AXA Distribution Investment ICVC - Funds

Annual Long Report and Audited Financial StatementsYear ended31 May 2021

AXA Distribution Investment ICVC

Contents Page

AXA Distribution Investment ICVC Page

Directory* 3

Report of the Directors of AXA Distribution Investment ICVC* 5

Fund Investment Commentaries* and Financial Statements

AXA Defensive Distribution Fund 6

AXA Distribution Fund 32

AXA Ethical Distribution Fund 58

AXA Global Distribution Fund 81

AXA Lifetime Distribution Fund 118

Accounting Policies 145

Statement of the Authorised Corporate Director's ("ACD") Responsibilities 149

Statement of the Depositary's Responsibilities 150

Report of the Independent Auditor 151

Further Information * 154

* Collectively, these comprise the Authorised Corporate Director’s Report.


Issued by AXA Investment Managers UK Limited authorised andregulated by the Financial Conduct Authority

More detailed information about AXA Investment Managers’ UK funds is available on the Fund Centre of our website where you

can find the Prospectus, Key Investor Information Document (KIID), annual reports and monthly fund factsheets at: https://retail.axa -im.co.uk/fund-centre

2

Directory

The Company and Head Office


22 Bishopsgate

London, EC2N 4BQ

Authorised Corporate Director ("ACD")

AXA Investment Managers UK Limited

22 Bishopsgate

London, EC2N 4BQ

www.axa‐im.co.uk

Authorised and regulated by the Financial Conduct Authority in the conduct of investment business.

Registered in England and Wales No. 01431068.

The company is a wholly owned subsidiary of AXA S.A., incorporated in France.

Member of the Investment Association (IA)

The Administrator and address for inspection of Register

SS&C Financial Services International Limited and SS&C Financial Services Europe Limited

SS&C House

St Nicholas Lane

Basildon

Essex, SS15 5FS

Authorised and regulated by the Financial Conduct Authority.

Sub‐Investment Managers

AXA Rosenberg Investment Management LLC

4 Orinda Way

Building E

Orinda

California

USA 94563

AXA Investment Managers Asia (Singapore) Limited

133 Cecil Street

Suite 100

# 15‐02 Keck Seng Tower

Singapore 069535

Legal Advisers

Eversheds LLP

One Wood Street

London, EC2V 7WS

Fund Accounting Administrator

State Street Bank & Trust Company

20 Churchill Place

London, E14 5HJ

Authorised and regulated by the Financial Conduct Authority.


3

Directory


Depositary

HSBC Bank plc,

8 Canada Square,

London, E14 5HQ

HSBC Bank plc is a subsidiary of HSBC Holdings plc.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the

Prudential Regulation Authority.

Independent Auditors' *

Ernst & Young LLP

Atria One

144 Morrison Street

Edinburgh, EH3 8EX

* Please note that effective 1st January 2021, our Independent Auditors for the fund range changed from PricewaterhouseCoopers

LLP to Ernst & Young LLP.

4


Report of the Directors of AXA Distribution Investment ICVC

AXA Distribution Investment ICVC (“the Company”) is an investment company with variable capital incorporated in England and Wales and authorised by the Financial Conduct Authority (“FCA”).

Shareholders are not liable for the debts of the Company.

There are five sub‐funds which are currently available in the Company (each a “Fund”), and in the future there may be other sub‐funds in the Company.

Each Fund has the investment powers equivalent to those of a UCITS (Undertakings for Collective Investment in Transferrable Securities) under the FCA’s Collective Investment Schemes Sourcebook (“COLL”). The Funds are segregated portfolios of assets and, accordingly, the assets of a Fund belong exclusively to that Fund and shall not be used or made available to discharge (directly or indirectly) the liabilities of, or claims against, any other person or body, including the Company and any other Fund, and shall not be available for any such purpose. Further details in relation to the segregated nature of the Funds can be found in the Prospectus.

None of the sub‐funds included within this report have holdings in any of the Company's other sub‐funds.

Important Events During the Year

During the period from 1st June 2020 to 31st May 2021 there were no significant changes to the Prospectus or the Instrument of Incorporation.

Since 4 January 2021, AXA changed their registered office address from 155 Bishopsgate London, EC2M 3XJ to 22 Bishopsgate London, EC2N 4BQ.

Effective 1st January 2021, our Independent Auditors for the fund range changed from PricewaterhouseCoopers LLP to Ernst & Young LLP.

5

AXA Defensive Distribution Fund

Investment Manager's ReportFor the year ended 31 May 2021

Lower Risk Higher Risk

1 2 3 4 5 6 7

Why is this Fund in this category?

As at 31 May 2021

Potentially lower reward Potentially higher reward


The risk category is calculated using historical performance data and may not be a reliable indicator of the Fund’s future risk

profile. The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free.

The capital of the Fund is not guaranteed. The Fund is invested in financial markets and uses techniques and instruments which

are subject to some levels of variation, which may result in gains or losses.

Additional risks

Under normal market conditions the Fund’s key risk factors are:

• Interest rate risk ‐ is the risk that the market value of bonds held by the Fund could fall as a result of higher market rates

(yields). Yields can change as a result of, among other things, the economic and inflation outlook which also affects supply and

demand as well as future interest rate expectations, without necessarily a change in official central bank short term interest

rates. Higher yields result in a decline in the value of bonds. Conversely, lower yields tend to increase the value of bonds.

Duration (a measure based on the coupon and maturity payments schedule of a bond) is an important concept in understanding

how the price of that bond might change for a 1% move in its redemption yield. A bond with a longer duration is more sensitive

to a change in yields and, generally speaking, will experience more volatility in its market value than bonds with shorter

durations.

Investment Objective

Investment Policy

Risk and Reward Profile

The Manager has full discretion to select investments for the Fund in line with the above investment policy and in doing so may

take into consideration a composite benchmark made up of the following indices in the stated proportions: 29% FTSE All Share

Index; 27.5% FTSE Index Linked all Stocks; 27.5% FTSE Index Linked < 5 Years; 3.5% FTSE Gilts All Stocks; 3.5% FTSE Gilts < 5

years; 9% LIBID 7 Day (cash) (the “Benchmark”). This Benchmark best represents the types of bonds and companies in which the

Fund predominantly invests.

The aim of this Fund is to provide income with some prospect for long‐term capital growth.

The Fund invests in a mix of UK Government bonds, the majority of which are linked to the rate of inflation, shares in large and

medium sized UK listed companies, and cash. The Fund's typical asset mix would have at least a minimum investment in UK

Government bonds and cash of 60%. As a result of this asset mix Fund's value should be less volatile than a fund with a higher

proportion of its investments in shares. The Manager selects shares in companies based upon their prospects for future growth

in dividend payments following an in depth analysis of their financial status, quality of business model and corporate governance

arrangements. Investments in UK Government bonds are diversified across a range of maturities (i.e., the length of time for full

repayment of the bond by the Government).

This Fund is actively managed in reference to the Benchmark, which may be used by investors to compare the Fund's

performance.

By investing in a fund which invests primarily in fixed interest stocks you are likely to be looking for an investment which has

reduced risk and you are prepared to accept less potential reward than is the case with other funds. You are willing to accept

that your investment will fall and rise in value and that you could get back less than you invest. Typically, you would prefer an

investment with less risk than that of a fund which invests significantly in equities or overseas.

6




Index‐linked bonds bought in the secondary market (i.e., not directly from the issuer) whose capital values have been adjusted

upward due to inflation since issuance, may decline in value if there is a subsequent period of deflation.

Due to the sensitivity of these bonds to interest rates and expectations of future inflation, there is no guarantee that the value

of these bonds will correlate with inflation rates in the short to medium term.

Index‐linked bonds risk is an inherent risk of investing in index‐linked bonds. Exposure to this risk is managed by the allocation

decision on the proportion of the portfolio to invest in index‐linked bonds, as well as the amount of remaining maturity of these

bonds, which will affect their sensitivity in value, to changes in expected inflation levels.

Internal investment guidelines are set if necessary to ensure interest rate risk is maintained within a range deemed suitable

based on the individual fund’s investment objectives and investment policy. These guidelines could include measures of

sensitivity to changes of interest rates.

• Index‐linked bonds risk ‐ are fixed interest securities whose capital repayment amounts and interest payments are adjusted in

line with movements in inflation indices. They are designed to mitigate the effects of inflation on the value of a portfolio. The

market value of index‐linked bonds is determined by the market’s expectations of future movements in both interest rates and

inflation rates.

As with other bonds, the value of index‐linked bonds will generally fall when expectations of interest rates rise and vice versa.

However, when the market anticipates a rise in inflation rates, index‐linked bonds will generally outperform other bonds, and

vice versa.

• Risks linked to investment in sovereign debt ‐ the Fund may invest in bonds issued by countries and governments (sovereign

debt). The governmental entity that controls the repayment of sovereign debt may not be able or willing to repay the capital

and/or interest when due in accordance with the terms of such debt. In such a scenario, the value of investments of the Fund

may be adversely affected. A governmental entity’s willingness or ability to repay capital and interest due in a timely manner

may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of

sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a

whole, the governmental entity’s policy towards the International Monetary Fund and the political constraints to which a

governmental entity may be subject. Governmental entities may also be dependent on expected disbursements from foreign

governments, multilateral agencies and others abroad to reduce principal and interest on their debt. In addition, there are no

bankruptcy proceedings for such issuers under which money to pay the debt obligations may be collected in whole or in part.

Holders may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to the issuers.

Certain countries are especially large debtors to commercial banks and foreign governments. Investment in sovereign debt

issued or guaranteed by such countries (or their governments or governmental entities) involves a higher degree of risk than

investment in other sovereign debt.

Certain funds may be further subject to the risk of high concentration in bonds issued by and/or guaranteed by a single

sovereign issuer which is below investment grade and/or unrated which is also subject to higher credit risk. In the event of a

default of the sovereign issuer, the Fund may suffer significant loss.

This is an inherent risk for funds invested within sovereign bonds. Internal investment guidelines, scenario testing as well as

other regular monitoring seek to ensure the level of risk is aligned with each individual fund’s investment objectives and

investment policy.

• Equity risk ‐ the value of shares in which the Fund invests fluctuate pursuant to market expectations. The value of such shares

will go up and down and equity markets have historically been more volatile than fixed interest markets. Should the price of

shares in which the Fund has invested fall, the Net Asset Value of the Fund will also fall.

Funds investing in shares are generally more volatile than funds investing in bonds or a combination of shares and bonds, but

may also achieve greater returns.

7




• Counterparty risk ‐ at any one time, the Fund may be exposed to the creditworthiness and stability of the counterparties to

transactions entered into by the Fund (including derivative and stock lending and repo/reverse repo transactions). The Fund will

be subject to the risk of the inability of its counterparties to perform its obligations under such transactions (default), whether

due to insolvency, bankruptcy or other causes. In the event of the insolvency of a counterparty, the Fund might not be able to

recover cash or assets of equivalent value, to that invested, in full. The Fund may receive assets or cash from the counterparty

(collateral) to protect against any such adverse effect. Where relevant, a counterparty will forfeit its collateral if it defaults on

the transaction with the Fund. However, if the collateral is in the form of securities, there is a risk that when it is sold, it will

realise insufficient cash to settle the counterparty’s debt to the Fund under a transaction or to purchase replacement securities

that were lent to the counterparty under a stock lending arrangement. In relation to stock lending arrangements, there is also

the risk that while cash is recovered in the event of a default, the actual stock cannot be repurchased. Furthermore, to the

extent that collateral is not present to cover part or all of the debt, a counterparty default may result in losses for the affected

Fund. To assist in managing these types of risks, the ACD sets criteria around the types of eligible collateral the Fund may accept.

Please see the paragraph entitled “Treatment of Collateral” in the “Investment and borrowing powers applicable to the Funds”

section in Appendix II of the Prospectus for more information.

Transactions in securities that the Fund may enter into expose it to the risk that the counterparty will not deliver the investment for a purchase or cash for a sale after the Fund has contracted to fulfil its responsibilities. This is minimised by the practice in the majority of markets of delivery versus payment and short settlement periods.

Important Information

Derivatives transactions may be used in the Fund for meeting the investment objectives of the Fund. The use of derivatives in this manner is not expected to change the risk profile of the Fund.

Market Review

One year ago, this report referenced the mounting death toll from coronavirus which, at the time, was still spreading voraciously across the globe. Today, deaths worldwide are approaching four million and many developing nations are still suffering terribly from its impact. Within developed markets, we have benefited from the phenomenal efforts made by scientists, regulators and governments to research, develop and produce multiple vaccines that have substantially reduced the harming effects of the virus. After a long, long time spent restricted in each of our daily lives we are approaching a return to normal life.

Internal investment guidelines are set, if necessary, to ensure equity risk is maintained within a range deemed suitable based on

the individual fund’s investment objectives and investment policy.

Other risks which could have an impact in extreme market conditions include:

• Liquidity risk ‐ under certain market conditions, it may be difficult to buy or sell investments for the Fund. For example, smaller

company shares may trade infrequently and in small volumes and corporate and emerging market bonds may be affected by the

demand in the market for such securities carrying credit risk, particularly in times of significant market stress. As a result, it may

not be possible to buy or sell such investments at a preferred time, close to the last market price quoted or in the volume

desired. The Manager may be forced to buy or sell such investments as a consequence of Unitholders buying or selling Units in

the Fund. Depending on market conditions at the time, this could lead to a significant drop in the Fund’s value.

Monthly monitoring is conducted, using an in‐house liquidity tool, to ensure a high degree of confidence that Fund liquidity will

meet the Fund’s expected liquidity requirements. Any concerns indicated by the tool are analysed by the Manager’s risk team

who may also discuss the results with portfolio management staff, or other senior professionals within the firm, as needed, to

ensure an appropriate scrutiny.

Based on the analysis, the Manager believes that the liquidity profile of the Fund is appropriate.

Further explanation of the risks associated with an investment in this Fund can be found in the prospectus.

8




As economies around the world re‐open, investors have been questioning what the post‐lockdown world will look like. New

working practices, increased reliance on technology, less use of cash as a means of payment, growth in pet ownership, increased

domestic travel and many other factors will shape the post‐COVID‐19 world. Undoubtedly, following the temporary hibernation

of the global economy, there is a level of optimism about the coming months and possibly years and reference to the ‘roaring

20s’ points to the release of the pent up demand and ambition of populations around the world.

A saying coined (and often shared) by a well‐known fund manager and former colleague that ‘things will not become better or

worse but different’ rings true and investment markets have certainly been grappling with this in recent months.

For the Fund, market conditions over the past six months have been generally positive as investors have looked forward to a

normalisation of economic conditions. Since the beginning of December, conditions impacting investment markets have

followed in much the same vein as during the last reporting period. In short, conditions have been volatile. Equities have made

solid progress while fixed income has been challenged by the positive investor view of life in a post‐lockdown world. The FTSE All‐

Share Index (on a Total Return basis) rose 15.2% with the FTSE 100 (+14.09%) underperforming the mid cap (+18.43%) and the

FTSE Small Cap (ex‐Investment Companies) (+35.87%) indices. The FTSE UK Gilts All Stocks (TR) fell 4.82% over the six‐month

period, while the FTSE UK Gilts Index‐Linked (TR) All stocks index outperformed its conventional peer and falling 2.35%.

The prospect of a resurgent UK economy following the long months of lockdown has helped push the FTSE All‐Share Index higher – although it remains some way below its all‐time highs, unlike many international bourses. As life returns to normal, the tailwinds of pent‐up consumer demand, record business investment intentions, a buoyant residential property market and low interest rates are directing economists to project GDP growth of over 7% in 2021. However, with oil, commodity and other raw material prices pushing inflation up from very low levels, markets have been tying themselves up in knots about the potential for the years of supportive central bank policy being reversed and used to cool the economy. For the first time in years, the spectre of inflation has become a central concern for investors.

The combination of equities and inflation‐linked sovereign bonds, that continues to define the Distribution range of funds, position them ideally for the on‐going market conditions.

The quantum of money pumped into the financial system over the past 18 months has paled into insignificance the financial backing the same organisations gave following the global financial crisis. Unquestionably, this support has enabled the economy to keep going and saved many jobs from being lost. It also provided a strong underpin to fixed income markets as central banks reiterated their ‘lower for longer’ mantra. However, the impact of the vaccine rollout has brought economic optimism back to market and while we had been anticipating a modest move higher in yields over the course of 2021, the adjustment in Q1 2021 happened quicker and in a larger magnitude than we had been anticipating. Markets quickly priced in a continuation of the strong economic rebound and is currently anticipating two rate hikes from the US Federal Reserve by Q1 2023, while in GBP rates, the market is pricing in one hike by Q1 2023.

The bearish* momentum for bonds has stabilised for now but would anticipate a modest move higher in yields later in the summer as speculation around tapering of asset purchases is likely to rise. However, with much of the good news on the economy fully priced, positioning and the knock‐on implications to risk assets via higher discounting rates and tighter financial conditions will require close attention.

In our view, yield levels continue to offer some additional level of protection for the portfolios as the technical backdrop remains supportive, with global central banks continuing their asset purchase programmes. In addition, central banks have been explicit in their guidance on short rates, which will remain anchored until inflation is above their target for a sustained period. This backdrop should continue to be supportive for breakevens and inflation‐linked bonds.

9




Another factor having a significant impact on the UK equity market has been the growth of investor interest in environmental, social and governance (ESG) issues. The growing awareness of consumers, and in turn companies, of product provenance, the environmental impact and corporate behaviours is being reflected increasingly in sales rates. Within the portfolio, this is impacting every company we hold from Great Portland Estates to BP. Sustainability reports, carbon reduction targets and positive societal change are now the norm amongst the high‐quality businesses the fund invests in. On behalf of our unitholders, we have continued our investment and efforts in ESG and produce a monthly report covering a wide range of ESG metrics. These include measuring the Fund’s carbon and water intensity, monitoring the proportion of female executives on our holdings’ Boards, monitoring for controversies, scoring individual company holdings and assessing the overall ESG score of the Fund. Our intention is to expand the reporting of these, and other measures, in the years ahead.

Our positive view of the prospect for UK equities in 2021 has been reinforced by the takeover and IPO activity that have also

characterised the year to date. At the time of writing this report buyout transactions involving over £25bn in value of UK‐listed

companies have been announced (this does not include the unsuccessful approaches for several other companies).

Concurrently, there has been a long, and growing, list of companies revealing an intention to seek a public listing in the UK.

Significantly, the vast majority of the new listings have been successful and share prices have risen to a premium to their IPO

price which has encouraged more companies to follow. In the meantime, the UK government appears to be closing in on some

significant international trade agreements following Brexit, providing a further potential tailwind for the economy.

We have added to the Fund’s holding of Hill & Smith during the period where we see positive structural and cyclical drivers providing tailwinds for the business. On the structural side they are positioned well to make a positive contribution to issues including climate change, health & safety, population growth, increased urbanisation, infrastructure safety and vision zero (no road deaths). On the cyclical side, we think that the company is an excellent way to play the increased government spending on infrastructure and, in particular, President Biden’s US infrastructure package. This, however, is considered the icing on the cake as there are already large spending plans in place, such as Texas spending $77bn on their roads alone. Hill & Smith has also been quick to highlight the environmental benefits of galvanising as opposed to painting steel, thanks to its longevity and ability to be reused.

The new CEO Paul Simmons is bringing years of experience from Halma and applying it to the not‐too‐dissimilar Hill & Smith decentralised business model. We are particularly pleased that he has clarified the role and type of M&A he wants to achieve and expect to see a more rigorous approach to portfolio management and innovation. All of this means that we anticipate seeing a more consistent, higher level of organic growth than the Group has historically been able to produce and with it a likely higher rating.

Outlook

We remain positive about the prospects for UK equities over the period ahead. Valuations, in aggregate, remain attractive on both an absolute and relative (to international markets) basis. We are seeing a strong level of M&A activity which we anticipate will continue and new, interesting and attractively priced IPOs are offering new opportunities.

While it is inevitable that conditions will remain volatile, we continue to believe that macro events cannot be accurately nor consistently predicted. As such, the Fund retains a preference for longer‐term structural trends and quality companies that can deliver robust, reliable and consistent growth, supported by a simple government bond and cash hedge.

10




Performance

Past performance is not a guide for future performance.

Cost (£'000) Proceeds (£'000)

● UK Treasury 4.25% 07/06/32 6,393 4,413

● UK Treasury 0.125% IL 22/03/26 4,218 4,000

● UK Treasury 4.25% 07/12/40 3,005 3,359

● UK Treasury 0.125% IL 22/03/29 2,769 2,988

● UK Treasury 0.125% IL 10/08/31 2,663 2,576


The performance of the equity holdings within the portfolio continued to outperform the FTSE All‐Share Index during the period under review. Equity holdings in the Technology and Consumer Services sectors were the main contributors to the outperformance. Just Group Plc and Luceco were among the main contributors to performance in the period. We participated in several IPOs during the review period including that of Moonpig. The company is the UK’s market‐leading online greetings cards e‐commerce operator. The business currently comprises its UK division with a 60% market share in the UK and, under the Greetz brand in the Netherlands, enjoys 65% market share. The business offers investors an appealing combination of highly-visible double digit growth, high operating margins and cash generation. Growth is underpinned by: 1) online shift at 10‐15% p.a., 2) growth‐driving initiatives (e.g. shifting customers onto market‐leading app and reminders), and 3) driving increases inthe gift attach rate, from 16% up towards the industry average of 70%. W H Smith (+19.0%), which owns online card retailerfunkypigeon.com, was boosted by interest in the online card segment as well as the prospects for a re‐opening economy.

Major Sales

● UK Treasury 1.875% IL 22/11/22

● UK Treasury 2% 22/07/20

● Codemasters

● UK Treasury 0.5% IL 22/03/50

● GlaxoSmithKline

Jamie Forbes‐Wilson, Matthew Huddart

31 May 2021

Major Purchases

All performance data source: AXA Investment Managers and Morningstar.

* In broad terms, rising prices indicate bullish market sentiment, while falling prices indicate bearish market sentiment.

11

Portfolio Statement Market Value % of Total

As at 31 May 2021 Holding £’000 Net Assets

BONDS 61.14% (31/05/20: 60.53%)

Corporate Bonds 0.00% (31/05/20: 0.00%)

Lambay Capital Securities FRN Perpetual ** 337,000 ‐ ‐

Index Linked Government Bonds 53.83% (31/05/20: 55.78%)

UK Treasury 0.125% IL 22/03/24 26,046,083 35,173 14.54

UK Treasury 0.125% IL 22/03/26 10,000,000 13,418 5.55

UK Treasury 0.125% IL 10/08/28 1,280,000 1,686 0.70

UK Treasury 0.125% IL 22/03/29 1,750,000 2,739 1.13

UK Treasury 0.125% IL 10/08/31 2,000,000 2,675 1.11

UK Treasury 0.125% IL 22/03/44 2,014,923 4,131 1.71

UK Treasury 0.125% IL 22/03/46 733,580 1,465 0.61

UK Treasury 0.125% IL 22/11/56 700,000 1,676 0.69

UK Treasury 0.125% IL 22/03/58 549,455 1,403 0.58

UK Treasury 0.125% IL 22/11/65 947,000 2,803 1.16

UK Treasury 0.125% IL 22/03/68 1,087,143 3,616 1.50

UK Treasury 0.25% IL 22/03/52 1,504,395 3,696 1.53

UK Treasury 0.375% IL 22/03/62 1,265,361 4,038 1.67

UK Treasury 0.5% IL 22/03/50 807,083 2,275 0.94

UK Treasury 0.625% IL 22/03/40 678,056 1,565 0.65

UK Treasury 0.625% IL 22/11/42 2,072,670 5,162 2.13

UK Treasury 0.75% IL 22/03/34 2,132,690 4,051 1.68

UK Treasury 0.75% IL 22/11/47 1,555,791 4,506 1.86

UK Treasury 1.125% IL 22/11/37 1,274,343 3,202 1.32

UK Treasury 1.25% IL 22/11/27 692,873 1,380 0.57

UK Treasury 1.25% IL 22/11/32 1,718,983 3,561 1.47

UK Treasury 1.25% IL 22/11/55 271,685 1,120 0.46

UK Treasury 1.875% IL 22/11/22 5,500,000 8,658 3.58

UK Treasury 2% IL 26/01/35 881,745 2,561 1.06

UK Treasury 2.5% IL 17/07/24 2,648,119 9,467 3.92

UK Treasury 4.125% IL 22/07/30 1,118,053 4,141 1.71

Traditional Government Bonds 7.31% (31/05/20: 4.75%)

UK Treasury 0% 07/06/21 5,027,381 5,027 2.08

UK Treasury 3.25% 22/01/44 1,151,427 1,588 0.66

UK Treasury 3.75% 22/07/52 183,548 298 0.12

UK Treasury 4.25% 07/06/32 4,720,913 6,350 2.63

UK Treasury 4.25% 07/03/36 400,000 570 0.23

UK Treasury 4.25% 07/12/40 2,105,913 3,196 1.32

UK Treasury 4.5% 07/12/42 239,224 383 0.16

UK Treasury 4.75% 07/12/38 173,575 271 0.11

TOTAL BONDS 147,851 61.14

BASIC MATERIALS 1.93% (31/05/20: 1.64%*)

Industrial Metals & Mining 1.93% (31/05/20: 1.64%*)

Hill & Smith 76,516 1,174 0.48

Rio Tinto 43,060 2,606 1.08

Trifast 575,767 893 0.37

TOTAL BASIC MATERIALS 4,673 1.93



12





CONSUMER DISCRETIONARY 9.84% (31/05/20: 7.48%*)

Household Goods & Home Construction 1.83% (31/05/20: 1.58%)

Countryside Properties 265,910 1,344 0.56

Redrow 223,609 1,526 0.63

Watkin Jones 703,930 1,552 0.64

Leisure Goods 0.55% (31/05/20: 1.21%)

Games Workshop 11,181 1,334 0.55

Media 0.47% (31/05/20: 0.40%*)

Everyman Media 758,000 1,137 0.47

Retailers 3.39% (31/05/20: 1.02%*)

Dunelm 78,944 1,157 0.48

Howden Joinery 171,549 1,371 0.57

Moonpig 320,015 1,463 0.60

Pets at Home 409,948 1,840 0.76

Virgin Wines UK 640,714 1,474 0.61

Wickes 350,000 900 0.37

Travel & Leisure 3.60% (31/05/20: 3.27%*)

Domino's Pizza 287,067 1,062 0.44

Gym 897,284 2,490 1.03

Loungers 887,647 2,352 0.97

On the Beach 286,863 1,173 0.49

TEN Entertainment 486,133 1,220 0.50

Trainline 140,709 400 0.17

TOTAL CONSUMER DISCRETIONARY 23,795 9.84

CONSUMER STAPLES 0.45% (31/05/20: 1.07%*)

Beverages 0.45% (31/05/20: 1.07%)

Diageo 32,294 1,097 0.45

TOTAL CONSUMER STAPLES 1,097 0.45

ENERGY 0.83% (31/05/20: 1.53%*)

Oil, Gas & Coal 0.83% (31/05/20: 1.53%*)

BP 246,593 756 0.31

Royal Dutch Shell 'A' Shares 45,901 621 0.26

Royal Dutch Shell 'B' Shares 48,448 624 0.26

TOTAL ENERGY 2,001 0.83

FINANCIALS 7.16% (31/05/20: 8.96%*)

Banks 0.52% (31/05/20: 1.21%)

Barclays 309,478 573 0.24

HSBC 149,070 683 0.28

Closed End Investments 0.35% (31/05/20: 0.44%*)

Syncona 402,324 855 0.35

13





Investment Banking & Brokerage 2.90% (31/05/20: 3.27%*)

3i 158,532 1,975 0.82

AJ Bell 171,025 739 0.30

IntegraFin 119,325 650 0.27

Intermediate Capital 71,766 1,513 0.62

MJ Hudson 1,900,000 912 0.38

St James's Place 87,555 1,231 0.51

Finance & Credit Services 0.00% (31/05/20: 0.43%*)

Life Insurance 2.27% (31/05/20: 2.11%*)

Just 1,750,021 1,929 0.80

Legal & General 479,757 1,378 0.57

Prudential 142,412 2,169 0.90

Nonlife Insurance 1.12% (31/05/20: 1.50%)

Admiral 24,250 717 0.30

Lancashire 198,307 1,253 0.52

Sabre Insurance 276,304 725 0.30

TOTAL FINANCIALS 17,302 7.16

HEALTH CARE 1.57% (31/05/20: 4.14%)

Pharmaceuticals & Biotechnology 1.57% (31/05/20: 4.14%)

AstraZeneca 33,203 2,671 1.10

GlaxoSmithKline 84,155 1,130 0.47

TOTAL HEALTH CARE 3,801 1.57

INDUSTRIALS 5.76% (31/05/20: 4.63%*)

Aerospace & Defense 0.61% (31/05/20: 1.36%)

Avon Rubber 49,401 1,478 0.61

Construction & Materials 1.75% (31/05/20: 1.23%)

Breedon 972,623 1,052 0.44

Forterra 444,132 1,326 0.55

Nexus Infrastructure 965,000 1,843 0.76

Electronic & Electrical Equipment 2.00% (31/05/20: 1.24%*)

Invinity Energy Systems 723,147 1,157 0.48

Luceco 769,281 2,708 1.12

Rotork 287,067 977 0.40

Industrial Support Services 1.40% (31/05/20: 0.80%*)

Boku 701,898 1,158 0.48

Experian 28,708 776 0.32

RWS 227,786 1,452 0.60

TOTAL INDUSTRIALS 13,927 5.76

14





REAL ESTATE 0.37% (31/05/20: 0.52%*)

Real Estate Investment & Services 0.37% (31/05/20: 0.52%)

Grainger 310,697 894 0.37

TOTAL REAL ESTATE 894 0.37

TECHNOLOGY 4.13% (31/05/20: 2.65%*)

Software & Computer Services 2.70% (31/05/20: 1.85%*)

Auction Technology 54,384 620 0.26

AVEVA 47,206 1,643 0.68

Bytes Technology 185,000 923 0.38

Eckoh ^ 1,536,465 1,014 0.42

Future 47,187 1,393 0.58

GB 100,000 926 0.38

Technology Hardware & Equipment 1.43% (31/05/20: 0.80%*)

IQE 1,330,683 717 0.30

TT Electronics 1,088,884 2,744 1.13

TOTAL TECHNOLOGY 9,980 4.13

TELECOMMUNICATIONS 0.67% (31/05/20: 0.63%)

Telecommunications Equipment 0.29% (31/05/20: 0.00%)

Spirent Communications 281,270 704 0.29

Telecommunications Service Providers 0.38% (31/05/20: 0.63%*)

Telecom Plus 78,815 930 0.38

TOTAL TELECOMMUNICATIONS 1,634 0.67

UTILITIES 0.58% (31/05/20: 0.64%)

Electricity 0.58% (31/05/20: 0.64%)

SSE 89,710 1,395 0.58

TOTAL UTILITIES 1,395 0.58

Portfolio of investments 228,350 94.43

Net other assets 13,458 5.57

Total net assets 241,808 100.00

All investments are ordinary shares unless otherwise stated.

All bonds are denominated in Sterling (unless otherwise indicated).

^ These are AIM (Alternative Investment Market) holdings.

** These stocks have either been suspended, delisted or are in liquidation. They are included at the Manager’s valuation.

* Since the previous report, the portfolio classifications and prior year comparative figures have been updated to reflect the

recent changes in the Industry Classification Benchmark (ICB) standard.

15

Comparative TablesAs at 31 May 2021

31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019

Change in net assets per share (p) (p) (p) (p) (p) (p)

Opening net asset value per share † 120.90 121.74 118.71 112.87 115.24 114.51

Return before operating charges ^ 11.70 (0.20) 3.64 10.90 (0.16) 3.47

Operating charges ^ (0.66) (0.64) (0.61) (0.61) (0.60) (0.59)

Return after operating charges ^ 11.04 (0.84) 3.03 10.29 (0.76) 2.88

Distributions (0.46) (1.74) (2.23) (0.43) (1.61) (2.15)

Retained distributions on accumulation

shares0.46 1.74 2.23 ‐ ‐ ‐

Closing net asset value per share † 131.94 120.90 121.74 122.73 112.87 115.24

*^ after direct transaction costs of: 0.03 0.07 0.01 0.02 0.07 0.01

Performance

Return after operating charges 9.13% ‐0.69% 2.55% 9.12% ‐0.66% 2.52%

Other information

Closing net asset value (£) † 2,805,273 2,884,889 2,669,985 63,508 58,808 59,908

Closing number of shares 2,126,157 2,386,080 2,193,246 51,748 52,103 51,985

Operating charges ^ 0.53% 0.53% 0.52% 0.53% 0.53% 0.52%

Direct transaction costs * 0.02% 0.06% 0.01% 0.02% 0.06% 0.01%

Prices

Highest share price # 132.30 126.40 121.80 123.20 118.50 116.30

Lowest share price # 120.60 102.90 113.30 112.60 96.17 108.50

31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (0.52) (1.92) (2.51) (0.45) (1.69) (2.24)


shares0.52 1.92 2.51 ‐ ‐ ‐



Performance


Other information

Closing net asset value (£) † 186,394,636 184,315,754 204,755,170 1,838,369 1,987,641 2,159,873

Closing number of shares 125,454,251 135,513,040 149,660,744 1,425,541 1,677,577 1,787,191



Prices




A Gross Accumulation A Gross Income

B Gross Accumulation B Gross Income


16




31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (0.54) (1.99) (2.66) (0.35) (1.31) (1.76)


shares0.54 1.99 2.66 ‐ ‐ ‐



Performance


Other information





Prices



R Gross Accumulation R Gross Income

17




31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (0.79) (2.92) (3.84) (0.37) (1.41) (1.87)


shares0.79 2.92 3.84 ‐ ‐ ‐



Performance


Other information





Prices



† Valued at bid‐market prices.

# High and low price disclosures are based on quoted share prices (Mid Market Price). Therefore the opening and closing NAV

prices may fall outside the high / low price threshold.

The figures used within the table have been calculated against the average net asset value for the accounting year.

* Direct transaction costs include fees, commissions, transfer taxes and duties in the purchasing and selling of investments,

within the accounting year.

Z Gross Accumulation Z Gross Income

^ Operating charges include indirect costs incurred in the maintenance and running of the Fund, as disclosed in the detailed

expenses within the Statement of Total Return.

18


Statement of Total ReturnFor the year ended 31 May 2021

Note £'000 £'000 £'000 £'000

Income:Net capital gains/(losses) 2 20,992 (4,324)Revenue 3 941 3,680

Expenses 4 (1,317) (1,400)Interest payable and similar charges ‐ ‐

Net (expense)/revenue before taxation (376) 2,280

Taxation 5 (12) (22)

Net (expense)/revenue after taxation (388) 2,258

Total return before distributions 20,604 (2,066)

Distributions 6 (864) (3,596)

Change in net assets attributable to Shareholders

from investment activities 19,740 (5,662)

Statement of Change in Net Assets Attributable to Shareholders For the year ended 31 May 2021

£'000 £'000 £'000 £'000

Opening net assets attributable to Shareholders 239,282 267,322

Amounts receivable on issue of shares 3,623 2,529 Amounts payable on cancellation of shares (21,671) (28,339)

(18,048) (25,810)

Change in net assets attributable to Shareholdersfrom investment activities (see above) 19,740 (5,662)

Retained distributions on accumulation shares 834 3,432

Closing net assets attributable to Shareholders 241,808 239,282


31/05/21 31/05/20

31/05/21 31/05/20

19


Balance SheetAs at 31 May

Note £'000 £'000Assets:

Fixed assets:

Investments 228,350 225,921

Current assets:

Debtors 7 2,149 513

Cash and bank balances 8 12,017 13,208

Total assets 242,516 239,642

Liabilities:

Creditors:

Distribution payable (12) (11)

Other creditors 9 (696) (349)

Total liabilities (708) (360)

Net assets attributable to Shareholders 241,808 239,282

31/05/21 31/05/20


20


Notes to the Financial Statements For the year ended 31 May 2021

31/05/21 31/05/20

£'000 £'000

The net capital gains/(losses) comprise:

Non‐derivative securities 20,995 (4,323)

Transaction charges (3) (1)

Net capital gains/(losses) 20,992 (4,324)

3. Revenue

31/05/21 31/05/20

£'000 £'000

Bank interest ‐ 14

Interest on debt securities (823) 975

Overseas dividends 69 185

UK dividends 1,695 2,506

Total revenue 941 3,680

31/05/21 31/05/20

£'000 £'000

1,252 1,338

11 12

1,263 1,350

29 32

5 5

34 37

17 8

3 5

20 13

1,317 1,400


1. Accounting Basis And Policies

The Fund's Financial Statements have been prepared on the basis detailed on pages 145- 147.

2. Net capital gains/(losses)

4. Expenses

Payable to the ACD, associates of the ACD, and agents

of either of them

Annual management charge

Registration fees

Payable to the Depositary, associates of the Depositary

and agents of either of them

Depositary's fees

Safe custody fees

Other expenses

Audit fees*Printing fees

Total expenses

Expenses include irrecoverable VAT where applicable.

* Audit fees for the financial year ending 2021 were £8,000 (2020: £12,000) (including VAT).

21




5. Taxation

31/05/21 31/05/20

£'000 £'000

(a) Analysis of the tax charge in the year

Irrecoverable overseas tax 12 22

(b) Factors affecting tax charge for the year

31/05/21 31/05/20

£'000 £'000

Net (expense)/revenue before taxation (376) 2,280

Net (expense)/revenue for the year multiplied by the standard rate of corporation tax (75) 456

Effects of:


Movement in excess management expenses 1,135 442

Relief for indexation on UK Gilts (707) (360)

Revenue not subject to corporation tax (353) (538)

Current tax charge for the year 12 22

(c) Deferred taxation:

(d) Factors that may affect future tax charges

There is no provision required for deferred taxation at the balance sheet date in the current year or prior year.

OEICs are exempt from tax on capital gains in the UK. Therefore, any capital return is not included within the reconciliation

above.

The tax assessed for the year is higher than the standard rate of corporation tax for an open ended investment company of

20% (2020: 20%) is applied to the net (expense)/revenue before taxation. The differences are explained below:

At the year end, after offset against revenue taxable on receipt, there is a potential deferred tax asset of £19,986,703 (2020:

£18,851,367) in relation to surplus management expenses. It is unlikely that the Fund will generate sufficient taxable profits

in the future to utilise this amount and therefore no deferred tax asset has been recognised in the year.

22




6. Distributions

31/05/21 31/05/20

£'000 £'000

First interim 311 1,366

Second interim 11 984

Third interim 130 825

Final 407 368

Add: Revenue paid on cancellation of shares 8 59

Deduct: Revenue received on creation of shares (3) (6)

Net distribution for the year 864 3,596

Reconciliation of net (expense)/revenue after taxation to distributions

Net (expense)/revenue after taxation (388) 2,258

Expenses charged to capital 1,252 1,338

Net distribution for the year 864 3,596

7. Debtors 31/05/21 31/05/20

£'000 £'000

Amounts receivable for creation of shares 412 16

Sales awaiting settlement 1,245 ‐

Accrued revenue 472 469

Overseas tax recoverable 20 28

Total debtors 2,149 513

8. Cash and bank balances 31/05/21 31/05/20

£'000 £'000

Cash and bank balances 12,017 13,208

Total cash and bank balances 12,017 13,208

9. Other creditors 31/05/21 31/05/20

£'000 £'000

Amounts payable for cancellation of shares 467 130

Accrued annual management charge 202 198

Accrued other expenses 27 21

Total other creditors 696 349

10. Related party transactions

Monies received and paid by the ACD through the creation and cancellation of shares are disclosed in the Statement of

Change in Shareholders’ Net Assets and amounts due at the year end are disclosed in Notes 7 and 9.

Annual management charge paid to the ACD and Registration fees are disclosed in Note 4 and amounts due at the year end

are disclosed in Note 9.

The distributions take account of revenue received on the creation of shares and revenue deducted on the cancellation of

shares, and comprise:

The ACD and its associates (including other authorised investment Funds managed by the ACD) have no shareholdings in the

Company at the year end.

The ACD is related to the Fund as defined by Financial Reporting Standard 102.33 ‘Related Party Disclosures’.

23




11. Share classes

Annual

management

charge rate

(%) 31/05/20 Issued Cancelled Converted 31/05/21

A Gross Accumulation 0.50 2,386,080 302,629 (562,552) ‐ 2,126,157

A Gross Income 0.50 52,103 1,485 (1,840) ‐ 51,748

B Gross Accumulation 0.40 135,513,040 158,832 (10,217,621) ‐ 125,454,251

B Gross Income 0.40 1,677,577 2,185 (254,221) ‐ 1,425,541

R Gross Accumulation 1.50 10,832,913 421,023 (1,137,715) ‐ 10,116,221

R Gross Income 1.50 3,176,686 12,015 (169,534) ‐ 3,019,167

Z Gross Accumulation 0.75 14,159,732 1,035,381 (1,874,582) ‐ 13,320,531

Z Gross Income 0.75 2,416,306 79,326 (492,061) ‐ 2,003,571

12. Commitments, contingent liabilities and contingent assets

13. Derivatives and other financial instruments

The functional currency of the Fund is Sterling. There was immaterial direct foreign currency exposure within the Fund at

the balance sheet date.

A 10% increase in the value of the Fund’s portfolio would have the effect of increasing the return and net assets by

£22,835,008 (2020: £22,592,092). A 10% decrease would have an equal and opposite effect.

Market price risk sensitivity

Market price risk

The Fund invests principally in equity and fixed income securities. The value of the Fund’s investment portfolio is not fixed

and may go down as well as up. This may be as a result of a specific factor affecting the value of an individual company or

may be caused by general market factors (such as government policy or the health of the underlying economy) which can

affect the entire portfolio. The Fund seeks to manage these risks by adhering to investment guidelines and to investment

and borrowing powers set out in the Prospectus. In addition, the Fund complies with the Collective Investment Schemes

sourcebook (“COLL”), which include rules relating to investment holdings that are designed to place limits on the Fund’s

investment concentration (same as at 31 May 2020).

The main risks from the Fund's holding of financial instruments, together with the ACD’s policy for managing these risks, are

outlined below.

Foreign currency risk

The reconciliation of the opening and closing numbers of shares of each class, along with the ACD’s annual management

charges applicable to each class, is shown below:

There are no commitments, contingent liabilities and contingent assets as at the balance sheet date (2020: nil).

24




The table below shows the interest rate risk profile at the balance sheet date:

Floating rate

financial

assets

Fixed rate

financial

assets

Financial

assets not

carrying

interest Total

Currency Assets £'000 £'000 £'000 £'000

31/05/21

Pound sterling 12,017 147,851 82,603 242,471

Euro ‐ ‐ 20 20

US dollar ‐ ‐ 25 25

Total 12,017 147,851 82,648 242,516

31/05/20

Pound sterling 13,208 144,833 81,514 239,555

Euro ‐ ‐ 21 21

US dollar ‐ ‐ 66 66

Total 13,208 144,833 81,601 239,642

Floating rate

financial

liabilities

Fixed rate

financial

liabilities

Financial

liabilities not

carrying

interest Total

Currency Liabilities £'000 £'000 £'000 £'000

31/05/21

Pound sterling ‐ ‐ (708) (708)

Total ‐ ‐ (708) (708)

31/05/20


Total ‐ ‐ (360) (360)

Fixed interest securities are particularly affected by trends in interest rates and inflation. If interest rates go up, the value of

capital may fall, and vice versa. Inflation will also decrease the real value of capital, with the exception of index linked bonds

which are protected against the effect of inflation.

Interest rate risk

Changes in interest rates or changes in expectations of future interest rates may result in an increase or decrease in the market value of the investments held. A 1% increase in interest rates would have the effect of decreasing the return and net assets £18,171,590 (2020: £18,836,338) . A 1% decrease would have an equal and opposite effect.

25




31/05/21 31/05/20

Market Value % Market Value %

£’000 £’000

147,851 61.14 144,833 60.53

147,851 61.14 144,833 60.53

14. Portfolio transaction costs

Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2021 £'000 £'000 % £'000 % £'000

Analysis of purchases

Bonds 22,921 ‐ ‐ ‐ ‐ 22,921

Equities 12,682 4 0.03 28 0.22 12,714Total 35,603 4 28 35,635

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2021 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 15,429 ‐ ‐ ‐ ‐ 15,429

Collective Investment Schemes 309 ‐ ‐ ‐ ‐ 309

Equities 36,615 (15) (0.04) ‐ ‐ 36,600Total 52,353 (15) ‐ 52,338

The Fund runs a very low credit risk in respect of unsettled investment transactions as these are normally settled as cash

against delivery.

Fixed interest investments are exposed to credit risk which reflects the ability of the bond issuer to meet its obligations.

Generally, the higher the rate of interest, the higher the perceived credit risk of the issuer. The ACD monitors the credit

quality and risk of the portfolio as a part of the overall investment process and in accordance with the objective and policy

of each fund.

Transactions in securities may expose a fund to the risk that the counterparty will not settle the transaction or do so on a

timely basis.

All transactions in the funds are conducted through counterparties approved by the ACD.

A breakdown of the investment portfolio by credit rating is disclosed on the table below:

Credit Rating Investment grade (BBB- credit rating and above)Total value of bonds

Credit risk

26




Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2020 £'000 £'000 % £'000 % £'000


Bonds 52,269 ‐ ‐ ‐ ‐ 52,269

Collective Investment Schemes 283 ‐ ‐ ‐ ‐ 283

Equities 33,198 14 0.04 121 0.36 33,333Total 85,750 14 121 85,885

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2020 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 84,133 ‐ ‐ ‐ ‐ 84,133

Equities 28,985 (11) (0.04) ‐ ‐ 28,974Total 113,118 (11) ‐ 113,107

31/05/21 31/05/20

Transaction costs as percentage of average net asset value % %

Commissions 0.01 0.01

Taxes 0.01 0.05

At the balance sheet date the average portfolio dealing spread was 0.36% (2020: 0.30%).

15. Post balance sheet events

16. Fair value disclosure

Assets Liabilities Assets Liabilities

Valuation technique £'000 £'000 £'000 £'000

Level 1 ^ 228,350 ‐ 225,921 ‐

Level 2 ^^ ‐ ‐ ‐ ‐

Level 3 ^^^ ‐ ‐ ‐ ‐

228,350 ‐ 225,921 ‐

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

measurement date. ^^ Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data)

for the asset or liability, either directly or indirectly.

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

The fair value of the Fund's investments has been determined using the hierarchy above.

31/05/21 31/05/20

There are no post balance sheet events which require adjustments at the year end.

27


As at 31 May 2021

First Distribution in pence per shareGroup 1 Shares purchased prior to 1 June 2020Group 2 Shares purchased on or after 1 June 2020 to 31 August 2020

Distribution DistributionNet paid paid

revenue Equalisation 30/10/20 31/10/19(p) (p) (p) (p)

Share Class A Gross AccumulationGroup 1 0.162 ‐ 0.162 0.673 Group 2 0.115 0.047 0.162 0.673

Share Class A Gross IncomeGroup 1 0.152 ‐ 0.152 0.611 Group 2 0.152 ‐ 0.152 0.611

Share Class B Gross AccumulationGroup 1 0.182 ‐ 0.182 0.721 Group 2 0.148 0.034 0.182 0.721

Share Class B Gross IncomeGroup 1 0.158 ‐ 0.158 0.639 Group 2 0.115 0.043 0.158 0.639

Share Class R Gross AccumulationGroup 1 0.190 ‐ 0.190 0.737 Group 2 0.164 0.026 0.190 0.737

Share Class R Gross IncomeGroup 1 0.122 ‐ 0.122 0.499 Group 2 0.122 ‐ 0.122 0.499

Share Class Z Gross AccumulationGroup 1 0.277 ‐ 0.277 1.100 Group 2 0.209 0.068 0.277 1.100

Share Class Z Gross IncomeGroup 1 0.132 ‐ 0.132 0.538 Group 2 0.116 0.016 0.132 0.538


Distribution Tables

28


As at 31 May 2021


Distribution Tables

Second Distribution in pence per shareGroup 1 Shares purchased prior to 1 September 2020Group 2 Shares purchased on or after 1 September 2020 to 30 November 2020



Share Class A Gross AccumulationGroup 1 0.006 ‐ 0.006 0.475 Group 2 ‐ 0.006 0.006 0.475


Share Class B Gross AccumulationGroup 1 0.006 ‐ 0.006 0.531 Group 2 ‐ 0.006 0.006 0.531

Share Class B Gross IncomeGroup 1 0.006 ‐ 0.006 0.467 Group 2 ‐ 0.006 0.006 0.467

Share Class R Gross AccumulationGroup 1 0.007 ‐ 0.007 0.556 Group 2 ‐ 0.007 0.007 0.556

Share Class R Gross IncomeGroup 1 0.004 ‐ 0.004 0.364 Group 2 ‐ 0.004 0.004 0.364

Share Class Z Gross AccumulationGroup 1 0.010 ‐ 0.010 0.811 Group 2 ‐ 0.010 0.010 0.811

Share Class Z Gross IncomeGroup 1 0.005 ‐ 0.005 0.390 Group 2 ‐ 0.005 0.005 0.390

29


As at 31 May 2021


Distribution Tables

Third Distribution in pence per shareGroup 1 Shares purchased prior to 1 December 2020Group 2 Shares purchased on or after 1 December 2020 to 28 February 2021








Share Class R Gross IncomeGroup 1 0.053 ‐ 0.053 0.309 Group 2 0.045 0.008 0.053 0.309



30


As at 31 May 2021


Distribution Tables

Final Distribution in pence per shareGroup 1 Shares purchased prior to 1 March 2021Group 2 Shares purchased on or after 1 March 2021 to 31 May 2021

Distribution DistributionNet payable paid







Share Class R Gross IncomeGroup 1 0.166 ‐ 0.166 0.141 Group 2 0.166 ‐ 0.166 0.141



31

AXA Distribution Fund



1 2 3 4 5 6 7



take into consideration a composite benchmark made up of the following indices in the stated proportions: 55% FTSE All‐Share

Index; 17.5% FTSE Index Linked All Stocks; 17.5% FTSE Index Linked < 5 Years; 3.5% FTSE Gilts All Stocks; 3.5% FTSE Gilts < 5

Years; 3% LIBID 7 Day (cash) (the “Benchmark”). This Benchmark best represents the types of bonds and companies in which the

Fund predominantly invests.

As at 31 May 2021


The Fund invests in a mix of shares in UK listed companies, UK Government bonds (the majority of which are linked to the rate

of inflation) and cash. The Fund's typical asset mix would range between 50‐60% investment in shares and 40‐50% in UK

Government bonds and cash. The Manager selects shares in companies based upon their prospects for future growth of capital

and dividend payments following an in depth analysis of the quality of their business model, financial status, and corporate

governance arrangements. Investments in UK Government bonds are diversified across a range of maturities (i.e., the length of

time for full repayment of the bond by the Government).

By investing in a fund which can invest up to 60% in equities you are likely to be looking for an investment which has lower risk

than a pure equity based fund but you are prepared to accept some risk for potential reward. You are willing to accept that your

investment will fall and rise in value and that you could get back less than you invest. Typically, you would prefer an investment

with less risk than that of a fund which invests predominantly in equities or overseas.



are subject to some level of variation which, may result in gains or losses.

Additional risks









durations.


Investment Policy



profile.The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free. The risk

category is recalculated weekly and for the period under review the risk category changed from a category 4 to a category 5.


32






































• Index‐linked bonds risk ‐ are fixed interest securities whose capital repayment amounts and interest payments are adjusted in

line with movements in inflation indices. They are designed to mitigate the effects of inflation on the value of a portfolio. The

market value of index‐linked bonds is determined by the market’s expectations of future movements in both interest rates and

inflation rates.



vice versa.

33
























section in Appendix II of this Prospectus for more information.



investment policy.










Market Review


34





















The bearish momentum for bonds has stabilised for now but would anticipate a modest move higher in yields later in the summer as speculation around tapering of asset purchases is likely to rise. However, with much of the good news on the economy fully priced, positioning and the knock‐on implications to risk assets via higher discounting rates and tighter financial conditions will require close attention.


Our positive view of the prospect for UK equities in 2021 has been reinforced by the takeover and IPO activity that have also characterised the year to date. At the time of writing this report buyout transactions involving over £25bn in value of UK‐listed companies have been announced (this does not include the unsuccessful approaches for several other companies). Concurrently, there has been a long, and growing, list of companies revealing an intention to seek a public listing in the

35





● UK Treasury 0.125% IL 22/03/29 14,220 13,770

● UK Treasury 4.25% 07/06/32 12,279 10,411

● Hargreaves Lansdown 8,374 9,440

● UK Treasury 0.125% IL 22/03/26 7,927 8,251

● AstraZeneca 5,017 6,847



UK. Significantly, the vast majority of the new listings have been successful and share prices have risen to a premium to their IPO price which has encouraged more companies to follow. In the meantime, the UK government appears to be closing in on some significant international trade agreements following Brexit, providing a further potential tailwind for the economy.

Major Sales

● Barrick Gold

● UK Treasury 1.875% IL 22/11/22

● Royal Dutch Shell

● Countryside Proper es

● Rio Tinto


31 May 2021

Major Purchases

We have added to the Fund’s holding of Hill & Smith during the period where we see strong structural and cyclical drivers providing tailwinds for the business. On the structural side they are positioned well to make a positive contribution to issues including climate change, health & safety, population growth, increased urbanisation, infrastructure safety and vision zero (no road deaths). On the cyclical side, we think that the company is an excellent way to play the increased government spending on infrastructure and, in particular, President Biden’s US infrastructure package. This, however, is considered the icing on the cake as there are already large spending plans in place, such as Texas spending $77bn on their roads alone. Hill & Smith has also been quick to highlight the environmental benefits of galvanising as opposed to painting steel, thanks to its longevity and ability to be reused.


Outlook

We remain positive about the prospects for UK equities over the period ahead. Valuations, in aggregate, remain attractive on both and absolute and relative (to international markets) basis. We are seeing a strong level of M&A activity which we anticipate will continue and new, interesting and attractively priced IPOs are offering new opportunities.




36



EQUITIES 57.67% (31/05/20: 58.00%)

BASIC MATERIALS 4.29% (31/05/20: 6.01%*)


Central Asia Metals 1,465,000 3,977 0.60

Hill & Smith 500,000 7,670 1.15

Rio Tinto 280,000 16,948 2.54

Precious Metals & Mining 0.00% (31/05/20: 1.99%*)



Automobiles & Parts 0.94% (31/05/20: 0.34%)

TI Fluid Systems 2,065,031 6,288 0.94

Household Goods & Home Construction 1.13% (31/05/20: 1.31%*)

Bellway 210,000 7,533 1.13

Retailers 2.93% (31/05/20: 1.97%*)

Dunelm 550,000 8,063 1.21

JD Sports Fashion 1,200,000 11,438 1.72

Travel & Leisure 1.41% (31/05/20: 0.83%)

Loungers 1,300,000 3,445 0.52

Whitbread 185,000 5,935 0.89



Beverages 2.29% (31/05/20: 1.97%)

Diageo 450,000 15,291 2.29

Personal Care, Drug & Grocery 2.58% (31/05/20: 3.15%*)

Reckitt Benckiser 200,000 12,718 1.91

Tesco 2,000,000 4,470 0.67


ENERGY 3.65% (31/05/20: 5.12%*)

Oil, Gas & Coal 3.65% (31/05/20: 5.12%*)

BP 4,500,000 13,799 2.07

Diversified Energy 2,973,849 3,140 0.47

Longboat Energy 250,000 193 0.03

Royal Dutch Shell 200,000 2,578 0.39

Serica Energy 3,989,250 4,604 0.69




37





FINANCIALS 13.75% (31/05/20: 11.48%*)

Banks 2.33% (31/05/20: 2.09%)

Lloyds Banking 12,500,000 6,219 0.93

Standard Chartered 1,800,000 9,295 1.40


Syncona 750,000 1,594 0.24

Finance & Credit Services 1.02% (31/05/20: 0.00%)

London Stock Exchange 90,000 6,773 1.02


3i 1,100,000 13,706 2.06

Argentex 1,350,000 1,681 0.25

Hargreaves Lansdown 550,000 9,207 1.38

TP ICAP 1,595,198 3,402 0.51

Life Insurance 4.94% (31/05/20: 4.44%)

Just 10,000,000 11,020 1.65

Legal & General 4,500,000 12,929 1.94

Phoenix 600,000 4,441 0.67

Prudential 300,000 4,569 0.68

Non‐Life Insurance 1.02% (31/05/20: 0.91%)

Sabre Insurance 2,600,000 6,825 1.02


HEALTH CARE 8.83% (31/05/20: 9.20%)

Medical Equipment & Services 2.28% (31/05/20: 2.67%*)

Abingdon Health 2,800,000 1,568 0.24

ConvaTec 4,000,000 9,424 1.41

Smith & Nephew 275,000 4,213 0.63


AstraZeneca 180,000 14,477 2.17

Genus 180,000 9,081 1.36

GlaxoSmithKline 1,175,000 15,780 2.37

Vectura 2,750,000 4,329 0.65


INDUSTRIALS 7.94% (31/05/20: 7.56%*)



Forterra 2,250,000 6,716 1.01

Marshalls 600,000 4,464 0.67

38





General Industrials 2.88% (31/05/20: 2.93%)

Coats 8,000,000 5,296 0.79

DS Smith 1,350,000 5,667 0.85

Melrose Industries 4,750,000 8,277 1.24

Industrial Support Services 1.52% (31/05/20: 1.30%)

Experian 375,000 10,133 1.52

Industrial Engineering 0.00% (31/05/20: 0.29%*)

Industrial Transportation 1.86% (31/05/20: 1.83%*)

Ashtead 240,000 12,432 1.86


REAL ESTATE 2.91% (31/05/20: 3.23%*)

Real Estate Investment & Services 1.26% (31/05/20: 1.85%*)

Rightmove 1,400,000 8,422 1.26

Real Estate Investment Trusts 1.65% (31/05/20: 1.38%)

Great Portland Estates 850,000 6,116 0.92

PRS 5,000,000 4,850 0.73

TOTAL REAL ESTATE 19,388 2.91

TECHNOLOGY 0.93% (31/05/20: 1.28%*)


AVEVA 177,777 6,188 0.93




Vodafone 7,000,000 9,005 1.35


UTILITIES 2.74% (31/05/20: 2.33%)

Electricity 1.05% (31/05/20: 0.65%)

SSE 450,000 6,998 1.05

Gas, Water & Multiutilities 1.69% (31/05/20: 1.68%)

National Grid 1,200,000 11,288 1.69


39





GOVERNMENT BONDS 37.53% (31/05/20: 37.96%)


UK Treasury 0.125% IL 22/03/24 44,535,500 60,141 9.02

UK Treasury 0.125% IL 22/03/26 16,800,000 22,542 3.38

UK Treasury 0.125% IL 10/08/28 3,000,000 3,952 0.59

UK Treasury 0.125% IL 22/03/29 9,000,000 14,087 2.11

UK Treasury 0.125% IL 22/03/44 2,642,800 5,419 0.81

UK Treasury 0.125% IL 22/03/46 1,300,000 2,596 0.39

UK Treasury 0.125% IL 22/11/56 1,200,000 2,874 0.43

UK Treasury 0.125% IL 22/03/58 960,129 2,452 0.37

UK Treasury 0.125% IL 22/11/65 1,640,000 4,853 0.73

UK Treasury 0.125% IL 22/03/68 2,366,600 7,871 1.18

UK Treasury 0.25% IL 22/03/52 2,282,917 5,608 0.84

UK Treasury 0.375% IL 22/03/62 1,293,253 4,127 0.62

UK Treasury 0.5% IL 22/03/50 1,465,548 4,130 0.62

UK Treasury 0.625% IL 22/03/40 982,496 2,268 0.34

UK Treasury 0.625% IL 22/11/42 3,200,000 7,970 1.20

UK Treasury 0.75% IL 22/03/34 1,990,000 3,780 0.57

UK Treasury 0.75% IL 22/11/47 1,899,000 5,501 0.83

UK Treasury 1.125% IL 22/11/37 2,200,000 5,528 0.83

UK Treasury 1.25% IL 22/11/27 1,184,400 2,359 0.35

UK Treasury 1.25% IL 22/11/32 1,500,000 3,107 0.47

UK Treasury 1.25% IL 22/11/55 588,230 2,425 0.36

UK Treasury 1.875% IL 22/11/22 10,000,000 15,742 2.36

UK Treasury 2% IL 26/01/35 2,614,000 7,593 1.14

UK Treasury 2.5% IL 17/07/24 4,373,000 15,633 2.35

UK Treasury 4.125% IL 22/07/30 1,646,000 6,096 0.91


UK Treasury 0% 07/06/21 1,000,000 1,000 0.15

UK Treasury 0.875% 22/10/29 2,040,000 2,060 0.31

UK Treasury 2% 07/09/25 273,000 293 0.04

UK Treasury 2.5% 22/07/65 74,000 106 0.02

UK Treasury 3.25% 22/01/44 2,600,000 3,585 0.54

UK Treasury 3.5% 22/01/45 350,000 505 0.08

UK Treasury 3.5% 22/07/68 125,000 228 0.03

UK Treasury 3.75% 22/07/52 282,000 458 0.07

UK Treasury 4% 22/01/60 217,000 400 0.06

UK Treasury 4.25% 07/12/27 27,500 34 0.01

UK Treasury 4.25% 07/06/32 8,700,000 11,702 1.75

UK Treasury 4.25% 07/03/36 2,000,000 2,848 0.43

UK Treasury 4.25% 07/09/39 252,000 377 0.06

UK Treasury 4.25% 07/12/40 1,890,000 2,868 0.43

UK Treasury 4.25% 07/12/46 271,000 442 0.07

UK Treasury 4.25% 07/12/49 100,000 170 0.03

UK Treasury 4.25% 07/12/55 200,000 365 0.05

UK Treasury 4.5% 07/09/34 1,850,120 2,636 0.39

UK Treasury 4.5% 07/12/42 150,000 240 0.04

40





UK Treasury 4.75% 07/12/30 300,000 408 0.06

UK Treasury 4.75% 07/12/38 277,000 433 0.06

UK Treasury 5% 07/03/25 190,000 224 0.03

UK Treasury 6% 07/12/28 87,000 121 0.02

TOTAL GOVERNMENT BONDS 250,157 37.53








41


31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (1.92) (2.81) (3.53) (1.69) (2.53) (3.27)


shares1.92 2.81 3.53 ‐ ‐ ‐



Performance


Other information





Prices



31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (2.23) (3.26) (4.09) (1.82) (2.71) (3.50)


shares2.23 3.26 4.09 ‐ ‐ ‐



Performance


Other information





Prices




A Accumulation A Income

B Accumulation B Income


42




31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019





Return after operating charges ^ 21.94 (5.26) (0.86) 11.59 (2.76) (0.54)

Distributions (3.34) (4.94) (6.26) (1.77) (2.67) (3.48)


shares3.34 4.94 6.26 ‐ ‐ ‐



Performance

Return after operating charges 10.39% ‐2.43% ‐0.40% 10.30% ‐2.34% ‐0.44%

Other information





Prices



R Accumulation R Income

43




31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (3.76) (5.51) (6.95) (1.98) (2.97) (3.85)


shares3.76 5.51 6.95 ‐ ‐ ‐



Performance


Other information





Prices









Z Accumulation Z Income



44



Note £'000 £'000 £'000 £'000

Income:Net capital gains/(losses) 2 64,549 (22,318)Revenue 3 10,140 16,419


Net revenue before taxation 5,173 10,950


Net revenue after taxation 5,119 10,867


Distributions 6 (9,974) (16,223)




£'000 £'000 £'000 £'000



(63,841) (65,689)


Retained distributions on accumulation shares 9,378 15,203

Unclaimed distributions 1 2



31/05/21 31/05/20

31/05/21 31/05/20

45




Fixed assets:


Current assets:

Debtors 7 2,905 2,334


Total assets 668,963 663,102

Liabilities:

Creditors:


Other creditors 9 (2,175) (1,524)

Total liabilities (2,344) (1,715)


31/05/21 31/05/20


46



31/05/21 31/05/20

£'000 £'000



Currency gains/(losses) 6 (20)



3. Revenue

31/05/21 31/05/20

£'000 £'000


Interest on debt securities (902) 1,660



Property revenue from REITs 357 278

Total revenue 10,140 16,419

31/05/21 31/05/20

£'000 £'000

4,855 5,356

47 50

4,902 5,406

29 32

17 17

46 49

16 8

3 6

19 14

4,967 5,469





4. Expenses

Payable to the ACD, associates of the ACD, and agents of either of them


Registration fees

Payable to the Depositary, associates of the Depositary and agents of either of them

Depositary's fees

Safe custody fees

Other expenses


Total expenses



47




5. Taxation

31/05/21 31/05/20

£'000 £'000




31/05/21 31/05/20

£'000 £'000


Net revenue for the year multiplied by the standard rate of corporation tax 1,035 2,190

Effects of:


Movement in excess management expenses 2,398 1,345

Relief for indexation on UK Gilts (1,251) (626)

Revenue not subject to corporation tax (2,182) (2,909)






above.

The tax assessed for the year is lower than the standard rate of corporation tax for an open ended investment company of

20% (2020: 20%) is applied to the net revenue before taxation. The differences are explained below:




48




6. Distributions

31/05/21 31/05/20

£'000 £'000

First interim 3,077 4,926

Second interim 1,434 4,559

Third interim 1,803 2,816

Final 3,550 3,746



Net distribution for the year 9,974 16,223

Reconciliation of net revenue after taxation to distributions




7. Debtors 31/05/21 31/05/20

£'000 £'000


Sales awaiting settlement 1,216 ‐

Accrued revenue 1,570 2,255

Income tax recoverable ‐ 4

Overseas tax recoverable ‐ 7

Total debtors 2,905 2,334


£'000 £'000



9. Other creditors 31/05/21 31/05/20

£'000 £'000

Amounts payable for cancellation of shares 1,360 725



Total other creditors 2,175 1,524



49





11. Share classes

Annual

management

charge rate


A Accumulation 0.50 4,849,447 847,435 (1,461,278) ‐ 4,235,604

A Income 0.50 287,690 36,853 (21,614) ‐ 302,929

B Accumulation 0.40 249,843,892 81,866 (17,253,099) (18,132) 232,654,527

B Income 0.40 1,989,784 2,055 (191,519) ‐ 1,800,320

R Accumulation 1.50 73,813,070 295,531 (6,813,263) (78,031) 67,217,307

R Income 1.50 6,608,198 1,010 (901,718) ‐ 5,707,490

Z Accumulation 0.75 49,120,368 855,643 (8,640,565) 80,170 41,415,616

Z Income 0.75 18,663,831 816,282 (3,559,324) 10,321 15,931,110



The functional currency of the Fund is Sterling. All assets and liabilities of the Fund are denominated in Pound sterling.

There was no direct foreign currency exposure within the Fund at the balance sheet date.




Market price risk













outlined below.








50





Floating rate

financial

assets

Fixed rate

financial

assets

Financial

assets not

carrying

interest Total

Currency Assets £'000 £'000 £'000 £'000

31/05/21

Pound sterling 31,426 250,157 387,105 668,688

US dollar ‐ ‐ 275 275

Total 31,426 250,157 387,380 668,963

31/05/20

Pound sterling 26,071 251,010 372,246 649,327

Canadian dollar ‐ ‐ 13,149 13,149

US dollar ‐ ‐ 626 626

Total 26,071 251,010 386,021 663,102

Floating rate

financial

liabilities

Fixed rate

financial

liabilities

Financial

liabilities not

carrying

interest Total


31/05/21

Pound sterling ‐ ‐ (2,344) (2,344)

Total ‐ ‐ (2,344) (2,344)

31/05/20

Pound sterling ‐ ‐ (1,715) (1,715)

Total ‐ ‐ (1,715) (1,715)




Interest rate risk


51




31/05/21 31/05/20


£’000 £’000

250,157 37.53 251,010 37.96

250,157 37.53 251,010 37.96


Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2021 £'000 £'000 % £'000 % £'000


Bonds 53,783 ‐ ‐ ‐ ‐ 53,783

Equities 48,106 20 0.04 179 0.37 48,305Total 101,889 20 179 102,088

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2021 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 46,560 ‐ ‐ ‐ ‐ 46,560

Collective Investment Schemes 1,331 (1) (0.05) ‐ ‐ 1,330

Equities 114,377 (56) (0.05) ‐ ‐ 114,321Total 162,268 (57) ‐ 162,211


against delivery.




of each fund.


timely basis.



Credit Rating Investment grade (BBB- credit rating and above) Total value of bonds

Credit risk

52




Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2020 £'000 £'000 % £'000 % £'000


Bonds 96,746 ‐ ‐ ‐ ‐ 96,746

Collective Investment Schemes 2,969 1 0.05 ‐ ‐ 2,970

Equities 86,066 41 0.05 403 0.47 86,510Total 185,781 42 403 186,226

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2020 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 145,871 ‐ ‐ ‐ ‐ 145,871

Equities 97,364 (42) (0.04) ‐ ‐ 97,322Total 243,235 (42) ‐ 243,193

31/05/21 31/05/20



Taxes 0.03 0.06






Level 1 ^ 634,632 ‐ 634,697 ‐

Level 2 ^^ ‐ ‐ ‐ ‐

Level 3 ^^^ ‐ ‐ ‐ ‐

634,632 ‐ 634,697 ‐


measurement date.

^^ Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data)




31/05/21 31/05/20


53


As at 31 May 2021

First Distribution in pence per shareGroup 1 Shares purchased prior to 1 June 2020Group 2 Shares purchased on or after 1 June 2020 to 31 August 2020



Share Class A AccumulationGroup 1 0.573 ‐ 0.573 0.839 Group 2 0.287 0.286 0.573 0.839

Share Class A IncomeGroup 1 0.510 ‐ 0.510 0.760 Group 2 0.510 ‐ 0.510 0.760

Share Class B AccumulationGroup 1 0.666 ‐ 0.666 0.971 Group 2 0.450 0.216 0.666 0.971

Share Class B IncomeGroup 1 0.546 ‐ 0.546 0.812 Group 2 0.546 ‐ 0.546 0.812

Share Class R AccumulationGroup 1 1.002 ‐ 1.002 1.476 Group 2 0.577 0.425 1.002 1.476

Share Class R IncomeGroup 1 0.534 ‐ 0.534 0.800 Group 2 0.277 0.257 0.534 0.800

Share Class Z AccumulationGroup 1 1.125 ‐ 1.125 1.642 Group 2 0.798 0.327 1.125 1.642

Share Class Z IncomeGroup 1 0.597 ‐ 0.597 0.889 Group 2 0.421 0.176 0.597 0.889


Distribution Tables

54


As at 31 May 2021


Distribution Tables

Second Distribution in pence per shareGroup 1 Shares purchased prior to 1 September 2020Group 2 Shares purchased on or after 1 September 2020 to 30 November 2020











55


As at 31 May 2021


Distribution Tables

Third Distribution in pence per shareGroup 1 Shares purchased prior to 1 December 2020Group 2 Shares purchased on or after 1 December 2020 to 28 February 2021




Share Class A IncomeGroup 1 0.312 ‐ 0.312 0.447 Group 2 0.201 0.111 0.312 0.447


Share Class B IncomeGroup 1 0.335 ‐ 0.335 0.478 Group 2 0.151 0.184 0.335 0.478





56


As at 31 May 2021


Distribution Tables

Final Distribution in pence per shareGroup 1 Shares purchased prior to 1 March 2021Group 2 Shares purchased on or after 1 March 2021 to 31 May 2021











57

AXA Ethical Distribution Fund



1 2 3 4 5 6 7


As at 31 May 2021



performance.

Due to the ethical constraints placed on this Fund, which exclude over half of the FTSE All‐Share Index, the value of the Fund

may fluctuate more than a Fund which is invested in a more diversified portfolio of UK equities. The value of investments and

the income from them is not guaranteed and can go down as well as up.







Investment Policy



The latest ethical policy for the Fund can be found on https://adviser.axa‐im.co.uk/fund‐centre/‐/funds‐center/axa‐

ethicaldistribution‐fund‐b‐gbp‐acc‐53826#/literature

The Fund invests in a mix of shares in UK listed companies, UK Government Bonds, the majority of which are linked to the rate of

inflation, and cash. The Fund's typical asset mix would range between 50‐60% investment in shares and 40‐50% in UK

Government bonds and cash. In accordance with the Manager's ethical screening criteria, the Fund invests in companies

identified in relation to their approach to: environmental issues (including biodiversity, ozone depleting substances, climate

change, fossil fuels, energy intensive industries, mining and quarrying, nuclear power, pollution and sustainable timber); human

rights violations; and, other corporate responsibility issues (including animal testing, gambling, intensive farming, military sales,

pornography and adult entertainment services, activities deemed detrimental to developing economies and tobacco sale and

production).


take into consideration a composite benchmark made up of the following indices in the stated proportions: 55% FTSE All Share

Index; 17.5% FTSE Index Linked All Stocks; 17.5% FTSE Index Linked < 5 Years 3.5% FTSE Gilts All Stocks; 3.5% FTSE Gilts < 5

Years; 3% LIBID 7 Day (cash) (monthly rebalance) (the “Benchmark”). This Benchmark best represents the types of bonds and

companies in which the Fund predominantly invests.

Eligible shares in companies for investment are then selected based upon their prospects for future growth in dividend

payments following an in depth analysis of their financial status, quality of business model and corporate governance

arrangements. Investments in UK Government bonds are diversified across a range of maturities (i.e., the length of time for full

repayment of the bond by the Government).

58





based on the individual fund’s investment objectives and investment policy.These guidelines could include measures of


• Index‐linked bonds ‐ index‐linked bonds are fixed interest securities whose capital repayment amounts and interest payments

are adjusted in line with movements in inflation indices. They are designed to mitigate the effects of inflation on the value of a

portfolio. The market value of index‐linked bonds is determined by the market’s expectations of future movements in both

interest rates and inflation rates.



vice versa.

Additional risks
















durations.










and/or interest when due in accordance with the terms of such debt. In such a scenario, the value of investments of the Funds









59





Derivatives transactions may be used in the Fund for meeting the investment objectives of the Fund. The use of derivatives in

this manner is not expected to change the risk profile of the Fund.






default of the sovereign issuer, a Fund may suffer significant loss.



investment policy






desired. The Manager may be forced to buy or sell such investments as a consequence of shareholders buying or selling shares

in the Fund. Depending on market conditions at the time, this could lead to a significant drop in the Fund’s value.





• Counterparty risk ‐ at any one time, a Fund may be exposed to the creditworthiness and stability of the counterparties to











Fund. To assist in managing these types of risks, the ACD sets criteria around the types of eligible collateral a Fund may accept.


section in Appendix II of this Prospectus for more information.

Transactions in securities that the Fund may enter into expose it to the risk that the counterparty will not deliver the investment

for a purchase or cash for a sale after the Fund has contracted to fulfil its responsibilities. This is minimised by the practice in the

majority of markets of delivery versus payment and short settlement periods.



60






One year ago, this report referenced the mounting death toll from coronavirus which, at the time, was still spreading voraciously

across the globe. Today, deaths worldwide are approaching four million and many developing nations are still suffering terribly

from its impact. Within developed markets, we have benefited from the phenomenal efforts made by scientists, regulators and

governments to research, develop and produce multiple vaccines that have substantially reduced the harming effects of the

virus. After a long, long time spent restricted in each of our daily lives we are approaching a return to normal life.






For the Fund, market conditions over the past six months have been generally positive as investors have looked forward to a normalisation of economic conditions. Since the beginning of December, conditions impacting investment markets have followed in much the same vein as during the last reporting period. In short, conditions have been volatile. Equities have made solid progress while fixed income has been challenged by the positive investor view of life in a post‐lockdown world. The FTSE All‐Share Index (on a Total Return basis) rose 15.2% with the FTSE 100 (+14.09%) underperforming the mid cap (+18.43%) and the FTSE Small Cap (ex‐Investment Companies) (+35.87%) indices. The FTSE UK Gilts All Stocks (TR) fell 4.82% over the six‐month period, while the FTSE UK Gilts Index‐Linked (TR) All stocks index outperformed its conventional peer and falling 2.35%.






Market Review

61














Outlook



Performance

The performance of the equity holdings within the portfolio continued to outperform the FTSE All‐Share Index during the period under review. As ever, there were individual holdings that proved challenging and, in particular, the London Stock Exchange contributed negatively over the half year. Following several strong years of performance, the London Stock Exchange surprised the market with its announcement of a significantly larger than expected investment it will be making in its newly acquired Refinitiv business. The shares were weak on the back of the news; however, we continue to see value in the business and have held the position. The portfolio’s largest relative position, Games Workshop, also detracted from performance over the period.

62





● UK Treasury 4.25% 07/06/32 5,207 3,140

● UK Treasury 0.125% IL 22/03/26 4,741 2,537

● UK Treasury 0.125% IL 22/03/24 3,029 2,518

● UK Treasury 0.125% IL 10/08/31 2,130 2,499

● UK Treasury 0.125% IL 10/08/28 1,999 2,038


● Ascental

● UK Treasury 3.75% 07/09/20

● HSBC

● Barclays

Matthew Huddart, Jamie Forbes‐Wilson

31 May 2021

Major Purchases


By contrast, Future Plc and Gym Group were among the best performers in the period. Future Plc is a media company which publishes more than 50 magazines in a range of fields including technology, music, photography and the home. The company has successfully transitioned in recent years from print to becoming a digital business and has reaped the rewards through consistent earnings growth. It has made a number of accretive acquisitions that have further bolstered the company’s growth. Gym Group plc is one of the leading low‐cost fitness centres in the UK. Following a difficult time in 2020 when its premises were forced to close due to COVID‐19 restrictions, the company has seen a strong surge in demand in 2021. The company has ambitions growth plans and we believe it could be positioned well in a post-pandemic world.

Major Sales

● UK Treasury 1.875% IL 22/11/22


63



EQUITIES 66.26% (31/05/20: 57.36%)

BASIC MATERIALS 1.46% (31/05/20: 1.25%*)


Hill & Smith 129,239 1,983 0.92

Trifast 750,000 1,163 0.54



Consumer Services 0.58% (31/05/20: 0.99%*)

HomeServe 133,762 1,247 0.58

Household Goods & Home Construction 2.30% (31/05/20: 2.03%)

Berkeley 35,670 1,678 0.78

Redrow 312,111 2,130 0.99

Vistry 87,010 1,156 0.53

Leisure Goods 2.08% (31/05/20: 1.96%)

Games Workshop 37,762 4,505 2.08

Media 2.00% (31/05/20: 2.70%*)

Bloomsbury Publishing 601,051 1,863 0.86

RELX 133,762 2,467 1.14

Retailers 5.95% (31/05/20: 4.34%*)

B&M European Value Retail 424,223 2,472 1.14

Dunelm 178,349 2,615 1.21

Howden Joinery 267,524 2,138 0.99

JD Sports Fashion 267,524 2,550 1.18

Pets at Home 686,645 3,082 1.43

Travel & Leisure 7.12% (31/05/20: 6.78%)

Domino's Pizza 642,057 2,374 1.10

Gym 1,410,723 3,915 1.81

Hollywood Bowl 1,238,156 3,083 1.43

Hostelworld 1,339,543 1,319 0.61

On the Beach 441,067 1,804 0.83

SSP 369,323 1,055 0.49

TEN Entertainment 728,764 1,829 0.85



Beverages 3.07% (31/05/20: 3.20%)

Diageo 195,293 6,636 3.07




64





FINANCIALS 14.21% (31/05/20: 15.56%*)

Banks 0.60% (31/05/20: 2.69%)

Natwest 624,223 1,303 0.60

Finance & Credit Services 1.52% (31/05/20: 2.69%*)



3i 280,900 3,500 1.62

Intermediate Capital 151,597 3,196 1.48

St James's Place 222,937 3,133 1.45

Life Insurance 4.88% (31/05/20: 3.83%*)

Just 2,318,542 2,555 1.18

Legal & General 891,747 2,562 1.19

Prudential 356,700 5,433 2.51


Admiral 62,422 1,846 0.86

Lancashire 356,700 2,254 1.04

Sabre Insurance 624,223 1,639 0.76


INDUSTRIALS 9.80% (31/05/20: 8.40%*)


Galliford Try 151,597 196 0.09

Polypipe 512,755 3,287 1.52

Electronic & Electrical Equipment 3.89% (31/05/20: 2.96%*)

Luceco 400,000 1,408 0.65

Oxford Instruments 155,916 3,235 1.50

Porvair 289,361 1,644 0.76

Rotork 624,223 2,125 0.98



Electrocomponents 191,725 1,903 0.88

Experian 89,174 2,409 1.11

RWS 470,320 2,998 1.39

Speedy Hire 2,633,711 1,983 0.92


REAL ESTATE 2.94% (31/05/20: 3.79%*)

Real Estate Investment & Services 1.22% (31/05/20: 1.48%)

Grainger 915,526 2,633 1.22

65






Segro 133,762 1,392 0.64

UNITE 205,101 2,335 1.08


TECHNOLOGY 6.21% (31/05/20: 5.34%*)


Aptitude Software 320,617 1,937 0.90

Future 115,736 3,417 1.58

GB 150,000 1,389 0.64

Technology Hardware & Equipment 3.09% (31/05/20: 2.28%*)

DiscoverIE 403,548 3,087 1.43

TT Electronics 1,421,116 3,581 1.66




Telecom Plus 128,401 1,515 0.70


GOVERNMENT BONDS 37.65% (31/05/20: 37.95%) Index Linked Government Bonds 31.92% (31/05/20: 33.05%)

UK Treasury 0.125% IL 22/03/24 12,540,000 16,934 7.84

UK Treasury 0.125% IL 22/03/26 7,700,000 10,332 4.78

UK Treasury 0.125% IL 10/08/28 1,510,000 1,989 0.92

UK Treasury 0.125% IL 22/03/29 1,285,000 2,011 0.93

UK Treasury 0.125% IL 10/08/31 1,600,000 2,140 0.99

UK Treasury 0.125% IL 22/11/36 873,000 1,471 0.68

UK Treasury 0.125% IL 22/03/44 940,000 1,927 0.89

UK Treasury 0.125% IL 22/03/46 777,000 1,552 0.72

UK Treasury 0.125% IL 22/11/56 486,000 1,164 0.54

UK Treasury 0.125% IL 22/03/58 524,844 1,341 0.62

UK Treasury 0.125% IL 22/11/65 615,000 1,820 0.84

UK Treasury 0.125% IL 22/03/68 400,400 1,332 0.62

UK Treasury 0.25% IL 22/03/52 605,000 1,486 0.69

UK Treasury 0.375% IL 22/03/62 587,904 1,876 0.87

UK Treasury 0.5% IL 22/03/50 323,500 912 0.42

UK Treasury 0.625% IL 22/03/40 115,000 265 0.12

UK Treasury 0.625% IL 22/11/42 599,000 1,492 0.69

UK Treasury 0.75% IL 22/03/34 430,000 817 0.38

UK Treasury 0.75% IL 22/11/47 603,300 1,748 0.81

UK Treasury 1.125% IL 22/11/37 650,000 1,633 0.76

UK Treasury 1.25% IL 22/11/27 692,000 1,378 0.64

UK Treasury 1.25% IL 22/11/32 1,429,000 2,960 1.37

UK Treasury 1.25% IL 22/11/55 104,565 431 0.20

UK Treasury 1.875% IL 22/11/22 2,149,500 3,384 1.57

66





UK Treasury 2% IL 26/01/35 216,000 627 0.29

UK Treasury 2.5% IL 17/07/24 1,406,000 5,026 2.33

UK Treasury 4.125% IL 22/07/30 240,000 889 0.41


UK Treasury 0% 07/06/21 1,775,000 1,775 0.82

UK Treasury 0.875% 22/10/29 900,000 909 0.42

UK Treasury 1.25% 22/07/27 210,000 219 0.10

UK Treasury 2% 07/09/25 1,087,000 1,167 0.54

UK Treasury 2.5% 22/07/65 12,000 17 0.01

UK Treasury 3.25% 22/01/44 28,000 39 0.02

UK Treasury 3.5% 22/01/45 70,000 101 0.05

UK Treasury 3.5% 22/07/68 80,000 146 0.07

UK Treasury 3.75% 22/07/52 59,000 96 0.04

UK Treasury 4% 22/01/60 76,000 140 0.06

UK Treasury 4.25% 07/06/32 3,650,000 4,910 2.27

UK Treasury 4.25% 07/03/36 155,000 221 0.10

UK Treasury 4.25% 07/12/40 74,000 112 0.05

UK Treasury 4.25% 07/12/46 1,143,000 1,865 0.86

UK Treasury 4.25% 07/12/49 38,000 65 0.03

UK Treasury 4.25% 07/12/55 89,000 162 0.07

UK Treasury 4.5% 07/12/42 50,000 80 0.04

UK Treasury 4.75% 07/12/30 184,000 250 0.12

UK Treasury 4.75% 07/12/38 50,000 78 0.04

UK Treasury 5% 07/03/25 41,000 48 0.02







* Since the previous report, the portfolio classifications and prior year comparative figures have been updated to reflect therecent changes in the Industry Classification Benchmark (ICB) standard.

67


31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (1.23) (1.82) (3.39) (1.13) (1.68) (3.21)


shares1.23 1.82 3.39 ‐ ‐ ‐



Performance


Other information





Prices



31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019





Return after operating charges ^ 25.18 (5.09) (0.55) 28.28 (5.73) (0.74)

Distributions (1.53) (2.28) (4.29) (1.72) (2.58) (5.01)


shares1.53 2.28 4.29 ‐ ‐ ‐



Performance

Return after operating charges 16.50% ‐3.23% ‐0.35% 16.47% ‐3.18% ‐0.40%

Other information





Prices







68




31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (1.75) (2.61) (4.83) (1.86) (2.78) (5.35)


shares1.75 2.61 4.83 ‐ ‐ ‐



Performance


Other information





Prices



Z Accumulation









Z Income

69



Note £'000 £'000 £'000 £'000



Net (expense)/revenue before taxation (151) 905


Net (expense)/revenue after taxation (205) 882






£'000 £'000 £'000 £'000



(13,974) (3,680)





31/05/21 31/05/20

31/05/21 31/05/20

70




Fixed assets:


Current assets:

Debtors 7 887 679


Total assets 216,970 198,944

Liabilities:

Creditors:


Other creditors 9 (791) (698)

Total liabilities (894) (823)


31/05/21 31/05/20


71



31/05/21 31/05/20

£'000 £'000



Transaction charges (1) ‐


3. Revenue

31/05/21 31/05/20

£'000 £'000


Interest on debt securities (408) 268





31/05/21 31/05/20

£'000 £'000

2,107 2,159

5 5

2,112 2,164

29 32

5 5

34 37

16 7

3 4

19 11

2,165 2,213





4. Expenses


of either of them


Registration fees



Depositary's fees

Safe custody fees

Other expenses


Total expenses


*Audit fees for the financial year ending 2021 were £8,000 (2020: £12,000) (including VAT).

72




5. Taxation

31/05/21 31/05/20

£'000 £'000




31/05/21 31/05/20

£'000 £'000

Net (expense)/revenue before taxation (151) 904

Net (expense)/revenue for the year multiplied by the standard rate of corporation tax (30) 181

Effects of:


Movement in excess management expenses 871 544






6. Distributions

31/05/21 31/05/20

£'000 £'000

Interim 707 1,851

Final 1,173 1,153




Reconciliation of net (expense)/revenue after taxation to distributions

Net (expense)/revenue after taxation (205) 881





above.

The tax assessed for the year is higher than the standard rate of corporation tax for an open ended investment company of20% (2020: 20%) is applied to the net revenue before taxation. The differences are explained below:






73




7. Debtors 31/05/21 31/05/20

£'000 £'000



Total debtors 887 679


£'000 £'000



9. Other creditors 31/05/21 31/05/20

£'000 £'000




Total other creditors 791 698


11. Share classes

Annual

management

charge rate


B Accumulation 0.50 7,566,964 39,016 (504,936) ‐ 7,101,044

B Income 0.50 21,115 2,143 (2,869) ‐ 20,389

R Accumulation 1.50 52,382,040 1,708,057 (5,278,892) (37,015) 48,774,190

R Income 1.50 445,747 8,928 (47,673) (7,550) 399,452

Z Accumulation 0.75 50,438,880 4,904,578 (6,148,551) 32,493 49,227,400

Z Income 0.75 11,128,138 944,179 (3,696,229) 6,958 8,383,046












74





Floating rate

financial

assets

Fixed rate

financial

assets

Financial

assets not

carrying

interest Total

Currency Assets £'000 £'000 £'000 £'000

31/05/21

Pound sterling 8,499 81,337 127,134 216,970

Total 8,499 81,337 127,134 216,970

31/05/20

Pound sterling 9,428 75,195 114,321 198,944

Total 9,428 75,195 114,321 198,944

The main risks from the Fund's holding of financial instruments, together with the ACD’s policy for managing these risks, areoutlined below.

Market price risk

The Fund invests principally in equity and fixed income securities. The value of the Fund’s investment portfolio is not fixedand may go down as well as up. This may be as a result of a specific factor affecting the value of an individual company ormay be caused by general market factors (such as government policy or the health of the underlying economy) which canaffect the entire portfolio. The Fund seeks to manage these risks by adhering to investment guidelines and to investment


sourcebook (“COLL”), which include rules relating to investment holdings that are designed to place limits on the Fund’sinvestment concentration (same as at 31 May 2020).


A 10% increase in the value of the Fund’s portfolio would have the effect of increasing the return and net assets by£20,758,382 (2020: £18,883,693). A 10% decrease would have an equal and opposite effect.


The functional currency of the Fund is Sterling. All assets and liabilities of the Fund are denominated in Pound sterling.There was no direct foreign currency exposure within the Fund at the balance sheet date.

Interest rate risk

Fixed interest securities are particularly affected by trends in interest rates and inflation. If interest rates go up, the value ofcapital may fall, and vice versa. Inflation will also decrease the real value of capital, with the exception of index linked bondswhich are protected against the effect of inflation.

Changes in interest rates or changes in expectations of future interest rates may result in an increase or decrease in themarket value of the investments held. A 1% increase in interest rates would have the effect of decreasing the return and netassets £9,714,285 (2020: £9,773,950) . A 1% decrease would have an equal and opposite effect.


75




Floating rate

financial

liabilities

Fixed rate

financial

liabilities

Financial

liabilities not

carrying

interest Total


31/05/21


Total ‐ ‐ (894) (894)

31/05/20


Total ‐ ‐ (823) (823)

31/05/21 31/05/20


£’000 £’000

77,422 35.84 75,195 37.95

3,915 1.81 ‐ ‐

81,337 37.65 75,195 37.95


against delivery.




of each fund.


timely basis.



Credit Rating Investment grade (BBB- credit rating and above) Unrated

Total value of bonds

Credit risk

76





Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2021 £'000 £'000 % £'000 % £'000


Equities 7,413 3 0.04 23 0.31 7,439

Bonds 19,944 ‐ ‐ ‐ ‐ 19,944Total 27,357 3 23 27,383

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2021 £'000 £'000 % £'000 % £'000

Analysis of sales

Equities 28,402 (12) (0.04) ‐ (0.00) 28,390

Bonds 11,252 ‐ ‐ ‐ ‐ 11,252Total 39,654 (12) ‐ 39,642

Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2020 £'000 £'000 % £'000 % £'000


Equities 43,411 21 0.05 195 0.45 43,627

Bonds 25,077 ‐ ‐ ‐ ‐ 25,077Total 68,488 21 195 68,704

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2020 £'000 £'000 % £'000 % £'000

Analysis of sales

Equities 37,876 (16) (0.04) ‐ ‐ 37,860

Bonds 35,433 ‐ ‐ ‐ ‐ 35,433Total 73,309 (16) ‐ 73,293

31/05/21 31/05/20



Taxes 0.01 0.09


77





Share class

B Accumulation

B Income

R Accumulation

R Income

Z Accumulation

Z Income




Level 1 ^ 207,584 ‐ 188,837 ‐

Level 2 ^^ ‐ ‐ ‐ ‐

Level 3 ^^^ ‐ ‐ ‐ ‐

207,584 ‐ 188,837 ‐

Price per share as at

28.05.21*Movement

143.90



Subsequent to the year end, on 17th September 2021 the Net Asset Value ("NAV") per share has increased above 5% onshare classes when compared to the year end date. The movements for each share class are shown below:




measurement date.

31/05/21 31/05/20

*Prices disclosed are based on quoted share prices and will therefore differ to net asset value per share shown in the

comparative tables which are valued at bid‐market prices.

6.05%130.80 5.50%178.00 5.79%199.60 5.21%203.90 6.03%216.80


17.09.21152.60138.00188.30210.00216.20228.60 5.44%

78


As at 31 May 2021

Interim Distribution in pence per shareGroup 1 Shares purchased prior to 1 June 2020Group 2 Shares purchased on or after 1 June 2020 to 30 November 2020










Distribution Tables

79


As at 31 May 2021


Distribution Tables

Final Distribution in pence per shareGroup 1 Shares purchased prior to 1 December 2020Group 2 Shares purchased on or after 1 December 2020 to 31 May 2021









80

AXA Global Distribution Fund



1 2 3 4 5 6 7


As at 31 May 2021






are subject to some levels of variation, which may result in gains or losses.

Additional risks






Investment Policy






The Fund invests in a mix of shares in listed companies worldwide and bonds issued by governments of major developed

countries worldwide (which are linked to the rate of inflation in those countries) and cash. The Fund's typical asset mix would

range between 50‐60% investment in shares and 40‐50% in Government bonds and cash.


In constructing the Fund's portfolio of shares, the Manager references a composite benchmark made up of the following indices

in the stated proportions: 55% MSCI AC World Total Return Net; 45% ICE BofAML Global Govt Inflation Linked (the

“Benchmark”) which means that, while the Manager has discretion to select the shares for the Fund, the Fund's divergence from

the Benchmark is controlled. The Benchmark is designed to measure the performance of small to large‐cap stocks from a

number of developed and emerging markets as selected by the Benchmark provider and index‐linked bonds issued by

governments of major developed countries. This Benchmark best represents the types of bonds and companies in which the

Fund predominantly invests. The Fund may also invest at the Manager's discretion in other transferable securities, cash,

deposits, units in collective investment schemes and money market instruments. The Fund may use derivatives for investment

purposes as well as for Efficient Portfolio Management. Use may be made of borrowing, cash holdings, hedging and other

investment techniques permitted in the applicable Financial Conduct Authority rules. The Benchmark may be used by investors

to compare the Fund's performance.




with less risk than that of a fund which invests predominantly in equities. You are aware that investing in a fund which has a

global remit can increase risk because of currency movements in return for greater potential reward.

81







• Index‐linked bonds risk ‐ index‐linked bonds are fixed interest securities whose capital repayment amounts and interest

payments are adjusted in line with movements in inflation indices. They are designed to mitigate the effects of inflation on the

value of a portfolio. The market value of index‐linked bonds is determined by the market’s expectations of future movements in

both interest rates and inflation rates.



vice versa.








durations.



























investment policy.

82




a) accounting, auditing and financial reporting standards, practices and disclosure requirements comparable to those applicable

to companies in developed markets;

b) the same level of government supervision and regulation of stock exchanges as countries with more advanced securities

markets.

Accordingly, certain emerging markets may not afford the same level of investor protection as would apply in more developed

jurisdictions.

• Investment model risk ‐ in seeking to achieve the investment objectives of the AXA Global Distribution Fund, the ACD and the

Sub‐Investment Managers use stock recommendations generated by proprietary quantitative analytical models owned and

operated by the AXA IM Group. Quantitative modelling is a very complex process involving hundreds of thousands of data points

and settings encoded in computer software, and the ACD and its affiliates review these codes and the various components to

the models with a view to ensuring that they are appropriately adapted and calibrated to reflect the ACD’s and the Sub‐

Investment Managers’ views as to the potential implications of evolving external events and factors, including constantly

changing economic, financial market and other conditions. This process involves the exercise of judgments and a number of

inherent uncertainties. The ACD’s and Sub‐Investment Managers’ views, including those related to the optimal configuration,

calibration and adaptation of the models, may change over time depending on evolving circumstances, on information that

becomes available to the ACD and its affiliates and on other factors.

While the ACD attempts to ensure that the models are appropriately developed, operated and implemented on a continuing

basis, sub‐optimal calibrations of the models and similar issues may arise from time to time, and neither the ACD nor any of its

affiliates can guarantee that the models are in an optimal state of calibration and configuration at all times. Further, inadvertent

human errors, trading errors, software development and implementation errors, and other types of errors are an inherent risk in

complex quantitative investment management processes of the type that the ACD employs. While the ACD’s policy is to

promptly address any such errors when identified, there can be no guarantee that the overall investment process will be

without error or that it will produce the desired results. There can be no guarantee that the ACD or the Sub‐Investment

Managers will be able to implement their quantitative strategies on an ongoing basis.

The ACD and the Fund Investment Managers have established systematic rules, reviews and processes for monitoring client

portfolios to assure that they are managed in a manner consistent with their investment objectives.

• Emerging Markets risk ‐ investment in emerging markets (countries that are transitioning towards more advanced financial

and economic structures) may involve a higher risk than those inherent in established markets. Emerging markets and their

currencies may experience unpredictable and dramatic fluctuations from time to time. Investors should consider whether or not

investment in such Funds is either suitable for or should constitute a substantial part of an investor’s portfolio.

Companies in emerging markets may not be subject to:

Restrictions on foreign investment in emerging markets may preclude investment in certain securities by the Funds referred to

above and, as a result, limit investment opportunities for those Funds. Substantial government involvement in, and influence on,

the economy, as well as a lack of political or social stability, may affect the value of securities in certain emerging markets.

The reliability of trading and settlement systems in some emerging markets may not be equal to that available in more

developed markets, which may result in delays in realising investments.

Lack of liquidity and efficiency in certain of the stock markets or foreign exchange markets in certain emerging markets may

mean that from time to time the ACD may experience more difficulty in purchasing or selling holdings of securities than it would

in a more developed market.

This is an inherent risk for funds invested within Emerging Markets. Internal investment guidelines (such a diversification

measures), scenario testing as well as other regular monitoring seek to ensure the level of risk is aligned with each individual

fund’s investment objectives and investment policy.

83




In practice, the Fund mitigates the above risks by the relatively small proportion of the fund which is invested using the Hong

Kong Stock Connect. For making new or increased investments, it is also notable that the portfolio manager has access to a

broad range of opportunities elsewhere in the market.

Operational risk

The Stock Connect program is premised on the functioning of the operational systems of the relevant market participants.

Market participants are permitted to participate in this program subject to meeting certain operational and risk management

requirements. The securities regimes and legal systems of Hong Kong stock exchange and the mainland China stock exchanges

differ significantly and market participants may need to address issues arising from the differences on an on‐going basis.

There is no assurance that the system of the stock exchanges and market participants will function properly or will continue to

be adapted to changes and developments in both markets. In the event that the relevant systems fail to function properly,

trading in both markets through the program could be disrupted. A Fund’s ability to access the China A share market and pursue

its investment strategy may be adversely affected.

The Manager monitors the normal functioning of trading activity on an ongoing basis.

• Investment in China A Shares via the Stock Connect program risk ‐ some Funds may invest in China A shares (shares issued by

domestic markets in mainland China in Chinese renminbi) through the Stock Connect program. China A shares are generally only

available for investment by residents of mainland China or by foreign investors through tightly regulated structures. The Stock

Connect program is one structure through which foreign investors can invest in China A shares by providing mutual market

access via the Hong Kong Stock Exchange, Shanghai Stock Exchange and Shenzhen Stock Exchange. In addition to the risks

disclosed under Emerging Markets Risk and Political, Economic, Convertibility and Regulatory Risk, investment by the Funds via

the Stock Connect program also involves the following risks.

Some geographical areas in which the Fund may invest (including but not limited to Asia, the Eurozone and the US) may be

affected by economic or political events or measures, changes in government policies, laws or tax regulations, currency

convertibility, or by currency redenomination, restrictions on foreign investments, and more generally by economic and financial

difficulties. In such contexts, volatility, liquidity, credit and currency risks may increase and adversely impact the Net Asset Value

of the Fund.

Investment limitations

The Stock Connect program is subject to quota limitations applying across all participants and utilised on a first‐come‐first‐

served basis. Once the quota is exceeded, buy orders will be rejected although sell orders would not be impacted. Such quota

limitations may restrict a Fund’s ability to invest in China A shares through the Stock Connect program on a timely basis, and the

Fund may not be able to effectively pursue its investment strategy.

In addition a particular stock may be recalled from the scope of eligible stocks for trading via the Stock Connect program and in

such a case a Fund would not be able to buy that stock (although it could sell it). This may affect the ability of the Fund to

implement its investment strategy.

Each of the stock exchanges participating in the Stock Connect program reserves the right to suspend trading if necessary for

ensuring an orderly and fair market and that risks are managed prudently. Consent from the relevant regulator would be sought

before a suspension is triggered. A suspension could adversely affect a Fund’s ability to access the mainland China stock

markets.

The Stock Connect program only operates on days when both the Chinese and Hong Kong markets are open for trading and

when banks in both markets are open on the corresponding settlement days. As a result there may be occasions when it is a

normal trading day for the mainland China market but a Fund cannot trade China A Shares via the Stock Connect program as

that day is not a trading day in Hong Kong. The Fund would be subject to a risk of price fluctuations in China A Shares for the

period it cannot trade via the Stock Connect program.

84




Ownership of Stock Connect securities

The Manager performs ongoing transaction cost analysis to ensure that all brokers used continue to provide value for their

services.

The Stock Connect program permits trades to be executed through one or multiple brokers that are market participants. Given

the custody requirements for the Funds, the ACD may determine that it is in the interest of a Fund that it only executes trades

via the Stock Connect program through a market participant that is part of the Depositary’s sub‐custodian network. In that

situation, whilst the ACD will be cognisant of its best execution obligations, it will not have the ability to trade through multiple

brokers and any switch to a new broker will not be possible without a commensurate change to the Depositary’s sub‐custody

arrangements.

Execution issues

China A shares purchased via the Stock Connect program are held by the sub‐custodian in accounts in the clearing system of Hong Kong’s central securities Depository. The Hong Kong central securities Depository, in turn, holds the China A shares as nominee through an omnibus securities account in its name registered with the Chinese central securities Depository. This means that there are multiple legal frameworks involved in establishing legal title to the China A shares and there are increased exposed to the credit risk of both the Hong Kong and Chinese central securities Depository but neither the ACD nor the Depositary have a legal relationship with such Depository’s and therefore have no direct recourse in the event of suffering a loss resulting from their performance or insolvency. While the Stock Connect program recognises the Fund’s beneficial ownership of the China A shares, there is a risk that the nominee structure may not be recognised under Chinese law and, in the event of the insolvency of the Hong Kong central securities Depository, there is uncertainty as to whether the Fund’s China A shares would be available to creditors of the Hong Kong central securities Depository or regarded as held on behalf of the Fund. Trading via the Stock Connect program is not covered by investor protection/compensation funds in either Hong Kong or mainland China.

Such risks are mitigated by the low proportion of the fund which is typically invested via the Hong Kong Stock Connect.


• Currency risk ‐ assets of the Fund (including cash), and any income paid on those assets, may be denominated in a currency

other than the base currency of the Fund. Changes in the exchange rate between the base currency and the currency of an

asset may cause the value of the asset/income (expressed in the base currency) to fall as well as rise even if there is no change

of the value of such assets in its local currency. This may also cause additional volatility in the Fund’s Price. It may not be

possible or practicable to hedge against such exchange rate risk.

The ACD aims to reduce the risk of movements in exchange rates on the value of all or part of the assets of the Fund through the use of currency exchange transactions. The Fund may enter into currency exchange transactions either on a spot basis (i.e., exchanging at the current price) or through forward currency transactions (i.e., agreeing to purchase the currency at an agreed price at a future date). Neither spot transactions nor forward currency transactions will completely eliminate fluctuations in the prices of the Fund’s securities or in foreign exchange rates, or prevent loss if the prices of these securities should decline. The performance of a Fund may be strongly influenced by movements in foreign exchange rates because currency positions held by the Fund may not correspond with the securities positions held.

Although these transactions are intended to minimise the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might be realised should the value of the hedged currency increase. Forward currency transactions may also have the effect of reducing or enhancing the Fund’s performance due to the difference between the exchange rate available on such transactions compared to the current (spot) exchange rate. Under normal market conditions this

85




Transactions in securities that the Fund may enter into expose it to the risk that the counterparty will not deliver the investment

for a purchase or cash for a sale after the Fund has contracted to fulfil its responsibilities. This is minimised by the practice in the

majority of markets of delivery versus payment and short settlement periods.


Derivatives transactions may be used in the Fund for meeting the investment objectives of the Fund. The use of derivatives in

this manner is not expected to change the risk profile of the Fund.

difference in exchange rates is mainly caused by the different short term interest rates applicable to the currency of the assets and the base currency of the Fund. Where the interest rate applying to the foreign currency is higher than that of the Fund’s base currency, this can reduce the Fund’s performance and vice‐versa. This impact on performance is usually far less pronounced than the effect of fluctuations of exchange rates that the use of such transactions is intended to reduce, but the impact can be significant over time, particularly where there is a wide gap between the interest rates applicable to the two currencies. The precise matching of the relevant contract amounts and the value of the securities involved will not generally be possible because the future value of such securities will change as a consequence of market movements in the value of such securities between the date when the relevant contract is entered into and the date when it matures. Therefore, the successful execution of a hedging strategy which matches exactly the profile of the investments of any fund cannot be assured. Furthermore, it may not be possible to hedge against generally anticipated exchange or interest rate fluctuations at a price sufficient to protect the Fund from the anticipated decline in value of its assets as a result of such fluctuations.

Internal investment guidelines are set, if necessary, to ensure currency risk is maintained within a range deemed suitable based

on the individual fund’s investment objectives and investment policy.



























86




Market Review

One year ago, this report referenced the mounting death toll from coronavirus which, at the time, was still spreading voraciously

across the globe. Today, deaths worldwide are approaching four million and many developing nations are still suffering terribly

from its impact. Within developed markets, we have benefited from the phenomenal efforts made by scientists, regulators and

governments to research, develop and produce multiple vaccines that have substantially reduced the harming effects of the

virus. After a long, long time spent restricted in each of our daily lives we are approaching a return to normal life.






A saying coined (and often shared) by a well‐known Fund manager and former colleague that ‘things will not become better or worse but different’ rings true and investment markets have certainly been grappling with this in recent months.

For the Fund, market conditions over the past six months have been generally positive as investors have looked forward to a normalisation of economic conditions. Since the beginning of December, conditions impacting investment markets have followed in much the same vein as during the last reporting period. In short, conditions have been volatile. Equities have made solid progress while fixed income has been challenged by the positive investor view of life in a post-lockdown world. Looking a little further into the past, over the past year global equity indices have rebounded strongly from the Covid-19 induced slump they had suffered in the first quarter of 2020. The enforced shutdown of large parts of the global economy funnelled investors into some specific areas of the equity market and the re-opening process has reversed, to an extent, that process. Investors are now grappling with the spectre of inflation, the timing of central bank support being withdrawn and the implications that will have on interest rates. The June outcome of the FOMC meeting, for example, proved to be more eventful than most investors had been anticipating. Fed officials adopted a more hawkish stance, their “dot plot” reflecting the risks of potentially earlier rate increases, predicting 2 rate hikes by end of 2023, with several members signalling a rate hike as early as 2022. Consequently, we see ‘normalisation’ of monetary policy as the big challenge being faced by markets.

However, as we transition to a post-lockdown world, investors are grappling with what the new normal will look like. When economies are re-opened, they bring sharply improving economic data and central banks are having to navigate short-term spikes in inflation in order to forecast longer term trends. Corporates are delivering earnings that are justifying their historically generous ratings and conditions suggest the equity market is well-set for the remainder of the year. However, conditions have become more volatile and, with confidence remaining fragile, we are anticipating bumps along the way.




87




In our view, yield levels continue to offer some additional level of protection for the portfolios as the technical backdrop remains

supportive, with global central banks continuing their asset purchase programmes. In addition, central banks have been explicit

in their guidance on short rates, which will remain anchored until inflation is above their target for a sustained period. This

backdrop should continue to be supportive for breakevens and inflation‐linked bonds.








Another factor having a significant impact on the UK equity market has been the growth of investor interest in environmental, social and governance (ESG) issues. The growing awareness of consumers, and in turn companies, of product provenance, the environmental impact and corporate behaviours is being reflected increasingly in sales rates. Within the portfolio, this is impacting every company we hold from Great Portland Estates to BP. Sustainability reports, carbon reduction targets and positive societal change are now the norm amongst the high‐quality businesses the Fund invests in. On behalf of our unitholders, we have continued our investment and efforts in ESG and produce a monthly report covering a wide range of ESG metrics. These include measuring the Fund’s carbon and water intensity, monitoring the proportion of female executives on our holdings’ Boards, monitoring for controversies, scoring individual company holdings and assessing the overall ESG score of the Fund. Our intention is to expand the reporting of these, and other measures, in the years ahead.



Outlook

We remain positive about the prospects for equities over the period ahead. Valuations, in aggregate, remain attractive on both and absolute and relative (to international markets) basis. We are seeing a strong level of M&A activity which we anticipate will continue and new, interesting and attractively priced IPOs are offering new opportunities.


88




Performance



● UK Treasury 0.125% IL 22/03/26 14,266 7,124

● UK Treasury 0.125% IL 22/03/29 13,066 4,708

● UK Treasury 0.125% IL 10/08/31 11,316 3,516

● US Treasury 0.125% IL 15/01/30 11,300 3,394

● UK Treasury 0.125% IL 10/08/28 9,297 3,254


Post the global recession of 2020, economic growth is set to rebound strongly in 2021 as economies re‐open on the back of

vaccination programmes. Economic support has generally been generous in many countries, allowing a rapid recovery towards

normal economic levels. Consumers have been forced to save (limited opportunities to consume/spend plus economic support

programmes), giving them substantial fire power to spend once economies re‐open. With a recovery in economic activity, a

central question is the impact on inflation, both in the short term and long term. Inflation is set to rise over 2021, as we lap

deflationary commodity prices and restrictions on opening‐up may cause temporary shortages. Longer term, many of the

deflationary forces that existed prior to the pandemic remain, while current unemployment levels are not expected to fall below

2019 levels until 2023 at the earliest.

Major Sales

● US Treasury 0.125% IL 15/04/21

● US Treasury 0.625% IL 15/01/26

● Adobe

● NVIDIA

● Royal Bank of Canada

Matthew Huddart, Jamie Forbes‐Wilson

31 May 2021

Major Purchases


The equity holdings within the portfolio struggled to keep up with the strong growth tilt within equity markets in 2020, especially

so in the US. During 2021, that style has shifted into the Fund’s favour and relative performance has improved.

89



AUSTRALIA 1.28% (31/05/20: 0.69%)

INDEX LINKED GOVERNMENT BONDS 0.15% (31/05/20: 0.19%)

Australia (Government of) 1.25% IL 21/02/22 AUD 482,000 311 0.08

Australia (Government of) 2.5% IL 20/09/30 AUD 312,000 270 0.07

EQUITIES 1.13% (31/05/20: 0.50%)

BlueScope Steel 24,511 285 0.07

Commonwealth Bank of Australia 5,344 292 0.07

Computershare 15,444 136 0.03

Fortescue Metals 71,170 857 0.21

Goodman # 48,250 507 0.13

Rio Tinto (Sydney Quoted) 15,378 1,030 0.26

Wesfarmers 42,189 1,275 0.32

Woodside Petroleum 12,764 154 0.04

TOTAL AUSTRALIA 5,117 1.28

AUSTRIA 0.16% (31/05/20: 0.13%)

OMV 15,422 629 0.16

TOTAL AUSTRIA 629 0.16

BELGIUM 0.21% (31/05/20: 0.34%)

Ageas 8,290 381 0.09

Etablissements Franz Colruyt 6,503 279 0.07

Solvay 2,138 205 0.05

TOTAL BELGIUM 865 0.21

BERMUDA 0.08% (31/05/20: 0.16%)

Invesco 17,100 343 0.08

TOTAL BERMUDA 343 0.08

BRAZIL 0.31% (31/05/20: 0.11%)

Banco Santander Brasil 154,200 836 0.21

BB Seguridade Participacoes 54,500 172 0.04

WEG 51,200 226 0.06

TOTAL BRAZIL 1,234 0.31

CANADA 3.30% (31/05/20: 2.23%)


Canada (Government of) 1.5% IL 01/12/44 CAD 268,000 242 0.06

Canada (Government of) 2% IL 01/12/41 CAD 282,000 282 0.07







90





EQUITIES 2.80% (31/05/20: 1.57%)

B2Gold 46,300 165 0.04

Bank of Montreal 10,100 741 0.18

Canadian Tire 2,600 313 0.08

CGI 11,500 714 0.18

Gildan Activewear Inc 6,200 156 0.04

iA Financial 4,700 191 0.05

Kinross Gold 56,100 314 0.08

Loblaw 16,900 728 0.18

Manulife Financial 117,300 1,721 0.43

National Bank of Canada 15,200 855 0.21

Nutrien 7,400 321 0.08

Pembina Pipeline 7,800 178 0.05

Quebecor 11,300 216 0.05

Rogers Communications 10,700 386 0.10

Royal Bank of Canada 6,200 455 0.11

Thomson Reuters 24,400 1,667 0.41

Toronto‐Dominion Bank/The 42,600 2,150 0.53

TOTAL CANADA 13,299 3.30

CAYMAN ISLANDS 0.99% (31/05/20: 1.02%)

Alibaba ADR 9,700 1,456 0.36

Herbalife Nutrition 5,100 190 0.05

MGM China 91,600 103 0.03

SITC International 105,000 261 0.06

Tencent 29,500 1,612 0.40

Xinyi Glass 134,000 370 0.09

TOTAL CAYMAN ISLANDS 3,992 0.99

CHINA (INCLUDING HONG KONG) 1.71% (31/05/20: 1.97%)

Anhui Conch Cement 87,500 382 0.10

Bank of China 2,220,000 593 0.15

Bank of Communications 384,000 183 0.05

China CITIC Bank 2,444,000 939 0.23

China Construction Bank 1,188,000 690 0.17

China Everbright Bank 494,000 148 0.04

China Railway 696,000 259 0.06

China Southern Airlines 220,000 110 0.03

Hong Kong Exchanges & Clearing 39,800 1,727 0.43

New China Life Insurance 232,800 618 0.15

PICC Property & Casualty 1,022,000 702 0.17

Sinopharm 135,600 319 0.08

Sinotruk Hong Kong 120,000 203 0.05

TOTAL CHINA (INCLUDING HONG KONG) 6,873 1.71

DENMARK 0.49% (31/05/20: 0.57%)

AP Moller ‐ Maersk 449 834 0.21

Carlsberg 2,162 280 0.07

91





Novo Nordisk 15,287 854 0.21

TOTAL DENMARK 1,968 0.49

FINLAND 0.05% (31/05/20: 0.18%)

Orion 7,138 222 0.05

TOTAL FINLAND 222 0.05

FRANCE 6.06% (31/05/20: 6.22%)


France OAT 0.1% IL 01/03/25 EUR 1,147,000 1,201 0.30

France OAT 0.1% IL 01/03/28 EUR 1,945,000 1,944 0.48

France OAT 0.1% IL 25/07/36 EUR 9,900,000 10,534 2.62

France OAT 0.1% IL 25/07/47 EUR 2,150,000 2,439 0.61

France OAT 0.25% IL 25/07/24 EUR 896,660 890 0.22

France OAT 1.1% IL 25/07/22 EUR 913,219 935 0.23

EQUITIES 1.60% (31/05/20: 1.17%)

BioMerieux 2,819 229 0.06

Carrefour 17,763 255 0.06

Edenred 3,940 153 0.04

Kering 1,797 1,149 0.29

L'Oreal 3,716 1,178 0.29

Publicis 8,785 421 0.10

Sanofi 13,106 984 0.24

Schneider Electric 17,620 1,968 0.49

Sodexo 1,908 131 0.03

TOTAL FRANCE 24,411 6.06

GERMANY 1.71% (31/05/20: 1.78%)


Deutsche Bundesrepublik 0.1% IL 15/04/23 EUR 940,000 919 0.23

Deutsche Bundesrepublik 0.1% IL 15/04/26 EUR 1,041,000 954 0.24

EQUITIES 1.24% (31/05/20: 1.13%)

Allianz 10,874 2,038 0.50

Bechtle 1,696 231 0.06

Brenntag 7,523 496 0.12

Covestro 5,492 272 0.07

Daimler 4,241 281 0.07

Deutsche Lufthansa 13,039 120 0.03

SAP 15,945 1,570 0.39

TOTAL GERMANY 6,881 1.71

GUERNSEY 0.07% (31/05/20: 0.09%)

Amdocs 5,300 291 0.07

TOTAL GUERNSEY 291 0.07

92





INDONESIA 0.00% (31/05/20: 0.10%)

IRELAND 0.95% (31/05/20: 1.48%)

CRH 11,808 437 0.11

DCC 5,173 313 0.08

Johnson Controls International 24,200 1,130 0.28

Linde 1,500 318 0.08

Medtronic 11,600 1,023 0.26

Pentair 7,700 377 0.09

Perrigo 6,700 217 0.05

TOTAL IRELAND 3,815 0.95

ISRAEL 0.25% (31/05/20: 0.35%)

Bank Leumi Le‐Israel 64,705 365 0.09

Check Point Software Technologies 5,700 468 0.12

Israel Discount Bank 50,412 182 0.04

TOTAL ISRAEL 1,015 0.25

ITALY 0.29% (31/05/20: 0.17%)

Hera 63,057 189 0.05

Poste Italiane 61,047 607 0.15

Telecom Italia 987,649 371 0.09

TOTAL ITALY 1,167 0.29

JAPAN 3.91% (31/05/20: 5.36%)


Japan Government 0.1% IL 10/03/24 JPY 13,100,000 89 0.02



EQUITIES 3.66% (31/05/20: 4.89%)

Aisin 10,300 318 0.08

ANA 15,300 261 0.06

Asahi Kasei 34,100 271 0.07

Astellas Pharma 46,800 529 0.13

Canon 19,300 325 0.08

ENEOS 50,100 146 0.04

FUJIFILM 10,500 511 0.13

Fujitsu 9,800 1,128 0.28

Hitachi 21,100 786 0.20

Honda Motor 79,100 1,760 0.44

Hulic 23,200 185 0.05

Idemitsu Kosan 7,200 121 0.03

Inpex 27,500 133 0.03

Kajima 24,500 241 0.06

KDDI 42,400 1,020 0.25

Kirin 13,200 188 0.05

Mitsubishi Chemical 57,500 329 0.08

93





Mitsubishi Electric 111,300 1,227 0.30

Mitsubishi UFJ Financial 72,900 295 0.07

NEC 6,500 214 0.05

Nintendo 600 262 0.07

Nippon Telegraph & Telephone 53,100 1,012 0.25

Nitto Denko 4,900 274 0.07

Nomura 152,100 591 0.15

ORIX 50,100 627 0.16

Otsuka 18,000 532 0.13

Resona 71,900 219 0.05

Sompo 13,700 390 0.10

Sumitomo Chemical 85,000 334 0.08

T&D 23,600 227 0.06

Teijin 8,000 93 0.02

Tosoh 14,000 176 0.04

TOTAL JAPAN 15,759 3.91

JERSEY 0.28% (31/05/20: 0.08%)

Ferguson 11,750 1,134 0.28

TOTAL JERSEY 1,134 0.28

MALAYSIA 0.04% (31/05/20: 0.10%)

RHB Bank 182,000 166 0.04

TOTAL MALAYSIA 166 0.04

MEXICO 0.04% (31/05/20: 0.12%)

Kimberly‐Clark de Mexico 115,800 145 0.04

TOTAL MEXICO 145 0.04

NETHERLANDS 1.49% (31/05/20: 1.23%)

Akzo Nobel 10,022 901 0.22

ASM 1,991 434 0.11

ASML 5,138 2,419 0.60

Koninklijke Ahold Delhaize 19,907 407 0.10

Koninklijke Philips 8,125 323 0.08

NN 7,186 259 0.06

QIAGEN 6,310 220 0.06

Signify 3,300 144 0.04

Wolters Kluwer 13,191 894 0.22

TOTAL NETHERLANDS 6,001 1.49

NEW ZEALAND 0.07% (31/05/20: 0.23%)

Fisher & Paykel Healthcare 18,374 274 0.07

TOTAL NEW ZEALAND 274 0.07

94





NORWAY 0.17% (31/05/20: 0.00%)

Gjensidige Forsikring 24,731 394 0.10

Orkla 36,824 272 0.07

TOTAL NORWAY 666 0.17

PANAMA 0.05% (31/05/20: 0.00%)

Carnival 9,200 194 0.05

TOTAL PANAMA 194 0.05

PAPUA NEW GUINEA 0.03% (31/05/20: 0.00%)

Oil Search 58,460 118 0.03

TOTAL PAPUA NEW GUINEA 118 0.03

PHILIPPINES 0.03% (31/05/20: 0.12%)

Globe Telecom 4,000 107 0.03

TOTAL PHILIPPINES 107 0.03

POLAND 0.00% (31/05/20: 0.04%)

PUERTO RICO 0.04% (31/05/20: 0.03%)

Popular 3,100 179 0.04

TOTAL PUERTO RICO 179 0.04

RUSSIAN FEDERATION 0.00% (31/05/20: 0.14%)

SINGAPORE 0.13% (31/05/20: 0.16%)

Flex 20,600 267 0.07

Singapore Exchange 43,000 238 0.06

TOTAL SINGAPORE 505 0.13

SOUTH AFRICA 0.16% (31/05/20: 0.23%)

Impala Platinum 29,908 369 0.09

Kumba Iron Ore 8,322 261 0.07

TOTAL SOUTH AFRICA 630 0.16

SOUTH KOREA 0.93% (31/05/20: 0.23%)

Hana Financial 10,671 307 0.08

KB Financial 18,416 664 0.17

Kia 8,280 443 0.11

LG Electronics 4,772 456 0.11

LG Household & Health Care 433 419 0.10

Samsung Electro‐Mechanics 1,935 206 0.05

Shinhan Financial 25,767 688 0.17

SK Hynix 3,601 285 0.07

95





SK Innovation 879 152 0.04

S‐Oil 2,328 140 0.03

TOTAL SOUTH KOREA 3,760 0.93

SPAIN 0.47% (31/05/20: 0.64%)

ACS Actividades de Construccion y Servicios 7,951 175 0.04

EDP Renovaveis 24,539 409 0.10

Iberdrola 72,711 706 0.18

Red Electrica 25,118 354 0.09

Repsol 27,442 258 0.06

TOTAL SPAIN 1,902 0.47

SWEDEN 0.94% (31/05/20: 0.88%)


Sweden (Kingdom of) 0.25% IL 01/06/22 SEK 940,000 88 0.02

Sweden (Kingdom of) 3.5% IL 01/12/28 SEK 1,875,000 297 0.07

EQUITIES 0.85% (31/05/20: 0.72%)

Atlas Copco 13,587 583 0.15

Boliden 10,696 300 0.07

Electrolux 13,805 275 0.07

Husqvarna 27,758 286 0.07

Sandvik 13,267 249 0.06

Securitas 14,000 162 0.04

Skanska 13,077 261 0.07

SKF 20,800 399 0.10

Telefonaktiebolaget LM Ericsson 94,749 898 0.22

TOTAL SWEDEN 3,798 0.94

SWITZERLAND 0.68% (31/05/20: 1.40%)

Adecco 7,783 381 0.10

Geberit 1,052 535 0.13

Logitech 6,679 573 0.14

Roche 5,024 1,236 0.31

TOTAL SWITZERLAND 2,725 0.68

TAIWAN 1.96% (31/05/20: 1.04%)

ASE Technology 129,000 361 0.09

Asustek Computer 33,000 328 0.08

Cathay Financial 623,000 878 0.22

China Life Insurance 164,045 103 0.02

CTBC Financial 879,000 513 0.13

Fubon Financial 482,000 881 0.22

Hon Hai Precision Industry 96,000 270 0.07

MediaTek 11,000 269 0.07

Novatek Microelectronics 29,000 372 0.09

Pou Chen 122,000 119 0.03

96





Quanta Computer 107,000 239 0.06

Taiwan Semiconductor Manufacturing 155,000 2,325 0.58

Uni‐President Enterprises 182,000 336 0.08

United Microelectronics 371,000 493 0.12

Yuanta Financial 652,080 424 0.10

TOTAL TAIWAN 7,911 1.96

THAILAND 0.10% (31/05/20: 0.00%)

Charoen Pokphand Foods NVDR 334,800 206 0.05

Kasikornbank NVDR 72,700 196 0.05

TOTAL THAILAND 402 0.10

UNITED KINGDOM 22.58% (31/05/20: 14.69%)


UK Treasury 0.125% IL 22/03/24 3,800,969 5,133 1.27

UK Treasury 0.125% IL 22/03/26 9,500,000 12,747 3.17

UK Treasury 0.125% IL 10/08/28 7,000,000 9,222 2.29

UK Treasury 0.125% IL 22/03/29 8,600,690 13,462 3.34

UK Treasury 0.125% IL 10/08/31 8,500,000 11,371 2.82

UK Treasury 0.125% IL 22/03/44 788,503 1,617 0.40

UK Treasury 0.125% IL 22/03/46 600,711 1,200 0.30

UK Treasury 0.125% IL 10/08/48 1,770,000 3,487 0.87

UK Treasury 0.125% IL 22/03/58 352,915 901 0.22

UK Treasury 0.125% IL 22/11/65 1,200,000 3,551 0.88

UK Treasury 0.125% IL 22/03/68 442,091 1,470 0.37

UK Treasury 0.25% IL 22/03/52 802,455 1,971 0.49

UK Treasury 0.375% IL 22/03/62 790,701 2,523 0.63

UK Treasury 0.5% IL 22/03/50 816,054 2,300 0.57

UK Treasury 0.625% IL 22/03/40 253,817 586 0.15

UK Treasury 0.625% IL 22/11/42 346,479 863 0.21

UK Treasury 0.75% IL 22/03/34 700,917 1,331 0.33

UK Treasury 0.75% IL 22/11/47 637,517 1,847 0.46

UK Treasury 1.125% IL 22/11/37 567,394 1,426 0.35

UK Treasury 1.25% IL 22/11/27 328,331 654 0.16

UK Treasury 1.25% IL 22/11/32 309,093 640 0.16

UK Treasury 1.25% IL 22/11/55 362,413 1,494 0.37

UK Treasury 2% IL 26/01/35 619,411 1,799 0.45

UK Treasury 2.5% IL 17/07/24 231,194 826 0.21

UK Treasury 4.125% IL 22/07/30 125,000 463 0.11

EQUITIES 2.00% (31/05/20: 1.29%)

3i 41,082 512 0.13

Aviva 187,950 781 0.19

Coca‐Cola Europacific Partners 9,000 381 0.10

easyJet 20,311 206 0.05

HSBC 61,293 281 0.07

Legal & General 292,523 840 0.21

M&G 119,494 293 0.07

Nielsen 15,600 302 0.08

97





Persimmon 16,174 514 0.13

Rio Tinto (London Quoted) 11,445 693 0.17


Unilever (EUR) 29,398 1,241 0.31

Unilever (GBP) 12,718 537 0.13

TOTAL UNITED KINGDOM 90,932 22.58

UNITED STATES 46.21% (31/05/20: 53.46%)


US Treasury 0.125% IL 15/07/22 USD 5,000,000 4,226 1.05















EQUITIES 30.47% (31/05/20: 33.66%)

3M 5,600 802 0.20

AbbVie 11,500 911 0.23

Advanced Micro Devices 19,700 1,089 0.27

AECOM 6,600 305 0.08

AGCO 3,600 352 0.09

Akamai Technologies 8,500 687 0.17

Alaska Air 2,100 104 0.03

Alphabet 2,600 4,321 1.07

Amazon.com 2,092 4,766 1.18

Amedisys 900 166 0.04

American International 25,000 929 0.23

Apple 82,900 7,326 1.82

Archer‐Daniels‐Midland 28,700 1,348 0.33

Arrow Electronics 3,700 316 0.08

Arthur J Gallagher 9,200 950 0.24

Autodesk 3,100 627 0.16

Autoliv 4,300 323 0.08

Automatic Data Processing 2,900 403 0.10

AutoNation 3,800 276 0.07

Avantor 21,300 480 0.12

Baker Hughes 30,500 523 0.13

Bank of America 35,500 1,065 0.26

Bank of New York Mellon 50,100 1,841 0.46

Becton Dickinson 4,200 714 0.18

98





Berkshire Hathaway 5,800 1,181 0.29

Best Buy 11,800 983 0.24

Booz Allen Hamilton 6,200 374 0.09

BorgWarner 9,100 330 0.08

Bristol‐Myers Squibb 13,200 611 0.15

Broadridge Financial Solutions 1,500 169 0.04

Brown & Brown 7,800 288 0.07

Brunswick 3,500 252 0.06

Campbell Soup 5,400 182 0.05

Cardinal Health 8,800 348 0.09

Cerner 12,600 696 0.17

CH Robinson Worldwide 6,900 473 0.12

Churchill Downs 1,600 229 0.06

Cincinnati Financial 8,300 707 0.18

Cisco Systems 48,861 1,823 0.45

Citigroup 5,000 278 0.07

Colgate‐Palmolive 21,300 1,257 0.31

ConocoPhillips 9,400 368 0.09

Crane 2,100 143 0.04

Cummins 7,700 1,408 0.35

Deckers Outdoor 1,300 311 0.08

Delta Air Lines 3,900 132 0.03

DENTSPLY SIRONA 9,100 426 0.11

Devon Energy 9,600 180 0.04

Dolby Laboratories 3,700 252 0.06

Dover 2,700 286 0.07

DR Horton 9,500 640 0.16

Dropbox 20,100 394 0.10

Eastman Chemical 6,600 582 0.14

Edison International 18,200 711 0.18

Entegris 5,100 409 0.10

EOG Resources 4,900 278 0.07

EPAM Systems 1,900 632 0.16

Equitable 19,700 444 0.11

Etsy 1,700 200 0.05

Expeditors International of Washington 8,400 741 0.18

Facebook 14,800 3,468 0.86

Fair Isaac 1,400 495 0.12

Fidelity National Information Services 4,000 422 0.10

First American Financial 4,300 193 0.05

First Solar 4,600 249 0.06

FleetCor Technologies 900 174 0.04

Ford Motor 104,800 1,099 0.27

Fortinet 4,200 641 0.16

Franklin Resources 23,200 559 0.14

Gaming and Leisure Properties # 8,100 263 0.07

Generac 2,900 666 0.17

General Mills 23,000 1,010 0.25

General Motors 54,800 2,308 0.57

Gilead Sciences 23,050 1,070 0.27

Global Payments Inc 2,200 300 0.07

99





Henry Schein 3,900 210 0.05

Hewlett Packard Enterprise 80,600 928 0.23

Hill‐Rom 2,800 220 0.05

HP 28,600 646 0.16

IDEXX Laboratories 1,400 547 0.14

Ingredion 2,600 174 0.04

Insperity 1,500 99 0.02

Intel 26,200 1,067 0.26

International Business Machines 10,300 1,044 0.26

Iron Mountain # 15,700 476 0.12

Jabil 6,800 270 0.07

Jack Henry & Associates 1,400 153 0.04

Jacobs Engineering 6,800 674 0.17

JM Smucker 4,800 449 0.11

Johnson & Johnson 13,000 1,548 0.38

JPMorgan Chase 14,200 1,644 0.41

Kellogg 16,500 763 0.19

KeyCorp 50,200 823 0.20

Keysight Technologies 400 40 0.01

Kroger 21,800 558 0.14

Lam Research 700 319 0.08

Las Vegas Sands 4,100 169 0.04

Lear 2,300 312 0.08

Leidos 7,400 537 0.13

Lowe's 2,800 382 0.09

LPL Financial 3,300 343 0.09

Lumen Technologies 33,200 333 0.08

Marathon Oil 17,100 146 0.04

Marathon Petroleum 6,000 260 0.06

Masco 10,900 465 0.12

Mastercard 4,700 1,198 0.30

Maximus 1,600 104 0.03

Merck 21,700 1,162 0.29

MetLife 6,500 301 0.07

Mettler‐Toledo International 400 366 0.09

Microsoft 42,100 7,404 1.84

Molina Healthcare 1,400 247 0.06

Monolithic Power Systems 1,500 362 0.09

Moody's 1,100 259 0.06

Moog 1,900 119 0.03

Mosaic 10,500 266 0.07

Netflix 4,000 1,421 0.35

Newell Brands 12,700 256 0.06

NortonLifeLock 16,700 326 0.08

Nucor 14,800 1,055 0.26

Old Dominion Freight Line 5,700 1,063 0.26

Omnicom 6,700 390 0.10

Oracle 43,300 2,411 0.60

Oshkosh 2,700 251 0.06

Owens Corning 3,800 286 0.07

PACCAR 4,000 258 0.06

100





Palo Alto Networks 2,100 544 0.14

Patterson 3,400 80 0.02

Paychex 3,100 221 0.05

Paycom Software 1,200 280 0.07

Paylocity 2,500 298 0.07

Penumbra 1,600 280 0.07

PerkinElmer 3,500 358 0.09

Pfizer 27,000 735 0.18

Phillips 66 4,000 238 0.06

Planet Fitness 1,800 101 0.03

Pool 1,600 487 0.12

Principal Financial 11,100 511 0.13

Procter & Gamble 5,300 505 0.13

Progressive 9,600 671 0.17

Prudential Financial 18,700 1,406 0.35

PTC 5,700 535 0.13

PulteGroup 7,000 286 0.07

PVH 1,400 115 0.03

Qorvo 3,000 392 0.10

Quanta Services 3,900 263 0.07

Quest Diagnostics 3,800 355 0.09

Regal Beloit 2,400 239 0.06

Reliance Steel & Aluminum 2,300 273 0.07

Repligen 1,800 230 0.06

RH 900 408 0.10

Santander Consumer USA 10,200 273 0.07

ServiceNow 3,400 1,148 0.29

SiteOne Landscape Supply 2,000 241 0.06

Snap‐on 2,400 429 0.11

Stanley Black & Decker 2,000 302 0.08

State Street 5,200 319 0.08

SVB Financial 900 371 0.09

Take‐Two Interactive Software 4,800 631 0.16

TEGNA 9,100 125 0.03

Teradyne 6,148 566 0.14

Tesla 4,000 1,780 0.44

Tractor Supply Co 4,100 528 0.13

Trex 4,400 301 0.07

UGI 7,700 246 0.06

Unum 8,900 194 0.05

Verizon Communications 20,700 821 0.20

Vertex Pharmaceuticals 3,400 497 0.12

VF 3,400 191 0.05

Viatris 9,000 96 0.02

VICI Properties # 22,000 479 0.12

Visa 8,900 1,423 0.35

West Pharmaceutical Services 3,000 729 0.18

Western Alliance Bancorp 4,200 295 0.07

Western Digital 9,700 518 0.13

Western Union 24,900 433 0.11

Weyerhaeuser # 21,200 573 0.14

101





Whirlpool 3,100 528 0.13

WW Grainger 1,200 389 0.10

Zoetis 6,400 788 0.20

Zynga 41,400 314 0.08

TOTAL UNITED STATES 186,106 46.21

FORWARD FX 0.29% (31/05/20: (0.27%))

Bought USD101,000,000 for GBP71,256,669 Settlement 04/06/21 (17) ‐

Sold USD101,000,000 for GBP72,423,898 Settlement 04/06/21 1,184 0.29

Sold USD103,000,000 for GBP72,664,124 Settlement 06/07/21 17 ‐

TOTAL FORWARD FX 1,184 0.29






Stocks shown as ADR's represent American Depositary Receipts.

Stocks shown as NVDR's represent Non‐Voting Depositary Receipts.

# Real Estate Investment Trust.

102


31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019



Return before operating charges ^ 20.84 7.31 5.26 19.51 6.98 5.06


Return after operating charges ^ 20.00 6.52 4.51 18.73 6.23 4.34

Distributions (1.84) (2.23) (2.32) (1.72) (2.12) (2.24)


shares1.84 2.23 2.32 ‐ ‐ ‐



Performance

Return after operating charges 13.46% 4.59% 3.28% 13.43% 4.60% 3.26%

Other information





Prices



31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (3.50) (4.28) (4.50) (2.27) (2.82) (3.01)


shares3.50 4.28 4.50 ‐ ‐ ‐



Performance


Other information





Prices







103




31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (3.93) (4.80) (4.97) (2.56) (3.16) (3.34)


shares3.93 4.80 4.97 ‐ ‐ ‐



Performance


Other information





Prices



Z Accumulation







Z Income



104



Note £'000 £'000 £'000 £'000

Income:Net capital gains 2 41,596 9,110 Revenue 3 4,617 4,876

Expenses 4 (2,775) (2,277)Interest payable and similar charges (8) (7)


Taxation 5 (494) (534)


Total return before distributions 42,936 11,168



from investment activities 38,902 6,930


£'000 £'000 £'000 £'000



55,843 44,857

Change in net assets attributable to Shareholdersfrom investment activities (see above) 38,902 6,930




31/05/21 31/05/20

31/05/21 31/05/20

105




Fixed assets:


Current assets:

Debtors 7 2,520 1,763


Total assets 410,159 305,704

Liabilities:

Investment liabilities (17) (817)

Creditors:


Other creditors 9 (7,221) (482)



31/05/21 31/05/20


106



31/05/21 31/05/20

£'000 £'000

The net capital gains comprise:

Non‐derivative securities 33,656 11,052

Currency (losses)/gains (1,460) 1,018

Forward currency contracts 9,419 (2,946)


Net capital gains 41,596 9,110

3. Revenue

31/05/21 31/05/20

£'000 £'000

Bank interest 1 10

Interest on debt securities 163 623

Offshore funds dividends 8 20

Overseas dividends 4,210 4,019

Scrip dividends 12 ‐

UK dividends 223 204


31/05/21 31/05/20

£'000 £'000

2,694 2,180

8 8

2,702 2,188

29 32

25 26

54 58

17 9

2 4

‐ 12

‐ 6

19 31

2,775 2,277




2. Net capital gains

4. Expenses


of either of them


Registration fees



Depositary's fees

Safe custody fees

Other expenses


Issuance fee

Professional fees

Total expenses



107




5. Taxation

31/05/21 31/05/20

£'000 £'000




31/05/21 31/05/20

£'000 £'000


Net revenue for the year multiplied by the standard rate of corporation tax 367 518

Effects of:


Movement in excess management expenses 864 357



Overseas tax expensed (3) (8)




6. Distributions

31/05/21 31/05/20

£'000 £'000

Interim 1,968 2,145

Final 2,242 2,317










above.

The tax assessed for the year is higher than the standard rate of corporation tax for an open ended investment company of







108




7. Debtors 31/05/21 31/05/20

£'000 £'000

Amounts receivable for creation of shares 1,807 970


Overseas tax recoverable 63 63



£'000 £'000



9. Other creditors 31/05/21 31/05/20

£'000 £'000


Purchases awaiting settlement 6,535 ‐



Total other creditors 7,221 482


11. Share classes

Annual

management

charge rate


B Accumulation 0.50 22,469,643 116,890 (1,625,456) ‐ 20,961,077

B Income 0.50 136,940 1,391 (11,641) ‐ 126,690

R Accumulation 1.50 7,248,683 753,942 (827,158) (22,196) 7,153,271

R Income 1.50 668,398 35,607 (120,994) ‐ 583,011

Z Accumulation 0.75 68,856,437 26,321,269 (9,422,059) 19,817 85,775,464

Z Income 0.75 14,771,151 2,200,195 (1,643,438) ‐ 15,327,908












109





31/05/21 31/05/20

Currency £'000 £'000

Australian dollar 5,271 2,095

Brazilian real 1,250 355

Canadian dollar 13,350 6,832

Danish krone 1,978 1,757

Euro 46,105 33,263

Hong Kong dollar 9,300 7,972

Hungarian forint 1 1

Indonesian rupiah ‐ 299

Japanese yen 16,243 16,618

Malaysian ringgit 166 309

Mexican peso 149 375

New Israeli shekel 549 571

New Taiwan dollar 7,924 3,187

New Zealand dollar 276 693

Norwegian krone 668 1

Philippine peso 108 360

Polish zloty 1 132

Singapore dollar 242 205

South African rand 631 715

South Korean won 3,760 709

Swedish krona 3,885 2,659

Swiss franc 2,724 4,247

Thailand baht 406 ‐

US dollar 116,775 116,632

Total 231,762 199,987

Net foreign currency

exposure

The main risks from the Fund's holding of financial instruments, together with the ACD’s policy for managing these risks, areoutlined below.

Market price risk

The Fund invests principally in equity and fixed income securities. The value of the Fund’s investment portfolio is not fixedand may go down as well as up. This may be as a result of a specific factor affecting the value of an individual company ormay be caused by general market factors (such as government policy or the health of the underlying economy) which canaffect the entire portfolio. The Fund seeks to manage these risks by adhering to investment guidelines and to investment


sourcebook (“COLL”), which include rules relating to investment holdings that are designed to place limits on the Fund’sinvestment concentration (same as at 31 May 2020).


A 10% increase in the value of the Fund’s portfolio would have the effect of increasing the return and net assets by£39,553,585 (2020: £29,736,564). A 10% decrease would have an equal and opposite effect.


The table below shows the foreign currency risk profile at the balance sheet date:

110





Floating rate

financial

assets

Fixed rate

financial

assets

Financial

assets not

carrying

interest Total

Currency Assets £'000 £'000 £'000 £'000

31/05/21

Pound sterling 7,161 82,884 7,968 98,013

Australian dollar 37 581 4,654 5,272

Brazilian real ‐ ‐ 1,250 1,250

Canadian dollar 616 2,028 11,320 13,964

Danish krone 2 ‐ 1,976 1,978

Euro 1,327 19,816 25,508 46,651

Hong Kong dollar 15 ‐ 9,285 9,300

Hungarian forint 1 ‐ ‐ 1

Japanese yen 297 1,034 14,911 16,242

Malaysian ringgit ‐ ‐ 166 166

Mexican peso 4 ‐ 145 149

New Israeli shekel 1 ‐ 547 548

New Taiwan dollar 15 ‐ 7,910 7,925

New Zealand dollar 2 ‐ 274 276

Norwegian krone 2 ‐ 666 668

Philippine peso ‐ ‐ 108 108

Polish zloty 1 ‐ ‐ 1

Singapore dollar 3 ‐ 238 241

South African rand 2 ‐ 630 632

South Korean won ‐ ‐ 3,760 3,760

Swedish krona 409 385 3,416 4,210

Swiss franc 2 ‐ 2,723 2,725

Thailand baht ‐ ‐ 406 406

US dollar 1,007 63,404 131,262 195,673

Total 10,904 170,132 229,123 410,159

Foreign exchange risk sensitivity




Assuming all other factors remain stable, if GBP strengthens by 10% the resulting change in the net assets attributable to

shareholders of the Fund would be a decrease of approximately £23,176,221 (2020: £19,998,660). A 10% weakening in GBP

would have an equal but opposite effect.

Interest rate risk


111




31/05/20

Pound sterling 5,505 40,764 4,517 50,786

Australian dollar 1 567 1,527 2,095

Brazilian real ‐ ‐ 355 355

Canadian dollar 1 2,000 4,830 6,831

Danish krone 3 ‐ 1,754 1,757

Euro 823 17,357 15,080 33,260

Hong Kong dollar 2 ‐ 7,969 7,971

Hungarian forint 1 ‐ ‐ 1

Indonesian rupiah ‐ ‐ 299 299

Japanese yen 94 1,422 15,103 16,619

Malaysian ringgit ‐ ‐ 308 308

Mexican peso 1 ‐ 373 374

New Israeli sheqel 2 ‐ 569 571

New Taiwan dollar 8 ‐ 3,178 3,186

New Zealand dollar 2 ‐ 691 693

Norwegian krone 1 ‐ ‐ 1

Philippine peso ‐ ‐ 360 360

Polish zloty 2 ‐ 130 132

Singapore dollar 1 ‐ 205 206

South African rand 3 ‐ 713 716

South Korean won ‐ ‐ 710 710

Swedish krona 2 473 2,184 2,659

Swiss franc 1 ‐ 4,247 4,248

US dollar 124 60,209 111,233 171,566

Total 6,577 122,792 176,335 305,704

Floating rate

financial

liabilities

Fixed rate

financial

liabilities

Financial

liabilities not

carrying

interest Total


31/05/21


Canadian dollar ‐ ‐ (615) (615)

Euro ‐ ‐ (546) (546)

Swedish krona ‐ ‐ (325) (325)

US dollar ‐ ‐ (5,067) (5,067)

Total ‐ ‐ (7,445) (7,445)

31/05/20


US dollar ‐ ‐ (817) (817)

Total ‐ ‐ (1,545) (1,545)

112




31/05/21 31/05/20


£’000 £’000

170,132 42.24 122,792 40.38

170,132 42.24 122,792 40.38

Financial derivative instrument risk exposure

31/05/21 31/05/20

Exposure Exposure

(a) Forwards £’000 £’000

State Street Bank 215,127 54,933

215,127 54,933


Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2021 £'000 £'000 % £'000 % £'000


Bonds 86,704 ‐ ‐ ‐ ‐ 86,704

Equities 250,704 41 0.02 81 0.03 250,826Total 337,408 41 81 337,530

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2021 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 32,048 ‐ ‐ ‐ ‐ 32,048

Collective Investment Schemes 1,292 ‐ ‐ ‐ ‐ 1,292

Equities 239,356 (38) (0.02) (34) (0.01) 239,284Total 272,696 (38) (34) 272,624


against delivery.




of each fund.


timely basis.



Credit Rating Investment grade (BBB- credit rating and above) Total value of bonds

Credit risk

Total value of derivatives

The exposure obtained through financial derivative instruments and identity of counterparties was as follows:

113




Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2020 £'000 £'000 % £'000 % £'000


Bonds 38,562 ‐ ‐ ‐ ‐ 38,562

Equities 236,012 44 0.02 62 0.03 236,118Total 274,574 44 62 274,680

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2020 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 30,757 ‐ ‐ ‐ ‐ 30,757

Equities 200,633 (39) (0.02) (26) (0.01) 200,568Total 231,390 (39) (26) 231,325

31/05/21 31/05/20



Taxes 0.04 0.03



Share class

B AccumulationB IncomeR AccumulationR IncomeZ AccumulationZ Income

Subsequent to the year end, on 17th September 2021 the Net Asset Value ("NAV") per share has increased above 5% onshare classes when compared to the year end date. The movements for each share class are shown below:


28.05.21*Movement

168.60

*Prices disclosed are based on quoted share prices and will therefore differ to net asset value per share shown in the

comparative tables which are valued at bid‐market prices.

358.90 5.27%233.20 4.67%

5.40%157.40 4.76%318.70 5.02%206.20


17.09.21177.70164.90334.70215.40377.80244.10

4.46%

114







Level 1 ^ 394,570 ‐ 296,325 ‐

Level 2 ^^ 2,167 (17) 1,040 (817)

Level 3 ^^^ ‐ ‐ ‐ ‐

396,737 (17) 297,365 (817)






measurement date.

31/05/21 31/05/20

115


As at 31 May 2021

Interim Distribution in pence per shareGroup 1 Shares purchased prior to 1 June 2020Group 2 Shares purchased on or after 1 June 2020 to 30 November 2020










Distribution Tables

116


As at 31 May 2021


Distribution Tables

Final Distribution in pence per shareGroup 1 Shares purchased prior to 1 December 2020Group 2 Shares purchased on or after 1 December 2020 to 31 May 2021









117

AXA Lifetime Distribution Fund



1 2 3 4 5 6 7



The Fund invests in a mix of shares in UK listed companies and UK Government bonds (the majority of which are linked to the

rate of inflation). The Fund's typical asset mix would range between 50‐60% investment in shares and 40‐50% in UK Government

bonds. The Manager selects shares in companies based upon their prospects for future growth in dividend payments following

an in depth analysis of their financial status, quality of business model and corporate governance arrangements. Investments in

UK Government bonds are diversified across a range of maturities (i.e., the length of time for full repayment of the bond by the

Government), with a bias towards bonds with longer maturities.




with less risk than that of a fund which invests predominantly in equities or overseas.



profile. The risk category shown is not guaranteed and may shift over time. The lowest category does not mean risk free. The

risk category is recalculated weekly and for the period under review the risk category changed from a category 4 to a category 5.



Additional risks






Investment Policy







take into consideration a composite benchmark made up of the following indices in the stated proportions: 55% FTSE All‐Share

Index; 45% FTSE Index Linked Govt All Stocks (the “Benchmark”). This Benchmark best represents the types of bonds and

companies in which the Fund predominantly invests.


performance.

As at 31 May 2021


118






vice versa.
































durations.




• Index‐linked bonds risk ‐ index‐linked bonds are fixed interest securities whose capital repayment amounts and interest

payments are adjusted in line with movements in inflation indices. They are designed to mitigate the effects of inflation on the

value of a portfolio. The market value of index‐linked bonds is determined by the market’s expectations of future movements in

both interest rates and inflation rates.

119











investment policy.


























Market Review


120























121






Outlook



Performance

Banks and Mining were the main sectors to detract from performance during the period under review. We have an underweight position in the banks sector, preferring financial exposure from life insurance and specialist financial businesses such as Legal & General and 3i Plc. Within the wider financials sector, the London Stock Exchange contributed negatively over the half year. Following several strong years of performance, the London Stock Exchange surprised the market with its announcement of a significantly larger than expected investment it will be making in its newly acquired Refinitiv business. The shares were weak on the back of the news; however, we continue to see value in the business and have held the position. Our exposure to the mining sector is predominantly via Rio Tinto but there is also exposure to copper through the holding in Central Asia Metals.









122






● Hargreaves Lansdown 10,695 17,383

● AstraZeneca 8,054 12,019

● UK Treasury 0.125% IL 10/08/31 6,989 10,512

● UK Treasury 0.125% IL 22/03/51 5,455 7,737

● AVEVA 4,488 7,178

Major Sales

● Barrick Gold

● Royal Dutch Shell

● Countryside Proper es

● BT

● Ascen al


31 May 2021

Major Purchases


In healthcare, several UK‐listed companies received bid approaches and the portfolio benefitted from the recent announcement

of an agreed bid approach for Vectura by Carlyle Europe Partners valuing the business at 155p cash per share. In addition,

GlaxoSmithKline’s share price bounced higher following news that Elliott Management has bought a multi‐billion‐pound stake in

the company.


123



EQUITIES 57.03% (31/05/20: 57.45%)

BASIC MATERIALS 4.32% (31/05/20: 5.75%*)


Central Asia Metals 1,820,000 4,941 0.57

Hill & Smith 650,000 9,971 1.14

Rio Tinto 375,000 22,699 2.61

Precious Metals & Mining 0.00% (31/05/20: 1.92%*)



Automobiles & Parts 0.87% (31/05/20: 0.28%)

TI Fluid Systems 2,500,000 7,613 0.87

Household Goods & Home Construction 1.09% (31/05/20: 1.29%*)

Bellway 265,000 9,506 1.09

Retailers 2.93% (31/05/20: 1.93%*)

Dunelm 700,000 10,262 1.18

JD Sports Fashion 1,600,000 15,251 1.75

Teachers Media ^ 670,000 ‐ ‐

Travel & Leisure 1.34% (31/05/20: 0.83%)

Loungers 1,625,000 4,306 0.49

Whitbread 230,000 7,378 0.85



Beverages 2.44% (31/05/20: 2.10%)

Diageo 625,000 21,238 2.44

Personal Care, Drug & Grocery 2.67% (31/05/20: 3.24%*)

Reckitt Benckiser 260,000 16,533 1.90

Tesco 3,000,000 6,705 0.77


ENERGY 3.53% (31/05/20: 4.94%*)

Oil, Gas & Coal 3.53% (31/05/20: 4.94%*)

BP 5,500,000 16,866 1.94

Diversified Energy 3,965,132 4,187 0.48

Longboat Energy 250,000 192 0.02


Serica Energy 6,000,000 6,924 0.79




124





FINANCIALS 13.72% (31/05/20: 11.39%*)

Banks 2.37% (31/05/20: 2.04%)

Lloyds Banking 15,500,000 7,711 0.89

Standard Chartered 2,500,000 12,910 1.48


Syncona 850,000 1,806 0.21

Finance & Credit Services 1.04% (31/05/20: 0.00%)



3i 1,450,000 18,067 2.07

Argentex 1,800,000 2,241 0.26

Hargreaves Lansdown 700,000 11,718 1.34

TP ICAP 2,163,953 4,615 0.53

Life Insurance 4.91% (31/05/20: 4.25%)

Just 12,250,000 13,499 1.55

Legal & General 6,000,000 17,238 1.98

Phoenix 800,000 5,922 0.68

Prudential 400,000 6,092 0.70


Sabre Insurance 3,300,000 8,663 0.99


HEALTH CARE 8.51% (31/05/20: 8.96%)

Medical Equipment & Services 2.04% (31/05/20: 2.76%*)

ConvaTec 5,250,000 12,369 1.42

Inspiration Healthcare 50,000 71 0.01

Smith & Nephew 350,000 5,362 0.61


AstraZeneca 230,000 18,499 2.12

Genus 250,000 12,612 1.45

GlaxoSmithKline 1,500,000 20,145 2.31

Vectura 3,250,000 5,116 0.59


INDUSTRIALS 8.14% (31/05/20: 8.49%*)



Forterra 3,000,000 8,955 1.03

Marshalls 1,150,000 8,556 0.98

125






Coats 10,000,000 6,620 0.76

DS Smith 1,750,000 7,346 0.84

Melrose Industries 6,000,000 10,455 1.20

Industrial Engineering 0.00% (31/05/20: 0.30%*)


Experian 500,000 13,510 1.55

Industrial Transportation 1.78% (31/05/20: 1.83%*)

Ashtead 300,000 15,540 1.78


REAL ESTATE 2.56% (31/05/20: 2.71%*)

Real Estate Investment & Services 0.90% (31/05/20: 1.30%*)

Rightmove 1,300,000 7,821 0.90


Great Portland Estates 1,200,000 8,634 0.99

PRS 6,000,000 5,820 0.67


TECHNOLOGY 1.00% (31/05/20: 1.16%*)


AVEVA 250,000 8,703 1.00




Vodafone 9,000,000 11,578 1.33


UTILITIES 2.58% (31/05/20: 2.32%)

Electricity 1.07% (31/05/20: 0.71%)

SSE 600,000 9,330 1.07

Gas, Water & Multiutilities 1.51% (31/05/20: 1.61%)

National Grid 1,400,000 13,170 1.51


GOVERNMENT BONDS 39.18% (31/05/20: 39.76%)


UK Treasury 0.125% IL 22/03/24 10,823,000 14,615 1.68

UK Treasury 0.125% IL 22/03/26 12,300,000 16,504 1.89

UK Treasury 0.125% IL 10/08/28 11,020,000 14,517 1.67

126





UK Treasury 0.125% IL 22/03/29 10,750,490 16,827 1.93

UK Treasury 0.125% IL 10/08/31 5,200,000 6,956 0.80

UK Treasury 0.125% IL 22/11/36 8,524,000 14,359 1.65

UK Treasury 0.125% IL 10/08/41 8,400,000 14,293 1.64

UK Treasury 0.125% IL 22/03/44 7,002,170 14,358 1.65

UK Treasury 0.125% IL 22/03/46 7,082,000 14,143 1.62

UK Treasury 0.125% IL 10/08/48 7,660,000 15,091 1.73

UK Treasury 0.125% IL 22/03/51 3,000,000 5,765 0.66

UK Treasury 0.125% IL 22/11/56 6,520,000 15,615 1.79

UK Treasury 0.125% IL 22/03/58 6,100,000 15,581 1.79

UK Treasury 0.25% IL 22/03/52 5,920,000 14,543 1.67

UK Treasury 0.5% IL 22/03/50 5,582,000 15,732 1.80

UK Treasury 0.625% IL 22/03/40 6,238,000 14,397 1.65

UK Treasury 0.625% IL 22/11/42 6,502,080 16,194 1.86

UK Treasury 0.75% IL 22/03/34 7,273,000 13,815 1.59

UK Treasury 0.75% IL 22/11/47 4,950,000 14,338 1.65

UK Treasury 1.125% IL 22/11/37 4,302,140 10,811 1.24

UK Treasury 1.25% IL 22/11/27 6,953,240 13,850 1.59

UK Treasury 1.25% IL 22/11/32 6,990,570 14,480 1.66

UK Treasury 1.25% IL 22/11/55 3,488,000 14,377 1.65

UK Treasury 1.875% IL 22/11/22 3,106,000 4,890 0.56

UK Treasury 2% IL 26/01/35 1,795,000 5,214 0.60

UK Treasury 2.5% IL 17/07/24 1,413,000 5,051 0.58

UK Treasury 4.125% IL 22/07/30 1,358,000 5,029 0.58







^ These stocks have either been suspended, delisted or are in liquidation. They are included at the Manager’s valuation.



127


31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (1.96) (2.95) (2.72) (1.74) (2.67) (2.52)


shares1.96 2.95 2.72 ‐ ‐ ‐



Performance


Other information


Closing number of shares 991,053 973,161 2,364,058 17,589 27,479 36,463



Prices



31/05/2021 31/05/2020 31/05/2019

Change in net assets per share (p) (p) (p)

Opening net asset value per share † 124.96 125.26 122.67

Return before operating charges ^ 14.17 (0.17) 2.76

Operating charges ^ (0.13) (0.13) (0.17)

Return after operating charges ^ 14.04 (0.30) 2.59

Distributions (1.91) (2.87) (2.64)


shares1.91 2.87 2.64

Closing net asset value per share † 139.00 124.96 125.26

*^ after direct transaction costs of: 0.05 0.09 0.09

Performance

Return after operating charges 11.24% ‐0.24% 2.11%

Other information

Closing net asset value (£) † 869,784,041 860,315,996 941,226,697

Closing number of shares 625,749,700 688,446,647 751,441,838

Operating charges ^ 0.10% 0.10% 0.14%+

Direct transaction costs * 0.04% 0.07% 0.08%

Prices

Highest share price # 139.10 136.60 126.10

Lowest share price # 121.00 101.00 114.20


A Accumulation A Income

I Accumulation


128




31/05/2021 31/05/2020 31/05/2019 31/05/2021 31/05/2020 31/05/2019






Distributions (1.56) (2.34) (2.17) (1.46) (2.22) (2.07)


shares1.56 2.34 2.17 ‐ ‐ ‐



Performance


Other information

Closing net asset value (£) † 4,998 4,997 4,996 4,988 4,980 4,984

Closing number of shares 4,440 4,921 4,892 4,753 5,183 5,042



Prices



+ The ACD fee changed on 1 April 2019 from 0.14% to 0.09%, the estimated ongoing charge taking into account the ACD %

change would be 0.10%.

Z Income








Z Accumulation


129



Note £'000 £'000 £'000 £'000


Expenses 4 (837) (897)Interest payable and similar charges ‐ ‐


Taxation 5 (138) (128)


Total return before distributions 90,883 (398)

Distributions 6 (12,544) (20,835)




£'000 £'000 £'000 £'000



(81,187) (82,216)





31/05/21 31/05/20

31/05/21 31/05/20

130




Fixed assets:


Current assets:

Debtors 7 2,709 6,593


Total assets 872,767 863,046

Liabilities:

Creditors:

Other creditors 9 (1,540) (1,440)



31/05/21 31/05/20


131



31/05/21 31/05/20

£'000 £'000



Currency gains 120 9



3. Revenue

31/05/21 31/05/20

£'000 £'000


Interest on debt securities (1,417) 2,660





31/05/21 31/05/20

£'000 £'000

768 832

768 832

29 33

22 21

51 54

17 7

1 4

18 11

837 897





4. Expenses


of either of them




Depositary's fees

Safe custody fee

Other expenses


Total expenses



132




5. Taxation

31/05/21 31/05/20

£'000 £'000




31/05/21 31/05/20

£'000 £'000


Net revenue for the year multiplied by the standard rate of corporation tax 2,383 4,026

Effects of:


Movement in excess management expenses 2,190 425

Relief for indexation on UK Gilts (1,775) (816)

Revenue not subject to corporation tax (2,798) (3,635)





above.

The tax assessed for the year is lower than the standard rate of corporation tax for an open ended investment company of






133




6. Distributions

31/05/21 31/05/20

£'000 £'000

First interim 388 4,318

Second interim 514 263

Third interim 3,156 4,106

Fourth interim 398 1,095

Fifth interim 240 1,391

Sixth interim 1,234 2,439

Seventh interim 674 770

Eighth interim 143 81

Ninth interim 1,143 1,751

Tenth interim 1,271 531

Eleventh interim 1,927 1,287

Final 1,382 2,697






Expenses charged to capital 768 832


7. Debtors 31/05/21 31/05/20

£'000 £'000

Amounts receivable for creation of shares 20 ‐

Sales awaiting settlement 1,216 4,034

Accrued revenue 1,473 2,559



£'000 £'000



9. Other creditors 31/05/21 31/05/20

£'000 £'000

Amounts payable for cancellation of shares 1,383 1,290



Total other creditors 1,540 1,440



134





11. Share classes

Annual

management

charge rate


A Accumulation 0.30 973,161 150,929 (133,037) ‐ 991,053

A Income 0.30 27,479 2,509 (12,399) ‐ 17,589

I Accumulation 0.09 688,446,647 827,960 (63,524,907) ‐ 625,749,700

Z Accumulation 0.45 4,921 2,711 (3,192) ‐ 4,440

Z Income 0.45 5,183 2,895 (3,325) ‐ 4,753














outlined below.





Market price risk








The functional currency of the Fund is Sterling. All assets and liabilities of the Fund are denominated in Pound sterling.

There was no direct foreign currency exposure within the Fund at the balance sheet date.

135





Floating rate

financial

assets

Fixed rate

financial

assets

Financial

assets not

carrying

interest Total

Currency Assets £'000 £'000 £'000 £'000

31/05/21

Pound sterling 31,838 341,345 499,250 872,433

US dollar ‐ ‐ 334 334

Total 31,838 341,345 499,584 872,767

31/05/20

Pound sterling 18,895 342,540 484,305 845,740

Canadian dollar ‐ ‐ 16,558 16,558

US dollar ‐ ‐ 748 748

Total 18,895 342,540 501,611 863,046

Floating rate

financial

liabilities

Fixed rate

financial

liabilities

Financial

liabilities not

carrying

interest Total


31/05/21

Pound sterling ‐ ‐ (1,540) (1,540)

Total ‐ ‐ (1,540) (1,540)

31/05/20

Pound sterling (1,440) (1,440)

Total ‐ ‐ (1,440) (1,440)

Interest rate risk





136




31/05/21 31/05/20


£’000 £’000

328,624 37.72 329,796 38.28

12,721 1.46 12,744 1.48

341,345 39.18 342,540 39.76


Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2021 £'000 £'000 % £'000 % £'000


Bonds 32,928 ‐ ‐ ‐ ‐ 32,928

Equities 60,398 26 0.04 236 0.39 60,660Total 93,326 26 236 93,588

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2021 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 22,895 ‐ ‐ ‐ ‐ 22,895

Collective Investment Schemes 1,062 (1) (0.05) ‐ ‐ 1,061

Equities 143,150 (73) (0.05) ‐ ‐ 143,077Total 167,107 (74) ‐ 167,033

Credit risk


Credit Rating Investment grade (BBB- credit rating and above) Unrated

Total value of bonds


against delivery.




of each fund.


timely basis.


137




Net purchase

cost

Commissions

paid Taxes

Total

purchase cost

31/05/2020 £'000 £'000 % £'000 % £'000


Bonds 62,569 - - - - 62,569

Equities 125,407 59 0.05 573 0.46 126,039Total 187,976 59 573 188,608

Net sale

proceeds

Commissions

paid Taxes

Total sale

proceeds

31/05/2020 £'000 £'000 % £'000 % £'000

Analysis of sales

Bonds 136,317 - - - - 136,317

Equities 108,836 (45) (0.04) - - 108,791Total 245,153 (45) - 245,108

31/05/21 31/05/20



Taxes 0.03 0.06







Level 1 ^ 838,220 - 837,558 -

Level 2 ^^ - - - -

Level 3 ^^^ - - - -

838,220 - 837,558 -


measurement date.





31/05/21 31/05/20

138


As at 31 May 2021

First Distribution in pence per shareGroup 1 Shares purchased prior to 1 June 2020Group 2 Shares purchased on or after 1 June 2020 to 30 June 2020



Share Class A AccumulationGroup 1 0.058 ‐ 0.058 0.593 Group 2 0.058 ‐ 0.058 0.593


Share Class I AccumulationGroup 1 0.057 ‐ 0.057 0.577 Group 2 ‐ 0.057 0.057 0.577

Share Class Z AccumulationGroup 1 0.046 ‐ 0.046 0.471 Group 2 0.046 ‐ 0.046 0.471

Share Class Z IncomeGroup 1 0.044 ‐ 0.044 0.453 Group 2 0.044 ‐ 0.044 0.453

Second Distribution in pence per shareGroup 1 Shares purchased prior to 1 July 2020Group 2 Shares purchased on or after 1 July 2020 to 31 July 2020









Distribution Tables

139


As at 31 May 2021


Distribution Tables

Third Distribution in pence per shareGroup 1 Shares purchased prior to 1 August 2020Group 2 Shares purchased on or after 1 August 2020 to 31 August 2020





Share Class I AccumulationGroup 1 0.467 ‐ 0.467 0.557 Group 2 0.036 0.431 0.467 0.557



Fourth Distribution in pence per shareGroup 1 Shares purchased prior to 1 September 2020Group 2 Shares purchased on or after 1 September 2020 to 30 September 2020








140


As at 31 May 2021


Distribution Tables

Fifth Distribution in pence per shareGroup 1 Shares purchased prior to 1 October 2020Group 2 Shares purchased on or after 1 October 2020 to 31 October 2020








Sixth Distribution in pence per shareGroup 1 Shares purchased prior to 1 November 2020Group 2 Shares purchased on or after 1 November 2020 to 30 November 2020








141


As at 31 May 2021


Distribution Tables

Seventh Distribution in pence per shareGroup 1 Shares purchased prior to 1 December 2020Group 2 Shares purchased on or after 1 December 2020 to 31 December 2020








Eighth Distribution in pence per shareGroup 1 Shares purchased prior to 1 January 2021Group 2 Shares purchased on or after 1 January 2021 to 31 January 2021



Share Class A AccumulationGroup 1 0.023 ‐ 0.023 0.012 Group 2 ‐ 0.023 0.023 0.012





142


As at 31 May 2021


Distribution Tables

Ninth Distribution in pence per shareGroup 1 Shares purchased prior to 1 February 2021Group 2 Shares purchased on or after 1 February 2021 to 28 February 2021








Tenth Distribution in pence per shareGroup 1 Shares purchased prior to 1 March 2021Group 2 Shares purchased on or after 1 March 2021 to 31 March 2021








143




0.312 ‐ 0.312 0.190 0.312 ‐ 0.312 0.190

0.276 ‐ 0.276 0.171 0.276 ‐ 0.276 0.171

0.305 ‐ 0.305 0.185 0.015 0.290 0.305 0.185

0.247 ‐ 0.247 0.152 0.247 ‐ 0.247 0.152

0.231 ‐ 0.231 0.144 0.231 ‐ 0.231 0.144



0.226 ‐ 0.226 0.401 0.028 0.198 0.226 0.401

0.199 ‐ 0.199 0.360 0.199 ‐ 0.199 0.360

0.220 ‐ 0.220 0.391 0.060 0.160 0.220 0.391

0.179 ‐ 0.179 0.319 0.179 ‐ 0.179 0.319

0.167 ‐ 0.167 0.303


Distribution TablesAs at 31 May 2021

Eleventh Distribution in pence per shareGroup 1 Shares purchased prior to 1 April 2021Group 2 Shares purchased on or after 1 April 2021 to 30 April 2021

Share Class A AccumulationGroup 1Group 2

Share Class A IncomeGroup 1Group 2

Share Class I AccumulationGroup 1Group 2

Share Class Z AccumulationGroup 1Group 2

Share Class Z IncomeGroup 1Group 2

Final Distribution in pence per shareGroup 1 Shares purchased prior to 1 May 2021Group 2 Shares purchased on or after 1 May 2021 to 31 May 2021

Share Class A AccumulationGroup 1Group 2

Share Class A IncomeGroup 1Group 2

Share Class I AccumulationGroup 1Group 2

Share Class Z AccumulationGroup 1Group 2

Share Class Z IncomeGroup 1Group 2 0.167 ‐ 0.167 0.303

144

For the year ended 31 May 2021

1. Accounting Basis and Policies

(a) Basis of accounting

(b) Recognition of revenue

(c) Treatment of special dividends

Accounting Policies

The Financial Statements of the Company comprise the Financial Statements of each of the sub‐funds and have been

prepared on a historical cost basis, as modified by the revaluation of investments, and in accordance with Financial

Reporting Standard 102 ("FRS 102") and the Statement of Recommended Practice for Authorised Funds issued by the

Investment Management Association ("IMA") in May 2014, and amended in June 2017. The Financial Statements are

prepared in accordance with the Instrument of Incorporation and the Financial Conduct Authority’s Collective Investment

Schemes Sourcebook (“COLL”).

Dividends on quoted equities and preference shares are recognised when the securities are quoted ex‐dividend and are

recognised net of attributable tax credits.

Revenue on debt securities (including allowance for interest bought and sold) is accounted for on an accruals basis. Where

it is considered that a bond has a likelihood of default appropriate provisions are made against any accrued revenue.

Revenue from debt securities is accounted for on a basis which takes account of the amortisation of any discount or

premium between the purchase price and the expected final maturity price over the remaining life of the security. Accrued

interest on purchase and sale contracts is recognised as revenue and transferred to revenue or capital as appropriate.

Indexation on UK index‐linked bonds is accrued monthly to the sub‐fund and forms part of the distributable income.

Interest on bank and other cash deposits is recognised on an accruals basis.

Returns on derivative transactions have been treated as either revenue or capital depending on the motives and

circumstances on acquisition. Where positions generate total returns, returns are apportioned between capital and

revenue to reflect the nature of the transaction.

There are no material events that have been identified that may cast significant doubt about the sub‐funds’ ability to

continue as a going concern for at least the next twelve months from the date these financial statements are authorised for

issue. The ACD believes that the sub‐funds have adequate resources to continue in operational existence for the

foreseeable future and, following consideration of the impact of COVID‐19, they continue to adopt the going concern basis

in preparing the financial statements.

Dividends from Real Estate Investment Trusts ('REITs') are recognised as distributable income when the securities are

quoted ex‐dividend.

Special dividends are reviewed on a case by case basis in determining whether the dividend is to be treated as revenue or

capital. Amounts recognised as revenue will form part of the distributable revenue. The tax treatment follows the

treatment of the principal amount.

Dividends received from US Real Estate Investment Trusts ('REITs') are recognised as revenue when the security is quoted

ex‐dividend. An assesment of capital/income split is performed, based on prior year dividend announcement for each

security. The capital element of the dividend is reallocated to the capital of the sub‐fund. Subsequently, when the

capital/income split is announced for the dividend a final assessment is performed to determine the correct distribution to

unitholders.


145


Accounting Policies


(d) Treatment of expenses

(e) Allocation of revenue and expenses to multiple share classes

(f) Taxation

(g) Distribution policy

(h) Basis of valuation of investments

(i) Exchange rates

Tax is provided for using tax rates and laws which have been enacted or substantively enacted at the balance sheet date.

In addition, the portfolio transaction charges will be charged wholly to the capital of all sub‐funds.

The net revenue after taxation, as disclosed in the Financial Statements, after adjustment for items of a capital nature, is

distributable to Shareholders as dividend distributions. Any revenue deficit is deducted from capital.

At the end of the reporting period all investments have been measured at their fair value using the prices and the portfolio

holdings determined at 12 noon on 28 May 2021, being the last valuation point of the accounting period, as this is not

materially different from a valuation carried out at close of business on the balance sheet date.

Deferred tax is provided using the liability method on all timing differences arising on the treatment of certain items for

taxation and accounting purposes, calculated at the rate at which it is anticipated the timing differences will reverse.

Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be

taxable profits in the future against which the deferred tax asset can be offset.

Any revenue or expenses not directly attributable to a particular share class will normally be allocated pro‐rata to the net

assets of the relevant share classes.

Corporation tax is provided for on the income liable to corporation tax less deductible expenses.

Expenses of the sub‐funds are charged against revenue except for costs associated with the purchase and sale of

investments and ACD fees which are allocated to the capital of the sub‐funds.

Transactions in foreign currencies are recorded in Sterling at the rate ruling at the date of the transactions. Assets and

liabilities expressed in foreign currencies at the end of the accounting period are translated into Sterling at the closing mid

market exchange rates ruling on that date.

Where the revenue from investments exceeds the expenses of a sub‐fund half yearly distributions (quarterly for Defensive

Distribution Fund and UK Distribution Fund, and monthly for Lifetime Distribution Fund) are paid to all holders of income

shares. Transfers are made to capital on behalf of all holders of accumulation shares. In all cases tax vouchers will be issued

to Shareholders.

ACD fees are offset against capital for the purposes of calculating the amount available for distribution. Accordingly, the

imposition of such charges may constrain the capital growth of every sub‐fund.

The listed investments of the sub‐funds are valued at bid‐market prices ruling at 12 noon on the last business day of the

accounting year. Where certain securities are listed on global markets which are closed at the 12 noon valuation point, the

last available closing bid‐price will be utilised, subject to the application of any fair value pricing adjustment. The fair value

of unlisted securities, and unquoted securities where the quotation has been suspended, is estimated by the Manager,

using independent sources where available.

Market value is defined by the SORP as fair value which is the bid value of each security.

146


Accounting Policies


(j) Equalisation


(a) Foreign currency risk

(b) Interest rate risk profile of financial assets and liabilities

(c) Inflation risk

(d) Credit risk

(e) Liquidity risk

Equalisation applies only to shares purchased during the distribution period (Group 2 shares). It represents the accrued

revenue included in the purchase price of the shares.

After averaging it is returned with the distribution as a capital repayment. It is not liable to income tax but must be

deducted from the cost of the shares for Capital Gains tax purposes.

The majority of the sub‐funds financial assets are considered to be readily realisable in accordance with the market

practices of the exchange on which they are traded. In general, sales and purchases of financial assets are managed so that

the sub‐funds cash requirement is kept to a minimum. The sub‐funds main financial liability relates to the potential

commitment to meet any cancellation of shares. In order to manage this risk the sub‐fund maintains a cash balance to

cover any known liabilities, with any cancellation of shares being covered by the sale of investments. Where investments

cannot be realised in time to meet a liability the ACD will utilise the company’s overdraft facility with HSBC.

The Company may find that companies in which it invests fail to settle their debts on a timely basis. The value of securities

issued by such companies may fall as a result of the perceived increase in credit risk. Adhering to investment guidelines and

avoiding excessive exposure to one particular issuer can limit credit risk.

Interest rate risk is analysed within the financial statements of each individual sub‐fund.

Inflation Linked Bond Risk: unlike other bonds, an inflation protected security (such as index linked gilts) reduces the

negative effect of inflation on its real value. The market value of such securities will be affected both by the market's

perception of future movements in interest rates and the future rate of inflation. Therefore the market value of such

securities (and the value of the sub‐fund) may not move in line with inflation rates in the short to medium term.

The interest rate risk is the risk that the value of the Company's investments will fluctuate due to changes in the interest

rate. Cashflows from floating rate securities, bank balances, or bank overdrafts will be affected by the changes in interest

rates. As the Company's objective is to seek capital growth, these cashflows are considered to be of secondary importance

and are not actively managed.

The Company did not have any long term financial liabilities at the balance sheet date.

A significant portion of the Company’s assets may be denominated in a currency other than the base currency of the

Company or Class. There is the risk that the value of such assets and/or the value of any distributions from such assets may

decrease if the underlying currency in which assets are traded falls relative to the base currency in which shares of the

relevant sub‐funds are valued and priced. Foreign currency risk is analysed within the financial statements of each

individual sub‐fund.

In pursuing the investment objectives a number of financial instruments are held which may comprise securities and other

investments, cash balances and debtors and creditors that arise directly from operations. Derivatives, such as futures or

forward currency contracts, may be utilised for hedging purposes.

The main risks from the Company's holdings of financial instruments are discussed below, the ACD's policy for managing

these risks are shown in the individual Fund Investment Manager's Report.

147


Accounting Policies


(f) Market price risk

(g) Counterparty risk

All of the sub‐funds' financial liabilities are payable in less than one year.

The Company invests principally in equity and fixed income securities. The value of the sub‐funds investment portfolio is

not fixed and may go down as well as up. This may be as a result of a specific factor affecting the value of an individual sub‐

fund or may be caused by general market factors (such as government policy or the health of the underlying economy)

which can affect the entire portfolio. The ACD seeks to manage these risks by adhering to investment guidelines and to

investment and borrowing powers set out in the Prospectus. In addition, the management of the Company complies with

the Collective Investment Schemes sourcebook (“COLL”), which include rules relating to investment holdings that are

designed to place limits on the sub‐funds investment concentration.

Transactions in securities entered into by the Company give rise to exposure to the risk that the counterparties may not be

able to fulfil their responsibility by completing their side of the transaction. The Investment Manager minimises this risk by

conducting trades through only the most reputable counterparties.

Counterparty risk is also managed by limiting the exposure to individual counterparties through adherence to the

investment spread restrictions included within the Company’s prospectus and COLL.

148

Directors approval

John Stainsby Director

22nd September 2021

Amanda Prince Director

22nd September 2021

In accordance with the requirements of the Financial Conduct Authority Sourcebook, the contents of this report have been

approved on behalf of AXA Investment Managers UK Limited by:

The ACD is responsible for the management of each portfolio in accordance with the Instrument of Incorporation, Prospectus

and COLL.

The ACD is also responsible for taking reasonable steps for the prevention and detection of fraud and other irregularities.


The Open‐Ended Investment Companies Regulations 2001 and the Collective Investment Schemes sourcebook (“COLL”) require

the ACD to prepare financial statements for each annual accounting period which give a true and fair view of the financial

position of the Company and of its net revenue and the net capital gains/(losses) on the property of the Company for the period.

In preparing the financial statements the ACD is required to:

• Select suitable accounting policies and then apply them consistently;

• Conform with the disclosure requirements of the Statement of Recommended Practice ‐ Financial statements of UK Authorised

Funds issued by the Investment Management Association (“IMA SORP 2014”) in May 2014, and amended in June 2017;

• Follow generally accepted accounting principles and applicable accounting standards;

• Keep proper accounting records which enable it to demonstrate that the financial statements as prepared comply with the

above requirements.

• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will

continue in operation.

The maintenance and integrity of the AXA Investment Managers UK Limited website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the

website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from

legislation in other jurisdictions.

Statement of the Authorised Corporate Director's ("ACD") Responsibilities

149

Aprince

Stamp

HSBC Bank PLC

22nd September 2021

Having carried out such procedures as we consider necessary to discharge our responsibilities as depositary of the Company, it

is our opinion, based on the information available to us and the explanations provided, that in all material respects the

Company, acting through the AFM:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Company’s shares and the

application of the Company’s income in accordance with the Regulations and the Scheme documents of the Company; and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Company.


• the Company’s cash flows are properly monitored and that cash of the Company is booked into the cash accounts in

accordance with the Regulations;

• the sale, issue, repurchase, redemption and cancellation of shares are carried out in accordance with the Regulations;

• the value of shares of the Company are calculated in accordance with the Regulations;

• any consideration relating to transactions in the Company’s assets is remitted to the Company within the usual time limits;

• the Company’s income is applied in accordance with the Regulations; and

• the instructions of the Authorised Fund Manager (“the AFM”), which is the UCITS Management Company, are carried out

(unless they conflict with the Regulations).

The Depositary also has a duty to take reasonable care to ensure that Company is managed in accordance with the Regulations

and Scheme documents in relation to the investment and borrowing powers applicable to the Company.

Statement of the Depositary’s Responsibilities in Respect of the Scheme and Report of the Depositary to the Shareholders of the AXA Distribution Investment ICVC (“the Company”) for the year ended 31st May 2021.

The Depositary must ensure that the Company is managed in accordance with the Financial Conduct Authority’s Collective Investment Schemes Sourcebook, the Open‐Ended Investment Companies Regulations 2001 (SI 2001/1228), as amended, the Financial Services and Markets Act 2000, as amended, (together “the Regulations”), the Company’s Instrument of Incorporation and Prospectus (together “the Scheme documents”) as detailed below.

The Depositary must in the context of its role act honestly, fairly, professionally, independently and in the interests of the Company and its investors.

The Depositary is responsible for the safekeeping of all custodial assets and maintaining a record of all other assets of the Company in accordance with the Regulations.

The Depositary must ensure that:

150

Opinion

We have audited the financial statements of AXA Distribution Investment ICVC (“the Company”) for the year ended 31 May 2021, which comprise the Statement of Total Return, the Statement of Changes in Net Assets Attributable to shareholders, the Balance Sheet, the related notes and the Distribution Tables, and the accounting policies and distribution policies of the Company. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 ‘The Financial Reporting Standard applicable to the UK and Republic of Ireland’.

In our opinion, the financial statements:

• give a true and fair view of the financial position of the Company comprising each of its sub‐funds as at 31 May 2021 and ofthe net revenue/expense and the net capital gains/losses on the scheme property of the Company comprising each of its sub‐funds for the year then ended; and

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report below. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the “FRC”) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Authorised Corporate Director’s (“the ACD”) use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the remaining sub‐funds’ ability to continue as a going concern for a

period assessed by the ACD, being the period of twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the ACD with respect to going concern are described in the relevant sections of

this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the

Company’s ability to continue as a going concern.

Other Information

The other information comprises the information included in the Annual Report other than the financial statements and our

auditor’s report thereon. The ACD is responsible for the other information contained within the Annual Report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly

stated in this report, we do not express any form of assurance conclusion thereon.


Independent Auditor's Report to the Shareholders of AXA Distribution Investment ICVC

151



Our responsibility is to read the other information and, in doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine

whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have

performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the rules of the Collective Investment Schemes Sourcebook of the

Financial Conduct Authority (the “FCA”)

In our opinion:

• the financial statements have been properly prepared in accordance with the Statement of Recommended Practice relatingto Authorised Funds, the rules of the Collective Investment Schemes Sourcebook of the Financial Conduct Authority and theInstrument of Incorporation;

• there is nothing to indicate that adequate accounting records have not been kept or that the financial statements are not inagreement with those records; and

• the information given in the ACD’s report for the financial year for which the financial statements are prepared isconsistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matter in relation to which the Collective Investment Schemes

Sourcebook of the Financial Conduct Authority requires us to report to you if, in our opinion:

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

the purposes of our audit

Responsibilities of the ACD

As explained more fully in the ACD’s responsibilities statement set out on page 150 the ACD is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the ACD determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the ACD is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the ACD either intends to wind up or terminate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance

is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non‐compliance with laws and regulations. We design procedures in line with

our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement

due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,

for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable

of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and

detection of fraud rests with both those charged with governance of the entity and management.

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Our approach was as follows:

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined

that the most significant are United Kingdom Generally Accepted Accounting Practice the Investment Management

Association’s Statement of Recommended Practice (“IMA SORP”), the FCA Collective Investment Schemes Sourcebook, theOEIC Regulations, the Company’s Instrument of Incorporation and the Prospectus.

• We understood how the Company is complying with those frameworks through discussions with the ACD and the Company’s

administrators and a review of the Company’s documented policies and procedures.

• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might

occur by considering the risk of management override, specifically management’s propensity to influence revenue andamounts available for distribution. We identified a fraud risk with respect to the incomplete or inaccurate income recognitionthrough incorrect classification of special dividends and the resulting impact to amounts available for distribution. We testedthe appropriateness of management’s classification of material special dividends as either a capital or revenue return.

• Based on this understanding we designed our audit procedures to identify non‐compliance with such laws and regulations.Our procedures involved review of the reporting to the ACD with respect to the application of the documented policies andprocedures and review of the financial statements to test compliance with the reporting requirements of the Company.

• Due to the regulated nature of the Company, the Statutory Auditor considered the experience and expertise of theengagement team to ensure that the team had the appropriate competence and capabilities to identify non‐compliance withthe applicable laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council’s website at https://www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Company’s Shareholders as a body, pursuant to Paragraph 4.5.12 of the rules of the Collective

Investment Schemes Sourcebook of the Financial Conduct Authority. Our audit work has been undertaken so that we might

state to the Company’s Shareholders those matters we are required to state to them in an auditor’s report and for no other

purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company

and the Company’s Shareholders as a body, for our audit work, for this report, or for the opinions we have formed

Ernst & Young LLP

Statutory Auditor

Edinburgh

22nd September 2021

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Classes of Shares

Valuation Point

Remuneration policy of the ACD

Details of the up to date Global Remuneration Policy are published online at www.axa‐im‐international.com/remuneration. This

includes the description of how remuneration and benefits are awarded for employees, and further information on the AXA IM

remuneration committee. A paper copy of the up to date Global Remuneration Policy is also available from the ACD free of

charge upon request.

Further Information

Significant Information

AXA IM’s Global Remuneration Policy, which has been approved by the AXA IM Remuneration Committee, sets out the

principles relating to remuneration within all entities of AXA IM (including the ACD) and takes into account AXA IM’s business

strategy, objectives, and risk tolerance, as well as the long‐term interests of AXA IM’s shareholders, employees and clients

(including the Funds). The AXA IM Remuneration Committee is responsible for determining and reviewing the AXA IM

remuneration guidelines, including the AXA IM Global Remuneration Policy, as well as reviewing the annual remuneration of

senior executives of the AXA IM Group and senior officers in control functions.

AXA IM provides both fixed and variable remuneration. An employee’s fixed remuneration is structured to reward

organisational responsibility, professional experience and the individual’s capability to perform the duties of the role. Variable

remuneration is based on performance and may be awarded annually on both a non‐deferred and, for certain employees, a

deferred basis. Non‐deferred variable remuneration may be awarded in cash or, where appropriate and subject to local laws

and regulation, in instruments linked to the performance of AXA IM funds. Deferred remuneration is awarded through various

instruments structured to reward medium and long‐term value creation for clients and AXA IM and long‐term value creation for

the AXA Group. AXA IM ensures appropriate balances between fixed and variable remuneration and deferred and non‐deferred


The Company can issue different classes of shares in respect of any Fund. Holders of Income shares are entitled to be paid the

revenue attributable to such shares, in respect of each annual or accounting period. Holders of Accumulation shares are not

entitled to be paid the revenue attributable to such shares, but that revenue is retained and accumulated for the benefit of

shareholders and is reflected in the price of shares.

The valuation point for each Fund is 12 noon on each dealing day (being each day which is a business day in London). Valuations

may be made at other times under the terms contained within the Prospectus.

The ACD has approved and adopted AXA IM’s Global Remuneration Policy, in accordance with the Regulations, which is

consistent with, and promotes, sound and effective risk management; does not encourage risk‐taking which is inconsistent with

the risk profiles of the Funds or the Instrument of Incorporation, and does not impair compliance of the ACD’s duty to act in the

best interests of each of the Funds.

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Further Information


(1) Excluding social charges

Remuneration to Identified Employee:

Risk Takers Senior Management Total

Fixed Pay and Variable Remuneration (£'000) 96,583 89,301 185,884

Number of employees 224 88 312

UK Identified Employee Remuneration:

Risk Takers Senior Management Total

Fixed Pay and Variable Remuneration (£'000) 20,696 13,192 33,888

Number of employees 48 13 61

Other Information

Report

Interim accounts period ended 30 November

Annual accounts year ended 31 May

Following the implementation of UCITS V in 2016, all authorised UCITS Managers are required to disclose information relating to

the remuneration paid to its staff for the financial year. The tables below provide an overview:

(3) Variable compensation, includes:

‐ the amounts awarded for the performance of the previous year and fully paid over the financial year under review,

‐ deferred variable remuneration,

‐ and long‐term incentives set up by the AXA Group.

Total amount of remuneration paid and / or allocated to all staff

for the year ended December 31, 2020(1)

Fixed Pay (2) (£'000) 211,310

Aggregate amount of compensation paid and / or allocated to risk takers and senior management whose activities have a

significant impact on the risk profile of investment vehicles

Aggregate amount of compensation paid and / or allocated to risk takers and senior management whose activities have a

significant impact on the risk profile of investment vehicles

Variable Pay (3) (£'000) 235,553

Number of employees (4) 2,516

(2)Fixed Pay Fixed Pay amount is based on 2019/20 compensation review final data

(4) Number of employees includes Permanent and Temporary contracts excluding internships (based on Staff list as of

31/12/2020)

The Instrument of Incorporation, Prospectus and the most recent and annual reports may be inspected at the office of the ACD which is also the Head Office of the Company and copies may be obtained upon application. Shareholders who have any complaints about the operation of the Company should contact the ACD or the Depositary in the first instance. In the event that a shareholder finds the response unsatisfactory they may make their complaint direct to the Financial Ombudsman Service at Exchange Tower, London E14 9SR.

The annual report of the Company will be published within four months of each annual accounting period and the report will be

published within two months of each accounting period.

155

Further Information


Data Protection

Effects of Personal Taxation

Risk Warning

The Securities Financing Transactions Regulation

Annual Management Charge

Preliminary Charge

Value Assessment

There is currently no initial charge on Class Z Shares, Class R Shares, Class I Shares, Class B Shares or Class A Shares.

Investors should be aware that unless their shares are held within an ISA, or switched between Funds in this OEIC, selling shares

is treated as a disposal for the purpose of Capital Gains tax.

An investment in an Open Ended Investment Company should be regarded as a medium to long term investment. Investors

should be aware that the price of shares and the income from them may fall as well as rise and investors may not receive back

the full amount invested. Past performance is not a guide to future performance. Investments denominated in currencies other

than the base currency of a fund are subject to fluctuation in exchange rates, which may be favourable or unfavourable.

The Securities Financing Transactions Regulation, as published by the European Securities and Markets Authority, aims to improve the transparency of the securities financing markets. Disclosures regarding exposure to Securities Financing Transactions (SFTs) or total return swaps required on all reports & accounts published after 13 January 2017. During the year to 31 May 2021 and at the balance sheet date, the Company did not use SFTs or total return swaps, as such no disclosure is

required.

AXA Investment Managers UK Limited, as ACD, will receive an Annual Management Charge out of the property for Defensive

Distribution Fund and Distribution Fund at the rate of 1.50% per annum for Class R Shares, 0.75% per annum for Class Z Shares,

0.40% per annum for Class B Shares, 0.50% per annum for Class A Shares, for Global Distribution Fund and Ethical Distribution

Fund at the rate of 1.50% per annum for Class R Shares, 0.75% per annum for Class Z Shares, 0.50% per annum for Class B

Shares and for Lifetime Distribution Fund at the rate of 0.45% per annum for Class Z Shares, 0.09% per annum for Class I Shares,

0.30% per annum for Class A Shares based on the net asset value of the relevant Fund calculated on a mid‐market basis. The

Annual Management Charge accrues monthly and is payable monthly in arrears. The maximum permitted Annual Management

Charge payable to the ACD is 2% per annum for Class R, Class Z and Class B Shares.

The details you have provided will be held on computer by the Funds’ Registrar but will not be used for any purpose except to

fulfil its obligations to shareholders.

It is our duty as Authorised Fund Manager (“AFM”) to act in the best interests of our investors. As part of fulfilling this duty, we need to consider whether the charges taken from our funds are justified in the context of the overall service and value that we provide to our investors.

The FCA have introduced new rules requiring the Boards of AFMs to consider robustly and in detail whether they are delivering value for money to their investors and to explain the assessment annually in a Value Statement made available to the public.

The Value Statement report is available on the AXA IM website: https://retail.axa‐im.co.uk/fund‐centre

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Documents

AXA Distribution Investment ICVC - Funds