and Audited Financial Statements · 2019. 7. 3. · John Fitzpatrick (Ireland) (Independent) Directors’ and Company Secretary’s interests in shares of the Company The Directors

ACPI Select UCITS Funds plc (an umbrella Company with segregated liability between sub-funds)

Annual Report and Audited

Financial Statements

For the financial year ended 31 March 2018

ACPI Select UCITS Funds plc

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Table of contents Page

Company information .......................................................................................................................................................................................... 3

Director’s report .................................................................................................................................................................................................. 4

Investment Manager’s report .............................................................................................................................................................................. 7

Report from the Depositary to the shareholders................................................................................................................................................ 32

Independent Auditors’ report to the shareholders of ACPI Select UCITS Funds plc ......................................................................................... 33

Statement of financial position .......................................................................................................................................................................... 36

Statement of comprehensive income ................................................................................................................................................................ 38

Statement of changes in net assets attributable to holders of redeemable participating shares ........................................................................ 40

Statement of cash flows .................................................................................................................................................................................... 42

Notes to the financial statements ...................................................................................................................................................................... 44

Schedule of investments ................................................................................................................................................................................... 62

Statement of significant portfolio movements (unaudited) ................................................................................................................................. 68

Appendix 1 – Remuneration disclosure (unaudited) .......................................................................................................................................... 73


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Company information Directors of the Company

Aaron Dunlop (United Kingdom) David Dillon (Ireland) (Independent) John Fitzpatrick (Ireland) (Independent) All Directors are non-executive

Registered Office

2nd Floor, 2 Grand Canal Square Grand Canal Harbour Dublin 2 D02 A342 Ireland

Manager Link Fund Manager Solutions (Ireland) Limited1


Investment Manager and Distributor ACPI Investments Limited Pegasus House 37- 43 Sackville Street London W1S 3EH United Kingdom

Administrator and Company Secretary

Link Fund Administrators (Ireland) Limited2


Independent Auditors

Deloitte Ireland LLP, Chartered Accountants and Statutory Audit Firm Deloitte & Touche House Earlsfort Terrace Dublin 2 D02 AY28 Ireland

Legal Advisor

Dillon Eustace 33 Sir John Rogerson’s Quay Dublin 2 D02 XK09 Ireland

Depositary

BNY Mellon Trust Company (Ireland) Limited One Dockland Central Guild Street IFSC Dublin 1 D01 E4X0 Ireland

Company Number 540964 (Registered in Ireland)

1Effective 6 November 2017, following an acquisition by Link Group, Capita Financial Managers (Ireland) Limited changed its trading name to Link Fund Manager Solutions (Ireland) Limited. 2Effective 6 November 2017, following an acquisition by Link Group, Capita Financial Administrators (Ireland) Limited changed its trading name to Link Fund Administrators (Ireland) Limited.


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Director’s report For the financial year ended 31 March 2018

The Directors of ACPI Select UCITS Funds plc (the “Company”) present herewith their Annual Report and Audited Financial Statements for the financial year ended 31 March 2018. The Company was incorporated on 12 March 2014 as an open ended umbrella investment company with variable capital and segregated liability between funds and was authorised by the Central Bank of Ireland as an Undertaking for Collective Investment in Transferable Securities (“UCITS”) pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, (S.I. No 352 of 2011) (as amended) (the “UCITS Regulations”). The Company is an umbrella type investment company with segregated liability between sub-funds. At the reporting date, there are three active sub-funds: ACPI Balanced UCITS Fund, ACPI Horizon UCITS Fund (formerly known as ACPI Focused UCITS Fund) and Q-ACPI India Equity UCITS Fund which launched on 8 June 2017. Effective 15 May 2017, ACPI Global Healthcare UCITS Fund (the “sub-fund”) closed. This decision was made following a review of the existing fund range, taking into account factors such as the relative size of the sub-fund’s assets. In addition to the above sub-funds, another two sub-funds of the Company were authorised by the Central Bank of Ireland which had yet to launch at the reporting date. ACPI Global Equity UCITS Fund was authorised on 24 March 2016, while Q-ACPI India Balanced UCITS Fund was authorised on 29 July 2016. Basis of preparation The audited financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union, Irish statute comprising the Companies Act 2014, the UCITS Regulations, and Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) UCITS Regulations, 2016 (the “Central Bank Regulations”). The format and certain wordings of the financial statements have been adapted from those contained in the Companies Act 2014 so that, in the opinion of the Directors, they more appropriately reflect the nature of the Company’s business as an investment fund.

Having considered the future plans for the Company, the Directors have reasonable expectation that the Company has adequate resources to continue its operational existence for the foreseeable future. Accordingly, the directors are satisfied that the going concern basis is appropriate for these financial statements.

Principal activities The Company is an open-ended investment company with variable capital and limited liability which has been authorised by the Central Bank of Ireland as a UCITS pursuant to the UCITS Regulations.

Accounting records The measures, which the Directors have taken to ensure that compliance with the requirements of sections 281 to 285 of the Companies Act 2014 with regard to the keeping of accounting records, are the adoption of suitable policies for recording transactions, assets and liabilities and the appointment of a suitable service organisation, Link Fund Administrators (Ireland) Limited (the “Administrator”). The accounting records of the Company are located at the offices of the Administrator.

Activities and business review An overview of the Company’s trading activities is detailed in the Investment Manager’s report for each sub-fund on pages 7 to 31.

Risks and uncertainties The principal risks and uncertainties faced by the Company are outlined in the prospectus. These risks include market risk comprising of currency risk, interest rate risk and market price risk, liquidity risk and credit risk. The Investment Manager reviews and agrees policies for managing each of these risks and these are detailed in note 16 to the financial statements.

Directors The names of the Directors during the financial year ended 31 March 2018 are set out below:

Aaron Dunlop (United Kingdom) David Dillon (Ireland) (Independent) John Fitzpatrick (Ireland) (Independent)

Directors’ and Company Secretary’s interests in shares of the Company The Directors and Secretary did not hold any shares in the sub-funds during the financial year ended 31 March 2018 (31 March 2017: nil) or at the financial year end.

Transactions involving Directors Other than as disclosed in note 26 to the financial statements, there were no contracts or arrangements of any significance in relation to the business of the Company in which the Directors had any interest, at any time during the year.

Transactions involving connected persons Chapter 10 of the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations, 2015 (the “Central Bank Regulations”) headed ‘Transactions involving Connected Persons’ states in regulation 41 that a responsible person shall ensure that any transaction between a UCITS and the management company or depositary to a UCITS; and the delegates or sub-delegates of such a management company or depositary (excluding any non-group company sub-custodians appointed by a depositary); and any associated or group company of such a management company, depositary, delegate or sub-delegate (“connected persons”) is conducted at arm’s length and is in the best interests of the unitholders of the UCITS.

The Manager is satisfied that there are arrangements (evidenced by written procedures) in place, to ensure that the obligations set out in regulation 41 of the Central Bank Regulations are applied to all transactions with connected persons; and the Board of Directors is satisfied that transactions with connected persons entered into during the year complied with the obligations set out in this paragraph.


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Directors’ report (continued) For the financial year ended 31 March 2018 Results of operations The results of operations for the year are set out in the statement of comprehensive income on page 38.

Distributions There were no dividends declared during the year (2017: nil).

Independent Auditors Deloitte Ireland LLP, Chartered Accountants and Statutory Audit Firm, have indicated their willingness to remain in office in accordance with section 383(2) of the Companies Act 2014.

Events after the reporting date There have been no events after the reporting date which impact on these financial statements other than those disclosed in note 29.

Corporate governance statement The Board of Directors of the Company has assessed and adopted the measures included in the voluntary Corporate Governance Code for Collective Investment Schemes and Management Companies as published by Irish Funds in December 2011.


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Investment Manager’s report


ACPI Global Healthcare UCITS Fund (the “Fund”) During the financial year in question, the Investment Manager and Distributor, ACPI Investments Limited, advised the Board that the assets of the Fund had fallen following a series of redemptions and accordingly it was not considered economically viable to continue the Fund. The Board therefore, on the advice of the Investment Manager and Distributor, made the decision to terminate the Fund effective 15 May 2017.


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Investment Manager’s report (continued) For the financial year ended 31 March 2018

ACPI Balanced UCITS Fund

Long term performance review

Q2 2017 The ACPI Balanced UCITS Fund (USD Institutional Share class, Net of fees) finished the second quarter +4.2% vs. +3.9% for the Lipper Cautious Index to leave the fund +10.8% vs. +8.0% on a year-to-date basis. Risk, as gauged by realised standard deviation, remained at 4.7% on a rolling 12 month annualised basis versus 5.2% versus the benchmark.

Since assuming management responsibilities for the Fund in December 2008, the R share class of the strategy with a 1.5% annual management charge has returned +76.7% net of fees versus +42.0% for the Lipper Cautious Index with an annualised standard deviation of 8.4% versus 9.0% for the Index.

Synchronised global growth, accommodative central bank policy and moderate corporate earnings growth broadly underpinned risk assets throughout the second quarter with performance gauges being relatively closely correlated whilst volatility was fairly muted. The MSCI AC World TR Index finished the second quarter +4.3% whilst the Barclays Global Aggregate Bond TR Index finished +2.6% to leave each benchmark +11.8% and +4.0% for the first half respectively.

The ACPI Balanced UCITS Fund had a solid second quarter, delivering equity-like returns despite running with an equity weighting of ~ 50% throughout the period. Strong relative performance from a number of the fund’s active equity managers in addition to the fund’s asset allocation positioning were the primary drivers to returns. Dispersion between style factors was once again a very dominant feature within markets throughout the second quarter with equities being broadly underpinned by the more growth-orientated segments of the market relative to value as investors started to question the cyclical-reflation trade which was a dominant feature over the back end of 2016.

The portfolio wasn't too impacted by this dominant factor-driven environment due to its broadly diversified style approach. At an aggregate level, 10 out of the Balanced Fund’s 16 active equity managers outperformed their respective benchmarks during the second quarter, however the strongest degree of outperformance pleasingly came from the Balanced Fund’s largest weighted managers such as the value-orientated Hermes Asia ex- Japan Fund (+9% vs. +6.2% MSCI Asia Pacific ex-Japan TR Index), the Veritas Global Equity Income Fund (+9.2% vs. +4.3% MSCI AC World TR Index) and the Sector Health Care Value Fund (+8% vs. +6.9% MSCI World Health Care TR Index) from a thematic perspective.

Against the blended direct benchmark comprising of 40% world equities (MSCI AC World TR Index), 55% fixed income (Barclays Global Aggregate Bond Index) and 5% cash, the fund (USD Retail Class) is +3.2% ahead on a year-to-date basis. Manager selection. I.e. exposure to active managers which have outperformed their respective benchmarks, has contributed +2.6%. Active asset allocation i.e. the degree to which we have shaped the skew of particular asset classes in the Balanced Fund has added a further +0.6%.

The broad based global reflation narrative which underpinned risk assets over the second half of 2016 has gradually waned over the first half of 2017 if one observes the recent price action between a host of style factors and asset classes most closely correlated to it. Within equities, the deep cyclical/ reflationary ends of the market which rallied so sharply following the US election underperformed the more defensively orientated ends of the market over the second quarter, whilst the higher growth ends of the global technology spectrum continued to make new highs. Yet despite this broad benchmarks still finished the quarter on a very strong footing.

Given the weighting it commands in broad indices, the US remained the primary driver to overall index returns (S&P 500 TR Index +3.1%) over the quarter with particularly strong performances from the Health Care (+7.1%) and Technology (+4.1%) sectors and sufficiently offsetting the negative returns of the Energy (-6.3%) and Telecoms (-7.0%) complexes. The foundation of the US equity market itself has changed quote materially over the first half, momentum and breadth appear to be rolling over whilst a number of broader gauges are also looking quite ominous at this stage of the cycle.


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ACPI Balanced UCITS Fund (continued)

Firstly, the US yield curve has flattened materially over the first half of the year with the difference in spread between the 10 yr yield and the 2yr yield now being at its tightest since the middle of last year at 0.90%. In theory if the economy is growing and if there remains hope that Trump’s reflation narrative is to succeed then the US yield curve should be steepening and certainly not flattening to the extent that it has recently. Other gauges such as the S&P 500 Retail ETF and the spread in performance between the market cap weighted and the equal weighted S&P 500 indices are also rolling over. Combined with the pullback in the Citi Economic Surprise Index over the period, markets do look as though they’re decoupling at present from weakening economic barometers.

Style factors have remained heavily to the fore within all markets throughout the second quarter and first half, a common feature over recent years and partly the result of unorthodox policy measures combined with the ever changing dynamics of the world’s economy. After a strong performance in the first quarter, Value (MSCI World Value Index +3.0%) underperformed Growth (MSCI World Growth Index +5.4%) during the second quarter as the Trump reflation trade which would typically underpin the more economically sensitive Value cohort floundered whilst suppressed bond yields underpinned the latter style. Financials (+6.1%), a traditional value-orientated sector, did however buck the trend on better news flow out of Europe in addition to the Fed’s announcement that it has approved the capital distribution plans of 34 US financial institutions following successful stress tests.

The Energy sector (MSCI World Energy –4.7%) was once again volatile over the period following a weak oil price (WTI –9.0% to $46p/b) which fell into a technical bear market on fears over excess supply and whether or not the members of OPEC would stick to their pledges to curb production. Over recent years however the Energy sector has had an ever declining net impact on overall market performance following the collapse in the oil price in late 2014 and against other sectors which have continued to grow, particularly Technology and Health Care. The Energy sector now accounts for only 7% of the S&P500 Index for instance, down from its highest weighting of 16% in early 2008. Although perhaps this has been overlooked by equity markets at present, the sector does however still account for a significant amount of the corporate debt market; accounting for approximately 20% of the US High Yield credit market alone for instance. The weakness in the oil price did have an impact here, with spreads in US High Yield Energy-related credit widening by +92bps from 448bps to 540ps by quarter end. This left the US High Yield Index +2.2% on the second quarter given the strong performance across the majority of the index’s other sectors.

Bond returns were closely correlated to those of equities with broad government and credit indices all advancing and spreads generally tightening. The Citi World Government Bond Index finished +2.9% and the Barclays Global Aggregate Corporate Bond Index finished +2.6% whilst the JP Morgan Emerging Market Bond Index returned +2.2% despite the political troubles in Brazil.

The positive correlation between bonds and equities is slightly odd given the very sharp divergence between hard and soft economic data within much of the world’s economy at present. Economic surprise data was broadly disappointing over the second quarter although it should be said that data points were being compared to relatively heightened readings over previous periods so it’s only natural to witness a period of consolidation and mean reversion in the trend.


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ACPI Balanced UCITS Fund (continued) Exhibit 2: Citi Economic Surprise Index G10 & Emerging Markets

Q3 2017 The ACPI Balanced UCITS Fund I USD Class finished the third quarter +2.5% vs. +3.3% for its benchmark, net of fees. This leaves the Fund +13.6% on a year-to-date basis, vs. +11.5% for the benchmark, net of all fees. Since assuming portfolio management responsibilities for the Fund in late 2008, the Retail USD Class of the Fund has returned +81.0% vs. +46.7% for the benchmark, net of all fees. The Institutional class has returned +93.0% using the actual performance of the Retail share class with the lower management fee of the Institutional class being retrospectively applied prior to its launch in April 2015. Volatility remained at 4.3% vs. 5.1% for the benchmark on a realised rolling 12 month annualised basis, versus its average of 8.3% vs. 8.9% for the benchmark since ACPI assumed responsibility for the Fund.

The third quarter was a relatively dull period from a relative sense with the Fund underperforming the direct benchmark by -20bps on the quarter net of fees. On a year-to-date basis the Fund remains +3% ahead of its direct benchmark net of fees with asset allocation contributing +60bps and manager selection contributing +240bps.

In summation a lacklustre quarter from our array of global equity managers detracted from relative returns after a very strong second quarter during which all outperformed. We would put this cohort’s third quarter’s underperformance down to residual cash positions and poor sector allocations during a period which saw an ongoing appetite for cyclicality and growth at any price, which are areas each manager tends to remain heavily underweight at present; (MSCI World) Energy +9.2%, Technology +8.5%, Industrials +5.7%, Financials +5.7% vs +4.8% for the Index. The Balanced Fund’s cash holding (~19%) was also a drag on performance during a period which saw steady asset price appreciation across the board.

Regionally speaking, we were quite enthused by the level of attribution from our positioning in Asia inclusive of Japan. The Asia ex-Japan allocation added +20bps from both manager selection and asset allocation (Hermes Asia ex-Japan Fund +7.4% vs. +5.9%, Pinebridge Asia ex- Japan Small Cap Equity Fund +8.9% vs. +5.9%), whilst in Japan both manager selection and asset allocation contributed +10bps each (Pinebridge Japan Small Cap Equity Fund +11.8% vs. 8.5%, Goodhart Michinori Fund +8.6% vs. +6.8%). The US exposure was relatively lacklustre during a period which saw momentum and growth-orientated elements of the market prosper and valuations become ever more stretched as previously outlined. Overall, five out of the fund’s fifteen active equity funds outperformed their respective benchmarks during the quarter, whilst seven remain ahead of their respective benchmarks on a year-to-date basis.

The Fund’s property allocation added +20bps to net performance with strong attribution from the fund’s direct holdings in two UK homebuilders and two REITs.


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ACPI Balanced UCITS Fund (continued) Within fixed income, asset allocation contributed +40bps to relative performance as we effectively sidestepped the degree of normalisation within rates during the month of September (CWGBI -1.2% in September) which saw 10-year German Bunds widen by +10bps to 0.46% and the US 10- year widen by +22bps to 2.3%. A good quarter from the Western Asset Macro Opportunity Bond Fund (+2.3%) also contributed meaningfully to performance with the fund’s positioning in EM currency and sovereign debt proving accretive against a backdrop of robust economic growth and a lower US Dollar (DXY -2.7%). The NB Corporate Hybrid Fund (+4.8% in USD Terms) was also a key contributor within the fixed income portfolio as the general reduction in credit risk premia continued to filter out across the European credit spectrum.

A general melt-up in asset prices continued over the third quarter which saw the S&P 500 record its eleventh consecutive monthly gain through to the end of September, only the second time in the last seventy years that this has happened. Better than expected global economic data, buoyant and broadly synchronised global economic growth and plentiful central bank liquidity have continued to underpin risk whilst any clear catalyst which has the ability to derail the current period of euphoria remains absent for the time being. On the economic growth side, all 45 countries tracked by the OECD are currently on course to expand this year, the most synchronised degree of global growth since 2010 and itself additionally spurred on by a weaker USD since it peaked in December 2016.

Currently 26 out of 27 of the world’s largest economies are in expansionary mode with PMI readings above 50 with only South Korea contracting (49.2). The average PMI for the Developed world is 54.2, a new post GFC crisis high, whilst from the Developing world it is at 51.7.

The MSCI AC World TR Index finished the period +5.2% to leave it +17.3% for the year. The third quarter marked the 9th consecutive quarterly gain since the -9.5% decline in Q3 of 2015 and is the longest stretch of quarterly gains since the index began in the mid-1990s. From a regional perspective and in local currency terms, Asia (Hang Seng Index +8.6%) and perhaps most markets within the developing world (MSCI EM TR Index +7.9%) were the lead stand out performing regions although the US wasn’t too far behind (S&P 500 TR Index +4.5%). In contrast, Europe ex-UK (+3.2%) was the relative laggard despite the cyclical upswing its economy is experiencing at present with the strength of the Euro (+3.4% vs. USD) impacting the more export-sensitive areas of the equity market. The UK, (MSCI UK TR Index +1.8%) was also a relative laggard over the period although currency also played its role in impacting headline numbers. Sterling (+1.1% on a trade weighted basis) rallied quite sharply against a number of major FX crosses (Cable +2.9%) as economic data points remained buoyant and hawkish comments (once again) from the Governor of the Bank of England led some to believe that the BOE would increase interest rates at its next policy meeting in November. This had a knock-on impact to the share prices of the export-sensitive large cap constituents of the index.

At the underlying sector and style levels, the oddity over the quarter was perhaps the degree to which Growth (MSCI World Growth Index +5.3%) continued to outperform Value (MSCI World Value Index +4.7%) at all regional levels despite the general move higher within rates and particularly at the longer ends of respective yield curves which would, under normal market conditions, underpin the latter style as illustrated below. We believe there are a number of dynamics which continue to cause this recent breakdown in the historical correlation between the yield curve and the relative performance between Value and Growth-orientated equities. We have broadly outlined this in the past but they are features today which, in our view continue to create a compelling market environment for a global balanced mandate which is able to capitalise from the clear risks and opportunities we observe within markets today.


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The chart below broadly outlines the ongoing degree of performance dispersion by style when decomposing the year-to-date performance of the broad S&P 500 Index. One can see that the year has so far been heavily influenced by momentum-driven and growth-orientated factors within the market and particularly skewed by the mega cap technology related companies within the market. Exhibit 10: US Equity Market Style Analysis 2017

In observing this in greater detail we can see from the chart below that nearly 51% of the S&P 500’s Indexes total return for 2017 has so far come from only 10% of the Index’s largest constituents. This is also a feature in other areas of the equity market today and although it is not being seen to the same degree as it is in the US, the top 50 stocks within the MSCI EAFE Index have accounted for ~30% of the Indices’ total return. This in itself can be a tricky backdrop against which active fund managers are able to outperform as the weighting these mega caps already command in a cap-weighted indices serve as an obstacle simply due to their size – it takes more NAV and thus active positioning within a portfolio to be more overweight an already large component of the index.


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ACPI Balanced UCITS Fund (continued) The indexes themselves therefore continue to get less diversified and more concentrated in their nature, not what a broad market passive equity instrument is theoretically there to provide. For instance the top 10 stocks in the S&P 500 Index ETF Tracker now represent ~20% of the Index. Many investors in an ETF often use an ETF to express a neutral view on the market but owning an ETF today represents the opposite, a holder is taking a significant momentum and overvaluation bias within their allocation, not the undiversified instrument many would perhaps believe.

We are also currently in a very momentum-led environment, a style factor which by nature is heavily cyclical and is basically valuation insensitive in the way it gains exposure. Momentum-led style factors effectively provide exposure to what has recently worked within the market. They therefore often struggle at the cyclical inflection points within markets and there are a number of risks we can observe when analysing those dominant trends today. Growth-orientated momentum strategies have benefited enormously during previous years as the frantic search for growth at any price has pushed valuations beyond any sensible level of sound judgement. We can observe this in the chart below which highlights the basic PEG Ratio (Price relative to the EPS Growth Rate) of growth-orientated equities in the US. Investors buying Growth-orientated equities today are broadly paying well above average valuations relative to the degree of earnings growth which is being generated by those companies. This has been a dominant and increasing trend over recent years, the near term risk to this trade remains the degree of assuredness which now manifests within this area of the market. So sure the holders of such equities are about the earnings growth profiles of these businesses, we believe that the vulnerability within this trade remains the degree to which the discount rate (government bond yields) which has underpinned this trade can move higher over the coming quarters.


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ACPI Balanced UCITS Fund (continued) Bonds also performed relatively well over the third quarter as quantitative easing programmes by the ECB and the BoJ continued and relatively mild cost pressures continued to exert their influence across the fixed income spectrum. The Barclays Global Aggregate Index finished +1.8% to leave it +6.0% for the year and currently on course to record its best yearly performance since 2009. Against a pro-risk backdrop the higher beta areas of the credit market witnessed strong gains with global high yield +6.3% in contrast to investment grade +5.9% whilst emerging market debt (+8.8%) was also strong against a weaker US Dollar (DXY -2.7%) and buoyant domestic economic growth.

Q4 2017 The ACPI Balanced UCITS Fund I USD Class finished the fourth quarter +3.2% vs. +2.6% for its benchmark, net of fees. This brings the 2017 calendar year performance of the Fund to +17.2%, vs. +14.4% for the benchmark, net of all fees. Since assuming portfolio management responsibilities for the Fund in late 2008, the Retail USD Class of the Fund has returned +86.4% vs. +50.4% for the benchmark, net of all fees. The Institutional class has returned +99.2% using the actual performance of the Retail share class with the lower management fee of the Institutional class being retrospectively applied prior to its launch in April 2015.

Volatility remained at 2.8% vs. 2.7% for the benchmark on a realized rolling 12 month annualized basis, versus its average of 8.2% vs. 8.8% for the benchmark since ACPI assumed responsibility for the Fund.

Although relative outperformance was quite front-end loaded in 2017 we were encouraged by the fund’s performance over the fourth quarter and indeed for the year as a whole, particularly when we consider the relatively moderate degree of risk we have run in the portfolio throughout much of the period. Equity exposure fluctuated around the ~55% level and the portfolio’s cash position varied between 10-20%, which was, in hindsight, a drag on aggregate returns against a relatively euphoric bull market within every conceivable asset class and a fixed income spectrum which gave scant real return potential over the majority of the year. The MSCI AC World TR Index finished the year +24%, so with just over half of the portfolio being exposed to equities we are pleased with the overall attribution from a number of the fund’s underlying active managers, in addition to the asset allocation calls within specific regions which have incrementally driven returns.

In summary and against the Fund’s direct static benchmark comprising 40% equities, 55% fixed income and 5% cash, the USD I Class delivered +0.3% in net outperformance over the fourth quarter, which in itself was a heavily stylized environment with the US being a very growth and momentum orientated environment, factors to which we remain heavily under exposed within the portfolio and which have in hindsight proved a headwind for our more value-orientated active managers in relative terms. This slight degree of underperformance was offset however by our overweight bias towards Asian bourses via specific manager expressions. Despite the feel good factor which permeated the US equity market the degree of dispersion was quite staggering over the quarter and indeed for the year as a whole. The spread between the best (Technology) and worst (Energy) performing sectors of the market was ~45%, dispersion we would not typically associate to a bull market, but which have in our view provided a number of investment opportunities from which we have steered the portfolio increasingly towards.

Over the calendar year of 2017, the fund delivered +3.8% in net outperformance, with attribution being more evenly balanced between manager selection which contributed +2% in outperformance whilst asset allocation added a further +1.3%. Overall in the fourth quarter, 6 out of the fund’s 13 active equity managers outperformed their respective benchmarks whilst this number increased to 8 out of 13 over the year as a whole. The most pronounced degrees of relative outperformance came from Asia, where following a sharp deceleration in economic activity in early 2016, a regional and broader global recovery led to one of the strongest recoveries in corporate earnings since the global financial crisis. Active stock opportunities are plentiful during such periods of distress and uncertainty and this correction was no different.

The Hermes Asia ex-Japan Fund (+46.4% vs. +37% MSCI Asia ex-Japan TR Index) was able to exploit the degree of pessimism which was priced into many lowly rated, yet higher quality cyclical stocks during this period, whilst we had taken the decision at the beginning of the year to maintain an overweight bias towards the region (9% vs. 4.5% Neutral Benchmark weighting) due to our conviction at the bottom-up level. Elsewhere, the Sanditon UK Fund (0% vs. +11.7% MSCI UK All-Share Index) performed relatively poorly given the manager’s more value orientated and defensive style skew against a broader UK market which continued to be driven by overseas earners at the expense of their more domestically orientated peers. This has led in our view to an interesting and heavily bifurcated market in the UK and is one where we see an array of compelling opportunities against a broader global market which appears to be fully valued. Patience and rigorous fundamental analysis remains vital here but we believe investors will be rewarded for this over the medium term.

Q1 2018 The ACPI Balanced UCITS Fund I USD Class finished the first quarter -1.3% vs. +0.2% for its benchmark, net of fees. Since assuming portfolio management responsibilities for the Fund in late 2008, the Retail USD Class of the Fund has returned +83.6% vs. +50.7% for the benchmark, net of all fees. The Institutional class has returned +96.7% using the actual performance of the Retail share class with the lower management fee of the Institutional class being retrospectively applied prior to its launch in April 2015.

Volatility increased to more normalised levels from the previous quarter to 5.6% vs. 5.4% for the benchmark on a realized rolling 12 month annualized basis, versus its average of 8.2% vs. 8.8% for the benchmark since ACPI assumed responsibility for the Fund.


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Q1 2018 (continued) The relative drags on overall performance came from both sides of the portfolio with the fund’s equity exposure detracting -120bps (gross) vs. –48bps from the Lipper Equity benchmark. The fixed income component of the portfolio detracted -31bps (gross) vs. +69bps whilst the fund’s overweight cash holding (~17% vs. 5%) wasn’t enough to offset the declines from the two core components of the portfolio. The ongoing weakness in the US Dollar (DXY -2.3%) remained a relative drag on the fund’s fixed income portfolio with the Lipper Fixed Income Index prospering well against this (+0.7%) and illustrates the degree to which international active money managers are overweight non-USD centres currently, particularly EM currencies which provided some degree of relative shelter; RUB +0.6%, ZAR +4.4%, BRL +0.2%. The primary support for global fixed income indices however was the Japanese Yen which rallied +5.7% versus the US Dollar and therefore had a significant impact on broader world bond indices due to the weighting it commands in major benchmarks; ~25% of the Citi World Government Bond Index for instance.

Performance at the underlying manager level was quite muted in relative terms over the first quarter with many of the core managers failing to add much in relative terms. Although the well owned and highly rated growth ends of the market appeared to wobble in March, they still provided a decent shelter overall (Technology +3.5%) in comparison to the broader market which finished in the red. This did detract from some of our managers’ relative numbers where positioning in such sectors remains modest. In essence, not owning enough growth and owning too much value at the underlying manager level probably summed up the frustration in the equity book over the quarter with the MSCI World Growth Index +0.7% vs. –3.0% MSCI World Value Index.

Overall, 5 out of the fund’s 13 active equity managers outperformed their respective benchmarks in the first quarter.

Volatility returned with a vengeance in the first quarter although not until after a very strong month for risk assets in January. The cause of the pullback could be one from a number of reasons, however the sheer over extendedness within markets in addition to bullish investor positioning, something we had touched upon only last quarter, was the probably the primary cause, we just needed a catalyst for markets to react to. As it turned out there was a confluence of catalysts, from a slightly more hawkish Fed, increasing wage pressures in the US, fears over an escalating trade war between the US and China in addition to broader geopolitical concerns all collectively unnerved sentiment during the second half of the quarter to leave the broad MSCI World TR Index – 1.3% overall, whilst bonds fared relatively well to finish +1.4%.

The degree of dispersion at the regional level was vast within equities with bourses in the UK (-7.3%) and Japan (-4.7%) falling into official correction territory (falling more than 10% from their recent highs) and giving all of January’s gains back by quarter end. Despite much of the unnerving news flow being quite US-focused (Trump, Facebook data scandal, Fed policy etc), its markets were quite contained relative to the rest of the world with the S&P 500 TR Index finishing -0.8%, whilst the growthier ends of the technology spectrum actually prospered and served as something of a defensive sector with the NASDAQ finishing +2.6%. The narrowness in the equity market was easily observable over the first quarter with ten of the largest capitalization companies in the Standard & Poor’s 500 accounting for 45% of the year-to-date performance of the index.

Emerging Markets (MSCI EM TR Index +1.4%) also fared relatively well despite the escalation in rhetoric between the US administration and China and the increased threat of a global trade war. EM currencies were particularly contained although much of this could be due to the general weakness in the Dollar with the Dollar Spot Index declining by 2.3% on the quarter whilst commodities underpinned broader sentiment.

Europe (MSCI Europe ex-UK TR Index -3.6%) was particularly challenging in local currency terms despite the general buoyancy in economic data. The absence of a domineering and high growth sector, unlike technology in the US, is a missing cog in this more value and quite export-orientated market. More recently the strength of the EUR (+2.7% in Q1 vs. the USD and +16% over TTM) has weighed on reported profitability for many of the continent’s major companies whilst the moderating pace of growth in China is also weighing on a number related European exporters. The US administration’s trade war rhetoric is also not helping sentiment towards the region, and although Trump has refrained from naming Germany explicitly during his recent ramblings, the nation’s trade (+€245bn) and current account (+€257bn) surpluses with the US remains in focus for the time being. The UK (-7.3%) also had a disappointing first quarter with the strength of Sterling (Cable +3.7%) weighing more heavily on many of the market’s more export orientated majors with British American Tobacco Plc -17.7%, HSBC Plc -13.2%, Reckitt Benckiser Plc -12.8%, Royal Dutch Shell Plc -9.9% and BP Plc -8.3%. UK small caps (-5.0%) with their more domestic orientation and growth drivers did provide some relative shelter against the broader currency effects which impacted large caps but it was still a broadly poor quarter for the region’s equity market. Investors it seems continue to shun the market for easily identifiable reasons such as the uncertainty surrounding Brexit and the political fragility, however equities are really pricing in a hard and imminent recession in the UK economy, the more recent underperformance of many of the large cap bellwethers has created compelling value across the market as we head into the second quarter.

In Asia (-0.6%), and after a very strong 2017 (+37%), the growth impetus paused to some degree with leadership in the market starting to show signs of change from last year’s technology-related behemoths to the more defensive areas of the market by quarter end. That said, it was still a good quarter overall for many of the leading tech companies with Alibaba +6.4%, Tencent +0.9%, Baidu -4.7% fairing ok. Markets in Japan (-4.7%) were impacted by domestic political uncertainty, trade war fears and the general risk-off tone which prompted a stronger Yen (+5.7% vs. USD). Foreign investor outflows, primarily futures trading to the tune of around Y8.2tr in Q1, were quite significant and impacted the more liquid large/mega cap ends of the market which led to some dispersion between large (Nikkei -5.1%) and small cap (-3.9%) indices.


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Q1 2018 (continued) Corporate bond markets weren’t able to provide a degree of shelter against the broader market dislocation although there was no real spill over into markets from a liquidity standpoint. Credit spreads modestly widened in investment grade credit (US IG +8bps to OAS 99.9) whilst the move at the long end of the yield curve (US 10 yr +33bps to 2.7%) also impacted the asset classes longer duration sensitivity. Overall carry wasn’t sufficient to offset the modest price erosion on a total return basis: LQD -2.9%. US high yield (HYG -1.9%) was also weak on a total return basis in the first quarter despite spreads tightening on an OAS basis; -14bps to 360.7 OAS. A resurgent oil price (+7.5%) wasn’t able to offset the degree of broader negativity. Overall however, global bond indices performed quite well (Citi World Government Bond Index +2.5%, Barclays Global Aggregate Bond TR Index +1.4%) although currency effects as pointed out earlier had a significant impact on reported numbers.

12 month attribution vs Lipper Cautious Index (to 31.12.2017)


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18



ACPI Investments Limited June 2018


19


ACPI Horizon UCITS Fund (the “Fund”)

Fund Performance The performance of the six live share classes over the period from 1 April 2017 - 31 March 2018 is shown below.

31-Mar-18 NAV FY 17-18 2018 YTD 2017 2016 2015

ACPI Horizon UCITS Fund USD* $14.10 3.45% -0.50% 7.42% 2.37% -5.84%

ACPI Horizon UCITS Fund Insti EUR* € 10.43 1.61% -0.99% 5.41% 1.50% -1.55%

ACPI Horizon UCITS Fund Insti GBP* £10.67 2.43% -0.78% 5.96% 1.96% -0.48%

ACPI Horizon UCITS Fund Retail EUR* € 10.67 1.19% -1.18% 4.75% 3.07% -

ACPI Horizon UCITS Fund Insti+ USD* $10.20 1.97% -0.26% 2.24% - -

ACPI Horizon UCITS Fund Insti USD* $9.77 - -2.32%

*Please note the following share class inception dates:

Share Class ISIN Inception Date

USD (Restricted) IE00BKXGWD15

01 June 2015

GBP (Institutional)

IE00BYQNYX13

22 October 2015

EUR (Institutional)

IE00BYQNYL90

23 October 2015

EUR (Retail) IE00BYQNY641

22 March 2016

USD (Institutional+)

IE00BYX19M21 26 May 2017

USD (Institutional)

IE00BYQNY534

19 January 2018

The performance of relevant global indices over the same period is displayed below:

Index FY 17-18 2018 YTD 2017 2016 2015

Global Equities - MSCI World USD Hedged (WHANWIHD) 10.61% -2.00% 19.13% 9.39% 2.01%

IG Fixed Income - Citi WorldBIG USD Hedged (SBAHC) 2.45% -0.11% 2.91% 3.88% 0.94%

Global Hedge Funds (HFRXGL) 3.20% -1.02% 5.99% 2.50% -3.64%

The since-inception of the USD restricted share class is +3.02% as at 31-Mar-2018 as displayed below:


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ACPI Horizon UCITS Fund (continued)

Portfolio & Performance Commentary Please note that any of the following references to specific absolute performance and contribution numbers are in relation to the USD (restricted) share class.

Over the period from 1 April 2017 - 31 March 2018 the fund returned 3.45% (USD share class).

The average asset class weightings and their respective performance contribution for the period under review are displayed in the charts below.

Allocation and contribution data displayed for the fund’s USD share class.

Q2 2017 The fund gained 1.0% in April, driven by the performance of our equity book, which added 75bps and was fuelled by strong performance across most stock markets.

With the exception of LyondellBasell and Deutsche Konsum which detracted a total of 22bps, there was no significant losing position. Volkswagen prefs added 16bps as the stock gained 6.6% primarily because of better-than-expected Q1 earnings, posting an operating profit of EUR4.4bn.

Italian financials: Unicredit and Intesa, benefitted performance, adding a total of 18bps following the outcome of the first round of French elections. P2P Global Investments and VPC Specialty Lending added a combined 16bps to performance as the former gained more than 11% in April after the company announced the purchase of some of its own stock and the intention to review management contracts and consider additional discount-management measures.

The fund gained 0.74% in May, largely driven by the performance of our equity book, which added 52bps and was fuelled by continued strong performance across most stock markets.

Real estate names recovered as benchmark yields continued to contract on the basis of a softer inflationary outlook and a lack of confidence in the Trump administration’s ability to execute on their agenda. Thus, Deutsche Konsum added 13bps while Adler contributed 12bps to the fund’s performance in May. The latter also benefitted from a strong set of numbers which saw a substantial increase in funds from operations compared to Q1 2016. Alstria, PRS Reit and Bellway added another 17bps in aggregate from real estate related businesses. UK TV company ITV detracted the most at 19bps as a result of weaker than expected results and a softer outlook. Volkswagen preferreds lost 11bps for the portfolio and this position was closed, realising a profit as we felt that the trade had run its course.

The performance of our fixed income book was broadly flat, adding 9bps in total.

The fund gained 0.46% in June, driven by equities, which contributed 50bps, while fixed income detracted 13bps.

Our long position in the EUR added a further 12bps as the currency continued to strengthen against the USD.


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Q2 2017 (continued) Within the equity book, Oracle added 33bps as the stock rose more than 10% in June. The company reported quarterly numbers, with higher-than-expected growth in its cloud business fuelling the stock as a result. Nike also reported strong quarterly figures and the stock closed the month up almost 12%, adding 23bps.

The fund‘s exposure to Italian banks added 23bps in performance as the country began to address the problems in its financial sector with a combination of restructurings and closings of ailing institutions. Our exposure to pharma, especially Roche and Sanofi detracted some performance in June but, overall, we were very positive on the prospects for the sector largely due to its attractive valuation level and earnings outlook.

Q3 2017 The fund gained 0.94% in July, of which 45bps were contributed by equities, 34bps by currencies, 10bps by credit and 5bps by alternatives.

Within equities, Vipshop was the best performer contributing 9bps as the stock gained 16% on renewed rumours about M&A and a closer cooperation with JD. Our book of Italian names (Telecom Italia, Unicredit and Intesa) continued to perform well, adding 20bps in total on the back of strong numbers out of the domestic financial sector. Metro Wholesale lost 8bps for the month as the market was still trying correctly to price the two companies that used to form Metro AG. Altria also lost 8bps as tobacco stocks came under pressure as a result of a FDA initiative to reduce nicotine content in tobacco products. We believe this will benefit large incumbents in the longer-run and, thus, the fund established a tactical position in the stock.

The fund‘s long position in EUR was the single-best performing asset in July as the currency gained 3.6% during the month.

Fixed income performed flat with BBVA coco bonds adding 5bps on the back of a strong market whilst NewLook detracted 7bps, owing to the difficult retail environment in the UK.

The fund lost 1.17% in August, all of which was contributed by equities as credit showed a flat performance for the month. The negative return and underperformance versus the market was largely driven by idiosyncratic factors as three stocks detracted more than 1% in aggregate.

Energy XXI detracted 58bps for the fund in August. This is a company that came out of a restructuring with a clean balance sheet whereby debt dropped from USD3.7bn to USD77m with substantial cash on hand, positive cash flow and a declining cost base. The share price drop was caused by an aggressive legacy shareholder selling down his position and oil prices largely moving sideways.

Vipshop detracted 27bps during August as short-term speculation about a potential M&A transaction involving the company did not materialise. Despite some short-term headwinds such as rising traffic acquisition costs, the business is still highly relevant in China, competing with Tmall, JD and Taobao and is attractively valued at only 11x next year‘s earnings compared to 24x for Alibaba and 66x for JD.

Nike stock lost 10% over August, detracting 24bps as the weak reporting season for bricks & mortar retail continued. The sector is by far the worst performer this year on concerns that the Amazonification will continue to hurt sports and apparel stocks as margins and revenue growth decline.

The fund gained 0.81% in September, 89bps of which were contributed by equities, 10bps by fixed income while 15bps were detracted by alternatives; mainly option hedging positions and the fund‘s position in Gold bullion.

Value experienced a revival in September as the performance of the so-called FANG stocks began to slow down. Deutsche Konsum REIT was the strongest contributor to returns during the month, adding 20bps as the stock gained 12%. The company is making progress in acquiring new properties, extending existing and negotiating new leases and increasing the leverage in the portfolio. Energy names as a group delivered a strong performance too on the back of oil‘s 9.4% rise. Thus, the fund‘s positions in Lyondell, an oil services ETF and the STOXX600 oil&gas ETF contributed a combined 37bps to performance.

Swiss-listed closed end fund HBM Healthcare contributed 6bps as it gained over 3% in September. Its underlying listed holdings continue to perform well and its NAV performance is very solid (20% this year). Nevertheless, the entity trades at a discount of ~24% to NAV, unduly penalising the fund for what is a very strong private equity book. The manager believes that there is substantial optionality not only in the listed but also in the private companies and, thus, the discount is unjustified.

Q4 2017 The fund gained 0.63% in October, 46bps of which were contributed by equities, 2bps by fixed income, 25bps by currencies while 10bps were detracted by alternatives. The latter category lost money mainly in the hedging allocations (S&P500 put options) as well as via long gold positions and the Treasury/Bund rate spread position. The credit book performance was flat for the month with some gains from Golden Star convertibles and BBVA negated by the negative performance of New Look.

The ~23% long dollar (vs EUR, GBP and JPY) position performed very well, adding 25bps to the fund‘s performance. At the time, the trend continued to be in favour of further dollar strength which supported the fund‘s largest single position. The US tax reform, tighter US monetary policies compared to the euro zone and Japan as well as strong economic growth all favoured the dollar.

Equities performed well, driven by strong underlying markets. The fund‘s key thematic positions attributed strongly to performance. Thus, the HBM Healthcare fund added 28bps after gaining 8.6% over the month on the back of strong performance of some of its underlying holdings. GLG Japan added 21bps, driven by very strong performance of Japanese equity markets, following Abe‘s landslide election victory. The Nikkei 225 index gained 8% in October as a result.

The fund lost 1% in November, primarily driven by currencies and credit whilst equities contributed little over the period.


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Q4 2017 (continued) The fund‘s overweight position in US dollar, expressed via a short EUR, GBP and JPY, suffered as the dollar index lost 1.6% in November. Some uncertainty surrounding the US tax reform and concerns about the path of future interest rates put a lid on the greenback‘s performance. However, as US growth was solid and underpinned by low inflation, the dollar should ultimately benefit, in particular after it lost almost 10% to date in 2017. Overall, the long dollar position detracted almost 50bps in November.

Credit lost a similar amount, as New Look, Frontier and several others detracted value whilst the majority of bonds traded unchanged.

The purchasing power of UK consumers weakened, driven by rising inflation (RPI at 4% yoy), caused by the weaker GBP, and relatively stagnant wages. At the same time, consumer credit appeared maxed out, leaving only little room for people to increase spending. As a result, consumer-oriented sectors suffered from downgrades and profit warnings. With benchmark interest rates going sideways and credit spreads near record-low levels, there was not much upside left for most corporate bonds.

Equity performance overall was flat with Nike, Roche, Altria, HBM and Vulcan adding 63bps and Energy XXI, Oracle, Adler and GLG Japan detracting 57bps.

The fund gained 1.54% in December, solely from its equity allocation as fixed income markets went sideways over the month. The single-largest contributor was Vipshop, attributing 43bps to performance after a joint JD/Tencent investment into the company that saw the stock rising by more than 40%.

Our combined exposure to oil and oil service stocks contributed another 17bps as oil prices continued to rally, driven by rising demand, falling inventories and a weaker dollar.

Real estate company Adler added 16bps as the stock recovered, following a period of weaker stock price performance. Fundamentally, the company made much progress over the past months in terms of reducing non-core assets, executing some large-scale refinancing and reshaping the management team of the business.

Altria attributed 10bps as the stock continued its recovery. The Japanese exposure in the form of the GLG Japan Corealpha fund attributed 20bps as the country’s stock markets rallied substantially.

Q1 2018 The fund gained 2% in January, solely from its equity allocation which attributed 2.1%.

The fund‘s long dollar position detracted 9bps as the currency continued to weaken and the DXY Dollar index lost more than 3%. This position was subsequently closed as the stop loss level was hit.

Similar to previous months, fixed income performance was flat for the reporting period with very little volatility across the bond book. Golden Star converts were the largest detractor, losing 5bps whilst Santander perps added 3bps.

In a month that was strong for equities globally, stocks attributed all the returns of the fund. Most positions gained while only very few detracted from performance. Adler Real Estate was the largest detractor at -7bp. As yields continued to rise in the US and Europe, rate-sensitive areas such as real estate and income proxies tended to underperform the market.

Value names fared very well in January and the fund‘s 4.3% position in the Vulcan Value Fund added 34bps as a result. Swiss-based HBM Healthcare continued its positive performance streak, gaining more than 7% and adding 26bps to the fund‘s performance. HBM is up more than 50% since the beginning of 2017, benefitting from strong underlying performance and M&A amongst its largest holdings.

The exposure to the technology sector (Oracle, Alphabet, Microsoft and Priceline) also delivered substantial performance of more than 50bps in January.

The fund lost 1.5% in February, a strong relative result for a month in which the MSCI World index was down 4.3% and the HFRX hedge fund index lost 2.4%.

The fund‘s positioning had become increasingly defensive as equity markets overshot on the upside, especially in December and January, and sentiment turned extremely bullish amidst record-low volatility.

The fund significantly increased its holdings in US Treasuries to approximately 30% of NAV. These holdings were spread across various maturities, ranging from one to 30 years. Following the surge in yields across the yield curve, Treasuries became interesting from an income perspective on the very short end and attractive as a hedging tool on the medium and longer end. As inflationary concerns in the market appeared somewhat overpriced, yields had room to fall, which would benefit the fund‘s positions.

There were no major detractors or contributors to performance in February with the oil services ETF being the most significant negative position, detracting 38bps as a result of a 13.5% monthly decline, driven by weaker oil prices. As oil prices lost 12% peak-to-trough in February, this was only a natural reaction but did not deter from the bullish prospects for oil and oil and services over the medium to longer term.

Despite the carnage in equity markets, 20% of the fund‘s stock positions performed positively, with Booking Holdings (formerly Priceline) being the best performer, gaining 6.4% after a strong set of results.

The fund lost 0.9% in March, another strong relative result for a month in which the MSCI World index ($ hedged) was down 2.5%, the HFRX hedge fund index lost 1% and bond markets gained 0.9%.

The fund‘s positioning continued to be defensive as the correction in equity markets was still evolving, primarily driven by news flow around the trade conflict between the US and China and to a lesser extent relating to the Facebook data privacy issue.


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Q1 2018 (continued) Equities detracted 88bps with Vulcan Value Fund, GLG and Oracle losing a combined 71bps. Oracle reported numbers in March that were at the lower end of the market‘s expectations although the longer-term investment case is broadly unchanged. Tech stocks in general suffered from profit-taking, especially in the FAANG names, which was triggered by the Facebook issue. As a result, technology detracted 38bps from March performance which was (relatively) pleasing, considering that the S&P500 was down 2.7%. Healthcare (HBM), real estate (Adler, Alstria) and the fund‘s European exposure in general helped in March, generating positive performance.

The fixed income book‘s performance was flat in March helped by the fund‘s high exposure to US Treasuries which added 25bps in performance. The fund held approximately 30% in Treasuries that gained in value as yields dropped in March.

The data below are presented as at 31-Mar-2018

Market Summary

Q2 2017 April was a strong month for world equity markets that were up for the sixth month in a row, a textbook example of the strong Nov-Apr seasonality historically observed in markets. Overall, the MSCI World index gained 1.3% and was up 7.3% for the year. Unlike 2016, the rally was driven by European and emerging markets, both of which appeared to show better intermediate prospects than the US, where investors’ imagination was somewhat deflated after the initial defeat of the healthcare reform and the subsequent delay of the tax reform.

The Eurozone continued to outperform the US. Thus, the Eurostoxx 50 index was up 8.2% for the year (1.7% in April) whilst the S&P500 gained 0.9% for a year-to-date advance of 6.5%.

However, both regions were outperformed by emerging markets, which recovered from their US-election induced retracement. The MSCI EM equity index gained 2% in April and was up 13.4% for the year, approximately one third of which is attributable to a weaker dollar versus EM currencies.

Complacency was what probably best described the state of markets in May. Volatility was extremely low and no event seems to be able to rattle markets in any serious way. Valuations were stretched but yields declined and corporate earnings were good enough for equities to continue to grind higher.

This narrow leadership especially in the US stock market was a clear concern, but what was also quite puzzling was that almost every asset class made money, which is very unusual. Thus, gold, bonds and stocks were going up at the same time and each seemed to reflect a somewhat different scenario.


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Q2 2017 (continued) June saw the first signs of a consolidation across equity markets as the so-called FAANG stocks began to lose some of their sparkle as their momentum vanished. Whilst this was a concentrated group of stocks only, it was significant as they were responsible for a disproportionately high share of the market‘s overall gains this year. The risk of increased regulatory scrutiny in combination with lofty valuations of some of these stocks provided a formidable headwind to upside potential.

Sovereign bond yields tested the lower bounds of their trading ranges before reversing higher as a result of better-than-expected economic data. The Citi Economic Surprise index reached a two-year low in June.

Q3 2017 July was a strong month for risk assets as the MSCI World equity index gained 2.3%, emerging markets gained 5.5% and US high-yield bonds gained 1.2%. Much of that was owed to a weak dollar, where the DXY dollar index lost another 2.9%; the steepest decline since March 2016. Thus, the dollar lost more than 9% against this currency basket of its most important trading partners year-to-date. Trump‘s lack of progress on his reform agenda was the main culprit for the wavering confidence in the US currency in addition to continued low inflation and a Fed that was less hawkish than it used to be earlier in the year.

Further rate hikes from the Fed were still not priced in for the remainder of the year, as growth was picking up and synchronising around the World, other central banks had a policy of ending uber-easy monetary conditions. This change in relative dynamics is what drove currencies the other way compared to the immediate post-election period. However, the oversold dollar and strengthening EUR, made a countermove in the short term very likely. The underlying bias in equity markets remained bullish for the time.

August was the first negative month for World equities since October 2016 albeit the loss was small at only 0.1% for the MSCI World Equity index. Regional dispersion was meaningful, however, and largely driven by currency moves. Thus, European markets lost 1.1% (broad Stoxx 600 index) as the Euro gained another 60bps.

Continued dollar weakness was a substantial driving factor behind solid US equity performance year-to-date as the DXY dollar index was down almost 10% as of the end of August. A EUR-based investor in US stock markets would have lost almost 2% this year had he not hedged his currency exposure back to EUR.

Due to the weak US dollar and even weaker Trump administration, emerging markets were recording their strongest year since 2009 coming from a relatively low valuation level on the basis of negative sentiment, primarily around China. As the country managed to return to healthy growth, avoiding the widely expected burst of a perceived credit bubble, Chinese and EM equities started to re-rate accordingly. However, as the dollar begun to look severely oversold, the risk of a pullback in EM increased.

The positive market performance continued in September as the MSCI World gained 2.1%, driven by the performance of Europe where the German DAX rose by 6.4% after a three-month losing streak. The Euro Stoxx 50 rose by over 5% with regional performance varying to a large degree. The outcome of the German elections as well as the weaker euro helped local stock markets although Angela Merkel will find it more difficult to govern going forward with a parliament as splintered as the current one.

The European currency lost almost 1% as a result over the month but was down 2.6% from its September peak. A deteriorating political picture in Europe in addition to a Yellen-led Fed that is more determined to tighten financial conditions should be incrementally more supportive for the dollar that lost more than 12% this year peak-to-trough via the dollar index. This sell off appears overdone considering the strengthening fundamental picture with a higher probability of a successful tax reform and a currently 70% likelihood of a rate hike in December. Also, on a micro level, the economy appears to accelerate with an ISM index at 60.8, the highest level since 1984. Therefore, the risk of bond yields rising further is not to be dismissed which could have negative implications for equity markets at some point.

Q4 2017 Strong equity market performance in October was supported by a fairly strong earnings season, progress on US tax reform and no hawkish surprises from any of the large central banks. Thus, the MSCI World equity index gained 1.8%, emerging markets rallied another 3.5% and the Stoxx600 was up 1.8%.

At the time it appeared that the US tax reform was moving ahead as expected in terms of sticking to its timeline as more details emerged during the month, driving performance of several sub sectors.

Earnings season was robust with earnings growth reported of 7.2% and sales growth at 5.6%. Growth rates continued to come down as the basis effect of 2016 was washing out over time. From earnings report commentaries one can glean that wage cost pressures were increasingly becoming a problem for companies as they were cited as one of the major worries as it pertains to the outlook.

Central banks delivered their decisions in-line with market expectations. The ECB announced a taper on it asset purchase programme and postponed any rate hike until late 2018/early 2019. The Fed left rates unchanged while the BoE increased the base rate as expected by 0.25%, adding a dovish message.

Equity markets initially stalled in November because of uncertainty around the US tax reform but were reassured of its success mid-month. Indices recovered but, internally, sector rotation was pronounced. Thus, investors took profits in technology stocks and sectors that were priced for growth and bought financials that would benefit from loosening regulation. Regional bank stocks in particular reacted positively to these developments. The regional bank index gained almost 4% while the NASDAQ 100 gained 1.9%. The so-called FANG stocks lost 1.3% in November as a result of this profit-taking.

Macro-economic numbers out of most regions were solid with Chinese retail sales and industrial production figures strong at 10% and 6%, respectively, although slightly below consensus expectations. Local stock markets did well in the first half of November but then started to sell off somewhat into month-end.


25



Q4 2017 (continued) European markets consolidated in November with most of them down for the month. The Euro Stoxx 50 lost 2.8% while the DAX shed 1.6% on fears about a growth slowdown in Asia.

Nevertheless, actual economic data in Europe remained strong with retail sales expanding by 3.7% and Eurozone PMI indices at 56, firmly in expansionary territory.

The month of December and the year 2017 both ended firmly positive for risk assets with equities and commodities bid and bonds and the dollar offered.

It was an exceptional year in terms of upside capitulation on one hand but also a year one would typically expect late in the business cycle. Volatility was crushed and dropped from one record low to another, growth equities and emerging market stocks were sought after and rallied and the crypto craze went into overdrive.

At the same time, interest rates did not make a new cycle low but, instead, turned higher and closed the year at the levels where they started in 2017 following the trajectory of inflation expectations and the Fed outlook.

With absolute rate levels still low, investors discounted the risk of outright tighter central bank policies, especially as the ECB and the BoJ are still easing substantially. Instead, the focus was on GDP and earnings growth expectations and the implications of the US tax reform on corporate earnings and investment activity.

Strong economic indicators across the board suggested the World economy was on solid ground and growth expectations were rising accordingly with inflation only accelerating modestly in most places. Economic momentum appeared fairly synchronised for the first time in a long while.

Q1 2018 January started the year as spectacularly as 2017 ended with the MSCI World equity index gaining more than 5% despite a precipitous rise in yields across the yield curve. Thus, the US 10-year bond yield rose by 30bps to 2.7% whilst the German 10-year yield rose by 27bps to 0.7%.

Strong macro-economic reports out of the US and the Eurozone continue to support a reflationary environment that is increasingly causing headwinds for risk assets. As bonds and bond proxies such as REITS, real estate, dividend stocks etc. are beginning to underperform, the risk is that growth-oriented sectors trading at high earnings multiples are beginning to underperform and could experience substantial multiple contraction.

Whilst the US dollar continued to trade weaker in January, likely with the implicit support of the US Treasury, the currency is expected to strengthen on the back of solid fundamentals and some pushback from the ECB and others that are trying to prevent their currencies from rising further. A stronger dollar could entail underperforming US and emerging markets but outperforming European equities that have been trading sideways for the last weeks.

February firmly ended the various record streaks of uninterrupted positive performance as markets became more nervous about the perceived risks from rising inflation.

Kicked off by higher-than-expected wage growth in the US, subsequent CPI and PMI figures confirmed solid momentum although some of it can be traced back to one-off events such as adverse weather conditions. Nevertheless, investors used the opportunity to take some profits and, thus, the MSCI World index lost 4.3% in February, whereas Europe lost even more at 4.7% and is now down 1.9% for the year (EuroStoxx50). German and UK equity markets suffered the most, both down (3.7% and 5.9%, respectively). Strengthening local currencies were the key factors behind these moves.

Emerging markets suffered from contagion, down 4.7% for February, although we noted relative strength in Russia and Brazil as oil prices and resurging domestic economies helped.

Negative performance across most asset classes continued in March as World equities lost another 2.4%, driven primarily by a slump in US stocks that suffered from concerns about a looming trade war as well as worries about the fallout from the Facebook data-sharing issues.

European markets lost almost as much as their US counterparts and merely emerging markets managed slightly to outperform by losing only 2%.

As oil gained almost 6%, commodity-exporting countries such as Russia and Brazil outperformed substantially. Industrial metals, on the other hand, performed poorly, losing 4.5% in March and -7.2% since the beginning of the year.

As the equity market correction continued and macro data did not suggest rising inflationary pressures, bond markets performed better, gaining 1.2% for the month. This was in stark contrast to the generally bearish sentiment towards fixed income. As the yield curve continued to flatten, investors expected the Fed to abandon their ambitious rate hike schedule at some point, reflecting the risks emanating from the US-China trade conflict as well as the somewhat slower job market.


26



Outlook

• Highly indebted major World economies are characterised by steady GDP growth, low inflation and re-synchronising growth patterns, whilst the lack of fiscal stimulus puts the burden on central banks, which will keep interest rates relatively low for a long time to come.

• Valuations are high but US equities benefit from improving growth. Rising wages and a stronger dollar could provide EPS headwinds. Positive sentiment was the missing ingredient to push stocks closer to the tops in this cycle.

• Earnings growth continues to be robust and the economic backdrop of the eurozone is strong. Interest rates will stay low for the foreseeable future, while macro risks include a looming trade war.

• Japanese equity markets are still amongst the cheapest globally and for as long as yields remain anchored, the market remains attractive, although currency volatility induces substantial equity volatility in the country.

• In the medium term, yields can rise further as expectations for growth and inflation improve. As yields rise, US Treasuries are becoming more suitable as a hedging instrument again whilst providing some income.

ACPI Investment Managers Limited June 2018


27


Q-ACPI India Equity UCITS Fund (the “Fund”)

Long term performance review


28


Q-ACPI India Equity UCITS Fund (continued)

JUNE 2017

• The S&P BSE-200 Index closed the calendar month ended June 30 at 4817.40 for a total return of -0.9% in INR and -1.4% in USD. The fund delivered-2.6% return in USD for the month. The S&P BSE Mid Cap Index lost -0.03% and the S&P BSE Small Cap Index gained +2.0% (price returns in USD). The INR depreciated by 0.5% against USD during the month.

• Foreign flows typically set the price of Indian equity assets. FIIs were buyers for 9 out of 21 trading days in June with net purchases amounting to USD 561 million for the month. Local investors bought USD 1.4 billion but, despite three years of successive inflows into equity markets, retail investors in India continue to be dramatically underweight equity as an asset class.

• The Fund built the portfolio by owning an interest in 18 companies. For the month, 4 of the 18 stocks (22%) owned by the Fund had positive price returns compared to 76 of the 200 stocks (38%) in the S&P BSE-200 Index. The month-end cash level in the Fund is 19.7%.

JULY 2017

• The S&P BSE-200 Index ended July at 5,100.00 for a total return of +5.87% in INR and a total return of +6.67% in USD. The Q-ACPI India Equity Fund returned +3.75% in USD during the month. The S&P BSE Mid Cap Index gained +5.8% and the S&P BSE Small Cap Index gained +5.2% (price returns in USD). The INR appreciated by 0.75% against USD during the month.

• Foreign flows typically set the price of Indian equity assets. FIIs were buyers for 13 out of 21 trading days in July with net purchases amounting to USD 803 million for the month while local investors bought USD 1.8 billion. However, despite three years of successive inflows into equity markets, Indian retail investors continue to be underweight equity as an asset class.

• The portfolio currently holds interest in 18 companies. In July, 14 of the 18 stocks (78%) owned by the Fund had positive price returns compared to 150 of the 201 stocks (75%) in the S&P BSE-200 Index. The month-end cash level in the Fund was 19.5%.

AUGUST 2017

• The S&P BSE-200 Index ended the month at 5,050.55, providing a total return of -0.97% in INR and -0.62% in USD. The Fund generated a -1.80% USD return for August. The S&P BSE Midcap Index gained +1.3% and the S&P BSE Small Cap Index lost -0.3% (price returns in USD). The INR appreciated by 0.35% against USD during the month.

• • Foreign Institutional Investor (FII) flows heavily influence the price of Indian equity assets and FIIs were buyers for only 6 out of 21

trading days in August, with net sales amounting to US$2.0 billion for the month. Local investors bought US$2.8 billion of Indian equities, but despite three years of inflows into domestic equity markets, Indian retail investors continue to be significantly underweight equity as an asset class.

• The Fund owns an interest in 18 companies. During August, 8 of the 18 stocks (44%) owned by the Fund delivered positive price returns, compared to 76 of the 201 stocks (38%) in the S&P BSE-200 Index. At month-end, cash represented 19.0% of the Fund’s assets.

SEPTEMBER

• The S&P BSE-200 Index ended the month to 30th September at 4,991.32, providing a total return of -1.17% in INR and -3.28% in USD. The fund generated a -1.92% return (in USD) for September. The S&P BSE Midcap Index lost -2.8% (in USD) and the S&P BSE Small Cap Index lost -1.4% (in USD). The INR depreciated by 2.18% against the USD during the month.

• Foreign Institutional Investor (FII) flows heavily influence the price of Indian equity assets. FIIs were net buyers for only 4 out of the 21 trading days in September - with aggregate net sales of US$1.8 billion during the month. Domestic investors bought US$2.7 billion of Indian equities during the month, but despite three years of successive inflows into equity markets, Indian retail investors remain underweight equity as an asset class.

• The Fund owns shares in 18 companies. During September, 7 of these 18 stocks (39%) delivered positive price returns, compared to 84 of the 201 stocks (42%) in the S&P BSE-200 Index. At month-end, cash represented 19.5% the Fund’s assets.

OCTOBER 2017

• The S&P BSE-200 Index ended the month to 31st October at 5298.08, providing a total return of 7.05% in INR and 6.15% in USD. The fund generated a 5.94% return (in USD) during October. The S&P BSE Midcap Index gained 8.6% (in USD) and the S&P BSE Small Cap Index gained 10.4% (in USD). The INR appreciated by 0.84% against the USD during the month.

• Foreign Institutional Investor (FII) flows heavily influence the price of Indian equity assets. FIIs were net buyers for only 8 out of the 20 trading days in October - with aggregate net purchases of US$0.5 billion during the month. Domestic investors bought US$1.5 billion of Indian equities during the month, but despite three years of successive inflows into equity markets, Indian retail investors remain underweight equity as an asset class.

• The Fund owns shares in 20 companies. During October, 18 of these 20 stocks (90%) delivered positive price returns, compared to 175 of the 201 stocks (87%) in the S&P BSE-200 Index. At month-end, cash represented 13.2% of the Fund’s assets.


29



NOVEMBER 2017

• The S&P BSE-200 Index ended the month to 30th November at 5,285.06, providing a total return of -0.25% in INR and 0.20% in USD. The fund generated a -0.43% return (in USD) for November. The S&P BSE Midcap Index gained 2.2% (in USD) and the S&P BSE Small Cap Index gained 3.8% (in USD). The INR appreciated by 0.45% against the USD during the month.

• Foreign Institutional Investor (FII) flows heavily influence the price of Indian equity assets. FIIs were net buyers for 14 out of the 22 trading days in November - with aggregate net purchases of US$3.0 billion during the month. Domestic investors bought US$1.6 billion of Indian equities during the month, but despite three years of successive inflows into equity markets, Indian retail investors remain underweight equity as an asset class.

• The Fund owns shares in 20 companies. During November, 7 of these 20 stocks (35%) delivered positive price returns, compared to 95 of the 201 stocks (47%) in the S&P BSE-200 Index. At month-end, cash represented 14.1% of the Fund’s assets.

DECEMBER 2017

• The S&P BSE-200 Index ended the month to 31st December at 5,462, providing a return of 3.3% in INR and 4.4% in USD. The fund generated a 3.74% return (in USD) for December. The S&P BSE Midcap Index gained 6.5% (in USD) and the S&P BSE Small Cap Index gained 6.7% (in USD). The INR appreciated by 1.01% against the USD during the month.

• Foreign Institutional Investors (FIIs) - who heavily influence the price of Indian equity assets - were net buyers for 10 of the 20 trading days in December, but with aggregate net sales of US$0.9 billion during the month. Domestic investors bought US$1.3 billion of Indian equities during the month, but despite three years of successive inflows into equity markets, Indian retail investors remain underweight equity as an asset class.

• The Fund owns shares in 19 companies. During December, 15 of these 19 stocks (79%) delivered positive price returns, compared to 160 of the 201 stocks (80%) in the S&P BSE-200 Index. At month-end, cash represented 10.9% the Fund’s assets.

JANUARY 2018

• The S&P BSE-200 Index ended the month to 31st January 2018 at 4,812, providing a total return of +2.9% in INR and 3.2% in USD. The fund generated a 3.25% return (in USD) during January. The S&P BSE Midcap Index lost -2.3% (in USD) and the S&P BSE Small Cap Index lost -2.4% (in USD). The INR appreciated by 0.35% against the USD during the month.

• Foreign Institutional Investor (FII) flows are a key component in determining the price of Indian equities. FIIs were net buyers on 17 out of the 22 trading days in January - with aggregate net purchases of US$2.2 billion during the month. Domestic investors bought US$1.4 billion of Indian equities during the month, but Indian retail investors remain underweight equity as an asset class.

• The Fund owns shares in 19 companies. During January, 9 of these 19 stocks (47%) delivered positive price returns, compared to 76 of the 201 stocks (38%) in the S&P BSE-200 Index. At month-end, cash represented 11.0% the Fund’s assets.

FEBRUARY 2018

• The S&P BSE-200 Index ended the month to 28th February at 4,591.54, providing a total return of -4.4% in INR and -6.7% in USD. The fund generated a -6.9% return (in USD) for February. The S&P BSE Midcap Index lost 6.7% (in USD) and the S&P BSE Small Cap Index lost 5.3% (in USD). The INR depreciated by 2.43% against the USD during the month.

• Foreign Institutional Investor (FII) flows heavily influence the price of Indian equity assets. FIIs were net buyers for only 4 out of the 19 trading days in February - with aggregate net sales of US$1.7 billion during the month. Domestic investors bought US$2.5billion of Indian equities during the month, but despite three years of successive inflows into equity markets, Indian retail investors remain underweight equity as an asset class.

• The Fund owns shares in 19 companies. During February, 2 of these 19 stocks (11%) delivered positive price returns, compared to 50 of the 201 stocks (25%) in the S&P BSE-200 Index. At month-end, cash represented 13.4% the Fund’s assets.

MARCH 2018

• The S&P BSE-200 Index ended the month to 28th March at 4,432.62, providing a total return of -3.3% in INR and -3.4% in USD. The fund generated a -4.60% return (in USD) for March. The S&P BSE Midcap Index lost -3.5% (in USD) and the S&P BSE Small Cap Index lost -6.2% (in USD). The INR depreciated by 0.12% against the USD during the month.

• Foreign Institutional Investor (FII) flows, which heavily influence the price of Indian equity assets, were positive for 12 out of the 19 trading days in March - with aggregate net purchases of US$1.8 billion during the month. Domestic investors bought US$1.2 billion of Indian equities during the month, but despite three years of successive inflows into equity markets, Indian retail investors remain underweight equity as an asset class.

• The Fund owns shares in 19 companies. During March, 3 of these 19 stocks (16%) delivered positive price returns, compared to 52 of the 201 stocks (26%) in the S&P BSE-200 Index. At month-end, cash represented 13.3% the Fund’s


30



Outlook

• For the Indian bond markets, the government announced its borrowing program for the first 6 months of the financial year starting April 2018. In the past, the government generally borrows 60-65% of the full year requirements in the first six months. This year, however, the government announced it would borrow just 48% of its full year needs between April and September. With that short-term ease in paper supply, bond yields fell (the 10y benchmark yield fell by c30bps in one day) and bond prices had their best day for years.

• However, with GST collections still not showing any rapid turnaround (20% lower than the average monthly estimates projected by the government), revenue collection may fall short and make it difficult to adhere to the budgeted 3.5% fiscal deficit target.

• The banking crisis in India just got worse. After months of news reports highlighting bad loans made by (mostly) government-owned (Public Sector Undertaking) banks and a massive fraud at India’s second largest Public Sector bank, it is now the turn of India’s largest private-sector bank, ICICI, to showcase its skills of alleged favouritism. The dreadful environment in the banking sector in the short-run may hamper loan growth in the system due to increased levels of lender risk aversion.

• On the political front, elections held from mid-February in three states in the north-eastern part of India resulted in a sweep for the BJP, which was non-existent in this region of India just five years ago. However, on 14th March, the BJP lost all 3 seats that were up for re-election in the crucial state of Uttar Pradesh, a drastic reversal of the BJP’s record victory a year ago in the UP state elections. The BJP’s massive win in the northeast followed by a shocking loss in UP, have introduced a factor of political uncertainty to the outcome of the next national election due to be held before May 2019. India has attracted significant capital flows over the last four years due to a perception of a reform-oriented, stable political regime. Any significant reversal in the political fortunes of the ruling party might trigger a sharp selloff.

• The havoc caused in rural India due to the demonetization in November, 2016 continues to show up in larger government pay outs to the rural sector and in street protests by farmers. Time – and a good monsoon – will heal this disruption. Meanwhile, Skymet, a private weather forecaster, has projected a “normal” monsoon in the country for 2018.

• Company earnings growth remains poor, so equity returns over the last four years have been driven by PE expansion. Private capex which saw a significant decline post the Lehman collapse, remains non-existent and large government spending is the key variable holding-up GDP growth rates. Capacity uitilisation amongst companies is estimated at c70% and Quantum do not see any evidence of companies planning large capacity expansion. The badly thought-out demonetisation scheme and the poor implementation of the Goods and Services Tax has dented demand, possibly pushing back a recovery in capex by 18-24 months.

• Despite all the near-term headwinds, Quantum continues to believe that India is a great investment destination. Indeed, we consider ourselves to be the original ‘India bull’ with a history that spans 27 years or more. India’s robust internal consumption patterns have offset the often miserable performance of the various governments that have held power during the past three decades. It is this domestic consumption story that makes Quantum so positive about the secular Indian growth story. India has some world class managements running world class businesses and there is a highly underpenetrated and strongly growing domestic demand across goods and services.

• However, we also strongly believe that it is imperative to maintain a value-based investment discipline. Quantum’s company-level valuation models assume a 6.5% rate of real GDP growth over the long term – and we value the businesses of Indian companies against this macro backdrop. As ‘value’ investors, Quantum believes it is important to understand the environment under which the companies that we research and choose to own are likely to operate.

• Our long-term value based research process has forced us to trim or exit stocks raising cash levels in the fund. Markets have shown early signs of increasing levels of risk aversion. At the current juncture, we continue to suggest an underweight allocation on India and suggest an allocation of 75% to 100% of what our investors think their long-term weighting ought to be. If the market were to fall on fear of bad news, we will quickly evaluate the long-term impact on those underlying businesses, deploy the exiting cash hoard and potentially request that investors allocate more capital to India.


31



Asset allocation (as at 31.03.2018)

ACPI Investments Limited June 2018


The accompanying notes form an integral part of these financial statements

37

Statement of financial position As at 31 March 2017

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund

ACPI Global Healthcare

UCITS Fund Total Note USD USD USD USD Assets Financial assets at fair value through profit or loss 3 - Transferable securities 11,598,821 30,918,174 4,005,865 46,522,860 - Collective investment schemes (“CIS”) 61,955,622 9,142,173 - 71,097,795 - Financial derivative instruments 214,702 511,271 19,500 745,473 Cash and cash equivalents 4 10,483,786 3,631,033 377,450 14,492,269 Securities sold receivable 2(j) 1,209,619 - - 1,209,619 Subscriptions receivable 540,396 4,026,897 - 4,567,293 Dividends receivable 43,802 17,611 4,303 65,716 Interest receivable 52,227 195,578 - 247,805 Prepaid expenses 6,609 473 - 7,082 Total assets 86,105,584 48,443,210 4,407,118 138,955,912 Liabilities Financial liabilities at fair value through profit or loss 3 - Financial derivative instruments 407 129,818 - 130,225 Redemptions payable 849,021 4,231,034 154,723 5,234,778 Spot contracts - 120 - 120 Performance fee 7 - 41,852 - 41,852 Investment management fee 6 81,100 54,564 6,070 141,734 Management fee 5 5,056 2,751 298 8,105 Administration fee 8 25,007 10,382 2,058 37,447 Audit fee 9 19,927 11,491 7,791 39,209 Depositary fee 9 22,372 11,620 16,313 50,305 Directors’ fees 11 3,881 2,100 513 6,494 Other expenses payable 24,020 22,360 7,742 54,122 Total liabilities (excluding net assets attributable to holders of redeemable participating shares) 1,030,791 4,518,092 195,508 5,744,391 Net assets attributable to holders of redeemable participating shares 85,074,793 43,925,118 4,211,610 133,211,521



38

Statement of comprehensive income For the financial year ended 31 March 2018

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund1

Q-ACPI India Equity

UCITS Fund2 Total USD USD USD USD USD Investment income Dividend income 612,599 633,161 6,729 62,077 1,314,566 Interest income 237,323 778,340 11 824 1,016,498 Other income 8,324 3,994 10,436 3,902 26,656 Net gain on financial assets and financial liabilities at fair value through profit or loss and foreign exchange 3 11,480,329 3,352,080 49,884 51,440 14,933,733 Total investment income 12,338,575 4,767,575 67,060 118,243 17,291,453 Expenses Investment management fee 6 1,296,816 625,942 4,518 58,291 1,985,567 Management fee 5 55,562 26,103 119 2,195 83,979 Performance fee 7 - 81,679 - - 81,679 Administration fee 8 116,885 75,671 - 78,133 270,689 Audit fee 9 12,671 7,396 - 5,834 25,901 Depositary fee 10 61,024 45,760 11,970 38,110 156,864 Directors’ fee 11 33,720 15,004 - 3,711 52,435 Other expenses 210,295 98,759 6,209 36,012 351,275 Total expenses 1,786,973 976,314 22,816 222,286 3,008,389 Fee cap re-imbursement - - - 100,000 100,000 Net investment income/(expense) 10,551,602 3,791,261 44,244 (4,043) 14,383,064 Finance costs Interest expense 8,695 10,079 393 67 19,234 Total finance costs 8,695 10,079 393 67 19,234 Profit/(loss) for the year 10,542,907 3,781,182 43,851 (4,110) 14,363,830 Taxation Withholding tax on dividends 19 59,448 88,174 1,633 - 149,255 Capital gains tax - - - 3,829 3,829 Increase/(decrease) in net assets attributable to holders of redeemable participating shares from continuing operations 10,483,459 3,693,008 42,218 (7,939) 14,210,746

Gains and losses arise solely from continuing operations with the exception of ACPI Global Healthcare UCITS Fund which discontinued operations during the year.There were no gains/losses in the year other than the increase/(decrease) in net assets attributable to holders of redeemable participating shares. 1 ACPI Global Healthcare UCITS Fund fully redeemed on 15 May 2017. 2 Q-ACPI India Equity UCITS Fund launched on 8 June 2017.



39

Statement of comprehensive income For the financial year ended 31 March 2017

ACPI Balanced

UCITS Fund ACPI Horizon UCITS Fund


UCITS Fund Total USD USD USD USD Investment income Dividend income 687,909 405,263 86,270 1,179,442 Interest income 36,829 673,618 - 710,447 Other income 43,002 - - 43,002 Net gain on financial assets and financial liabilities at fair value through profit or loss and foreign exchange 3 7,177,115 1,750,393 311,921 9,239,429 Total investment income 7,944,855 2,829,274 398,191 11,172,320 Expenses Investment management fee 6 917,422 468,320 71,870 1,457,612 Management fee 5 57,186 23,606 3,520 84,312 Performance fee 7 - 59,129 - 59,129 Administration fee 8 153,052 64,014 9,954 227,020 Audit fee 9 23,108 11,785 8,084 42,977 Depositary fee 10 45,621 25,296 26,307 97,224 Directors’ fee 11 21,605 9,473 1,546 32,624 Other expenses 164,147 63,275 17,035 244,457 Total expenses 1,382,141 724,898 138,316 2,245,355 Net investment income 6,562,714 2,104,376 259,875 8,926,965 Finance costs Interest expense 917 5,113 581 6,611 Total finance costs 917 5,113 581 6,611 Profit for the year 6,561,797 2,099,263 259,294 8,920,354 Withholding tax on dividends 19 8,579 63,004 20,527 92,110 Increase in net assets attributable to holders of redeemable participating shares from continuing operations 6,553,218 2,036,259 238,767 8,828,244 All amounts relate to continuing operations. There were no gains/losses in the year other than the increase in net assets attributable to holders of redeemable participating shares.



40

Statement of changes in net assets attributable to holders of redeemable participating shares For the financial year ended 31 March 2018

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund1

Q-ACPI India Equity

UCITS Fund2 Total USD USD USD USD USD Net assets attributable to holders of redeemable participating shares at the start of the year 85,074,793 43,925,118 4,211,610 - 133,211,521 Increase/(decrease) in net assets attributable to holders of redeemable participating shares from continuing operations 10,483,459 3,693,008 42,218 (7,939) 14,210,746 Issue of redeemable participating shares 74,959,579 19,182,504 - 7,017,749 101,159,832 Redemption of redeemable participating shares (13,070,788) (2,356,902) (4,253,828) (1,771,995) (21,453,513) Net assets attributable to holders of redeemable participating shares at the end of the year 157,447,043 64,443,728 - 5,237,815 227,128,586 1 ACPI Global Healthcare UCITS Fund fully redeemed on 15 May 2017. 2 Q-ACPI India Equity UCITS Fund launched on 8 June 2017.



41

Statement of changes in net assets attributable to holders of redeemable participating shares For the financial year ended 31 March 2017

ACPI Balanced



UCITS Fund Total USD USD USD USD Net assets attributable to holders of redeemable participating shares at the start of the year 80,913,715 26,404,325 5,071,605 112,389,645 Increase in net assets attributable to holders of redeemable participating shares from continuing operations 6,553,218 2,036,259 238,767 8,828,244 Issue of redeemable participating shares 26,931,812 27,139,843 69,616 54,141,271 Redemption of redeemable participating shares (29,323,952) (11,655,309) (1,168,378) (42,147,639) Net assets attributable to holders of redeemable participating shares at the end of the year 85,074,793 43,925,118 4,211,610 133,211,521



42

Statement of cash flows For the financial year ended 31 March 2018

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund1

Q-ACPI India Equity

UCITS Fund2 Total USD USD USD USD USD Cash flow from operating activities Increase/(decrease) in net assets attributable to holders of redeemable participating shares from continuing operations 10,483,459 3,693,008 42,218 (7,939) 14,210,746 Adjustment for: - Dividend income (612,599) (633,161) (6,729) (62,077) (1,314,566) Interest income (237,323) (778,340) (11) (824) (1,016,498) Other income (8,324) (3,994) - (3,902) (116,220) Withholding taxes 59,448 88,174 1,633 156 149,411 Interest expense 8,695 10,079 393 67 19,234 Net operating cash flow before change in operating assets and liabilities 9,693,356 2,375,766 37,504 (174,519) 12,032,107 Net (increase)/decrease in financial assets at fair value through profit or loss (59,913,555) (20,537,126) 4,025,365 (4,542,177) (80,967,493) Net decrease in financial liabilities at fair value through profit or loss 254,076 271,099 - 1,731 526,906 Net decrease/(increase) in other receivables 1,190,211 (301,685) - (23,080) 865,446 Net increase /(decrease) in other payables 3,210,270 (70,274) (35,494) 53,384 3,157,886 Cash (used in)/from operations (45,565,642) (18,262,220) 4,027,375 (4,684,661) (64,3485,148) Dividend received 560,632 527,799 9,399 61,180 1,159,010 Interest received 161,742 777,339 11 824 939,916 Other income received 8,324 3,994 - 3,902 116,220 Interest paid (8,695) (10,079) (393) (67) (19,234) Net cash (used in)/from operating activities (44,843,639) (16,963,167) 4,036,392 (4,518,822) (62,289,236) Cash flow from financing activities Issue of participating shares 70,487,250 23,209,401 - 7,017,749 100,714,400 Redemption of participating shares (9,782,601) (6,587,936) (4,408,551) (1,766,275) (22,545,363) Net cash from/(used in) financing activities 60,704,649 16,621,465 (4,408,551) 5,251,474 78,169,037 Net increase/(decrease) in cash and cash equivalents 15,861,010 (341,702) (372,159) 732,652 15,879,801 Cash and cash equivalents at the start of the year 10,483,786 3,631,033 377,450 - 14,492,269 Cash and cash equivalents at the end of the year 26,344,796 3,289,331 5,291 732,652 30,372,070 Cash and cash equivalents 26,344,796 3,289,331 5,291 732,652 30,372,070 Supplemental disclosure of cash flow information Cash received during the year for interest 161,742 777,339 11 824 939,916 Cash received during the year for dividends 560,632 527,799 9,399 61,180 1,159,010 Cash paid during the year for interest 8,695 10,079 393 67 19,234 1 ACPI Global Healthcare UCITS Fund fully redeemed on 15 May 2017. 2 Q-ACPI India Equity UCITS Fund launched on 8 June 2017.



43

Statement of cash flows For the financial year ended 31 March 2017

ACPI Balanced



UCITS Fund Total USD USD USD USD Cash flow from operating activities Increase in net assets attributable to holders of redeemable participating shares from continuing operations 6,553,218 2,036,259 238,767 8,828,244 Adjustment for: Dividend income (687,909) (405,263) (86,270) (1,179,442) Interest income (36,829) (673,618) - (710,447) Other income (43,002) - - (43,002) Withholding taxes 8,579 63,004 20,527 92,110 Interest expense 917 5,113 581 6,611 Net operating cash flow before change in operating assets and liabilities 5,794,974 1,025,495 173,605 6,994,074 Net decrease/(increase) in financial assets at fair value through profit or loss 1,171,833 (16,873,217) 676,131 (15,025,253) Net decrease in financial liabilities at fair value through profit or loss (692) (236,734) (51,324) (288,750) Net (increase)/decrease in other receivables (1,207,503) 1,471 787 (1,205,245) Net increase in other payables 29,268 84,287 21,790 135,345 Cash from/(used in) operations 5,787,880 (15,998,698) 820,989 (9,389,829) Dividend received 635,528 331,809 71,189 1,038,526 Interest received (15,398) 728,435 - 713,037 Other income received 43,002 - - 43,002 Interest paid (917) (5,113) (581) (6,611) Net cash from/(used in) operating activities 6,450,095 (14,943,567) 891,597 (7,601,875) Cash flow from financing activities Issue of participating shares 25,063,745 19,923,733 69,616 50,510,642 Redemption of participating shares (27,268,346) (3,398,398) (1,013,655) (37,133,947) Net cash (used in)/from financing activities (2,204,601) 16,525,335 (944,039) 13,376,695 Net increase/(decrease) in cash and cash equivalents 4,245,494 1,581,768 (52,442) 5,774,820 Cash and cash equivalents at the start of the year 6,238,292 2,049,265 429,892 8,717,449 Cash and cash equivalents at the end of the year 10,483,786 3,631,033 377,450 14,492,269 Cash and cash equivalents 10,483,786 3,631,033 377,450 14,492,269 Supplemental disclosure of cash flow information Cash received during the year for interest (15,398) 728,435 - 713,037 Cash received during the year for dividends 644,107 394,813 91,716 1,130,636 Cash paid during the year for interest 917 5,113 581 6,611


44

Notes to the financial statements For the financial year ended 31 March 2018

1. General information

ACPI Select UCITS Funds plc (the “Company”), was incorporated on 12 March 2014 as an open-ended umbrella investment company with variable capital and segregated liability between sub-funds. The Company has been authorised in Ireland as an Undertaking for Collective Investment in Transferable Securities (“UCITS”) pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 and Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations, 2016 (the “Central Bank Regulations”).

At the reporting date, the Company has 3 live sub-funds; ACPI Balanced UCITS Fund, ACPI Horizon UCITS Fund (formerly known as ACPI Focused Equity UCITS Fund) and Q-ACPI India Equity UCITS Fund which launched on 8 June 2017. Effective 15 May 2017, ACPI Global Healthcare UCITS Fund (the “sub-fund”) closed.This decision was made following a review of the existing fund range, taking into account factors such as the relative size of the Sub-fund’s assets.In addition to the live sub-funds, another two sub-funds of the Company were authorised by the Central Bank of Ireland and which had yet to launch at the reporting date. ACPI Global Equity UCITS Fund was authorised on 24 March 2016, while Q-ACPI India Balanced UCITS Fund was authorised on 29 July 2016.

The investment objective of the ACPI Balanced UCITS Fund is to outperform the USD Libor 1 year Index by 300 basis points per annum. The investment objective of the ACPI Horizon UCITS Fund is to outperform the USD Libor 1 year Index by 300 basis points per annum over a business cycle and the investment objective of the Q-ACPI India Equity UCITS Fund is to achieve long term capital appreciation by investing in the listed equities of Indian companies that are in a position to benefit from the anticipated growth and development of the Indian economy and its markets.

2. Significant accounting policies

(a) Basis of preparation

The audited financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union, Irish statute comprising the Companies Act 2014, the UCITS Regulations, and the Central Bank Regulations. The financial statements have been prepared on a going concern basis and under the historical cost convention, except for financial assets and financial liabilities classified at fair value through profit or loss that have been measured at fair value.

The preparation of financial statements in accordance with IFRS as adopted by the European Union requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the year. Actual results could differ from those estimates and these differences could be material.

(b) Standards, interpretations and amendments issued and effective

IFRS 9 – Financial Instruments – Classification and Measurement

IFRS 9, published in July 2014, will replace the existing guidance in IAS 39 - Financial Instruments: Recognition and Measurement (“IAS 39”). It includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39.

IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018. The adoption of IFRS 9 does not have any impact on the Company.

IFRS 15 – Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes.

IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018. This standard doew not have any impact on the Company.

(c) Foreign currency

(i) Functional and presentation currency

The functional currency of the sub-funds is United States Dollar (“USD”). The Company has adopted the USD as its presentation currency.

(ii) Foreign currency translation

Assets and liabilities denominated in currencies other than the functional currency of the sub-funds are translated into the functional currency using exchange rates prevailing at the reporting date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the reporting date exchange rates of assets and liabilities, denominated in foreign currencies, are recognised in the statement of comprehensive income in the year in which they arise.


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Notes to the financial statements (continued) For the financial year ended 31 March 2018 2. Significant accounting policies (continued)

(d) Financial assets and financial liabilities at fair value through profit or loss

(i) Classification

The Company classifies its financial assets and financial liabilities into the categories below in accordance with IAS 39.

• Financial assets or financial liabilities held for trading are those acquired or incurred principally for the purposes of selling or repurchasing in the short term. This category includes derivatives.

• Financial assets and financial liabilities designated at fair value through profit or loss upon initial recognition are those that are managed and their performance evaluated on a fair value basis in accordance with the Company’s documented investment strategy.

The Company has classified all of its financial assets and financial liabilities at fair value through profit or loss as held for trading at the reporting date.

(ii) Recognition

All “regular way” purchases and sales of financial instruments are recognised using trade date accounting, the day that the sub-funds commit to purchase or sell the asset. From this date any gains and losses arising from changes in fair value of the financial assets or financial liabilities are recorded. Regular way purchases, or sales, are purchases and sales of financial assets that require delivery of the asset within a time frame generally established by regulation or convention in the market place.

(iii) Initial measurement

At initial recognition financial assets and financial liabilities categorised at fair value through profit or loss are recognised initially at fair value, with transaction costs for such instruments being recognised directly in the statement of comprehensive income.

(iv) Subsequent measurement

Subsequent to initial recognition, all instruments classified at fair value through profit or loss, are measured at fair value with changes in their fair value recognised in the statement of comprehensive income.

• Investments in listed equity positions are valued at their last traded price. • Investments in collective investment schemes (“CIS”) are valued at their net asset value (“NAV”) as calculated by the relevant

administrator. Where available prices will be verified against audited financial statements. • Investments in exchange traded funds are valued in accordance with the closing market price on the exchange on which they are

traded. • Investments in warrants are valued in reference to the underlying stock price. • Investments in forward currency contracts are valued at the close-of-business rates as reported by the pricing vendors utilised by the

Administrator to the Company. If a quoted market price is not available on a recognised stock exchange or from a broker, the fair value of the instrument is estimated using valuation techniques, including the use of recent arm’s length market transactions, reference to the current fair value of another instrument that is substantially the same, discounted cash flow techniques, option pricing models or any other valuation technique selected by the Directors and approved for such purpose by BNY Mellon Trust Company (Ireland) Limited (the “Depositary”) with care and in good faith. There were two securities held by ACPI Balanced UCITS Fund that were priced by the Investment Manager at the reporting date, as detailed in note 3 (ii).

(v) Derecognition

Financial assets are derecognised when the contractual rights to the cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

The Company derecognises financial liabilities when the obligation specified in the contract is discharged, expires or is cancelled.

(vi) Offsetting

The Company only offsets financial assets and financial liabilities at fair value through profit or loss if the Company has a legally enforceable right to set off the recognised amounts and either intends to settle on a net basis, or to realise the asset and settle the liability simultaneously. There were no offset positions during the year.

(vii) Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk.

When available, the Company measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company measures instruments quoted in an active market at a last traded price, because this price provides a reasonable approximation of the exit price. If there is no quoted price on an active market, then the Company uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

(e) Income

Dividends arising on the investments are recognised as income of the Company on an ex-dividend date, and interest income is recognised on an effective interest basis.


46

Notes to the financial statements (continued) For the financial year ended 31 March 2018 2. Significant accounting policies (continued)

(f) Net gain/(loss) on financial assets and financial liabilities at fair value through profit or loss and foreign exchange

Net gain/(loss) from financial assets and financial liabilities at fair value through profit or loss includes all realised and unrealised fair value changes and foreign exchange differences.

(g) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash on hand held at Saxo Bank and the Bank of New York Mellon SA/NV in Brussels, the global sub-custodian of the Depositary, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, with original maturities of three months or less. Short term investments that are not held for the purpose of meeting short-term cash commitments and restricted margin accounts are not considered as cash and cash equivalents. Cash and cash equivalents also includes cash held in the investor money collection account held at Bank of New York Mellon – London Branch. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

(e) Cross holdings

When a sub-fund holds an investment in another sub-fund within the same umbrella the value of the holding must be deducted from the Company totals. This does not affect the NAV per share of any of the individual sub-funds.

(h) Expenses

All expenses are recognised in the statement of comprehensive income on an accrual basis.

(i) Redeemable participating shares

All redeemable shares issued by the Company provide the investors with the right to require redemption for cash at the value proportionate to the investor’s share in the Company’s net assets at the redemption date. In accordance with IAS 32 - Financial Instruments: Presentation of such instruments give rise to a financial liability for the present value of the redemption amount.

(j) Securities sold receivable and securities purchased payable

Securities sold receivable represent receivables for securities sold that have been contracted for but not yet settled or delivered on the reporting date. These amounts are recognised at cost and include all transaction costs and commissions due in relation to the trade. Securities purchased payable represent payables for securities purchased that have been contracted for but not yet settled or delivered on the reporting date. (k) Transaction costs

Transaction costs are incremental costs, which are separately identifiable and directly attributable to the acquisition, issue or disposal of a financial asset or financial liability. Transaction costs are included in the statement of comprehensive income as part of net gain/(loss) on financial assets and financial liabilities at fair value through profit or loss and foreign exchange.

The following costs are included in the transaction costs disclosure in note 12:

- identifiable brokerage charges and commissions; - identifiable transaction related taxes and other market charges; and - separately identifiable transaction costs related to derivatives.

(l) Withholding tax

The Company currently incurs withholding taxes imposed by certain countries on investment income. Such income is recorded gross of withholding taxes in the statement of comprehensive income. Withholding taxes are shown as a separate item in the statement of comprehensive income.

3. Financial assets and financial liabilities at fair value through profit or loss

(i) The following table sets out the net gain and loss on financial assets and financial liabilities at fair value through profit or loss and foreign exchange:


ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund

Q-ACPI India Equity

UCITS Fund Total USD USD USD USD USD Net realised gain on financial assets and financial liabilities at fair value through profit or loss and foreign exchange 5,904,788 1,158,632 257,198 118,082 7,438,700 Change in unrealised gain/(loss) on financial assets and financial liabilities at fair value through profit or loss and foreign exchange 5,575,541 2,193,448 (207,314) (66,642) 7,495,033 Net gain on financial assets and financial liabilities at fair value through profit or loss and foreign exchange 11,480,329 3,352,080 49,884 51,440 14,933,733


47

Notes to the financial statements (continued) For the financial year ended 31 March 2018

3. Financial assets and financial liabilities at fair value through profit or loss (continued)

(i) The following table sets out the gain and loss on financial assets and financial liabilities at fair value through profit or loss and foreign exchange (continued)


ACPI Balanced



UCITS Fund Total USD USD USD USD Net realised gain on financial assets and financial liabilities at fair value through profit or loss and foreign exchange

1,734,622

50,870

138,739

1,924,231

Change in unrealised gain/(loss) on financial assets and financial liabilities at fair value through profit or loss and foreign exchange

5,442,493 1,699,523

173,182

7,315,198

Net gain on financial assets and financial liabilities at fair value through profit or loss and foreign exchange

7,177,115 1,750,393

311,921

9,239,429

(ii) Fair value of financial instruments

IFRS 13 – Fair Value Measurement, requires a fair value hierarchy for inputs used in measuring fair value that classifies investments according to how observable the inputs are. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions, made in good faith, about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

•••• Level 1: Inputs reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

•••• Level 2: Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and

•••• Level 3: Inputs that are not observable

There were no transfers between any levels during the financial year ended 31 March 2018 (31 March 2017: nil).

The following table provides an analysis of financial instruments that are measured at fair value, grouped into Levels 1 to 3:

As at 31 March 2018 Level 1 Level 2 Level 3 Total USD USD USD USD ACPI Balanced UCITS Fund Held for trading - Equity securities 4,059,096 - - 4,059,096 - CIS - 101,721,997 - 101,721,997 - CIS - ETF 10,499,483 10,499,483 - Debt securities - 17,158,090 - 17,158,090 - Derivatives - Forward currency contracts - 244,034 - 244,034 Financial assets at fair value through profit or loss 14,558,579 119,124,121 - 133,682,700 Held for trading - Derivatives - Forward currency contracts 254,483 - 254,483 Financial liabilities at fair value through profit or loss - 254,483 - 254,483 ACPI Horizon UCITS Fund Held for trading - Equity securities 13,410,066 - - 13,410,066 - CIS - 13,776,667 - 13,776,667 - CIS - ETF 5,630,855 - - 5,630,855 - Debt securities - 27,627,165 - 27,627,165 - Derivatives - Warrants - 341,650 - 341,650 - Forward currency contracts - 322,341 - 322,341 Financial assets at fair value through profit or loss 19,040,921 42,067,823 - 61,108,744 Held for trading - Derivatives - Forward currency contracts 400,917 400,917 Financial liabilities at fair value through profit or loss - 400,917 - 400,917


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(ii) Fair value of financial instruments (continued)

As at 31 March 2018 (continued) Level 1 Level 2 Level 3 Total USD USD USD USD Q-ACPI India Equity UCITS Fund Held for trading - Equity securities 4,542,101 - - 4,542,101 - Derivatives - Forward currency contracts - 76 - 76 Financial assets at fair value through profit or loss 4,542,101 76 - 4,542,177 Held for trading - Derivatives - Forward currency contracts - 1,731 - 1,731 Financial liabilities at fair value through profit or loss - 1,731 - 1,731 Effective 15 May 2017, ACPI Global Healthcare UCITS Fund closed. Therefore, this sub-fund did not hold investments as at 31 March 2018. As at 31 March 2017 Level 1 Level 2 Level 3 Total USD USD USD USD ACPI Balanced UCITS Fund Held for trading - Equity securities 4,927,923 - - 4,927,923 - CIS - 60,548,790 - 60,548,790 - CIS - ETF 1,406,832 - - 1,406,832 -Debt securities - 6,670,898 - 6,670,898 - Derivatives - Forward currency contracts - 214,702 - 214,702 Financial assets at fair value through profit or loss 6,334,755 67,434,390 - 73,769,145 Held for trading - Derivatives - - - - - Forward currency contracts - 407 - 407 Financial liabilities at fair value through profit or loss - 407 - 407 ACPI Horizon UCITS Fund Held for trading - Equity securities 16,939,896 - - 16,939,896 - CIS - 5,618,883 - 5,618,883 - CIS - ETF 3,523,290 - - 3,523,290 - Debt securities - 13,978,278 13,978,278 - Derivatives - Forward currency contracts - 511,271 - 511,271 Financial assets at fair value through profit or loss 20,463,186 20,108,432 - 40,571,618 Held for trading - Derivatives - Forward currency contracts - 129,818 - 129,818 Financial liabilities at fair value through profit or loss - 129,818 - 129,818 ACPI Global Healthcare UCITS Fund Held for trading - Equity securities 4,005,865 - - 4,005,865 - Derivatives - Forward currency contracts - 19,500 - 19,500 Financial assets at fair value through profit of loss 4,005,865 19,500 - 4,025,365


49



(ii) Fair value of financial instruments (continued)

Level 3 securities

There were no purchases, sales, gains or losses on Level 3 financial instruments held at the reporting date 31 March 2018 (2017: nil).

ACPI FM Limited Dimano Fund and Millennium Global Emerging Credit Fund Limited were priced by competent persons at the reporting date 29 March 2018, collectively representing 0.00% of the NAV. ACPI FM Limited Dimano Fund is suspended and the Investment Manager instructed to price the position at zero. Millennium Global Emerging Credit Fund Limited is in liquidation. The Liquidator advised that sufficient assets are not available to satisfy creditors’ claims in full and the investors will not realise any value from their shareholdings. The liquidation process is ongoing. (iii) Financial derivative instruments

The derivative contracts that the Company holds or issues are forward currency contracts and warrants. The Company records its derivative activities on a mark-to-market basis.

A forward currency contract involves an obligation to purchase or sell a specific currency at a future date, at a price set at the time the contract is made. Forward currency contracts are valued by reference to the forward price at which a new forward contract of the same size and maturity could be undertaken at the valuation date. The unrealised gain or loss on open forward currency contracts is calculated as the difference between the contract rate and this forward price, and this difference is recognised in the statement of comprehensive income.

Warrants are securities, similar to options that allow the owner to redeem the warrant for shares of a stock in the issuing company for a predetermined price. Warrants can be exchange traded and can have a long duration to expiration. The value of a warrant is determined in reference to the underlying stock price. Gains and losses on warrants are recorded by the Company based upon market fluctuations and are recorded as realised or unrealised gains or losses in the statement of comprehensive income.

4. Cash and cash equivalents

Cash and cash equivalents represent the cash balances held at Saxo Bank and The Bank of New York Mellon SA/NV in Brussels, the global sub-custodian of the Depositary and cash held at The Bank of New York Mellon - London Branch, in the name of the Company, which is used as an umbrella collection account to collect subscription monies from investors and pay out redemption monies and also dividends (where applicable) to shareholders.The S&P long term credit rating of The Bank of New York Mellon, the ultimate parent company of the Depositary, is AA- (2017: AA-). The Depositary and Saxo Bank are not rated.

As at 31 March 2018

Credit rating Currency

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund

ACPI Global

Healthcare UCITS

Fund

Q-ACPI India

Equity UCITS

Fund Total (S&P) USD USD USD USD USD The Bank of New York Mellon AA- The Bank of New York Mellon SA/NV in Brussels CHF 1,173,910 751 - - 1,174,661 The Bank of New York Mellon SA/NV in Brussels EUR 113,870 320 - 147 114,337 The Bank of New York Mellon SA/NV in Brussels GBP 4,214,445 1,650,462 - - 5,864,907 The Bank of New York Mellon SA/NV in Brussels INR - - - 3 3 The Bank of New York Mellon SA/NV in Brussels JPY - 21,104 - - 21,104 The Bank of New York Mellon SA/NV in Brussels USD 20,565,252 - 5,291 732,502 21,303,045 The Bank of New York Mellon SA/NV in Brussels ZAR 1 - - - 1 Saxo Bank NR Saxo Bank USD - 1,616,694 - - 1,616,694 Bank of New York Mellon - London Branch AA- Bank of New York Mellon - London Branch GBP 137,474 - - - 137,474 Bank of New York Mellon - London Branch USD 139,844 - - - 139,844 Total 26,344,796 3,289,331 5,291 732,652 30,372,070


50


4. Cash and cash equivalents (continued)

As at 31 March 2017

Credit rating Currency

ACPI Balanced UCITS

Fund

ACPI Horizon

UCITS Fund


UCITS Fund Total (S&P) USD USD USD USD The Bank of New York Mellon AA- The Bank of New York Mellon SA/NV in Brussels CHF - 18,191 42,260 60,451 The Bank of New York Mellon SA/NV in Brussels EUR 71,076 8,347 80,783 160,206 The Bank of New York Mellon SA/NV in Brussels GBP 146,076 691,580 18,922 856,578 The Bank of New York Mellon SA/NV in Brussels JPY - (16) - (16) The Bank of New York Mellon SA/NV in Brussels MXN - 69,939 - 69,939 The Bank of New York Mellon SA/NV in Brussels USD 10,249,709 2,659,992 235,485 13,145,186 Bank of New York Mellon - London Branch AA- Bank of New York Mellon - London Branch EUR 16,925 - - 16,925 Bank of New York Mellon - London Branch USD - 183,000 - 183,000 Total 10,483,786 3,631,033 377,450 14,492,269

5. Management fee

Link Fund Manager Solutions (Ireland) Limited (the “Manager”) receives a fee of up to 0.02% per annum of the NAV of each sub-fund subject to an annual minimum fee of $25,000 per annum rising to a minimum of $30,000 per annum after 1 year from the date of appointment of the Manager. The management fee accrues as of each valuation point and is paid monthly in arrears (plus VAT, if any).

The Manager is entitled to be reimbursed by each sub-fund for reasonable out-of-pocket expenses incurred by it and any VAT on fees and expenses payable to or by it.

Total management fee accrued at the reporting date and charged during the year is shown in the statement of financial position and the statement of comprehensive income respectively.

6. Investment management fee

The Investment Manager receives, out of the assets of the sub-funds a fee equal to the difference between the maximum aggregate management fee and investment management fee payable in respect of each share class as detailed in the table below. The investment management fee accrues as of each valuation point and is paid monthly in arrears (plus VAT, if any). The Investment Manager is entitled to be reimbursed for reasonable out of pocket expenses incurred by it and any VAT on fees and expenses payable to or by it.

Share class ACPI Balanced

UCITS Fund ACPI Horizon

UCITS Fund ACPI Global Healthcare

UCITS Fund Q-ACPI India

Equity UCITS Fund CHF Retail Unhedged 1.50% per annum - - - EUR Institutional Class 0.75% per annum 0.75% per annum - 1.25% per annum EUR Retail Class 1.50% per annum 1.50% per annum - 1.75% per annum GBP Institutional Class 0.75% per annum 0.75% per annum - - GBP Institutional unhedged Class 0.75% per annum - - - GBP Retail Class 1.50% per annum 1.50% per annum - - US$ Class - 1.50% per annum 1.50% per annum - US$ Institutional Class 0.75% per annum 0.75% per annum - 1.25% per annum US$ Institutional + Class - 0.50% per annum - - US$ Retail Class 1.50% per annum 1.50% per annum - 1.75% per annum US$ Z Class 1.25% per annum - - -

The investment management fee accrued at the reporting date and charged during the year is shown in the statement of financial position and the statement of comprehensive income respectively.

7. Performance fee

In addition to the investment management fee, the Investment Manager will be entitled to receive a performance fee in respect of the US$ Retail Class, US$ Institutional Class, US$ Institutional + Class, EUR Retail Class, EUR Institutional Class, GBP Retail Class and GBP Institutional Class (the “performance fee”) on ACPI Horizon UCITS Fund.

For each of these classes, a performance fee of 10% of the amount (if any) by which the NAV per share on the relevant calculation day is greater than the highest NAV per share on any preceding calculation day on which a performance fee was paid (or greater than the initial offer price in the case of the first calculation day) such excess being multiplied by the actual number of shares in issue, of that class, at the relevant valuation point or, in respect of shares which are redeemed, the number of shares being redeemed.

No performance fee will be paid unless the NAV per share exceeds the level at which a performance fee was last paid (or the initial offer price where no performance fee has ever been paid) and any previous reduction in the NAV per share below that level has been recovered.

Subject to verification by the Depositary, the performance fee will accrue daily, be payable quarterly in arrears and be calculated by the Administrator in respect of each period of three months ending on the last business day in the period ending on 31 March, 30 June, 30 September and 31 December in each year (the “performance period”).

Total performance fee accrued at the reporting date and charged during the year is shown in the statement of financial position and the statement of comprehensive income respectively.


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Notes to the financial statements (continued) For the financial year ended 31 March 2018 8. Administration fee

Link Fund Administrators (Ireland) Limited (the “Administrator”) receives a fee of up to 0.09% of the NAV of each sub-fund subject to an annual minimum fee of $450,000 which is allocated between the sub-funds on a pro rata basis to the NAV of the sub-funds during the relevant period. For accounting purposes, the minimum fee is seen as $75,000 per sub-fund so if one sub-fund has assets above the annual minimum fee, the minimum fee apportioned will be allocated to the remaining sub-funds, as adjusted. Such fees accrue daily and are paid monthly in arrears.

The Administrator is entitled to be reimbursed out of the assets of the sub-fund for reasonable out of pocket expenses incurred by it and any VAT on fees and expenses payable to or by it.

Total administration fee accrued at the reporting date and charged during the year is shown in the statement of financial position and the statement of comprehensive income respectively. 9. Auditors’ fee

Fees and expenses charged by the Company’s statutory auditor, Deloitte Ireland LLP, in respect of the financial year, relate to the audit of the financial statements of the Company of €30,000 exclusive of VAT and out of pocket expenses (2017: €25,200 exclusive of VAT and out of pocket expenses). There were no other expenses charged in respect of other assurance, tax advisory or non-audit services provided by the statutory auditor for the year ended 31 March 2018.

Audit fees accrued at the reporting date and charged for the year are disclosed in the statement of financial position and the statement of comprehensive income respectively. 10. Depositary fee

The Depositary receives out of the assets of each sub-fund an annual trustee fee which accrues monthly and is paid monthly in arrears not exceeding 0.03% of the NAV of each sub-fund subject to a minimum monthly fee in respect of the sub-fund of $2,500.

The Depositary is entitled to be reimbursed out of the assets of the sub-fund for reasonable out of pocket expenses incurred by it including sub-custodian fees which will be at normal commercial rates.

Total depositary fee accrued at the reporting date and charged during the year is shown in the statement of financial position and the statement of comprehensive income respectively.

11. Directors’ fee

The remuneration of the Directors in respect of services rendered or to be rendered to the Company will not exceed €55,000 (exclusive of taxes) in the aggregate per annum. Aaron Dunlop does not receive a fee as a Director.

All Directors are entitled to reimbursement by the Company of expenses properly incurred in the performance of their duties in connection with the business of the Company. The Directors’ remuneration and expenses will be paid pro rata out of the assets of the sub-funds, to include the deduction and payment of all taxes payable on remuneration earned from the Company.

Directors’ fees accrued at the reporting date and charged during the year are shown in the statement of financial position and the statement of comprehensive income respectively. 12. Transaction costs

The sub-funds incurred transaction costs as follows for the year ended:

31 March 2018 31 March 2017 USD USD ACPI Balanced UCITS Fund 26,538 29,181 ACPI Horizon UCITS Fund 76,559 73,574 ACPI Global Healthcare UCITS Fund 4,214 4,481 Q-ACPI India Equity UCITS Fund 21,388 - 13. Exchange rates

The following spot foreign exchange rates were used to convert the assets and liabilities held in currencies other than the functional currency of the Company at the reporting date.

31 March 2018 31 March 2017 Currency Exchange rate to USD Exchange rate to USD British Pound 0.712860 0.799712 Euro 0.813107 0.934972 Hong Kong Dollars 7.848300 7.771500 Indian Rupee 65.221700 64.151250 Japanese Yen 106.350000 111.430000 Mexican Peso - 18.834150 South African Rand 11.848750 13.408750 Swiss Franc 0.957600 1.000950


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Notes to the financial statements (continued) For the financial year ended 31 March 2018 14. Fund asset regime

The Company operates under a Fund Asset Model, whereby an umbrella collection account is held in the name of the Company. The umbrella collection account is used to collect subscription monies from investors and pay out redemption monies and also dividends (where applicable) to shareholders. The balances held in the accounts are reconciled on a daily basis and monies are not intended to be held in the account for long periods. The monies held in the collection accounts are considered an asset of the Company and are disclosed in the statement of financial position. Cash balances held in the collection accounts are disclosed in note 4.

15. Share capital

Authorised The Company has an authorised share capital of 2 redeemable non-participating shares of no par value and 500,000,000,000 participating shares of no par value. Two non-participating shares are currently in issue and are held by employees of the legal advisor. These shares do not form part of the NAV of the Company and are disclosed by way of this note only. Non-participating shares do not entitle the holders to any dividend and on winding up entitle the holders to receive the consideration paid but do not otherwise entitle them to participate in the assets of the Company. Every holder of non-participating shares is entitled to one vote.

Redeemable participating shares Redeemable participating shares carry the right to a proportionate share in the assets of the sub-funds and the holders of redeemable participating shares are entitled to attend and vote on all meetings of the Company and the relevant sub-fund. Shareholders may redeem their shares on and with effect from any dealing day at the NAV per share calculated on or with respect to the relevant dealing day. In the event of a shareholder requesting a redemption which would, if carried out, leave the shareholder holding shares having a NAV less than the minimum holding, the Company may, if it thinks fit, redeem the whole of the shareholders holding or the request for partial redemption will be refused. On a poll, every shareholder shall be entitled to one vote in respect of each full share held by him. In the case of an equality of votes, the chairman shall be entitled to a second or casting vote.

Issued share capital The table below shows the share transactions during the financial year ended 31 March 2018:

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund

Q- ACPI India Equity UCITS Fund

CHF Retail Unhedged Class Opening balance - - - - Units issued 115,200.00 - - - Units redeemed - - - - Closing balance 115,200.00 - - - EUR Institutional Class Opening balance 172,956.51 52,102.00 - Units issued 422,133.15 145,252.72 - 10,035.25 Units redeemed - - - (7,700.25) Closing balance 595,089.66 197,354.72 - 2,335.00 EUR Retail Class Opening balance 399,639.39 184,614.96 - - Units issued 814,393.28 14,375.00 - - Units redeemed (143,957.23) (28,570.00) - - Closing balance 1,070,075.44 170,419.96 - - GBP Institutional Class Opening balance 470,238.39 984,031.60 - - Units issued 1,099,013.54 150,523.63 - - Units redeemed (38,691.30) - - - Closing balance 1,530,560.63 1,134,555.23 - - GBP Retail Class Opening balance 156,167.92 - - - Units issued 132,319.45 - - - Units redeemed (163,254.23) - - - Closing balance 125,233.14 - - - GBP Institutional Unhedged Class Opening balance - - - - Units issued 337,416.14 - - - Units redeemed - - - - Closing balance 337,416.14 - - - US$ Institutional Class Opening balance 2,789,476.80 - - - Units issued 1,446,207.30 259,354.32 - 58,911.47 Units redeemed (372,526.25) - - (8,143.43) Closing balance 3,863,157.85 259,354.32 - 50,768.04


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15. Share capital (continued)

Issued share capital (continued) The table below shows the share transactions during the financial year ended 31 March 2018 (continued):

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund


US$ Institutional + Class Opening balance - - - - Units issued - 973,108.47 - - Units redeemed - (150,000.00) - - Closing balance - 823,108.47 - - US$ Retail Class Opening balance 2,515,398.85 - - - Units issued 685,833.60 - - - Units redeemed (204,266.82) - - - Closing balance 2,996,965.63 - - - US$ Class Opening balance - 2,086,687.78 27,357.41 - Units issued - 197,346.13 - - Units redeemed - (31,552.96) (27,357.41) - Closing balance - 2,252,480.95 - -

US$ Z Class Opening balance - - - - Units issued 377,074.24 - - - Units redeemed - - - - Closing balance 377,074.24 - - -

The table below shows the share transactions during the financial year ended 31 March 2017:

ACPI

Balanced UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund EUR Institutional Class Opening balance 212,956.51 73,290.61 - Units issued - 32,650.49 - Units redeemed (40,000.00) (53,839.10) - Closing balance 172,956.51 52,102.00 - EUR Retail Class Opening balance 260,017.64 85,500.00 - Units issued 173,774.02 129,594.96 - Units redeemed (34,152.27) (30,480.00) - Closing balance 399,639.39 184,614.96 - GBP Institutional Class Opening balance 153,138.31 74,282.32 - Units issued 347,933.49 919,476.91 - Units redeemed (30,833.41) (9,727.63) - Closing balance 470,238.39 984,031.60 - GBP Retail Class Opening balance 326,962.76 - - Units issued - - - Units redeemed (170,794.84) - - Closing balance 156,167.92 - -


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15. Share capital (continued)

Issued share capital (continued) The table below shows the share transactions during the financial year ended 31 March 2017 (continued):

ACPI Balanced

UCITS Fund

ACPI Horizon

UCITS Fund


UCITS Fund US$ Institutional Class Opening balance 2,053,909.77 - - Units issued 1,399,930.03 - - Units redeemed (664,363.00) - - Closing balance 2,789,476.80 - - US$ Retail Class Opening balance 3,392,683.40 - - Units issued 407,400.22 - - Units redeemed (1,284,684.77) - - Closing balance 2,515,398.85 - - US$ class Opening balance - 1,876,817.33 34,734.14 Units issued - 993,695.96 470.78 Units redeemed - (783,825.51) (7,847.51) Closing balance - 2,086,687.78 27,357.41 16. Financial instruments and risk management

The Company’s risks are set out in the prospectus and any consideration of risks here should be viewed in the context of the prospectus which is the primary document governing the operation of the Company. The Company’s investing activities expose it to various types of risks that are associated with the financial investments and markets in which it invests. Asset allocation is determined by the Investment Manager, who manages distribution of assets to achieve the investment objectives. The composition of the portfolio is closely monitored by the Investment Manager.

The investments of the Company are subject to normal market fluctuations and other risks inherent in investing in securities. The value of investments and the income from them, and therefore the value of and income from shares relating to the sub-funds can go down as well as up and an investor may not get back the amount originally invested. Changes in exchange rates between currencies or the conversion from one currency to another may also cause the value of the investments to diminish or increase. To meet redemption requests from time to time, the sub-funds may have to dispose of assets it would not otherwise dispose of.

The nature and extent of the financial instruments outstanding at the reporting date and the specific risk management policies employed by the Company are discussed below. Investors should also see the section of the relevant supplement headed “Risk Factors” for a discussion of any additional risks particular to shares of the sub-funds.

Market risk Market risk arises from uncertainty about future prices of financial investments held by the sub-funds, whether those changes are caused by factors specific to individual financial instruments, or other factors affecting a number of similar financial instruments traded in the markets. It represents the potential loss a sub-fund might suffer through holding market positions in the face of price movements. Usually the maximum risk resulting from financial instruments is determined by the opening fair value of the instruments. Market risk consists of currency risk, interest rate risk and market price risk.

(i) Currency risk

Currency risk is the risk that as certain assets of a sub-fund may be invested in securities and other investments denominated in foreign currencies (i.e. non-functional currency), the value of such assets may be affected favourably or unfavourably by fluctuations in currency rates.

Many of the assets of the sub-funds may be invested in other currencies and any income received by the sub-funds from these investments will be received in those currencies, some of which may fall in value against the functional currency of the sub-funds. Accordingly, the value of the shares may be affected favourably or unfavourably by fluctuations in currency rates and the funds will therefore be subject to foreign exchange risks. The portfolio manager monitors the sub-funds’ currency position on a daily basis and may enter into forward foreign currency exchange contracts to hedge the foreign exchange risk implicit in the value of portfolio securities denominated in a foreign currency.


55

Notes to the financial statements (continued) For the financial year ended 31 March 2018 16. Financial instruments and risk management (continued)

Market risk (continued) (i) Currency risk (continued)

The following table sets out the net exposure (after hedging) to foreign currency risk as at the 31 March 2018:

ACPI Balanced

UCITS Fund USD

ACPI Horizon UCITS Fund

USD


UCITS Fund USD


USD British Pound 16,441,392 (1,313,506) - - Euro 6,279,941 (2,738,418) (102) 5,867 Hong Kong Dollar - - (19) - Japanese Yen 11,038,446 (468) - - Indian Rupee - - - 4,542,845 Swiss Franc 1,173,910 162,365 (59) - South African Rand 1 - - - Total 34,933,690 (3,890,027) (180) 4,548,712

The following table sets out the net exposure (after hedging) to foreign currency risk as at the 31 March 2017:

ACPI Balanced

UCITS Fund USD

ACPI Horizon UCITS Fund

USD


UCITS Fund USD

British Pound 12,149,851 4,143,992 249 Euro 6,299,223 911,736 202,797 Hong Kong Dollar - - 227,395 Japanese Yen 5,523,961 (16) - Mexican Pesos - 2,029,151 - Indonesian Rupiah - (71,453) - Swiss Franc - 45,553 55,804 Total 23,973,035 7,058,963 486,245

(ii) Interest rate risk

If not reflected in the market price itself, the effect of interest rate movements on the present value of future payments represents an additional risk in the value of securities to be considered.

Interest rate risk represents the potential loss that a sub-fund might suffer due to adverse movements in relevant interest rates. The value of fixed interest securities may be affected by changes in the interest rate environment and the amount of income receivable from floating rate securities and bank balances, or payable on overdrafts, will also be affected by fluctuations in interest rates.

The Investment Manager monitors the sub-funds' securities and cash positions with respect to interest rate risk. Other than cash and cash equivalents ACPI Global Healthcare UCITS Fund is not subject to interest rate risk (2017: nil). In addition, ACPI Balanced UCITS Fund is not materially exposed to interest rate risk at 31 March 2018. The sub-fund’s interest exposure at the reporting date was on cash and cash equivalents and its investment in United States Treasury Note, which accounted for 10.90% of the NAV. (2017: other than cash and cash equivalents ACPI Balanced UCITS Fund was not exposed to interest rate risk).

ACPI Horizon UCITS Fund is exposed to interest rate risk through debt securities held which accounted for 42.86% of the NAV at the reporting date (2017: 31.82%).

The below tables outline the interest rate exposure of ACPI Horizon UCITS Fund:

As at 31 March 2018

Sub-fund

Interest rate risk

< 6 months

Interest rate risk

6 to 12 months

Interest rate risk

> 12 months

Not subject to interest

rate risk Total ACPI Select Horizon Fund USD USD USD USD USD Financial assets Financial assets at fair value through profit or loss 409,000 493,864 26,724,301 33,481,579 61,108,744 Cash at bank 3,289,331 - - - 3,289,331 Securities sold receivable - - - 292,125 292,125 Subscriptions receivable - - - - - Interest receivable 5,321 186,175 4,777 306 196,579 Diviidend receivable - - - 34,799 34,799 Prepaid expenses - - - 10,033 10,033 3,703,652 498,641 26,910,476 33,818,842 64,931,611 Financial liabilities - - - 487,883 487,883 Total interest sensitivity 3,703,652 498,641 26,910,476 33,330,959 64,443,728


56


Market risk (ii) Interest rate risk (continued)

The below tables outline the interest rate exposure of ACPI Horizon UCITS Fund:

As at 31 March 2017

Sub-fund

Interest rate risk

< 6 months

Interest rate risk

6 to 12 months

Interest rate risk

> 12 months

Not subject to interest

rate risk Total ACPI Select Horizon Fund USD USD USD USD USD Financial assets Financial assets at fair value through profit or loss 580,766 1,336,938 12,060,574 26,593,340 40,571,618 Cash and cash equivalents 3,631,033 - - - 3,631,033 Subscriptions receivable - - - 4,026,897 4,026,897 Interest receivable 59,885 1,129 1,445 133,119 195,578 Dividend receivable - - - 17,611 17,611 Other assets - - - 473 473 4,271,684 1,338,067 12,062,019 30,771,440 48,443,210 Financial liabilities - - - 4,519,384 4,519,384 Total interest sensitivity 4,271,684 1,338,067 12,062,019 26,252,056 43,923,826 (iii) Market price risk

Market price risk arises mainly from uncertainty about future prices of investments. It represents the potential loss a sub-fund might suffer through holding market positions in the face of price movements.

The sub-funds’ market price risk is managed through diversification of the investment portfolio. The sub-funds’ investments in securities are susceptible to price risk arising from uncertainties about future prices of the securities. The sub-funds’ overall market positions are monitored on a daily basis by the Investment Manager by monitoring the market value of the sub-funds’ positions. The maximum risk resulting from these financial instruments is determined by the fair value of the financial instruments. Price fluctuations for debt investments are expected to arise principally from interest rate or credit risk. As a result such financial instruments are not considered to be subject to significant market price risk.The following table demonstrates the impact on net assets attributable to holders of redeemable participating shares of a movement in investment prices. The table assumes a 10% upwards movement in the value of the local currencies (a negative 10% would have an equal but opposite effect).

Sub-fund 31 March 2018

USD 31 March 2017

USD ACPI Balanced UCITS Fund 11,628,058 6,688,355 ACPI Horizon UCITS Fund 3,315,924 2,608,207 ACPI Global Healthcare UCITS Fund - 400,587 Q - ACPI India Equity UCITS Fund 454,210 - Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The sub-funds’ assets are comprised mainly of realisable securities which can be readily sold. The sub-funds’ liquidity risk is managed on a daily basis by the Investment Manager in accordance with policies and procedures in place. The Investment Manager will normally keep an allocation of cash to meet pending liabilities that may arise from time to time. The sub-funds’ expected cash flows on these instruments do not vary significantly from this analysis, except for net assets attributable to holders of redeemable participating shares, which the Company has a contractual obligation to settle once a redemption request is received.

The Investment Manager reviews the ownership of the shares of the sub-funds regularly in order to monitor the liquidity risk of redemptions.

As at 31 March 2018 and 31 March 2017 all liabilities of sub-funds’ had a maturity of less than one month.


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Credit risk

Credit risk is the risk that the Company’s counterparty or investment issuer will be unable or unwilling to meet a commitment that it has entered into and cause the Company to incur a financial loss. The Company will be exposed to settlement risk on parties with whom it trades and custodian risk on parties with whom the Company has placed its assets in custody. In managing this risk, the Investment Manager, on behalf of the Company, seeks to do business with institutions that are well known, financially sound and where appropriate well rated by rating agencies.

Settlement risk: Most transactions in listed securities are settled on a cash versus delivery basis (“DVP”) with settlement a few days after execution. Default by the Broker could expose the Company to an adverse price movement in the security between execution and default. Because the Company would only be exposed to a potentially adverse market move (rather than 100% of the principal sum) during a short period, this risk is limited.

Depositary risk: Depositary risk is the risk of loss of assets held in custody. This is not a “primary credit risk” as the unencumbered assets of the sub-funds are segregated from the Depositary’s own assets and the Depositary requires its sub-custodians likewise to segregate non-cash assets. This mitigates depositary risk but does not entirely eliminate it. The Depositary has the power to appoint sub-custodians, although, in accordance with the terms of the depositary agreement, the Depositary’s liability shall not be affected by the fact that it has entrusted some or all of the assets in safekeeping to any third party (in order for the Depositary to discharge this responsibility, it must exercise care and diligence in choosing and appointing a third party as a safe-keeping agent so as to ensure that the third party has and maintains the expertise, competence and standing appropriate to discharge the responsibilities concerned and the Depositary must maintain an appropriate level of supervision over the safe-keeping agent and make appropriate enquiries from time to time to confirm that the obligations of the agent continue to be competently discharged). The S&P long term credit rating of The Bank of New York Mellon, the parent company of the Depositary and The Bank of New York Mellon – London Branch, is AA- (2017: AA-) as at the reporting date. The Depositary does not have its own credit rating. As at 31 March 2018, financial assets at fair value through profit and loss and other receivables were exposed to credit risk. The total amount of financial assets exposed to credit risk approximates to their carrying value in the statement of financial position. Offsetting Financial Assets and Financial Liabilities: The sub-funds did not enter into master netting agreements during the financial year. Due to this, offsetting disclosures are not required under IFRS.

At the reporting date, the Company uses the commitment approach to calculate the global exposure of the Company in accordance with UCITS Regulations.


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Notes to the financial statements (continued) For the financial year ended 31 March 2018 17. Net asset values

Net asset value 31 March 2018 31 March 2017 31 March 2016 ACPI Balanced UCITS Fund CHF Retail unhedged Class CHF1,105,218 - - EUR Institutional Class €6,837,548 €1,870,223 €2,124,815 EUR Retail Class €12,785,493 €4,528,752 €2,738,183 GBP Institutional Class £18,132,834 £5,203,062 £1,552,487 GBP Retail Class £1,538,122 £1,804,457 £3,489,696 GBP Institutional Unhedged Class £3,225,972 - - US$ Institutional Class $46,481,236 $30,847,730 $20,577,215 US$ Retail Class $49,691,748 $38,620,482 $47,547,757 US$ Z Class $3,866,669 - - ACPI Horizon UCITS Fund EUR Institutional Class €2,058,318 €534,791 €703,194 EUR Retail Class €1,818,308 €1,952,100 €855,034 GBP Institutional Class £12,103,365 £10,248,788 £721,805 US$ Institutional Class $2,533,273 - - US$ Institutional + Class $8,393,611 - - US$ Class $31,770,562 $28,449,667 $23,591,197 ACPI Global Healthcare UCITS Fund US$ Class - $4,211,610 $5,071,605 Q-ACPI India Equity UCITS FundQ-ACPI India Equity UCITS Fund EUR Institutional Class €223,687 - - US$ Institutional Class $4,961,540 - -

Net asset value per share 31 March 2018 31 March 2017 31 March 2016 ACPI Balanced UCITS Fund CHF Retail unhedged Class CHF9.7004 - - EUR Institutional Class €11.6644 €10.8133 €9.9777 EUR Retail Class €12.1319 €11.3321 €10.5308 GBP Institutional Class £12.0222 £11.0647 £10.1378 GBP Retail Class £12.4657 £11.5546 £10.6731 GBP Institutional Unhedged Class £9.7031 - - US$ Institutional Class $12.1983 $11.0586 $10.0186 US$ Retail Class $16.8131 $15.3536 $14.0148 US$ Z Class $10.3975 - - ACPI Horizon UCITS Fund EUR Institutional Class €10.4295 €10.2643 €9.5946 EUR Retail Class €10.6696 €10.5739 €10.0004 GBP Institutional Class £10.6679 £10.4151 £9.7170 US$ Institutional Class $9.7676 - - US$ Institutional + Class $10.1975 - - US$ Class $14.1047 $13.6339 $12.5698 ACPI Global Healthcare UCITS Fund US$ Class - $153.9477 $146.0121 Q-ACPI India Equity UCITS FundQ-ACPI India Equity UCITS Fund EUR Institutional Class €96.8554 - - US$ Institutional Class $98.7154 - -


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Notes to the financial statements (continued) For the financial year ended 31 March 2018 18. Taxation

The Company qualifies as an investment undertaking as defined in Section 739B (1) of the Taxes Consolidation Act, 1997, as amended from time to time (the “Taxes Act”). Under current Irish law and practice, the Company is not chargeable to Irish tax on its income and gains. However, tax can arise on the happening of a “chargeable event” in the Company. A chargeable event includes any distribution payments to shareholders or any encashment, redemption, cancellation, transfer or deemed disposal (a deemed disposal will occur at the expiration of a relevant period) of shares or the appropriation or cancellation of shares of a shareholder by the Company for the purposes of meeting the amount of tax payable on a gain arising on a transfer. No tax will arise on the Company in respect of chargeable events in respect of a shareholder who is neither Irish resident nor ordinarily resident in Ireland at the time of the chargeable event provided that a relevant declaration is in place and the Company is not in possession of any information which would reasonably suggest that the information contained therein is no longer materially correct.

Dividends, interest and capital gains (if any) which the Company or any sub-fund receives with respect to their investments (other than securities of Irish issuers) may be subject to taxes, including withholding taxes, in the countries in which the issuers of investments are located. It is anticipated that the Company may not be able to benefit from reduced rates of withholding tax in double taxation agreements between Ireland and such countries. If this position changes in the future and the application of a lower rate results in a repayment to the Company the NAV will not be re-stated and the benefit will be allocated to the existing shareholders rateably at the time of the repayment. Any reclaims due to the sub-funds are accounted for on a receipt basis. In addition, where the Company invests in securities that are not subject to local taxes, for example withholding tax, at the time of acquisition, there can be no assurance that tax may not be charged or withheld in the future as a result of any change in the applicable laws, treaties, rules or regulations or the interpretation thereof.

No stamp duty is payable in Ireland on the issue, transfer, repurchase or redemption of shares in the Company. Where any subscription for or redemption of shares is satisfied by the in specie transfer of securities, property or other types of assets, Irish stamp duty may arise on the transfer of such assets. No Irish stamp duty will be payable by the Company on the conveyance or transfer of stock or marketable securities provided that the stock or marketable securities in question have not been issued by a Company registered in Ireland and provided that the conveyance or transfer does not relate to any immovable property situated in Ireland or any right over or interest in such property or to any stocks or marketable securities of a company (other than a company which is an investment undertaking within the meaning of the Taxes Act) which is registered in Ireland.

19. Efficient portfolio management and financial derivatives

The Company may, subject to the conditions and within the limits laid down by the Central Bank, employ techniques and instruments relating to transferable securities, including investment in financial derivative instruments (“FDI”). Such techniques and instruments may be used for efficient portfolio management purposes, or to provide protection against exchange risk or for direct investment purposes, where applicable. Only such FDI as are provided for in the current risk management process for the Company approved by the Central Bank may be used by the Company.

20. Net asset value reconciliation

The published NAV is adjusted for subscriptions receivable and redemptions payable which have a value date of the last NAV of each sub-fund in the accounting year.

31 March 2018 31 March 2017 USD USD ACPI Balanced UCITS Fund Net asset value per financial statements 157,447,043 85,074,793 Subscriptions receivable1 110,767 15,756 Redemptions payable2 ( 4,358) (1,287) Published net asset value 157,553,452 85,089,262 1Subscriptions receivable effective 31 March 2018 2Redemptions payable effective 31 March 2018 21. Soft commission arrangements

The Investment Manager had a soft commission arrangement in place during the year with Cantor Fitzgerald that included transactions from ACPI Horizon UCITS Fund.

Transactions from ACPI Horizon UCITS Fund generated USD 10,284 in soft commissions that were used to pay research (for example BCA research) (31 March 2017: USD 6,284).

Effective 1 January 2018, soft commission arrangements are no longer utilised.

22. Commitments and contingent liabilities

The Directors are not aware of any commitments or contingent liabilities of the Company as at 31 March 2018 (31 March 2017: nil).

23. Capital management

The redeemable shares issued by the Company provide an investor with the right to require redemption for cash at a value proportionate to the investor’s shares in the sub-fund’s net assets at each redemption date and are classified as liabilities. The sub-fund’s objective, in managing the redeemable shares, is to ensure a stable base to maximise returns to all investors and to manage liquidity risk arising from redemptions.


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Notes to the financial statements (continued) For the financial year ended 31 March 2018 24. Cross holdings

When a sub-fund holds an investment in another sub-fund within the same umbrella, the total for the Company will be overstated by the cross holding. This does not affect the NAV per share of any of the individual sub-funds. The ACPI Balanced UCITS Fund is invested into the Q-ACPI India Equity UCITS Fund with a market value of $911,554 (0.58% of the NAV) at the reporting date (31 March 2017: nil).

The table below provides details of realised gains/losses and the movement in unrealised gains/losses in cross holdings within the Company as at 31 March 2018.

Q-ACPI India Equity UCITS Fund

USD Investment by ACPI Balanced UCITS Fund Shares invested 9,327 Market Value 911,554 Movement in unrealised gain/(loss) (21,177) Realised gain 32,731 The statement of financial position, statement of comprehensive income and statement of changes in net assets attributable to holders of redeemable participating shares have not been updated for this cross holding.

25. Related party disclosures

In accordance with IAS 24 ‘Related Party Disclosures’ the related parties of the Company and the required disclosures relating to material transactions with parties are outlined below. All transactions between related parties are conducted at arm’s length.

Investment Manager In the opinion of the Directors, the Investment Manager is considered a related party as Aaron Dunlop is Chief Financial Officer of the Investment Manager and is also a Director of the Company.

Details of fees payable to the Investment Manager at the reporting date are outlined below: 31 March 2018 31 March 2017 USD USD Investment management fee 188,486 141,734 Details of fees charged to the Investment Manager during the year are outlined below: 31 March 2018 31 March 2017 USD USD Investment management fee 1,985,568 1,457,612 Distributor The Investment Manager acted as Distributor of the Company during the year. The Distributor does not receive a fee in its capacity as Distributor to the Company.

Directors The Directors are also considered related parties of the Company.

Aggregate directors’ fees charged during the financial year ended 31 March 2018 amounted to €32,000 (financial year ended 31 March 2017: €32,000).

Director fees accrued at the reporting date and director fees charged during the year are disclosed in the statement of financial position and the statement of comprehensive income, respectively.

The Directors did not hold any shares in the sub-funds at the reporting date (31 March 2017: nil).


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26. Related party disclosures (continued)

Other related parties of the Company Dillon Eustace (the “Legal Advisor”) is considered a related party by virtue of David Dillon being a partner of Dillon Eustace and a Director of the Company.

Details of fess charged are outlined below*:

31 March 2018 31 March 2017 USD USD Legal fees charged by Dillon Eustace 19,759 31,528 *Note that fees charged are based on the accruals on the individual sub-funds and converted to the base currency of the Company using the average exchange rate for the year. The actual amounts paid may differ from those disclosed above.

27. Significant events during the year

The Directors of the Company decided to terminate ACPI Global Healthcare UCITS Fund during the financial year. This decision was made following a review of the existing fund range, taking into account factors such as the relative size of the sub-fund’s assets. Effective 15 May 2017, the Fund closed.

Effective 26 May 2017 ACPI Horizon UCITS Fund launched the USD Institutional + Class.

Effective 08 June 2017, Q-ACPI India Equity UCITS Fund, a new sub-fund of the Company, launched with EUR Institutional and US$ Institutional share classes .

Effective 26 July 2017 ACPI Balanced UCITS Fund launched the USD Z Class.

Effective 31 October 2017, ACPI Balanced UCITS Fund launched GBP Institutional Unhedged Class.

Effective 6 November 2017, ACPI Balanced UCITS Fund launched CHF Retail unhedged Class

Effective 6 November 2017, following an acquisition by Link Group, Capita Financial Managers (Ireland) Limited changed its trading name to Link Fund Manager Solutions (Ireland) Limited.

Effective 6 November 2017, following an acquisition by Link Group, Capita Financial Administrators (Ireland) Limited changed its trading name to Link Fund Administrators (Ireland) Limited.

Effective 19 January 2018, ACPI Horizon UCITS Fund launched the USD Institutional Class. 28. Changes to the prospectus

An updated prospectus, including the supplements for the three newly authorized sub-funds was issued on 22 May 2017. The updated prospectus was amended generally and to reflect updates necessitated by the European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2016 (UCITS V) and the Central Bank Regulations.

29. Events after the reporting date

There are no significant events that occurred after the reporting date and up to the approval of these financial statements that are required to be disclosed.

30. Approval of the financial statements

The financial statements were authorised for issue by the Directors on 24 July 2018.


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Schedule of investments As at 31 March 2018

ACPI Balanced UCITS Fund Currency Nominal holding

Fair value USD % of NAV

Financial assets at fair value through profit or loss Equities United Kingdom British Land Co PLC/The GBP 252,700 2,275,810 1.44% Land Securities Group PLC GBP 135,656 1,783,286 1.13% 4,059,096 2.57% Total equities 4,059,096 2.57% Collective investment schemes Ireland ACPI FM Limited Dimano Fund USD 141,134.07 - 0.00% ACPI Select UCITS Funds PLC - Q-ACPI India Equity UCITS Fund USD 9,327 911,554 0.58% First State Global Umbrella PLC - Stewart Investors Worldwide Equity Fund

USD 321,157 5,055,011 3.21%

HERMES ASIA EX-JAPAN EQUITY FUND USD 3,116,556 11,028,245 7.00% J O Hambro Capital Management Umbrella Fund PLC - Continental European Fund EUR 1,020,205 4,365,100 2.77% Kames High Yield Global Bond USD 6,458 71,603 0.05% Kames Short Dated High Yield Global Bond Fund USD 544,810 5,533,693 3.51% Legg Mason Global Funds PLC-Legg Mason Western Asset Macro Opportunities Bond Fund USD 28,637 3,854,254 2.45% MAN Funds PLC - MAN GLG Japan CoreAlpha Equity JPY 45,445 9,155,633 5.82% MillenniumGlobal Emerging Credit Fund Limited USD 4,452 - 0.00% PineBridge Asia ex Japan Small Cap Equity Fund USD 5,482 3,736,956 2.37% PineBridge Japan Small Cap Equity Fund JPY 21,435 1,882,813 1.20% Rubrics Global Credit UCITS Fund USD 288,771 4,569,222 2.90% Sector Capital Fund plc - Sector Healthcare Value Fund USD 46,045 5,134,012 3.26% Veritas Funds PLC - Global Equity Income Fund USD 22,181 3,690,305 2.34% Vulcan Value Equity Fund USD 79,265 12,887,617 8.19% 71,876,018 45.65% Luxembourg Amundi Funds - Bond Global Aggregate USD 2,121 4,678,449 2.97% Conventum - Lyrical Fund USD 3,134 770,702 0.49% Jupiter JGF - Asia Pacific Income1 USD 897,610 8,949,167 5.68% LO Funds - Europe High Conviction EUR 100,000 1,722,750 1.09% Morgan Stanley Investment Funds-Global Brands Equity Income Fund USD 191,583 5,716,830 3.63% 21,837,898 13.86% United Kingdom Fundsmith Equity Fund GBP 900,810 4,388,300 2.79% Thesis Unit Trust Management - TM Sanditon UK Fund GBP 2,680,373 3,619,781 2.30% 8,008,081 5.09% Total CIS 101,721,997 64.60% CIS – ETF1 United States Energy Select Sector SPDR Fund USD 17,940 1,209,335 0.77% SPDR Gold Shares USD 11,850 1,490,612 0.95% VanEck Vectors Oil Services ET USD 191,600 4,573,492 2.90% Vanguard Consumer Staples ETF USD 23,700 3,226,044 2.05% 10,499,483 6.67% Total CIS ETF 10,499,483 6.67% Debt securities Government bond United States United States Treasury Note/Bond 1.25% 04/30/2019 USD 3,000,000 2,971,113 1.89% United States Treasury Note/Bond 2.00% 11/15/2026 USD 15,050,000 14,186,977 9.01% 17,158,090 10.90% Total government bond 17,158,090 10.90% Total debt securities 17,158,090 10.90% 1 CIS not regulated by the UCITS Regulations.


63

Schedule of investments (continued) As at 31 March 2018

ACPI Balanced UCITS Fund (continued) Financial assets at fair value through profit or loss (continued) Derivatives Forward currency contracts (Counterparty – BNY Mellon)

Purchase currency Amount Sale

currency Amount Settlement

date Fair value

USD % of NAV EUR Retail Class USD 187,560 EUR (151,873) 13-Apr-2018 659 0.00% USD 172,025 EUR (139,306) 13-Apr-2018 589 0.00% USD 102,323 EUR (82,782) 13-Apr-2018 449 0.00% EUR 73,641 USD (90,523) 13-Apr-2018 102 0.00% USD 12,619 EUR (10,196) 13-Apr-2018 71 0.00% GBP Retail Class GBP 1,384,495 USD (1,925,965) 13-Apr-2018 16,950 0.01% GBP 72,035 USD (100,260) 13-Apr-2018 829 0.00% GBP Institutional Class GBP 17,666,010 USD (24,575,117) 13-Apr-2018 216,276 0.14% GBP 650,000 USD (904,061) 13-Apr-2018 8,109 0.01% 244,034 0.16% Total unrealised gain on forward currency contracts 244,034 0.16% Total derivatives 244,034 0.16% Total financial assets at fair value through profit or loss 133,682,700 84.90% Financial liabilities at fair value through profit or loss Derivatives

Forward currency contracts (Counterparty – BNY Mellon)



date Fair value

USD % of NAV Class EUR Retail Class EUR 36,660 USD (45,471) 13-Apr-2018 (356) (0.00%) EUR 37,796 USD (47,003) 13-Apr-2018 (489) (0.00%) EUR 13,080,692 USD (16,262,587) 13-Apr-2018 (164,961) (0.10%) Class EUR Institutional Class EUR 6,915,855 USD (8,598,146) 13-Apr-2018 (87,216) (0.06%) Class GBP Retail Class GBP 98,000 USD (138,786) 13-Apr-2018 (1,259) (0.00%) Class GBP Institutional Class GBP 10,000 USD (14,235) 13-Apr-2018 (202) (0.00%) (254,483) (0.16%) Total unrealised loss on forward currency contracts (254,483) (0.16%) Total derivatives (254,483) (0.16%) Total financial liabilities at fair value through profit or loss (254,483) (0.16%) Cash and cash equivalents and other net assets 24,018,826 15.26% Net assets attributable to holders of redeemable participating shares 157,447,043 100.00% Analysis of total assets % of total assets Transferable securities listed on an official stock exchange or dealt on another regulated market 11.32% CIS (UCITS) 63.11% CIS (Non-UCITS) 6.51% OTC financial derivative instruments 0.15% Other current assets 18.91% 100.00%


64

Schedule of investments(continued) As at 31 March 2018

ACPI Horizon UCITS Fund Currency Nominal holding


Financial assets at fair value through profit or loss Equities France Thales SA EUR 6,850 833,517 1.29% 833,517 1.29% Germany ADLER Real Estate AG EUR 110,360 1,862,165 2.89% alstria office REIT-AG EUR 41,100 643,461 1.00% METRO AG EUR 55,700 985,753 1.53% SAP SE EUR 9,330 974,989 1.51% 4,466,368 6.93% Italy Telecom Italia SpA/Milano EUR 792,000 658,842 1.02% 658,842 1.02% Jersey British Airways Finance Jersey LP 6.75% EUR 18,670 585,513 0.91% 585,513 0.91% Netherlands ING Groep NV 6.13% USD 22,800 583,452 0.91% Randstad Holding NV EUR 10,330 678,667 1.05% 1,262,119 1.96% United States Alphabet Inc USD 750 777,855 1.21% American Express Co USD 4,400 410,432 0.64% Booking Holdings Inc USD 338 703,172 1.09% Facebook Inc USD 3,390 541,688 0.84% Invesco Mortgage Capital Inc USD 10,965 272,590 0.42% Microsoft Corp USD 10,100 921,827 1.43% Oracle Corp USD 25,990 1,189,043 1.85% Visa Inc USD 6,580 787,100 1.22% 5,603,707 8.70% Total equities 13,410,066 20.81% Collective investment schemes Ireland Kames Short Dated High Yield Global Bond Fund USD 129,067 1,310,948 2.03% MAN Funds PLC - MAN GLG Japan CoreAlpha Equity USD 11,970 2,445,671 3.80% Rubrics Global Credit UCITS Fund USD 145,114 2,296,145 3.56% Sector Capital Fund plc - Sector Healthcare Value Fund USD 10,556 1,177,030 1.83% Vulcan Value Equity Fund USD 16,627 2,703,404 4.19% 9,933,198 15.41% Switzerland HBM Healthcare Investments AG 1 CHF 13,491 2,028,722 3.15% 2,028,722 3.15% United Kingdom Thesis Unit Trust Management - TM Sanditon UK Fund GBP 1,343,783 1,814,747 2.82% 1,814,747 2.82% Total collective investment schemes 13,776,667 21.38% CIS - ETF Germany iShares STOXX Europe 600 Oil & Gas UCITS ETF DE EUR 27,900 1,045,512 1.62% 1,045,512 1.62% Ireland Xtrackers MSCI USA Consumer Staples UCITS ETF EUR 50,900 1,492,995 2.32% 1,492,995 2.32% United States1 PowerShares KBW Bank Portfolio USD 27,340 1,502,606 2.33% VanEck Vectors Oil Services ET USD 66,600 1,589,742 2.47% 3,092,348 4.80% Total CIS ETF 5,630,855 8.74% 1CIS not regulated by the UCITS Regulations.


65


ACPI Horizon UCITS Fund (continued) Currency Nominal holding


Financial assets at fair value through profit or loss (continued) Debt securities Corporate bond Canada Golden Star Resources Ltd 7.00% 08/15/2021 >12 months USD 500,000 542,200 0.84% 542,200 0.84% France AXA SA 4.39% >12 months EUR 200,000 255,809 0.40% 255,809 0.40% Germany Wild Bunch AG 8.00% 03/23/2019 6-12 months EUR 100,000 92,239 0.14% 92,239 0.14% Mexico Cemex SAB de CV 6.47% 10/15/2018 USD 400,000 409,000 0.63% 409,000 0.63% Netherlands Fyber NV 3.00% 07/27/2020 EUR 900,000 752,668 1.17% Amatheon Financing BV 2.25% 07/31/2019 EUR 800,000 418,149 0.65% 1,170,817 1.82% Spain Banco Bilbao Vizcaya Argentaria SA 7.00% EUR 800,000 1,035,278 1.61% Santander Perpetual SA 1.27% EUR 600,000 695,480 1.08% 1,730,758 2.69% United Kingdom Mclaren Finance PLC 5.00% 01/08/2022 GBP 587,000 818,808 1.27% Prudential PLC 5.25% USD 350,000 341,250 0.53% 1,160,058 1.80% United States CF Industries Inc 3.45% 01/06/2023 USD 538,000 518,498 0.80% Dell International LLC / EMC Corp 3.48% 01/06/2019 USD 399,000 401,625 0.62% Jefferies Group LLC / Jefferies Group Capital Finance Inc 9.00% 07/31/2037

USD 538,000 497,650 0.77%

Jefferies Group LLC / Jefferies Group Capital Finance Inc 8.00% 08/31/2037

USD 774,000 754,650 1.17%

Morgan Stanley 3.14% 10/24/2023 USD 503,000 514,135 0.80% 2,686,558 4.16% Total corporate bond 8,047,439 12.48% Government bond United States Treasury Note/Bond 1.25% 04/30/2019 USD 12,920,000 12,795,594 19.86% United States Treasury Note/Bond 2.25% 11/15/2027 USD 3,517,000 3,366,566 5.22% United States Treasury Note/Bond 2.75% 11/15/2047 USD 3,583,000 3,417,566 5.30% 19,579,726 30.38% Total government bond 19,579,726 30.38% Total debt securities 27,627,165 42.86% Derivatives Warrants Goldman Sachs & Co Wertpapier GmbH 0.00% EUR 6,138 154,185 0.24% Goldman Sachs & Co Wertpapier GmbH 0.00% USD 10,230 187,465 0.29% Total warrants 341,650 0.53%


66

Schedule of investments (continued) As at 31 March 2018 ACPI Horizon UCITS Fund (continued) Financial assets at fair value through profit or loss (continued) Derivatives (continued) Forward currency contracts (counterparty – BNY Mellon)



date Fair value

USD % of NAV Fund Level JPY 131,025,450 USD (1,185,000) 13-Apr-2018 47,716 0.07% EUR 3,873,586 USD (4,725,000) 13-Apr-2018 41,991 0.07% GBP 867,941 USD (1,185,000) 13-Apr-2018 33,015 0.05% USD 1,491,645 EUR (1,192,000) 15-Jun-2018 17,763 0.03% USD 1,884,451 CHF (1,777,000) 15-Jun-2018 17,343 0.03% USD 11,762,045 EUR (9,500,000) 15-Jun-2018 15,504 0.02% GBP Institutional Class GBP 12,171,439 USD (16,931,642) 13-Apr-2018 149,009 0.23% 322,341 0.50% Total unrealised gain on forward currency contracts 322,341 0.50% Total derivatives 322,341 0.50% Total financial assets at fair value through profit or loss 61,108,744 94.82% Financial liabilities at fair value through profit or loss Forward currency contracts (Counterparty – BNY Mellon)



date Fair value

USD % of NAV Fund Level USD 2,609,000 EUR (2,130,492) 05-Jun-2018 (23,051) (0.04%) USD 1,305,000 GBP (945,378) 05-Jun-2018 (24,569) (0.04%) USD 1,185,000 GBP (879,994) 13-Apr-2018 (49,930) (0.08%) USD 4,207,744 GBP (3,026,000) 15-Jun-2018 (50,044) (0.08%) USD 1,185,000 JPY (133,318,425) 13-Apr-2018 (69,289) (0.11%) USD 4,725,000 EUR (3,949,018) 13-Apr-2018 (134,821) (0.21%) EUR Institutional Class EUR 2,071,541 USD (2,575,447) 13-Apr-2018 (26,124) (0.04%) EUR Retail Class EUR 1,830,860 USD (2,276,219) 13-Apr-2018 (23,089) (0.04%) (400,917) (0.64%)

Total unrealised loss on forward currency contracts (400,917) (0.64%) Total derivatives (400,917) (0.64%) Total financial liabilities at fair value through profit or loss (400,917) (0.64%) Cash and cash equivalents and other net assets 3,735,901 5.82% Net assets attributable to holders of redeemable participating shares 64,443,728 100.00% Analysis of total assets % of total assets Transferable securities listed on an official stock exchange or dealt on another regulated market 63.73% CIS (UCITS) 21.22% CIS (Non-UCITS) 8.67% OTC financial derivative instruments 0.50% Other current assets 5.88% 100.00%


67


Q-ACPI India Equity UCITS Fund Currency Nominal holding


Financial assets at fair value through profit or loss Equities India Bajaj Auto Ltd INR 8,328 350,464 6.69% Cipla Ltd/India INR 25,381 212,262 4.05% Exide Industries Ltd INR 55,681 190,251 3.63% GAIL India Ltd INR 41,618 209,648 4.00% Hero MotoCorp Ltd INR 6,518 354,053 6.76% Housing Development Finance Corp Ltd INR 13,811 386,579 7.38% ICICI Bank Ltd INR 53,574 228,641 4.37% Indian Hotels Co Ltd/The INR 111,288 220,796 4.22% Infosys Ltd INR 21,547 373,908 7.14% Larsen & Toubro Ltd INR 2,890 58,087 1.11% Lupin Ltd INR 13,820 155,921 2.98% NTPC Ltd INR 92,792 241,435 4.61% Oil & Natural Gas Corp Ltd INR 84,317 229,855 4.39% Power Grid Corp of India Ltd INR 64,689 191,672 3.66% State Bank of India INR 56,468 216,360 4.13% Tata Consultancy Services Ltd INR 8,378 365,985 6.99% Tata Motors Ltd INR 38,872 194,802 3.72% Tata Steel Ltd INR 1,151 2,480 0.05% Tata Steel Ltd INR 16,702 146,235 2.79% Wipro Ltd INR 49,335 212,667 4.06% 4,542,101 86.73% Total equities 4,542,101 86.73% Derivatives Forward currency contracts (Counterparty – BNY Mellon)


currency Amount Settlement date Fair value

USD % of NAV EUR Institutional Class USD 8,981 EUR (7,212) 13-Apr-2018 68 0.00% USD 5,731 EUR (4,631) 13-Apr-2018 8 0.00% 76 0.00% Total unrealised gain on forward currency contracts 76 0.00% Total derivatives 76 0.00% Total financial assets at fair value through profit or loss 4,542,177 86.73% Financial liabilities at fair value through profit or loss Derivatives Forward currency contracts (Counterparty – BNY Mellon)


currency Amount Settlement date Fair value

USD % of NAV EUR Institutional Class EUR 235,081 USD (292,264) 13-Apr-2018 (1,731) (0.03%) (1,731) (0.03%) Total unrealised loss on forward currency contracts (1,731) (0.03%) Total derivatives (1,731) (0.03%) Total financial liabilities at fair value through profit or loss (1,731) (0.03%) Cash and cash equivalents and other net assets 697,369 13.30% Net assets attributable to holders of redeemable participating shares 5,237,815 100.00% Analysis of total assets % of total assets Transferable securities listed on an official stock exchange or dealt on another regulated market 85.72% OTC financial derivative instruments 0.00% Other current assets 14.28% 100.00%


68

Statement of significant portfolio movements (unaudited) For the financial year ended 31 March 2018

The Central Bank Regulations requires all material changes that have occurred in the disposition of the assets of the UCITS to be documented in the annual report. A material change is defined as the aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the year or aggregate disposals greater than 1 per cent of the total value of sales for the year.

ACPI Balanced UCITS Fund Cost Purchases USD Jupiter JGF - Asia Pacific Income 9,000,000 United States Treasury Note/Bond 2.00% 11/15/2026 7,950,264 MAN Funds PLC - MAN GLG Japan CoreAlpha Equity 6,531,643 Kames Short Dated High Yield Global Bond Fund 5,500,000 Morgan Stanley Investment Funds-Global Brands Equity Income Fund 4,728,259 VanEck Vectors Oil Services ET 4,511,685 Vulcan Value Equity Fund 4,500,000 Vanguard Consumer Staples ETF 3,207,789 Rubrics Global Credit UCITS Fu 3,000,000 HERMES ASIA EX-JAPAN EQUITY FUND 3,000,000 United States Treasury Note/Bond 1.25% 04/30/2019 2,972,914 Amundi Funds - Bond Global Aggregate 2,499,999 J O Hambro Capital Management Umbrella Fund PLC - Continental European Fund 2,245,023 Kames High Yield Global Bond 2,227,050 ACPI Select UCITS Funds PLC - Q-ACPI India Equity UCITS Fund 1,500,000 Thesis Unit Trust Management - TM Sanditon UK Fund 1,336,151 Energy Select Sector SPDR Fund 1,303,470 Land Securities Group PLC 1,122,272 Sector Capital Fund plc - Sector Healthcare Value Fund 1,000,000 PineBridge Asia ex Japan Small Cap Equity Fund 1,000,000 Proceeds Sales USD Kames High Yield Global Bond 6,229,798 Neuberger Berman Investment Funds PLC - Neuberger Berman Corporate Hybrid Bond F 3,536,181 Goodhart Partners Horizon Fund - Michinori Japan Equity 2,350,212 Morgan Stanley Investment Funds - Global Quality Fund 2,228,260 Persimmon PLC 1,630,398 Barratt Developments PLC 1,488,522 ACPI Select UCITS Funds PLC - Q-ACPI India Equity UCITS Fund 600,000 Due to trading volumes the above details all of the sales during the year. Financial derivative instruments are excluded from the above due to no cost being attributed to purchases and sales of such instruments.


69

Statement of significant portfolio movements (unaudited) (continued) For the financial year ended 31 March 2018

The Central Bank Regulations requires all material changes that have occurred in the disposition of the assets of the UCITS to be documented in the annual report. A material change is defined as the aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the year or aggregate disposals greater than 1 per cent of the total value of sales for the year.

ACPI Horizon UCITS Fund Cost Purchases USD United States Treasury Note/Bond 1.25% 04/30/2019 13,542,738 United States Treasury Note/Bond 125.00% 04/30/2019 3,598,191 United States Treasury Note/Bond 2.75% 11/15/2047 3,345,066 United States Treasury Note/Bond 2.25% 11/15/2027 3,342,661 MAN Funds PLC - MAN GLG Japan CoreAlpha Equity 2,405,000 HBM Healthcare Investments AG 1,948,863 Thesis Unit Trust Management - TM Sanditon UK Fund 1,802,252 METRO AG 1,735,832 VanEck Vectors Oil Services ET 1,701,406 MAN SE 1,675,174 Xtrackers MSCI USA Consumer Staples UCITS ETF 1,490,635 PowerShares KBW Bank Portfolio 1,401,787 Kames Short Dated High Yield Global Bond Fund 1,290,000 iShares China Large Cap UCITS ETF USD Dist 1,214,591 UniCredit SpA 1,194,618 Sector Capital Fund plc - Sector Healthcare Value Fund 1,150,000 NIKE Inc 1,121,694 Altria Group Inc 1,043,617 Vornado Realty Trust 998,120 SAP SE 974,976 Amatheon Financing BV 782,477 Mclaren Finance PLC 762,220 Bayerische Motoren Werke AG 761,154 Jefferies Group LLC / Jefferies Group Capital Finance Inc 758,520 Thales SA 751,328 Vulcan Value Equity Fund 715,000 Vipshop Holdings Ltd 714,311 Energy XXI Gulf Coast Inc 663,992 Visa Inc 651,861 Pacific Industrial & Logistics REIT Plc 644,131 Randstad Holding NV 631,722 Proceeds Sales USD United States Treasury Note/Bond 125.00% 04/30/2019 3,588,750 UniCredit SpA 1,962,645 Mexican Bonos 5.75% 05/03/2026 1,943,710 MAN SE 1,655,503 Boxwell Strategy Ltd 4.13% Mtn 25/07/2017 1,457,751 iShares China Large Cap UCITS ETF USD Dist 1,376,761 NIKE Inc 1,361,366 ETFS Physical Gold 1,165,338 Volkswagen AG 1,124,761 PowerShares KBW Bank Portfolio 1,109,936 Deutsche Konsum REIT-AG 1,046,146 Altria Group Inc 1,022,173 Rubrics Global Credit UCITS Fu 900,000 Intesa Sanpaolo SpA 889,506 Roche Holding AG 853,202 LyondellBasell Industries NV 848,019 Bayerische Motoren Werke AG 829,631 Vipshop Holdings Ltd 825,100 Amatheon Financing BV 2.00% 07/31/2019 801,217 Ovako AB 6.50% 01/06/2019 763,394


70

Statement of significant portfolio movements (unaudited) (continued) For the financial year ended 31 March 2018 ACPI Horizon UCITS Fund (continued) Cost Sales USD Bayer AG 746,318 Sanofi 727,354 Pacific Industrial & Logistics REIT Plc 723,454 Gilead Sciences Inc 710,385 Bellway PLC 697,870 United States Treasury Note/Bond 697,813 Orange SA 692,696 IG Group Holdings PLC 675,085 Wild Bunch AG 643,217 Aviva PLC 619,140 Vue International Bidco PLC 593,554 METRO AG 588,716 ITV PLC 586,182 Prudential PLC 584,475 Estee Lauder Cos Inc/The 582,176 Hypo Real Estate International Trust 563,925 JPMorgan Chase & Co 507,401 Frontier Communications Corp 475,500 Garfunkelux Holdco 3 SA 472,069 P2P Global Investments PLC/Fund 463,312 Financial derivative instruments are excluded from the above due to no cost being attributed to purchases and sales of such instruments.


71


The Central Bank Regulations requires all material changes that have occurred in the disposition of the assets of the UCITS to be documented in the annual report. A material change is defined as the aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the year or aggregate disposals greater than 1 per cent of the total value of sales for the year. ACPI Global Healthcare UCITS Fund Proceeds Purchases USD - - Sales Gilead Sciences Inc 285,297 Sanofi 282,351 Roche Holding AG 264,159 Amgen Inc 226,472 Luye Pharma Group Ltd 225,801 Laboratory Corp of America Holdings 212,261 GlaxoSmithKline PLC 192,451 Intuitive Surgical Inc 188,847 Baxter International Inc 181,046 Straumann Holding AG 180,850 Fresenius Medical Care AG & Co KGaA 178,699 Bayer AG 169,613 Walgreens Boots Alliance Inc 168,141 Pfizer Inc 165,737 Johnson & Johnson 164,948 DaVita Inc 163,062 Stryker Corp 160,680 Grifols SA 160,161 Allergan PLC 136,948 Due to trading volumes the above details all of the purchases and sales during the year. Financial derivative instruments are excluded from the above due to no cost being attributed to purchases and sales of such instruments.


72


The Central Bank Regulations requires all material changes that have occurred in the disposition of the assets of the UCITS to be documented in the annual report. A material change is defined as the aggregate purchases of a security exceeding 1 per cent of the total value of purchases for the year or aggregate disposals greater than 1 per cent of the total value of sales for the year. Q-ACPI India Equity UCITS Fund Cost Purchases USD Hero MotoCorp Ltd 391,931 Bajaj Auto Ltd 388,622 Tata Consultancy Services Ltd 387,372 Infosys Ltd 387,206 Indian Hotels Co Ltd/The 380,532 Housing Development Finance Corp Ltd 371,667 Tata Motors Ltd 338,261 State Bank of India 327,199 Wipro Ltd 316,513 ICICI Bank Ltd 308,609 NTPC Ltd 307,382 Lupin Ltd 298,992 Oil & Natural Gas Corp Ltd 275,462 Cipla Ltd/India 266,627 Power Grid Corp of India Ltd 262,891 GAIL India Ltd 257,730 Exide Industries Ltd 244,478 Tata Steel Ltd 182,670 Bharti Airtel Ltd 181,845 Larsen & Toubro Ltd 66,066 Proceeds Sales USD Bharti Airtel Ltd 222,895 Indian Hotels Co Ltd/The 206,553 Wipro Ltd 126,139 GAIL India Ltd 91,110 State Bank of India 85,629 NTPC Ltd 80,069 Tata Consultancy Services Ltd 77,450 Infosys Ltd 70,407 ICICI Bank Ltd 68,656 Oil & Natural Gas Corp Ltd 65,021 Exide Industries Ltd 54,591 Tata Motors Ltd 51,836 Cipla Ltd/India 50,999 Power Grid Corp of India Ltd 47,718 Lupin Ltd 46,249 Bajaj Auto Ltd 22,054 Larsen & Toubro Ltd 17,435 Tata Steel Ltd 11,889* Hero MotoCorp Ltd 8,960* Housing Development Finance Corp Ltd 6,762* *Total value of disposal is less than 1 per cent of the total value of sales for the year; however the Central Bank Regulations require a minimum of 20 purchases and sales to be disclosed. Due to trading volumes the above details all of the sales during the year. Financial derivative instruments are excluded from the above due to no cost being attributed to purchases and sales of such instruments.


73

Appendix 1 – Remuneration disclosure (unaudited) For the financial year ended 31 March 2018 Remuneration UCITS Regulations require certain disclosures to be made with regard to the remuneration policy of Link Fund Manager Solutions (Ireland) Limited (“LFMSI”). LFMSI, as a UCITS management company, has in place a remuneration policy which has applied to LFMSI since 1 January 2015, being the beginning of the first financial year of LFMSI following its authorisation as a UCITS management company.

Details of LFMSI’s remuneration policy are disclosed on LFMSI’s website. In accordance with the UCITS Regulations remuneration requirements, LFMSI is committed to ensuring that its remuneration policies and practices are consistent with and promote sound and effective risk management. This remuneration policy is designed to ensure that excessive risk taking is not encouraged within LFMSI and to enable LFMSI to achieve and maintain a sound capital base. In order to reduce the potential for conflicts of interests, none of the staff of LFMSI receive remuneration, either fixed or variable, which depends on the performance of any UCITS which LFMSI manages.

Remuneration costs are based on the direct employees of LFMSI plus a portion of the shared resources. These costs are allocated to funds based on the number of sub-funds managed by LFMSI.

The remuneration policy is in line with the business strategy, objectives, values and interests of the UCITS management company and the UCITS that it manages and of the investors in such UCITS, and includes measures to avoid conflicts of interest. The remuneration policy is adopted by the management body of the management company in its supervisory function, and that body adopts, and reviews at least annually, the general principles of the remuneration policy and is responsible for, and oversees, their implementation. There were no material changes to the policy during the year.

Number of beneficiaries

Fixed (EUR)

Variable (EUR)

Total (EUR)

Total remuneration paid to staff of the Management Company during the financial year ended 31 March 2018 24 606,915 58,622 665,537 Attributable to ACPI Select UCITS Funds plc 38,976 3,765 42,741 Total amount of remuneration paid to members of staff whose activities have a material impact on the risk profile of the funds for the financial year ended 31 March 2018:

Fixed (EUR)

Variable (EUR)

Total (EUR)

Senior Management (including executives) - - - Risk Takers and other identified staff - - - Any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers - - - Remuneration of employees whose actions have a material impact on the risk profile of the UCITS managed by the Management Company - - -

Documents

and Audited Financial Statements · 2019. 7. 3. · John Fitzpatrick (Ireland) (Independent) Directors’ and Company Secretary’s interests in shares of the Company The Directors