Rathbone Global Opportunities Fund - Rathbone Unit Trust ...

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Rathbone Global Opportunities Fund - Rathbone Unit Trust ...

Rathbone Unit Trust Management LimitedRathbone Global Opportunities FundShort Report as at31 January 2006

The photography is of the ‘Orangery’, one of the most notable features of our New Bond Streetoffices in London. It is an imposing internal glassed atrium within a grade II listed building of muchcharacter and tradition, that dates back to circa 1830.

Rathbone Unit Trust Management LimitedRathbone Global Opportunities FundManagerRathbone Unit Trust Management Limited159 New Bond StreetLondon W1S 2UDTelephone 020 7399 0399Facsimile 020 7399 0057A member of the Rathbone GroupAuthorised and regulated by the FinancialServices Authority and member of theInvestment Management AssociationDealing OfficeNorthern House,Woodsome ParkFenay Bridge, Huddersfield HD8 0GATelephone 0845 300 2101Facsimile 01484 601 500RegistrarCapita Financial Administrators LimitedNorthern House,Woodsome ParkFenay Bridge, Huddersfield HD8 0GATelephone 0845 300 2101Facsimile 01484 601 500Authorised and regulated by the FinancialServices AuthorityAuditorAGN ShipleysChartered Accountants10 Orange StreetHaymarketLondon WC2H 7DQDirectorsGM Powell – ChairmanPG Pearson Lund – Chief Executive OfficerJR Chillingworth – Chief Investment OfficerHMC CunninghamCRC HextonRP LanyonRE Loader FCACP Mason – Compliance DirectorAD PomfretCR StickAdministratorCapita Financial Administrators LimitedBeaufort House15 St Botolph StreetLondon EC3A 7HHTelephone 0845 300 2110Facsimile 020 7556 8854Authorised and regulated by the FinancialServices AuthorityTrusteeRoyal Bank of Scotland plcTrustee and Depositary Services36 St Andrew Square, Edinburgh EH2 2YBAuthorised and regulated by the FinancialServices Authority1

Rathbone Unit Trust Management LimitedManager’s report for the year to 31 January 20062During the 12 months to 1 February 2006,the offer price of the Rathbone GlobalOpportunities Fund increased 41.4% versus a22.7% return from the FTSE World Index.Thisplaces the fund in the top decile of performanceagainst peers over one, two and three years.Unlike many global funds, I do not start withcountry weightings and then find the stocks tofit. Jumping between ‘hot’ areas producesinconsistent returns. Instead, I work from thebottom up, identifying companies with starquality that can succeed in most climates. Myasset allocation is dictated by stock selection.However, a company is unlikely to prosper in anunstable environment, and I must consider theimpact of legislation, taxation, geopolitics andeconomic growth on business performance.I can invest in any stock, sector, company size,virtually anywhere in the world. Theweightings are also flexible within theframework of managing a diversified portfolio,although no single investment will be over 4%of the fund. Investment decisions are not madeby committee, but I do value the input andideas generated by other Rathbone InvestmentManagers and benefit from our investmentprocess.This approach broadens my reach andprovides a system of checks and balances.Nevertheless, we maintain a global network ofbrokers, analysts and economists to ensuregrassroots information flow.I seek companies that operate in growingmarkets with a predictable supply/demandprofile, defensible product, scaleable businessmodel,trustworthy management and reasonablevaluation. I look to innovation andentrepreneurial spirit, and to identify ideas early.Many investors dismiss stocks as a fad or ditchquality companies for the next fad; thesescenarios present opportunities that I mustjudge correctly. Unless the risk/reward profile iscompelling, I avoid early-stage, unprovencompanies. I stick to companies I understand.A stock specific example of this process isAmerican Science and Engineering, a UScompany and play on homeland security. Thiscompany has developed a new type of securityX-ray machine with a high image qualitywhich is safe for use on humans. Unliketraditional detectors, it will pick up non-metalobjects such as ceramic guns and plasticexplosives.This equipment is now being trialledin airports to screen passengers. It can also beloaded on to a van, and used to scan containersand trucks for explosives, contraband or illegalimmigrants.The fund will include some higher riskinvestments where I feel the downside isprotected. One example is a Canadian oil and gasexploration company,with assets in Argentina andPeru. It floated in November 2005 with aportfolio of drilling prospects.At float, 50% of theshare price was in cash. This was key - I couldquantify the downside. During lower riskdevelopment drilling in Argentina, the companyhit a huge reservoir and is able to convert thisproduction to cashflow immediately. The shareshave risen more than seven times and still lookreasonable value.The most difficult part of my job is selectingstocks to sell. Calculated risks are taken anderrors do occur, but one must accept that acompany will make mistakes that are notnecessarily fatal.The fund has posted strong performance over thepast year but I am not complacent. I maintainpositions in some of the most exciting companiesacross global markets. A flexible, stockpickingfund is difficult for outside investors topigeonhole but it provides a framework for yourManager potentially to outperform.James Thomson21 February 2006

Net asset value per unit and comparative tablesFund sizeNet AssetNet AssetValue Units in Value (penceDate £ issue per unit)31 January 2002 6,057,326 15,837,930 38.2531 January 2003 4,147,504 15,282,042 27.1431 January 2004 5,110,241 14,014,430 36.4631 January 2005* 13,568,289 30,377,778 44.6731 January 2006 24,184,961 38,191,509 63.33*On 1 October 2004, the Fund merged with the Rathbone Technology Fund.Price historyThe table below shows, on a calendar year basis, the highest buying and lowest selling pricesin pence per unit for the last five years. Past performance should not be seen as a guide to futureperformance.Year Highest buying Lowest selling2001 50.91 32.192002 42.44 27.092003 38.04 25.332004 46.31 34.952005 61.45 42.222006* 67.60 58.25*To 31 January 2006.DistributionsDue to the net deficit of income since launch, no distributions have been made.Fund performanceUnit class Net Asset Value as Net Asset Value as Net Assetat 31 January 2006 at 31 January 2005 Value change(pence per unit) (pence per unit) %Accumulation 63.33 44.67 41.773

Portfolio informationGeographical breakdownUnited KingdomAustraliaBelgiumCanadaEgyptFranceGermanyGreeceHong KongIrelandSouth KoreaMexicoSingaporeUnited StatesCash1.00%1.99%2.00%0.00%1.57%0.00%2.15%2.72%4.14%4.43%0.00%0.00%2.46%1.24%1.55%1.16%1.98%3.59%0.00%2.30%5.46%4.73%0.96%5.57%9.23%8.84%16.99%24.53%31.82%29.15%31.01.0531.01.0637.28%0 5 10 15 20 25 30 35 40Risk profileThere is little exposure to credit or cash flow risk.There are no net borrowings and little exposureto liquidity risk.The main risks arising from the financial instruments are foreign currency, interestrate, market price and counterparty. If a security cannot be liquidated in a timely manner it maybe harder to attain a reasonable price.The fund may invest up to 10% of its net asset in securitiesfor which there is no ready market.The investment portfolio is exposed to market price fluctuations which are monitored by theManager in pursuance of the investment objective and policy set out in the Prospectus.Adherence to investment guidelines and to investment and borrowing powers set out in the TrustDeed and Prospectus and the rules of the FSA’s CIS Sourcebook mitigates the risk of excessiveexposure to any particular type of security or issuer.ISA and PEP eligibilityThe fund has been managed throughout the year to ensure that it is eligible to qualify and beincluded in an Individual Savings Account (ISA) and a Personal Equity Plan (PEP).The fund willat all times be invested in such a way that the units will constitute “Qualifying Investments” forpurposes of the Individual Savings Account (ISA) Regulations 1998 and the Personal Equity Plan(PEP) Regulations 1989, as amended from time to time.5

Rathbone Unit Trust Management LimitedGeneral informationAuthorised statusRathbone Global Opportunities Fund is anauthorised unit trust scheme, established bya Trust Deed dated 20 March 2001 andlaunched in May 2001.It is a ‘securities fund’ authorised underSection 243 of the Financial Services andMarkets Act 2000, and the currency of theFund is pounds sterling.Investment objective and policyThe objective of the fund is to provide aboveaverage long term capital growth from a globalportfolio. The fund will be able to invest in anytransferable security in all recognized worldfinancial markets.The income yield will at bestbe minimal.Valuation of the fundThe fund is valued on each business day at12 noon for the purpose of determining pricesat which units in the fund may be bought orsold.Valuations may be made at other times onbusiness days with the Trustee’s approval.Long ReportThe full report and accounts are available free ofcharge upon written request from:Capita Financial Administrators Limited,Beaufort House15 St Botolph StreetLondon EC3A 7HHFurther detailsShould you require further details of this fundor any of the other Funds managed byRathbone Unit Trust Management Limited, aSimplified Prospectus (incorporating KeyFeatures) document (all literature is availablefree of charge), please write to:Capita Financial Administrators LimitedBeaufort House15 St Botolph StreetLondon EC3A 7HHInformation is also available on our website:www.rutm.comFund compositionData for the top 10 holdings and geographicalbreakdown of the fund have been based oninvestments valued at the closing mid-marketprices ruling on the markets on which the stocksare quoted, on the last business day of theaccounting period.6

Rathbone Unit Trust Management LimitedAuthorised and regulated by the Financial ServicesAuthority and member of the InvestmentManagement Association159 New Bond Street, London W1S 2UDTelephone: 020 7399 0000Information Line: 020 7399 0399Facsimile: 020 7399 0057Website: www.rutm.comEmail:rutm@rathbones.com

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