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Semi-annual report 2010 - CF Danske Fund

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					CF Danske Fund
Manager’s Half Yearly Report
for the period 1 January 2010 to 30 June 2010
Contents




    3   Welcome to CF Danske Fund
    4   Investment Strategy
    6   CF Danske Fund Income
    8   CF Danske Fund Cautious Managed
10      CF Danske Fund Balanced
12      CF Danske Fund Active Growth
14      The Danske Bank Group
15      Useful Information




AUTHORISED CORPORATE DIRECTOR (‘ACD’)     INVESTMENT MANAGER
Capita Financial Managers Limited         Danske Capital
Head Office:                              Strødamvej 46
Ibex House                                2100 København Ø
42-47 Minories
London EC3N 1DX

2
Welcome to CF Danske Fund




Introduction                                                 Our Investment Philosophy
Welcome to the Manager’s Half Yearly Report for CF Danske    CF Danske Fund’s investment philosophy is to ensure that
Fund covering the period 1st January 2010 to 30th June       investors achieve the best possible medium to long term
2010. The information in this report is designed to enable   return on their investments. Therefore, we liaise with asset
you to understand the activities and results of CF Danske    managers that take a medium to long term perspective on
Fund during this period. For more information about your     investments and have an in-depth knowledge of international
investment please visit www.danskefund.co.uk or              stock markets, global trends and high performing and/or
alternatively consult your Financial Planner.                growing sectors.

Background                                                   The Fund Range
CF Danske Fund is part of the Danske Bank Group fund         When you invest with CF Danske Fund you gain access to a
range. CF Danske Fund is an Open Ended Investment            range of investment solutions. CF Danske Fund offers four
Company (OEIC) with four sub-funds, each aligned to          different sub-funds. These sub-funds cover a wide range of
different risk profiles.                                     asset classes across different sectors and geographies that
                                                             are appropriate for different levels of investment risk.
At Danske Fund, experienced and professional investment
managers and analysts are monitoring the market in order
to identify opportunities.

We believe that no single asset manager can be the best in
all markets and therefore we co-operate with investment
experts and asset managers from around the world.




                                                                                                                       3
Investment Strategy




Two of the most important decisions to be made when              How we select the Investment Managers?
investing your money are the assets we select for you and        At Danske Fund we believe that no single asset manager can
where we choose to invest them. The information below will       be the best in all markets. Therefore, we use an independent
provide some insight into how we decide what assets to           unit in Danske Bank known as “Fund Rating & Selection”.
invest in and how we choose the right investment managers        By thorough analysis “Fund Rating & Selection” strives to
for you.                                                         deliver extensive information on value creating funds and
                                                                 external managers to ensure that our investment team has
What is Asset Allocation?                                        the appropriate information to make informed decisions.
Asset Allocation simply means how money is spread
across the different asset classes within a fund. The goal of    The objective is achieved based on an in-house developed
effective asset allocation is to develop an appropriate mix      model and in-depth knowledge of the potential managers
of investments that maximise performance potential in line       as well as investor needs. The data used in the model is
with your personal objectives and investment risk profile.       delivered by external and independent providers.

Asset Allocation is an effective way of reducing the             The main criteria for selection are: brand, investment style
fluctuations of an investment. Although asset classes            and process, risk management and global investment
develop differently, they are largely dependent on each other.   performance standards.
This means that if one is increasing in value, another may be
decreasing. We normally distinguish between two kinds of         The main criteria for rating are: return, risk-adjusted return,
asset allocation, both of which are used in CF Danske Fund:      volatility and tracking error.

Strategic Asset Allocation – long-term allocation                We do not aim for a neutral investment style and that is why
between asset types                                              we choose several managers for each market. We select the
Strategic Asset Allocation (SAA) is the long-term allocation     fund manager who we believe will be capable of delivering
between major asset classes. The purpose of Strategic            the best performance. Our choice is evaluated on a regular
Asset Allocation is to maximise the return of the portfolio      basis and the fund manager is replaced if necessary. Our
given the risk tolerance of the investor and the long-term       current managers are detailed on the next page.
expectations to asset class returns, risk and correlation
between asset classes.

Tactical Asset Allocation – short-term deviations in
order to enhance returns
A very important feature of CF Danske Fund is the tactical
deviations from the strategic asset allocation. The purpose
of Tactical Asset Allocation (TAA) is to generate excess
return by shifting weights between different asset classes
based on current market data in the short term. TAA allows
us to react to market news and change the portfolios
accordingly.




4
Ou r Sel ect e d F und Manag e rS



asset class                                         Investment Manager            the company Behind


Nordic Fixed Income                                                               Danske Capital is an international asset          Carefully selected external managers manage
Nordic Equity                                                                     manager with offices in Denmark, Sweden,          investments in regions where Danske Capital
                                                    www.danskecapital.com         Norway, Finland and Luxembourg. Danske            does not possess core competencies. Thus,
European Fixed Income
                                                                                  Capital is a division of the Danske Bank group.   Danske Capital selects managers with core
European Equity                                                                   Danske Capital focuses its resources on           expertise and may at any time decide to change
Eastern European Equity                                                           selected core investment areas (alpha areas).     manager, if this is deemed to be beneficial.


US Equity                                                                         Wellington Management Company was                 When selecting companies for the portfolio,
                                                                                  founded in 1928. Headquartered in Boston, the     Wellington focuses on quality companies,
                                                                                  company also has offices in North America,        which make stable dividend payments and
                                                    www.wellington.com            Europe, Asia and Australia. Wellington is         have the potential for gaining market shares.
                                                                                  exclusively dealing with portfolio management     Wellington is looking for investments within
                                                                                  and has – due to its American roots - great       sectors to which the market from time to time
                                                                                  expertise in the US market. Their local           is addressing less focus, since this approach
                                                                                  knowledge and expertise are supported by a        entails an opportunity to identify attractively
                                                                                  large global team of analysts.                    priced companies.



Japanese Equity                                                                   Daiwa SB Investments has more than 40             Daiwa SB Investments draws on a large and
                                                                                  years of investment experience in Japanese        dedicated team of analysts and portfolio
                                                    www.daiwasbi.co.jp/english/   equities. As per end of December 2009, Daiwa      managers and employs an active investment
                                                                                  had approximately USD 46bn in assets under        style when investing in the Japanese stock
                                                                                  management – USD 21bn alone in Japanese           market. After conducting a quantitative
                                                                                  equities.                                         screening to identify undervalued shares,
                                                                                                                                    Daiwa picks the individual shares following
                                                                                                                                    in-depth qualitative analysis.


UK Equity                                                                         Cartesian Capital Partners LLP is a specialist    Artemis Investment Management Limited
                                                                                  UK equity boutique set up as a joint venture      was established by Mark Tyndall, John Dodd,
                                                                                  with Resolution Asset Management. Founded         Derek Stuart and Lindsay Whitelaw in 1997
                                                    www.resolutionasset.com/      by David Stevenson and Andrew Kelly in            as a dedicated active investment management
                                                    cartesian                     December 2005 and joined by former                house specialising in investments for retail
                                                                                  colleague Jeremy Hall in 2007, Cartesian          investors.
                                                                                  brings together nearly 40 years of investment
                                                                                  experience. The joint venture structure enables   In addition UK equity exposure may be taken by
                                                                                  the managers to focus almost exclusively on       the use of index trackers such as iShares and
                                                                                  investment management, generating high alpha      db x-trackers.
                                                                                  performance from both a long only and long/
                                                    www.artemisonline.co.uk       short perspective.



Emerging Market Equity                                                            Aberdeen Asset Managers Ltd manages               The company was listed on the London Stock
                                                                                  Danske Fund India and Danske Fund Global          Exchange in 1991 and on the Stock Exchange in
                                                                                  Emerging Market.                                  Singapore in November 1997.
       artemis_spot.eps PANTONE 876   PANTONE 294
                                                                                  The company is a subsidiary of Aberdeen Asset
                                                                                  Management PLC (Aberdeen).                        Aberdeen is well known for its management
                                                                                                                                    of equities and bonds from Asia and emerging
                                                    www.aberdeen-asset.com
                                                                                  The company was established in 1983 and           markets due to its investment process and
                                                                                  within recent years the company has expanded      investment teams. Owing to these qualities the
                                                                                  steadily through take-overs and organic growth.   company has won several awards for its unit
                                                                                                                                    trust sub-funds.



Chinese Equity                                                                    Schroders Investment Management Limited           Management (SIM). Headquartered in London,
                                                                                  manages Danske Fund Greater China.                its global network of investment management
                                                                                  The company is a subsidiary of Schroder plc,      offices has more than 250 locally based fund
                                                    www.schroders.com
                                                                                  which is headquartered in London.                 managers and research analysts. Together,
                                                                                                                                    these resources enable us to combine
                                                                                  Schroders is a global asset management            “top-down” market analysis with “bottom-up”
                                                                                  company. Assets are managed through our           stock research and local knowledge in all major
                                                                                  central operation, Schroders Investment           markets.


High Yield Bonds                                                                  ING Investment Management is a Dutch              ING’s investment process is based on, among
                                                                                  company, which specialises in bonds issued        others, expectations to the development of
                                                                                  by emerging market countries. The portfolio       the global interest rate, the relative value of
                                                    www.ingim.com                 managers are placed strategically all over the    the countries given throughout analysis of
                                                                                  world, and the team advising Danske Invest        the political and economical situation, and
                                                                                  works out of offices in The Hague, Singapore      individual supply and demand conditions.
                                                                                  and Atlanta.

                                                                                                                                                                              5
CF Danske Fund Income




Investment Objective and Policy                                 For the year up to the end of June, UK equities have fallen
The Fund aims to provide an above average level of income,      7.6%, Europe 6.7%, US 7.0% and Japan 7.5%. Global
while seeking to maintain capital over the longer term.         Emerging Markets was down 4.3%. Medium-term Gilts
                                                                delivered a return of 5.3%. All returns in local currencies.
The Fund invests predominantly in a range of transferable
securities, such as fixed interest and floating rate            Performance
securities, equities, money market instruments and              The sub-fund provided a return for the half year to 30 June
deposits, and in collective investment schemes giving           2010 of -0.16%. There is no benchmark.
exposure to these types of investment and managed within
the Danske Bank group or by other selected fund managers.       The investments in Gilts and credit bonds were positive
While income-generating assets are likely to represent a        contributors to return, while equities detracted from return.
major part of the portfolio, the portfolio may also include
assets with scope for capital growth in real terms.             Forecast of market trends
                                                                We expect continued modest economic growth in the
A significant proportion of the Fund may be maintained in       second half of 2010, with positive but decelerating growth.
or hedged back to Sterling at any time, therefore, forward      Equities and credit bonds are expected to provide moderate
foreign exchange transactions may be used.                      returns.

The Fund may invest in derivatives for investment purposes      In the UK, a tough fiscal policy is expected to slow economic
after the ACD has given not less than 60 days’ notice to the    growth. As a consequence, we do not expect Bank of England
shareholders, which may make the portfolio composition          to raise interest rates until 2011. Lower growth and less
of the Fund highly volatile in the absence of compensating      issuance will also help the bond market and we expect lower
investment techniques.                                          yields during the summer.

Ha l F Ye a rlY r ep ort                                        Investment strategy
                                                                We expect a successful stabilisation of the European
Fo r t H e F I r S t H al F oF 2 0 1 0
                                                                economies and expect signs of continued economic growth.
                                                                However, if the political measures turn out to be ineffective,
Market
                                                                or if economic growth decelerate more than expected, we
Huge public deficits and high debt in many Western
                                                                will consider reducing our exposure in equities and credit
countries pulled down investor sentiment already in the
                                                                bonds.
first quarter. This escalated during the second quarter
as concern about public finances in primarily Greece but
                                                                We aim to be in a position to exploit unexpected market
also Spain, Portugal and Ireland caused renewed market
                                                                movements to change the allocation to equities and create
turbulence. Following a bailout package, markets stabilised
                                                                return from thematic investments in, e.g. Emerging Market
to some extent, but equity markets dropped again due to
                                                                bonds and equities.
somewhat disappointing macro data out of the US. UK inter-
est rates fell due to the crisis in Greece and the Euro area.




6
Accounting and Distribution Dates                                                                                                                       Share Price Comparison
                                                                       ACCO UN T I N G                            DI S T R IBU TION                     NET A SSET VA LU E AT          C LA SS A                 C L A SS D

Interim                                                                    30 June                                   31 August                          31 December 2009                113.65                   101.53
Final                                                                 31 December                                   28 February                         30 June 2010                    113.47                    99.95
                                                                                                                                                        Change (%)                        -0.18                    -1.58




Income history                                                                                                                                          Major holdings
CA L E ND E R Y E AR                                                                   DI S T R I B UT I O N PE R SHA RE                                A S AT 30/06/10

2009                                                                                                                                                    Danske Invest Global High Income A (EUR)                 17,00%
Class A                                                                                                                                 3.32            4.00 U.K. TREASURY 7/9-2016                              12,98%
Class D                                                                                                                                 3.08            5.00 U.K. TREASURY 7/3-2012                              12,15%
                                                                                                                                                        5.00 U.K. TREASURY 7/9-2014                               9,93%
2010*
                                                                                                                                                        Danske Invest Danish Mortgage Bond A                      8,76%
Class A                                                                                                                                 3.29            Artemis Income Fund R Income                              6,14%
Class D                                                                                                                                 2.95            ING (L) Renta-Emerging Markets Debt LC-IH                 6,01%
*To June 30 2010                                                                                                                                        ING (L) Renta Fund Global High Yield P                    5,79%
                                                                                                                                                        Danske Invest Europe High Dividend A                      4,47%
                                                                                                                                                        Danske Invest Global Emerging Markets A                   3,49%
                                                                                                                                                        Other investments                                        13,28%
Total Expense Ratio
A S AT                                                   CL AS S A + D

At at 30 June 2010                                                            1.84




Historical performance                                                                                                                                  Regional Allocation
30/06 / 1 0                                                                                                                                             A S AT 30/06/10

120
                                                                                                                                                                                        Cash, 3,9%

                                                                                                                                                                                        Emerging markets equities, 3,4%
100                                                                                                                                                                                     Global equities, 6,0%

                                                                                                                                                                                        UK equities, 9,9%

                                                                                                                                                                                        Global fixed income, 36,9%
80
                                                                                                                                                                                        UK fixed income, 39,9%
      04-06

              07-06

                      10-06

                              01-07

                                      04-07

                                              07-07

                                                      10-07

                                                              01-08

                                                                      04-08

                                                                               07-08

                                                                                        10-08

                                                                                                01-09

                                                                                                        04-09

                                                                                                                07-09

                                                                                                                        10-09

                                                                                                                                12-09

                                                                                                                                        01-10

                                                                                                                                                04-10




                                                                                                                                                                                                                          7
CF Danske Fund Cautious Managed




Investment Objective and Policy                                  For the year up to the end of June, UK equities have fallen
The Fund aims to provide an above average total return by        7.6%, Europe 6.7%, US 7.0% and Japan 7.5%. Global
way of balance of income and capital appreciation.               Emerging Markets was down 4.3%. Medium-term Gilts
                                                                 delivered a return of 5.3%. All returns in local currencies.
The Fund will invest conservatively in a diversified portfolio
of transferable securities, such as equities, fixed interest     Performance
and floating rate securities, and in collective investment       The sub-fund provided a return for the half year to 30 June
schemes giving exposure to these types of investment and         2010 of -0.50%. There is no benchmark.
managed within the Danske Bank group or by selected fund
managers. The Fund will comprise a mixture of income-            The investments in Gilts and credit bonds were positive
generating assets and assets with scope for capital growth       contributors to return, while equities mostly detracted from
in real terms. At all times the Fund’s equity exposure will be   return.
limited to a maximum of 60% of the portfolio value. The Fund
may also invest in money market instruments and deposits.        Forecast of market trends
                                                                 We expect continued modest economic growth in the
A significant proportion of the Fund may be maintained in        second half of 2010, with positive but decelerating growth.
or hedged back to Sterling at any time, therefore, forward       Equities and credit bonds are expected to provide moderate
foreign exchange transactions may be used.                       returns.

The Fund may invest in derivatives for investment purposes       In the UK, a tough fiscal policy is expected to slow economic
after the ACD has given not less than 60 days’ notice to the     growth. As a consequence, we do not expect Bank of England
shareholders, which may make the portfolio composition           to raise interest rates until 2011. Lower growth and less
of the Fund highly volatile in the absence of compensating       issuance will also help the bond market and we expect lower
investment techniques.                                           yields during the summer.

Ha l F Ye a rlY r ep ort                                         Investment strategy
                                                                 We expect a successful stabilisation of the European
Fo r t H e F I r S t H al F oF 2 0 1 0
                                                                 economies and expect signs of continued economic growth.
                                                                 However, if the political measures turn out to be ineffective,
Market
                                                                 or if economic growth decelerate more than expected, we
Huge public deficits and high debt in many Western
                                                                 will consider reducing our exposure in equities and credit
countries pulled down investor sentiment already in the
                                                                 bonds.
first quarter. This escalated during the second quarter
as concern about public finances in primarily Greece but
                                                                 We aim to be in a position to exploit unexpected market
also Spain, Portugal and Ireland caused renewed market
                                                                 movements to change the allocation to equities and create
turbulence. Following a bailout package, markets stabilised
                                                                 return from thematic investments in, e.g. Emerging Market
to some extent, but equity markets dropped again due to
                                                                 bonds and equities.
somewhat disappointing macro data out of the US. UK
interest rates fell due to the crisis in Greece and the Euro
area.




8
Accounting and Distribution Dates                                                                                                                      Share price comparison
                                                                       ACCO UN T I N G                          DI S T R IBU TION                      NET A SSET VA LU E AT          C LA SS A                 C L A SS D

Interim                                                                    30 June                                  31 August                          31 December 2009                105.72                   103.10
Final                                                                 31 December                                  28 February                         30 June 2010                    105.19                   102.58
                                                                                                                                                       Change (%)                        -0.53                    -0.52




Income History                                                                                                                                         Major holdings
CA L E ND AR Y E AR                                                                   DI S T R I B UT I O N PE R SHA RE                                A S AT 30/06/10

2009                                                                                                                                                   Danske Invest Global High Income A (EUR)                  9,33%
                                                                                                                                                       Artemis UK Special Situations Fund R Accum.               9,32%
Class A                                                                                                                                0.72
                                                                                                                                                       Danske Invest Danish Mortgage Bond A                      7,89%
Class D                                                                                                                                0.71
                                                                                                                                                       Danske Invest Global Emerging Markets A                   7,13%
2010*                                                                                                                                                  4.00 U.K. TREASURY 7/9-2016                               6,94%
Class A                                                                                                                                0.24            ING (L) Renta-Emerging Markets Debt LC-IH                 5,90%
Class D                                                                                                                                0.23            iShares FTSE 100 (GBP)                                    5,81%
*To June 30 2010                                                                                                                                       ING (L) Renta Fund Global High Yield P                    5,21%
                                                                                                                                                       Danske Invest Global StockPicking                         5,07%
                                                                                                                                                       Danske Invest Europe High Dividend A                      3,51%
                                                                                                                                                       Other investments                                        33,89%
Total Expense Ratio
A S AT                                                   CL AS S A + D

At at 30 June 2010                                                        1.89




Historical performance                                                                                                                                 Regional Allocation
30/0 6 / 1 0                                                                                                                                           A S AT 30/06/10

120
                                                                                                                                                                                       Cash, 6,6%

                                                                                                                                                                                       Emerging markets equities, 8,8%
100                                                                                                                                                                                    Global equities, 11,7%

                                                                                                                                                                                       UK equities, 19,6%

                                                                                                                                                                                       Global fixed income, 28,0%
80
                                                                                                                                                                                       UK fixed income, 25,4%
      04-06

              07-06

                      10-06

                              01-07

                                      04-07

                                              07-07

                                                      10-07

                                                              01-08

                                                                      04-08

                                                                              07-08

                                                                                       10-08

                                                                                               01-09

                                                                                                       04-09

                                                                                                               07-09

                                                                                                                       10-09

                                                                                                                               12-09

                                                                                                                                       01-10

                                                                                                                                               04-10




                                                                                                                                                                                                                         9
CF Danske Fund Balanced




Investment Objective and Policy                                  For the year up to the end of June, UK equities have fallen
This Fund aims to provide an above average total return by       7.6%, Europe 6.7%, US 7.0% and Japan 7.5%. Global
way of balance of income and capital appreciation.               Emerging Markets was down 4.3%. Medium-term Gilts
                                                                 delivered a return of 5.3%. All returns in local currencies.
The Fund invests predominantly in a range of transferable
securities, such as equities, fixed interest and floating rate   Performance
securities, and in collective investment schemes giving          The sub-fund provided a return for the half year to 30 June
exposure to these types of investment and managed within         2010 of -2.07%. There is no benchmark.
the Danske Bank group or by selected fund managers. The
Fund will comprise income-generating assets and assets           The investments in Gilts and credit bonds were positive
with scope for capital growth in real terms. Assets with         contributors to return, while equities mostly detracted from
scope for capital growth in real terms may represent a           return.
major part of the portfolio. The Fund may also invest in
money market instruments and deposits.                           Forecast of market trends
                                                                 We expect continued modest economic growth in the
A significant proportion of the Fund may be maintained in        second half of 2010, with positive but decelerating growth.
or hedged back to Sterling at any time, therefore, forward       Equities and credit bonds are expected to provide moderate
foreign exchange transactions may be used.                       returns.

The Fund may invest in derivatives for investment purposes       In the UK, a tough fiscal policy is expected to slow economic
after the ACD has given not less than 60 days’ notice to the     growth. As a consequence, we do not expect Bank of England
shareholders, which may make the portfolio composition           to raise interest rates until 2011. Lower growth and less
of the Fund highly volatile in the absence of compensating       issuance will also help the bond market and we expect lower
investment techniques.                                           yields during the summer.


Ha l F Ye a rlY r ep ort                                         Investment strategy
                                                                 We expect a successful stabilisation of the European
Fo r t H e F I r S t H al F oF 2 0 1 0                           economies and expect signs of continued economic growth.
                                                                 However, if the political measures turn out to be ineffective,
Market
                                                                 or if economic growth decelerate more than expected, we
Huge public deficits and high debt in many Western
                                                                 will consider reducing our exposure in equities and credit
countries pulled down investor sentiment already in the
                                                                 bonds.
first quarter. This escalated during the second quarter
as concern about public finances in primarily Greece but
                                                                 We aim to be in a position to exploit unexpected market
also Spain, Portugal and Ireland caused renewed market
                                                                 movements to change the allocation to equities and create
turbulence. Following a bailout package, markets stabilised
                                                                 return from thematic investments in, e.g. Emerging Market
to some extent, but equity markets dropped again due to
                                                                 bonds and equities.
somewhat disappointing macro data out of the US. UK
interest rates fell due to the crisis in Greece and the Euro
area.




10
Accounting and Distribution Dates                                                                                                                       Share price comparison
                                                                       ACCO UN T I N G                           DI S T R IBU TION                      NET A SSET VA LU E AT          C LA SS A                  C L A SS D

Interim                                                                    30 June                                   31 August                          31 December 2009                 98.32                       96.40
Final                                                                 31 December                                   28 February                         30 June 2010                     96.28                       94.80
                                                                                                                                                        Change (%)                        2.04                        1.60




Income History                                                                                                                                          Major holdings
CA L E ND AR Y E AR                                                                    DI S T R I B UT I O N PE R SHA RE                                A S AT 30/06/10

2009                                                                                                                                                    Danske Invest Global Emerging Markets A                   12,28%
                                                                                                                                                        Artemis UK Special Situations Fund R Accum.               11,47%
Class A                                                                                                                                 0.51
                                                                                                                                                        DB X-Trackers FTSE All-Share ETF                           9,98%
Class D                                                                                                                                 0.51
                                                                                                                                                        Danske Invest Global High Income A (EUR)                   9,72%
2010*                                                                                                                                                   5.00 U.K. TREASURY 7/3-2012                                6,06%
Class A                                                                                                                                 N/A             Danske Invest Global StockPicking                          5,84%
Class D                                                                                                                                 N/A             ING (L) Renta-Emerging Markets Debt LC-IH                  5,83%
*To June 30 2010                                                                                                                                        Danske Invest Europe High Dividend A                       5,28%
                                                                                                                                                        iShares FTSE 100 (GBP)                                     5,06%
                                                                                                                                                        4.00 U.K. TREASURY 7/9-2016                                4,87%
                                                                                                                                                        Other investments                                         23,61%
Total Expense Ratio
A S AT                                                  CL AS S A + D

At at 30 June 2010                                                         2.04




Historical performance                                                                                                                                  Regional Allocation
30/0 6 / 1 0                                                                                                                                            A S AT 30/06/10

120
                                                                                                                                                                                         Cash, 4.6%

100                                                                                                                                                                                      Emerging markets equities, 6.1%

                                                                                                                                                                                         Global equities, 29.5%
80
                                                                                                                                                                                         UK equities, 34.8%

                                                                                                                                                                                         Global fixed income, 8.6%
60
                                                                                                                                                                                         UK fixed income, 16.5%
      04-06

              07-06

                      10-06

                              01-07

                                      04-07

                                              07-07

                                                      10-07

                                                              01-08

                                                                       04-08

                                                                               07-08

                                                                                        10-08

                                                                                                01-09

                                                                                                        04-09

                                                                                                                07-09

                                                                                                                        10-09

                                                                                                                                12-09

                                                                                                                                        01-10

                                                                                                                                                04-10




                                                                                                                                                                                                                         11
CF Danske Fund active Growth




Investment Objective and Policy                                For the year up to the end of June, UK equities have fallen
This Fund aims to provide an above average total return        7.6%, Europe 6.7%, US 7.0% and Japan 7.5%. Global
primarily by way of growth in capital.                         Emerging Markets was down 4.3%. Medium-term Gilts
                                                               delivered a return of 5.3%. All returns in local currencies.
The Fund invests predominantly in a range of transferable
securities, such as equities, and collective investment        Performance
schemes managed within the Danske Bank group or by             The sub-fund provided a return for the half year to 30 June
selected fund managers. Assets with scope for capital          2010 of -3.28%. There is no benchmark.
growth in real terms are likely to represent a major part
of the portfolio. The Fund may also invest in money market     The investments in Gilts and credit bonds were positive
instruments and deposits.                                      contributors to return, while equities mostly detracted from
                                                               return.
A significant proportion of the Fund may be maintained in
or hedged back to Sterling at any time, therefore forward      Forecast of market trends
foreign exchange transactions may be used.The Fund may         We expect continued modest economic growth in the
invest in derivatives for investment purposes after the ACD    second half of 2010, with positive but decelerating growth.
has given not less than 60 days’ notice to the shareholders,   Equities and credit bonds are expected to provide moderate
which may make the portfolio composition of the Fund           returns.
highly volatile in the absence of compensating investment
techniques.                                                    In the UK, a tough fiscal policy is expected to slow economic
                                                               growth. As a consequence, we do not expect Bank of England
Ha l F Ye a rlY r ep ort                                       to raise interest rates until 2011. Lower growth and less
                                                               issuance will also help the bond market and we expect lower
Fo r t H e F I r S t H al F oF 2 0 1 0                         yields during the summer.

Market
                                                               Investment strategy
Huge public deficits and high debt in many Western
                                                               We expect a successful stabilisation of the European
countries pulled down investor sentiment already in the
                                                               economies and expect signs of continued economic growth.
first quarter. This escalated during the second quarter
                                                               However, if the political measures turn out to be ineffective,
as concern about public finances in primarily Greece but
                                                               or if economic growth decelerate more than expected, we
also Spain, Portugal and Ireland caused renewed market
                                                               will consider reducing our exposure in equities and credit
turbulence. Following a bailout package, markets stabilised
                                                               bonds.
to some extent, but equity markets dropped again due to
somewhat disappointing macro data out of the US. UK
                                                               We aim to be in a position to exploit unexpected market
interest rates fell due to the crisis in Greece and the Euro
                                                               movements to change the allocation to equities and create
area.
                                                               return from thematic investments in, e.g. Emerging Market
                                                               bonds and equities.




12
Accounting and Distribution Dates                                                                                                                       Share price comparison
                                                                       ACCO UN T I N G                           DI S T R IBU TION                      NET A SSET VA LU E AT          C LA SS A                 C L A SS D

Interim                                                                    30 June                                      31 August                       31 December 2009                 91.03                       90.06
Final                                                                 31 December                                      28 February                      30 June 2010                     88.04                       86.80
                                                                                                                                                        Change (%)                        -2.99                       -3,26




Income history                                                                                                                                          Major holdings
CA L E ND E R Y E AR                                                                   DI S T R I B UT I O N PE R SHA RE                                A S AT 30/06/10

2009                                                                                                                                                    Artemis UK Special Situations Fund R Accum.              16,97%
                                                                                                                                                        Danske Invest Global Emerging Markets A                  13,83%
Class A                                                                                                                                 0.12
                                                                                                                                                        DB X-Trackers FTSE All-Share ETF                         10,33%
Class D                                                                                                                                 0.09
                                                                                                                                                        Danske Invest Global StockPicking                         8,24%
2010*                                                                                                                                                   Danske Invest Europe High Dividend A                      7,32%
Class A                                                                                                                                 N/A             iShares FTSE 100 (GBP)                                    6,84%
Class D                                                                                                                                 N/A             Danske Invest Global High Income A (EUR)                  5,82%
*To June 30 2010                                                                                                                                        Danske Invest Europe A (Lux)                              5,63%
                                                                                                                                                        ING (L) Renta-Emerging Markets Debt LC-IH                 4,52%
                                                                                                                                                        Ignis Cartesian UK Opp-A Fund                             4,43%
                                                                                                                                                        Other investments                                        16,07%
Total Expense Ratio
A S AT                                                   CL AS S A + D

At at 30 June 2010                                                            2.88




Historical performance                                                                                                                                  Regional Allocation
30/0 6 / 1 0                                                                                                                                            A S AT 30/06/10

120
                                                                                                                                                                                        Cash, 6,2%

100                                                                                                                                                                                     Emerging markets equities, 16,3%

                                                                                                                                                                                        Global equities, 21,4%
80
                                                                                                                                                                                        UK equities, 38,3%

                                                                                                                                                                                        Global fixed income, 10,2%
60
                                                                                                                                                                                        UK fixed income, 7,7%
      04-06

              07-06

                      10-06

                              01-07

                                      04-07

                                              07-07

                                                      10-07

                                                              01-08

                                                                      04-08

                                                                               07-08

                                                                                       10-08

                                                                                               01-09

                                                                                                       04-09

                                                                                                               07-09

                                                                                                                        10-09

                                                                                                                                12-09

                                                                                                                                        01-10

                                                                                                                                                04-10




                                                                                                                                                                                                                        13
the Danske Bank Group




Measured by total assets, the Danske Bank Group is the           Customer base
largest financial enterprise in Denmark and one of the           In total, the Group serves more than 5 million retail
largest in the Nordic region. The Group offers Danish and        customers and a significant number of public sector and
international customers a wide range of services in the          institutional organisations. Some 2 million customers use
fields of banking, mortgage finance, insurance, leasing, real-   the Bank’s online services.
estate brokerage and asset management.
                                                                 Staff
Banking, insurance, mortgage finance and asset                   A well-qualified and professional staff provide an individual
management                                                       service tailored to the wishes and needs of customers. The
The Group serves personal and business customers                 Danske Bank Group employs about 23,500 staff.
through banks with nationwide branch networks in
                                                                 Growth and development
•	   Denmark	                                                    The Group continues to expand its activities to take
•	   Sweden	                                                     advantage of promising business opportunities that also
•	   Norway	                                                     offer a satisfactory return. Our considerable capital
•	   Northern	Ireland	                                           strength enables us to both expand our business universe
•	   the	Republic	of	Ireland	                                    and adapt existing activities in a competitive market
•	   Finland	                                                    environment.
•	   the	Baltic	states
•	   Lithuania                                                   Danske Fund
•	   Latvia                                                      CF Danske Fund is part of the Danske Invest family which
•	   Estonia                                                     is the brand name for mutual funds managed by fund
                                                                 management companies in the Danske Bank Group.
In addition, customers in Denmark are served by head office
departments, finance centres and subsidiary companies.           CF Danske Fund is the brand name used in the United
Customers in Sweden are also served by a large corporate         Kingdom and comprises a range of four balanced funds.
client department and several head office departments.
                                                                 We draw upon a number of investment experts who are
The Group also has branches in London, Hamburg, and              providing advice in respect of the sub-funds’ concrete
Warsaw. A subsidiary in Luxembourg specialises in private        investments. Therefore, an important part of our job is to
banking services, and one in St. Petersburg serves the           identify competent advisers who are in possession of the
Bank’s corporate customers. In addition, the Group is            relevant expertise within the individual investment areas.
represented in the leading international financial centres
and in Denmark’s most important export markets.                  For more information please visit www.danskefund.co.uk

The Group’s insurance activities are handled by the Danica       Northern Bank
Pension insurance group, which offers life and pension           Northern Bank is part of the Danish-based Danske Bank
products under its own brand name. Mortgage finance              Group and is one of the leading retail banks in Northern
activities are provided by Realkredit Danmark. Apart             Ireland. Northern Bank has over 1,800 employees, 83
from banking, insurance and mortgage finance services            branches, 3 finance centres and 5 satellite finance centres.
for personal and business customers, the Group provides          Northern Bank is part of the Danske Bank Group and use
asset management services to institutional clients and life      Danske’s leading technology platform. This allows Northern
insurance providers.                                             Bank to offer personal and business customers a high level
                                                                 of service, competitive products and a full range of banking
                                                                 channels.


14
Useful Information




Buying and Selling of Shares
The ACD will accept orders to deal in the shares on normal business days between 9.00am and 5.30pm. Shares may be bought or sold by
contacting the Northern Bank Sharedeal order line on 02890 047500 (calls may be recorded, monitored and used to confirm details of our
conversation and to help improve our ongoing service) or via eBanking if you have subscribed to this service (eBanking may be temporarily
unavailable during periods of routine maintenance). A contract note will be issued by close of business on the next business day after the
dealing date to confirm the transaction. Transaction costs and other charges may apply for buying and/or selling shares. Requests for sale
and redemption of shares from the Northern Bank Stocks and Shares ISA must be given in writing to one of the branches of Northern Bank.


Reports and Accounts
This document is a short report on the CF Danske Fund for the period 1 January 2010 to 30 June 2010. The full Report and Accounts for
the Fund is available upon written request to Capita Financial Managers Limited, Beaufort House, 15 St Botolph Street, London EC3A 7HH.




Authorised Corporate Director (‘ACD’)                                   Depositary
Capita Financial Managers Limited                                       BNY Mellon Trust & Depositary (UK) Limited
(Authorised and regulated by the Financial Services Authority)          The Bank of New York Mellon Centre
                                                                        (Authorised and regulated by the Financial Services Authority)
Head Office
Ibex House                                                              160 Queen Victoria Street
42-47 Minories                                                          London EC4V 4LA
London EC3N 1DX
Telephone: 0870 607 2555, Fax: 0870 607 2550                            Investment Manager
Email: enquiries@capitafinancial.com                                    Danske Capital a division of Danske Bank
                                                                        (Authorised and regulated by the Financial Services Authority)
Registrars                                                              Strødamvej 46
Capita Financial Administrators Limited                                 2100 København Ø
Customer Service Centre:
(Authorised and regulated by the Financial Services Authority)          Administrator and Registrar
                                                                        Capita Financial Managers Limited
2 The Boulevard
City West One Offi ce Park                                              Auditor
Gelderd Road                                                            Ernst & Young LLP
Leeds LS12 6NT                                                          1 More London Place
Telephone: 0845 922 0044, Fax: 0113 224 6001                            London SE1 2AF

Directors of the ACD                                                    Distributor
C. Addenbrooke                                                          Northern Bank Limited
L. Everitt                                                              (Authorised and regulated by the Financial Services Authority)
C. Hayes                                                                14 Donegall Square West
K.J. Midl                                                               Belfast BT1 6JS
J. Millan




                                                                                                                                         15
www.danskefund.co.uk




                                                                                                                                                                       NB30062010




CF Danske Fund is an authorised collective investment scheme as defined in the Financial Services and Market Act 2000. It is an open-ended umbrella investment
company established as a ‘UCITS Scheme’ being compliant with the ‘COLL Sourcebook’ published by the Financial Services Authority (FSA). CF Danske Fund is an
investment company with variable capital which is authorised and regulated by the Financial Services Authority and was incorporated in England and Wales on April 05
2006. The Company Registration Number is IC000425.

				
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