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Old Mutual Investment Funds

Annual Report and Financial Statements For the year ended 31 December 2017


Contents Page


Company Information 3

Report of the Directors of Old Mutual Investment Funds 6

Authorised Corporate Director’s report 7

Cross Holdings 7

Statement of the Authorised Corporate Director’s responsibilities 7

Remuneration Policy 8

Statement of the Depositary’s Responsibilities in Respect of the Scheme and Report of the Depositary to the Shareholders of Old Mutual Investment Funds 10

Independent Auditor's Report to the Shareholders of Old Mutual Investment Funds 11

Old Mutual Global Best Ideas Fund 13

Investment Manager's review 13 Performance record 14 Portfolio statement 18 Statement of total return 21 Statement of change in net assets attributable to shareholders 21 Balance sheet 22 Notes to the financial statements 23 Distribution table 33

Old Mutual Voyager Global Dynamic Equity Fund 35

Investment Manager's review 35 Performance record 36 Portfolio statement 39 Statement of total return 55 Statement of change in net assets attributable to shareholders 55 Balance sheet 56 Notes to the financial statements 57 Distribution table 68

Accounting Policies 69


Company Information


3

Authorised Corporate Director (“ACD”)

Old Mutual Investment Management Limited Millennium Bridge House 2 Lambeth Hill London EC4V 4AJ

Authorised and regulated by the Financial Conduct Authority.

Investment Manager

Old Mutual Global Investors (UK) Limited Millennium Bridge House 2 Lambeth Hill London EC4P 4WR

Authorised and regulated by the Financial Conduct Authority.

Depositary

Citibank Europe plc, UK Branch Citigroup Centre Canada Square, Canary Wharf London E14 5LB Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Legal Adviser

Macfarlanes LLP 20 Cursitor Street London EC4A 1LT

Auditor

KPMG LLP Saltire Court 20 Castle Terrace Edinburgh EH1 2EG

Administrator

Citibank Europe plc 1, North Wall Quay Dublin 1 Ireland Authorised by the Central Bank of Ireland (Central Bank) under the Investment Intermediaries Act. 1995

Registrar

DST Financial Services International Ltd (formerly International Financial Data Services) DST House Saint Nicholas Lane Basildon Essex SS15 5FS The register of shareholders can be inspected at the above address.

Directors of the ACD

M Dean J Brescia P Simpson J Little (appointed 14 February 2018) – Non-Executive Director C Turner (appointed 14 February 2018) – Non-Executive Director


Company Information (continued)


4

Investment Advisers

Old Mutual Global Best Ideas Fund:

First State Investment Management (UK) Limited 23 St Andrew Square Edinburgh EH2 1BB Authorised and regulated by the Financial Conduct Authority. Odey Asset Management LLP 12 Upper Grosvenor Street London W1K 2ND Authorised and regulated by the Financial Conduct Authority. Old Mutual Global Investors (UK) Limited Millennium Bridge House 2 Lambeth Hill London EC4P 4WR Authorised and regulated by the Financial Conduct Authority. TimesSquare Capital Management, LLC 1177 Avenue of the Americas, 39th FL New York NY 10036-2714 USA Regulated by the US Securities and Exchange Commission.


Company Information (continued)


5

Investment Advisers (continued)

Old Mutual Voyager Global Dynamic Equity Fund:

Brandywine Global Investment Management LLC 2929 Arch Street 8th Floor Philadelphia, PA 19104 USA Regulated by the US Securities and Exchange Commission. Lapides Asset Management LLC 500 West Putnam Avenue 4th Floor Greenwich, CT 06830 USA Regulated by the US Securities and Exchange Commission. LSV Asset Management 155 North Wacker Drive Suite 4600 Chicago, IL 60606 USA Regulated by the US Securities and Exchange Commission. Old Mutual Global Investors (UK) Limited Millennium Bridge House 2 Lambeth Hill London EC4P 4WR Authorised and regulated by the Financial Conduct Authority. Schroder Investment Management Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority. Wellington Management International Limited Cardinal Place 80 Victoria Street London SW1E 5JL Authorised and regulated by the Financial Conduct Authority. Wells Capital Management Incorporated 525 Market Street San Francisco CA 94105 USA Regulated by the US Securities and Exchange Commission.

Old Mutual Investment Management Limited, a member of the Old Mutual Group of companies, is authorised and regulated by the Financial Conduct Authority. FCA Register number 208543. Registered Office: Millennium Bridge House, 2 Lambeth Hill, London, EC4V 4AJ, United Kingdom. Registered Number: 4227837 England. www.omglobalinvestors.com


Authorised Corporate Director’s Report


7

The purpose of this report is to provide details of the progress of the Company, and its sub-funds contained within. The report provides details of the performance and the portfolio of each of the sub-funds.

Net asset value of sub-funds

31 December 2017 31 December 2016

Net asset value of

sub-fund by share class

Shares

in issue

Net asset value per

share

Net asset value of

sub-fund by share class

Shares

in issue

Net asset value per

share

Old Mutual Global Best Ideas Fund

– Accumulation ‘A’ £148,944,779 129,407,062 115.10p £213,716,388 204,060,424 104.73p

– Accumulation ‘A’ EUR £1,608,606 1,377,044 116.82p £30,648,900 28,798,233 106.43p

– Accumulation ‘A’ USD £960 1,000 96.02p £871 1,000 87.14p

– Accumulation ‘R’ £21,773,989 18,259,658 119.25p £22,227,710 20,640,043 107.69p

– Accumulation ‘U1’ £18,088,215 12,816,512 141.13p £20,679,382 16,236,156 127.37p

– Accumulation ‘U2’ £97,387 68,366 142.45p £109,820 85,500 128.44p

Old Mutual Voyager Global Dynamic Equity Fund

– Accumulation ‘A’ £556,454,126 456,907,632 121.79p £729,932,218 669,899,662 108.96p

– Accumulation ‘A’ EUR £982,643 811,936 121.02p £888,143 820,330 108.27p

– Accumulation ‘A’ USD £3,290,725 2,705,896 121.61p £786,462 721,243 109.04p

– Accumulation ‘R’ £27,349,337 21,393,396 127.84p £21,396,253 18,893,549 113.25p Cross Holdings

There were no cross holdings held by the sub-funds throughout the year to 31 December 2017.

Securities Financing Transactions Regulation Disclosure None of the sub-funds in the Company currently undertakes securities financing transactions (as defined in Article 3 of Regulation (EU) 2015/2365) or uses total return swaps.

Statement of the Authorised Corporate Director’s responsibilities The Financial Conduct Authority’s Collective Investment Schemes Sourcebook (‘COLL’) require the Authorised Corporate Director to prepare financial statements for each interim and annual accounting period that give a true and fair view of the financial position of the Company and of its revenue and expenditure and of its net gains on the property of the Company for the year. In preparing the financial statements the Authorised Corporate Director is required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

comply with the disclosure requirements of the Statement of Recommended Practice ‘Financial Statements of UK Authorised Funds’ issued by the Investment

Association (“IA”) in May 2014;

follow generally accepted United Kingdom accounting principles and standards and applicable United Kingdom laws;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the scheme will continue in operation;

keep proper accounting records that enable it to demonstrate that the financial statements as prepared comply with the above requirements; and

take reasonable steps for the prevention and detection of fraud and irregularities.

The Authorised Corporate Director is responsible for the management of the Company in accordance with the Regulations, the Prospectus and the Instrument of Incorporation.


Remuneration Policy


8

Remuneration Disclosure Annual Report and Accounts

Remuneration Policy Sub-funds of the Company (listed below) are managed by Old Mutual Investment Management Limited, which is a wholly owned subsidiary of Old Mutual Global Investors Holdings Limited.

Old Mutual Global Best Ideas Fund Old Mutual Voyager Dynamic Equity Fund

The board of OMIML has established a Remuneration Policy encompassing the specific requirements of the UCITS Directive. This policy applies to OMIML and the sub-funds it manages. Remuneration philosophy and alignment with risk management OMIML’s remuneration philosophy is focused on pay for performance, where the performance is delivered within the risk appetite of the firm and the funds it manages. Remuneration is structured in a way to attract, motivate and retain the individuals needed to lead and develop the business. Remuneration structures are designed to support the delivery of OMIML’s strategy and align the interests of executives, shareholders and customers. Remuneration is comprised of fixed pay, variable pay (cash bonus with deferral and LTIP), non-contributory defined contribution pension and other market competitive benefits. A proportion of the annual bonus is deferred into approved funds or Old Mutual plc shares. The deferral rates applied increase in line with the amount of the annual bonus and are applied on a tax table basis. For OMIML ‘Identified Staff’, where variable remuneration amounts to more than £500,000 (or local currency equivalent) a deferral rate of 60% is applied. The Remuneration Committee monitors the compensation process and ensures that proposals do not reward senior staff for excessive risk-taking. The deferred element of the annual bonus vests in equal tranches on an annual basis over three years after award. During the deferral period the unvested bonus award remains at risk of forfeiture or reduction. This helps promote sound risk management and discourage risk taking that exceeds the firm’s level of tolerated risk or that of OMIML’s client funds. Through the use of deferral into funds or shares the interests of staff are closely aligned to the long-term interests of investors and shareholders. An LTIP is offered in the form of a Joint Share Ownership Plan which is designed to align senior management reward to the success of the company in achieving its strategic priorities and growing the value of the business. Awards under the plan have a vesting period of 3 years. At vesting, the participant’s interest is exchanged for Old Mutual plc shares of equal value, of which 50% of the net amount are subject to a 12 month restricted period. A copy of the Remuneration Policy is available upon request. Financial and non-financial criteria Variable remuneration is based on a rounded assessment of firm and individual performance. The assessment of corporate performance covers both financial and non-financial performance including risk management. Individual performance is assessed against the individual’s objectives and includes an employee’s compliance with controls and applicable company standards including the Code of Ethics. Conflicts of interest The approach to and management of remuneration contain a number of measures to avoid conflicts of interest.

Guidance is provided to managers to assist them in determining appropriate remuneration recommendations for their staff. Remuneration proposals are subject to approval by department or functional heads. For senior employees these proposals are subject to moderation as part of a broader Old Mutual Wealth process. No employee may determine their own remuneration.

Employees engaged in control functions (e.g. Risk, Compliance and Internal Audit) have functional line management structures outside of the business units they oversee, to ensure that remuneration decisions are not directly determined by the business units they oversee. Variable remuneration for control function employees is determined on the achievement of meeting their own functional objectives as set in their appraisal. The Old Mutual Wealth Remuneration Committee signs off the remuneration of higher paid staff.

Personal hedging strategies which may undermine the risk alignment of variable remuneration are not permissible (e.g. entering into an arrangement with a third party under which payments will be linked to the person's remuneration or deferred consideration). Personal Account dealing policies are in place which prohibit dealing on a personal basis or by any connected party without prior consent from Compliance.

Employee remuneration disclosure The table below provides an overview of the following:

Aggregate total remuneration of OMIML entire staff; and Aggregate total remuneration of OMIML ‘Identified Staff’

The ‘Identified Staff’ of OMIML are those employees who are considered could have a material impact on the risk profile of OMIML or the funds it manages (including funds under the Old Mutual Investment Funds). This broadly includes senior management, risk takers and control functions. For the purposes of this disclosure, ‘Identified Staff’ does not include employees of entities to which activities have been delegated. Amounts shown reflect payments made during the financial reporting period of OMIML.


Remuneration Policy


9


Headcount Total Remuneration Proportion3

OMIML Staff1 325 £16,514,242 £445,786

of which

Fixed remuneration £6,012,464 £162,333

Variable remuneration £10,501,778 £283,543

Carried interest Nil Nil

OMIML ‘Identified Staff’2 6 £1,052,466 £28,416

of which

Senior Management 5 £989,487 £26,716

Other Identified Staff 1 £62,979 £1,700

1 Total remuneration costs represent an apportioned amount of OMGI’s total remuneration costs for fixed and variable pay, apportioned to OMIML based on average

time allocation, and to sub-fund activity on an AUM basis (as at 31 December 2017). The Headcount figure provided represents an apportioned amount of the OMGI’s total FTE headcount as at 31 December 2017, apportioned to OMIML on the basis of average time allocation.

2 The Identified Staff disclosure represents total compensation of OMIML Code Staff, apportioned to the estimated time relevant to the activity. Across the Identified Staff, the average time allocation per individual based on work undertaken for OMIML was 20%.

3 This figure represents an apportioned amount of the total remuneration attributable to the sub-fund allocated on an AUM basis (as at 31 December 2017).


Statement of the Depositary’s Responsibilities in Respect of the Scheme and Report of the Depositary to the Shareholders of Old Mutual Investment Funds


10

for the year from 1 January 2017 to 31 December 2017

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 and for the collection of revenue that arises from that property.

It is the duty of the Depositary to take reasonable care to ensure that the Company is managed by the Authorised Corporate Director in accordance with the FCA’s Collective Investment Schemes Sourcebook (the COLL Sourcebook), the Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) (the OEIC Regulations) and the Company’s Instrument of Incorporation and Prospectus, as appropriate, in relation to the pricing of, and dealings in, shares in the Company, the application of revenue 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 Authorised Corporate Director:

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 revenue in accordance with the COLL Sourcebook and, where applicable, the OEIC Regulations and the Company’s Instrument of Incorporation and Prospectus; and

has observed the investment and borrowing powers and restrictions applicable to the Company; and

has, otherwise, ensured the proper operation of the Company.

Citibank Europe Plc, UK Branch Depositary 18 April 2018




13

Launch date 13 June 2006

IA Sector Global

Investment Adviser

First State Investment Management (UK) Limited Odey Asset Management LLP

Old Mutual Global Investors (UK) Limited TimesSquare Capital Management LLC

Net asset value £190,513,936

Objective

The sub-fund aims to provide long term total return from capital growth and income through investment in global securities.

Policy

The sub-fund investment will be in a portfolio of global securities (including the UK), either directly in transferable securities or through collective investment schemes. Investment will generally be directly into global equities, although the sub-fund may invest up to 10% of its property in regulated collective investment schemes including those that are managed or operated by the ACD or an associate of the ACD.

The sub-fund may hold cash weightings.

For efficient portfolio management purposes only, investment may also be made into derivatives or forward transactions. The ACD considers that the use of derivatives for this purpose is not likely to affect the volatility or risk profile of the sub-fund.

Investment Manager’s review

2017 was a very strong year for equity markets. Credit markets also had a solid year, outperforming government bonds, although the asset class underperformed equities. Continued signs of healthy economic growth, strong earnings and US tax cuts resulted in a strong fourth-quarter, capping off a year in which the MSCI All Country World Index rose every month in US dollars. Over the year, several central banks modestly tightened monetary policy, although some emerging market (EM) central banks cut rates, in response to lower inflation. Anticipated political risks broadly failed to materialise in a range of national elections.

It was another decent year in which the sub-fund’s NAV grew, however relative to the sub-fund’s reference index the sub-fund lagged the broader market, the difference largely being explained by the sub-fund holding circa 11% in cash during the year. The sub-fund is unconstrained and the managers’ remit allows for them to hold high cash levels as part of their strategy. When markets shoot up, like they did in 2017, holding cash is clearly a headwind.

Looking at our stock picks during the year a general observation was that our names in leading sectors such as technology, healthcare and materials lagged their respective sectors. However, good stock selection in financials, real estate investment trusts and consumer staples names helped to more than offset the lagging names. At a country level our European companies, especially in the UK, did well. However, relative to the sub-fund’s reference index having a materially lower weighting to Europe ex UK names and the euro detracted. Our limited exposure to emerging market names positively contributed and helped more than offset the headwind of having a very small allocation to Japan ideas. Our US company share exposure, in aggregate, marginally lagged the US stock market during the year. Most of the managers enjoyed a good 2017, the notable exception being US small cap value manager, FPA. During the year we removed Liontrust, whose manager was running a global developed mandate, as well as FPA. In a desire to increase our exposure to European companies and, in an effort to diversify beyond our UK exposure, we added the Old Mutual European Best Ideas Fund. This gives us access to a group of proven managers with a long track record of delivering good performance returns using the same ‘best ideas’ approach.

The portfolio attempts to control risk through diversification across countries/currencies, sectors (economic sensitivity), managers (style) and market-cap (all-cap). We seek to drive returns from manager (stock) selection. In the short term, as always, the main ‘relative risk’ to the sub-fund is a narrow market that favours areas to which the sub-fund is underexposed.

Our outlook has not changed. The global recovery could be blown off course by the rise of nationalism (as evidenced in the UK, Spain and the US), poor execution from politicians or central bankers (particularly around the removal of QE and rising interest rates). In emerging markets, the managed deceleration in China’s growth as it tries to move to consumer-driven expansion from an export and investment/credit-led economy may cause bouts of volatility. The US stock market is still trading at or near all-time highs, on elevated multiples and margins and needs earnings growth to now drive shares higher to justify current valuations. Few markets offer a margin of safety on valuation grounds.

Risk and Reward Profile

The calculated risk and reward category, as shown above, uses a method of calculation derived from EU rules. It is based on the rate at which the returns of the sub-fund have moved up and down in the past (i.e. volatility) and is not a guide to the future risk and reward category of the sub-fund. The category shown is not a target or guarantee and may shift over time. Even the lowest category 1 does not mean a risk-free investment. The seven-category scale is nonlinear, for example, 2 is not twice as risky as 1.

Sub-funds in category 5 have in the past shown moderately high volatility. With a sub-fund of category 5, you have a moderately high risk of losing money but your chance for gains is also moderately high.

Investment risk - there is no guarantee that the sub-fund will achieve its objective. A capital loss of some or all of the amount invested may occur.

Currency risk (EUR share class) - the sub-fund is denominated in British Pounds but holds assets denominated in other currencies. This share class is denominated in Euro. The value of your shares may rise and fall as a result of exchange rate movements between these currencies.

Currency risk (GBP share class) - the sub-fund is denominated in British Pounds but holds assets denominated in other currencies. The value of your shares may rise and fall as a result of exchange rate movements between these currencies.

Currency risk (USD share class) - the sub-fund is denominated in British Pounds but holds assets denominated in other currencies. This share class is denominated in US Dollars. The value of your shares may rise and fall as a result of exchange rate movements between these currencies.

Derivative risk - the sub-fund may use derivatives to reduce costs and/or the overall risk of the sub-fund (i.e. Efficient Portfolio Management (EPM)). Derivatives involve a level of risk, however, for EPM they should not increase the overall riskiness of the sub-fund. Derivatives also involve counterparty risk where the institutions acting as counterparty to derivatives may not meet their contractual obligations.

Capital erosion risk - the sub-fund takes its charges from the income of the sub-fund in the first instance. The impact of sub-fund charges may be material on the value of any income you receive from your investment. There is potential for capital erosion if insufficient income is generated by the sub-fund to cover these charges. Capital erosion may have the effect of reducing the level of income generated.

For a more detailed explanation of risks, please refer to the "Risks" section of the prospectus.



14

Performance Records Comparative Tables 1 January 2017 to 1 January 2016 to 1 January 2015 to Accumulation 'A' 31 December 2017 31 December 2016 31 December 2015 p/share p/share p/share Change in net assets per share

Opening net asset value per share 104.73 90.41 87.72

Return before operating charges* 12.76 16.42 4.83 Operating charges** (2.39) (2.10) (2.14)

Return after operating charges* 10.37 14.32 2.69 Distributions - - - Retained distributions - - -

Closing asset value per share 115.10 104.73 90.41

* after direct transaction costs of*** 0.17 0.21 0.41 Performance

Return after charges 9.90% 15.84% 3.07% Other information

Closing net asset value (£) 148,944,779 213,716,388 227,028,588 Closing number of shares 129,407,062 204,060,424 251,113,991 Operating charges**** 2.18% 2.24% 2.35% Direct transaction costs*** 0.15% 0.22% 0.46%

Prices pence per share pence per share pence per share Highest share price 115.0 105.1 97.64 Lowest share price 104.5 78.96 83.99

1 January 2017 to 1 January 2016 to 1 January 2015 to Accumulation 'A' EUR 31 December 2017 31 December 2016 31 December 2015 p/share p/share p/share Change in net assets per share



Return after operating charges* 10.39 14.56 2.73 Distributions - - - Retained distributions - - -





Prices cents per share cents per share cents per share Highest share price 132.0 125.3 138.0 Lowest share price 119.9 102.7 113.0



15

Comparative Tables (continued) 1 January 2017 to 1 January 2016 to 1 January 2015 to Accumulation 'A' USD† 31 December 2017 31 December 2016 31 December 2015 p/share p/share p/ share Change in net assets per share

Opening net asset value per share 87.14 72.00 -

Return before operating charges* 10.88 16.92 - Operating charges** (2.00) (1.78) -

Return after operating charges* 8.88 15.14 - Distributions - (0.04) - Retained distributions - 0.04 -

Closing asset value per share 96.02 87.14 -

* after direct transaction costs of*** 0.14 0.18 - Performance

Return after charges 10.19% 21.03% - Other information

Closing net asset value (£) 960 871 - Closing number of shares 1,000 1,000 - Operating charges**** 2.18% 2.24% - Direct transaction costs*** 0.15% 0.22% -

Prices cents per share cents per share cents per share Highest share price 129.6 110.7 - Lowest share price 106.8 99.77 -

1 January 2017 to 1 January 2016 to 1 January 2015 to Accumulation 'R' 31 December 2017 31 December 2016 31 December 2015 p/share p/share p/ share Change in net assets per share



Return after operating charges* 11.56 15.41 3.41 Distributions (0.09) (0.04) (0.25) Retained distributions 0.09 0.04 0.25



Return after charges 10.73% 16.70% 3.84% Other information Closing net asset value (£) 21,773,989 22,227,710 21,005,345

Closing number of shares 18,259,658 20,640,043 22,762,754 Operating charges**** 1.43% 1.49% 1.60% Direct transaction costs*** 0.15% 0.22% 0.46%




16

Comparative Tables (continued) 1 January 2017 to 1 January 2016 to 1 January 2015 to Accumulation 'U1' 31 December 2017 31 December 2016 31 December 2015 p/share p/share p/ share Change in net assets per share









1 January 2017 to 1 January 2016 to 1 January 2015 to Accumulation 'U2' 31 December 2017 31 December 2016 31 December 2015 p/share p/share p/share Change in net assets per share




Closing asset value per shares 142.45 128.44 109.89



Closing net asset value (£) 97,387 109,820 57,554 Closing number of shares 68,366 85,500 52,374 Operating charges**** 1.28% 1.34% 1.45% Direct transaction costs*** 0.15% 0.22% 0.46%


† Launched 1 March 2016 ** The operating charges include all costs borne by the sub-fund, except for direct transaction costs. Since the sub-fund invests less than 10% of net assets in

underlying sub-funds there is no inclusion of a synthetic element for underlying sub-funds OCF. *** The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities

exchanges as well as transfer taxes and duties. They do not include any difference between the quoted bid and offer prices or internal administrative or holding costs. These costs arise as a result of transactions undertaken both for efficient portfolio management and the meeting of the sub-fund’s objectives. These costs exclude any effect of dilution adjustments used to offset the costs.

**** The operating charges percentage is the equivalent of the ongoing charges figure per the prior year accounts. It is the ratio of the sub-fund's ongoing charges (excluding interest on borrowings) to the average net assets of the sub-fund.



17

Performance

6 months to

31 December 2017

1 year to

31 December 2017

3 years to

31 December 2017

5 years to

31 December 2017

Old Mutual Global Best Ideas* 6.24% 10.79% 34.17% 70.65%

GBI Custom (benchmark) 5.83% 12.66% 46.11% 77.43%

IA Global (sector average) 6.55% 13.86% 45.15% 89.24%

Quartile ranking 3 4 4 4

* Accumulation ‘R’ shares

Data Source – Factset. Figures are calculated on a total return and single price basis, with net income reinvested into the sub-fund.

Portfolio allocation

North America Equities 38.99%

United Kingdom Equities 19.97%

Europe Equities 18.93%

Asia Pacific Equities ( excluding Japan) 5.88%

South America Equities 3.23%

Africa Equities 1.12%

Japan Equities 0.85%

Net other assets 11.03%

Total 100.00%

Asset allocation

Equities 88.97%


Total 100.00%

Major holdings Percentage of

portfolio

Old Mutual European Best Ideas Fund - U2 Income 8.34%

Progressive 3.98%

Global Payments 3.63%

Gartner 3.24%

SBA Communications Class A 3.17%

Randgold Resources 2.91%

CBRE 2.60%

Booz Allen Hamilton 2.34%

Dollar Tree 2.33%

Alliance Data Systems 2.14%

Number of holdings 60


Portfolio statement as at 31 December 2017


18

Holding Investment Market Percentage of

Value total net assets £’000 %

United Kingdom 19.97% (31 December 2016 20.16%)

United Kingdom Equities 19.97% (31 December 2016 20.16%) 278,200 3i 2,525 1.32 120,577 Alfa Financial Software 641 0.34 722,400 Ascential 2,780 1.46 138,400 Ashtead 2,728 1.43 247,300 GVC Holdings 2,292 1.20 380,200 HomeServe 3,066 1.61 894,150 Man 1,841 0.97

1,101,000 Melrose Industries 2,325 1.22 90,900 Micro Focus International 2,280 1.20

9,777,000 Pendragon 2,713 1.42 75,330 Randgold Resources 5,537 2.91

895,600 Rentokil Initial 2,833 1.49 384,000 Sky 3,863 2.03 489,900 TP ICAP 2,621 1.37

38,045 19.97

Overseas 69.00% (31 December 2016 67.23%)

Africa 1.12% (31 December 2016 1.47%)

South Africa Equities 1.12% (31 December 2016 1.47%) 182,142 Standard Bank 2,134 1.12

2,134 1.12

Asia Pacific (excluding Japan) 5.88% (31 December 2016 6.57%)

Australia Equities 0.00% (31 December 2016 0.34%)

Hong Kong Equities 0.67% (31 December 2016 0.96%) 676,000 Vitasoy 1,279 0.67

1,279 0.67

India Equities 2.94% (31 December 2016 3.97%) 1,293,492 Idea Cellular 1,625 0.85

63,522 Tata Consultancy Services 1,985 1.04 1,843,445 Tata Power 1,996 1.05

5,606 2.94

New Zealand Equities 0.00% (31 December 2016 0.27%)

Singapore Equities 1.11% (31 December 2016 1.03%) 308,800 Oversea-Chinese Banking 2,120 1.11

2,120 1.11


Portfolio statement (continued) as at 31 December 2017


19



Taiwan Equities 1.16% (31 December 2016 0.00%) 1,352,000 Uni-President Enterprises 2,206 1.16

2,206 1.16

Japan 0.85% (31 December 2016 2.94%)

Japan Equities 0.85% (31 December 2016 2.94%) 83,900 Unicharm 1,616 0.85

1,616 0.85

Europe 18.93% (31 December 2016 10.03%)

Denmark Equities 0.90% (31 December 2016 0.00%) 42,723 Novo Nordisk 1,705 0.90

1,705 0.90

France Equities 3.37% (31 December 2016 4.28%) 15,248 Air Liquide 1,427 0.75 12,740 Essilor International 1,303 0.69 13,360 Ingenico 1,047 0.55 7,827 Sodexo 778 0.41

24,486 Vinci 1,854 0.97

6,409 3.37

Germany Equities 1.34% (31 December 2016 1.30%) 10,048 Beiersdorf 872 0.46 19,024 Henkel 1,683 0.88

2,555 1.34

Ireland Equities 8.34% (31 December 2016 0.00%) 1,262,010 Old Mutual European Best Ideas Fund - U2 Income 15,888 8.34

15,888 8.34

Italy Equities 1.76% (31 December 2016 0.00%) 92,241 Banca IFIS 3,354 1.76

3,354 1.76

Norway Equities 1.20% (31 December 2016 0.86%) 125,100 Aker 2,287 1.20

2,287 1.20

Spain Equities 1.39% (31 December 2016 2.18%) 24,357 Amadeus IT 1,306 0.68 52,176 Industria de Diseno Textil 1,347 0.71

2,653 1.39

Switzerland Equities 0.63% (31 December 2016 1.41%) 3,670 Geberit 1,198 0.63

1,198 0.63




20



North America 38.99% (31 December 2016 44.38%)

Canada Equities 1.01% (31 December 2016 0.70%) 603,335 Kinross Gold (CAD Listing) 1,920 1.01

1,920 1.01

United States Equities 37.98% (31 December 2016 43.68%) 9,751 3M 1,701 0.89

21,900 Alliance Data Systems 4,074 2.14 58,700 Amdocs 2,847 1.49 14,446 Amgen 1,873 0.98

157,500 Booz Allen Hamilton 4,464 2.34 237,913 Cadiz 2,509 1.32 152,400 CBRE 4,956 2.60

55,500 Dollar Tree 4,439 2.33 24,500 FleetCor Technologies 3,507 1.84 67,300 Gartner 6,171 3.24 93,200 Global Payments 6,919 3.63 15,658 Marriott 1,583 0.83 30,652 Nike 1,428 0.75 24,472 PepsiCo 2,161 1.13

181,200 Progressive 7,577 3.98 50,000 SBA Communications Class A 6,032 3.17 14,463 Stryker 1,666 0.88 19,142 United Technologies 1,815 0.95 61,456 Verizon Communications 2,430 1.28 17,399 Visa 1,472 0.77 50,744 Walgreens Boots Alliance 2,739 1.44

72,363 37.98

South America 3.23% (31 December 2016 1.84%)

Brazil Equities 2.11% (31 December 2016 0.78%) 680,000 SLC Agricola 4,026 2.11

4,026 2.11

Chile Equities 1.12% (31 December 2016 1.06%) 98,509 Cia Cervecerias Unidas ADR 2,129 1.12

2,129 1.12

Investment assets 169,493 88.97

Net other assets 21,021 11.03

Total net assets 190,514 100.00

All investments are approved securities being either officially listed in a member state or traded on or under the rules of an eligible securities market, unless otherwise stated. All investments are in ordinary shares unless otherwise stated.



21

Statement of total return for the year from 1 January 2017 to 31 December 2017

01.01.17 to 01.01.17 to 01.01.16 to 01.01.16 to

31.12.17 31.12.17 31.12.16 31.12.16

Notes £'000 £'000 £'000 £'000

Income

Net capital gains 2 24,422 45,177

Revenue 3 3,656 4,815

Expenses 4 (4,606) (6,315)

Interest payable and similar charges 5 (18) (22)

Net expense before taxation (968) (1,522)

Taxation 6 (212) (318)

Net expense after taxation (1,180) (1,840)

Total return before distributions 23,242 43,337

Distributions 7 (52) (50)

Change in net assets attributable to

shareholders from investment activities 23,190 43,287

Statement of change in net assets attributable to shareholders for the year from 1 January 2017 to 31 December 2017

01.01.17 to 01.01.17 to 01.01.16 to 01.01.16 to

31.12.17 31.12.17 31.12.16 31.12.16

£'000 £'000 £'000 £'000

Opening net assets attributable to shareholders 287,383 332,408

Amounts received on issue of shares 16,464 20,715

Amounts paid on cancellation of shares (136,826) (109,181)

(120,362) (88,466)

Dilution adjustment 259 109

Change in net assets attributable to shareholders

from investment activities 23,190 43,287

Retained distribution on accumulation shares 44 45

Closing net assets attributable to shareholders 190,514 287,383 The notes on pages 23 to 32 form an integral part of these financial statements.



22

Balance sheet

as at 31 December 2017

31.12.17 31.12.16

Notes £'000 £'000

Assets

Fixed assets

Investments 169,493 251,143

Current assets

Debtors 8 852 400

Cash and bank balances 9 20,688 37,342

Total assets 191,033 288,885

Liabilities

Investment liabilities - (1)

Creditors

Other creditors 10 (519) (1,501)

Total liabilities (519) (1,502)

Net assets attributable to shareholders 190,514 287,383 The notes on pages 23 to 32 form an integral part of these financial statements


Notes to the financial statements for the year from 1 January 2017 to 31 December 2017


23

1 Accounting policies The applicable accounting policies adopted by the Old Mutual Global Best Ideas Fund are included on pages 69 to 70.

2 Net capital gains

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

The net capital gains on investments comprise:

Gains on non-derivative securities 25,391 43,033

Gains on forward currency contracts 6 7

(Losses)/gains on currency contracts (912) 2,200

Handling charges (63) (63)

Net capital gains on investments 24,422 45,177

3 Revenue

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Authorised corporate director capitalised fee rebate 54 -

Bank interest 15 19

Non-taxable overseas dividends 2,703 3,320

Taxable overseas dividends - 54

UK dividends 884 1,422

Total revenue 3,656 4,815

4 Expenses

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Payable to the Authorised Corporate Director, associates of the Authorised Corporate Director and agents of either of them:

Authorised Corporate Director's periodic charge 3,121 4,166

Fixed expense* 283 384

3,404 4,550

Other expenses:

Investment Adviser’s fees** 1,202 1,765

Total expenses 4,606 6,315

* These figures represent the fixed expense charge which covers all fees payable to the Depositary (including associates etc.), and other expenses. The Audit fee for the year, excluding VAT, was £7,300 (31 December 2016: £7,150). ** The Investment adviser’s fees are not included within the fixed expense charge.

5 Interest payable and similar charges

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Bank overdraft interest 18

22

Total interest payable and similar charges 18 22


Notes to the financial statements (continued) for the year from 1 January 2017 to 31 December 2017


24

6 Taxation

a) Analysis of tax charge in the year

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Overseas tax suffered 212 318

Total current tax charge for the year 212 318

Deferred tax charge for the year - -

Total taxation for the year (see note 6(c)) 212 318

b) Factors affecting current tax charge for the year

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

The taxation assessed for the year is higher than the standard rate of corporation tax in the UK for an open ended investment company (20%). The differences are explained below:

Net expense before taxation (968) (1,522)

Corporation tax at 20% (31 December 2016: 20%) (194) (305)

Effects of:

Excess management expenses for which no relief taken 911 1,255

Revenue not subject to taxation - UK (177) (284)

Non-taxable overseas dividends (540) (664)

Overseas tax expensed - (2)

Overseas tax suffered 212 318

Total tax charge for the year (see note 6(a)) 212 318

OEICs are exempt from tax in capital gains, therefore, any capital return is not included in the above reconciliation.

c) Movement in deferred tax liability

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Deferred tax liability at the start of the year - -

Deferred tax charge for the year (see note 6(a)) - -

Deferred tax liability at the end of the year - -

At 31 December 2017 the sub-fund had surplus management expenses of £71,095,218 (31 December 2016: £66,537,889), which can be utilised against profits chargeable to corporation tax in future periods. It is unlikely that the sub-fund will generate sufficient taxable profits in the future to utilise these expenses and, therefore, no deferred tax asset has been recognised.




25

7 Distributions The distributions take account of revenue received on the issue of shares and revenue deducted on the cancellation of shares, and comprise:

01.01.17 to 01.01.16 to 31.12.17 31.12.16 £'000 £'000 Interim - Accumulation Shares (30 June) 1 13 Final - Accumulation Shares (31 December) 43 32 44 45 Revenue deducted on cancellation of shares 8 5 Revenue received on issue of shares - - Distributions 52 50

Reconciliation of distributions: Net expense after taxation (1,180) (1,840) Equalisation on conversions 1 - Tax effect of fee rebates taken to capital 11 - Authorised Corporate Director's capitalised fee rebates (54) - Revenue deficit reimbursed from capital 1,274 1,890 Distributions 52 50

Details of the interim and final distributions per share are set out in the tables on page 33.

8 Debtors

31.12.17 31.12.16

£'000 £'000

Accrued revenue 87 190

Accrued ACD Fee Rebate 54 -

Amounts receivable for issue of shares 18 6

Overseas tax recoverable 88 204

Sales awaiting settlement 605 -

Total debtors 852 400

9 Cash and bank balances

31.12.17 31.12.16

£'000 £'000

Cash and bank balances 20,688 37,342

Total cash and bank balances 20,688 37,342

10 Other creditors

31.12.17 31.12.16

£'000 £'000

Accrued Authorised Corporate Director's periodic charge 199 320

Accrued Investment Adviser's fees 152 135

Accrued expenses 22 34

Amounts payable for cancellation of shares 146 855

Purchases awaiting settlement - 157

Total creditors 519 1,501




26

11 Related party transactions Old Mutual Investment Management Limited, as ACD, is a related party, and acts as principal in respect of all transactions of shares in each sub-fund. The monies received on issue and paid on cancellation are disclosed in the Statement of change in net assets attributable to shareholders on page 21. Any amounts due to or from Old Mutual Investment Management Limited at the end of the accounting year in respect of transactions of shares in each sub-fund are disclosed in notes 8 and 10. Amounts paid to the ACD in respect of expenses are disclosed in note 4.

The sub-fund held the following securities and received the noted income in related funds throughout the year to 31 December 2017:

Shares Security Name Market Value

£’000 Gross Income Earned

£’000

1,262,010 Old Mutual European Best Ideas Fund - U2 Income 15,888 231

12 Derivatives and other financial instruments

a) Financial instrument risk

The sub-fund, in pursuing its objective, holds a number of financial instruments, which may comprise of the following:

Equity shares and equity related shares.

The sub-fund will also hold cash and other short term debtors and creditors that arise directly from its operations.

In addition, the sub-fund may hold derivatives in the form of forward foreign exchange contracts and/or future contacts for the purpose of efficient portfolio management in accordance with the COLL Sourcebook.

The financial instruments are held in line with the sub-fund's investment policy.

Each Investment Adviser is responsible for monitoring the portfolio of his/her sub-fund in accordance with its investment objective and seeks to ensure that individual assets also meet a risk reward profile that is acceptable. The ACD has appointed specialist managers to manage the sub-fund, and continuously monitors this appointment.

Adherence to the investment guidelines and the investment and borrowing powers as set out in the Scheme Particulars and in the rules of the Regulations also mitigates the risk of excessive exposure to any particular type of security or issuer. Further information on the investment portfolio is set out in the Investment Manager's review and the Portfolio statement of each sub-fund.

The main risks arising from financial instruments are interest rate risk, foreign currency risk, credit risk, counterparty risk, liquidity risk and market risk which are summarised below.




27

12 Derivatives and other financial instruments (continued)

b) Foreign currency risk

A significant proportion of the sub-fund's financial assets and liabilities are invested overseas. As a result, movements in exchange rates may affect the market price of investments and, due to timing differences between the transaction dates of investment sales, purchases and income, and actual cash settlement, create currency exchange gains/losses. The Investment Manager does seek to reduce some of this risk by using forward currency contracts.

The direct foreign currency exposure of the sub-fund as at 31 December 2017 (31 December 2016) was as follows:

Currency Net foreign currency assets/(liabilities) Net foreign currency assets/(liabilities)

Monetary exposures*

31.12.17 £’000

Non-monetary exposures

31.12.17 £’000

Total

31.12.17 £’000

Monetary exposures*

31.12.16 £’000


31.12.16 £’000

Total

31.12.16 £’000

Australian Dollar - - - - 982 982

Brazilian Real - - - 15 - 15

Danish Krone 27 1,704 1,731 13 - 13

Euro 341 14,972 15,313 649 22,302 22,951

Hong Kong Dollar 605 1,279 1,884 - 2,767 2,767

Indian Rupee - 5,606 5,606 - 11,405 11,405

Japanese Yen 4 1,616 1,620 8 8,452 8,460

New Zealand Dollar - - - - 780 780

Norwegian Krone - 2,287 2,287 - 2,483 2,483

Singapore Dollar - 2,119 2,119 - 2,946 2,946

South African Rand - 2,134 2,134 1 4,211 4,212

Swiss Franc 7 1,197 1,204 74 4,054 4,128

Taiwan Dollar - 2,206 2,206 - - -

US Dollar 9,596 80,440 90,036 13,636 132,977 146,613

Total 10,580 115,560 126,140 14,396 193,359 207,755

* For the purpose of the above disclosure, monetary is taken to include only cash or near-cash items.

Currency sensitivity

A 5% increase in the value of the sub-fund’s foreign currency exposure would have the effect of increasing the return and net assets as at 31 December 2017 by £6,307,042 or 3.31% (31 December 2016: £10,387,750 or 3.61%). A 5% decrease would have an equal and opposite effect.




28


c) Interest rate risk

Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates.

The interest rate risk profile of the sub-fund’s financial assets and liabilities at 31 December 2017 (31 December 2016) was as follows:

Currency 31.12.17

Variable rate financial assets

£’000

Fixed rate financial asset

£’000

Financial assets not carrying interest

£’000

Total £’000

Danish Krone - - 1,731 1,731

Euro 289 - 15,027 15,316

Hong Kong Dollar - - 1,884 1,884

Indian Rupee - - 5,606 5,606

Japanese Yen - - 1,620 1,620

Norwegian Krone - - 2,287 2,287

Singapore Dollar - - 2,119 2,119

South Africa Rand - - 2,134 2,134

Sterling 10,844 - 54,046 64,890

Swiss Franc 1 - 1,203 1,204

Taiwan Dollar - - 2,206 2,206

US Dollar 9,554 - 80,482 90,036

Total 20,688 - 170,345 191,033

Currency 31.12.16


£’000

Fixed rate financial asset

£’000


£’000

Total £’000

Australian Dollar - - 982 982

Brazilian Real - - 15 15

Danish Krone - - 13 13

Euro 506 - 22,445 22,951


Indian Rupee - - 11,405 11,405

Japanese Yen - - 8,460 8,460

New Zealand Dollar - - 780 780

Norwegian Krone - - 2,483 2,483


South African Rand 1 - 4,211 4,212

Swiss Franc - - 4,128 4,128

Sterling 23,164 - 57,966 81,130

US Dollar 13,671 - 133,099 146,770

Total 37,342 - 251,700 289,042




29


c) Interest rate risk (continued)

Currency 31.12.17

Variable rate financial liabilities

£’000

Financial liabilities not carrying interest

£’000 Total £’000

Euro - (3) (3)

Sterling - (516) (516)

- (519) (519)

Currency 31.12.16


£’000


£’000 Total £’000

Sterling - (1,502) (1,502)

US Dollar - (157) (157)

Total - (1,659) (1,659)

Interest rate risk sensitivity

In the event of changes in interest rates, there would be no material impact upon the assets of the sub-fund.

d) Credit risk

Credit risk is the risk of suffering loss due to another party not meeting its financial obligation. The risk is managed by the Investment Adviser who monitors the credit profile of financial instruments in accordance with the objective and policy of the sub-fund.

Adherence to the investment guidelines and the investment and borrowing powers as set out in the Scheme Particulars and in the rules of the Regulations also mitigates the risk of excessive exposure to any particular type of security or issuer. Further information on the investment portfolio is set out in the Investment Manager’s review and the portfolio statement.

e) Counterparty risk

Certain transactions in financial instruments that a sub-fund enters into have the risk that the counterparty will not meet its financial obligations, i.e. the investment (purchase) or cash (sale) after the sub-fund has fulfilled its responsibilities.

The sub-funds will only buy and sell investments through brokers which have been approved by the ACD and Investment Adviser as an acceptable counterparty. This is overseen by the Depositary to ensure that the exposure to any counterparty remains appropriate for investors.

f) Liquidity risk

Each sub-fund's assets comprise mainly of readily realisable securities which can be sold promptly to meet liquidity requirements. The main source of this risk comes from the obligation from shareholders to meet any cancellation of shares. Assets from a sub-fund may need to be sold to meet any redemption proceeds. As part of its operating duties the ACD regularly monitors the liquidity levels held on each sub-fund (cash and underlying securities) to ensure any redemptions can be readily met. Some investments may be less liquid than other securities and can be more sensitive to economic factors. The rules of the Regulations mitigate the risk of excessive exposure to assets which are not readily realisable.

g) Market risk

Market risk arises from uncertainty about future prices of financial instruments held. The main source of risk to the sub-fund is the potential movement in the value of financial instruments held as a result of price fluctuations. Stock market prices can move erratically and be unpredictably affected by diverse factors including political and economic events but also rumours and sentiment. The ACD adheres to the investment guidelines and borrowing powers set out within the Scheme Particulars and the COLL Sourcebook. In this way the ACD monitors and controls the exposure to risk from any type of security, sector or issuer. The sub-fund may also use derivative instruments to mitigate risk and reduce cost.

Market price risk sensitivity

A 5% market movement in the price of investments held by the sub-fund, with all other variables remaining constant, would result in an increase or decrease on net asset value of the sub-fund by approximately £8,474,665 or 4.45% (31 December 2016: £12,557,112 or 4.37%).




30


h) Fair value of financial assets and liabilities

There is no material difference between the carrying value of the financial assets and liabilities, as shown in the Balance Sheet, and their fair value.

Basis of valuation 31.12.17 31.12.16

Assets £’000

Liabilities £’000

Assets £’000


Level 1: Quoted prices 153,605 - 251,143 -

Level 2: Observable market data 15,888 - - (1)

Level 3: Unobservable data - - - -

Total 169,493 - 251,143 (1)

i) Global exposure

The Investment Adviser assesses the market risk of Old Mutual Global Best Ideas Fund, including any derivative exposures, using a commitment approach. All exposure arising through the investment in financial derivative instruments will be covered by the underlying assets of the sub-fund. The sub-fund will use the commitment approach methodology to measure, monitor and manage the “leverage” effect produced by the use of financial derivative instruments and for the calculation of global exposure. In using the commitment approach for the calculation of global exposure, the sub-fund will convert each derivative position into the market value of an equivalent position in the underlying asset of that derivative.

13 Contingent liabilities The sub-fund had no contingent liabilities at the Balance sheet date (31 December 2016: £Nil).




31

14 Portfolio transaction costs

Analysis of total purchase costs Value Commissions Other costs

31.12.17 £'000 £'000 % £'000 %

Equities 116,426 74 0.06% 128 0.11%

Collective investment schemes 15,500 - - - -

Corporate actions 600 - - - -

Total 132,526 74 128

Total purchases including transaction costs 132,728

Value Commissions Other costs

31.12.16 £'000 £'000 % £'000 %

Equities 247,189 178 0.07% 170 0.07%

Corporate actions 2,127 - - - -

Total 249,316 178 170


Analysis of total sale costs Value Commissions Other costs

31.12.17 £'000 £'000 % £'000 %

Equities 236,957 127 0.05% 21 0.01%

2,934 - - - -

Total 239,891 127 21

Total sales including transaction costs 239,743


31.12.16 £'000 £'000 % £'000 %

Equities 353,983 258 0.07% 56 0.02%

Total 353,983 258 56


Transaction costs as a percentage of average Net Assets 31.12.17 31.12.16

Commissions: 0.09% 0.15%

Taxes: 0.06% 0.08%

In the case of shares, transaction costs are paid by the sub-fund on each transaction, commissions relate to those paid to agents, advisers, brokers and dealers in the buying and selling of securities. Other costs include any additional fees that may be paid to agents, advisers, brokers and dealers as well as levies by regulatory agencies and security exchanges and any transfer taxes or duties. Unlike shares, other types of investments have no separately identifiable transaction costs, these costs form part of the dealing spread. Dealing spreads may vary considerably depending on the transaction value and market sentiment. At the balance sheet date the dealing spread was 0.07% (31 December 2016: 0.09%).




32

15 Shareholders’ funds The sub-fund currently has six share classes; Accumulation ‘A’, Accumulation ‘A’ EUR, Accumulation ‘A’ USD, Accumulation ‘R’, Accumulation ‘U1’ and Accumulation ‘U2’. The net asset value of each share class, net asset value per share and the number of shares in issue are given in the information pages for each sub-fund.

The share classes currently in issue and the Authorised Corporate Director's fee of each share class are shown below:

31.12.17 31.12.16

– Accumulation ‘A’ 1.50% 1.50%

– Accumulation ‘A’ EUR 1.50% 1.50%

– Accumulation ‘A’ USD 1.50% 1.50%

– Accumulation ‘R’ 0.75% 0.75%

– Accumulation ‘U1’ 0.675% 0.675%

– Accumulation ‘U2’ 0.60% 0.60%

Share class movement reconciliation Opening Issued Redeemed Converted Closing

– Accumulation ‘A’ 204,060,424 6,097,840 (79,887,559) (863,643) 129,407,062

– Accumulation ‘A’ EUR 28,798,233 8,090,159 (35,511,348) - 1,377,044

– Accumulation ‘A’ USD 1,000 - - - 1,000

– Accumulation ‘R’ 20,640,043 333,498 (3,534,486) 820,603 18,259,658

– Accumulation ‘U1’ 16,236,156 133,283 (3,565,799) 12,872 12,816,512

– Accumulation ‘U2’ 85,500 25,898 (43,032) - 68,366

16 Post balance sheet date events There are no post balance sheet events requiring disclosure.


Distribution table


33

Final distribution Group 1: Shares purchased prior to 1 July 2017 Group 2 : Shares purchased from 1 July 2017 to 31 December 2017

Net revenue pence per share

Equalisation pence per share*

Distribution paid 28.02.18

pence per share


pence per share Accumulation ‘A’ Shares Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘A’ EUR Shares Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘A’ USD Shares** Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘R’ Shares Group 1 0.0945 - 0.0945 0.0261 Group 2 0.0000 0.0945 0.0945 0.0261 Accumulation ‘U1’ Shares Group 1 0.1965 - 0.1965 0.1619 Group 2 0.0000 0.1965 0.1965 0.1619 Accumulation ‘U2’ Shares Group 1 0.2542 - 0.2542 0.1357 Group 2 0.0000 0.2542 0.2542 0.1357


Distribution table (continued)


34

Interim distribution Group 1: Shares purchased prior to 1 January 2017 Group 2 : Shares purchased from 1 January 2017 to 30 June 2017




pence per share


pence per share Accumulation ‘A’ Shares Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘A’ EUR Shares Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘A’ USD Shares** Group 1 0.0000 - 0.0000 0.0566 Group 2 0.0000 0.0000 0.0000 0.0566 Accumulation ‘R’ Shares Group 1 0.0000 - 0.0000 0.0125 Group 2 0.0000 0.0000 0.0000 0.0125 Accumulation ‘U1’ Shares Group 1 0.0087 - 0.0087 0.0578 Group 2 0.0000 0.0087 0.0087 0.0578 Accumulation ‘U2’ Shares Group 1 0.0381 - 0.0381 0.0973 Group 2 0.0149 0.0232 0.0381 0.0973

* Equalisation only applies to shares purchased during the distribution period (Group 2 shares). It is the average amount of revenue 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.

** Launched on 1 March 2016.




35

Launch date 27 March 2009

IA Sector Global Investment Adviser Brandywine Global Investment Management LLC

Lapides Asset Management LLC LSV Asset Management

Old Mutual Global Investors (UK) Limited Schroder Investment Management Limited

Wellington Management International Limited Wells Capital Management Incorporated

Net asset value £588,076,831

Objective

The sub-fund aims to provide long term capital growth predominantly through investment in global equities.

Policy

The sub-fund will invest directly in securities or through collective investment schemes in order to give exposure to a diversified portfolio predominantly investing in global equities. The sub-fund may have exposure to cash, near cash, money market instruments, permitted deposits, and securities.

The sub-fund may invest up to 10% of its property in collective investment schemes including those that are managed or operated by the ACD or an associate of the ACD.

The sub-fund may also invest directly in derivative instruments and forward transactions for the purposes of investment or efficient portfolio management. Forward transactions may also be used with the aim of reducing currency risk for currency hedged share classes. The use of derivatives for this purpose may affect the volatility or risk profile of the sub-fund although this is not the ACD’s intention.

Investment Manager’s review

2017 was a very strong year for equity markets. Credit markets also had a solid year, outperforming government bonds, although the asset class underperformed equities. Continued signs of healthy economic growth, strong earnings and US tax cuts resulted in a strong fourth-quarter, capping off a year in which the MSCI All Country World index rose every month in US dollars. Over the year, several central banks modestly tightened monetary policy, although some emerging market (EM) central banks cut rates, in response to lower inflation. Anticipated political risks broadly failed to materialise in a range of national elections. The sub-fund slightly lagged its reference benchmark in 2017, the difference being largely explained by the 2-3% in cash, which acted as a drag as markets heated up. From a global perspective, our stock picks generally did well across the board, the notable exception being North America, where our names lagged. At a manager level, notable positive contributions came from Schroders (Robin Parbrook and Toby Hudson) in Asia ex Japan, US value manager Brandywine Global (Patrick Kaser and team), Wellington Management (Dirk Enderlein) in Europe, and Aubrey Capital Management (removed) that ran a global consumer themed mandate. Notable negative contributions came from US managers Lapides Asset Management (Steve Wilson), however this was largely a function of the area of the market in which he invests, small cap value stocks, being under pressure in 2017. Argonaut Investments (removed) in Europe were another notable detractor. Finally, a few of our more conservative strategies lagged as would be expected, namely Wellington (Dan Pozens) Durable Companies Strategy, Wells Fargo’s global emerging markets income strategy, and US manager LSV Asset Management’s managed volatility strategy. During the year, we added global emerging markets manager Wells Fargo (Anthony Cragg and Alison Shimada), replacing Aubrey (Andrew Dalrymple), to give us a more rounded exposure to emerging markets. We also replaced the mandates we had with Argonaut and Montanaro Asset Management in Europe with an investment into the JPM Europe Dynamic ex UK Fund. While at the very beginning of the year we replaced Dalton Investments, as our Japan manager, with Schroders (Andrew Rose). All these changes were made to ensure the portfolio retains a good overall balance. The portfolio attempts to control risk via a globally balanced strategic allocation and manage shorter-term market volatility through diversification across countries/currencies, sectors (economic sensitivity), managers (style) and market-cap (all-cap). We seek to drive returns from manager (stock) selection.

Our approach is to try to have a mix of alpha sources that complement each other. In the short term, as always, the main ‘relative risk’ to the sub-fund is a narrow market that favours areas to which the sub-fund is underexposed.

Our outlook has not changed. The global recovery could be blown off course by the rise of nationalism (as evidenced in the UK, Spain and the US), poor execution from politicians or central bankers (particularly around the removal of QE and rising interest rates). In emerging markets, the managed deceleration in China’s growth as it tries to move to consumer-driven expansion from an export and investment/credit-led economy may cause bouts of volatility. The US equity market is still trading at or near all-time highs, on elevated multiples and margins. It now needs earnings growth to drive shares higher to justify current valuations. Few markets offer a margin of safety on valuation grounds.

Risk and Reward Profile

The calculated risk and reward category, as shown above, uses a method of calculation derived from EU rules. It is based on the rate at which the returns of the sub-fund have moved up and down in the past (i.e. volatility) and is not a guide to the future risk and reward category of the sub-fund. The category shown is not a target or guarantee and may shift over time. Even the lowest category 1 does not mean a risk-free investment. The seven-category scale is nonlinear, for example, 2 is not twice as risky as 1.

Sub-funds in category 5 have in the past shown moderately high volatility. With a sub-fund of category 5, you have a moderately high risk of losing money but your chance for gains is also moderately high.

Investment risk - there is no guarantee that the sub-fund will achieve its objective. A capital loss of some or all of the amount invested may occur.

Currency risk (EUR share class) - the sub-fund is denominated in British Pounds but holds assets denominated in other currencies. This share class is denominated in Euro. The value of your shares may rise and fall as a result of exchange rate movements between these currencies.

Currency risk (GBP share classes) - the sub-fund is denominated in British Pounds but holds assets denominated in other currencies. The value of your shares may rise and fall as a result of exchange rate movements between these currencies.

Currency risk (USD share class)- the sub-fund is denominated in British Pounds but holds assets denominated in other currencies. This share class is denominated in US Dollars. The value of your shares may rise and fall as a result of exchange rate movements between these currencies.

Derivative risk - the sub-fund uses derivatives to generate returns and/or to reduce costs and the overall risk of the sub-fund. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment. Derivatives also involve counterparty risk where the institutions acting as counterparty to derivatives may not meet their contractual obligations.

Capital erosion risk - the sub-fund takes its charges from the income of the sub-fund in the first instance. The impact of sub-fund charges may be material on the value of any income you receive from your investment. There is potential for capital erosion if insufficient income is generated by the sub-fund to cover these charges. Capital erosion may have the effect of reducing the level of income generated.

For a more detailed explanation of risks, please refer to the "Risks" section of the prospectus.



36

Performance Records Comparative Tables

1 January 2017 to 1 January 2016 to 1 January 2015 to

Accumulation 'A' 31 December 2017 31 December 2016 31 December 2015

p/share p/share p/share

Change in net assets per share


Return before operating charges* 15.15 21.03 (3.18)

Operating charges** (2.32) (1.87) (1.99)

Return after operating charges* 12.83 19.16 (5.17)

Distributions - (0.19) (0.16)

Retained distributions - 0.19 0.16


* after direct transaction costs of*** 0.14 0.25 0.32

Performance

Return after charges 11.77% 21.34% (5.44)%

Other information

Closing net asset value 556,454,126 729,932,218 795,358,100

Closing number of shares 456,907,632 669,899,662 885,686,803

Operating Charges**** 2.00% 1.97% 2.07%

Direct transaction costs*** 0.12% 0.27% 0.34%

Prices pence per share pence per share pence per share

Highest share price 122.1 109.7 111.0

Lowest share price 108.8 78.12 82.48


Accumulation 'A' EUR 31 December 2017 31 December 2016 31 December 2015











Performance


Other information

Closing net asset value 982,643 888,143 22,549,782

Closing number of shares 811,936 820,330 25,215,755



Prices cents per share cents per share cents per share





37

Comparative Tables (continued)


Accumulation 'A' USD 31 December 2017 31 December 2016 31 December 2015











Performance


Other information

Closing net asset value 3,290,725 786,462 14,273,156

Closing number of shares 2,705,896 721,243 15,902,956



Prices cents per share cents per share cents per share


Lowest Share price 133.8 113.5 82.43


Accumulation 'R' 31 December 2017 31 December 2016 31 December 2015







Distributions (0.85) (0.90) (0.86)

Retained distributions 0.85 0.90 0.86

Closing asset value per shares 127.84 113.25 92.41


Performance


Other information

Closing net asset value 27,349,337 21,396,253 5,217,136

Closing number of shares 21,393,396 18,893,549 5,645,475



Prices pence per share pence per share pence per share



** The operating charges include all costs borne by the sub-fund, except for direct transaction costs. Since the sub-fund invests less than 10% of net assets in underlying sub-funds there is no inclusion of a synthetic element for underlying sub-funds OCF.

*** The direct transaction costs are made up of fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. They do not include any difference between the quoted bid and offer prices or internal administrative or holding costs. These costs arise as a result of transactions undertaken both for efficient portfolio management and the meeting of the sub-fund’s objectives. These costs exclude any effect of dilution adjustments used to offset the costs.

**** The operating charges percentage is the equivalent of the ongoing charges figure per the prior year accounts. It is the ratio of the sub-fund's ongoing charges (excluding interest on borrowings) to the average net assets of the sub-fund.



38

Performance 6 months to

31 December 2017

1 year to

31 December 2017

3 years to

31 December 2017

5 years to

31 December 2017

Old Mutual Voyager Global Dynamic Equity* 6.15% 12.91% 32.11% 57.78%

VGDE Custom (benchmark) 6.79% 13.24% 45.08% 76.18%

IA Global (sector average) 6.55% 13.86% 45.15% 89.24%

Quartile ranking 3 3 4 4

* Accumulation ‘R’ shares

Data Source – Factset. Figures are calculated on a total return and single price basis, with net income reinvested into the sub-fund. Portfolio allocation

North America 51.93%

Asia Pacific (excluding Japan) 12.27%

Europe 12.26%

United Kingdom 11.15%

Japan 7.81%

South America 0.68%

Africa 0.34%


Total 100.00%

Asset allocation

Equities 96.44%


Total 100.00%

Major holdings Percentage of

portfolio

JPMorgan Fund ICVC - Europe Dynamic Ex-UK Fund 5.48%

Polar Capital Financial Opportunities - I Accumulation Fund (GBP)

2.58%

Taiwan Semiconductor Manufacturing 0.81%

Samsung Electronics 0.76%

KKR 0.68%

Citi 0.67%

Berkshire Hathaway 0.67%

Cisco Systems 0.64%

Tencent 0.62%

Motorola Solutions 0.56%

Number of holdings 604


Portfolio statement as at 31 December 2017


39

Holding Investment

Market Value £’000

Percentage of total net assets

%

United Kingdom 11.15% (31 December 2016 8.17%)

United Kingdom Equities 11.15% (31 December 2016 8.17%)

Banks 0.61% (31 December 2016 0.45%) 408,009 Barclays 824 0.14 144,012 HSBC (UK Listing) 1,100 0.19

93,200 HSBC (HK Listing) 706 0.12 1,412,114 Lloyds Banking 954 0.16

3,584 0.61

Collective Investment Schemes 5.48% (31 December 2016 2.52%) 31,514,554 JPMorgan Fund ICVC - Europe Dynamic Ex-UK Fund 32,208 5.48

32,208 5.48

Construction & Materials 0.10% (31 December 2016 0.09%) 275,619 Melrose Industries 582 0.10

582 0.10

Electricity 0.06% (31 December 2016 0.09%) 139,403 Drax 376 0.06

376 0.06

Financial Services 0.09% (31 December 2016 0.07%) 104,211 TP ICAP 558 0.09

558 0.09

Food & Drug Retailers 0.11% (31 December 2016 0.45%) 312,152 Tesco 650 0.11

650 0.11

Food Producers 0.45% (31 December 2016 0.42%) 68,019 Cranswick 2,264 0.39 51,939 Tate & Lyle 365 0.06

2,629 0.45

General Industrials 0.52% (31 December 2016 0.38%) 48,368 DS Smith 250 0.04

323,010 RPC (UK Listing) 2,836 0.48

3,086 0.52

General Retailers 0.12% (31 December 2016 0.28%) 6,427 Next 289 0.05

227,983 Pets at Home 400 0.07

689 0.12

Health Care Equipment & Services 0.42% (31 December 2016 0.37%) 45,514 Smith & Nephew 582 0.10 29,332 STERIS 1,916 0.32

2,498 0.42




40

Holding Investment



%

Life Insurance 0.40% (31 December 2016 0.36%) 152,163 Aviva 765 0.13

45,147 Prudential 851 0.14 62,075 St James's Place 753 0.13

2,369 0.40

Mining 0.25% (31 December 2016 0.21%) 15,523 Rio Tinto (Australian Listing) 680 0.12 20,031 Rio Tinto (UK Listing) 784 0.13

1,464 0.25

Mobile Telecommunications 0.15% (31 December 2016 0.12%) 366,661 Vodafone 857 0.15

857 0.15

Oil & Gas Producers 0.72% (31 December 2016 0.75%) 203,732 BP 1,058 0.18 101,587 BP ADR 3,148 0.54

4,206 0.72

Personal Goods 0.26% (31 December 2016 0.43%) 20,539 Burberry 367 0.06 28,433 Unilever (Dutch Listing) 1,187 0.20

1,554 0.26

Pharmaceuticals & Biotechnology 0.34% (31 December 2016 0.39%) 12,612 AstraZeneca (UK Listing) 640 0.11 59,313 GlaxoSmithKline 778 0.13 21,800 GlaxoSmithKline ADR 573 0.10

1,991 0.34

Software & Computer Services 0.25% (31 December 2016 0.30%) 17,509 Micro Focus International 439 0.08

130,028 Sage 1,027 0.17

1,466 0.25

Support Services 0.25% (31 December 2016 0.08%) 35,149 Experian 568 0.10

214,552 Worldpay 906 0.15

1,474 0.25

Travel & Leisure 0.57% (31 December 2016 0.41%) 97,725 International Consolidated Airlines (UK Listing) 631 0.11

477,749 Ladbrokes Coral 869 0.15 140,492 Merlin Entertainments 508 0.08 137,023 SSP 938 0.16

10,296 Whitbread 409 0.07

3,355 0.57




41

Holding Investment



%

Overseas 85.29% (31 December 2016 89.87%)

Africa 0.34% (31 December 2016 0.00%)

Africa Equities 0.34% (31 December 2016 0.00%)

South Africa Equities 0.34% (31 December 2016 0.00%) 26,865 Barclays Africa 292 0.05

115,331 Life Healthcare 192 0.03 9,586 Mondi 184 0.03

15,100 Mr Price 222 0.04 46,982 MTN 385 0.07 54,297 Sanlam 284 0.05 7,407 Sasol 191 0.03

42,202 Truworths International 239 0.04

1,989 0.34

Asia Pacific (excluding Japan) 12.27% (31 December 2016 11.74%)

Asia Pacific (excluding Japan) Equities 12.27% (31 December 2016 11.74%)

Australia Equities 1.09% (31 December 2016 1.22%) 16,186 ASX 513 0.09 45,658 Australia & New Zealand Banking 758 0.13 59,275 BHP Billiton (Australian Listing) 1,014 0.17

125,459 Brambles 728 0.12 13,925 CSL 1,133 0.19

146,170 Dulux 648 0.11 365,650 Incitec Pivot 817 0.14

44,825 Westpac Banking 812 0.14

6,423 1.09

China Equities 3.28% (31 December 2016 2.59%) 719,000 Agricultural Bank of China 'H' 248 0.04

24,997 Alibaba ADR 3,188 0.54 836,000 Bank of China 304 0.05 280,000 Beijing Capital International Airport 312 0.05 336,000 China Communications Construction 282 0.05 760,000 China Communications Services 377 0.06

1,731,000 China Construction Bank 1,180 0.20 442,000 China Lesso 211 0.04

13,363 China Lodging ADR 1,391 0.24 251,200 China Pacific Insurance 893 0.15 798,000 China Petroleum & Chemical 433 0.07

1,201,000 CNOOC (HK Listing) 1,276 0.22 13,719 Ctrip.com ADR 454 0.08

248,000 Haitian International 552 0.09 29,500 Hengan International 242 0.04

318,000 Huaneng Power International 148 0.03 1,637,000 Industrial & Commercial Bank of China 975 0.17

2,571 NetEase ADR 666 0.11 326,000 PICC Property & Casualty 463 0.08




42

Holding Investment



% China Equities (continued)

82,500 Ping An Insurance China 636 0.11 128,000 Shenzhou 897 0.15 855,000 Sinotrans 309 0.05

95,000 Tencent 3,652 0.62 284,000 Zhejiang Expressway 230 0.04

19,319 3.28

Hong Kong Equities 2.45% (31 December 2016 2.70%) 343,200 AIA 2,165 0.37

48,900 ASM Pacific Technology 504 0.09 364,000 Brilliance China Automotive 719 0.12

1,017,000 China Metal Recycling 0 0.00 172,000 China Mobile 1,291 0.22

18,500 China Mobile ADR 684 0.12 342,000 China Resources Cement 166 0.03 112,000 China Resources Land 244 0.04 310,000 China State Construction International 321 0.05

1,503,755 Guangdong Investment 1,487 0.25 137,900 Hongkong Land 719 0.12

20,800 Jardine Matheson 935 0.16 320,750 Johnson Electric 986 0.17 788,000 Pacific Textiles 614 0.10 220,500 Sun Art Retail 172 0.03

42,000 Sun Hung Kai Properties 517 0.09 428,800 Swire Properties 1,021 0.17 339,000 Techtronic Industries 1,628 0.28 220,000 Xinyi Glass 212 0.04

14,385 2.45

India Equities 1.59% (31 December 2016 2.43%) 43,484 Apollo Hospitals Enterprise 608 0.10 80,302 Bharat Petroleum 482 0.08 86,580 Bharti Infratel 381 0.07 9,718 Care Ratings 150 0.03

62,711 Godrej Consumer Products 726 0.12 14,329 HCL Technologies 149 0.03 87,031 HDFC Bank 1,889 0.32 7,820 Hero MotoCorp 345 0.06

47,880 IndusInd Bank 914 0.16 16,205 Infosys 196 0.03

171,853 Marico 640 0.11 171,138 NTPC 349 0.06 176,164 Phoenix Mills 1,281 0.22 121,861 Vedanta 467 0.08

99,588 Zee Entertainment Enterprises 671 0.11 643,557 Zee Entertainment Enterprises 6% preference 05/03/2022 75 0.01

9,323 1.59

Indonesia Equities 0.13% (31 December 2016 0.35%) 1,638,000 Bank Rakyat Indonesia 324 0.05 1,509,900 Cikarang Listrindo 105 0.02

318,700 Matahari Department Store 174 0.03 771,000 Telekomunikasi Indonesia 187 0.03

790 0.13




43

Holding Investment



%

Macau Equities 0.08% (31 December 2016 0.00%) 195,200 Wynn Macau 457 0.08

457 0.08

Malaysia Equities 0.12% (31 December 2016 0.00%) 98,700 Bursa Malaysia 183 0.03

353,000 Sime Darby 143 0.03 179,000 Telekom Malaysia 199 0.03

59,700 Tenaga Nasional 166 0.03

691 0.12

Philippines Equities 0.04% (31 December 2016 0.15%) 479,560 Semirara Mining & Power 261 0.04

261 0.04

Singapore Equities 0.37% (31 December 2016 0.17%) 41,300 BOC Aviation 163 0.03

182,000 CapitaLand Retail China Trust 162 0.03 36,700 Jardine Cycle & Carriage 827 0.14

101,000 Oversea-Chinese Banking 693 0.12 162,700 Singapore Telecommunications 322 0.05

2,167 0.37

South Korea Equities 1.18% (31 December 2016 0.50%) 3,241 Amorepacific 315 0.05 3,698 Coway 250 0.04 2,781 Hyundai Motor 299 0.05 4,258 KB Financial 186 0.03

13,201 Korea Electric Power 348 0.06 31,374 Korean Reinsurance 237 0.04

657 NAVER 395 0.07 2,544 Samsung Electronics 4,481 0.76 1,929 SK Innovation 272 0.05 2,007 S-Oil 162 0.03

6,945 1.18

Taiwan Equities 1.58% (31 December 2016 1.14%) 48,000 Advantech 251 0.04

171,000 Cathay Financial 227 0.04 81,000 Chicony Electronics 151 0.03

357,000 CTBC Financial 182 0.03 31,000 CTCI 35 0.01 71,000 Formosa Plastics 174 0.03

117,000 Giant Manufacturing 474 0.08 572,295 Hon Hai Precision Industry 1,354 0.23

5,000 Largan Precision 500 0.08 78,000 Novatek Microelectronics 220 0.04

117,000 Siliconware Precision Industries 146 0.02 835,000 Taiwan Semiconductor Manufacturing 4,756 0.81 304,000 Teco Electric and Machinery 215 0.04 162,000 Uni-President Enterprises 264 0.04 184,896 United Microelectronics 326 0.06

9,275 1.58




44

Holding Investment



%

Thailand Equities 0.36% (31 December 2016 0.49%) 387,000 Charoen Pokphand Foods (Alien Market) 211 0.04 133,800 Intouch NVDR 170 0.03 166,000 Kasikornbank (Foreign Reg) 901 0.15

1,504,400 Land & Houses 355 0.06 343,000 Major Cineplex 224 0.04 467,900 Thai Beverage PCL 237 0.04

2,098 0.36

Japan 7.81% (31 December 2016 7.21%)

Japan Equities 7.81% (31 December 2016 7.21%) 14,300 77 Bank 267 0.04 6,900 ABC-Mart 293 0.05 7,700 Advan 55 0.01

29,400 Astellas Pharma 278 0.05 19,600 AT 353 0.06 35,100 Bridgestone 1,209 0.21 15,300 Canon 423 0.07

100 Canon (US Listing) 3 0.00 3,400 Central Japan Railway 451 0.08 8,700 Chubu-Nippon Broadcasting 51 0.01

19,391 Daito Trust Construction 2,930 0.50 4,300 Disco 708 0.12 5,300 Don Quijotegs 205 0.03

11,200 Dowags 339 0.06 13,500 East Japan Railway 975 0.17 4,500 Enplas 138 0.02

15,200 Fujifilm 460 0.08 99,000 Fujitsu 523 0.09 74,000 Fukuoka Financial 308 0.05 6,600 Glory 185 0.03

22,400 H2O Retailing 347 0.06 40,600 Haseko 467 0.08 29,000 HI-LEX 533 0.09 94,000 Hitachi 542 0.09 19,100 Hitachi Capital 356 0.06 27,700 Hitachi Transport System 535 0.09 23,500 Honda Motor 596 0.10 4,200 IHI 104 0.02

23,500 Iida 328 0.06 38,600 Inabata 433 0.07 51,400 Isuzu Motors 638 0.11 26,100 ITOCHU 361 0.06 7,600 Izumi 350 0.06

28,600 Japan Airlines 829 0.14 8,600 Japan Tobacco 205 0.03

14,900 JFE 265 0.04 32,000 JGC 459 0.08 16,400 JTEKT 209 0.04

150,300 JX 718 0.12 105,155 KDDI 1,940 0.33

8,800 Kintetsu World Express 135 0.02




45

Holding Investment



% Japan Equities (continued)

13,100 Koito Manufacturing 681 0.12 53,500 Matsumotokiyoshi 1,631 0.28 6,400 Mitsubishi 131 0.02

47,600 Mitsubishi Electric 586 0.10 143,800 Mitsubishi UFJ Financial 781 0.13

76,400 Mitsui 920 0.16 20,300 Mitsui Fudosan 337 0.06 4,100 Mitsui OSK Lines 101 0.02 1,300 Murata Manufacturing 129 0.02

11,600 Nabtesco 330 0.06 16,200 Nafco 208 0.03 2,300 Nidec 239 0.04

300 Nintendo 81 0.01 3,600 Nippon Shokubai 180 0.03

27,000 Nippon Soda 133 0.02 84,815 Nippon Telegraph & Telephone 2,957 0.50 33,100 Nippon Telegraph & Telephone ADR 1,157 0.20 57,700 Nippon Thompson 341 0.06

103,700 Nomura 454 0.08 13,500 Nomura Real Estate 224 0.04 6,400 Okinawa Electric Power 124 0.02

14,700 Otsuka 478 0.08 12,400 Recruit 228 0.04 11,500 Renesas Electronics 99 0.02 27,900 Sakata INX 330 0.06 22,700 Sanki Engineering 205 0.03 24,300 Sankyu 777 0.13 53,700 Santen Pharmaceutical 625 0.11 7,900 Sapporo 179 0.03

32,300 Sekisui Chemical 480 0.08 16,800 Seven & I 517 0.09 18,300 Shimadzu 308 0.05 4,500 Ship Healthcare 110 0.02 8,000 SK Kaken 590 0.10 1,600 SMC 488 0.08

20,100 Sompo 577 0.10 93,863 Sony Financial 1,231 0.21 23,000 Sumitomo Electric Industries 288 0.05 40,500 Sumitomo Mitsui Financial 1,296 0.22 55,000 T&D 696 0.12 12,700 T&K Toka 122 0.02 16,900 TDK 998 0.17 11,200 Techno Associe 97 0.02 45,500 Tokai Tokyo Financial 218 0.04 17,000 Tokio Marine 575 0.10 30,100 Toyota Motor 1,428 0.24 15,600 Unipres 311 0.05

106,800 Yamada Denki 436 0.07

45,916 7.81

Europe 12.26% (31 December 2016 19.75%)

Europe Equities 12.26% (31 December 2016 19.75%)




46

Holding Investment



%

Austria Equities 0.00% (31 December 2016 0.10%)

Belgium Equities 0.37% (31 December 2016 0.52%) 5,905 Ackermans & van Haaren 759 0.13

24,058 UCB 1,414 0.24

2,173 0.37

Czech Republic Equities 0.00% (31 December 2016 0.10%)

Denmark Equities 0.21% (31 December 2016 1.19%) 21,659 DSV 1,258 0.21

1,258 0.21

Faroe Islands Equities 0.00% (31 December 2016 0.05%)

Finland Equities 0.52% (31 December 2016 0.46%) 32,037 Kone 1,271 0.22 30,664 Nokian Renkaat 1,025 0.17 19,361 Sampo 783 0.13

3,079 0.52

France Equities 2.14% (31 December 2016 1.52%) 58,075 Altran Technologies 720 0.12 41,000 BNP Paribas ADR 1,139 0.19 46,003 Elior 693 0.12 60,063 Elis 1,212 0.21 23,580 Legrand 1,343 0.23 7,508 L'Oreal 1,233 0.21

11,005 Pernod Ricard 1,283 0.22 40,627 Rubis (Post subdivision) 2,132 0.36 11,600 TOTAL ADR 476 0.08 30,956 Vinci 2,345 0.40

12,576 2.14

Germany Equities 1.17% (31 December 2016 1.91%) 15,267 Beiersdorf 1,324 0.22 19,913 Brenntag 930 0.16 23,183 Fuchs Petrolub 914 0.16 56,260 Infineon Technologies 1,152 0.20 14,347 Merck 1,142 0.19 27,807 United Internet 1,413 0.24

6,875 1.17

Greece Equities 0.11% (31 December 2016 0.07%) 76,598 Grivalia Properties REIC 619 0.11

619 0.11

Hungary Equities 0.00% (31 December 2016 0.10%)




47

Holding Investment



%

Ireland Equities 3.84% (31 December 2016 6.48%) 9,134 Accenture 1,038 0.18

45,500 AerCap 1,784 0.30 17,711 CRH (UK Listing) 469 0.08

656,120 Irish Continental 3,301 0.56 63,781 James Hardie Industries 818 0.14

1,377,647 Polar Capital Financial Opportunities - I Accumulation Fund (GBP) 15,154 2.58

22,564 3.84

Italy Equities 0.45% (31 December 2016 1.40%) 209,123 Cerved Information Solutions 1,969 0.33 142,620 OVS 703 0.12

2,672 0.45

Luxembourg Equities 0.05% (31 December 2016 0.07%) 13,874 Ternium 323 0.05

323 0.05

Netherlands Equities 0.66% (31 December 2016 0.81%) 4,759 Core Laboratories 382 0.07

15,619 Heineken (Temporary Listing) 1,202 0.20 79,714 ING 1,087 0.19 48,154 Royal Dutch Shell 'B' 1,197 0.20

3,868 0.66

Norway Equities 0.00% (31 December 2016 0.39%)

Poland Equities 0.00% (31 December 2016 0.03%)

Portugal Equities 0.00% (31 December 2016 0.09%)

Russia Equities 0.19% (31 December 2016 0.27%) 6,526 Lukoil ADR 277 0.05

40,844 Magnitogorsk Iron & Steel Works PJSC 289 0.05 19,581 MegaFon PJSC 134 0.02 18,507 Sberbank of Russia ADR 232 0.04

312,000 United Co RUSAL 162 0.03

1,094 0.19

Spain Equities 0.35% (31 December 2016 0.81%) 28,218 Vidrala 2,049 0.35

2,049 0.35

Sweden Equities 0.80% (31 December 2016 1.48%) 82,864 Assa Abloy 1,275 0.22 37,941 Atlas Copco 1,216 0.21 82,924 Sandvik 1,078 0.18 66,439 Trelleborg 1,143 0.19

4,712 0.80

Switzerland Equities 1.34% (31 December 2016 1.90%) 12,928 Cie Financiere Richemont 869 0.15 27,300 Garmin 1,208 0.21




48

Holding Investment



% Switzerland Equities (continued)

2,607 Geberit 851 0.14 274,302 Glencore 1,062 0.18

28,408 Julius Baer 1,282 0.22 6,709 Kuehne + Nagel 881 0.15 5,400 TE Connectivity 381 0.06

101,093 UBS 1,374 0.23

7,908 1.34

Turkey Equities 0.06% (31 December 2016 0.00%) 6,534 Tupras Turkiye Petrol Rafinerileri 156 0.03

63,400 Turkcell Iletisim Hizmetleri 189 0.03

345 0.06

North America 51.93% (31 December 2016 50.69%)

North America Equities 51.93% (31 December 2016 50.69%)

Bermuda Equities 0.45% (31 December 2016 0.21%) 10,118 Enstar 1,516 0.26 4,500 Everest Re 741 0.12 4,338 RenaissanceRe 406 0.07

2,663 0.45

Canada Equities 3.44% (31 December 2016 2.41%) 8,700 Bank of Montreal 516 0.09 9,000 BCE 319 0.05 7,300 Canadian Imperial Bank of Commerce 527 0.09

34,398 Canadian National Railway 2,110 0.36 123,900 Canadian Natural Resources 3,290 0.56

8,500 Canadian Tire 822 0.14 4,872 Fairfax Financial 1,919 0.33

18,900 Gildan Activewear 454 0.08 43,869 Intact Financial 2,707 0.46 1,100 Loblaw Cos 44 0.01

47,900 Magna (USD Listing) 2,026 0.34 10,338 Maxar Technologies (USD Listing) 497 0.08 5,585 Maxar Technologies (CAD Listing) 269 0.05

40,200 TELUS NCS Shares 1,128 0.19 15,700 Toronto-Dominion 680 0.11 56,206 Waste Connections (USA Listing) 2,947 0.50

20,255 3.44

Mexico Equities 0.08% (31 December 2016 0.32%) 38,000 Grupo Financiero Banorte 153 0.02

188,800 Wal-Mart de Mexico 334 0.06

487 0.08

United States Equities 47.96% (31 December 2016 47.75%) 15,700 Aaron's 467 0.08 13,600 AbbVie 984 0.17 36,240 Advance Auto Parts 2,674 0.45 29,600 AECOM 819 0.14 6,345 Affiliated Managers 969 0.16




49

Holding Investment



% United States Equities (continued)

20,868 AGCO 1,116 0.19 15,014 Akorn 354 0.06 7,166 Alexandria Real Estate Equities 693 0.12

40,700 Allegheny Technologies 738 0.13 8,400 Alliance Data Systems 1,562 0.27

31,090 Alliant Energy 982 0.17 54,673 Allison Transmission 1,763 0.30 17,400 Allstate 1,351 0.23 5,200 Altria 274 0.05

78,500 AMC Entertainment 863 0.15 21,000 Amdocs 1,019 0.17 29,580 American Airlines 1,148 0.20 11,300 American Electric Power 616 0.10 3,600 American Financial 291 0.05

29,162 American Tower 3,084 0.52 33,449 Ametek 1,803 0.31 2,800 Amgen 363 0.06

21,100 Anadarko Petroleum 840 0.14 97,600 Annaly Capital Management 868 0.15 14,000 Apple 1,772 0.30 51,881 Aramark 1,658 0.28 30,790 Ares Capital 359 0.06 21,076 Arrow Electronics 1,256 0.21 27,306 Arthur J Gallagher 1,286 0.22 18,066 Ashland Global 956 0.16 68,600 AT&T 1,989 0.34 10,287 Automatic Data Processing 893 0.15

700 AutoZone 372 0.06 65,289 Avangrid 2,461 0.42 4,200 Avery Dennison 359 0.06

10,500 Axalta Coating Systems 251 0.04 110,618 Ball 3,104 0.53 110,800 Bank of America 2,443 0.42

14,400 Belden 850 0.14 26,717 Berkshire Hathaway 3,944 0.67 97,200 Blackstone 2,321 0.39 3,000 Boeing 658 0.11

31,392 BorgWarner 1,210 0.21 3,500 Broadridge Financial Solutions 235 0.04

22,464 Brown & Brown 861 0.15 25,667 Brunswick 1,056 0.18 20,591 Cadence Design Systems 644 0.11 55,600 Calpine 622 0.11 18,100 Campbell Soup 649 0.11 14,289 Carlisle 1,200 0.20 12,300 Carnival 605 0.10 52,283 Catalent 1,602 0.27 11,100 Celanese 889 0.15 9,700 Celgene 752 0.13

12,989 CenterState Bank 251 0.04 25,175 Chemical Financial 1,006 0.17 48,357 Ciena 766 0.13




50

Holding Investment




132,100 Cisco Systems 3,772 0.64 71,300 Citi 3,961 0.67 68,460 Clean Harbors 2,716 0.46 9,842 Cognizant Technology Solutions 520 0.09

34,500 Comcast 1,028 0.18 22,689 Commerce Bancshares 949 0.16 56,900 Conduent 676 0.12 36,100 ConocoPhillips 1,475 0.25 15,500 Consolidated Edison 976 0.17 6,952 Cooper 1,133 0.19

28,007 CoreLogic 950 0.16 22,100 Corning 528 0.09 7,200 Cree 199 0.03

12,800 Crown 533 0.09 37,300 CVS Health 2,016 0.34 4,600 Darden Restaurants 332 0.06

32,000 Delta Air Lines 1,334 0.23 31,335 DENTSPLY SIRONA 1,540 0.26 51,800 Devon Energy 1,601 0.27 10,489 DexCom 445 0.08 32,500 Dick's Sporting Goods 700 0.12 72,000 Diebold 885 0.15 8,000 Discover Financial Services 459 0.08

26,791 DISH Network 948 0.16 34,786 Dolby Laboratories 1,594 0.27 12,200 Dollar General 836 0.14 26,881 Douglas Emmett 817 0.14 25,400 DR Horton 965 0.16 3,900 DTE Energy Co 316 0.05 7,474 Dycom Industries 630 0.11

10,694 East West 485 0.08 15,700 Eastman Chemical 1,085 0.18 33,726 Edison International 1,596 0.27 17,500 Entergy 1,051 0.18 14,892 Equity LifeStyle Properties 980 0.17 33,800 Exelon 983 0.17 14,600 Exxon Mobil 908 0.15 3,600 F5 Networks 352 0.06

13,916 FCB Financial 537 0.09 20,424 Fidelity National Information Services 1,425 0.24 7,300 First American Financial 304 0.05

77,058 First Horizon National 1,151 0.20 9,760 First Republic Bank 630 0.11

38,500 FirstEnergy 867 0.15 50,200 Flowers Foods 722 0.12 16,800 FMC 1,181 0.20 4,700 Foot Locker 164 0.03

18,002 Fortune Brands Home & Security 916 0.16 13,000 Fresh Del Monte Produce 466 0.08 10,330 Gartner 947 0.16 67,000 General Motors 2,051 0.35 18,701 Genpact 445 0.08




51

Holding Investment




23,500 Getty Realty 475 0.08 23,900 Gilead Sciences 1,282 0.22 52,300 Goodyear Tire & Rubber 1,268 0.22 1,411 Graham 585 0.10

35,328 Gramercy Property Trust 700 0.12 199,783 Graphic Packaging 2,281 0.39

60,200 Gulfport Energy 586 0.10 59,392 Hain Celestial 1,864 0.32

110,300 Hanesbrands 1,717 0.29 52,600 Harsco 722 0.12 39,093 HCA 2,555 0.43 36,800 Helmerich & Payne 1,765 0.30 16,872 Henry Schein 881 0.15 30,564 Hexcel 1,407 0.24 86,300 Horizon Pharma 954 0.16

219,100 Houghton Mifflin Harcourt 1,508 0.26 48,400 Huntsman 1,196 0.20 12,773 IDACORP 866 0.15 10,530 IDEX 1,033 0.18 3,020 Ingredion 313 0.05

31,467 Integrated Device Technology 702 0.12 55,600 Intel 1,902 0.32 11,800 International Business Machines 1,345 0.23 12,200 Jacobs Engineering 601 0.10 8,200 JM Smucker 758 0.13

23,600 Johnson & Johnson 2,454 0.42 20,700 JPMorgan Chase 1,651 0.28 16,927 K2M 227 0.04 88,651 KapStone Paper and Packaging 1,501 0.26 53,350 KAR Auction Services 2,002 0.34 80,400 Kinder Morgan 1,089 0.19 15,265 Kirby 759 0.13

254,900 KKR 3,986 0.68 6,200 KLA-Tencor 495 0.08

67,100 Knowles 733 0.12 19,100 Kroger 391 0.07 19,007 Lamar Advertising 1,044 0.18 22,967 Leidos 1,101 0.19 10,444 Lennox International 1,628 0.28 9,140 Liberty Ventures 372 0.06 8,400 Lowe's 577 0.10

20,500 Macquarie Infrastructure 980 0.17 5,423 Masimo 344 0.06

21,857 Match 507 0.09 94,900 Mattel 1,077 0.18 12,702 McKesson 1,483 0.25 30,400 Merck (US Listing) 1,273 0.22 75,500 MFA Financial 448 0.08 6,377 Microchip Technology 418 0.07

40,800 Micron Technology 1,263 0.21 16,900 Mid-America Apartment Communities 1,258 0.21 15,447 Middleby 1,539 0.26 20,600 Minerals Technologies 1,057 0.18




52

Holding Investment




27,600 Mobile Mini 711 0.12 16,300 Molson Coors Brewing 989 0.17

117,454 Morgan Stanley China A Share Fund 2,021 0.34 49,541 Motorola Solutions 3,320 0.56 14,145 MSC Industrial Direct 1,018 0.17 7,800 Murphy USA 466 0.08

39,100 Mylan 1,211 0.21 28,800 NCR 725 0.12 35,016 New Mountain Finance 355 0.06 36,960 Newfield Exploration 875 0.15 48,054 NiSource 909 0.15 9,132 Nordson 992 0.17

13,798 Nordstrom 487 0.08 107,100 Nuance Communications 1,298 0.22

5,600 Old Dominion Freight Line 550 0.09 9,100 Omega Healthcare Investors 185 0.03

69,197 ON Semiconductor 1,082 0.18 24,500 Oracle 861 0.15 10,988 Owens Corning 754 0.13 11,520 Pacira Pharmaceuticals 387 0.07 29,867 Parsley Energy 660 0.11 43,174 Performance Food 1,059 0.18 11,904 PerkinElmer 647 0.11

112,700 Pfizer 3,033 0.52 25,900 Piedmont Office Realty Trust 377 0.06

194,400 Pitney Bowes 1,607 0.27 16,654 ProAssurance 704 0.12 45,376 PTC 2,057 0.35 31,300 Public Service Enterprise 1,189 0.20 3,762 Puma Biotechnology 278 0.05 7,510 PVH 761 0.13 3,800 Quest Diagnostics 279 0.05

12,580 Raymond James Financial 836 0.14 4,100 Raytheon 573 0.10

18,493 Reinsurance Group of America 2,144 0.36 25,921 Reliance Steel & Aluminum 1,668 0.28 16,700 Republic Services 833 0.14

114,562 ResMed CDI 729 0.12 46,000 Retail Properties of America 455 0.08 17,433 Rollins 601 0.10 23,352 RPC (US Listing) 440 0.07 13,673 Ryder System 859 0.15 55,924 Sabre 853 0.15 6,000 Sanderson Farms 630 0.11

116,350 Santander Consumer 1,601 0.27 10,622 SBA Communications Class A 1,281 0.22 28,100 Schlumberger 1,403 0.24 33,766 Sealed Air 1,236 0.21 31,700 Senior Housing Properties Trust 451 0.08 23,680 ServiceMaster Global 904 0.15 10,672 Shire (UK Listing) 414 0.07 17,000 Silgan 369 0.06




53

Holding Investment




8,221 Snap-on 1,070 0.18 200 Sonoco Products 8 0.00

16,259 Spectrum Brands 1,346 0.23 25,931 Spirit Airlines 869 0.15 99,700 Sprouts Farmers Market 1,804 0.31 34,400 Starwood Property Trust 545 0.09 10,227 Steel Dynamics 332 0.06 27,582 Stericycle 1,385 0.24 65,300 Stratasys 967 0.16 34,600 Synchrony Financial 998 0.17 11,027 Synopsys 699 0.12 27,500 Target 1,319 0.22

164,469 TEGNA 1,716 0.29 48,900 Teradata 1,392 0.24 22,600 Tetra Tech 810 0.14 32,669 Torchmark 2,204 0.37 24,800 TPG Specialty Lending 368 0.06 16,500 Travelers 1,657 0.28 44,800 Tronox 691 0.12 21,700 Tyson Foods 1,310 0.22 13,039 UniFirst 1,596 0.27 33,785 United Community Banks 709 0.12 20,800 United Continental 1,040 0.18 12,500 United Technologies 1,185 0.20 3,060 UnitedHealth 504 0.09

29,202 Universal Health Services 2,471 0.42 9,900 Valero Energy 676 0.12 8,936 Valmont Industries 1,101 0.19

51,005 Valvoline 934 0.16 20,837 Vantiv 1,138 0.19

152,500 VeriFone Systems 1,993 0.34 68,000 Verint Systems 2,109 0.36 13,306 VeriSign 1,137 0.19 8,363 Verisk Analytics 597 0.10

39,800 Verizon Communications 1,574 0.27 3,500 Walgreens Boots Alliance 189 0.03

35,400 Wal-Mart Stores 2,604 0.44 17,100 Walt Disney 1,364 0.23 13,700 Waste Management 875 0.15 15,480 Webster Financial 648 0.11 10,155 West Pharmaceutical Services 744 0.13 11,299 Westamerica Bancorporation 504 0.09 17,608 Westar Energy 687 0.12 28,635 Western Alliance Bank 1,213 0.21 2,300 Western Union 32 0.01

29,500 WestRock 1,380 0.23 8,400 Xcel Energy 299 0.05 5,500 Zebra Technologies 424 0.07

19,854 Zions Banco 754 0.13

282,022 47.96




54

Holding Investment



%

South America 0.68% (31 December 2016 0.48%)

South America Equities 0.68% (31 December 2016 0.48%)

Argentina Equities 0.05% (31 December 2016 0.00%) 3,656 Banco Macro 314 0.05

314 0.05

Brazil Equities 0.57% (31 December 2016 0.48%) 33,900 Ambev 161 0.03 44,900 B3 SA - Brasil Bolsa Balcao 228 0.04 51,000 Banco Bradesco 384 0.07 27,000 Banco do Brasil 192 0.03 52,000 BB Seguridade Participacoes 331 0.06

103,900 Cia de Saneamento do Parana 271 0.05 32,400 Energisa 197 0.03

300 Itausa - Investimentos Itau 1 - 240,900 Itausa - Investimentos Itau Preference Shares 582 0.10

69,100 Petrobras Distribuidora 260 0.04 43,039 Petroleo Brasileiro 311 0.05 24,756 Vale (BRL Listing) 222 0.04 37,300 WEG 201 0.03

3,341 0.57

Chile Equities 0.06% (31 December 2016 0.00%) 40,555 Enel Americas 332 0.06

332 0.06

Investment assets 567,164 96.44

Net other assets 20,913 3.56

Total net assets 588,077 100.00

All investments are approved securities being either officially listed in a member state or traded on or under the rules of an eligible securities market, unless otherwise stated.

All investments are in ordinary shares unless otherwise stated.



55

Statement of total return for the year from 1 January 2017 to 31 December 2017

01.01.17 to 01.01.17 to 01.01.16 to 01.01.16 to

31.12.17 31.12.17 31.12.16 31.12.16

Notes £'000 £'000 £'000 £'000

Income

Net capital gains 2 76,745 133,666

Revenue 3 12,282 14,449

Expenses 4 (12,443) (13,986)

Interest payable and similar charges 5 (26) (62)

Net revenue before taxation (187) 401

Taxation 6 (1,090) (1,006)

Net expense after taxation (1,277) (605)

Total return before distributions 75,468 133,061

Distributions 7 (192) (1,520)

Change in net assets attributable to

shareholders from investment activities 75,276 131,541

Statement of change in net assets attributable to shareholders for the year from 1 January 2017 to 31 December 2017

01.01.17 to 01.01.17 to 01.01.16 to 01.01.16 to

31.12.17 31.12.17 31.12.16 31.12.16

£'000 £'000 £'000 £'000

Opening net assets attributable to shareholders 753,003 837,398

Amounts received on issue of shares 38,490 41,632

Amounts paid on cancellation of shares (279,302) (259,457)

(240,812) (217,825)

Dilution adjustment 420 394

Change in net assets attributable to shareholders

from investment activities 75,276 131,541

Retained distribution on accumulation shares 190 1,495

Closing net assets attributable to shareholders 588,077 753,003 The notes on pages 57 to 67 form an integral part of these financial statements.



56

Balance sheet as at 31 December 2017

31.12.17 31.12.16

Notes £'000 £'000

Assets

Fixed assets

Investments 567,164 738,236

Current assets

Debtors 8 2,364 2,185

Cash and bank balances 9 20,778 15,478

Total assets 590,306 755,899

Liabilities

Creditors

Bank overdrafts 10 (260) (57)

Other creditors 11 (1,969) (2,839)

Total liabilities (2,229) (2,896)

Net assets attributable to shareholders 588,077 753,003

The notes on pages 57 to 67 form an integral part of these statements.


Notes to the financial statements for the year from 1 January 2017 to 31 December 2017


57

1 Accounting policies The applicable accounting policies adopted by the Old Mutual Voyager Global Dynamic Equity Fund are included on pages 69 to 70.

2 Net capital gains

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

The net capital gains on investments comprise:

Gains on non-derivative securities 78,005 131,658

Gains on derivative contracts 370 938

(Losses)/gains on forward currency contracts (107) 1,938

Losses on currency contracts (1,322) (866)

Handling charges (201) (2)

Net capital gains 76,745 133,666

3 Revenue

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Authorised Corporate Director's fee rebate 1 132

Authorised corporate director capitalised fee rebate 199 -

Bank interest 5 46

Franked distributions on Collective Investment Schemes - 5

Interest from offshore investments 21 20

Non-taxable overseas dividends 9,684 10,752

Non-taxable distributions on Offshore Funds 419 840

Overseas REIT dividends 724 385

Taxable overseas dividends 42 345

UK dividends 1,187 1,924

Total revenue 12,282 14,449

4 Expenses

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Payable to the Authorised Corporate Director, associates of the Authorised Corporate Director and agents of either of them:

Authorised Corporate Director's periodic charge 9,405 10,608

Fixed expenses* 346 542

9,751 11,150

Other expenses:

Investment adviser’s fees** 2,692 2,836

Total expenses 12,443 13,986 * These figures represent the fixed expense charge which covers all fees payable to the Depositary (including associates etc.), and other expenses. The Audit fee for the year, excluding VAT, was £9,300 (31 December 2016: £9,100). ** The Investment adviser’s fess are not included within the new fixed expense charge.




58

5 Interest payable and similar charges

01.01.17 to 01.01.16 to

31.12.17

31.12.16

£'000 £'000

Bank overdraft interest 26 62

Total interest payable and similar charges 26

62

6 Taxation

a) Analysis of tax charge in the year

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Overseas tax suffered 1,090 1,006

Total current tax charge for the year 1,090 1,006

Deferred tax charge for the year (see note 6(c)) - -

Total taxation for the year (see note 6(b)) 1,090 1,006

b) Factors affecting current tax charge for the year

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

The taxation assessed for the year is higher than the standard rate of corporation tax in the UK for an open ended investment company (20%). The differences are explained below:

Net revenue before taxation (187) 401

Corporation tax at 20% (31 December 2016: 20%) (37) 80

Effects of:

Excess management expenses for which no relief taken 2,309 2,633

Revenue not subject to taxation - UK (237) (385)

Non-taxable overseas dividends (2,021) (2,319)

Overseas tax expensed (14) (9)

Overseas withholding tax 1,090 1,006

Total tax charge for the year (see note 6(a)) 1,090 1,006

OEICs are exempt from tax in capital gains, therefore, any capital return is not included in the above reconciliation.

c) Movement in deferred tax liability

01.01.17 to 01.01.16 to

31.12.17 31.12.16

£'000 £'000

Deferred tax liability at the start of the year - -

Deferred tax charge for the year (see note 6(a)) - -

Deferred tax liability at the end of the year - -

At 31 December 2017 the sub-fund had surplus management expenses of £148,307,952 (31 December 2016: £136,559,945), which can be utilised against profits chargeable to corporation tax in future periods. It is unlikely that the sub-fund will generate sufficient taxable profits in the future to utilise these expenses and, therefore, no deferred tax asset has been recognised.




59

7 Distributions

The distributions take account of revenue received on the issue of share and revenue deducted on the cancellation of shares, and comprise:

01.01.17 to 01.01.16 to 31.12.17 31.12.16 £'000 £'000 Interim - Accumulation Shares (30 June) 130 1,448 Final - Accumulation Shares (31 December) 60 47 190 1,495 Revenue deducted on cancellation of shares 18 43 Revenue received on issue of shares (16) (18) Distributions 192 1,520

Reconciliation of distributions: Net expense after taxation (1,277) (605) Authorised Corporate Director's capitalised fee rebates (199) - Revenue deficit reimbursed from capital 1,628 2,125 Tax effect of fee rebates taken to capital 40 - Distributions 192 1,520

Details of the interim and final distributions per share are set out in the tables on page 68.

8 Debtors

31.12.17 31.12.16

£'000 £'000

Accrued Authorised Corporate Director's fee rebates 20 31

Accrued revenue 547 678

Amounts receivable for issue of shares 1,107 213

Overseas tax recoverable 247 368

Sales awaiting settlement 443 895

Total debtors 2,364 2,185

9 Cash and bank balances

31.12.17 31.12.16

£'000 £'000

Amounts held at futures clearing houses and brokers - 3

Cash and bank balances 20,778 15,475

Total cash and bank balances 20,778 15,478

10 Bank overdrafts

31.12.17 31.12.16

£'000 £'000

Amounts held at futures clearing houses and brokers - 3

Cash and bank overdrafts 260 54

Total overdrafts 260 57




60

11 Other creditors

31.12.17 31.12.16

£'000 £'000

Accrued Authorised Corporate Director's periodic charge 674 938

Accrued Investment Adviser's fees 386 295

Accrued expenses 39 63

Amounts payable for cancellation of shares 93 689

Purchases awaiting settlement 777 854

Total creditors 1,969 2,839

12 Related party transactions Old Mutual Investment Management Limited, as ACD, is a related party, and acts as principal in respect of all transactions of shares in each sub-fund. The monies received on issue and paid on cancellation are disclosed in the Statement of change in net assets attributable to shareholders on page 55. Any amounts due to or from Old Mutual Investment Management Limited at the end of the accounting year in respect of transactions of shares in each sub-fund are disclosed in notes 8 and 11. Other amounts paid to the ACD are disclosed in note 4 and amounts due to it at the year end are disclosed in note 11.

13 Derivatives and other financial instruments

a) Financial instrument risk

The sub-fund, in pursuing its objective, holds a number of financial instruments, which may comprise of the following:

Equity shares and equity related shares.

The sub-fund will also hold cash and other short term debtors and creditors that arise directly from its operations.

In addition, the sub-fund may hold derivatives in the form of forward foreign exchange contracts and/or futures contracts for the purpose of efficient portfolio management in accordance with the COLL Sourcebook.

The financial instruments are held in line with the sub-fund's investment policy.

Each Investment Adviser is responsible for monitoring the portfolio of his sub-fund in accordance with its investment objective and seeks to ensure that individual assets also meet a risk reward profile that is acceptable. The ACD has appointed specialist managers to manage the sub-fund, and continuously monitors this appointment.

Adherence to the investment guidelines and the investment and borrowing powers as set out in the Scheme Particulars and in the rules of the Regulations also mitigates the risk of excessive exposure to any particular type of security or issuer. Further information on the investment portfolio is set out in the Investment Manager's review and the Portfolio statement of each sub-fund.

The main risks arising from financial instruments are interest rate risk, foreign currency risk, credit risk, counterparty risk, liquidity risk and market risk which are summarised below.




61


b) Foreign currency risk

A significant proportion of the sub-fund's financial assets and liabilities are invested overseas. As a result, movements in exchange rates may affect the market price of investments and, due to timing differences between the transaction dates of investment sales, purchases and income, and actual cash settlement, create currency exchange gains/losses. The Investment Manager does seek to reduce some of this risk by using forward currency contracts.

The direct foreign currency exposure of the sub-fund as at 31 December 2017 (31 December 2016) was as follows:

Currency Net foreign currency assets/(liabilities) Net foreign currency assets/(liabilities)

Monetary exposures*

31.12.17 £’000


31.12.17 £’000

Total

31.12.17 £’000

Monetary exposures*

31.12.16 £’000


31.12.16 £’000

Total

31.12.16 £’000

Australian Dollar 4 8,650 8,654 117 11,752 11,869

Brazilian Real (238) 3,029 2,791 12 3,647 3,659

Canadian Dollar 1 11,041 11,042 (107) 10,092 9,985

Czech Koruna - - - - 730 730

Danish Krone 63 1,258 1,321 7 8,994 9,001

Euro 364 35,204 35,568 (255) 63,517 63,262

Hong Kong Dollar 86 27,155 27,241 158 26,312 26,470

Hungary Forint - - - - 768 768

Indian Rupee 35 9,321 9,356 - 17,369 17,369

Indonesian Rupiah - 790 790 - 2,645 2,645

Japanese Yen 470 44,757 45,227 391 52,124 52,515

Malaysian Ringgit 5 691 696 - - -

Mexican Peso - 487 487 - 2,445 2,445

Norwegian Krone 8 - 8 300 3,333 3,633

Philippine Peso - 261 261 - 1,156 1,156

Polish Zloty - - - - 244 244

Singapore Dollar 9 2,241 2,250 12 1,268 1,280

South Africa Rand - 1,806 1,806 - - -

South Korean Won 38 6,944 6,982 24 3,209 3,233

Swedish Krona 13 4,712 4,725 - 11,911 11,911

Swiss Franc 43 5,257 5,300 108 11,053 11,161

Taiwan Dollar 169 8,948 9,117 118 8,548 8,666

Thailand Baht - 1,861 1,861 175 3,724 3,899

Turkish Lira - 345 345 - - -

US Dollar 10,205 316,541 326,746 11,054 420,368 431,422

Total 11,275 491,299 502,574 12,114 665,209 677,323

* For the purpose of the above disclosure, monetary is taken to include only cash or near-cash items.




62


c) Interest rate risk

Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates.

The interest rate risk profile of the sub-fund’s financial assets and liabilities at 31 December 2017 (31 December 2016) was as follows:

Currency 31.12.17


£’000

Fixed rate financial assets

£’000


£’000

Total £’000

Australian Dollar - - 8,654 8,654

Brazilian Real - - 3,051 3,051

Canadian Dollar 27 - 11,059 11,086

Danish Krone - - 1,321 1,321

Euro 212 - 35,356 35,568

Hong Kong Dollar 4 - 27,237 27,241

Indian Rupee 35 - 9,321 9,356

Indonesian Rupiah - - 790 790

Japanese Yen 477 - 44,804 45,281

Malaysian Ringgit 7 - 691 698

Mexican Peso - - 487 487

Norwegian Krone - - 8 8

Philippine Peso - - 261 261


South Africa Rand - - 1,806 1,806

South Korean Won - - 6,982 6,982

Sterling 9,640 - 77,055 86,695

Swedish Krona 13 - 4,712 4,725

Swiss Franc 12 - 5,288 5,300

Taiwan Dollar 161 - 8,956 9,117

Thailand Baht - - 1,861 1,861

Turkish Lira - - 345 345

US Dollar 10,190 - 317,233 327,423

Total 20,778 - 569,528 590,306




63


c) Interest rate risk (continued)

Currency 31.12.16


£’000

Fixed rate financial assets

£’000


£’000

Total £’000

Australian Dollar - - 11,986 11,986

Brazilian Real - - 3,659 3,659

Canadian Dollar 17 - 10,125 10,142

Czech Koruna - - 730 730

Danish Krone 7 - 8,994 9,001

Euro - - 63,821 63,821


Hungary Forint - - 768 768

Indian Rupee - - 17,369 17,369

Indonesian Rupiah - - 2,645 2,645

Japanese Yen 352 - 52,163 52,515

Mexican Peso - - 2,445 2,445

Norwegian Krone 300 - 3,333 3,633

Philippine Peso - - 1,156 1,156

Polish Zloty - - 244 244


South Korean Won - - 3,233 3,233

Sterling 3,950 - 73,719 77,669

Swedish Krona 42 - 11,911 11,953

Swiss Franc 192 - 11,053 11,245

Taiwan Dollar - - 8,666 8,666

Thailand Baht - - 3,899 3,899

US Dollar 10,618 - 421,113 431,731

Total 15,478 - 740,903 756,381

Currency 31.12.17


£’000


£’000 Total £’000

Brazilian Real (260) - (260)

Canadian Dollar - (44) (44)

Japanese Yen - (54) (54)

Malaysian Ringgit - (2) (2)

Sterling - (1,192) (1,192)

US Dollar - (677) (677)

Total (260) (1,969) (2,229)

Currency 31.12.16


£’000


£’000 Total £’000

Australian Dollar - (117) (117)

Canadian Dollar - (157) (157)

Euro (54) (505) (559)

Hong Kong Dollar (1) (120) (121)

Swedish Krona - (42) (42)

Swiss Franc - (84) (84)

Sterling (2) (1,987) (1,989)

US Dollar - (309) (309)

Total (57) (3,321) (3,378)




64


d) Credit risk

Credit risk is the risk of suffering loss due to another party not meeting its financial obligation. The risk is managed by the Investment Adviser who monitors the credit profile of financial instruments in accordance with the objective and policy of the sub-fund.

Adherence to the investment guidelines and the investment and borrowing powers as set out in the Scheme Particulars and in the rules of the Regulations also mitigates the risk of excessive exposure to any particular type of security or issuer. Further information on the investment portfolio is set out in the Investment Manager’s review and the Portfolio statement.

e) Counterparty risk

Certain transactions in financial instruments that a sub-fund enters into have the risk that the counterparty will not meet its financial obligations, i.e. the investment (purchase) or cash (sale) after the sub-fund has fulfilled its responsibilities.

The sub-funds will only buy and sell investments through brokers which have been approved by the ACD and Investment Adviser as an acceptable counterparty. This is overseen by the Trustee to ensure that the exposure to any counterparty remains appropriate for investors.

Exposure Table 31.12.17

Credit default swaps

exposure

Interest rate swaps

exposure

Futures and options

exposure

Forward foreign

exchange contracts exposure Collateral held

Counterparty £’000 £’000 £’000 £’000 £’000

No uncollateralised counterparty exposure - - - - -

Exposure Table 31.12.16

Counterparty £’000 £’000 £’000 £’000 £’000 BNP Paribas - - - 1 -

Citibank London - - - 1 -

Positive exposure represents the sub-fund's exposure to that counterparty and not the sub-fund's holdings with that counterparty.

f) Liquidity risk

Each sub-fund's assets comprise mainly of readily realisable securities which can be sold promptly to meet liquidity requirements. The main source of this risk comes from the obligation from shareholders to meet any cancellation of shares. Assets from a sub-fund may need to be sold to meet any redemption proceeds. As part of its operating duties the ACD regularly monitors the liquidity levels held on each sub-fund (cash and underlying securities) to ensure any redemptions can be readily met. Some investments may be less liquid than other securities and can be more sensitive to economic factors. The rules of the Regulations mitigates the risk of excessive exposure to assets which are not readily realisable.

g) Market risk

Market risk arises from uncertainty about future prices of financial instruments held. The main source of risk to the sub-fund is the potential movement in the value of financial instruments held as a result of price fluctuations. Stock market prices can move erratically and be unpredictably affected by diverse factors including political and economic events but also rumours and sentiment. The ACD adheres to the investment guidelines and borrowing powers set out within the Scheme Particulars and the COLL Sourcebook. In this way the ACD monitors and controls the exposure to risk from any type of security, sector or issuer. The sub-fund may also use derivative instruments to mitigate risk and reduce cost.

h) Fair value of financial assets and liabilities

There is no material difference between the carrying value of the financial assets and liabilities, as shown in the Balance sheet, and their fair value.

Basis of valuation 31.12.17 31.12.16

Assets £’000


Assets £’000


Level 1: Quoted prices 519,802 - 684,720 -

Level 2: Observable market data 47,362 - 53,516 -

Level 3: Unobservable data - - - -

Total 567,164 - 738,236 -




65


i) Sensitivity analysis

The Investment Manager assesses the market risk of the Old Mutual Voyager Global Dynamic Equity Fund, including any derivative exposures, using an Absolute Value at Risk (‘VaR’) methodology. VaR is a process that provides the Investment Manager with an estimate of the maximum potential loss that could be expected to occur as a result of changes in market prices over a given period of time in all but a given percentage of circumstances. As the sub-fund adopts an absolute VaR Model to measure the global market risk, the daily VaR limit for the sub-fund cannot be greater than 20 per cent of the Net Asset Value of the sub-fund. The VaR is calculated using a one-tailed 99 per cent confidence level, a one day holding period and the historical period of one year (250 Business Days). Derivatives are used to efficiently manage the tactical asset allocation positioning of the sub-fund, Old Mutual Voyager Global Dynamic Equity Fund. The sub-fund uses absolute methodology to measure Value at Risk (VaR). The VaR for the sub-fund at 31 December 2017 was 7.60% (31 December 2016: 8.90%).

The minimum, average and maximum VaR of the sub-fund over the year was 7.50%, 8.50% and 9.50% (31 December 2016: 8.00%, 9.20% and 10.80%).

The Gross sum of notionals (GSON) leverage figures are prepared with no hedging or netting of any asset class. Across the range of asset classes exposures are treated differently. For instance currency forwards are treated by valuing both legs of the underlying and expressing them as a percentage of the NAV. Physical assets are excluded to get the incremental exposure resulting from derivatives.

Using the “gross sum of notionals” methodology, the leverage as at the 31 December 2017 was 0.00% (31 December 2016: 0.00%).

14 Contingent liabilities The sub-fund had no contingent liabilities at the Balance sheet date (31 December 2016: £Nil).




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15 Portfolio transaction costs

Analysis of total purchase costs Value Commissions Other costs

31.12.17 £'000 £'000 % £'000 %

Equities 261,414 205 0.08% 104 0.04%

Collective Investment Schemes 62,703 2 - - -

Corporate actions 834 - - - -

Total 324,951 207 104



31.12.16 £'000 £'000 % £'000 %

Equities 627,254 557 0.09% 169 0.03%

Collective Investment Schemes 89,819 6 0.01% - -


Total 718,239 563 169


Analysis of total sale costs Value Commissions Other costs

31.12.17 £'000 £'000 % £'000 %

Equities 497,514 367 0.07% 93 0.02%

Collective Investment Schemes 73,622 10 0.01% - -


Total 574,528 377 93



31.12.16 £'000 £'000 % £'000 %

Equities 819,064 914 0.11% 256 0.03%

Collective Investment Schemes 57,449 1 - - -


Total 881,295 915 256


Transaction costs as a percentage of average Net Assets* 31.12.17 31.12.16

Commissions: 0.09% 0.21%

Taxes: 0.03% 0.06%

* Includes commissions on derivative transactions of £6,566 (31 December 2016: £35,000). There were no taxes on derivative transactions (31 December 2016: £Nil).

In the case of shares, transaction costs are paid by the sub-fund on each transaction, commissions relate to those paid to agents, advisers, brokers and dealers in the buying and selling of securities. Other costs include any additional fees that may be paid to agents, advisers, brokers and dealers as well as levies by regulatory agencies and security exchanges and any transfer taxes or duties. Unlike shares, other types of investments have no separately identifiable transaction costs, these costs form part of the dealing spread. Dealing spreads may vary considerably depending on the transaction value and market sentiment. At the balance sheet date the dealing spread was 0.10% (31 December 2016: 0.11%)




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16 Shareholders’ funds The sub-fund currently has four share classes; Accumulation ‘A’, Accumulation ‘R’, Accumulation ‘A’ EUR and Accumulation ‘A’ USD. The net asset value of each share class, net asset value per share and the number of shares in issue are given in the information pages for each sub-fund.

The share classes currently in issue and the Authorised Corporate Director's fee of each share class are shown below:

31.12.17 31.12.16

– Accumulation ‘A’ 1.50% 1.50%

– Accumulation ‘A’ EUR 1.50% 1.50%

– Accumulation ‘A’ USD 1.50% 1.50%

– Accumulation ‘R’ 0.50% 0.50%

Share class movement reconciliation Opening Issued Redeemed Converted Closing

– Accumulation ‘A’ 669,899,662 15,762,487 (228,707,002) (47,515) 456,907,632

– Accumulation ‘A’ EUR 820,330 11,723 (20,117) - 811,936

– Accumulation ‘A’ USD 721,243 10,801,634 (8,816,981) - 2,705,896

– Accumulation ‘R’ 18,893,549 6,042,356 (3,587,953) 45,444 21,393,396

17 Post balance sheet date events There are no post balance sheet events requiring disclosure.


Distribution


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Final distribution Group 1: Shares purchased prior to 1 July 2017 Group 2 : Shares purchased from 1 July 2017 to 31 December 2017




pence per share


pence per share Accumulation ‘A’ Shares Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘A’ EUR Shares Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘A’ USD Shares Group 1 0.0000 - 0.0000 0.0000 Group 2 0.0000 0.0000 0.0000 0.0000 Accumulation ‘R’ Shares Group 1 0.2821 - 0.2821 0.2479 Group 2 0.1370 0.1451 0.2821 0.2479

Interim distribution Group 1: Shares purchased prior to 1 January 2017 Group 2 : Shares purchased from 1 January 2017 to 30 June 2017

Net revenue

pence per share Equalisation

pence per share*


pence per share


pence per share Accumulation 'A' Shares Group 1 0.0000 - 0.0000 0.1937 Group 2 0.0000 0.0000 0.0000 0.1937 Accumulation ‘A’ EUR Shares Group 1 0.0001 - 0.0001 0.2302 Group 2 0.0001 0.0000 0.0001 0.2302 Accumulation ‘A’ USD Shares Group 1 0.0000 - 0.0000 0.2649 Group 2 0.0000 0.0000 0.0000 0.2649 Accumulation 'R' Shares Group 1 0.5710 - 0.5710 0.6472 Group 2 0.2948 0.2762 0.5710 0.6472 * Equalisation only applies to shares purchased during the distribution period (Group 2 shares). It is the average amount of revenue 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.


Accounting policies


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a) Basis of accounting

The financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments in accordance with applicable United Kingdom accounting principles, and in accordance with the Statement of Recommended Practice ‘Financial Statements of Authorised Funds’, issued by the IA in May 2014.

b) Recognition of revenue

Dividends on quoted ordinary shares, preference shares and distributions on holdings in Collective Investment Schemes are recognised when the securities are quoted ex-dividend. Where such securities are not quoted, dividends are recognised when they are declared. Nominal interest on interest bearing securities and bank interest are recognised on an accruals basis. Accrued interest purchased and sold on interest bearing securities is excluded from the capital cost of these securities and dealt with as part of the revenue of the sub-fund. Revenue arising on debt securities that are purchased at a discount/premium to the maturity value is amortised or accumulated over the life of such securities and recognised at a consistent rate over the life of the instrument (effective yield basis). This basis uses the effective interest rate of the security to discount exactly the expected stream of future cash flows to the current net carrying value of the security. All distributions from accumulation holdings in Collective Investment Schemes are treated as revenue. The equalisation component of collective investment scheme distributions has been recognised as capital.

c) Treatment of stock dividends

Ordinary stock dividends are recognised wholly as revenue and are based on the market value of the shares on the dates they are quoted ex-dividend. Where an enhancement is offered, the amount by which the market value of the shares (on the date they are quoted ex-dividend) exceeds the cash dividend is taken to capital. The ordinary element of stock dividends is treated as revenue but does not form part of the distribution.

d) Special dividends and share buy-backs

The underlying circumstances behind both special dividends and share buy backs are reviewed on a case by case basis in determining whether the amount is revenue or capital in nature. Amounts recognised as revenue will form part of the distribution. Any tax treatment will follow the accounting treatment of the principal amount.

e) Underwriting commission

Underwriting commission is wholly recognised as revenue when the issue takes place, except where the sub-fund is required to take up some or all of the shares underwritten, in which case an appropriate proportion of the commission received is deducted from the cost of those shares.

f) Treatment of expenses

All expenses, except those relating to the purchase and sale of investments, are included in expenses, in the Statement of Total Return. Expenses are recognised on an accruals basis and include irrecoverable VAT where appropriate.

g) Revenue allocation to share classes

Revenue is allocated to the share classes of each sub-fund based on the proportion of assets held within each share class.

h) Rebate of Authorised Corporate Director’s periodic charge from underlying instruments

The sub-funds may be entitled to a rebate of Authorised Corporate Director’s charge, or is sometimes paid as renewal commission, when it holds underlying investments in Collective Investment Schemes. This is accrued daily and treated as revenue or capital depending on the treatment of the ACD charge in the underlying investment.

i) Taxation and deferred taxation

Provision is made for corporation tax at the current rate on the excess of taxable revenue over allowable expenses. Provision is made on all material timing differences arising from the different treatment of items for accounting and tax purposes. A deferred tax asset is recognised only to the extent that there will be taxable profits in the future against which the asset can be offset.

j) Distribution policy

All of the net revenue available for distribution at the end of both interim and final distribution periods will be distributed to shareholders. Any share class in deficit of revenue will be made-up from the capital attributable to that share class. Should taxation and expenses taken together exceed revenue, there will be no distribution and the shortfall will be met by capital. For all sub-funds, equalisation received on collective investment scheme distributions will be distributed.


Accounting policies (continued)


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k) Basis of valuation of investments

The investments of the sub-fund are valued at noon bid prices on the last business day of the accounting year. Any unquoted or suspended investments are valued at the ACD’s valuation taking into account, where appropriate, latest dealing prices, valuations from reliable sources, financial performance and other relevant factors.

The ACD may apply a fair value price determined in accordance with the COLL Sourcebook if it has reasonable grounds for believing that no reliable price exists for a security at a valuation point or the most recent price available does not reflect the ACD’s best estimate of the value at the valuation point.

Where a sub-fund invests in securities markets that are closed for trading (including planned stock exchange closures) at the sub-fund's valuation point, there is a risk that the price calculated is not representative of the markets in which it invests due to developments since the market’s closure. Potentially this could lead to gains or losses on the sub-fund as it opens a window for investors or market timers to buy or sell at stale prices. An example would be when a sub-fund is priced using end of day prices from a market which closed for trading for a material period prior to the sub-fund's valuation point, for example, a UK Fund which is invested in US stocks, valuing at 12 noon UK time and using US asset prices from the previous day close of the US market within the sub-fund valuation. During this period it may be concluded that prices may change significantly when the market reopens, perhaps off the back of a global event or on indications from the global futures markets. In an event like this, the ACD has the power to invoke a fair value price to give our best estimate of the value of the market or asset in question using a reliable source. A delegated Committee is responsible for the monitoring and approval of any fair value pricing decisions.

The fair value pricing policy for the Old Mutual Investment Funds differs depending on the type of instruments held within the Portfolio and their economic exposure and the materiality of any fair value adjustment. Our fair value pricing policy is regularly reviewed by the Depositary of the Funds to ensure adherence to the COLL Sourcebook.

Authorised unit trusts and collective investment schemes operated by Old Mutual have been valued at cancellation price, for all other such funds they have been valued at bid price. Single priced authorised unit trusts and collective investment schemes have been valued at the dealing price and open-ended investment companies have been valued at the latest available bid price.

l) Exchange rates

Assets and liabilities in foreign currencies are translated into sterling at the exchange rates ruling at close of business on the last business day of the accounting year. Revenue items in foreign currencies are translated into sterling at the exchange rates ruling when the revenue is received.

m) Financial instruments

Where appropriate, certain permitted financial instruments such as derivatives or forward currency contracts are used for efficient portfolio management. Where such financial instruments are used to protect or enhance revenue, the revenue and expenses derived therefrom are included in “revenue” or “expenses” in the statement of total return. Where such financial instruments are used to protect or enhance capital, the gains and losses derived therefrom are included in “Net capital gains/(losses) in the statement of total return. Any positions on such financial instruments open at the year end are reflected in the balance sheet at their market value at the close of business on the last business day of the accounting year. Assets and liabilities in foreign currencies are translated into sterling at the exchange rates ruling at close of business on the last business day of the accounting year.

n) Dilution policy

The ACD has discretion to require a dilution adjustment to the price of a share on the purchase or redemption of shares in the sub-fund. The ACD's policy is to make a dilution adjustment when the ACD believes it is in the interest of the shareholders to do so.

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