulation shares) 250,933,247 2,599,143 (45,058,504) (59,502,161) 148,971,725



for this Fund.


Currency exposure

Total Total

29.02.16 28.02.15


Australian Dollar 11,429 21,888

Canadian Dollar 25 4,521

Euro 39,379 63,504

Hong Kong Dollar 36,336 45,206

Indian Rupee 5 –



Norwegian Krone – 12,736

Sterling 50,695 65,648

Swedish Krona – 4

Swiss Franc 12,941 21,793

Taiwan Dollar – 21

Thai Baht – 12,370

US Dollar 43 5,219 435,588

Total 63 6,145 742,513

The majority of the Fund’s fi nancial assets are equity shares and other investments which neither pay interest nor have a maturity date. Therefore, the fund’s exposure

to interest rate risk is not considered to be signifi cant.

18. Fair value

29.02.16 28.02.15



Quoted prices for identical instruments in an active market 6 17,840 – 712,127 –

REPORT AND ACCOUNTS


Global Dynamic Fund



Group 1 shares purchased before 1 March 2015

Group 2 shares purchased between 1 March 2015 and 29 February 2016


Net payable paid

Income Equalisation 30-Apr-16 30-Apr-15

pence pence pence pence

Share Class A – Accumulation

Group 1 0.1220 – 0.1220 0.1758

Group 2 0.0872 0.0348 0.1220 0.1758

Share Class B – Accumulation

Group 1 1.0536 – 1.0536 0.1953

Group 2 1.0536 – 1.0536 0.1953

Share Class I – Accumulation

Group 1 1.6222 – 1.6222 1.5783

Group 2 0.4879 1.1343 1.6222 1.5783

Share Class R – Accumulation

Group 1 0.8634 – 0.8634 0.8591

Group 2 0.8634 – 0.8634 0.8591

Share Class S – Accumulation

Group 1 3.2108 – 3.2108 2.9929

Group 2 0.8160 2.3948 3.2108 2.9929


Net payable paid


Euro cent Euro cent Euro cent Euro cent

Share Class I EUR – Accumulation (1)

Group 1 0.6429 – 0.6429 n/a

Group 2 0.6429 – 0.6429 n/a


Net payable paid


US cent US cent US cent US cent

Share Class A USD – Accumulation

Group 1 0.1753 – 0.1753 0.2895

Group 2 0.1753 – 0.1753 0.2895

(1) Launched 7 April 2015

Equalisation




REPORT AND ACCOUNTS



29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

Income

Net capital (losses)/gains 4 (2 2,31 8) 58,273

Revenue 6 8,511 9,270

Expenses 7 (1,687) (1,228)



Taxation 8 (788) (941)


Total return before distributions (1 6,289) 65,370



shareholders from investment activities (2 2,082) 58,317


29.02.16 28.02.15

£’000 £’000 £’000 £’000




(164,591) (89,463)



shareholders from investment activities (2 2,082) 58,317





29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

ASSETS

Investment assets 29 1,213 464,585

Current assets

Debtors 10 1,131 2,831



Total assets 29 5,680 478,429

LIABILITIES

Creditors

Distribution payable 79 388


Total liabilities 794 1,077



Global Equity Fund

REPORT AND ACCOUNTS







The Risk management policies for the Fund are disclosed in the notes to the fi nancial statements on page s 54-57.

4. Net capital (losses)/gains

The net capital (losses)/gains during the year comprise:

29.02.16 28.02.15

£’000 £’000

Non-derivative securities (2 1,657) 58,528

Losses on foreign exchange (582) (183)

Transaction charges (7 9) (72)

Net capital (losses)/gains (2 2,318) 58,273



Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

£’000 £’000 £’000 £’000

Equities 142,528 156,461 294,347 246,336

Commissions

Equities 87 96 (123) (107)

Taxes

Equities 50 55 (47) (54)

Total costs 137 151 (170) (161)



Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

% % % %

Commissions

Equities 0.06 0.06 0.04 0.04

Taxes

Equities 0.04 0.04 0.02 0.02



6. Revenue

29.02.16 28.02.15

£’000 £’000

UK dividends 687 503

Overseas dividends 7,711 8,714

Bank interest 11 37

Stocklending income* – 11

Interest on foreign tax reclaims amounts 32 5

Foreign tax reclaims 70 –



REPORT AND ACCOUNTS


7. Expenses

29.02.16 28.02.15

£’000 £’000


ACD fee 1,294 766


1,599 1,119



89 112

Other expenses:

Stock lending fee – 1


DTC fees – 1

ADR issuance fees 6 8


HSBC renewal fees 3 –

(1) (3)





8. Taxation


29.02.16 28.02.15

£’000 £’000

Overseas tax 788 941

Current tax charge (note 8(b)) 788 941


Total tax charge 788 941



below:

29.02.16 28.02.15

£’000 £’000



Effects of:

Revenue not subject to taxation (1,666) (1,791)

Overseas tax expensed (3) (8)


Overseas tax 788 941

Current tax charge (note 8(a)) 788 941




The Fund has surplus management expenses that have resulted in an unrecognised deferred asset of £1,366,000 (28.02.15: £1,060,000). This asset has not been


REPORT AND ACCOUNTS



9. Finance costs

Distributions and Interest


29.02.16 28.02.15

£’000 £’000

Final 4,219 6,854

4,219 6,854

Add: Equalisation deducted on cancellation of shares 1,945 513






29.02.16 28.02.15

£’000 £’000


Equalisation on conversion shares (236) (44)


10. Debtors

29.02.16 28.02.15

£’000 £’000


Sales awaiting settlement 376 1,610

Accrued dividends and bank interest 432 627

Overseas tax recoverable 305 328

1,131 2,831


29.02.16 28.02.15

£’000 £’000


3,336 11,013

12. Creditors

29.02.16 28.02.15

£’000 £’000


Purchases awaiting settlement 134 490





715 689









At the year end date 1.78% of the Fund’s shares (by net asset value) were held by other Funds managed by the ACD (28.02.15: 52.61%).



REPORT AND ACCOUNTS




A Shares 1.50%

I Shares 0.75%

R Shares 1.00%

S Shares 0.00%




28.02.15 29.02.16

Opening Closing



‘A’ Net Class (Accumulation shares) 3,986,107 292,580 (804,650) (424,861) 3,049,176

‘A’ Net Class (USD Accumulation shares) 3,946,062 372,705 (264,376) – 4,054,391

‘I’ Net Class (Accumulation shares) 4,092,191 582,488 (221,025) 5,125,076 9,578,730

‘I’ Net Class (USD Accumulation shares) 54,629,831 1,781,654 (26,348,505) – 30,062,980

‘R’ Net Class (Accumulation shares) 37,293 – – – 37,293

‘S’ Net Class (Accumulation shares) 262,689,307 16,847,645 (121,811,624) (65,600,771) 92,124,557

‘S’ Net Class (Income shares) 20,590,024 310,558 (17,147,045) – 3,753,537



for this Fund.

The Fund’s currency exposure as at 29 February 2016 was: Currency exposure

Total Total

29.02.16 28.02.15


Australian Dollar 4 5,809

Canadian Dollar 6, 510 7,172

Chinese Yuan (Offshore) 4,409 –

Euro 28,934 44,378

Hong Kong Dollar 16,528 34,127

Indian Rupee 1 –

Israeli Shekel 74 –


Malaysian Ringgit – 3,575

New Zealand Dollar 3 3

Norwegian Krone 1,517 9,746

Singapore Dollar 4 4

South African Rand 5 6

South Korean Won 2,735 4,887

Sterling 18,776 34,293

Swedish Krona – 1

Swiss Franc 9,236 20,969

Taiwan Dollar 5,029 7,710

Thai Baht – 3,049

Turkish Lira 1 1

US Dollar 17 0,273 263,440

Total 29 4,886 477,352



18. Fair value

29.02.16 28.02.15


Valuation technique £’000 £’000 £’000 £’000

Quoted prices for identical instruments in an active market 291, 213 – 464,585 –

29 1,213 – 464,585 –

REPORT AND ACCOUNTS


Global Equity Fund






Net payable paid




Group 1 0.4118 – 0.4118 0.2974

Group 2 0.0827 0.3291 0.4118 0.2974


Group 1 17.8823 – 17.8823 15.4886

Group 2 9.5732 8.3091 17.8823 15.4886


Group 1 1.1880 – 1.1880 1.0594

Group 2 1.1880 – 1.1880 1.0594


Group 1 2.3259 – 2.3259 2.0585

Group 2 0.4325 1.8934 2.3259 2.0585

Share Class S – Income

Group 1 2.1021 – 2.1021 1.8864

Group 2 1.4837 0.6184 2.1021 1.8864


Net payable paid




Group 1 0.5749 – 0.5749 0.4719

Group 2 – 0.5749 0.5749 0.4719

Share Class I USD – Accumulation

Group 1 1.1734 – 1.1734 1.1307

Group 2 0.4982 0.6752 1.1734 1.1307

Equalisation




REPORT AND ACCOUNTS



29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

Income

Net capital gains/(losses) 4 5,256 (6,192)

Revenue 6 395 665

Expenses 7 (419) (725)

Interest payable and similar charges 9 – –

Net expenses before taxation (24) (60)

Taxation 8 (39) (72)

Net expenses after taxation (63) (132)

Total return before distributions 5,193 (6,324)

Distribution 9 (36) (61)


shareholders from investment activities 5,157 (6,385)


29.02.16 28.02.15

£’000 £’000 £’000 £’000




14,619 (22,317)


Stamp duty reserve tax – (2)


shareholders from investment activities 5,157 (6,385)

Retained distribution on accumulation shares 40 75




29.02.16 28.02.15

Note £’000 £’000 £’000 £’000

ASSETS

Investment assets 6 2, 464 42,747

Current assets

Debtors 10 2,96 6 388

Cash and bank balances 11 1,198 333

Total other assets 4, 164 721

Total assets 6 6, 628 43,468

LIABILITIES

Creditors

Other creditors 12 3,482 172

Total liabilities 3,482 172



Global Gold Fund

REPORT AND ACCOUNTS








4. Net capital gains/(losses)

The net capital gains/(losses) during the year comprise:

29.02.16 28.02.15

£’000 £’000

Non-derivative securities 5, 380 (6,185)

(Losses)/gains on foreign exchange (92) 5


Net capital gains/(losses) 5,256 (6,192)



Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

£’000 £’000 £’000 £’000

Equities 63,620 26,508 49,399 48,360

Commissions

Equities 48 19 (35) (33)

Taxes

Equities 32 24 (1) –

Total costs 80 43 (36) (33)



Purchases Sales

29.02.16 28.02.15 29.02.16 28.02.15

% % % %

Commissions

Equities 0.08 0.07 0.07 0.07

Taxes

Equities 0.05 0.09 0.00 –



6. Revenue

29.02.16 28.02.15

£’000 £’000

UK dividends 17 105

Overseas dividends 356 541

Bank interest 2 4

Stocklending income 20 15

Total revenue 395 665


REPORT AND ACCOUNTS


7. Expenses

29.02.16 28.02.15

£’000 £’000


ACD fee 385 675


414 718



6 8

Other expenses:


VAT refund (4) (4)

ADR issuance fees – 1

(1) (1)

Total expenses 419 725




8. Taxation


29.02.16 28.02.15

£’000 £’000

Overseas tax 39 72

Current tax charge (note 8(b)) 39 72


Total tax charge 39 72


The tax assessed for the year is higher than the standard rate of corporation tax in the UK for an authorised OEIC (20%) (28.02.15: 20%). The differences are

explained below:

29.02.16 28.02.15

£’000 £’000

Net expenses before taxation (24) (60)

Corporation tax of 20% (5) (12)

Effects of:

Revenue not subject to taxation (74) (128)


Overseas tax 39 72

Current tax charge (note 8(a)) 39 72




The Fund has surplus management expenses that have resulted in an unrecognised deferred asset of £1,952,000 (28.02.15: £1,873,000). This asset has not been


9. Finance costs



29.02.16 28.02.15

£’000 £’000

Final 40 75

40 75

Add: Equalisation deducted on cancellation of shares 24 15


Finance costs: Distribution 36 61

Finance cost: Interest – –

Total fi nance costs 36 61

REPORT AND ACCOUNTS




29.02.16 28.02.15

£’000 £’000

Net expenses after taxation (63) (132)

Shortfall of income transferred from capital 94 182

Equalisation on conversion shares 5 11

Finance costs: Distribution 36 61

10. Debtors

29.02.16 28.02.15

£’000 £’000

Amounts receivable for creation of shares 2,53 8 350

Sales awaiting settlement 402 34

Accrued dividends and bank interest 26 4

2,96 6 388


29.02.16 28.02.15

£’000 £’000

Cash and bank balances 1,198 333

1,198 333

12. Creditors

29.02.16 28.02.15

£’000 £’000

Amounts payable for cancellation of shares – 129

Purchases awaiting settlement 3,428 –





3,482 172














A Shares 1.50%

I Shares 0.75%

R Shares 1.00%

S Shares 0.00%



REPORT AND ACCOUNTS



28.02.15 29.02.16

Opening Closing



‘A’ Net Class (Accumulation shares) 21,331,207 8,516,900 (6,832,090) (5,109,877) 17,906,14 0

‘A’ Net Class (USD Accumulation shares) 140,370 18,500 (50,316) – 108,554

‘I’ Net Class (Accumulation shares) 22,466,883 28,501,166 (12,797,521) 5,337,946 43,508,47 4

‘R’ Net Class (Accumulation shares) 109,351 – (85,024) – 24,32 7

‘ S’ Net Class (Accumulation shares) 2,050,008 148,137 ( 2,169,512) – 2 8,633



for this Fund.


Currency exposure

Total Total

29.02.16 28.02.15


Australian Dollar 10,420 1,448

Canadian Dollar 15, 825 16,101

South African Rand 8,4 80 3,373

Sterling 8,8 88 8,217

Turkish Lira 1 1

US Dollar 1 9, 532 14,156

Total 6 3,146 43,296





a) Stock lending


table below. Securities on loan are included in the portfolio statement and no account is taken of any collateral held. The aggregate value of collateral held at

29 February 2016 is £nil (28.02.15: £5,692,000). This collateral is listed in the collateral held table below.

29.02.16 28.02.15


Citigroup – 320

Credit Suisse – 8

Goldman Sachs – 1,713

JPMorgan – 2

Meryll Lynch, Pierce, Fenner & Smith – 2,017

Morgan Stanley – 710

Scotia Capital – 188

SG Americas Securities – 430

UBS – 69

Total – 5,457

29.02.16 28.02.15


Cash – 5,692

19. Fair value

29.02.16 28.02.15



Quoted prices for identical instruments in an active market 6 2,464 – 42,747 –

REPORT AND ACCOUNTS


Global Gold Fund






Net payable paid




Group 1 0.0000 – 0.0000 0.0000

Group 2 0.0000 – 0.0000 0.0000


Group 1 0.0907 – 0.0907 0.2438

Group 2 – 0.0907 0.0907 0.2438


Group 1 0.0000 – 0.0000 0.0039

Group 2 0.0000 – 0.0000 0.0039


Group 1 0.7076 – 0.7076 1.0075

Group 2 0.7076 – 0.7076 1.0075


Net payable paid




Group 1 0.0000 – 0.0000 0.0000

Group 2 0.0000 – 0.0000 0.0000

Equalisation


all Group 2 shares and is refunded to holders of these shares as a return of capital. Being capital, it is not liable to income tax but must be deducted from the cost

of shares for capital gains tax purposes.

REPORT AND ACCOUNTS


Active management

An active investment approach is one where a portfolio manager aims to beat the market through research, analysis and

his/her judgement. (See also passive management).

Asset allocation

A fund’s allotment to different asset classes.

Asset class

The main types of investment available. The traditional asset classes are equities, bonds and cash.

Bear market

A market where prices fall consistently over a long period of time. Investors are referred to as ‘bearish’ if they believe prices

are going to fall.

Benchmark

A comparative performance index.

Bond

A form of loan issued by a government or company. Typically, an investor should receive a regular coupon and the return of

the principal originally lent when the bond matures. Note: Not all bonds are interest bearing (see zero coupon bond), and not

all bonds are fi xed rate (e.g. index linked, fl oating rate and stepped rate bonds).

Bottom-up investing

An investment approach that concentrates on the analysis of individual companies and considers the company’s history,

management and potential as more important than macroeconomic trends.

Bull market

A market where prices rise consistently over a long period of time. Investors are referred to as ‘bullish’ if they believe prices

are going to rise.

Cash

The most liquid form in which to store capital. While it is regarded as a safe asset class, over time the purchasing power of

cash tends to be eroded by infl ation.

Central bank base rate

The basic rate of interest set by a central bank that determines the cost of borrowing.

Commodities

An asset class which comprises physical assets such as oil, base and precious metals and agricultural produce.

Credit rating agency

An institution that assigns credit ratings to debt issuers, such as companies and governments. Standard & Poor’s and

Moody’s are well-known examples.

Glossary

REPORT AND ACCOUNTS


Credit risk

The risk that a bond issuer or borrower will be unable to meet their contractual obligations.

Credit spread

The differences in yield between ‘risk-free’ bonds, such as gilts or US treasuries, and non-treasury (or gilt) bonds, which are

identical in all respects except for the quality of their rating. Corporate bonds tend to offer additional yield to compensate

investors for the potential risk of default.

Currency risk

The risk of incurring losses of foreign assets due to adverse movements in exchange rates between domestic and foreign

currencies.

Defl ation

As opposed to infl ation, it describes conditions in which there is a widespread, consistent decline in prices. It conveys the

rarer occurrence of the money in one’s pocket actually increasing in buying power, rather than the more usual opposite.

Derivatives

An instrument whose value depends on the performance of an underlying security or rate which requires no initial exchange

of principal. Options, futures and swaps are all examples of derivatives.

Developed markets

Refers to industrialised countries with relatively high levels of economic productivity, high standards of living and stable

economies.

Disinfl ation

Refers to a slowing down in price growth, as opposed to defl ation where prices are already falling.

Diversifi cation

Holding a range of assets to reduce risk.

Dividend

The portion of company net profi ts paid out to shareholders.

Dividend yield

The annual dividend per share divided by the current share price.

Duration

A measure of a bond investment’s sensitivity to changes in interest rates. The longer the duration, the more sensitive it is.

Calculating ‘duration’ for a fi xed income investment such as a bond is a complicated sum. It takes into account the current

value of the bond, the coupon or interest payment, the book cost, and the number of years the bond has left to run. Put

simply, the higher the duration number the higher the potential return (and the greater the risk).

REPORT AND ACCOUNTS


Emerging markets

Countries in the process of industrialising which tend to have rapidly growing economies.

Emerging market debt

Debt issued by governments and corporates in emerging markets.

Equity

Refers to shares. A share in a company provides an investor with part ownership of that company.

Fixed Income

An investment that provides a return in the form of fi xed periodic payments and the eventual return of principal at maturity.

Future

An obligation to buy or sell an asset on a specifi c date in the future at an agreed price.

Gilt

A bond that is issued by the British government which is generally considered low risk. Bonds issued by South African and

Irish governments are also referred to as gilts.

Hedging

A technique seeking to offset or minimise the exposure to specifi c risk by entering an opposing position.

High yield bond

A below investment grade rated bond, providing the investor with greater returns due to its higher default risk. (See Junk

bond).

Index-linked bonds

Bonds whose coupons and principal payment are linked to movements in infl ation.

Infl ation

Describes conditions in which there have been a consistent rise in prices.

Initial public offering (IPO)

The fi rst public sale of a company’s equity resulting in a quoted stock price on a stock exchange.

Interest

The return earned on funds which have been deposited, loaned, or invested.

Investment grade bonds

Bonds considered of the highest quality by credit rating agencies. The threshold credit rating for Standard & Poor’s is BBB

and Baa3 for Moody’s.

REPORT AND ACCOUNTS


Liabilities

Financial obligations that must be met.

Liquidity

The ease with which an asset can be sold at a reasonable price for cash.

Long dated bond

A bond with usually 15 years or more remaining before redemption, at which point the principal is paid to the holder.

Long-term investment

Holding an asset for an extended period of time. Depending on the security, a long-term asset can be held for as little as one

year or for as long as 30 years.

Macroeconomic

Refers to the big trends in an economy as a whole, such as infl ation and unemployment, while microeconomic forces refer to

the factors affecting individual situations or companies.

Market capitalisation

The total value of a company’s equity, calculated by the number of shares multiplied by their market price.

Maturity

With regards to bonds, maturity refers to the time at which the principal of the bond is repayable and it ceases to exist. In

terms of a pension fund, it conveys the average age of the membership and the time until benefi ts are payable.

Outperformance

The return of a fund in excess of the comparative performance index.

Overweight

When a fund has greater exposure to an asset than the comparative performance index.

Peer group

A group of funds that can be compared with one another for performance purposes. A peer group will usually be based on

the funds’ investment scope, for example UK equities.

Performance

The results of an investment over a given period.

Portfolio

A grouping of fi nancial assets, such as equities, bonds and cash equivalents. Portfolios are held directly by investors and/or

managed by fi nancial professionals.

REPORT AND ACCOUNTS


Rally

A swift rise.

Real estate

An asset class comprising buildings and land.

Risk premium

The extra return expected by an investor in compensation for holding a risky asset.

Security

A general term for a tradable fi nancial instrument.

Short-term investment

Investments that are held for or mature in 12 months or less.

Standard deviation

A measure of risk, deriving from the historic volatility of a particular asset.

Top-down investing

Contrasting with bottom-up analysis, a top-down approach to investment analysis begins with an assessment of

macroeconomic factors, then business cycles before moving on to look at individual sectors and companies.

Treasuries

Debt securities issued by the US government. Treasuries fall under three categories: treasury bills (T-bills), treasury notes

(T-notes) and treasury bonds (T-bonds).

Underweight

When a fund has less exposure to an asset than the benchmark.

Volatility

Price movements. Standard deviation is a measure of an asset’s historic volatility.

Year-to-date (YTD)

Refers to the period extending from the beginning of the current calendar year to the present date.

Yield

A measure of the income return earned on an investment. In the case of a share the yield expresses the annual dividend

payment as the percentage of the market price of the share. In the case of a property, it is the rental income as a percentage

of the capital value. In the case of a bond the running yield (or fl at or current yield) is the annual interest payable as a

percentage of the current market price. The redemption yield (or yield to maturity) allows for any gain or loss of capital which

will be realised at the maturity date.

REPORT AND ACCOUNTS


Yield curve

A graphical representation off all the yields of bonds of the same quality with maturities ranging from the shortest to the

longest available.

Yield spread

The difference in yield between different bonds.

Yield to maturity

The annualised return (internal rate of return) that would be earned on a bond if held to maturity.

REPORT AND ACCOUNTS


Other information

ISA status

During the period under review, the shares of the funds met the requirements for eligibility to be held in a stocks and shares

ISA as determined by the regulations which govern ISAs.

Investec Fund Managers Limited offer the ‘A’ shares of the funds through its own ISA plan.

Distributions

Where a distribution is to be paid, it has been calculated as at 29 February 2016 and will be distributed to shareholders,

where applicable, on 30 April 2016. For accumulations shares income distribution payments are deemed to be paid on

30 April 2016.

Telephone calls

Telephone calls may be recorded for training and quality assurance purposes.

Cross holding table

There were no cross holdings between sub-funds in Investec Funds Series iii as at 29 February 2016.

REPORT AND ACCOUNTS


Investec Fund Managers LimitedContact address PO Box 9042, Chelmsford CM99 2XL

Telephone +44 (0)20 7597 1900

Free phone 0800 389 2299

Email [email protected]

Indicator online valuation service

www.investecassetmanagement.com

Registered address Woolgate Exchange

25 Basinghall Street, London EC2V 5HA

Investment AdviserInvestec Asset Management Limited

Woolgate Exchange

25 Basinghall Street

London EC2V 5HA

Registered number for Investec Funds Series iiiIC13 England and Wales

RegistrarInternational Financial Data Services (UK) Limited

IFDS House

St. Nicholas Lane

Basildon

Essex SS15 5FS

DepositaryState Street Trustees Limited

20 Churchill Place

London E14 5HJ

Fund AccountingState Street Bank and Trust Company Limited

20 Churchill Place

London E14 5HJ

Independent AuditorsKPMG LLP

15 Canada Square

Canary Wharf

London E14 5GL

Issued by Investec Fund Managers Limited, April 2016.

Authorised and regulated by the Financial Conduct Authority.

Authorised Corporate Director (ACD)


REPORT AND ACCOUNTS

Chile Peru Switzerland UK

Emerging Markets Local Currency Debt Fund ✓ ✓ ✓ ✓

Global Bond Fund ✓ ✓

Global Dynamic Fund ✓ ✓

Global Equity Fund ✓ ✓

Global Gold Fund ✓ ✓

Notes: Chile and Peru to be distributed to AFPs (Pension Funds) only.

The Company’s Prospectus, Key Investor Information Documents, Instrument of Incorporation, annual and semi-annual reports and accounts may be

obtained, free of charge, from Investec Fund Managers Limited or, in Switzerland, from the Swiss Representative and Paying Agent, RBC Investor Services

Bank S.A., Esch-sur-Alzette, Zurich Branch, Badenerstrasse 567, PO Box 101, CH-8066 Zurich.

A copy of the full portfolio changes during the period under review, is available free of charge from the Swiss Representative.

ACD fees during the year 01/03/15 to 29/02/16.

Effective Commission for Commission for

charge administration, administration

and daily monthly paid according to

calculated to ACD the prospectus

Sub-Fund Class (%) (%) (%)

Emerging Markets Local Currency Debt Fund ‘A’ Class 0.00410959 0.12500000 1.50

Emerging Markets Local Currency Debt Fund ‘I’ Class 0.00205479 0.06250000 0.75

Emerging Markets Local Currency Debt Fund ‘R’ Class 0.00273973 0.08333333 1.00

Emerging Markets Local Currency Debt Fund ‘S’ Class 0.00000000 0.00000000 0.00

Global Bond Fund ‘A’ Class 0.00273973 0.08333333 1.00

Global Bond Fund ‘I’ Class 0.00136986 0.04166667 0.50

Global Bond Fund ‘R’ Class 0.00205479 0.06250000 0.75

Global Bond Fund ‘S’ Class 0.00000000 0.00000000 0.00

Global Dynamic Fund ‘A’ Class 0.00410959 0.12500000 1.50

Global Dynamic Fund ‘B’ Class 0.00136986 0.04166667 0.50

Global Dynamic Fund ‘I’ Class 0.00205479 0.06250000 0.75

Global Dynamic Fund ‘R’ Class 0.00273973 0.08333333 1.00

Global Dynamic Fund ‘S’ Class 0.00000000 0.00000000 0.00

Global Equity Fund ‘A’ Class 0.00410959 0.12500000 1.50

Global Equity Fund ‘I’ Class 0.00205479 0.06250000 0.75

Global Equity Fund ‘R’ Class 0.00273973 0.08333333 1.00

Global Equity Fund ‘S’ Class 0.00000000 0.00000000 0.00

Global Gold Fund ‘A’ Class 0.00410959 0.12500000 1.50

Global Gold Fund ‘I’ Class 0.00205479 0.06250000 0.75

Global Gold Fund ‘R’ Class 0.00273973 0.08333333 1.00

Global Gold Fund ‘S’ Class 0.00000000 0.00000000 0.00

Registration in overseas markets

REPORT AND ACCOUNTS


Shares start Shares Shares Shares end

Sub-Fund Class of year created redeemed of year

Emerging Markets Local Currency Debt Fund ‘A’ Class (Net Accumulation shares) 23,174,507 243,870 (13,760,018) 9,658,359

Emerging Markets Local Currency Debt Fund ‘A’ Class (Gross Accumulation shares) 63,308,707 5,283,622 (44,738,543) 23,853,786

Emerging Markets Local Currency Debt Fund ‘A’ Class (USD Gross Accumulation shares) 3,840,195 – (2,897,396) 942,799

Emerging Markets Local Currency Debt Fund ‘A’ Class (Net Income–2 shares) 28,023,042 116,675 (18,152,781) 9,986,936

Emerging Markets Local Currency Debt Fund ‘A’ Class (Gross Income–2 shares) 4,750,164 104,533 (1,782,099) 3,072,598

Emerging Markets Local Currency Debt Fund ‘I’ Class (Net Accumulation shares) 49,408,678 18,736,058 (24,041,957) 44,102,779

Emerging Markets Local Currency Debt Fund ‘I’ Class (Gross Accumulation shares) 39,555,100 102,595,777 (83,857,216) 58,293,661

Emerging Markets Local Currency Debt Fund ‘I’ Class (Gross USD Accumulation shares) 277,083,603 10,784,342 (197,411,724) 90,456,221

Emerging Markets Local Currency Debt Fund ‘I’ Class (Net Income–2 shares) 156,744,599 20,287,796 (92,782,556) 84,249,839

Emerging Markets Local Currency Debt Fund ‘I’ Class (Gross Income–2 shares) 6,250 255,035 (18,538) 242,747

Emerging Markets Local Currency Debt Fund ‘R’ Class (Net Accumulation shares) 75,696 217 (13,809) 62,104

Emerging Markets Local Currency Debt Fund ‘R’ Class (Net Income–2 shares) 6,250 405 – 6,655

Emerging Markets Local Currency Debt Fund ‘S’ Class (Gross Accumulation shares) 211,113,316 3,435,609 (148,890,746) 65,658,179

Global Bond Fund ‘A’ Class (Net Accumulation shares) 18,367,208 1,235,708 (3,749,880) 15,853,036

Global Bond Fund ‘A’ Class (Net Income shares) 4,666,984 64,824 (3,398,621) 1,333,187

Global Bond Fund ‘A’ Class (Gross Income shares) 1,301,971 23,110 (491,991) 833,090

Global Bond Fund ‘A’ Class (Net USD Income shares) 347,151 2,383 (310,246) 39,288

Global Bond Fund ‘I’ Class (Net Accumulation shares) 1,761,446 3,486,541 (785,814) 4,462,173

Global Bond Fund ‘I’ Class (Net Income shares) 436,410 233,710 (256,084) 414,036

Global Bond Fund ‘I’ Class (Gross Income shares) 69,985 6,375 (29,514) 46,846

Global Bond Fund ‘R’ Class (Net Accumulation shares) 6,250 8 – 6,258

Global Bond Fund ‘S’ Class (Gross Income shares) 83,082,345 6,642,804 (39,470,678) 50,254,471

Global Dynamic Fund ‘A’ Class (Accumulation shares) 1,101,333 4,029,960 (2,314,437) 2,816,856

Global Dynamic Fund ‘A’ Class (USD Accumulation shares) 795,021 – (48,207) 746,814

Global Dynamic Fund ‘B’ Class (Accumulation shares) 144,886,366 – – 144,886,366

Global Dynamic Fund ‘I’ Class (Accumulation shares) 39,682,042 84,632,833 (22,563,960) 101,750,915

Global Dynamic Fund ‘I’ Class (EUR Accumulation shares) – – 320,119 320,119

Global Dynamic Fund ‘R’ Class (Accumulation shares) 84,225 – – 84,225

Global Dynamic Fund ‘S’ Class (Accumulation shares) 250,933,247 2,599,143 (104,560,665) 148,971,725

Global Equity Fund ‘A’ Class (Accumulation shares) 3,986,107 292,580 (1,229,511) 3,049,176

Global Equity Fund ‘A’ Class (USD Accumulation shares) 3,946,062 372,705 (264,376) 4,054,391

Global Equity Fund ‘I’ Class (Accumulation shares) 4,092,191 5,707,565 (221,026) 9,578,730

Global Equity Fund ‘I’ Class (USD Accumulation shares) 54,629,831 1,781,654 (26,348,505) 30,062,980

Global Equity Fund ‘R’ Class (Accumulation shares) 37,293 – – 37,293

Global Equity Fund ‘S’ Class (Accumulation shares) 262,689,307 16,847,645 (187,412,395) 92,124,557

Global Equity Fund ‘S’ Class (Income shares) 20,590,024 310,558 (17,147,045) 3,753,537

Global Gold Fund ‘A’ Class (Accumulation shares) 21,331,207 8,522,786 (11,947,852) 17,906,141

Global Gold Fund ‘A’ Class (USD Accumulation shares) 140,370 18,500 (50,316) 108,554

Global Gold Fund ‘I’ Class (Accumulation shares) 22,466,883 33,845,293 (12,803,701) 43,508,475

Global Gold Fund ‘R’ Class (Accumulation shares) 109,351 – (85,025) 24,326

Global Gold Fund ‘S’ Class (Accumulation shares) 2,050,008 148,137 (2,169,512) 28,633

Additional Information for Overseas Regulators


REPORT AND ACCOUNTS

01-Mar-15 to Year ended Year ended Year ended

29-Feb-16 31-Dec-15 31-Dec-14 31-Dec-13

% % % %


‘A’ Acc Net (7.56) (0.02) (21.26) 8.77

‘A’ Acc Gross (6.65) 1.13 (20.23) 10.28

‘A’ Acc Gross USD(6) (7.05) 1.41 (20.63) 10.66

‘A’ Inc-2 Net (7.86) (0.09) (21.24) 8.80

‘A’ Inc-2 Gross (6.65) 1.16 (20.23) 11.98

‘I’ Acc Net (7.03) 0.58 (20.59) 9.66

‘I’ Acc Gross (5.95) 1.86 (19.61) 10.98

‘I’ Acc Gross USD (6.35) 2.16 (20.01) 11.39

‘I’ Inc-2 Net(7) (7.19) 0.66 (20.62) 11.04

‘I’ Inc-2 Gross(4)(7) (4.50) – – –

‘R’ Acc Net(1) (7.23) 0.40 (20.84) –

‘R’ Inc-2 Net(1)(7) (7.43) 1.10 (20.81) –

‘S’ Acc Gross (5.24) 2.65 (19.02) 11.92

JPMorgan GBI-EM Global Diversifi ed TR USD (2.97) 2.11 (18.61) 11.64

Investment Association OE Global Emerging Markets Bond (1.55) 5.04 (13.78) 11.87

Global Bond Fund

‘A’ Acc Net 9.44 4.97 (11.49) 4.31

‘A’ Inc Net 9.43 4.95 (11.50) 4.24

‘A’ Inc Gross 9.65 5.28 (11.19) 4.61

‘A’ Inc Net USD(6) 8.89 5.10 (12.18) 4.54

‘I’ Acc Net 9.86 5.32 (11.07) 4.77

‘I’ Inc Net 9.86 5.39 (11.19) 4.51

‘I’ Inc Gross 10.20 5.81 (10.75) 5.11

‘R’ Acc Net(1) 9.68 5.26 (11.06) –

‘S’ Inc Gross 10.75 6.34 (10.30) 5.66

Barclays Capital Global Aggregate (pre 01/5/11 Citi WGBI) 11.82 5.42 (7.89) 6.05

Investment Association OE Global Bonds 2.46 4.20 (5.71) 9.59

Global Dynamic Fund

‘A’ Acc (3.75) 14.63 10.59 16.04

‘A’ Acc USD(6) (4.17) 14.95 10.22 16.40

‘B’ Acc(3) (2.94) – – –

‘I’ Acc (3.01) 15.50 11.66 16.95

‘I’ Acc EUR(6) (7.48) – – –

‘R’ Acc(1) (3.26) 15.20 11.43 –

‘S’ Acc (2.27) 16.35 12.46 17.82

MSCI AC World NDR (MSCI World NDR Pre 01/01/11) (2.77) 16.63 7.03 15.01

Investment Association OE Global (3.72) 11.71 9.23 12.50

Global Equity Fund

‘A’ Acc (5.66) 14.24 9.88 13.26

‘A’ Acc USD(6) (6.07) 14.56 9.23 13.65

‘I’ Acc (4.94) 15.11 10.71 14.18

‘I’ Acc USD(2)(6) (4.46) 15.92 – –

‘R’ Acc(1) (5.17) 14.78 10.54 –

‘S’ Acc (4.22) 15.98 11.55 15.04

‘S’ Inc (4.21) 16.01 11.51 15.00

MSCI AC World NDR (MSCI World NDR Pre 01/01/11) (2.77) 16.63 7.03 15.01

Investment Association OE Global (3.72) 11.71 9.23 12.50

Global Gold Fund

‘A’ Acc 7.95 (9.92) (30.33) (27.19)

‘A’ Acc USD(6) 7.43 (9.69) (30.70) (27.00)

‘I’ Acc 8.79 (9.25) (29.81) (26.64)

‘R’ Acc(1) 8.55 (9.49) (29.95) –

‘S’ Acc 9.61 (8.57) (29.30) (26.09)

Euromoney Global Gold TR (pre 01/10/14 PR) 8.26 (9.44) (36.69) (29.52)

Source: Lipper, total return, net of UK basic rate tax, no initial charges net of fees in GBP. Index shown for performance comparison purposes only.

Past performance should not be taken as a guide to the future and there is no guarantee that this investment will make profi ts. Returns will vary with market

action, fee levels and taxes, and in certain market conditions losses may be exaggerated.

(1) Launched 2 January 2013.

(2) Launched 30 July 2013.

(3) Launched 30 September 2014.

(4) Launched 5 December 2014.

(5) Launched 7 April 2015.

(6) The indices are shown in GBP.

(7) Share class names charged effective 6 April 2015 (previously ‘Income’ classes).

Fund performance

REPORT AND ACCOUNTS


29 February

Sub-Fund Class 2016


‘A’ Acc Net 1.66%

‘A’ Acc Gross 1.66%

‘A’ Acc Gross USD 1.66%

‘A’ Inc-2 Net 1.66%

‘A’ Inc-2 Gross 1.66%

‘I’ Acc Net 0.91%

‘I’ Acc Gross 0.91%

‘I’ Acc Gross USD 0.91%

‘I’ Inc-2 Net 0.91%

‘I’ Inc-2 Gross 0.91%

‘R’ Acc Net 1.16%

‘R’ Inc-2 Net 1.16%

‘S’ Acc Gross 0.16%

Global Bond Fund

‘A’ Acc Net 1.11%

‘A’ Inc Net 1.11%

‘A’ Inc Gross 1.11%

‘A’ Inc Net USD 1.11%

‘I’ Acc Net 0.61%

‘I’ Inc Net 0.61%

‘I’ Inc Gross 0.61%

‘R’ Acc Net 0.86%

Global Dynamic Fund

‘A’ Acc 1.61%

‘A’ Acc USD 1.61%

‘B’ Acc 0.78%

‘I’ Acc 0.86%

‘I’ Acc EUR 0.86%

‘R’ Acc 1.11%

‘S’ Acc 0.11%

Global Equity Fund

‘A’ Acc 1.62%


‘I’ Acc 0.87%

‘I’ Acc USD 0.87%

‘R’ Acc 1.12%

‘S’ Acc 0.12%

‘S’ Inc 0.12%

Global Gold Fund

‘A’ Acc 1.68%


‘I’ Acc 0.93%

‘R’ Acc 1.18%

‘S’ Acc 0.18%

Total expense ratios

REPORT AND ACCOUNTS


The total expense ratio is calculated in accordance with the principles set down by EFAMA, the Pan-European umbrella

organisation of the Investments Funds Industry to comply with the Code of Conduct for the Swiss Funds Industry.

Defi nition of TER

The Total Expense Ratio (TER) represents the relevant annualised operating expenses of each Share Class for the year as a

percentage of the average Net Asset Value of that share class over the same period.

TER = Operating costs

Average NAV

The ratio will be expressed as a percentage to 2 decimal places.

Source of operating cost:

(a) The following list is indicative, but not exhaustive, of the types of expenses included within the TER fi gure:

• fund management fees;

• administration fees;

• trustee or depositary fees;

• custody fees;

• audit fees;

• fund accounting fees;

• valuation fees;

• fees for shareholder services;

• registration fees and regulatory fees;

• legal and advisory fees relating to fund establishment and operation;

• performance fees (if applicable disclosed separately).

(b) The total operating costs do not include:

• transaction costs (including transfer taxes);

• interest on borrowing;

• payments incurred because derivatives;

• fees paid directly by the investors, such as entry/exit fees;

• soft commissions.

Average NAV

The average net assets are calculated using fi gures that are based on the Funds net assets at each calculation point of the

net asset value (NAV).

Total expense ratio (‘TER’) methodology

Investec Funds Series iii Annual Report and Accounts · 2016. 6. 10. · REPORT AND ACCOUNTS...

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