PHOENIX UNIT TRUST MANAGERS MANAGER’S ANNUAL REPORT/media/Files/.../reports-and-accounts/... ·...

PHOENIX UNIT TRUST MANAGERS

MANAGER’S ANNUAL REPORT For the year: 16 May 2017 to 15 May 2018

PUTM BOTHWELL ASIA PACIFIC (EX JAPAN) FUND

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Contents

Investment review* 2-3

Portfolio of investments* 4-7

Top ten purchases and sales 8

Statistical information* 9-12

Statements of total return & change in net assets attributable to unitholders 13

Balance sheet 14

Notes to the financial statements 15-24

Distribution tables 25

Responsibilities of the manager and the trustee 26

Trustee’s report and directors’ statement 27

Independent auditor’s report 28-30

Appendix 31-32

Corporate information* 33-35

*These collectively comprise the Authorised Fund Manager’s Report.

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Dear Investor

Welcome to the PUTM Bothwell Asia Pacific (ex Japan)Fund annual report for 12 months to 15 May 2018.

Performance Review

Over the review period, the PUTM Bothwell Asia Pacific(ex Japan) Fund returned 16.5% (Source: Standard LifeInvestments for 12 months to 15/05/18). This wascompared to its benchmark index, which returned 13.3%(Source: Datastream, MSCI AC Asia Pacific ex Japan(NR) for 12 months to 15/05/18). The Fund’sbenchmark changed from the FTSE AW Asia Pacific exJapan (TR) Index to the MSCI AC Asia Pacific ex Japan(NR) on 30/04/11.

In the table below, you can see how the Fund performedagainst its benchmark index over the last five discreteone-year periods.

Investment review

Source: Fund performance is Standard Life Investments, benchmark index performance is Datastream, MSCI AC AsiaPacific ex Japan (NR) to 15 May for each year. The Fund’s benchmark changed from the FTSE AW Asia Pacific ex Japan(TR) Index to the MSCI AC Asia Pacific ex Japan (NR) on 30/04/11.

Past performance is not a guide to future performance.

The value of units and the income from them can go down as well as up and is not guaranteed. You may not get backthe full amount invested.

Please note that all past performance figures are calculated without taking the initial charge into account.

Standardised Past Performance

PUTM Bothwell Asia Pacific (ex Japan) Fund 16.5 46.5 -13.3 15.0 -3.4

Benchmark Index 13.3 42.4 -11.5 14.7 -5.8

May 17-18 May 16-17 May 15-16 May 14-15 May 13-14% growth % growth % growth % growth % growth

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Portfolio and Market Review

Asian equities generally performed well over the period.The initial robust showing was thanks to improvingeconomic conditions (notably in China), heighteneddemand for commodities later in the year and positivecorporate results. However, volatility returned with avengeance in 2018, with Asia Pacific markets falling dueto the resurgent US dollar and concerns around aChina/US trade war.

At the portfolio level, property developer and malloperator China Resources Land boosted Fund returns,after it announced exceptionally strong residential sales inChina. Ping An Insurance also performed well thanks to acombination of rising stock markets and improvinginvestor perception of the company’s new businessopportunities. Elsewhere, Sino Biopharmaceuticals foundits shares in demand after it gained approval for one of itsdrugs, while Indian air-conditioning group Voltasannounced positive revenue and margin growth, with theimproving outlook resulting in the shares rerating.

On the downside, China’s online travel agent Ctrip.comstruggled due to increased consumer group andregulatory scrutiny of bundled products, such as travelinsurance. The company is currently rethinking itsmonetisation policy. Shares in National Australia Bankslipped on disappointing earnings results and politicalconcerns. A position in Taiwanese tech firm Hon Hai alsoadversely affected Fund returns, with concerns aboutsales of the latest iPhone weighing on sentiment.

Purchases during the period included Thailand’s KasikornBank, attracted by the improving outlook for credit costsand potential benefits from its digital strategy. We alsoadded Chinese engine maker Weichai Power, on thebelief the market is failing to price in in the growingopportunities in warehouse automation and the strengthof its hydraulic components business. Finally, we boughtfresh-fruit producer Costa Group, which has a strongcompetitive advantage thanks to its diverse range ofproducts.

Turning to sales, we exited United Tractor on the beliefthat corporate profitability reflected a near cycle-peak – aview that was reinforced after a meeting with itsmanagement. We also sold telecoms firm KT Corporation,as the regulatory environment had become less attractive.Staying in Korea, we sold tyre maker Hankook, as itproved unable to pass on rising input costs due toincreased market competition. Lastly, we exited shipyardgroup Sembcorp Marine on the back of lower-than-expected order recovery.

Market Outlook and Fund Strategy

As we enter the second quarter of 2018, the extent towhich regional and global economic growth can supportthe ongoing improvement in corporate earnings in Asiawill remain in focus. As ever, China is key in thisnarrative from both an economic and policy perspective.Market participants will especially watch how the nascenttrade war between it and the US develops. Against thisbackdrop, the manager believes that stock-specific insightwill drive the Fund’s performance.

Investment review

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Portfolio of investments (unaudited)

Investments held at 15 May 2018 Market Percentage of value total net assets Holding Investment £000 %

Australia (15/05/17 – 18.41%) 17.04 Automobiles & Parts 0.63 867,409 Bapcor 3,036 0.63

Banks 5.72 717,728 Australia & New Zealand Banking Group 10,992 2.30 472,905 National Australia Bank 7,208 1.51 551,032 Westpac Banking 9,156 1.91

Beverages 1.29 623,696 Treasury Wine Estates 6,184 1.29

Electricity 0.27 1,051,339 Spark Infrastructure 1,293 0.27

Food & Drug Retailers 0.52 159,750 Woolworths 2,513 0.52

Food Producers 0.56 647,324 Costa Group Holdings 2,671 0.56

General Industrials 0.27 239,158 Brambles 1,298 0.27

Industrial Metals 1.02 3,428,425 Metals X 1,690 0.35 1,965,011 Syrah Resources 3,194 0.67

Life Insurance 1.02 717,560 Challenger 4,873 1.02

Mining 0.14 787,500 Westgold Resources 676 0.14

Non-Life Insurance 0.93 780,801 QBE Insurance Group 4,433 0.93

Pharmaceuticals & Biotechnology 0.72 34,920 CSL 3,424 0.72

Real Estate Investment & Services 0.59 1,233,696 Scentre Group 2,808 0.59

Real Estate Investment Trusts 0.95 917,418 Goodman Group 4,558 0.95

Travel & Leisure 2.41 539,581 Aristocrat Leisure 8,548 1.79 854,104 Qantas 2,966 0.62

Bermuda (15/05/17 – 0.13%) 0.51 Industrial Transportation 0.51 353,713 Orient Overseas (International) 2,437 0.51

Cayman Islands (15/05/17 – 18.36%) 22.12 Food & Drug Retailers 0.33 187,717 CK Hutchison Holdings 1,595 0.33

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Investments held at 15 May 2018 Market Percentage of value total net assets Holding Investment £000 %

General Retailers 4.44 146,042 Alibaba Group Holding ADR~ 21,263 4.44

Personal Goods 1.71 1,892,486 Anta Sports Products 8,172 1.71

Real Estate Investment & Services 3.33 2,518,117 China Resources Land 7,118 1.49 1,372,759 CK Asset Holdings 8,804 1.84

Software & Computer Services 8.90 46,953 Baidu ADR~ 9,459 1.98 262,867 JD.com ADR~ 7,033 1.47 9,410 NetEase ADR~ 1,857 0.39 644,232 Tencent Holdings 24,189 5.06

Travel & Leisure 3.41 36,994 China Lodging Group ADR~ 4,646 0.97 170,500 Ctrip.com International ADR~ 5,413 1.13 1,410,363 Sands China 6,257 1.31

China (15/05/17 – 7.95%) 8.73 Banks 4.67 18,149,740 China Construction Bank 14,167 2.96 2,478,884 China Merchants Bank 8,166 1.71

Industrial Engineering 0.67 3,509,123 Weichai Power 3,226 0.67

Life Insurance 2.42 1,555,336 Ping An Insurance 11,575 2.42

Oil & Gas Producers 0.97 6,107,397 China Petroleum & Chemical 4,664 0.97

Hong Kong (15/05/17 – 9.27%) 8.87 Banks 1.51 1,868,308 Bank of China (Hong Kong) 7,204 1.51

Life Insurance 1.93 1,341,005 AIA Group 9,253 1.93

Mobile Telecommunications 1.31 507,584 China Mobile (HK) 3,545 0.74 2,619,919 China Unicom 2,735 0.57

Oil & Gas Producers 1.41 5,107,984 CNOOC 6,750 1.41

Pharmaceuticals & Biotechnology 1.29 3,375,359 Sino Biopharmaceutical 6,162 1.29

Real Estate Investment & Services 1.42 2,038,859 Hang Lung Properties 3,683 0.77 254,983 Sun Hung Kai Properties 3,105 0.65

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Investments held at 15 May 2018 Market Percentage of value total net assets

Holding Investment £000 %

India (15/05/17 – 7.82%) 6.27 Banks 0.79 632,645 Axis Bank 3,790 0.79

Construction & Materials 1.25 399,393 Larsen & Toubro 5,981 1.25

Industrial Engineering 1.77 1,936,024 Bharat Heavy Electricals 1,648 0.34 36,565 Tata Motors ‘A’ 72 0.02 1,033,093 Voltas 6,729 1.41

Mining 0.30 496,351 Coal India 1,425 0.30

Software & Computer Services 0.94 118,407 Tata Consultancy Services 4,493 0.94

Tobacco 1.22 1,896,097 ITC 5,824 1.22

Indonesia (15/05/17 – 1.55%) 1.19 Banks 0.77 10,152,532 Bank Mandiri 3,671 0.77

Support Services 0.42 7,925,180 AKR Corporindo 1,987 0.42

Malaysia (15/05/17 – 0.37%) 0.39 Travel & Leisure 0.39 2,922,058 Airasia Berhad 1,866 0.39

Papua New Guinea (15/05/17 – 0.59%) 0.61 Oil & Gas Producers 0.61 623,759 Oil Search 2,919 0.61

Philippines (15/05/17 – 0.04%) Singapore (15/05/17 – 4.41%) 4.38 Banks 3.43 405,215 Development Bank of Singapore 6,453 1.35 613,735 United Overseas Bank 9,970 2.08

Real Estate Investment & Services 0.95 2,280,488 Capitaland 4,539 0.95

South Korea (15/05/17 – 15.83%) 11.05 Automobiles & Parts 0.43 29,696 Hyundai Motor 2,069 0.43

Banks 1.85 124,827 KB Financial Group 4,935 1.03 118,769 Shinhan Financial Group 3,937 0.82

Chemicals 0.98 19,603 LG Chem 4,713 0.98

Electronic & Electrical Equipment 5.45 545,650 Samsung Electronics 18,521 3.87 188,450 Samsung Electronics Preference 5,110 1.07 18,028 Samsung SDI 2,432 0.51

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Investments held at 15 May 2018 Market Percentage of value total net assets

Holding Investment £000 %

Life Insurance 0.81 136,186 ING Life Insurance 3,895 0.81

Technology Hardware & Equipment 1.53 125,440 SK Hynix 7,313 1.53

Taiwan (15/05/17 – 9.61%) 9.82 Chemicals 0.71 1,236,459 Formosa Plastics 3,392 0.71

Electronic & Electrical Equipment 1.57 3,511,992 Hon Hai Precision Industry 7,489 1.57

Food & Drug Retailers 1.25 791,596 President Chain Store 6,004 1.25

Life Insurance 0.79 2,833,286 Cathay Financial Holding 3,791 0.79

Technology Hardware & Equipment 5.50 1,610,710 Macronix International 1,713 0.36 4,300,219 Taiwan Semiconductor Manufacturing 24,607 5.14

Thailand (15/05/17 – 1.00%) 3.07 Banks 0.89 67,572 Kasikornbank 309 0.06 881,972 Kasikornbank NV 3,970 0.83

Mobile Telecommunications 1.36 1,444,980 Advanced Info Service 6,522 1.36

Oil & Gas Producers 0.82 2,996,740 PTT 3,929 0.82

United Kingdom (15/05/17 – 1.74%) 1.82 Mining 1.82 509,616 BHP Billiton 8,726 1.82

Money Markets (15/05/17 – 0.37%) 2.24 £10,711,283 Standard Life Investments Sterling Liquidity Fund Class ‘0’ GBP+ 10,711 2.24

Portfolio of investments 469,454 98.11

Net other assets 9,047 1.89

Net assets 478,501 100.00

All investments are listed on recognised stock exchanges and are ‘approved securities’ within the meaning of the FCA rules unless otherwise stated. +SICAVs (open ended investment schemes registered outside the UK) ~ADR – American Depositary Receipt

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Purchases Cost £000Standard Life Investments Sterling Liquidity Fund Class ‘0’ GBP 102,035 Australia & New Zealand Banking Group 6,881 President Chain Store 5,526 CNOOC 5,519 Advanced Info Service 5,454 Goodman Group 5,008 KB Financial Group 4,972 LG Chem 4,968 PTT 3,911 Sands China 3,575

Subtotal 147,849

Other purchases 53,569

Sales Proceeds £000Standard Life Investments Sterling Liquidity Fund Class ‘0’ GBP 93,147 Samsung SDI 8,644 National Australia Bank 8,040 KT Corporation 6,364 China State Construction International 6,203 Samsung Electronics 5,755 China Lodging Group ADR 5,670 United Tractors 5,633 SK Hynix 5,610 Woori Bank 5,129

Subtotal 150,195

Other sales 127,347

Total purchases for the year 201,418 Total sales for the year 277,542

Top ten purchases and salesFor the year ended 15 May 2018

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Statistical information

Comparative tables Class ‘A’ Accumulation 15/05/18 15/05/17 15/05/16 pence pence penceChange in net assets per unitOpening net asset value per unit 301.26 210.01 245.89

Return before operating charges* 48.97 95.46 (32.47)Operating charges (5.14) (4.21) (3.41)

Return after operating charges* 43.83 91.25 (35.88)

Distributions on accumulation units (3.06) (2.35) (2.66)Retained distributions on accumulation units 3.06 2.35 2.66

Closing net asset value per unit 345.09 301.26 210.01

*after direct transaction costs of: 0.52 0.75 0.67

PerformanceReturn after charges 14.55% 43.45% (14.59%)

Other informationClosing net asset value (£000) 28,344 28,212 22,744 Closing number of units 8,213,691 9,364,505 10,829,915Operating charges 1.57% 1.58% 1.58%Direct transaction costs 0.16% 0.28% 0.31%

Prices+

Highest unit price (pence) 379.12 327.74 272.39Lowest unit price (pence) 295.23 204.04 188.49

+High and low price disclosures are based on quoted unit price. Therefore, the opening andclosing NAV prices may fall outside the high/low price threshold.

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Comparative tables Class ‘B’ Accumulation 15/05/18 15/05/17 15/05/16 pence pence penceChange in net assets per unitOpening net asset value per unit 332.10 228.05 263.02

Return before operating charges* 54.33 104.27 (34.79)Operating charges (0.24) (0.22) (0.18)

Return after operating charges* 54.09 104.05 (34.97)

Distributions on accumulation units (8.89) (6.91) (6.35)Retained distributions on accumulation units 8.89 6.91 6.35

Closing net asset value per unit 386.19 332.10 228.05

*after direct transaction costs of: 0.57 0.82 0.72

PerformanceReturn after charges 16.29% 45.63% (13.30%)

Other informationClosing net asset value (£000) 450,157 466,791 390,965 Closing number of units 116,564,277 140,555,518 171,435,060Operating charges 0.07% 0.08% 0.08%Direct transaction costs 0.16% 0.28% 0.31%

Prices+

Highest unit price (pence) 392.90 335.34 271.77Lowest unit price (pence) 325.49 221.62 202.45

+High and low price disclosures are based on quoted unit price. Therefore, the opening andclosing NAV prices may fall outside the high/low price threshold.

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Investment objective

The Fund aims to achieve above average capital growth by investing predominantly inshares in companies incorporated in Asia and the Pacific Basin, including Australiaand New Zealand, but excluding Japan.

Investment policy

The Fund will be actively managed with its investments spread across the region witha focus on companies with above average growth prospects. The Fund may invest inemerging markets in the region. The Fund may also invest in companies that areheadquartered or quoted outwith the region which deliver a significant part of theirbusiness from the region, and whose securities are listed or traded on an eligiblesecurities or derivatives exchange. The Fund can invest up to 15% in other regions.The Fund is not constrained by any index weightings and does not concentrate on anyparticular country or sector but invests from a broad range of stocks without regard tomarket capitalisation. The Fund may also invest in other transferable securities, unitsin collective investment schemes, money market investments, deposits, cash and nearcash.

Revenue distribution and pricing

Units of the Fund are available as either Class ‘A’ Accumulation or Class ‘B’Accumulation units (where revenue is reinvested to enhance the unit price). There willbe two potential distributions in each accounting year: an interim distribution as at 15November and a final distribution as at 15 May.

At each distribution the net revenue after deduction of expenses, arising in thepreceding six months from the investments of the Fund is apportioned amongst theunitholders. Unitholders receive a tax voucher giving details of the distribution and theManager’s Report no later than two months after these dates.


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fi


Risk and reward profileThe Risk and Reward Indicator table demonstrates where the Fund ranks in terms of itspotential risk and reward. The higher the rank the greater the potential reward but thegreater the risk of losing money. It is based on past data, may change over time andmay not be a reliable indication of the future risk profile of the Fund. The shaded area inthe table below shows the Fund’s ranking on the Risk and Reward Indicator.

Typically lower rewards, Typically higher rewards, lower risk higher risk fi

1 2 3 4 5 6 7

This Fund is ranked at 6 (15/05/17: 6) because funds of this type have experiencedhigh rises and falls in value in the past. Although this is a high risk ranking it is not thehighest.

The above figure applies to the following unit classes:

• Class ‘A’ Accumulation• Class ‘B’ Accumulation

Please note that even the lowest risk class can lose you money and that extreme marketcircumstances can mean you suffer severe losses in all cases. Please note the Fund’srisk category may change in the future. The indicator does not take into account thefollowing risks of investing in this Fund:

• Investing overseas can bring additional returns and spread risk to different markets.There are risks, however, that changes in currency rates will reduce the value of yourinvestment.

• Emerging markets or less developed countries may face more political, economic orstructural challenges than developed countries. This means that your money is atgreater risk.

• The Fund may use derivatives to reduce risk or cost or to generate additional capitalor income at low risk, or to meet its investment objective.

For more information on the Risk and Reward profiles of our Funds, please refer to themost up to date relevant fund and Unit Class Key Investor Information Documents(KIIDs). These are available online at www.phoenixunittrust.co.uk.

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Annual financial statementsFor the year ended 15 May 2018

Statement of total return 15/05/18 15/05/17 Notes £000 £000 £000 £000

Income

Net capital gains 4 62,327 169,552 Revenue 5 13,126 12,978

Expenses 6 (720) (733)

Interest payable and similar charges (3) (13)

Net revenue before taxation 12,403 12,232

Taxation 7 (967) (1,022)

Net revenue after taxation 11,436 11,210

Total return before distributions 73,763 180,762

Distributions 8 (11,610) (11,403)

Change in net assets attributable to unitholdersinvestment activities 62,153 169,359

Statement of change in net assets attributable to unitholders

15/05/18 15/05/17 £000 £000 £000 £000

Opening net assets attributableto unitholders 495,003 413,709

Amounts receivable on issue of units 1,720 21,456Amounts payable on cancellation of units (91,266) (120,039)

(89,546) (98,583)

Change in net assets attributable to unitholdersfrom investment activities 62,153 169,359

Retained distribution on accumulation units 10,891 10,518

Closing net assets attributable to unitholders 478,501 495,003

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Balance sheet 15/05/18 15/05/17 Notes £000 £000 £000 £000

Assets:Fixed assets:Investments 469,454 482,393

Current assets:Debtors 9 1,753 3,808 Cash and bank balances 10 7,332 13,191

Total current assets 9,085 16,999

Total assets 478,539 499,392

Liabilities: Creditors:Other creditors 11 (38) (4,389) Total liabilities (38) (4,389)

Net assets attributable to unitholders 478,501 495,003

Annual financial statementsAs at 15 May 2018

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Note 1 Accounting policies(a) Basis of preparation

The financial statements have been prepared under the historical cost basis, asmodified by the revaluation of investments and in compliance with FinancialReporting Standard (FRS102) and in accordance with the Statement ofRecommended Practice (SORP) for financial statements of Authorised Fundsissued by The Investment Association in May 2014 (and amended in June2017). The financial statements have been prepared on a going concern basis.Unless otherwise stated all accounting policies are consistent with those of theprior year.

(b) Valuation of investmentsThe quoted investments of the Fund have been valued at bid dealing pricesas at close of business 15 May 2018, the last valuation point in theaccounting year, in accordance with the Trust Deed. Investments in collective investment schemes have been valued at bid pricefor dual priced funds or the single price for single priced funds. Where theseinvestments are managed by the Manager or an associate of the Manager, theholdings have been valued at the cancellation price for dual priced funds orthe single price for single priced funds. This price is the last availablepublished price at the year end.

(c) Foreign exchangeTransactions in foreign currencies during the year are translated into Sterling(the functional currency of the Fund), at the rates of exchange ruling on thetransaction date. Amounts held in foreign currencies have been translated atthe rate of exchange ruling at close of business, 15 May 2018, the lastvaluation point in the accounting year.

(d) RevenueDividends receivable from equity investments and distributions receivablefrom collective investment schemes are credited to revenue when they arefirst quoted ex-dividend. Interest receivable on bank deposits and moneymarket funds is accounted for on an accruals basis.

Any commission arising from stocklending is recognised on an accruals basisand is disclosed net of fees.

(e) Special dividendsSpecial dividends are treated either as revenue or repayments of capitaldepending on the facts of each particular case. It is likely that where thereceipt of a special dividend results in a significant reduction in the capitalvalue of the holding, then the special dividend should be treated as capital innature so as to ensure the matching principle is applied to gains and losses.Otherwise, the special dividend should be treated as revenue.

(f) ExpensesExpenses are accounted for on an accruals basis. Expenses of the Fund arecharged against revenue, except for costs associated with the purchase andsale of investments, which are charged to capital.

Notes to the financial statements

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Note 1 Accounting policies (continued)

(g) TaxationThe charge for taxation is based on taxable income for the year less allowableexpenses. UK dividends and franked distributions from UK collectiveinvestment schemes are disclosed net of any related tax credit. Overseasdividends, unfranked distributions from UK collective investment schemes,and distributions from overseas collective investment schemes are disclosedgross of any tax suffered, the tax element being separately disclosed in thetaxation note.

(h) Deferred taxationDeferred tax is provided at current rates of corporation tax on all timingdifferences which have originated but not reversed by the Balance sheet date.Deferred tax is not recognised on permanent differences. Deferred tax assetsare recognised only to the extent that the Manager considers it is more likely than not that there will be taxable profits from which underlying timingdifferences can be deducted.

Note 2 Distribution policies(a) Basis of distribution

Revenue produced by the Fund’s investments accumulates during eachaccounting period. If, at the end of each accounting period, revenue exceedsexpenses, the net revenue of the Fund is available to be distributed /accumulated to unitholders.The Fund is not more than 60% invested in qualifying investments (asdefined by SI 2006/964, Reg 20) and will pay a dividend distribution.

(b) Unclaimed distributionsDistributions remaining unclaimed after six years are paid into the Fund aspart of the capital property.

(c) Apportionment to multiple unit classesWith the exception of the Manager’s periodic charge, the allocation of revenueand expenses to each unit class is based upon the proportion of the Fund’sassets attributable to each unit class on the day the revenue is earned or theexpense is suffered. The Manager’s periodic charge is specific to each unit class. Tax will be allocated between the unit classes according to income.Consequently, the revenue available to distribute for each unit class will differ.

(d) Special dividendsIt is the policy of the Fund, where applicable, to distribute special dividendswhich have been treated as revenue.

(e) Distributions from collective investment schemesIt is the policy of the Fund to distribute revenue from both income andaccumulation distributions.

(f) ExpensesIn determining the net revenue available for distribution, charges in relation tothe safe custody of investments are ultimately borne by capital.

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Note 3 Risk management policiesThe risks arising from the Fund’s financial instruments are market price risk,interest rate risk, foreign currency risk, liquidity risk and counterparty risk.The Manager’s policies for managing these risks are summarised below andhave been applied throughout the year.

(a) Market price riskMarket price risk arises mainly from uncertainty about future prices offinancial instruments held. It represents the potential loss the Fund mightsuffer through holding market positions in the face of price movements. TheFund’s investment portfolio is exposed to market fluctuations which aremonitored by the Manager in pursuit of the investment objectives andpolicies. Adherence to investment guidelines and to investment andborrowing powers set out in the Trust Deed, the Prospectus and in theCollective Investment Schemes Sourcebook (“the Sourcebook”) mitigates therisk of excessive exposure to any particular type of security or issuer.

(b) Interest rate riskThe majority of the Fund’s financial assets are equity shares and otherinvestments which neither pay interest nor have a maturity date.Interest receivable on bank deposits or payable on bank overdraft positionswill be affected by fluctuations in interest rates.

(c) Foreign currency riskA substantial proportion of the Fund’s investment portfolio is invested inoverseas securities and the Balance sheet can be (significantly) affected bymovements in foreign exchange rates. The Fund may be subject to shortterm exposure to exchange rate movements between placing the purchase orsale of securities and agreeing a related currency transaction albeit usuallythe two transactions are agreed at the same time. Any such currency transactions must be used in accordance with theinvestment objective of the Fund and must be deemed by the InvestmentManager to be economically appropriate. Regular production of portfolio riskreports highlight concentrations of risk, including currency risk, for the Fund.

(d) Liquidity riskThe Fund’s assets are comprised of mainly readily realisable securities. Ifinsufficient cash is available to finance unitholder redemptions then securitiesheld by the Fund may need to be sold. The risk of low market liquidity,through reduced trading volumes, may affect the ability of the Fund to tradefinancial instruments at values previously indicated by financial brokers. Fromtime to time, liquidity may also be affected by stock specific or economicevents. To manage these risks the Manager performs market research in orderto achieve the best price for any transactions entered into on behalf of theFund. All stocks are valued daily but those stocks identified as being lessliquid are reviewed on a regular basis for pricing accuracy.

(e) Counterparty riskCertain transactions in securities that the Fund enters into expose it to therisk that the counterparty will not deliver the investment (purchase) or cash(sale) after the Fund has fulfilled its responsibilities. The Fund only buys andsells investments through brokers which have been approved by the Manageras an acceptable counterparty. This list is reviewed annually.


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Note 3 Risk management policies (continued)(f) Derivatives

Derivative transactions may be used by the Fund for the purposes of meetingits investment objectives and also for hedging. In doing so the Manager maymake use of a variety of derivative instruments in accordance with theSourcebook. The use of derivatives for investment purposes means that thenet asset value of the Fund may at times have high volatility, althoughderivatives will not be used with the intention of raising the risk profile of theFund. Where derivatives are used for hedging this will not compromise therisk profile of the Fund. Use of derivatives will not knowingly contravene anyrelevant investment objective or limits.There are no derivatives held at the year end.

Note 4 Net capital gainsThe net capital gains during the year comprise:

15/05/18 15/05/17 £000 £000

Gains on non-derivative securities 63,170 168,699Gains on derivative contracts 16 110Currency (losses)/gains (966) 749Handling charges (21) (36)Capital special dividends 128 30

Net capital gains 62,327 169,552

Note 5 Revenue 15/05/18 15/05/17 £000 £000

UK dividends 465 418Overseas dividends 12,484 12,466Stocklending commission 161 77Bank interest 1 –Liquidity interest 15 17

Total revenue 13,126 12,978

Note 6 Expenses 15/05/18 15/05/17 £000 £000(a) Payable to the Manager or associates of the Manager

and agents of either of them:Manager’s periodic charge 496 470

(b) Payable to the Trustee or associates of the Trustee and agents of either of them:Trustee’s fees 32 58

(c) Other expenses:Audit fee 7 7Safe custody charges 174 180Dividend collection expenses 1 –Printing & stationery 2 2Legal fee – 8Professional fees 8 8

192 205

Total expenses 720 733

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Note 7 Taxation 15/05/18 15/05/17 £000 £000

(a) Analysis of tax charge for the year

Overseas withholding tax 967 1,022

Total taxation 967 1,022

(b) Factors affecting the tax charge for the year

The tax assessed for the year is lower than that calculated when the standardrate of corporation tax for Authorised Unit Trusts is applied to total revenuereturn. The differences are explained below:

Net revenue before taxation 12,403 12,232

Corporation tax at 20% (15/05/17: 20%) 2,481 2,446 Effects of:Revenue not subject to taxation (2,528) (2,457)Overseas withholding tax 967 1,022Tax relief on overseas tax suffered (7) (17)Excess management expenses unutilised 54 28

Total tax charge for the year (Note 7(a)) 967 1,022

Authorised Unit Trusts are exempt from tax on capital gains in the UK.

(c) Provision for deferred taxation

At 15 May 2018 the Fund had a potential deferred tax asset of £812,632(15/05/17: £758,414) in relation to surplus management expenses of£4,063,159 (15/05/17: £3,792,072). It is unlikely that the Fund will generatesufficient taxable profits in the future to utilise these expenses and, therefore, nodeferred tax asset has been recognised in the year or the prior year.

Note 8 DistributionsThe distributions take account of amounts added on the issue of units andamounts deducted on the cancellation of units, and comprise:

15/05/18 15/05/17 £000 £000

Interim 7,231 7,322Final 3,660 3,196

10,891 10,518

Amounts deducted on cancellation of units 725 1,020Amounts added on issue of units (6) (135)

Net distribution for the year 11,610 11,403

Net revenue after taxation 11,436 11,210Expenses taken to capital 174 188Income deficit transfer to capital – 5

Net distribution for the year 11,610 11,403

Details of the distribution per unit are set out in the tables on page 25.


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Note 9 Debtors 15/05/18 15/05/17 £000 £000

Creations awaiting settlement 313 –Sales awaiting settlement – 3,230Accrued income 1,440 578

Total debtors 1,753 3,808

Note 10 Cash and bank balances 15/05/18 15/05/17 £000 £000

Cash and bank balances 7,332 13,191

Note 11 Other creditors 15/05/18 15/05/17 £000 £000

Cancellations awaiting settlement – 423Purchases awaiting settlement – 3,883Manager’s periodic charge payable 20 61Trustee’s fees payable 4 7Safe custody charges payable 7 7Audit fee payable 7 7Handling charges payable – 1

Total other creditors 38 4,389

Note 12 Reconciliation of units Class ‘A’ Class ‘B’ Accumulation Accumulation

Opening units issued at 16/05/17 9,364,505 140,555,518 Unit movements in year:

Units issued 92,275 375,320 Units cancelled (1,243,089) (24,366,561)

Closing units at 15/05/18 8,213,691 116,564,277

Note 13 Contingencies and commitmentsAs at 15 May 2018 the Fund had no outstanding calls on partly paid shares,no potential underwriting commitments or any other contingent liabilities(15/05/17: £nil).

Note 14 StocklendingThe total value of securities on loan at the Balance sheet date was£19,645,590 (15/05/17: £8,526,601). Collateral is held in the following form:

15/05/18 15/05/17 £000 £000

Government bonds 20,778 9,145

The gross earnings and fees paid for the year were £196,465 (15/05/17:£93,339) and £35,364 (15/05/17: £16,801) respectively.

The counterparties for the securities on loan are shown in the appendix onpage 31.

21

Note 15 Unitholders’ fundsThere are two unit classes in issue within the Fund. These are Class ‘A’Accumulation and Class ‘B’ Accumulation.

The Manager’s periodic charge in respect of Class ‘A’ and Class ‘B’ units isexpressed as an annual percentage of the value of the property of the Fundattributable to each unit class and is currently 1.515% in respect of Class ‘A’units and 0.015% in respect of Class ‘B’ units.

Consequently, the level of net revenue attributable to each unit class will differ.Should it be necessary to wind-up the Fund, each unit class will have thesame rights as regards to the distribution of the property of the Fund.

Note 16 Related party transactionsThe Manager is a related party to the Fund by virtue of its controllinginfluence.

The Manager is part of the Phoenix Group. Phoenix Life Limited which is alsopart of the Phoenix Group, is a material unitholder in the Fund and therefore arelated party, holding 100% of the Class 'A' Accumulation (15.05.17: 100%)and 99.39% of the Class 'B' Accumulation (15.05.17: 99.32%) units at theyear end.

Manager’s periodic charge paid to the Manager, Phoenix Unit Trust ManagersLimited, or its associates, is shown in Note 6(a) and details of the units issuedand cancelled by the Manager are shown in the Statement of change in netassets attributable to unitholder and Note 8.

Any balances due to/from the Manager or its associates at 15 May 2018 inrespect of these transactions are shown in Notes 9 and 11.


22


Note 17 Financial instrumentsIn accordance with the investment objective, the Fund holds certain financialinstruments. These comprise:

• securities held in accordance with the investment objective and policies;

• derivative transactions which the Fund may also enter into, the purpose of which is to manage the currency and market risks arising from the Fund’s investment activities; and

• cash and short term debtors and creditors arising directly from operations.

Counterparty exposureThere was no counterparty exposure at the year end.

Currency exposureAn analysis of the monetary assets and liabilities at the year end is shownbelow: Net currency assets Net currency assets 15/05/18 15/05/17

Currency Monetary Non- Total Monetary Non- Total exposure monetary exposure exposure monetary exposure exposure exposure £000 £000 £000 £000 £000 £000

Sterling 543 19,437 19,980 (2,731) 10,440 7,709 Australian Dollar 625 84,441 85,066 331 94,032 94,363 Hong Kong Dollar 314 142,806 143,120 (241) 124,986 124,745 Indian Rupee – 29,962 29,962 – 38,697 38,697 Indonesian Rupiah 36 5,658 5,694 9 7,695 7,704 Korean Won 140 52,924 53,064 79 78,349 78,428 Malaysian Ringitt – 1,866 1,866 – 1,850 1,850 Philippine Peso – – – 63 175 238 Singaporean Dollar 371 20,962 21,333 158 21,831 21,989 Taiwanese Dollar 7,012 46,997 54,009 10,575 48,558 59,133 Thai Baht – 14,730 14,730 41 4,964 5,005 US Dollar 6 49,671 49,677 4,326 50,816 55,142

9,047 469,454 478,501 12,610 482,393 495,003

Income received in other currencies is converted to Sterling on or near thedate of receipt. The Fund does not hedge or otherwise seek to avoid,movement risk on accrued income.

Interest profileAt the year end date, 3.77% (15/05/17: 2.66%) of the Fund’s net assets byvalue were interest bearing.

Interest rates earned/paid on deposits are earned/paid at a rate linked toLIBOR (London Interbank Offered Rate) or international equivalent.

Sensitivity analysisInterest rate risk sensitivityAs the majority of the Fund's financial assets are non-interest bearing, theFund is only subject to limited exposure to fair value interest rate risk due tofluctuations in levels of market interest rates and therefore, no sensitivityanalysis has been provided.

23

Note 17 Financial instruments (continued)Foreign currency risk sensitivityA five percent increase in the value of the Fund’s foreign currency exposure would have the effect of increasing the return and net assets by £23,448,942 (15/05/17: £24,354,147). A five percent decrease would have an equal and opposite effect.

Price risk sensitivityA five percent increase in the value of the Fund’s portfolio would have the effect of increasing the return and net assets by £23,925,050 (15/05/17: £24,750,150).A five percent decrease would have an equal and opposite effect.

Note 18 Fair value of investmentsThe fair value of the Fund’s investments has been determined using thehierarchy below.

This complies with the ‘Amendments to FRS102 – Fair value hierarchy disclosures’ issued by the Financial Reporting Council in March 2016.

Level 1 The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2 Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

Level 3 Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

For the year ended 15/05/18Level 1 2 3 TotalInvestment assets £000 £000 £000 £000Equities 458,743 – – 458,743 Money markets 10,711 – – 10,711 469,454 – – 469,454

For the year ended 15/05/17Level 1 2 3 TotalInvestment assets £000 £000 £000 £000Equities 480,570 – – 480,570 Money markets 1,823 – – 1,823 482,393 – – 482,393

Note 19 Portfolio transaction costsFor the year ended 15/05/18 Value Commission TaxesAnalysis of total purchases costs £000 £000 % £000 %Equity transactions 99,189 169 0.17 25 0.00Money markets 102,035 – – – –

Total 201,224 169 25


24


Note 19 Portfolio transaction costs (continued)

Value Commission TaxesAnalysis of total sales costs £000 £000 % £000 %Equity transactions 184,961 (530) (0.29) (36) (0.00)Money markets 93,147 – – – –

Total 278,108 (530) (36)

Commission and taxes as % of average net assets:Commission 0.15%Taxes 0.01%

For the year ended 15/05/17 Value Commission TaxesAnalysis of total purchases costs £000 £000 % £000 %Equity transactions 212,351 392 0.18 80 0.00Money markets 159,810 – – – –Corporate actions 1,055 – – – –

Total 373,216 392 80

Value Commission TaxesAnalysis of total sales costs £000 £000 % £000 %Equity transactions 299,070 (834) (0.28) (70) (0.00)Money markets 158,165 – – – –Corporate actions 6,160 – – – –

Total 463,395 (834) 70

Commission and taxes as % of average net assets:Commission 0.25%Taxes 0.03%

Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments. These costs vary depending on the class of investment, country of exchange and method of execution.

These costs can be classified as either direct or indirect transaction costs:

Direct transaction costs: Broker commissions, fees and taxes.

Indirect transaction costs: “Dealing spread” – the difference between buying and selling prices of the underlying investments.

At the Balance sheet date the portfolio dealing spread was 0.29% (15/05/17: 0.28%) being the difference between the respective bid and offer prices for the Fund’s investments.

25

Dividend distributionsInterim distribution in pence per unitGroup 1: units purchased prior to 16 May 2017Group 2: units purchased between 16 May 2017 to 15 November 2017 2018 2017 pence pence per unit per unit Net paid paid income Equalisation 15 Jan 15 Jan

Class ‘A’ Accumulation

Group 1 2.7810 — 2.7810 2.3468Group 2 2.7810 0.0000 2.7810 2.3468

Class ‘B’ Accumulation

Group 1 5.7656 — 5.7656 4.6359Group 2 2.0163 3.7493 5.7656 4.6359

Final distribution in pence per unitGroup 1: units purchased prior to 16 November 2017Group 2: units purchased between 16 November 2017 to 15 May 2018 2018 2017 pence pence per unit per unit Net payable paid income Equalisation 15 Jul 15 Jul

Class ‘A’ Accumulation

Group 1 0.2761 — 0.2761 0.0000Group 2 0.0050 0.2711 0.2761 0.0000

Class ‘B’ Accumulation

Group 1 3.1208 — 3.1208 2.2738Group 2 2.5819 0.5389 3.1208 2.2738

EqualisationThis applies only to units purchased during the distribution period (Group 2 units). Itis the average amount of revenue included in the purchase price of all Group 2 unitsand is refunded to the holders of these units as a return of capital. Being capital it isnot liable to income tax but must be deducted from the cost of the units for capitalgains tax purposes.

Distribution tablesFor the year ended 15 May 2018

26

Responsibilities of the manager and the trusteea) The Manager of the Fund is required by the Financial Conduct Authority’s Collective

Investment Schemes Sourcebook (‘the Sourcebook’) to prepare financial statementsfor each annual accounting period which give a true and fair view of the financialposition of the Fund at the end of that period and the net revenue or expense andthe net gains or losses on the property of the Fund for the period then ended.

In preparing these financial statements, the Manager is required to:

• select suitable accounting policies and then apply them consistently;• make judgements and estimates that are prudent and reasonable;• state whether applicable accounting standards have been followed subject to

any material departure disclosed and explained in the financial statements; and• prepare the financial statements on the basis that the Fund will continue in

operation unless it is inappropriate to presume this.

The Manager is also required to manage the Fund in accordance with the TrustDeed, the Prospectus and the Sourcebook, maintain proper financial records toenable them to ensure that the financial statements comply with the Statement ofRecommended Practice for Authorised Funds as issued by the IA in May 2014(amended June 2017) and the Sourcebook and take reasonable steps for theprevention and detection of fraud and other irregularities.

b) The Depositary in its capacity as Trustee of the PUTM Bothwell Asia Pacific (exJapan) Fund must ensure that the Trust is managed in accordance with the FinancialConduct Authority’s Collective Investment Schemes Sourcebook, the FinancialServices and Markets Act 2000, as amended, (together ‘the Regulations’), the TrustDeed and Prospectus (together ‘the Scheme documents’) as detailed below.

The Depositary must in the context of its role act honestly, fairly, professionally,independently and in the interests of the Trust and its investors. The Depositary is responsible for the safekeeping of all custodial assets andmaintaining a record of all other assets of the Trust in accordance with theRegulations.

The Depositary must ensure that:

• the Trust’s cash flows are properly monitored and that cash of the Trust isbooked in cash accounts in accordance with the Regulations;

• the sale, issue, repurchase, redemption and cancellation of units are carried outin accordance with the Regulations;

• the value of units of the Trust are calculated in accordance with the Regulations;• any consideration relating to transactions in the Trust’s assets is remitted to the

Trust within the usual time limits;• the Trust’s income is applied in accordance with the Regulations; and• the instructions of the Authorised Fund Manager (‘the AFM’), which is the

UCITS Management Company, are carried out (unless they conflict with theRegulations).

The Depositary also has a duty to take reasonable care to ensure that the Trust ismanaged in accordance with the Regulations and the Scheme documents of theTrust in relation to the investment and borrowing powers applicable to the Trust.

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Trustee’s report and directors’ statement

Report of the Trustee to the Unitholders of the PUTM Bothwell Asia Pacific (exJapan) Fund for the period from 16 May 2017 to 15 May 2018.Having carried out such procedures as we considered necessary to discharge ourresponsibilities as Depositary of the Trust, it is our opinion, based on the informationavailable to us and the explanations provided, that, in all material respects the Trust,acting through the AFM:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Trust’s units and the application of the Trust’s income in accordance with the Regulations and the Scheme documents of the Trust; and (ii) has observed the investment and borrowing powers and restrictions applicable to the Trust in accordance with the Regulations and the Scheme documents of the Trust.London HSBC Bank plc27 July 2018

Directors’ statementIn accordance with the requirements of the Collective Investment Schemes Sourcebookas issued and amended by the Financial Conduct Authority, we hereby certify the reporton behalf of the Directors of Phoenix Unit Trust Managers Limited.

Birmingham Director27 July 2018 Director

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OpinionWe have audited the financial statements of the PUTM Bothwell Asia Pacific (ex Japan)Fund (“the Fund”) for the year ended 15 May 2018 which comprise the Statement ofTotal Return, the Statement of Change in Net Assets attributable to Unitholders, theBalance Sheet, the Distribution Tables and the related Notes 1 to 19, including asummary of significant accounting policies. The financial reporting framework that hasbeen applied in their preparation is applicable law and United Kingdom AccountingStandards (United Kingdom Generally Accepted Accounting Practice) including FRS 102‘The Financial Reporting Standard applicable to the UK and Republic of Ireland’.

In our opinion, the financial statements:

• give a true and fair view of the financial position of the Fund as at 15 May 2018 and of the net revenue and the net capital gains on the scheme property of theFund for the year then ended; and

• have been properly prepared in accordance with United Kingdom GenerallyAccepted Accounting Practice including FRS 102 ‘The Financial Reporting Standardapplicable to the UK and Republic of Ireland’.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK)(ISAs (UK)) and applicable law. Our responsibilities under those standards are furtherdescribed in the Auditor’s responsibilities for the audit of the financial statements sectionof our report below. We are independent of the Fund in accordance with the ethicalrequirements that are relevant to our audit of the financial statements in the UK,including the FRC’s Ethical Standard, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which theISAs (UK) require us to report to you where:

• the Manager’s use of the going concern basis of accounting in the preparation ofthe financial statements is not appropriate; or

• the Manager has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Fund’s ability to continue toadopt the going concern basis of accounting for a period of at least twelve monthsfrom the date when the financial statements are authorised for issue.

Independent auditor’s report to the unitholders of the PUTM Bothwell Asia Pacific (Ex Japan) Unit Trust

29


Other information The other information comprises the information included in the Annual Report otherthan the financial statements and our auditor’s report thereon. The Manager isresponsible for the other information.

Our opinion on the financial statements does not cover the other information and, exceptto the extent otherwise explicitly stated in this report, we do not express any form ofassurance conclusion thereon. In connection with our audit of the financial statements,our responsibility is to read the other information and, in doing so, consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If weidentify such material inconsistencies or apparent material misstatements, we arerequired to determine whether there is a material misstatement in the financialstatements or a material misstatement of the other information. If, based on the work wehave performed, we conclude that there is a material misstatement of the otherinformation, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the rules of the Collective InvestmentSchemes Sourcebook of the Financial Conduct AuthorityIn our opinion:

• the financial statements have been properly prepared in accordance with the Statement of Recommended Practice relating to Authorised Funds, the rules of theCollective Investment Schemes Sourcebook of the Financial Conduct Authority andthe Trust Deed;

• the information given in the Manager’s report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• tthere is nothing to indicate that proper accounting records have not been kept orthat the financial statements are not in agreement with those records.

Matters on which we are required to report by exception We have nothing to report in respect of the following matter in relation to which theCollective Investment Schemes Sourcebook of the Financial Conduct Authority rulesrequires us to report to you if, in our opinion:

• we have not received all the information and explanations which, to the best of ourknowledge and belief, are necessary for the purposes of our audit

Responsibilities of the Manager As explained more fully in the Manager’s responsibilities statement set out on page 26,the Manager is responsible for the preparation of the financial statements and for beingsatisfied that they give a true and fair view, and for such internal control as the Managerdetermines is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.

In preparing the financial statements, the Manager is responsible for assessing theFund’s ability to continue as a going concern, disclosing, as applicable, matters relatedto going concern and using the going concern basis of accounting unless the Managereither intends to liquidate the Fund or to cease operations, or has no realistic alternativebut to do so.

30

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor’s report that includes our opinion. Reasonable assurance isa high level of assurance, but is not a guarantee that an audit conducted in accordancewith ISAs (UK) will always detect a material misstatement when it exists. Misstatementscan arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements islocated on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the unitholders of the Fund, as a body, pursuant toParagraph 4.5.12 of the rules of the Collective Investment Schemes Sourcebook of theFinancial Conduct Authority. Our audit work has been undertaken so that we might stateto the unitholders of the Fund those matters we are required to state to them in anauditor’s report and for no other purpose. To the fullest extent permitted by law, we donot accept or assume responsibility to anyone other than the Fund and the unitholders ofthe Fund as a body, for our audit work, for this report, or for the opinions we haveformed.

Ernst & Young LLPStatutory AuditorEdinburgh27 July 2018

Notes:

1. The maintenance and integrity of the PUTM Unit Trust Managers Limited web site is theresponsibility of the Manager; the work carried out by the auditors does not involve consideration ofthese matters and, accordingly, the auditors accept no responsibility for any changes that may haveoccurred to the financial statements since they were initially presented on the web site.

2. Legislation in the United Kingdom governing the preparation and dissemination of financialstatements may differ from legislation in other jurisdictions.


31

Appendix

The Fund carried out stock lending activities for the purpose of efficient portfolio managementand in order to generate income.

Revenue earned from these activities is shown in the Statement of Total Return.

Global DataAmount of securities and commodities on loan % of total lendable assets*

Securities 4.18

Amount of assets engaged in each type of SFT

Amount of assets % of AUM

19,645,590 4.11

* Total lendable assets excludes cash and cash equivalents. It also excludes other monetary amounts such asnet debtors and creditors which are not deemed ‘lendable assets’.

Concentration DataAll collateral issuers (across all SFT) Collateral Fair valueIssuer Holding £’000

Bundesrepublik Deutsche 3.0% 04/07/2020 8,325,440 8,066UK Treasury Gilt 4.75% 07/03/2020 4,831,497 5,221US Treasury Bill 0.0% 24/05/2018 3,618,900 2,661US Treasury Note 2.0% 15/02/2025 3,166,000 2,204UK Treasury Gilt 3.75% 22/07/2052 1,323,520 1,995UK Treasury Gilt 4.25% 07/03/2036 377,906 520French Government 1.75% 25/06/2039 116,792 110French Government 1.0% 25/11/2018 751 1UK Treasury Gilt 4.75% 07/12/2030 288 –

All counterparties Gross Volume of outstanding transactions Fair ValueCounterparty £’000

UBS AG 12,643Citigroup Global Markets Limited 2,517Nomura International plc 2,073JP Morgan Securities plc 1,838Morgan Stanley & Co International plc 575

32

Appendix

Aggregate DataType and quality of collateral Fair valueType Quality* £’000

Bonds Investment grade 20,778

20,778

* Quality of collateral has been interpreted as pertaining to bond instruments, which have been assessed andreported in accordance with whether they are considered investment grade, below investment grade or not-rated.

Maturity tenor of collateral Fair valueMaturity £’000

Rolling Maturity 20,778

20,778

Currency of collateral Fair valueCurrency £’000

Euro 7,736Sterling 8,177US Dollar 4,865

20,778

Maturity tenor of SFTs Fair valueMaturity £’000

Rolling Maturity 19,646

19,646

Country in which counterparties are established

Counterparty

All counterparties are UK based

Return and cost Gross return Cost % of overall Net return £’000 £’000 returns £’000

Fund 196 35 82.00 161

196 35 82.00 161

The gross earnings were split by the lending agent as follows: • 82% to the Lender (PUTM Bothwell Asia Pacific (ex Japan) Fund) • 8% to the Manager (Phoenix Unit Trust Managers Limited) • 10% retained by the Lending Agent (eSec)

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Corporate information

The information in this report is designed to enable unitholders to make an informed judgement on the activitiesof the Fund during the period it covers and the results of those activities at the end of the year.

Phoenix Unit Trust Managers Limited is part of the Phoenix Group.

Ignis Investment Services Limited is part of the Standard Life Aberdeen plc group and its subsidiaries.

Unit prices appear daily on our website www.phoenixunittrust.co.uk

Dealing: 0370 707 0073 Administration: 0330 1233 703

RemunerationThe Manager has adopted a remuneration policy, up-to-date details of which can be found onwww.phoenixunittrust.co.uk. This statement describes how remuneration and benefits are calculated andidentifies the committee which oversees and controls this policy. A paper copy of these details can berequested free of charge from the Manager.

This statement fulfils PUTM Unit Trust Managers Ltd’s (‘the Manager’) obligations as an authorised UCITSManager in respect of compliance with the UCITS V Remuneration Code and contains relevant remunerationdisclosures.

PUTM Unit Trusts are managed by PUTM Unit Trust Managers Ltd, which is a subsidiary of Phoenix LifeLimited, part of The Phoenix Group plc (‘the Group’).

The Remuneration Committee (‘the Committee’) of the Group has established a Remuneration Policy whichapplies to all entities of the Group. The guiding principles of this policy ensure sound and effective riskmanagement so as not to encourage risk-taking outside of the Group’s risk appetite, and supportmanagement in the operation of their business through identification of minimum control standards and keycontrols. The Committee approves the list of UCITS Code Staff annually and identified UCITS Code Staff areannually notified of their status and the associated implications.

Further information on the Group Remuneration Policy can be found in the Group annual reports andaccounts which can be found on www.phoenixgroup.com.

The below table provides detail of remuneration provided, split between fixed and variable remuneration, forUCITS Code Staff (defined as all staff whose professional activities have material impact on the risk profilesof the fund it manages).

As at 31 December 2017 Headcount Total remuneration

Phoenix Unit Trust Managers 2 32,845.47of whichFixed Remuneration 2 24,592.57Variable Remuneration 1 8,252.90Carried Interest n/a

Highest paid Director’s Remuneration 22,845.47

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The Directors are employed by fellow entities of the Group. The total compensation paid to the Directors ofthe Manager is in respect of services to the Manager, irrespective of which entity within the Phoenix Grouphas paid the compensation.

Please note that due to the employment structure and resourcing practices of the Group, the staff indicatedin this table may also provide services to other companies in the Group.

The table states the actual number of employees who are fully or partly involved in the activities of theManager, no attempt has been made to apportion the time spent specifically in support of each fund as thisdata is not captured as part of the Manager’s normal processes.

The remuneration disclosed is the total remuneration for the year and has been apportioned between theprovisions of services to the Manager and not the fund.

Total remuneration can include any of the following;

• Fixed pay and annual/long term incentive bonuses

• Where fixed pay is directly attributable to PUTM Unit Trusts (for example, fees for Phoenix Unit TrustManagers Ltd), 100% of those fees

• For other individuals, pro-rated using the average AUM of PUTM Unit Trusts (as a proportion of theaggregate average AUM of The Phoenix Group plc) as proxy.

Senior Management includes – PUTM Board and PUTM Executive Committees.

Other Code Staff includes all other UCITS Code Staff not covered by the above.

RisksThe price of units and the revenue from them can go down as well as up and investors may not get back theamount they invested, particularly in the case of early withdrawal. Tax levels and reliefs are those currentlyapplicable and may change. The value of any tax relief depends on personal circumstances.

Management charges on some funds are charged to capital and therefore a reduction in capital may occur.

Depending on the fund, the value of your investment may change with currency movements.

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Investment AdviserIgnis Investment Services Limited1 George StreetEdinburgh EH2 2LLRegistered in Scotland – No.SC101825Authorised and regulated by the Financial ConductAuthority.

Trustee HSBC Bank plc1-2 Lochside WayEdinburgh ParkEdinburgh EH12 9DTAuthorised by the Prudential Regulation Authorityand regulated by the Financial Conduct Authorityand the Prudential Regulation Authority.

Independent AuditorErnst & Young LLPAtria One144 Morrison StreetEdinburgh EH3 8EX

Authorised statusThis Fund is an Authorised Unit Trust scheme undersection 243 of the Financial Services & Markets Act2000 and is categorised under the CollectiveInvestment Schemes Sourcebook as a UCITS fund.

ManagerPhoenix Unit Trust Managers Limited (PUTM)1 Wythall Green WayWythallBirmingham B47 6WGTel: 0330 1233 703Registered in England – No.03588031Authorised and regulated by the Financial ConductAuthority.

DirectorsAndrew Moss PUTM Director, Chief Executive

Phoenix Life;Shamira Mohammed PUTM Director, Finance Director

Phoenix Life (resigned 13 June2017);

Craig Baker PUTM Director, Head of InvestmentManagement Phoenix Life;

Mike Urmston Non Executive Director of PUTM.

Registrar and correspondence addressPhoenix Unit Trust Managers LimitedPO Box 12997Chelmsford CM99 2ENAuthorised and regulated by the Financial Conduct Authority.

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Notes

B540.05.18

Telephone calls may be monitored and/or recorded for the purposes of security, internal training, accurate accountoperation, internal customer monitoring and to improve the quality of service.

Please note the Key Investor Information Document (KIID), the supplementary Information Document (SID) and thefull prospectus are available free of charge. These are available by contacting Client Services on 0330 1233 703.

Phoenix Unit Trust Managers Limited does not accept liability for any claims or losses of any nature arising directlyor indirectly from use of the data or material in this report. The information supplied is not intended to constituteinvestment, tax, legal or other advice.

Phoenix Unit Trust Managers Limited* is a Phoenix Group Company. Registered in England No 3588031.Registered office: 1 Wythall Green Way, Wythall, Birmingham B47 6WG.*Authorised and regulated by the Financial Conduct Authority.

Contact: Client ServicesCall: 0330 1233 703Correspondence Address: PO Box 12997 Chelmsford CM99 2ENVisit: phoenixunittrust.co.uk

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