PHOENIX UNIT TRUST MANAGERS MANAGER’S ANNUAL REPORT/media/Files/P/... · 2020. 3. 31. · 374,224...

PHOENIX UNIT TRUST MANAGERS

MANAGER’S ANNUAL REPORTFor the year: 1 October 2018 to 30 September 2019

PUTM BOTHWELL EMERGING MARKETS EQUITY FUND

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Contents

Investment review* 2-3

Portfolio of investments* 4-8

Top ten purchases and sales 9

Statistical information* 10-13

Statements of total return & change in net assets attributableto unitholders 14

Balance sheet 15

Notes to the financial statements 16-25

Distribution tables 26

Responsibilities of the manager and the trustee 27

Trustee’s report and directors’ statement 28

Independent auditor’s report 29-31

Appendix 32-33

Corporate information* 34-36

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

PUTM Bothwell Emerging MarketsEquity Fund 10.7 1.4 25.5 32.3 -11.3

Benchmark Index 4.1 2.4 19.0 36.2 -13.6

Sep 18-19 Sep 17-18 Sep 16-17 Sep 15 16 Sep 14-15% growth % growth % growth % growth % growth

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Dear Investor

Welcome to the PUTM Bothwell Emerging Markets EquityFund annual report for the 12 months to 30 September2019.

Performance Review

Over the review period, the PUTM Bothwell EmergingMarkets Equity Fund returned 10.7% (Source: AberdeenStandard Investments for 12 months to 30/09/19). Thisis compared to its benchmark index, which returned4.1% (Source: Datastream, MSCI Emerging MarketsIndex, Net Return, GBP for six months to 30/09/19).

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

Investment review

Source: Fund performance is Aberdeen Standard Investments for the 12 months to 30 September for each year.Benchmark Index performance is Datastream, MSCI Emerging Markets Index, Net Return, GBP to 30 September foreach year.

Past performance is not a guide to future performance.

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

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

Standardised Past Performance

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Portfolio and Market ReviewGlobal emerging markets delivered a positive return overthe year. The early stages of the review period sawemerging markets in retreat. However, they provedresilient relative to their developed counterparts, whichsuffered a sharp reversal of earlier gains. A confluence offactors weighed on sentiment, these included simmeringtrade tensions, faltering global growth and the FederalReserve’s commitment to reducing its balance sheet.

As we moved into 2019, emerging markets were on afirmer footing, shrugging off fears of a global slowdown.The market’s mood was lifted by the US FederalReserve’s accommodative policy stance, signs of aresolution to the US-China trade conflict and Beijing’sfresh stimulus.

Indeed, China-US trade tensions continued to dominateheadlines as 2019 progressed. Initial hopes of a dealgave way to concerns in May. This was spurred by theUS crackdown on Chinese telecoms giant Huawei.However, relations thawed at June’s G20 summit, withboth sides agreeing to renew talks. A market recovery atthe end of the period was not enough to make up for asharp fall in July. The inversion of the US-Treasury bondyield curve in August also spooked investors, especiallyas trade talks between the US and China broke down.

Regarding Fund performance, Brazil’s Banco Bradescowas a standout holding. Its first-quarter results metforecasts, with a 22% increase in recurring net income.More importantly, it was able to grow its loan book at a

fast pace while improving the quality of its assets.Meanwhile, not owning Chinese internet giant Baidu alsoproved helpful. The company’s shares fell after its first-quarter earnings signalled a deterioration in thecompetitiveness of its search advertising portal.Additional highlights included Lojas Renner, KotakMahindra Bank and China Resources Land.

On the downside, LG Chem hurt performance as its stockwas held in check by weak expectations surrounding itsthird-quarter results. Our lack of exposure to Russia’sGazprom was also negative. The share price of the state-owned oil & gas and exploration & production firm rallied62% after it announced a material change to its dividendpolicy. Positions in Naspers, Vale and Grupo FinancieroBanorte also disappointed.

Market Outlook and Fund Strategy

We are cautiously optimistic about the outlook foremerging markets given the easing monetary policy stanceamong global central banks. With the persisting trade warbetween the US and China continuing to fuel concernsover a global economic recession, expectations are thatcentral banks will continue to inject stimulus to boosteconomic activity. Against this backdrop, corporateearnings should rise, albeit modestly. Beyond the near-term volatility, our commitment to focus on qualitycompanies with healthy fundamentals and experiencedmanagement should yield sustainable returns for investorsin the longer term.

Investment review

Portfolio of investments (unaudited)

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Investments held at 30 September 2019 Market Percentage of value total net assets Holding Investment £000 %

United Kingdom (30/09/18 – 0.86%) 0.31 Banks 246,058 Bank of Georgia Group 3,287 0.31

Australia (30/09/18 – 0.45%)

Bermuda (30/09/18 – 1.02%) 0.89 Banks 56,317 Credicorp 9,526 0.89

Brazil (30/09/18 – 8.44%) 9.13 Banks 6,135,326 Banco Bradesco 37,352 3.50

Beverages 2,612,118 Ambev 9,796 0.92

Food Producers 736,440 BRF 5,481 0.51

General Retailers 1,264,477 Lojas Renner 12,433 1.17

Mining 2,011,377 Vale 18,711 1.75

Oil & Gas Producers 2,327,273 Petrobras 13,670 1.28

British Virgin Islands (30/09/18 – 1.48%) 0.60 Software & Computer Services 374,224 Mail.Ru Group GDR++ 6,359 0.60

Cayman Islands (30/09/18 –17.47%) 21.60 Alternative Energy 3,622,000 China Conch Venture Holdings 10,817 1.01

Beverages 2,379,400 Budweiser Brewing 6,909 0.65

General Retailers 379,066 Alibaba Group Holding ADR+ 51,441 4.82

Industrial Engineering 2,088,730 Haitian International Holdings 3,468 0.33

Personal Goods 1,122,133 Anta Sports Products 7,527 0.71

Pharmaceuticals & Biotechnology 1,040,500 WuXi Biologics 8,595 0.81

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Real Estate & Investment Services 7,317,210 China Resources Land 24,844 2.33

Software & Computer Services 257,255 58.com ADR+ 10,288 0.96 183,710 Autohome 12,379 1.16 1,722,021 Tencent Holdings 58,824 5.51

Travel & Leisure 261,124 Ctrip.com International ADR+ 6,204 0.58 687,043 Huazhu Group 18,398 1.72 2,945,200 Sands China 10,808 1.01

Chile (30/09/18 – 0.58%) 0.74 Electricity 53,266,238 Enel Americas 7,907 0.74

China (30/09/18 – 9.30%) 6.96 Banks 12,209,544 China Construction Bank 7,545 0.71 6,445,396 China Merchants Bank ‘H’ 24,853 2.33

Life Insurance 4,489,818 Ping An Insurance 41,805 3.92

Cyprus (30/09/18 – 1.43%) 0.79 Industrial Transportation 1,208,263 Globaltrans Investment 8,432 0.79

Hong Kong (30/09/18 – 5.77%) 4.89 Financial Services 266,479 Hong Kong Exchanges and Clearing 6,339 0.59

Life Insurance 2,925,610 AIA Group 22,410 2.10

Mobile Telecommunications 1,131,779 China Mobile 7,592 0.71

Oil & Gas Producers 12,802,000 CNOOC 15,849 1.49

India (30/09/18 – 9.96%) 10.72 Banks 919,367 Kotak Mahindra Bank 17,312 1.62

Construction & Materials 525,021 Larsen & Toubro 8,863 0.83 284,441 UltraTech Cement 14,140 1.33



Financial Services 1,334,745 Housing Development Finance 30,217 2.83

Life Insurance 874,249 SBI Life Insurance 8,473 0.79

Pharmaceuticals & Biotechnology 1,625,640 Biocon 4,150 0.39 226,741 Piramal Healthcare 4,238 0.40

Software & Computer Services 644,957 Tata Consultancy Services 15,504 1.45

Tobacco 3,860,026 ITC 11,485 1.08

Indonesia (30/09/18 – 3.22%) 4.28 Automobiles & Parts 28,146,030 Astra International 10,579 0.99

Banks 9,140,758 Bank Central Asia 15,846 1.49 58,191,421 Bank Rakyat Indonesia 13,706 1.29

Support Services 25,333,350 AKR Corporindo 5,489 0.51

Luxembourg (30/09/18 – 0.00%) 1.03 Industrial Metals 642,421 Tenaris ADR+ 11,036 1.03

Malaysia (30/09/18 – 0.77%)

Mexico (30/09/18 – 4.96%) 4.47 Banks 4,158,679 Grupo Financiero Banorte SAB de CV 18,127 1.70

Beverages 3,097,304 Fomento Economico Mexicano 22,991 2.16

Industrial Transportation 530,614 Grupo Aeroportuario del Sureste 6,554 0.61

Netherlands (30/09/18 – 0.00%) 1.09 Financial Services 195,140 Prosus 11,601 1.09

Panama (30/09/18 – 0.60%) 0.52 Travel & Leisure 68,867 Copa Holdings 5,518 0.52

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Philippines (30/09/18 – 1.46%) 1.57 Real Estate & Investment Services 21,666,153 Ayala Land 16,775 1.57

Russia (30/09/18 – 3.45%) 3.12 Banks 1,387,456 Sberbank of Russia ADR+ 15,929 1.49

Oil & Gas Producers 111,367 Lukoil 7,495 0.70 604,717 Novatek 9,962 0.93

South Africa (30/09/18 – 3.81%) 3.87 Banks 1,890,637 FirstRand 6,293 0.59

Media 163,152 Naspers ‘N’ 20,040 1.88

Mobile Telecommunications 1,221,960 MTN Group 6,293 0.59 1,342,580 Vodacom Group 8,597 0.81

South Korea (30/09/18 – 11.59%) 9.05 Banks 248,777 KB Financial Group 7,198 0.67

Chemicals 88,102 LG Chem 17,871 1.68

Electronic & Electrical Equipment 1,208,750 Samsung Electronics 40,182 3.77 657,328 Samsung Electronics Preference Share 17,615 1.65

Life Insurance 114,406 ING Life Insurance 2,096 0.20

Technology Hardware & Equipment 206,733 SK Hynix 11,501 1.08

Taiwan (30/09/18 – 8.13%) 6.59 Electronic & Electrical Equipment 3,348,816 Hon Hai Precision Industry 6,403 0.60

Food & Drug Retailers 923,386 President Chain Store 6,992 0.66

Technology Hardware & Equipment 8,011,066 Taiwan Semiconductor Manufacturing 56,890 5.33

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Thailand (30/09/18 – 2.84%) 1.27 Banks 1,013,506 Kasikornbank 4,222 0.40

Oil & Gas Producers 7,640,201 PTT Public 9,274 0.87

Turkey (30/09/18 – 1.15%) 0.78 Food & Drug Retailers 1,182,151 BIM Birlesik Magazalar A.S 8,345 0.78

Money Markets (30/09/18 – 0.95%) 0.11 1,156 Aberdeen Standard Liquidity Fund ‘Z‒1 Income’ GBP+ 1,156 0.11

Portfolio of investments 1,006,807 94.38 Net other assets 60,001 5.62

Net assets 1,066,808 100.00

Unless otherwise stated, all investments are listed on recognised stockexchanges and are ‘approved securities’ within the meaning of the FCA rules.~SICAVs (open ended investment schemes registered outside the UK).+ADR – American Depositary Receipt++GDR – Global Depositary Receipt

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Purchases Cost£000

Aberdeen Standard Liquidity Fund‘Z‒1 Income’ GBP 170,615Alibaba Group Holding ADR 22,393CNOOC 17,580Ping An Insurance 16,154Naspers ‘N’ 14,321Bank Rakyat Indonesia 14,102Banco Bradesco 13,037Tenaris ADR 11,713Sands China 11,644Housing Development Finance 11,080

Subtotal 302,639Other purchases 213,402

Total purchases for the year 516,041

Sales Proceeds£000

Aberdeen Standard Liquidity Fund‘Z‒1 Income’ GBP 169,508Ignis Liquidity Fund 15,227Lukoil 13,257China Petroleum & Chemical ‘H’ 11,131Voltas 10,716Anhui Conch Cement 10,097Banco Bradesco 8,888Advanced Info Service 8,481Anta Sports Products 6,747CVC Brasil Operadora e Agência de Viagens 6,557

Subtotal 260,609Other sales 125,221

Total sales for the year 385,830

Top ten purchases and salesFor the year ended 30 September 2019

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Statistical information

Comparative tables Class ‘A’ Accumulation 30/09/19 30/09/18 30/09/17 pence pence penceChange in net assets per unitOpening net asset value per unit 125.90 126.59 102.66

Return before operating charges* 13.22 1.39 25.73Operating charges (2.08) (2.08) (1.80)

Return after operating charges* 11.14 (0.69) 23.93

Distributions on accumulation units (0.90) (1.17) (0.83)

Retained distributions on accumulation units 0.90 1.17 0.83

Closing net asset value per unit 137.04 125.90 126.59

*after direct transaction costs of: 0.12 0.16 0.36

PerformanceReturn after charges 8.85% (0.55%) 23.31%

Other informationClosing net asset value (£000) 24,434 18,584 9,332Closing number of units 17,829,449 14,761,779 7,371,820Operating charges 1.58% 1.58% 1.57%Direct transaction costs 0.09% 0.12% 0.31%

Prices+

Highest unit price (pence) 157.54 153.96 142.39Lowest unit price (pence) 113.67 120.65 99.34

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

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Comparative tables Class ‘B’ Accumulation 30/09/19 30/09/18 30/09/17 pence pence penceChange in net assets per unitOpening net asset value per unit 157.24 155.78 124.45

Return before operating charges* 16.52 1.59 31.45Operating charges (0.14) (0.13) (0.12)

Return after operating charges* 16.38 1.46 31.33

Distributions on accumulation units (3.59) (3.80) (3.13)

Retained distributions on accumulation units 3.59 3.80 3.13

Closing net asset value per unit 173.62 157.24 155.78

*after direct transaction costs of: 0.15 0.20 0.44

PerformanceReturn after charges 10.42% 0.94% 25.17%

Other informationClosing net asset value (£000) 1,042,374 789,731 775,356Closing number of units 600,365,605 502,248,801 497,728,576Operating charges 0.08% 0.08% 0.09%Direct transaction costs 0.09% 0.12% 0.31%

Prices+

Highest unit price (pence) 184.84 176.70 162.41Lowest unit price (pence) 141.70 150.18 120.36

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

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Investment objective

The Fund aims to provide capital growth by outperforming the benchmark (beforefees) by 0.5% to 1.5% per annum over any given 3 year period.

The benchmark is the MSCI Emerging Markets £ Index (the “Index”).

Investment policy

The Fund aims to achieve its objective by investing at least 70% of the portfolio inequities and equity related securities of emerging market companies that are listed ortraded on an eligible market. In order to improve liquidity, the Fund will have the abilityto invest in the securities of companies incorporated in emerging markets whosesecurities are traded on Eligible Markets in developed economies.

The Fund’s holdings will typically consist of equites or “Equity related securities” whichwill include convertible stocks, stock exchange listed warrants, depository receipts,exchange traded funds (ETFs), MSCI Opals, participation notes (or similar equivalentsecurities) where these provide a cost effective method of gaining access to someemerging markets, offer reduced settlement risk and improved liquidity. The Fund willalso hold such investments which entitled the holder to subscribe for or convert intothe equity of the company and/or where the share price performance is, in the opinionof the Investment Manager, influenced significantly by the stock market performance ofthe company's ordinary shares. The Fund may also invest in other transferablesecurities, money-market instruments, deposits, cash and near cash and othercollective investment schemes. The Fund’s exposure to unapproved securities will belimited to no more than 10% of its net asset value.

The Fund may invest in companies incorporated outside of emerging markets whoserevenue derives substantially from emerging markets or whose assets are substantiallyin emerging markets. The Fund may also invest in eligible collective investmentschemes and in equities of (or interests in) other investment companies (or similarfunds) the investment objective of which is to invest in emerging markets. The Fundmay also invest part of its assets in stocks of companies incorporated in developedmarkets.

Derivatives may be used for efficient portfolio management and hedging only.

Investment strategy

Although a minimum of 70% of the Fund is invested in components of the Index, theFund is actively managed. The Investment Adviser uses research techniques to selectindividual holdings. The research process is focused on finding high quality companiesat attractive valuations that can be held for the long term.The Investment Adviserreferences the Index, which means that while the Fund is not required to match theweightings of the Index and does not concentrate on any particular sector, the Fund ismanaged within constraints, so that divergence from the Index is controlled. The Fund’sportfolio may, therefore, be similar to the components of the Index.


Revenue distribution and pricing

Units of the Fund are available as either Class ‘A’ or ‘B’ Accumulation units (whererevenue is reinvested to enhance the unit price). There will be two potential distributionsin each accounting year: an interim distribution as at 31 March and a final distributionas at 30 September.

At each distribution the net revenue after deduction of expenses, arising in the precedingsix months from the investments of the Fund is apportioned amongst the unitholders.Unitholders receive a tax voucher giving details of the distribution and the Manager’sReport no later than two months after these dates.

Risk and reward profileThe Risk and Reward Indicator table demonstrates where the Fund ranks in terms ofits potential risk and reward. The higher the rank the greater the potential reward butthe greater the risk of losing money. It is based on past data, may change over timeand may not be a reliable indication of the future risk profile of the Fund. The shadedarea in the table below shows the Fund’s ranking on the Risk and Reward Indicator.

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

1 2 3 4 5 6 7

This Fund is ranked at 6 (30/09/18: 6) because funds of this type have experiencedhigh rises and falls in value in the past. Although this is a high ranking it is not thehighest. The above figure applies to the following unit classes:

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

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

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

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

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

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

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fi

Statement of total return 30/09/19 30/09/18 Notes £000 £000 £000 £000

Income

Net capital gains/(losses) 4 70,115 (12,304) Revenue 5 21,281 21,549

Expenses 6 (1,019) (817)

Interest payable and similar charges (19) (18)

Net revenue before taxation 20,243 20,714

Taxation 7 (2,340) (2,580)

Net revenue after taxation 17,903 18,134

Total return before distributions 88,018 5,830

Distributions 8 (18,349) (18,595)

Change in net assetsattributable to unitholdersfrom investment activities 69,669 (12,765)

Statement of change in net assets attributable to unitholders 30/09/19 30/09/18 £000 £000 £000 £000

Opening net assetsattributable to unitholders 808,315 784,688

Amounts receivable on issue of units 276,334 98,819

Amounts payable on cancellation of units (108,560) (81,255)

167,774 17,564Change in net assetsattributable to unitholdersfrom investment activities 69,669 (12,765)

Retained distributions on accumulation units 21,050 18,828

Closing net assetsattributable to unitholders 1,066,808 808,315

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Annual financial statementsFor the year ended 30 September 2019

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Balance sheet 30/09/19 30/09/18 Notes £000 £000 £000 £000

Assets:Fixed assets:Investments 1,006,807 805,788

Current assets:Debtors 9 123,477 5,848Cash and bank balances 10 5,925 19,560

Total current assets 129,402 25,408

Total assets 1,136,209 831,196

Liabilities:Creditors:Other creditors 11 (69,401) (22,881)

Total liabilities (69,401) (22,881)

Net assets attributable to unitholders 1,066,808 808,315

Annual financial statementsAs at 30 September 2019

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Notes to the financial statements

Note 1 Accounting policies(a) Basis of preparation

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

(b) Valuation of investmentsThe quoted investments of the Fund have been valued at bid dealing prices as atclose of business on 30 September 2019, the last valuation point in the accountingyear, in accordance with the Trust Deed.Investments in collective investment schemes have been valued at bid price fordual priced funds or the single price for single priced funds. Where theseinvestments are managed by the Manager or an associate of the Manager, theholdings have been valued at the cancellation price for dual priced funds or thesingle price for single priced funds. This price is the last available published price atthe year end.

(c) Foreign exchangeTransactions in foreign currencies during the year are translated into Sterling (thefunctional currency of the Fund), at the rates of exchange ruling on the transactiondate. Amounts held in foreign currencies have been translated at the rate ofexchange ruling at close of business, 30 September 2019, the last valuation pointin the accounting year.

(d) RevenueDividends receivable from equity investments and distributions receivable fromcollective investment schemes are credited to revenue when they are first quotedex-dividend. Interest receivable on bank deposits is accounted for on a accrualsbasis.

(e) Special dividendsSpecial dividends are treated either as revenue or repayments of capital dependingon the facts of each particular case. It is likely that where the receipt of a specialdividend results in a significant reduction in the capital value of the holding, thenthe special dividend should be treated as capital in nature so as to ensure thematching principle is applied to gains and losses. Otherwise, the special dividendshould be treated as revenue.

(f) Stock dividendsThe ordinary element of stocks received in lieu of cash is recognised asrevenue. Any excess in value of shares received over the amount of cashforgone would be treated as capital.

(g) ExpensesExpenses are accounted for on an accruals basis. Expenses of the Fund are chargedagainst revenue, except for the costs associated with the purchase and sale ofinvestments, which are charged to capital.

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Note 1 Accounting policies (continued)

(h) TaxationThe charge for taxation is based on taxable income for the year less allowableexpenses. UK dividends and franked distributions from UK collective investmentschemes are disclosed net of any related tax credit. Overseas dividends,unfranked distributions from UK collective investment schemes, and distributionsfrom overseas collective investment schemes are disclosed gross of any taxsuffered, the tax element being separately disclosed in the taxation note.

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

Note 2 Distribution policies(a) Basis of distribution

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

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

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

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

(e) ExpensesIn determining the net revenue available for distribution, charges in relation to thesafe custody of investments are ultimately borne by capital.

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

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Note 3 Risk management policies (continued) (a) Market price risk

Market price risk arises mainly from uncertainty about future prices of financialinstruments held. It represents the potential loss the Fund might suffer throughholding market positions in the face of price movements. The Fund’s investmentportfolio is exposed to market fluctuations which are monitored by the Managerin pursuit of the investment objectives and policies. Adherence to investmentguidelines and to investment and borrowing powers set out in the Trust Deed, theProspectus and in the Collective Investment Schemes Sourcebook (“theSourcebook”) mitigates the risk of excessive exposure to any particular type ofsecurity or issuer.

(b) Interest rate riskThe majority of the Fund’s financial assets are equity shares and otherinvestments which neither pay interest nor have a maturity date.

Interest receivable on bank deposits or payable on bank overdraft positions willbe affected by fluctuations in interest rates.

(c) Foreign currency riskA substantial proportion of the Fund’s investment portfolio is invested inoverseas securities and the Balance sheet can be (significantly) affected bymovements in foreign exchange rates. The Fund may be subject to short termexposure to exchange rate movements between placing the purchase or saleof securities and agreeing a related currency transaction albeit usually the twotransactions are agreed at the same time.

Any such currency transactions must be used in accordance with theinvestment objective of the Fund and must be deemed by the InvestmentManager to be economically appropriate. Regular production of portfolio riskreports highlight concentrations of risk, including currency risk, for the Fund.

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

(e) Counterparty riskCertain transactions in securities that the Fund enters into expose it to the riskthat the counterparty will not deliver the investment (purchase) or cash (sale)after the Fund has fulfilled its responsibilities. The Fund only buys and sellsinvestments through brokers which have been approved by the Manager as anacceptable counterparty. This list is reviewed annually.

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

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

Note 4 Net capital gains/(losses)The net capital gains/(losses) during the year comprise:

30/09/19 30/09/18 £000 £000

Gains/(losses) on non-derivative securities 70,808 (12,205)Losses on derivative contracts (134) (70)Currency losses (509) (279)Handling charges (50) (25)Capital special dividends – 275

Net capital gains/(losses) 70,115 (12,304)

Note 5 Revenue 30/09/19 30/09/18 £000 £000

UK dividends 178 187Overseas dividends 20,835 21,086Interest on overseas debt securities 2 4Stocklending commission 158 208Bank interest 41 6Liquidity interest 67 58

Total revenue 21,281 21,549

Note 6 Expenses 30/09/19 30/09/18 £000 £000(a) Payable to the Manager or associates of the

Manager and agents of either of them:Manager’s periodic charge 485 322

(b) Payable to the Trustee or associates of the Trustee and agents of either of them:Trustee’s fees 44 42

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Note 6 Expenses (continued) 30/09/19 30/09/18 £000 £000(c) Other expenses:

Audit fee 10 7Safe custody charges 382 352Printing & stationery – 2Legal fee – 3Revenue collection expenses 72 80Professional fees 26 9

490 453

Total expenses 1,019 817

Note 7 Taxation 30/09/19 30/09/18 £000 £000

(a) Analysis of tax charge for the year

Corporation tax 426 733Double tax relief (343) (651)Overseas withholding tax 2,117 2,321Overseas capital gains tax 137 176Greek sales tax 3 1

Total taxation (Note 7(b)) 2,340 2,580

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

Net revenue before taxation 20,243 20,714

Corporation tax at 20% (30/09/18: 20%) 4,049 4,143

Effects of:Revenue not subject to taxation (3,644) (3,410)Overseas withholding tax 2,117 2,321Double tax relief (343) (651)Adjustments in respect of prior years 21 –Overseas capital gains tax 137 176Greek sales tax 3 1

Total tax charge for the year (Note 7(a)) 2,340 2,580

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

(c) Provision for deferred taxationNo deferred tax asset has been recognised in the year or the prior year.

21


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

30/09/19 30/09/18 £000 £000

Interim 4,130 4,152Final 16,920 14,676

21,050 18,828

Amounts deducted on cancellation of units 471 179Amounts added on issue of units (3,172) (412)

Net distribution for the year 18,349 18,595

Net revenue after taxation 17,903 18,134Expenses taken to capital 382 355Tax credit taken to capital (76) (71)Capital tax balances 140 177

Net distribution for the year 18,349 18,595

Details of the distribution per unit are set out in the tables on page 26.

Note 9 Debtors 30/09/19 30/09/18 £000 £000

Creations awaiting settlement 122,101 –Sales awaiting settlement – 5,258Accrued income 1,366 581Overseas tax recoverable 10 9

Total debtors 123,477 5,848

Note 10 Cash and bank balances 30/09/19 30/09/18 £000 £000

Cash and bank balances 5,925 19,560

Total cash and bank balances 5,925 19,560

Note 11 Other creditors 30/09/19 30/09/18 £000 £000

Cancellations awaiting settlement 117 3Purchases awaiting settlement 69,057 22,757Manager’s periodic charge payable 136 32Trustee’s fees payable 8 7Safe custody charges payable 37 30Audit fee payable 8 7Handling charges payable 1 3Tax payable 37 42

Total other creditors 69,401 22,881

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

Opening units at 01/10/18 14,761,779 502,248,801

Unit movements in year:Units issued 5,162,586 162,442,705Units cancelled (2,094,916) (64,325,901)

Closing units at 30/09/19 17,829,449 600,365,605

Note 13 Contingencies and commitmentsAt 30 September 2019 the Fund had no outstanding calls on partly paid shares,no potential underwriting commitments or any other contingent liabilities(30/09/18: £nil).

Note 14 StocklendingThe total value of securities on loan at the Balance sheet date was £34,640,351(30/09/18: £21,871,253). Collateral was held in the following form:

30/09/19 30/09/18 £000 £000Government bonds 36,372 23,160

36,372 23,160

The gross earnings and fees paid for the year were £192,744 (30/09/18:£253,947) and £34,694 (30/09/18: £45,710) respectively.

The counterparties for the securities on loan are shown in the appendix onpage 32.

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

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

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

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

The Manager is part of the Phoenix Group. Phoenix Life Limited which is also partof the Phoenix Group, is a material unitholder in the Fund and therefore a relatedparty, holding 100% of the units in Class ‘A’ Accumulation at the year end(30/09/18: 100%) and 99.93% of the units in Class ‘B’ Accumulation at theyear end (30/09/18: 100%).

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

Any balances due to/from the Manager or its associates at 30 September 2019 inrespect of these transactions are shown in Notes 9 and 11.

23


Note 17 Financial instruments

In accordance with the investment objective, the Fund held certain financialinstruments.These comprise:• securities held in accordance with the investment objective and policies;• derivative transactions which the Fund also may enter into, the purpose of which isto manage the currency and market risks arising from the Fund’s investmentactivities; and

• cash and short term debtors and creditors arising directly from operations.There was no counterparty exposure held at the year end.

Currency exposureAn analysis of the monetary assets and liabilities at the year end is shown below: Net currency assets Net currency assets 30/09/19 30/09/18

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

Sterling 91,337 4,443 95,780 (2,155) 14,601 12,446 Brazilian Real 159 97,443 97,602 103 68,223 68,326 Hong Kong Dollar (29,420) 258,185 228,765 2,965 207,247 210,212 Indian Rupee – 114,382 114,382 (12) 80,539 80,527 South Korean Won – 96,463 96,463 435 93,668 94,103 Mexican Peso 370 47,672 48,042 371 40,034 40,405 South African Rand (1,389) 41,223 39,834 – 30,778 30,778 Thai Bhat – 13,496 13,496 11 22,942 22,953 New Taiwan Dollar 412 70,285 70,697 6,886 65,748 72,634 Turkish Lira – 8,345 8,345 (766) 9,330 8,564 US Dollar (36) 155,510 155,474 3,155 102,675 105,830 Other foreign

currencies* (1,432) 99,360 97,928 (8,466) 70,003 61,537

60,001 1,006,807 1,066,808 2,527 805,788 808,315

* foreign currencies included within 'other foreign currencies’ above amounts to lessthan 10% (30/09/18: less than 8%) of the net asset value of the Fund.

Income received in other currencies is converted to Sterling on or near the date ofreceipt. The Fund does not hedge or otherwise seek to avoid, movement risk onaccrued income.

Interest profileAt the year end date, 0.56% (30/09/18: 2.42%) of the Fund’s net assets by valuewere interest bearing. Interest rates earned/paid on deposits are earned/paid at a ratelinked to LIBOR (London Interbank Offered Rate) or international equivalent.

24


Note 17 Financial instruments (continued)Sensitivity analysisInterest rate risk sensitivity

As the majority of the Fund’s financial assets are non-interest bearing, the Fund is onlysubject to limited exposure to fair value interest rate risk due to fluctuations in levels ofmarket interest rates and therefore, no sensitivity analysis has been provided.

Foreign currency risk sensitivity A five percent increase in the value of the Fund’s foreign currency exposure would have

the effect of increasing the return and net assets by £48,551,400 (30/09/18:£39,793,347). A five percent decrease would have an equal and opposite effect.

Price risk sensitivityA five percent increase in the value of the Fund’s portfolio would have the effect ofincreasing the return and net assets by £53,340,400 (30/09/18: £40,415,750). Afive percent decrease would have an equal and opposite effect.

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

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

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

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

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

For the year ended 30/09/19Level 1 2 3 Total

Investment assets £000 £000 £000 £000Equities 1,005,651 – – 1,005,651Money market 1,156 – – 1,156

1,006,807 – – 1,006,807

For the year ended 30/09/18Level 1 2 3 Total

Investment assets £000 £000 £000 £000Equities 798,137 – – 798,137Money market 7,651 – – 7,651

805,788 – – 805,788

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Note 19 Portfolio transaction costsFor the year ended 30/09/19 Other Total

Value Commission Taxes expenses costsAnalysis of total purchases costs £000 £000 % £000 % £000 % £000Equity transactions 335,500 244 0.07 155 0.05 73 0.02 335,972Money markets 178,240 – – – – – – 178,240Corporate actions 1,829 – – – – – – 1,829

Total 515,569 244 155 73 516,041

Other TotalValue Commission Taxes expenses costs

Analysis of total sales costs £000 £000 % £000 % £000 % £000Equity transactions 196,122 (110) (0.06) (71) (0.04) (118) (0.06) 195,823Money markets 184,735 – – – – – – 184,735Corporate actions 5,272 – – – – – – 5,272

Total 386,129 (110) (71) (118) 385,830

Commission, taxes and other expenses as % of average net assets:Commission 0.04%Taxes 0.03%Other expenses 0.02%For the year ended 30/09/18 Other Total

Value Commission Taxes expenses costsAnalysis of total purchases costs £000 £000 % £000 % £000 % £000Equity transactions 348,537 198 0.06 97 0.03 95 0.03 348,927Money markets 171,516 – – – – – – 171,516Corporate actions 3 – – – – – – 3

Total 520,056 198 97 95 520,446

Other TotalValue Commission Taxes expenses costs

Analysis of total sales costs £000 £000 % £000 % £000 % £000Equity transactions 309,593 (232) (0.07) (83) (0.03) (248) (0.08) 309,030Money markets 180,021 – – – – – – 180,021Corporate actions 2,900 – – – – – – 2,900

Total 492,514 (232) (83) (248) 491,951

Commission, taxes and other expenses as % of average net assets:Commission 0.06%Taxes 0.02%Other expenses 0.04%Portfolio transaction costs are incurred by the Fund when buying and selling underlying investments.These costs vary depending on the class of investment, country of exchange and method of execution.These costs can be classified as either direct or indirect transaction costs:Direct transaction costs: Broker commissions, fees and taxes.Indirect transaction costs: “Dealing spread” – the difference between buying and selling prices of theunderlying investments.At the Balance sheet date the portfolio dealing spread was 0.17% (30/09/18: 0.15%) being thedifference between the respective bid and offer prices for the Fund’s investments.

Note 20 Post Balance sheet eventsAs indicated in the accounting policies in note 1(b), the investments have been valued at close of business on 30September 2019. Since that date the Fund’s quoted bid price have risen from 137.04p to 146.21p for Class Aunits and from 173.62p to 185.80p for Class ‘B’ units as at 22 January 2020 (the latest applicable date beforecompletion of the accounts), a rise of 6.69% and 7.02% for Class ‘A’ and Class ‘B’ units respectively.

26

Interim distribution in pence per unitGroup 1: units purchased prior to 1 October 2018Group 2: units purchased 1 October 2018 to 31 March 2019

2019 2018 pence pence per unit per unit Net paid paid income Equalisation 31 May 31 May

Class ‘A’ Accumulation

Group 1 0.0000 — 0.0000 0.0000Group 2 0.0000 0.0000 0.0000 0.0000

Class ‘B’ Accumulation

Group 1 0.7943 — 0.7943 0.9094Group 2 0.3149 0.4794 0.7943 0.9094

Final distribution in pence per unitGroup 1: units purchased prior to 1 April 2019Group 2: units purchased 1 April 2019 to 30 September 2019

2019 2018 pence pence per unit per unit Net payable paid income Equalisation 30 Nov 30 Nov

Class ‘A’ Accumulation

Group 1 0.8964 — 0.8964 1.1653Group 2 0.0000 0.8964 0.8964 1.1653

Class ‘B’ Accumulation

Group 1 2.7917 — 2.7917 2.8879Group 2 0.4003 2.3914 2.7917 2.8879

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

Distribution tablesFor the year ended 30 September 2019

27

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

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

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

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

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

operation unless it is inappropriate to presume this.

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

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

The Depositary must in the context of its role act honestly, fairly, professionally,independently and in the interests of the Trust and its investors.

The Depositary is responsible for the safekeeping of all custodial assets andmaintaining a record of all other assets of the Trust in accordance with theRegulations.

The Depositary must ensure that:

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

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

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

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

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

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

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Trustee’s report and directors’ statement

Report of the Trustee to the Unitholders of the PUTM Bothwell Emerging MarketsEquity Fund for the year from 1 October 2018 to 30 September 2019Having carried out such procedures as we considered necessary to discharge ourresponsibilities as Depositary of the Trust, it is our opinion, based on the informationavailable to us and the explanations provided, that, in all material respects the Trust,acting through the AFM:

(i) has carried out the issue, sale, redemption and cancellation, and calculation ofthe price of the Trust’s units and the application of the Trust’s income inaccordance with the Regulations and the Scheme documents of the Trust; and

(ii) has observed the investment and borrowing powers and restrictions applicableto the Trust in accordance with the Regulations and the Scheme documents ofthe Trust.

London HSBC Bank plc5 February 2020

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

Birmingham Craig Baker, Director5 February 2020 Andrew Moss, Director

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OpinionWe have audited the financial statements of the PUTM Bothwell Emerging Markets Equity Fund (“theFund”) for the year ended 30 September 2019 which comprise the Statement of Total Return, theStatement of Change in Net Assets attributable to Unitholders, the Balance Sheet, the DistributionTables and the related Notes 1 to 20, including a summary of significant accounting policies. Thefinancial reporting framework that has been applied in their preparation is applicable law and UnitedKingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) includingFRS 102 ‘The Financial Reporting Standard applicable to the UK and Republic of Ireland’.

In our opinion, the financial statements:

• give a true and fair view of the financial position of the Fund as at 30 September 2019 and of thenet revenue and the net capital gains on the scheme property of the Fund for the year then ended;and

• have been properly prepared in accordance with United Kingdom Generally Accepted AccountingPractice including FRS 102 ‘The Financial Reporting Standard applicable to the UK and Republicof Ireland’.

Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) andapplicable law. Our responsibilities under those standards are further described in the Auditor’sresponsibilities for the audit of the financial statements section of our report below. We are independentof the Fund in accordance with the ethical requirements that are relevant to our audit of the financialstatements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.

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

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

• the Manager has not disclosed in the financial statements any identified material uncertainties thatmay cast significant doubt about the Fund’s ability to continue to adopt the going concern basis ofaccounting for a period of at least twelve months from the date when the financial statements areauthorised for issue.

Independent auditor’s report to the unitholders ofthe PUTM Bothwell Emerging Markets Equity Fund

30


Other information The other information comprises the information included in the Annual Report other than the financialstatements and our auditor’s report thereon. The Manager is responsible for the other information.

Our opinion on the financial statements does not cover the other information and, except to the extentotherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If we identify such material inconsistencies or apparent material misstatements, we arerequired to determine whether there is a material misstatement in the financial statements or a materialmisstatement of the other information. If, based on the work we have performed, we conclude thatthere is a material misstatement of the other information, we are required to report that fact. We havenothing to report in this regard.

We have nothing to report in this regard.

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

• the financial statements have been properly prepared in accordance with the Statement ofRecommended Practice relating to Authorised Funds, the rules of the Collective InvestmentSchemes Sourcebook of the Financial Conduct Authority and the Trust Deed;

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

• there is nothing to indicate that proper accounting records have not been kept or that the financialstatements are not in agreement with those records.

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

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

Responsibilities of the Manager As explained more fully in the Manager’s responsibilities statement set out on page 27, the Manager isresponsible for the preparation of the financial statements and for being satisfied that they give a trueand fair view, and for such internal control as the Manager determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud orerror.

In preparing the financial statements, the Manager is responsible for assessing the Fund’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the Manager either intends to liquidate the Fund or to ceaseoperations, or has no realistic alternative but to do so.

31


Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with ISAs (UK) will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

Use of our reportThis report is made solely to the unitholders of the Fund, as a body, pursuant to Paragraph 4.5.12 ofthe rules of the Collective Investment Schemes Sourcebook of the Financial Conduct Authority. Ouraudit work has been undertaken so that we might state to the unitholders of the Fund those matters weare required to state to them in an auditor’s report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other than the Fund and theunitholders of the Fund as a body, for our audit work, for this report, or for the opinions we haveformed.

Ernst & Young LLPStatutory AuditorEdinburgh

5 February 2020

Notes:

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

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

32

Appendix (unaudited)

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

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

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

Securities 3.44

Amount of assets engaged in each type of SFT

Amount of assets % of AUM

34,640,351 3.25

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

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

France (Government of) 0% 25/03/2024 16,727,648 15,302Bundesrepublik Deutsche Index Linked 0.5% 15/04/2030 6,199,980 7,143Canada (Government of) 4% 01/06/2041 7,000,000 6,284Bundesrepublik Deutsche 1.25% 15/08/2048 2,999,997 3,745United States Treasury Bill 0% 10/10/2019 2,448,200 1,987Canada (Government of) 3.25% 01/06/2021 3,000,000 1,911

All counterparties Gross volume of outstanding transactions Fair valueCounterparty £000

UBS AG (London Branch) 34,640

Appendix (unaudited)

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

Bonds Investment grade 36,372

36,372

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

Maturity tenor of collateral Fair valueMaturity £000

Rolling Maturity 36,372

36,372

Currency of collateral Fair valueCurrency £000

US Dollar 36,372

36,372

Maturity tenor of SFTs Fair valueMaturity £000

Rolling Maturity 34,640

34,640

Country in which counterparties are established

Counterparty

All counterparties are UK based

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

Fund 193 35 82.00 158

193 35 158 The gross earnings were split by the lending agent as follows:- 82% to the Lender (PUTM Bothwell Emerging Markets Equity Fund)- 8% to the Manager (Phoenix Unit Trust Managers Limited)- 10% retained by the Lending Agent (eSec)

33

34

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

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

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

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

Administration & Dealing: 0345 584 2803 (between the hours of 9am & 5pm).

Remuneration

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

This statement fulfils Phoenix Unit Trust Managers Limited's ('the Manager') obligations as an authorisedUCITS Manager in respect of compliance with the UCITS V Remuneration Code and contains relevantremuneration disclosures.

PUTM Unit Trusts are managed by Phoenix Unit Trust Managers Limited, which is a subsidiary ofPhoenix Life Limited, part of The Phoenix Group plc ('the Group').

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

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

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

Corporate information (unaudited)

As at 31 December 2018 Headcount Total remuneration

Phoenix Unit Trust Managers 2 39,675.21of whichFixed Remuneration 2 30,603.21Variable Remuneration 1 9,072.00Carried Interest n/a

Highest paid Director’s Remuneration 24,675.21

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

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

35

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

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

Total remuneration can include any of the following;

• Fixed pay and annual/long term incentive bonuses

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

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

Senior Management includes – PUTM Board and PUTM Executive Committees

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

Assessment of Value

We are required to perform an annual assessment of the value for money for each unit class of PUTMBothwell Emerging Markets Equity Fund. This has been performed based on the information available as at30 September 2019.

We have performed this review having regard to a wide range of factors. In doing so, we have madecomparison with the other unit classes of the relevant fund, with the unit classes and sub-funds within ourfund ranges and also with comparable unit classes and sub-funds in the rest of the market.

Broadly speaking, assessment of value requires consideration of a combination of factors, including thereturn achieved, the price paid, the risk taken and the quality and range of services provided by the assetmanager. This also needs to be considered in the context of the investment objectives and policy for thefund, the target investor and the recommended holding period.

In considering cost, regard needs to be had to the total cost of investing, including any adviser charges,platform charges, adviser fees and the on-going annual management charge. Regard also needs to be had tothe degree of active management; as an investor, you would not be receiving value, if you were beingcharged fees for active portfolio management, where in fact, the fund’s composition of performance isstaying very close to a benchmark. These factors also need to be considered in the context of the size of theportfolio and the ability of larger funds to benefits from economies of scale. As regards performance, it isimportant that performance is considered over an appropriate timescale given the fund’s objectives, andshould be measured net of fees.

Based on our assessment of the value of each unit class, PUTM are comfortable that the fund meets therequired Assessment of Value criteria. No immediate action is required.

Further details on our Assessment of Value methodology can be found at the following link:https://www.phoenixunittrust.co.uk/report-and-accounts.aspx

Risks

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

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

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


36


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

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

Independent AuditorErnst & Young LLPAtria One144 Morrison StreetEdinburgh EH3 8EX

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

ManagerPhoenix Unit Trust Managers Limited (PUTM)1 Wythall Green WayWythallBirmingham B47 6WGTel: 0345 584 2803Registered in England – No.03588031Authorised and regulated by the Financial Conduct Authority.

DirectorsAndrew Moss PUTM Director, Chief Executive

Phoenix Life;Craig Baker PUTM Director, Head of Investment

Management Phoenix Life;Mike Urmston Non Executive Director of PUTM;Nick Poyntz-Wright Non Executive Director of PUTM.

Registrar and correspondence addressPhoenix Unit Trust Managers LimitedFloor 1, 1 Grand Canal SquareGrand Canal HarbourDublin 2IrelandAuthorised and regulated by the Financial Conduct Authority.

B133.10.19

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

Please note the Key Investor Information Document (KIID), the Supplementary Information Document (SID) and thefull prospectus are available free of charge. These are available by contacting Client Services on 0345 584 2803.

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

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

Contact: Client ServicesCall: 0345 584 2803Correspondence Address: Floor 1, 1 Grand Canal Square, Grand Canal Harbour, Dublin 2, IrelandVisit: phoenixunittrust.co.uk

Date post:	24-Sep-2020
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