mutual global investors series plc an investment company with variable capital incorporated with...

OLD MUTUAL GLOBAL INVESTORS SERIES PLC

An investment company with variable capital incorporated with limited liability in Ireland, established

as an umbrella fund with segregated liability between Funds and authorised pursuant to the European

Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, as

amended, and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings

for Collective Investment in Transferable Securities) Regulations 2015

(Registered Number 271517)

Interim Report and Unaudited Financial Statements

for the financial period ended 30 June 2017

Old Mutual Global Investors Series Plc Interim Report and Unaudited Financial Statements for the financial period ended 30 June 2017

CONTENTS PAGE

2

Directory 4 - 8

General Information 9 - 13

Investment Advisers Reports:

Old Mutual China Equity Fund 14

Old Mutual Global Bond Fund 15

Old Mutual World Equity Fund 16

Old Mutual Pacific Equity Fund 17

Old Mutual European Equity Fund 18

Old Mutual Japanese Equity Fund 19

Old Mutual US Dividend Fund 20

Old Mutual North American Equity Fund 21

Old Mutual Total Return USD Bond Fund 22

Old Mutual Emerging Market Debt Fund 23

Old Mutual European Best Ideas Fund 24

Old Mutual Investment Grade Corporate Bond Fund 25

Old Mutual Global Emerging Markets Fund 26

Old Mutual Asian Equity Income Fund 27

Old Mutual Local Currency Emerging Market Debt Fund 28

Old Mutual UK Alpha Fund (IRL) 29

Old Mutual UK Smaller Companies Focus Fund 30

Old Mutual UK Dynamic Equity Fund 31

Old Mutual Global Equity Absolute Return Fund 32

Old Mutual Strategic Absolute Return Bond Fund^ 33

Old Mutual Pan African Fund 34

Old Mutual Monthly Income High Yield Bond Fund 35

Old Mutual Europe (ex UK) Smaller Companies Fund 36

Old Mutual Global Equity Income Fund (IRL) 37

Old Mutual Gold & Silver Fund 38

Old Mutual Compass Portfolio 2 39




Old Mutual UK Specialist Equity Fund 43

Old Mutual Style Premia Absolute Return Fund 44

Portfolio of Investments:

Old Mutual China Equity Fund 45 - 46

Old Mutual Global Bond Fund 47 - 50

Old Mutual World Equity Fund 51 - 63

Old Mutual Pacific Equity Fund 64 - 68

Old Mutual European Equity Fund 69 - 70

Old Mutual Japanese Equity Fund 71 - 74

Old Mutual US Dividend Fund 75 - 76

Old Mutual North American Equity Fund 77 - 82

Old Mutual Total Return USD Bond Fund 83 - 90

Old Mutual Emerging Market Debt Fund 91 - 96

Old Mutual European Best Ideas Fund 97 - 99

Old Mutual Investment Grade Corporate Bond Fund 100 - 104

Old Mutual Global Emerging Markets Fund 105 - 107

Old Mutual Asian Equity Income Fund 108 - 112

Old Mutual Local Currency Emerging Market Debt Fund 113 - 118

Old Mutual UK Alpha Fund (IRL) 119 - 121

Old Mutual UK Smaller Companies Focus Fund 122 - 125

Old Mutual UK Dynamic Equity Fund 126 - 129

Old Mutual Global Equity Absolute Return Fund 130 - 147

Old Mutual Strategic Absolute Return Bond Fund^ 148 - 151

Old Mutual Pan African Fund 152 - 153

Old Mutual Monthly Income High Yield Bond Fund 154 - 159


CONTENTS (continued) PAGE

3

Portfolio of Investments (continued):

Old Mutual Europe (ex UK) Smaller Companies Fund 160 - 162

Old Mutual Global Equity Income Fund (IRL) 163 - 172

Old Mutual Gold & Silver Fund 173 - 174

Old Mutual Compass Portfolio 2 175 - 179




Old Mutual UK Specialist Equity Fund 194 - 198

Old Mutual Style Premia Absolute Return Fund 199 - 209

Financial Statements:

Statement of Operations 210 - 219

Statement of Financial Position 220 - 242

Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders 243 - 266

Notes to the Financial Statements 267 - 382

Significant Purchases and Sales:

Old Mutual China Equity Fund 383 - 384

Old Mutual Global Bond Fund 385 - 386

Old Mutual World Equity Fund 387 - 388

Old Mutual Pacific Equity Fund 389 - 390

Old Mutual European Equity Fund 391 - 392

Old Mutual Japanese Equity Fund 393 - 394

Old Mutual US Dividend Fund 395 - 396

Old Mutual North American Equity Fund 397 - 398

Old Mutual Total Return USD Bond Fund 399 - 400

Old Mutual Emerging Market Debt Fund 401 - 402

Old Mutual European Best Ideas Fund 403 - 404

Old Mutual Investment Grade Corporate Bond Fund 405 - 406

Old Mutual Global Emerging Markets Fund 407 - 408

Old Mutual Asian Equity Income Fund 409 - 410

Old Mutual Local Currency Emerging Market Debt Fund 411 - 412

Old Mutual UK Alpha Fund (IRL) 413 - 414

Old Mutual UK Smaller Companies Focus Fund 415 - 416

Old Mutual UK Dynamic Equity Fund 417 - 418

Old Mutual Global Equity Absolute Return Fund 419 - 420

Old Mutual Strategic Absolute Return Bond Fund^ 421 - 422

Old Mutual Pan African Fund 423 - 424

Old Mutual Monthly Income High Yield Bond Fund 425 - 426

Old Mutual Europe (ex UK) Smaller Companies Fund 427 - 428

Old Mutual Global Equity Income Fund (IRL) 429 - 430

Old Mutual Gold & Silver Fund 431 - 432





Old Mutual UK Specialist Equity Fund 441 - 442

Old Mutual Style Premia Absolute Return Fund 443 - 444

Total Expense Ratios 445 - 451

Fund Performance 452 - 453

Significant Events During The Financial Period 454

Post Statement of Financial Position events 455

Supplementary Information 456 - 463


DIRECTORY

4

Board of Directors Bronwyn Wright (Irish)*

Tom Murray (Irish)*

Adrian Waters (Irish)*

Jessica Brescia (British)

Paul Simpson (British)

*Independent, Non-Executive Directors

Investment Manager, Distributor and Promoter Old Mutual Global Investors (UK) Limited

2 Lambeth Hill

London EC4P 4WR

United Kingdom

Investment Adviser to the Investment Manager Old Mutual Global Investors (UK) Limited

for the Old Mutual Global Bond Fund, 2 Lambeth Hill

for the Old Mutual World Equity Fund, London EC4P 4WR

for the Old Mutual European Equity Fund, United Kingdom

for the Old Mutual North American Equity Fund,

for the Old Mutual Emerging Market Debt Fund,

for the Old Mutual European Best Ideas Fund,

for the Old Mutual Investment Grade Corporate Bond

Fund

for the Old Mutual Local Currency Emerging Market Debt

Fund,

for the Old Mutual UK Alpha Fund (IRL),

for the Old Mutual UK Smaller Companies Focus Fund,

for the Old Mutual UK Dynamic Equity Fund,

for the Old Mutual Global Equity Absolute Return Fund,

for the Old Mutual Strategic Absolute Return Bond Fund

(formerly known as the Old Mutual Global Strategic Bond

Fund)^,

for the Old Mutual Monthly Income High Yield Bond Fund,

for the Old Mutual Europe (ex UK) Smaller Companies

Fund,

for the Old Mutual Global Equity Income Fund (IRL),

for the Old Mutual Compass Portfolio 2,



for the Old Mutual Compass Portfolio 5

for the Old Mutual UK Specialist Equity Fund

and for the Old Mutual Style Premia Absolute Return Fund

Investment Adviser to the Investment Manager Old Mutual Global Investors (Asia Pacific) Limited

for the Old Mutual China Equity Fund, 24th

Floor

for the Old Mutual Pacific Equity Fund, Henley Building

for the Old Mutual Japanese Equity Fund 5 Queens Road

and for the Old Mutual Asian Equity Income Fund Central

Hong Kong

Investment Adviser to the Investment Manager Barrow, Hanley, Mewhinney & Strauss LLC

for the Old Mutual US Dividend Fund JP Morgan Chase Tower

2200 Ross Avenue

31st Floor

Dallas, TX 75201

United States of America

^With effect from 26 May 2017 Old Mutual Global Strategic Bond Fund changed its name to Old Mutual Strategic Absolute Return Bond Fund.

The above footnote is consistently applied throughout the document.


DIRECTORY (continued)

5

Investment Adviser to the Investment Manager Janus Henderson Group Plc

for the Old Mutual Total Return USD Bond Fund (formerly Janus Capital International Limited)

201 Bishopsgate

London EC2M 3AE

United Kingdom

Sub-Investment Adviser

Janus Capital Management LLC

151 Detroit Street

Denver

Colorado 80206


Investment Advisers to the Investment Manager Liontrust Investment Partners LLP

for the Old Mutual European Best Ideas Fund 2 Savoy Court

London WC2R 0EZ

United Kingdom

Odey Asset Management LLP

12 Upper Grosvenor Square

London W1K 2ND

United Kingdom

Wellington Management International Ltd

Cardinal Place,

80 Victoria Street

London SW1E 5JL

United Kingdom

Investment Adviser to the Investment Manager Fisher Asset Management LLC

for the Old Mutual Global Emerging 13100 Skyline Blvd.

Markets Fund Woodside

CA 94062


Investment Adviser to the Investment Manager Old Mutual Investment Group (Pty) Limited

for the Old Mutual Pan African Fund Mutualpark, Jan Smuts Drive

Pinelands, Cape Town

7705, South Africa

Depositary Citi Depositary Services Ireland Designated Activity

Company (Citi Depositary Services Ireland DAC)

1 North Wall Quay

Dublin

D01 T8Y1

Ireland

Administrator, Registrar and Transfer Agent Citibank Europe plc

1 North Wall Quay

Dublin

D01 T8Y1

Ireland

Company Secretary Tudor Trust Limited

33 Sir John Rogersons Quay

Dublin

D02 XK09

Ireland



6

Registered Office 33 Sir John Rogersons Quay

Dublin

D02 XK09

Ireland

Auditors KPMG

Chartered Accountants

1 Harbourmaster Place

International Financial Services Centre

Dublin

D01 F6F5

Ireland

Legal Advisers Dillon Eustace

33 Sir John Rogersons Quay

Dublin

D02 XK09

Ireland

Hong Kong Representative Old Mutual Global Investors (Asia Pacific) Limited

24th

Floor

Henley Building

5 Queens Road

Hong Kong

Paying Agent in Luxembourg BNP Paribas Securities Services

Luxembourg Branch

60 Avenue John F. Kennedy

1855 Luxembourg

Grand Duchy of Luxembourg

Paying Agent in Switzerland BNP Paribas Securities Services, Paris

Succursale de Zurich, Selnaustrasse 16

8002 Zurich

Switzerland

Representative in Switzerland First Independent Fund Services Limited

Klausstrasse 33

8008 Zurich

Switzerland

Facilities Agent in the United Kingdom Old Mutual Global Investors (UK) Limited

Millennium Bridge House, 2 Lambeth Hill

London EC4P 4WR

United Kingdom

French Centralising and Financial Agent BNP Paribas Securities Services

3 Rue dAntin

75002, Paris

France

Paying Agent in Austria Erste Bank der Oesterreichischen Sparkassen AG, France

Graben 21

1010 Wien

Austria



7

Paying Agents in Chile Cruz del Sur, Corredora de Bolsa S.A.

Augusto Legua 70

Piso 5

Las Condes

Santiago,

Chile

Larran Vial S.A., Corredora de Bolsa

Avenida El Bosque Norte N0 0177, piso 3

Las Condes

Santiago,

Chile

Paying Agent in Italy Allfunds Bank, S.A.

Via Santa Margherita

720121 Milan

Italy

SGSS. S.p.A, Milan

Via Benigno Crespi n19A

MAC2,l

Italy

German Information Agent Skandia Portfolio Management GmbH

Kaiserin-Augusta-Allee 108

10553 Berlin

Germany

Belgian Financial Agent Caceis Belgium SA

B 1000 Brussels, Avenue du Port 86 C b320

Belgium

Copies of the Memorandum and Articles of Association, the Prospectus, the Key Investor Information documents, the annual and

semi-annual reports of the Company are available free of charge at the office of the representative or agent of each jurisdiction.

Additionally, a list of the purchases and sales of each fund made during the financial period of this report may be obtained free of

charge from the Representative in Switzerland.



8

The following funds are not authorised in Hong Kong and not available to Hong Kong residents:

Old Mutual China Equity Fund

Old Mutual US Dividend Fund

Old Mutual European Best Ideas Fund

Old Mutual Investment Grade Corporate Bond Fund

Old Mutual Global Emerging Markets Fund

Old Mutual Local Currency Emerging Market Debt Fund

Old Mutual UK Smaller Companies Focus Fund

Old Mutual UK Dynamic Equity Fund

Old Mutual Global Equity Absolute Return Fund

Old Mutual Strategic Absolute Return Bond Fund^

Old Mutual Pan African Fund

Old Mutual UK Specialist Equity Fund

Old Mutual Gold & Silver Fund

Old Mutual Compass Portfolio 2




Old Mutual Style Premia Absolute Return Fund

The following funds are not authorised in Sweden and not available to Swedish residents:

Old Mutual Europe (ex UK) Smaller Companies Fund






Old Mutual Style Premia Absolute Return Fund


GENERAL INFORMATION

9

Structure

Old Mutual Global Investors Series Plc (the Company) is an umbrella fund with segregated liability between funds established as a

self-managed open-ended investment company with variable capital organised under the laws of Ireland as a public limited company

pursuant to the Companies Act 2014, the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for

Collective Investment in Transferable Securities) Regulations 2015 and the European Communities (Undertakings for Collective

Investment in Transferable Securities) Regulations, 2011, as amended (the Regulations) and has been authorised by the Central

Bank of Ireland as a UCITS within the meaning of the Regulations.

The share capital of the Company shall at all times equal the Net Asset Value. The initial capital of the Company was EUR 38,082

represented by 30,000 Subscriber Shares of no par value. For the period of five financial years from the date of incorporation, the

Directors are empowered to issue up to five hundred billion Shares of no par value in the Company at the Net Asset Value per Share

on such terms as they may think fit. The subscriber Shares do not entitle the holders to participate in the assets of any fund.

Investment Objectives of the Funds

Old Mutual China Equity Fund

The objective of the Old Mutual China Equity Fund is to seek to achieve long-term capital appreciation by investing in a well-

diversified portfolio of equity securities issued by companies with either the predominant part of their assets in, or the predominant

part of their revenues derived from, the Peoples Republic of China, Hong Kong and/or Taiwan that are listed, traded or dealt in on

Regulated Markets in the Peoples Republic of China, Hong Kong, Taiwan, the United States of America (US), Singapore, Korea,

Thailand and Malaysia or in a member state of the Organisation for Economic Co-Operation and Development (OECD).

Old Mutual Global Bond Fund

The objective of the Old Mutual Global Bond Fund is to seek to achieve asset growth through worldwide investment in a well-

diversified portfolio of fixed and variable rate debt securities.

Old Mutual World Equity Fund

The objective of the Old Mutual World Equity Fund is to seek to achieve asset growth through investment in a well-diversified

portfolio of securities of issuers worldwide. It is not proposed to concentrate investments in any one geographical region, industry or

sector.

Old Mutual Pacific Equity Fund

The objective of the Old Mutual Pacific Equity Fund is to seek to achieve asset growth through investment in a well-diversified

portfolio of securities of Pacific region issuers or of issuers established outside the Pacific region which have a predominant

proportion of their assets or business operations in the Pacific region. It is not proposed to concentrate investment in any one industry

or sector.

Old Mutual European Equity Fund

The objective of the Old Mutual European Equity Fund is to seek to achieve asset growth through investment in a well-diversified

portfolio of securities of European issuers or of issuers established outside Europe which have a predominant proportion of their

assets or business operations in Europe, or of securities listed or having a listing on a European exchange. It is not proposed to

concentrate investments in any one industry or sector.

Old Mutual Japanese Equity Fund

The objective of the Old Mutual Japanese Equity Fund is to seek to achieve asset growth through investment in a well-diversified

portfolio of securities of Japanese issuers or of issuers established outside Japan which have a predominant proportion of their assets

or business operations in Japan. It is not proposed to concentrate investments in any one industry or sector.

Old Mutual US Dividend Fund

The objective of the Old Mutual US Dividend Fund is to seek to achieve asset growth through investment in a diversified portfolio of

equity and equity-related securities of issuers in the US emphasising larger companies which have dividend characteristics and which

appear to be undervalued relative to their market value.

Old Mutual North American Equity Fund

The objective of the Old Mutual North American Equity Fund is to seek to achieve long term capital growth through the active

management of a diversified portfolio invested primarily in North American stock markets. It is not proposed to concentrate

investments in any one industry or sector.


GENERAL INFORMATION (continued)

10

Investment Objectives of the Funds (continued)

Old Mutual Total Return USD Bond Fund

The objective of the Old Mutual Total Return USD Bond Fund is to seek to maximise total return consistent with preservation of

capital and prudent investment management.

Old Mutual Emerging Market Debt Fund

The objective of the Old Mutual Emerging Market Debt Fund is to seek to achieve asset growth through investment in a well-

diversified portfolio of fixed and variable rate debt securities issued in Emerging Markets.

Old Mutual European Best Ideas Fund

The objective of the Old Mutual European Best Ideas Fund is to seek to achieve asset growth through investment in a well-diversified

portfolio of equities or equity-related securities of European issuers or of issuers established outside Europe which have a

predominant proportion of their assets and/or business operations in Europe.

Old Mutual Investment Grade Corporate Bond Fund

The objective of the Old Mutual Investment Grade Corporate Bond Fund is to seek to achieve income and capital growth

predominantly through investment in a well-diversified portfolio of credit securities rated Investment Grade.

Old Mutual Global Emerging Markets Fund

The objective of the Old Mutual Global Emerging Markets Fund is to seek to achieve asset growth through investment in a well-

diversified portfolio of equity securities of issuers in the Emerging Markets or of issuers established outside of the Emerging Markets,

which have a predominant proportion of their assets or business operations in the Emerging Markets and which are listed, traded or

dealt in on a Regulated Market worldwide. It is not proposed to concentrate investments in any one industry or sector.

Old Mutual Asian Equity Income Fund

The objective of the Old Mutual Asian Equity Income Fund is to seek to achieve a total return through a combination of income and

capital growth. The Old Mutual Asian Equity Income Fund will seek to achieve its objective through investment of not less than 70%

of its Net Asset Value in a diversified portfolio of equity securities of Asian issuers or of issuers established outside the Asian region

which have a majority proportion of their assets, value or business operations in the Asian region.

Old Mutual Local Currency Emerging Market Debt Fund

The objective of the Old Mutual Local Currency Emerging Market Debt Fund is to seek to achieve total return through investment in

a well-diversified portfolio of fixed and variable rate debt securities issued in the Emerging Markets worldwide and which are

primarily denominated in the local currency of the issuer.

Old Mutual UK Alpha Fund (IRL)

The objective of the Old Mutual UK Alpha Fund (IRL) is to seek to achieve capital appreciation. The Old Mutual UK Alpha Fund

(IRL) seeks to achieve its objective through investment in a well-diversified portfolio of equities of predominantly United Kingdom

(UK) issuers or of issuers established outside the UK which have a predominant proportion of their assets and/or business

operations in the UK or securities listed on a UK exchange.

Old Mutual UK Smaller Companies Focus Fund

The Funds investment objective aims to provide capital growth from investing primarily in an equity portfolio of UK smaller

companies. Smaller companies are defined for this purpose as those companies which are quoted on a Regulated Market and which

have a market capitalisation no greater than the largest company in the Numis Smaller Companies Index at the time of initial

investment. The Numis Smaller Companies Index is designed to monitor the performance of the smaller companies sector.

Old Mutual UK Dynamic Equity Fund

The investment objective of the Old Mutual UK Dynamic Equity Fund is aiming to achieve capital appreciation by taking long and

short positions principally in UK equities outside of the FTSE 100 Index.

Old Mutual Global Equity Absolute Return Fund

The investment objective of the Old Mutual Global Equity Absolute Return Fund is capital appreciation while closely controlling risk.

In addition, the Fund intends to deliver absolute returns that have a low correlation with equity and bond markets.

Old Mutual Strategic Absolute Return Bond Fund^ The investment objective of the Old Mutual Strategic Absolute Return Bond Fund is to seek to deliver positive total returns on a

rolling twelve month basis with stable levels of volatility uncorrelated to bond and equity market conditions.



11

Investment Objectives of the Funds (continued)


The investment objective of the Old Mutual Pan African Fund is to seek to achieve long term capital growth by investing in

companies that directly benefit from long term economic growth opportunities in the African continent.

Old Mutual Monthly Income High Yield Bond Fund

The objective of the Old Mutual Monthly Income High Yield Bond Fund is to seek to achieve a total return through a combination of

income and capital growth from a well-diversified portfolio predominantly comprising of fixed and variable rate debt securities

located worldwide.

Old Mutual Europe (ex UK) Smaller Companies Fund

The investment objective of the Old Mutual Europe (ex UK) Smaller Companies Fund is to achieve long term capital growth through

investing primarily in an equity portfolio of smaller companies incorporated in Europe (excluding the United Kingdom) or of

companies incorporated outside of Europe (excluding the UK) which have a predominant proportion of their assets and/or business

operations in Europe (excluding the UK).

Old Mutual Global Equity Income Fund (IRL)

The investment objective of the Old Mutual Global Equity Income Fund (IRL) is to seek to achieve a total return through a

combination of income and capital growth.

Old Mutual Gold & Silver Fund

The investment objective of the Old Mutual Gold & Silver Fund is to seek to achieve a total return by investing predominantly in

listed equities.


The investment objective of the Old Mutual Compass Portfolio 2 is to generate a long-term total return.







Old Mutual UK Specialist Equity Fund

The investment objective of the Old Mutual UK Specialist Equity Fund is to seek to achieve capital appreciation by taking long and

short positions mainly in UK equities outside the FTSE 100 Index, whilst seeking to deliver absolute returns in all market conditions.

Old Mutual Style Premia Absolute Return Fund The investment objective of the Old Mutual Style Premia Absolute Return Fund is to seek to deliver positive total returns on a rolling

twelve month basis with stable levels of volatility uncorrelated to bond and equity market conditions.



12

Distribution Policy

Distributions to holders of Redeemable Participating Shares are recorded in the Statement of Comprehensive Income as finance costs.

Distributions paid and proposed during the financial period ended 30 June 2017 and 31 December 2016 with respect to certain Share

Classes are outlined in Note 13. All of the other funds income and capital gains were reinvested in accordance with the investment

objective and policy of the funds.

Dilution Adjustment

On any Dealing Day the Directors may determine when there are net inflows into a Fund or net outflows from a Fund to apply a

dilution adjustment to the dealing Net Asset Value per Share so that the price of a Share in the Fund is above or below that which

would have resulted from a latest available market valuation. This adjustment is intended to pass the estimated costs of underlying

investment activity of the Fund to the active Shareholders by adjusting the Net Asset Value of the relevant classes of Shares and thus

to protect the Funds long-term Shareholders from costs associated with ongoing subscription and redemption activity. These costs

may include dealing charges, commissions and the effects of dealing at prices other than the middle market price. The price of each

Class of Share in a Fund will be calculated separately but any dilution adjustment will affect the price of Shares of each Class in a

Fund in an identical manner.

Investment Risks

An investment in any fund involves investment risks, including possible loss of the amount invested. Moreover, there can be no

assurance that a fund will achieve its investment objective.

Subscriptions and Repurchases

Certain Share Classes have minimum initial investment, minimum subsequent investment and minimum holding requirements which

are disclosed in the Prospectus.

An initial charge may be payable to the Company on subscriptions for Shares. A contingent deferred sales charge may be payable to

the Company on the subscription price for certain Shares, with the of the contingent deferred sales charge payable dependent on the

length of time between the date the Shares were purchased and their repurchase. The following table outlines these charges:

Class of Shares: Initial Charge:

Contingent deferred sales charge as a percentage of

the subscription price paid

Years since purchase

0 1

Years

1 2

Years

2 3

Years

3 4

Years

4+

Years

Class A Shares Up to 6.25% of the Net Asset Value per Share Nil Nil Nil Nil Nil

Class B Shares Nil 4.00% 3.00% 2.00% 1.00% Nil

Class C Shares Up to 1.00% of the Net Asset Value per Share 1.00% Nil Nil Nil Nil

Class C2 Shares Up to 0.50% of the Net Asset Value per Share 2.00% 1.00% Nil Nil Nil

Class D1 Shares Nil Nil Nil Nil Nil Nil

Class D2 Shares Nil Nil Nil Nil Nil Nil

Class F Shares Nil Nil Nil Nil Nil Nil

Class I Shares Nil Nil Nil Nil Nil Nil

Class N Shares Up to 3.00% of the Net Asset Value per Share Nil Nil Nil Nil Nil

Class R Shares Nil Nil Nil Nil Nil Nil

Class S Shares Nil Nil Nil Nil Nil Nil

Class U1 Shares Nil Nil Nil Nil Nil Nil



Class X Shares Nil Nil Nil Nil Nil Nil

Taxation

As an investment undertaking within the meaning of Section 739(B) of the Taxes Consolidation Act 1997, as amended, the Company

is generally exempt from Irish tax on its income and gains and the Company will not be required to account for any tax in respect of

Shareholders who are not Irish residents or exempt Irish residents provided that the signed necessary declarations are in place. The

Company may be required to account for tax in respect of Shareholders who are Irish residents. Shareholders who are not Irish

residents and have made the required declaration of non-residence will not be liable to Irish tax on income from their Shares or gains

made on the disposal of their Shares, provided the Shares are not attributable to an Irish branch or agency of such shareholder. No

stamp duty or other tax is generally payable in Ireland on the subscription, issue, holding, redemption, conversion or transfer of

Shares.



13

Selling Restrictions

The Shares may not be purchased or held by US persons unless pursuant to an exemption under applicable US law and may not be

offered or sold in any jurisdiction in which such offer or sale is not lawful or in which the person making such offer or sale is not

qualified to do so or to anyone to whom it is unlawful to make such an offer or sale.

Dealing Days

A Dealing Day in respect of all of the funds means every Business Day (as defined for each fund in the Prospectus) or such other days

as the Directors may determine provided that there shall be at least one Dealing Day each fortnight.


OLD MUTUAL CHINA EQUITY FUND

INVESTMENT ADVISERS REPORT FOR THE FINANCIAL PERIOD ENDED 30 JUNE 2017

Old Mutual China Equity Fund Old Mutual Global Investors (Asia Pacific) Limited

14

Sub-Fund performance in absolute terms was extremely strong over the first half of the year, however relative to the index it did lag

slightly. Financials and materials largely drove performance in January and February as investors sought to increase their exposure to

value and cyclical areas of the market from heavily underweight stances. This reversed violently in the second quarter as growth,

consumer and technology stocks outperformed. The Sub-funds underweight to the IT sector contributed to the relative

underperformance and to highlight how narrow the shift was, the underweights to Alibaba and Tencent cost approximately 1.4% and

1.0% respectively. On the positive side China Shenhua Energy announced a special dividend back in March, committing to paying out

just over 20%, which buoyed the share price significantly. Ping An Insurance did well during the second quarter as it broke through a

key technical resistance level and Longfor Properties was strong as Chinas Tier 1, 2 and 3 cities all notched up record average prices.

Early in the first half we added to steel exposure via Maanshan Iron & Steel, based on supply rationalisation starting to take more

shape and increased focus on addressing pollution levels. Towards the end of February we booked profits on a number of cyclical

stocks, such as Nine Dragons Paper and Brilliance Auto, with the cash being used to top up Bank of China, which we felt would

benefit from curve steepening. In the second quarter we switched some Tencent exposure into Netease, as we believe they are the

preferred partner of foreign gaming companies.

We think the market rotation towards growth, and more specifically the giant technology stocks, looks overdone, with many of the

names heavily over-owned and style positioning now at 30 year extremes. US interest rate rises and the potential unwind of

quantitative easing are potential headwinds to sentiment for China, however in our view these should have limited impact as long as

the pace is gradual. Any further protectionist rhetoric from the Trump administration is also an unknown, although in our view Trump

is not the main game for China right now as there is significant momentum behind a domestic economic resurgence. China trades on

one of the lowest price/earnings to growth ratios in the region and therefore the investment case for Chinese equities remains

extremely compelling, in our view.


OLD MUTUAL GLOBAL BOND FUND


Old Mutual Global Bond Fund Old Mutual Global Investors (UK) Limited

15

Politics has dominated markets during recent months, with elections in Europe accompanied by President Trumps troubles in the US

taking centre stage. There were no stresses and tribulations associated with Emmanuel Macrons presidential victory in France.

The UK witnessed further volatility as Theresa May confidently called for a snap general election on 18 April seemingly believing

that her popularity, strategy on Brexit and confidence in the party would soar to ever loftier heights. As campaigning got underway,

this proved to be the wrong decision borne out by the verdict a hung parliament.

The US Federal Reserve (Fed) continues at a gradual pace to normalise interest rates. Rhetoric from Fed Chair Janet Yellen and her

committee remains hawkish, dismissing recent weak inflation data as one-offs whilst pointing to labour market tightness as a major

concern.

The Bank of Englands Monetary Policy Committee left rates unchanged at 0.25% at its June meeting, but surprised on the hawkish

side with three of its eight members dissenting on the decision. The committee expressed concern over inflation, which has risen at a

faster-than-expected pace in recent months, and pointed out that slack in the labour market is continuing to decline.

European Central Bank (ECB) President Draghi hinted at how the central bank may sell a gradual unwinding of the stimulus package,

this was the first step towards the ECBs monetary policy becoming less accommodative for 2018, now the discussion is when will

there be a formal tapering announcement?

During the first half of 2017 the fund outperformed the benchmark.

Themes that the managers continue to adopt are overweight Spain, Portugal and Greece in Europe whilst underweight the core

Germany and France relative to the index. The two key drivers to the rationale is a decline in political risk premia and secondly the

sanguine ECB.

Central banks have changed their thought pattern and are now looking towards the normalisation of policy. Their focus has switched

from low inflation to economic stability, and they are reviewing current protocols. At the end of the second quarter there was a

concerted effort from several developed central banks towards policy normalisation. The managers see little to alter the trajectory at

this juncture. Central bank tightening hasnt finished, positive cyclical factors are aligning; the reflation trade is still alive.


OLD MUTUAL WORLD EQUITY FUND


Old Mutual World Equity Fund Old Mutual Global Investors (UK) Limited

16

Global equities were strong over the six month period, generally trending upwards despite perceptions of increased political risk.

Beneath an apparently calm surface of low market volatility, style rotations were nevertheless significant: a growth style

outperformed a value style during the period, reversing the revival of value in the latter months of last year. US equities

underperformed the rest of the world, and emerging markets equities outperformed both. Disillusionment grew about the ability of the

Trump administration to execute on campaign promises. This held back US equities, which would have benefited from promised tax

cuts, but helped emerging markets as the threat of their being hurt by trade wars appeared to recede.

Markets have also been buoyed by the relative strength and resilience of Eurozone economic data. The election of Emmanuel Macron

as president of France inspired confidence in the ability of the euro bloc to thrive.

Performance across most stock selection components during the six months was positive. The flexibility of our approach to

dynamically weighting value alongside balance sheet quality served to stabilise returns. The funds Dynamic Valuation stock

selection criterion rotated towards quality throughout most of the period, to reflect the continual unwinding of the earlier Trump trade.

The Market Dynamics stock selection criterion was a detractor, as changes in market direction affected our deployment of stock-level

momentum.

Style and sector rotations remind us that accommodative monetary policy from central banks continues to camouflage the true extent

of volatility in the system. In place of conventional realised and implied volatility, markets continued to demonstrate rotational

behaviours at a style, sector and factor level.

While attention is drawn to stretched valuations in certain sections of the market, investors cite the resilience of economic data as

providing fundamental support. As ever, judicious risk management in active investing requires offsetting opportunities against risks

inherent in the market. There are risks inherent in the path towards normalisation itself, as central banks globally wrestle with the

timing and form of their respective exit strategies.


OLD MUTUAL PACIFIC EQUITY FUND


Old Mutual Pacific Equity Fund Old Mutual Global Investors (Asia Pacific) Limited

17

In absolute terms the fund performed strongly over the first half of the year, however, it underperformed relative to the index.

Financial and material related stocks drove returns in January and February as investors sought to increase their value and cyclical

exposure from heavily underweight stances. Key contributors were India, as the market bounced following the favourable election

result, and China, where sentiment improved rapidly and earnings expectations were upgraded materially. In the second quarter,

growth, consumer and technology stocks performed extremely well and the funds underweight to the IT sector hurt relative

performance. To highlight how narrow this shift was, the underweights to Alibaba and Tencent cost 0.8% and 0.6% respectively.

In the first quarter we partially closed the underweight to the South Korean market by buying stakes in KB Financial and Hana

Financial, given the improving backdrop of higher interest rates and steeper yield curves. We added to positions in the chemical

space, such as China Petrochemical and Taiwan Prosperity Chemical, as pollution is gradually being taken more seriously in China.

During the second quarter we took profit on Hindalco, in order to focus more on domestic cyclicals such as GMR, the airports to

highways infrastructure company. The weighting in Indonesia was increased given it has finally received a long awaited jump to

investment grade from S&P. This should lower funding costs for corporates and improve the case for foreign direct investment. We

continue to build out the artificial intelligence/internet of things theme, by owning companies that have exposure to things like 3D

sensors (Finisar) and smart speakers (Primax Electronics).


names heavily over-owned and style positioning now at 30 year extremes. We have maintained the value tilt in the fund and we

expect a renewed focus on financials and cyclicals in the second half of the year. US interest rate rises and the unwinding of

quantitative easing are potential headwinds to sentiment, however these should have limited impact as long as the pace is gradual. Its

instructive to look at the 2003-2007 period when US rates hikes meant the US dollar strengthened, however against perceived general

wisdom Asian equities continued to perform well as global trade and growth was strong. The Asian equity investment case therefore

remains extremely compelling.


OLD MUTUAL EUROPEAN EQUITY FUND


Old Mutual European Equity Fund Old Mutual Global Investors (UK) Limited

18

European equity markets moved higher in the first half of 2017 as improving growth prospects globally largely outweighed political

worries and growing questions about the longevity of central bank ultra-loose monetary policy. The MSCI Europe Index advanced

6.68% during the first half of 2017 in euro terms, with the market led higher by the technology and industrial sectors in particular;

while energy was a clear laggard following the decline in the oil price from US$58 to US$48 in the period.

The fund performed in line with the benchmark but was modestly behind the peer group median in the second quarter. Sector

allocation was negligible. The UK was surprisingly dull considering the election outcome and the start of Brexit negotiations with the

EU. In a very low volatility environment sector dispersion was limited apart from continued weakness in energy. Positive stock

contributions came from Volvo, which continues to see strengthened demand, and from Aurelius, which we managed to buy close to

exaggerated lows. At the other end of the spectrum, Pandora, Micro Focus, and ArcelorMittal all lagged the fund and benchmark.

The management of the fund changed in the middle of the period which caused a relatively high activity level as existing holdings

were reviewed and replaced where appropriate. While it is important to stress that all of the changes made were as a result of bottom-

up analysis rather than top-down sector or country level decisions, the individual changes have manifested themselves in tilted sector

allocations: most noticeably, in the form of a lower exposure to the materials sector and a considerably higher allocation to the

consumer staples sector. New positions have been added in Refresco, Suedzucker, Tesco, Caixabank, Novo Nordisk, Publicis and

Micro Focus.

Following last quarters rebalancing, the fund is now largely configured as we want it to be in view of corporate and economic

fundamentals. The funds holdings are now closer to an equally-weighted approach, with the largest constituent at 2.63% of the fund

and the smallest at 0.46%. We remain underweight in the UK, where currency dominates the discussion. Sterling weakness may

benefit some of our stocks, but it creates a negative currency effect for a European fund. Additionally, there is major uncertainty

around the British economy. The portfolio is trading on 12.3 times earnings, compared to a ratio of 14.9 for the benchmark. It remains

positioned for positive economic news and rising bond yields, with overweight positions in financials and underweight in consumer

staples, healthcare and utilities. Overall, self-sustaining growth, a stable currency and decent valuations should deliver positive returns

for markets and our investors.


OLD MUTUAL JAPANESE EQUITY FUND


Old Mutual Japanese Equity Fund Old Mutual Global Investors (Asia Pacific) Limited

19

Japanese equity markets gained modestly compared to other Asian markets during the first half of 2017 and the fund performed

roughly in-line with the TOPIX. In the first quarter the screen aspect of the funds investment process performed well and a number of

themes were accretive to returns, namely regenerative medicine, robotics and renovation. The fund gave back this outperformance in

the second half, predominantly in the financials, real estate and consumer staples sectors.

Ahead of the Trump-Abe meeting in February, we tactically added to a number of stocks on expectations of increased Japanese

capital expenditure in the US. Around the same time we started to reduce exposure to reflation areas trimming stocks such as Kajima,

Nomura Real Estate, Taisei and Tokyo Steel. We initiated two new themes during the first quarter. Firstly, MedTech, which is a key

focus of Japanese healthcare in the current administration plan, and secondly, FinTech, as we believe Japan is a significant laggard in

this space and there is room for companies to grow.

We initiated a position in Nissin Electric during the second quarter on major capital expenditure announcements by its organic light-

emitting diode (OLED) screen customers. The company has a very dominant market share in the ion implantation machines used to

manufacture OLED screens for smartphones, which is a huge growth area currently. We have also added to Rakuten as we think this

will be re-evaluated as a domestic artificial intelligence (AI) name and we would like to increase exposure to this theme following the

Microsoft, Facebook and Google declarations that were all in on AI. The funds holdings in domestic AI stocks Rakuten, Line and

Artspark have not been trading in line with FANG/Tencent and we think that there is good potential for these to be positively re-

evaluated.

Looking at markets today, we see no particularly convincing reason for the Japanese equity bull market to end. From a

macroeconomic perspective things look benign and Abenomics remains on track. Domestic demand is good, with nominal GDP now

at an all-time high, and external demand seems to be robust. Crucially, unemployment in Japan is now at the lowest levels since 1994

and the job to applicant ratio is at 1.5, highlighting the strength of the employment backdrop. Given the relatively cheap valuations for

the Japanese market versus developed markets, we believe now is an extremely attractive time to invest.


OLD MUTUAL US DIVIDEND FUND


Old Mutual US Dividend Fund Barrow, Hanley, Mewhinney & Strauss LLC

20

Domestic value stocks have significantly lagged the growth benchmarks. Technology stocks have led the market in 2017, more than

doubling the return of many other sectors. Healthcare stocks have also been strong performers after being the worst-performing sector

in 2016. Several sectors that rose sharply on the Trump trade late last year (financials, telecom services, and energy) have lagged

thus far in 2017 as many expected pro-growth policies have been delayed.

As interest rates rose in the second half of 2016, the attractiveness of many bond proxy stocks diminished, and investors began

looking for beneficiaries of higher interest rates and better economic growth, creating a significant change in market leadership

favouring financials, technology, and industrials sector stocks.

Stock selection in the Industrials sector, combined with an overweight in the sector, contributed most to the funds performance.

Stock selection in financials, consumer staples and energy also positively benefited performance for the period. The top contributors

to performance were Southwest Airlines, Stanley Black & Decker, Philip Morris International, Medtronic and XL Group.

Stock selection within the consumer discretionary sector was the largest detractor from performance for the first six months of 2017.

Relative selection and allocation within telecommunication services also hurt performance, as did an underweight in information

technology. Target Corporation, Verizon Communications, Occidental Petroleum Corporation, ConocoPhillips and BP plc ADR all

underperformed for the first half of the year.

HCP, Oracle Corporation, Sanofi ADR and Tyson Foods Inc. Class A were added to the portfolio during the six months while

Ameriprise Financial, Gap, International Paper Company, PNC Financial Services Group and Rio Tinto plc Sponsored ADR were

eliminated.

S&P 500 valuations remain stretched and continue to rise. In fact, nearly half of the S&P 500 return thus far in 2017 was derived from

valuation expansion. While earnings growth materialised, mainly in energy, financial and technology stocks, current expectations are

for full steam ahead with double digit earnings growth projected for 2017 and 2018 led by the same aforementioned sectors.

Given elevated stock valuations and the likelihood of higher interest rates, we expect a more moderate return environment going

forward and better opportunities for active management to outperform.


OLD MUTUAL NORTH AMERICAN EQUITY FUND


Old Mutual North American Equity Fund Old Mutual Global Investors (UK) Limited

21

North American equities were strong over the six month period, generally trending upwards despite perceptions of increased political

risk. During the period, the S&P 500 index set 24 new closing record highs, the most through any first-half period since 1998. US

equities were bolstered by a surprisingly positive first-quarter earnings reporting season, together with the momentum demonstrated

by a variety of technology companies, which continued to demonstrate structural growth characteristics. During the period, Amazon

breached the US$1,000-per share level. The first half of the year was marked milestone exemplifies how tech stocks have displaced

the Trump trade in popularity: the FANGs Facebook, Amazon, Netflix, Google (now Alphabet) have posted first half returns

ranging between 15% and 30%.



underperformed the rest of the world, and especially emerging markets equities during the period, as disillusionment grew about the

ability of the Trump administration to execute on campaign promises.

Performance across most stock selection components during the six months was positive. The flexibility of our approach to

dynamically weighting value alongside balance sheet quality served to stabilise returns. The funds Dynamic Valuation stock

selection criterion rotated towards quality throughout most of the period, to reflect the continual unwinding of the earlier Trump trade.

The Market Dynamics stock selection criterion was a detractor, as changes in market direction affected our deployment of stock-level

momentum.

While attention is drawn to stretched valuations in certain sections of the market, investors cite the resilience of economic data as

providing fundamental support.

The top 10 stocks in the S&P 500 account for 2% of its number of stocks but currently a whopping 20% of its market capitalisation.

Investors who put their money into passives tracking US equities may now be taking on a degree of risk they had not anticipated. In

such circumstance we feel it is important to maintain diversification in terms of stock selection, and a balanced approach to

investment style exposures within a portfolio.


OLD MUTUAL TOTAL RETURN USD BOND FUND


Old Mutual Total Return USD Bond Fund Janus Henderson Group Plc (formerly Janus Capital International Limited)

Sub-Investment Adviser: Janus Capital Management LLC

22

Global fixed income markets, in aggregate, rallied during the period, spurred early on by the Trump Trade and relatively strong

economic data. The 10-year Treasury yield reached a year to date high of 2.63%. However, missteps in Washington brought growth

projections into question and longer dated Treasuries came back into favour. On the front end of the curve, the 2-year yield rose

steadily amid two interest rate hikes by the US Federal Reserve. The 10-year yield gave up ground near the periods end, but

ultimately finished at 2.30%. The yield on Germanys 10-year Bonds was volatile until selling off on comments from Mario Draghi,

European Central Bank president, suggesting highly accommodative monetary policy could be nearing its end. Spreads on

investment-grade and high-yield corporate credit narrowed considerably.

The fund outperformed its Barclays Capital U.S. Aggregate Bond Index benchmark. For much of the period, the fund was positioned

for interest rates to remain range-bound. As interest rates reached 2017 lows and spreads on corporate credit tightened to their

narrowest level in several years, our concern regarding fixed-income valuations grew. Being mindful toward downside protection, we

maintained a portfolio duration lower than that of the benchmark over the final part of the period, a beneficial move during the late

June rise in interest rates.

The core of the portfolio is comprised of shorter duration, cash-based fixed income securities. We believe that higher yielding

corporate credits with durations under three years represent an attractive source of income that is often overlooked by the market. For

the period, the Funds cash-based core generated positive returns, led by our holdings in shorter dated corporate credits. Also

contributing was our exposure to inflation-linked Mexican government bonds.

We also employ a series of strategies we refer to as Structural Alpha, which are designed to generate excess returns by judiciously

utilising instruments, including options, futures, swaps and other derivatives. A key component of Structural Alpha is the selling of

volatility on a range of asset classes as we believe the market tends to overpay for protection against price movements. Several

components of our Structural Alpha strategy performed well during the period, especially volatility sales on interest rates. During the

period, we positioned the portfolio to benefit from interest rates staying range bound.

As rates gravitated lower during much of the period, the positions aimed at profiting from falling rates generated positive returns.

Toward the latter part of the period, as rates reached their year to date lows, we shifted our bias toward rising rates. Consequently,

these positions proved profitable during the sell-off that occurred during the periods closing days.

Other Structural Alpha components also contributed to performance, including volatility sales on corporate credit indices, foreign

currency and equity indices.


OLD MUTUAL EMERGING MARKET DEBT FUND


Old Mutual Emerging Market Debt Fund Old Mutual Global Investors (UK) Limited

23

During the first half of 2017 there were supportive inflows to emerging market debt even though during June the asset class had its first

wobble after almost six months of uninterrupted gains. Despite a relatively benign global environment and supportive growth outlook in

emerging markets, sentiment has turned slightly more cautious. Emerging market debt has become more vulnerable to a sudden risk

reversal, be it from a hawkish US Federal Reserve (though we view this as small probability in view of soft US data), from softer

commodities (iron ore prices have fallen more than 30% since Mid-March, and oil remains below US$50 per barrel), or even from

weaker US economic data sparking renewed fears of a recession. On the other hand, emerging market debt is in far better shape than it

was four years ago during the taper tantrum. GDP growth during the first quarter was strong almost across the board, especially in

central and eastern Europe. Even the much maligned Brazil enjoyed a strong rebound in the first quarter, although that is unlikely to be

sustainable throughout the rest of the year due to political uncertainty. Trade data have improved considerably, with a strong rebound in

exports in Asia but also in commodity exporters. All of the formerly named fragile 5 Brazil, Indonesia, India, Turkey and South

Africa are now showing current account deficits of less than 2% (from highs of 6-8% in 2013). This makes them far less vulnerable to

a sudden stop in portfolio inflows.

The fund had a strong first half. Whilst we do not expect as significant gains in the second half, we expect further positive gains,

because we believe that key dynamics continue to favour emerging market debt. These include a sanguine US Federal Reserve,

emerging market growth on an upward trajectory, a stable to improving Chinese economy, commodity stability, and domestic policy

and reforms.

The fund remains overweight EMEA countries, continuing to see value in this region versus the benchmark weighting. In the second

quarter there were gains in most Latin American countries, although political issues in Venezuela caused volatility in that country. We

continue to see value in some frontier markets such as Gabon, Cameroon and Zambia.


OLD MUTUAL EUROPEAN BEST IDEAS FUND


Old Mutual European Best Ideas Fund Liontrust Investment Partners LLP

Odey Asset Management LLP

Old Mutual Global Investors (UK) Limited

Wellington Management International Limited

24

Global equities gained over the period, boosted by stronger-than-expected company earnings and robust economic growth. On the

MSCI All Country World index, technology and healthcare stocks outperformed as the so-called reflation trade faded, while energy

stocks declined as oil prices dropped. The fund was ahead of its benchmark over the period returns driven by stock selection effects.

European equities outperformed other developed markets, following a number of elections in which populist candidates were

defeated. Sterling gained versus major currencies following an election in the UK that raised the prospect of a soft Brexit.

Outperformance in the fund came both from Continental European allocations and UK exposures, with stock selection effects driving

returns in both cases.

On a sectoral basis it was also pleasing to see positive effects from most sectors, again with stock selection driving the

outperformance, even managing to overcome the drag from a 6 percent cash holding. Highlights included health care names Novo

Nordisk and bioMerieux, while other consumer names also generated strong returns including Italian fashion retailer OVS and beer

producer Heineken. Cyclical exposures were slightly more challenging however with losses generated from materials and financials

stocks including a significant loss from packaging company RPC.


OLD MUTUAL INVESTMENT GRADE CORPORATE BOND FUND


Old Mutual Investment Grade Corporate Bond Fund Old Mutual Global Investors (UK) Limited

25

Politics has dominated markets during recent months, with elections in Europe accompanied by President Trumps troubles in the US

taking centre stage. There were no stress and tribulations associated with the Emmanuel Macron presidential victory in France

convincingly winning the second round; it is an important step in ascertaining the policy direction for the future. The markets breathed

a massive sigh of relief after the unexpected events that prevailed in 2016, namely Brexit and Trump.

The UK witnessed further volatility as Theresa May confidently called for a snap general election on the 18 April seemingly believing

that her popularity, strategy on Brexit and confidence in the party would soar to ever loftier heights. As campaigning got underway,

this proved to be the wrong decision borne out by the verdict a hung parliament.

The US Federal Reserve (Fed) continues at a gradual pace to normalise interest rates. Rhetoric from Fed Chair Janet Yellen and her

committee remains hawkish, dismissing recent weak inflation data as one offs whilst pointing to labour market tightness as a major

concern.

The Bank of Englands (BoE) Monetary Policy Committee left rates unchanged at 0.25% at its June meeting, but surprised on the

hawkish side with three of its eight members dissenting on the decision. The committee expressed concern over inflation, which has

risen at a faster-than-expected pace in recent months, and pointed out that slack in the labour market is continuing to decline.

President Draghi hinted at how the committee may sell a gradual unwinding of the stimulus package, this was the first step towards

the ECB Monetary Policy becoming less accommodative for 2018, now the discussion is when will there be a formal tapering

announcement?

Over the period the fund outperformed the benchmark. Duration of the fund as at 30 June was +6.2 years.

The aim of the fund is to maximise the total return through investment in a diversified portfolio of fixed interest and other debt

securities. Downside protection is at the heart of the investment process, with a focus on high-quality investment grade companies that

respect the core fundamentals of the asset class. Strong liquidity is sought with the aim of preserving capital and taking advantage of

opportunities as they develop. In the current environment where central banks will only increase interest rates at a gradual pace and

where any stimulus removal will be telegraphed high quality corporate bonds continue to offer value.

The fund remains overweight banks, technology and covered bonds at the expense of underweights in telecommunications and

utilities. This philosophy is likely to continue as uncertainty in the market continues to be prevalent especially with Brexit. Growth in

the UK is likely to be revised slightly lower with these uncertainties cementing our investment view.


OLD MUTUAL GLOBAL EMERGING MARKETS FUND


Old Mutual Global Emerging Markets Fund Fisher Asset Management LLC

26

After years of debate, index provider MSCI announced it will include mainland Chinese equities (known as A-shares) in its Emerging

Markets (EM) Index starting in May 2018 a largely symbolic change, in our view. As for Chinas broader economic picture, recent

economic data suggest continued growth, with consumer-related and industrial segments of the economy looking strong.

Brazilian President Michel Temer was ensnared in the Car Wash corruption scandal, damaging his ability to advance the reforms

many investors had anticipated. This likely holds back Temer and drains away his political capitalalready limited given his 7%

approval rating. Along with political headwinds, economic growth remains tepid.

In Korea, voters elected Moon Jae-in of the centre-left Democratic Party as president, replacing the recently impeached Park Geun-

hye. There are high hopes Moon can introduce and implement meaningful chaebol reform to loosen the grip Koreas huge, family-run

mega conglomerates hold over the economy and policies. Whether Moons efforts are successful or not, the passing of this political

uncertainty is a positive as it allows investors to see Koreas other solid drivers.

The most significant thematic change to the portfolio during the first half of 2017 was a decision to overweight Eastern European

equities particularly financials tied to a bullish view on Europe as a whole. The fund outperformed the MSCI Emerging Markets

index year to date ending 30 June, 2017. Country, sector and equity selection contributed to relative return. Selection within banks

was the largest contributor to relative return, driven by financial services companies HDFC Bank and KB Financial, as well as insurer

Ping An Insurance. Conversely, an overweight to and selection within pharmaceuticals detracted, driven by pharmaceuticals

companies Dr. Reddy's Laboratories and Sun Pharmaceuticals, as well as hospital and healthcare services provider Bangkok Dusit

Medical Services.

In our view, sentiment toward emerging markets overall remains too dour. Investors often fail to distinguish between emerging

markets nationscommodity-reliant economies have struggled much more than those with burgeoning consumer classes, technology

exposure and services sectors. Many downplay continued swift growth and escalating economic reforms throughout Southeast Asia

and Eastern Europe as strength in the developed world is helping pull emerging markets along, too. Most focus on political tumult in a

few select countries, and while political uncertainty is a factor to consider, it is not problematic for emerging markets overall. We

believe the disconnect between sentiment and reality creates opportunities for investors.


OLD MUTUAL ASIAN EQUITY INCOME FUND


Old Mutual Asian Equity Income Fund Old Mutual Global Investors (Asia Pacific) Limited

27

Financial and material related stocks drove returns in January and February as investors sought to increase their value and cyclical

exposure from heavily underweight stances. Key contributors were India, as the market bounced following the favourable election

result, and China, where sentiment improved rapidly and earnings expectations were upgraded materially. In the second quarter

growth, consumer and technology stocks performed extremely well and the funds underweight to the Information Technology sector

hurt relative performance.

In the first quarter we partially closed the funds underweight to the Korean market by buying stakes in KB Financial and Hana

Financial, given the improving backdrop of higher interest rates and steeper yield curves. We added to positions in the chemicals

space, such as China Petrochemical and Taiwan Prosperity Chemical, as pollution is gradually being taken more seriously in China.

During the second quarter we took profit on Hindalco, in order to focus more on domestic cyclicals such as GMR, the airports to

highways infrastructure company. The weighting in Indonesia was increased given it has finally received a long awaited jump to

investment grade from S&P. This should lower funding costs for corporates and improve the case for FDI. We continue to build out

the artificial intelligence and Internet of Things theme, by owning companies that have exposure to things like 3D sensors (Finisar)

and smart speakers (Primax Electronics).


names heavily over-owned and style positioning now at 30 year extremes. We have maintained the value tilt in the fund and we

expect a renewed focus on financials and cyclicals in the second half of the year. US interest rate rises and the unwind of QE are

potential headwinds to sentiment, however these should have limited impact as long as the pace is gradual. It is instructive to look at

the 2003-7 period when US rates hikes meant the USD strengthened, however against perceived general wisdom Asian equities

continued to perform well as global trade and growth was strong. The Asian equity investment case therefore remains extremely

compelling in our view.


OLD MUTUAL LOCAL CURRENCY EMERGING MARKET DEBT FUND


Old Mutual Local Currency Emerging Market Debt Fund Old Mutual Global Investors (UK) Limited

28

During the first half of 2017 there were supportive inflows to emerging market debt even though during June the asset class had its first

wobble after almost six months of uninterrupted gains. Despite a relatively benign global environment and supportive growth outlook in

emerging markets, sentiment has turned slightly more cautious. Emerging market debt has become more vulnerable to a sudden risk

reversal, be it from a hawkish US Federal Reserve (though we view this as small probability in view of soft US data), from softer

commodities (iron ore prices have fallen more than 30% since Mid-March, and oil remains below US$50 per barrel), or even from

weaker US economic data sparking renewed fears of a recession. On the other hand, emerging market debt is in far better shape than it

was four years ago during the taper tantrum. GDP growth during the first quarter was strong almost across the board, especially in

central and eastern Europe. Even the much maligned Brazil enjoyed a strong rebound in the first quarter, although that is unlikely to be

sustainable throughout the rest of the year due to political uncertainty. Trade data have improved considerably, with a strong rebound in

exports in Asia but also in commodity exporters. All of the formerly named fragile 5 Brazil, Indonesia, India, Turkey and South

Africa are now showing current account deficits of less than 2% (from highs of 6-8% in 2013). This makes them far less vulnerable to

a sudden stop in portfolio inflows.

The fund had an extremely strong first half. Whilst we do not expect as significant gains in the second half, we expect further positive

gains, because we believe that key dynamics continue to favour emerging market debt. These include a sanguine US Federal Reserve,

emerging market growth on an upward trajectory, a stable to improving Chinese economy, commodity stability, and domestic policy

and reforms.

The fund remains overweight Latin America, namely Mexico, Columbia and Brazil. We continue to see value in some frontier markets

and off-benchmark countries such as Zambia and Uruguay.


OLD MUTUAL UK ALPHA FUND (IRL)


Old Mutual UK Alpha Fund (IRL) Old Mutual Global Investors (UK) Limited

29

The FTSE All Share Index returned 5.5% over the period. Economic data suggested the global economy was delivering solid growth

with low inflation. This benign combination saw bond yields trend lower, and equities higher, during the first five months of the year. A

further increase in US interest rates, and comments from central bankers in the US, UK and Europe suggesting a less accommodative

stance, broke the status quo in June. Bond yields spiked higher putting pressure on equity markets.

Theresa May called an election, attempting to bolster her partys majority and her hand in the Brexit negotiations. The Conservatives

lost their majority but retained a tenuous grip on power by forming a coalition with the Northern Irish DUP. In contrast, Emmanuel

Macron won the French presidency and a majority in parliament, giving hope for greater stability on the continent. President Trump

pulled the US out of the Trans Pacific Partnership and attempted to ban entry of nationals from certain countries. Failure to pass a

healthcare bill provoked fears that passing other legislation may prove difficult.

Commodity prices moved lower, contributing to the low inflation narrative. Standard Life announced a merger with Aberdeen Asset

Management, in oil services Wood Group a merger with Amec Foster Wheeler, Tesco a merger with wholesaler Booker, Reckitt

Benckiser a bid for Mead Johnson, while Unilever received a swiftly aborted approach from Kraft Heinz.

Among the funds holdings, retailers Pets at Home, Next and Tesco moved lower on disappointing trading against a background of

weak consumer spending, while Drax underperformed on a poorly received dividend policy. These were offset by positive contributions

from International Consolidated Airlines, engineer Melrose, caterer SSP and wealth manager St Jamess Place, which announced

positive trading during the period. We sold electronic broker NEX Group and added to our position in voice broker TP ICAP. We

switched based on relative valuations and our assessment of the future prospects of both businesses. We added to Lloyds Bank, theme

park operator Merlin, medical devices group Smith & Nephew and Tesco; and we took profits in Micro Focus. We sold out of

Debenhams on concerns over the new CEOs strategy and reduced AstraZeneca ahead of key drug trials this year.

Central banks appear to be signalling a gradual reduction in the extraordinarily easy liquidity conditions created since the financial

crisis. The US Federal Reserve is likely to start unwinding its bond holdings soon, with or instead of a further interest rate rise. Whilst

the Bank of England is unlikely to nudge rates higher yet, any positive economic data will bring that day closer in the bond markets

eyes. UK growth has been gently decelerating, with accompanying softness in consumer-related shares. Any evidence of stabilisation or

improvement will likely move short-dated UK bonds, sterling and domestic and internationally facing equities. Corporate results will be

scrutinised for clues as to the pace of growth going forward.

The fund remains overweight the financial sectors and underweight bond proxies, given relative valuations and the respective

sensitivities to higher interest rates.


OLD MUTUAL UK SMALLER COMPANIES FOCUS FUND


Old Mutual UK Smaller Companies Focus Fund Old Mutual Global Investors (UK) Limited

30

UK stock markets generally performed well over the first half of 2017, although the period was punctuated by a variety of

macroeconomic and political events. Of most note was the fizzling out of the so-called reflation trade over the back end of the first

quarter; the UK general election, which significantly weakened Teresa Mays hand; and falling commodity prices, especially oil.

Notable by its absence was any significant clarity over the likely path for Brexit, particularly in light of the Tories loss of their

majority.

Despite all these headwinds, the benchmark index (Numis Smaller Companies Index) rose 9.7% and pleasingly the fund

outperformed. Sector allocation was neutral, meaning all of the outperformance was driven by stock selection. Key drivers of

performance were: Purplebricks- (shares up 203%) with the UK market rapidly adopting the online model and the US now targeted;

boohoo.com (up 69%) and Fevertree (up 51%), both driven by very strong trading and upgrades to profit forecasts. Revolution Bars

(down 52%) was the biggest disappointment, as inflated costs drove a profits warning. This position has been sold.

Generally, there was no significant actively in terms of shifting the balance of the fund. At the margin, certain industrial positions

were fully built out, such as Dialight and XP Power, closing somewhat the reflation underweight was initiated over 4Q16, and we are

now comfortable in this regard. In terms of sales, we have taken the underweight position in oil and gas to a zero weight, as the

prognosis for the oil price feels uncertain, but mainly to fund higher conviction ideas elsewhere.

Once more, we are faced with a challenging outlook for the UK. The UK government is more precarious than prior to the election;

Brexits form is still as opaque as ever; certain macro indicators are weakening; and the Bank of England has been more hawkish of

late, to name a few concerns. Our approach remains to run a relatively balanced portfolio, albeit one with a skew towards structural

growth stocks. Despite the wider uncertainty, we continue to find excellent UK businesses to invest in, and the IPO pipeline remains

interesting. This leads us to be cautiously optimistic over prospects for the second half of the year; stock picking will again be crucial.


OLD MUTUAL UK DYNAMIC EQUITY FUND


Old Mutual UK Dynamic Equity Fund Old Mutual Global Investors (UK) Limited

31

UK stock markets generally performed well over the first half of 2017, although the period was punctuated by a variety of

macroeconomic and political events. Of most note was the fizzling out of the so-called reflation trade over the back end of the first

quarter; the UK general election, which significantly weakened Theresa Mays hand; and falling commodity prices, especially oil.

Notable by its absence was any significant clarity over the likely path for Brexit, particularly in light of Tories loss of their majority.

Against this backdrop the fund delivered a pleasing performance. Stock selection was particularly strong with modest additional

performance from sector allocation. Key drivers in the long book were boohoo.com, Purplebricks, Paysafe, Fevertree Drinks, Burford

Capital, Melrose Industries and Ascential whilst Just Eat and RPC were disappointing. Given the continuing strength of markets, the

funds short book has remained negligible during the period.

The fund entered 2017 relatively balanced in terms of sectoral positioning and little has been changed during the first half. Within

industrials, IMI, RPC and G4S were replaced by Bodycote, Vesuvius and Capita. Elsewhere, the fund took new positions in

Greencore, 3i, Blue Prism, Alfa Financial and Medica and sold out of Ashtead, Just Eat, Card Factory, Jupiter and Robert Walters.

The outlook for the UK economy remains lacklustre, especially after the weak Conservative showing in the general election which

means the direction and timeline of Brexit negotiations has become more uncertain. Globally, the growth outlook is steady if a little

uninspiring whilst central bankers have recently emphasised, in an increasingly co-ordinated manner, that the era of easy money is

coming to an end. This interplay between the strength of global growth and the likely pace of monetary policy normalization will

likely shape the nature of markets during the balance of the year.

From a UK perspective, we shall also have to contend with the overlay of Brexit-related posturing and negotiating tactics which,

whilst giving little indication as to the likely outturn, could nonetheless cause volatility in the market.

In the current environment, the fund retains a relatively balanced sector and thematic set of stances, deliberately avoiding significant

macroeconomic bets, and instead looking to stock selection as the primary means by which to add value.


OLD MUTUAL GLOBAL EQUITY ABSOLUTE RETURN FUND


Old Mutual Global Equity Absolute Return Fund Old Mutual Global Investors (UK) Limited

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Global equities were strong over the six month period, generally trending upwards despite perceptions of increased political risk.



underperformed the rest of the world, and emerging markets equities outperformed both. Disillusionment grew about the ability of the

Trump administration to execute on campaign promises. This held back US equities, which would have benefited from promised tax

cuts, but helped emerging markets as the threat of their being hurt by trade wars appeared to recede.

Markets have also been buoyed by the relative strength and resilience of Eurozone economic data. The election of Emmanuel Macron

as president of France inspired confidence in the ability of the euro bloc to thrive.

Performance across all stock selection components during the six months was posi

mutual global investors series plc an investment company with variable capital incorporated with...

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