Hermes Investment Funds Public Limited Company · 2016-07-26 · 6 Hermes Investment Funds Public Limited Company Investment Manager’s Report Performance Update Returns to the period

Hermes Investment Funds Public Limited Company

(An umbrella investment company with variable capital and having segregated liability between its Sub-

Funds incorporated with limited liability in Ireland)

Interim Report and Condensed Unaudited Financial Statements

For the period ended 30 June 2015

Company Registration Number: 463628

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Hermes Investment Funds Public Limited Company Contents

Management and Administration .......................................................................................................................... 3 Investment Manager Information .......................................................................................................................... 4 Investment Manager’s Report ............................................................................................................................... 6 Unaudited Portfolio Statements ......................................................................................................................... 37 Unaudited Balance Sheet ................................................................................................................................ 127 Unaudited Income Statement .......................................................................................................................... 135 Unaudited Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares ................................................................................................................... 143 Unaudited Cash Flow Statement ..................................................................................................................... 151 Notes to the Financial Statements .................................................................................................................... 159 Unaudited Schedule of Significant Portfolio Movements .................................................................................. 214

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Hermes Investment Funds Public Limited Company Management and Administration

Directors Registered Office Paul McNaughton (Chairman) (Irish)* Georges Court Justin Egan (Irish)* 54-62 Townsend Street Brian Collins (Irish)* Dublin 2 Michelle Green (British)** (resigned 17 July 2015) Ireland Stephen Allen (British) ** Promoter, Investment Manager and Distributor Advisor on voting and engagement Hermes Investment Management Limited Hermes Equity Ownership Services Limited Lloyds Chambers Lloyds Chambers 1 Portsoken Street 1 Portsoken Street London E1 8HZ London E1 8HZ England ............................................................................ England Custodian Administrator, Registrar, Transfer Agent and Secretary Northern Trust Fiduciary Services (Ireland) Limited Northern Trust International Fund Georges Court Administration Services (Ireland) Limited 54-62 Townsend Street Georges Court Dublin 2 54-62 Townsend Street Ireland Dublin 2 Ireland Independent Auditor Legal Advisor to the Company Deloitte & Touche William Fry Chartered Accountants & Statutory Audit Firm Fitzwilton House Deloitte & Touche House Wilton Place Earlsfort Terrace ............................................................ Dublin 2 Dublin 2 ....................................................................... Ireland Ireland ......................................................................... *Non-executive Directors, independent of Investment Manager ** Non-executive Directors

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Hermes Investment Funds Public Limited Company Investment Manager Information

Responsibility: a core value Hermes Investment Management is an active asset manager working to deliver excellent, long-term, risk adjusted performance – responsibly. We strive to lead the debate and contribute to the transformation of the investment industry for the benefit of our clients, their stakeholders and, ultimately, society at large. Our agenda and activities are driven by the long term objectives of our clients’ beneficiaries and we act in their interests. Responsibility in practice We have a comprehensive programme to ensure our responsibility approach and activities are integrated seamlessly in our funds and stewardship service. This includes:

- Delivering sustainable performance within the terms of the mandate and within the clients’ risk appetite - Taking into account all material investment factors including environmental, social and governance (ESG)

ensuring that we are informed though not constrained by these considerations - Acting as a responsible, engaged, long-term steward of investments encompassing constructive dialogue

and taking action where necessary - Engaging with public policy makers and industry bodies to encourage a sustainable economy beyond the

timeframe of a specific mandate Hermes investment teams across Equities and Fixed Income integrate ESG factors into their investment decisions by accessing in-house expertise, proprietary and third-party research. This includes Hermes’ proprietary ESG Dashboard which provides an ESG score per stock and the ESG Portfolio Monitor, which provides a holistic view of ESG statistics at a portfolio level. The ESG dashboard and Portfolio Monitor draw on best-in-class data from various sources including Sustainalytics, Trucost as well as voting and engagement progress data from EOS, Hermes’ stewardship service. Through the dashboard and close interaction with the EOS team, our investment teams are able to benefit from the unique data insights and positive impact of our engagement work. Hermes EOS which provides stewardship services for close to 40 institutional investors is a global market leader in voting and engagement with both companies and public policy makers. The team votes over 9,000 companies and actively engages with over 400 companies a year at executive and board level on a range of issues including board governance, executive remuneration, risk management, business strategy, corporate culture, carbon, pollution, water stress, labour and community rights. We are also active participants in a wide range of public policy discussions and our Chief Executive, Saker Nusseibeh, founded the 300 Club, an independent forum for discussion and debate about the responsibilities of the investment industry. Whilst the responsibility for implementation resides with all Hermes personnel, the ESG integration programme is led, coordinated and supported by a small dedicated team: a head of responsibility reporting to the CEO and a senior executive responsible for co-ordination and execution. This team is further supported by the Policy Working Group, which meets quarterly, to set Hermes policy and lead initiatives. The Policy Working Group, includes the CEO, investment, business development and responsibility representatives as members. Voting Over the first six months of 2015, for Hermes Investment Funds Plc, we voted at 369 shareholder meetings (4,832 resolutions). At 137 of those meetings we opposed one or more resolutions. We voted with management by exception at three meetings and abstained at two meetings. We supported management on all resolutions at the remaining 227 meetings.

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Hermes Investment Funds Public Limited Company Investment Manager Information (continued)

Voting (continued)

Statistics Total

Total meetings voted in favour 369

Meetings where voted against (or voted against AND abstained) 227

Meetings where abstained 137

Meetings where voted with management by exception 2

Total meetings 417

Source: Hermes 01/01/2015 - 30/06/2015 Engagement Over the first six months of 2015, for Hermes Investment Funds Plc, we engaged with 77 companies on 167 issues. Hermes’ holistic approach to engagement means that we typically engage with companies on more than one issue simultaneously. The engagements included in these figures are in addition to our discussions with companies around voting matters.

Theme Global

Environmental 21

Social and Ethical 33

Governance 94

Strategy and Risk 15

Stewardship 4

Total 167

Source: Hermes 01/01/2015 - 30/06/2015

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Hermes Investment Funds Public Limited Company Investment Manager’s Report

Performance Update Returns to the period ended 30 June 2015

Return % Benchmark % Performance

Hermes Global Emerging Markets Fund1 4.68 2.07 2.56

Hermes Global Equity Fund1 2.60 1.75 0.84

Hermes UK Small and Mid Cap Companies Fund 11.09 11.44 (0.31)

Hermes Sourcecap European Alpha Fund 8.78 3.72 4.88

Hermes Global High Yield Bond Fund 2.71 2.92 (0.20)

Hermes Sourcecap Europe Ex-UK Fund 8.21 4.11 3.93

Hermes US SMID Fund1,2 4.70 2.48 2.17

Hermes Active UK Inflation-Linked Bond Fund (0.57) (0.12) (0.45)

Hermes Asia Ex-Japan Equity Fund1 9.09 5.41 3.50

Hermes Global Equity ESG Fund 3.83 1.78 2.01

Hermes Multi Strategy Credit Fund4 2.98 - -

Hermes Multi Asset Inflation Fund4 1.93 - -

Hermes Global Small Cap Equity Fund5 (1.36) (1.63) 0.28

Hermes US All Cap Equity Fund1,3,5 (5.36) (4.95) (0.43)

Hermes Absolute Return Credit Fund4,5 (0.06) - -

Period

Note: Relative performance returns are calculated on a geometric basis Total Return in GBP except Global High Yield in EUR, Multi Strategy in USD and Absolute Return Credit in USD, net of fees, (this is the 'F' Share Class). Returns based on midday F GBP Acc NAV since seeding with midday Z GBP Acc NAV fee adjusted synthetic history except Hermes Global High Yield F EUR Acc and Hermes Multi Strategy F USD Acc. 1 Benchmark is net of withholding tax

2 Russell 2500 TR net benchmark is calculated from the penultimate working day of each month

3 Russell 3000 TR net benchmark is calculated from the penultimate working day of each month

4 Fund has no benchmark

5 As these funds launched during the year, the performance data presented is from inception to period end

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Hermes Investment Funds Public Limited Company Investment Manager’s Report (continued)

Hermes Global Emerging Markets Fund Market Review The benchmark MSCI Emerging Markets Index rose 2.9% over the period in US dollar terms to outperform developed markets. Emerging Asia was the top performing region, up 5.1%, led by a 14.7% move in China as the government implemented further stimulus measures (including a rate cut and lowering of the reserve ratio requirement for banks) amid lacklustre economic indicators. The local securities regulator’s move to permit mainland investors to invest in Hong Kong stocks in April also contributed to a steep rally. The non-benchmark China A share benchmark rose 28% for the period despite falling 7% in June. Indonesia was the region’s worst performer, dropping 12% on worries over slowing growth, flagging reform momentum and disappointing corporate earnings. India returned a modest 1.6% given concerns of yet another retrospective tax, this time on foreign investors, while disappointing corporate earnings and a disproportionate monsoon weighed on investor sentiment. EMEA rose 3.9%, led by Russia, which gained 27.6% as the oil price and the rouble rebounded significantly. Hungary moved up 26.5%, driven by oil refiner Mol. Greece lagged 25.7% amid a highly volatile trading period, which produced a series of wide swings as politics drove the local market. Egypt fell 4.9% amid heightened security concerns following the recent terrorist attacks. Slowing global growth, weak commodity prices and a strengthening dollar created headwinds for Latin America equities, which lagged other regions to drop 6.4%. An ongoing corruption scandal at Petrobras and weak commodity prices were headwinds to performance in Brazil, which fell 8.7%. Brazil’s central bank hiked rates by 0.5% to 12.3%, the highest level in more than three years, to combat inflation, in marked contrast to the monetary loosening seen across other emerging and developed markets. Investment Strategy We remain overweight emerging Asia and underweight the other regions. We reduced the overweight to China in early June and now hold a small overweight position relative to the market. This has been achieved by scaling down positions, rather than exiting them completely, as we believe the rout is not harming the strong fundamentals of these stocks. We don’t think the correction in the Chinese market is finished, and are not at all sure it will resume its strong rally when it does. However, the fundamental case for China is intact, we believe, and thus think it represents a good environment for innovative and well-run companies like Tencent, Shenzen International, Techtronics, Hangzhou Hikvision, Gree Electric and Alibaba. We closed our position in Bangkok Bank given weak economic momentum (the central bank has cut rates twice in the year to date) which is resulting in lacklustre corporate and retail loan growth and rising non-performing loans in the small- and medium-enterprise sector. We retain an underweight in EMEA. We have no direct exposure to Greece and no exposure to Poland or the Czech Republic. Turkey is a 2.2% weighting in the portfolio and we hold a modest 1.7% exposure to Hungary through Richter Gedeon, which was added in the second quarter, which manufactures generic pharmaceuticals. Richter trades at a very attractive valuation with a good pipeline of drugs coming to market, which should support margin expansion. We are underweight Russia with a 3.2% exposure to Norilsk Nickel, given its improving governance and high dividend yield, and Mail.ru, the predominant social network in the country. We remain underweight in Latin America. However, we are seeing some opportunity in the region following substantial multi-year underperformance relative to emerging markets. Brazil is still in a recession where the monetary and fiscal environment is contracting and the state banks are turning off the credit taps. Inflation is at nearly double the target level, but should confidence be rebuilt in the country’s economic and political direction it is possible that Brazil could begin to recover. Currency has driven a large part of this underperformance and we are approaching a decent entry point in hard currency terms.

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Hermes Global Emerging Markets Fund (continued) Investment Strategy (continued) During the first half of the year, we added BB Seguridade, a high-return, high-growth insurance broker, underwriter, and asset manager that is controlled by Banco do Brasil, and Embraer, which manufactures and markets commercial, corporate and defence aircraft. Our main sector exposures continue to be overweight information technology and consumer discretionary. We remain underweight financials, energy, telecoms and materials. Performance Review The Fund gained 4.7% to outperform the benchmark by 2.6%. Asset allocation contributed the majority of outperformance, notably the overweight China (which we have been reducing) and strong stock selection in the country. At the sector level, stock selection accounted for the majority of outperformance (+3.8%), notably selected stocks in the consumer discretionary sector, adding 2.1%, and in information technology adding, which contributed 1.2% to relative returns. Allocation detracted, led by the underweight to energy, the top-performing sector over the period, and an overweight to consumer discretionary. Five of the top 10 contributors to relative returns were China A-share (p-notes) positions, led by Gree Electric Appliances (air conditioning), Hangzhou Hikvison (video surveillance cameras), Huayu Automotive (autoparts), Kweichow Moutai (spirits) and Daqin Railway, which all benefited from a rising market. China Dongxiang (sports apparel) also aided returns as it posted strong operating results and investor interest was revived by the company’s holding in and relationship with Alibaba. The period was marked by high levels of volatility: June saw the start of a major correction which has continued into July. Tech Mahindra (India, telecoms software services provider) was the biggest detractor as it missed 4Q FY15 results, largely due to near-term cyclical weakness in IT spending, notably US telcos (cutting capital expenditure) and currency headwinds. Galaxy Entertainment (Hong Kong, casinos and hotels) moved lower given weak revenue trends in both the VIP and mass market segments. Baidu (China, internet) detracted after publishing lower than expected 1Q profit guidance. Outlook The recent market falls have undermined the economic reforms being implemented by the Chinese Government. China aimed to recapitalise banks and state-owned enterprises by using money from the stock-market bubble it created through plentiful liquidity and by encouraging margin investing, and will now struggle to do this. In time, the falls in the market will help to provide an accurate assessment of the coming economic reality: a more pronounced economic slowdown in China. Amid this turbulence, we are managing our exposure to China and assessing high-quality companies which are beginning to trade at more reasonable valuations. The China stocks we own, which have risen substantially this year, are still on average cheaper than the market with an average valuation of 11x PE. Given the extent of government intervention, however, we will wait until the dust settles before increasing existing holdings or building new positions. Hermes Investment Management Limited July 2015

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Hermes Global Equity Fund

Market Review Global equity markets had a volatile first half of the year as investors became increasingly skittish as the period wore on. This led to a series of swings in sentiment, initially as investors became concerned that the rally in the first quarter had gone too far too fast. In this period valuation was king regardless of quality, although it was short-lived as fundamentals picked up the baton and markets recovered. The sense of unease was compounded later in the second quarter as the Greek tragedy escalated and the Chinese equity market bubble burst. Europe was the most newsworthy region with a number of notable events that kept investors on their toes. The Swiss National Bank removed its peg from the euro in January, which resulted in its currency soaring, while the Swiss stock market plummeted by an almost equal amount. The Greek electorate rejected austerity, first in the general elections and then in a referendum as the bailout negotiations with ‘the Troika’ ground to a halt. In early March, the ECB announced QE, which along with encouraging macro data gave European markets a boost, particularly in the first quarter. Japan was the strongest performer, however, despite some mixed economic news. Monetary easing and the consolidation of the yen’s dramatic weakening towards the end of last year saw investors positively disposed towards Japan cashing in on its position as a big exporter. The US did not fare as well. Partly owing to its outperformance in recent years, but supplemented by the strong currency amid signals that interest rates rises are forthcoming; some mixed economic data and the demise of QE saw investors become increasingly nervous, switching allegiances to different regions. Investment Strategy There were no enhancements to the investment process over the half year and we remained focused on stock selection, with neutral regional and sector weightings. The Global Equity Fund uses systematic fundamental analysis to assess the attractiveness of over 5,000 stocks on a daily basis. This analysis involves a disciplined bottom-up stock selection process based on well-documented anomalies and trends in investor behaviour. The strategy aims to take advantage of systematic behavioural biases of market participants while remaining cognisant of the risks associated with the modelling of such behaviour. We determine fair value for a stock using metrics from the full range of a company’s financial statements, and our modelling employs a wide variety of stock characteristics (often referred to as factors) designed to proxy expected investment returns and the behaviour of market participants. The Fund’s multi-factor approach ensures we remain exposed to a range of styles and aims to generate consistent out performance in all market environments. We closely monitor the performance of each factor with the aim of building stock selection models that deliver consistent and sustainable excess returns. Portfolio modelling is utilised in the portfolio construction process to trade-off between expected return and portfolio risk, allowing for both portfolio constraints and transaction costs. The process is further supplemented by portfolio exposure analysis using our proprietary risk modelling system, MultiFRAME, which allows us to assess the fund ’s exposure to any quantifiable risk factor. Unlike traditional quantitative strategies, analysis is also completed on a disciplined subjective, stock level basis. The team uses their extensive experience to challenge the output of the investment model and remove trades subject to significant non-quantifiable factors or unreliable inputs.

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Hermes Global Equity Fund (continued) Performance Review Over the period the Fund rose 2.6% to outperform the benchmark index which returned 1.8%.The first half of 2015 was characterised by some sharp swings in sentiment, highlighting the volatile nature of markets during the period. Despite the gyrations, the Strategy remained consistent, outperforming the benchmark index in each quarter as the investment approach proved to be successful. Individually, the biggest contributions came from Aena, the Spanish airport operator that made its debut in February and subsequently soared as investors were attracted to its high quality, cash generative business. It was joined by ING Groep, which reported better than expected earnings and continued its restructuring. Humana, completed the top three contributors after being at the centre of M&A activity towards the end of May with Aetna and Cigna said to be interested. The biggest detractors in the period came from Union Pacific, which hit the buffers amid weak railroad traffic numbers. It was joined by Western Digital and Sandisk, the data storage providers, which both fell amid concerns of a slowdown in the industry. Outlook Japan remains the big opportunity from a regional perspective. Many companies have restructured during the difficult times making them leaner and the new stewardship code will ensure Japanese companies become more transparent. With the economy remaining in the doldrums and the currency weak, our focus is trained towards exporters such as component companies, at the expense of domestic orientated companies. Elsewhere, Europe offers too much uncertainty with the repercussions from Greece’s decision to reject austerity (or stay in the euro depending on whether you are Greek or German) yet to be realised. With Greece’s financial system perilously close to collapse, all will become clear sooner rather than later. Whatever the outcome, it is unlikely to be pain free. The thinly traded summer months are typically a time when volatility increases as the reaction to news, either good or bad, is amplified. This summer is likely to be no different and with the Greek tragedy and China adding to investor uncertainty, volatility is certain to rise. In times of uncertainty, investors tend to flock to the “safer”, higher quality section of the market, although given their good run this year many will have to justify their valuations through earnings and growth. It should, however provide a fertile hunting ground for bottom-up investors like the Hermes Global Equities team. Hermes Investment Management Limited July 2015

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Hermes UK Small and Mid Cap Companies Fund Market review In the year to date, there has been a marked divergence in the fortunes of large and small- and mid-cap companies. FTSE 100 forecasts have continued to be downgraded, particularly across the resources sector but also for companies earning revenues from overseas operations, as concerns have developed over economic growth in China and the US. By contrast, small- and mid-cap companies have experienced upgrades, primarily due to their greater exposure to the strength of the domestic economy. The disparity in earnings revisions has more or less been reflected in the performance of the indices over the first half, with the FTSE 100 index exhibiting particular weakness towards the end of the first half as the acrimonious Greek debt negotiations broke down. By contrast, the FTSE 250 and FTSE Small Cap indices were boosted by the unexpectedly decisive national election result in May, but have also benefited from the resilience of the UK economy compared to problems in small- and mid-cap markets overseas. Investment strategy Our core belief is that growth in shareholder value is derived from the cash flows generated by businesses. To generate shareholder value, we seek to identify companies within the UK small- and mid-cap universe that have strong competitive advantages and are protected from the full force of competition by the existence of barriers to entry. As such, these businesses should be able to generate sustainable and growing cash flows. Critically, these businesses have to be priced below their intrinsic value in order to be attractive investments. This style bias, as evidenced by Style Research analysis, has shown the Fund to be consistently overweight companies with high returns on equity and growth rates and underweight factors such as price-to-book, which are associated with lower quality stocks trading at appealing prices but are potential value traps. Risk management is very much at the core of our investment process. We consider risk at the stock level in terms of the fundamental business risk as well as the financial risk associated with the business. But we also consider portfolio risk by looking at sector weightings and correlations across the portfolio. Our aim is to structure the Fund so that the majority of risk is stock specific. This is reflected in the Barra risk analysis which has consistently shown that the majority of the tracking error associated with the Fund is from stock selection. Performance review The Fund returned a net 11.1%, compared to the benchmark return of 11.4%, a modest relative underperformance of -0.3% over the first half. The Fund has continued to maintain its track record of substantial outperformance since inception. Notable positive contributors were Galliford Try and RPC Group. Galliford Try’s share price was strong over the first half as both news of trading at the Group’s housebuilding operations and new contract wins for the construction arm boosted prospects for the business. RPC, the packaging company, was seen as a beneficiary of the weakness in the oil price; the company’s primary feedstock is derived from oil. The most notable underperformer was Synergy Healthcare, the provider of outsourced sterilisation services for hospitals and medical device manufacturers, where the share price suffered from the news that the Federal Trade Commission was intervening to block the proposed purchase of Synergy by Steris, a US competitor. This prompted arbitrageurs, who had bought about 20% of the shares in Synergy, to start selling down their holdings. Shares in Ashtead, the construction and industrial equipment rental company, suffered in the first half due to concerns relating to the business’ exposure to the oil and gas sector and more general signs of weakness across the US economy.

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Hermes UK Small and Mid Cap Companies Fund (continued) Outlook The prevailing backdrop for financial markets remains broadly unchanged. High levels of debt, low interest rates and slow economic growth will continue to be the dominant influences as economies struggle to emerge from the consequences of the financial crisis. Longer term, financial markets will have to adjust to the withdrawal of stimulus from central banks. In this regard, it is interesting to see the backing up of bond yields, which indicates that financial markets are less concerned about the prospect of deflation, although economic growth remains lacklustre. In terms of the corporate earnings outlook, increases in nominal wages and negative inflation are leading to rising disposable incomes for the first time since the onset of the financial crisis. Consumer confidence is receiving a further boost from falls in unemployment, which in turn is leading to increased consumption across the UK economy. After a very strong performance from UK small- and mid-caps, particularly over 2012 and 2013, when returns far outstripped earnings growth and dividends, it is encouraging to see the recent modest improvement in earnings growth expectations for the asset class. This potentially provides a basis for further significant advances by the asset class over the coming months.

Hermes Investment Management Limited July 2015

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Hermes Sourcecap European Alpha Fund Market Review European equities got off to a very strong start to the year, posting double-digit gains in the first quarter, as the announcement of Quantitative Easing (QE) and an improving macro economic backdrop offset the concerns over the unresolved negotiations with Greece that would explode into life at the end of June. QE has delivered a competitive euro, low interest rates and a greater sense of confidence among consumers and business managers alike that has been compounded by the weak oil price. Adding to the feel-good factor was the first positive earnings cycle in Europe for four years, which gave markets a further boost. As the period wore on, however, volatility returned to European equity markets as the Greek bailout crisis reached a head. The Greek government’s decision to let the people decide whether or not to accept austerity (or remain in the euro if you were German) wrong-footed both the market and Greece’s creditors. This only served to add to investors’ unease and overshadowed the definite positives elsewhere in the region as markets fell. However given its strong performance earlier in the period it was perhaps inevitable that a correction of some sort would occur. Investment Strategy Towards the start of the period there was a flurry of activity that had the explicit aim of reinforcing the Fund’s bias towards sustainable growth, while simultaneously reducing the more volatile cyclical exposures. Although the economic backdrop is undoubtedly improving, growth remains hard-won. Those companies that can demonstrate growth, have balance sheet flexibility, are well-run and have healthy margins will ultimately be those that are well rewarded. The strategy proved to be successful as the Fund negotiated the earnings seasons in the period with aplomb and this was reflected in the Fund’s strong relative and absolute performance in the period. The latter half of the period saw volatility creep higher as the prospects for a Greek tragedy ebbed and flowed. In this period, activity was muted – wholesale changes are not our style – so the strategy remained positively primed towards future growth opportunities. In times of heightened volatility, the wisest decisions are often those where you hold your nerve. All positions in the portfolio are held with conviction, which requires in-depth knowledge of a stock and its drivers. This affords the team the ability to sort the ‘wheat from the chaff’ in terms of what is noise and what is a more fundamental shift that requires action. After a strong ascent since the lows last November, corporate profits need to catch-up with elevated markets, which might lead to disappointment among investors looking for a rapid rehabilitation of European company P&Ls. Any correction this brings, or even one induced by a panic reaction to a policy change at the Federal Reserve, should be seen as an opportunity to acquire stocks at a more attractive level – rather than a full scale reversal of the fortunes of the market. Performance Review The Fund enjoyed a strong first half of the year in both absolute and relative returns, returning 8.8% versus the benchmark index gain of 3.7%. The relative return was driven by stock selection (including currency effects) with healthy support provided by sector allocation. The contribution from stock selection was broad with eight of the ten sectors adding value with Oil & Gas, Financials and Consumer Goods particularly prominent. From a sector allocation perspective, not owning and Utilities stocks was responsible for the majority of the contribution from sector allocation. Individually, the biggest contributions all came from companies that reported strong earnings, ahead of expectations and these were Gamesa, Renault and ING Groep. The strong earnings posted by Gamesa were supplemented by a number of new orders that led to it raising guidance, while Renault benefited from strong auto sales data in Europe and ING Groep continued its restructuring by reducing its stake in NN insurance during the period.

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Hermes Sourcecap European Alpha Fund (continued) Performance Review (continued) The biggest detractors were Delta Lloyd, which reported earnings in-line with expectations, but a deterioration in its key solvency ratio disappointed investors. It was joined by Nokia, which also reported weaker than expected earnings citing pricing pressures, although it recovered after reports emerged that Uber were interested in its maps business ‘Here’. Aryzta made up the triumvirate after reporting a self-inflicted weak set of results came from the company’s repositioning to higher margin products in the US. This was compounded by an acquisition at the end of the period with the core bakery business and prompted us to close the position. Outlook Our investment philosophy has always been driven by the fundamentals of the companies in which we invest and despite the headlines coming out of Greece, European companies have maintained a positive and improving tone. Corporates have taken measures to diversify revenue bases, cut out low profitability product lines, reduce fixed costs and optimise tax bills. This has driven profitability even ahead of any revenue gains, which have started to come through this year, as the macro gradually improves. Through our ongoing meetings with companies across the region and across all sectors, management broadly continued to give us a positive account of current trading conditions. There are clear improvements emerging in those peripheral European nations grappling with high unemployment – in particular, Spain, Ireland, Portugal and more recently, Italy. While these countries still face their share of problems, there has been an effort to enact reforms in their respective labour markets and reduce bureaucracy, gradually making it easier for small and large companies to conduct business. This adds further weight to our view that combined with a weaker Euro, we will see an acceleration in the rate of foreign companies looking to invest in the region, taking up macroeconomic slack in these reforming Member States. So while we are mindful the upcoming weeks may be turbulent, we continue to remain positive on the outlook for the rest of Europe, and in particular, European companies. Market volatility will actually increase the investment opportunities for the strategy, as the alarmist headlines create improved entry points for new names on our watch list. Hermes Investment Management Limited July 2015

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Hermes Global High Yield Bond Fund Market review The first two months of the year proved to be positive for the asset class, while volatility increased substantially over the rest of the period. Some of the most remarkable moves were seen in government bond markets. For example, the German Bund tightened by 46bps to 8bps between January and April, but then peaked at 100bps during June. While somewhat correlated, the US 10-year treasury also experienced volatility, but not to the same extent. We witnessed favourable developments in monetary policy, as well as in the calming tensions between Russia and Ukraine. However, uncertainties increased on heightened volatility in government rates, as well as in elevated sovereign risks in Greece and China. Anticipating higher future costs of capital, companies were keen to raise debt to finance anything from near-term debt maturities through to acquisitions. Supply, as a result, remained elevated. Although credit fundamentals generally remain favourable, we observed an increase in gross debt levels, relative to cash flow generation. Despite this, default and distressed-debt-exchange risk (outside of the energy space) is likely to remain muted over the next twelve months. It was difficult for the market to gain any kind of momentum in this environment. Investment strategy Our top down view increased our appetite for credit risk during the first quarter, based largely on improving technicals and relative value. However, this view was tempered by our negative view on sentiment. After the credit rally of the first quarter, we cut risk heading into the second quarter, principally predicated on concerns about supply and valuation. At the same time, we allocated the balance of our risk exposure to US and emerging market credits, at the expense of European credit. The Fund continues to run an up-in-quality bias and we reduced exposure to higher beta names. In sector terms, the strategy remains overweight in up-in-quality financials. We saw value emerge, for example, in some peripherals and in US financials issuing into European debt markets at a nice discount to existing bonds. In financials, we preferred insurance companies over banks. Credit curves experienced a decent bear flattening in the front end, which represented an attractive opportunity from a risk reward perspective. This is especially true for sterling credits. In the US, we continued to be positive on the long end of the curve as it materially cheapened. Companies have been issuing bonds at the long end to finance corporate activity. From a valuation perspective, the normalisation of call constraints on securities was a major consequence of the market correction. As such, some bonds lower in the credit spectrum offered decent prospects of capital appreciation. The portfolio gradually increased its position in the yield to call strategy within its Defensive bucket, to take advantage of this change in relative value. Performance review The portfolio returned 2.7% over the first half of 2015, while the benchmark returned 2.9%. Our exposure to emerging market (+89bps) and US (+33bps) issuers were positive, offsetting negative contribution from GBP credits (-25bps). Strong single name performance came from our allocation to emerging markets – with Vedanta Resources adding +21bps, Rosneft +14bps and Lukoil +14bps. Verso Corporation detracted -26bps on the back of negative idiosyncratic developments and further evidence of a secular decline in the paper industry. In terms of credit quality, our overweight in investment grade securities (+77bps) mitigated the underperformance linked to our underweight in lower quality credit – with the single-B rated and lower credit contributing -98bps.

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Hermes Global High Yield Bond Fund (continued) Outlook Although credit fundamentals remain good, we are concerned about the swift rise in gross debt relative to cash generation, particularly in the US. While Greece dominated news flow, other headwinds remain. These include the timing and velocity of rate rises, market technicals, depth of market liquidity, commodity/energy prices, China weaknesses and the impact of a strong dollar on emerging markets. Despite this, there are numerous opportunities to capture value across the globe, given the decompression starting to develop. In terms of fundamentals, we are encouraged by developments in Europe. Although not entirely consistent week after week, the general trend in data is positive. On a global basis, many years of structurally low rates have allowed companies to refinance maturing debt at lower rates, which has had two positive effects. Firstly, it has reduced default risk, as debt maturities have been pushed out. It has also lowered cash debt service costs. However, we are starting to witness gross debt rising, as the low rates encourage companies to borrow in order to finance equity-friendly activities. This re-levering trend, particularly in the US investment grade market, has not gone unnoticed by our team and we suspect balance sheet strength has peaked for the current cycle. Despite this, aside from the energy space, default/restructuring risk remains muted over the near term. Volatility will remain elevated in the near term. While we have reduced our overall appetite for credit risk, we view this as a great opportunity to select securities in high-quality issuers – particularly in hard currency EM and in the US. Paying the right price for the right securities will be crucial to outperformance for the remainder of 2015. Hermes Investment Management Limited July 2015

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Hermes Sourcecap Europe Ex-UK Fund Market Review European equities got off to a strong start to the year, posting double-digit gains in the first quarter, as the announcement of Quantitative Easing (QE) and an improving macro economic backdrop offset the concerns over the unresolved negotiations with Greece that would explode into life at the end of June. QE has delivered a competitive euro, low interest rates and a greater sense of confidence among consumers and business managers alike that has been compounded by the weak oil price. Adding to the feel-good factor was the first positive earnings cycle in Europe for four years, which gave markets a further boost. As the period wore on, however, volatility returned to European equity markets as the Greek bailout crisis reached a head. The Greek government’s decision to let the people decide whether or not to accept austerity (or remain in the euro if you were German) wrong-footed both the market and Greece’s creditors. This only served to add to investors’ unease and overshadowed the definite positives elsewhere in the region as markets fell. However given its strong performance earlier in the period it was perhaps inevitable that a correction of some sort would occur. Investment Strategy Towards the start of the period there was a flurry of activity that had the explicit aim of reinforcing the Fund’s bias towards sustainable growth, while simultaneously reducing the more volatile cyclical exposures. Although the economic backdrop is undoubtedly improving, growth remains hard-won. Those companies that can demonstrate growth, have balance sheet flexibility, are well-run and have healthy margins will ultimately be those that are rewarded. The strategy proved to be successful as the Fund negotiated the earnings seasons in the period with aplomb and this was reflected in the Fund’s strong relative and absolute performance in the period. The latter half of the period saw volatility creep higher as the prospects for a Greek tragedy ebbed and flowed. In this period, activity was muted – wholesale changes are not our style – so the strategy remained positively primed towards future growth opportunities. In times of heightened volatility, the wisest decisions are often those where you hold your nerve. All positions in the portfolio are held with conviction, which requires in-depth knowledge of a stock and its drivers. This affords the team the ability to sort the ‘wheat from the chaff’ in terms of what is noise and what is a more fundamental shift that requires action. After a strong ascent since the lows last November, corporate profits need to catch-up with elevated markets, which might lead to disappointment among investors looking for a rapid rehabilitation of European company P&Ls. Any correction this brings, or even one induced by a panic reaction to a policy change at the Federal Reserve, should be seen as an opportunity to acquire stocks at a more attractive level – rather than a full scale reversal of the fortunes of the market. Performance Review The Fund enjoyed a strong first half of the year both in absolute and relative returns, returning 8.2%, versus the benchmark which rose 4.1%. The relative return was driven by stock selection (including currency effects) with healthy support provided by sector allocation. The contribution from stock selection was broad with eight of the 10 sectors adding value with Oil & Gas, Industrials and Consumer Goods particularly prominent. From a sector allocation perspective, not owning and Utilities stocks was responsible for the contribution from sector allocation. Individually, the biggest contributions all came from companies that reported strong earnings, ahead of expectations and these were Gamesa, Renault and Sartorious. The strong earnings posted by Gamesa were supplemented by a number of new orders that led to it raising guidance, while Renault benefited from strong auto sales data in Europe.

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Hermes Sourcecap Europe Ex-UK Fund (continued) Performance Review (continued) The biggest detractors were Delta Lloyd, which reported earnings in-line with expectations, but a deterioration in its key solvency ratio disappointed investors. It was joined by Aryzta after reporting a self-inflicted weak set of results that came from the company’s repositioning to higher margin products in the US. This was compounded by an acquisition at the end of the period with the core bakery business and prompted us to close the position. Rocket Internet, despite reporting better than expected results in the period, completed the triumvirate, as it declined on little news. Outlook Our investment philosophy has always been driven by the fundamentals of the companies in which we invest, and European companies have maintained a positive and improving tone, despite the headlines coming out of Greece. Corporates have taken measures to diversify revenue bases, cut out low profitability product lines, reduce fixed costs and optimise tax bills. This has driven profitability even ahead of any revenue gains, which have started to come through this year, as the macro gradually improves. Through our ongoing meetings with companies across the region and across all sectors, management broadly continued to give us a positive account of current trading conditions. There are clear improvements emerging in those peripheral European nations grappling with high unemployment – in particular, Spain, Ireland, Portugal and more recently, Italy. While these countries still face their share of problems, there has been an effort to enact reforms in their respective labour markets and reduce bureaucracy, gradually making it easier for small and large companies to conduct business. This adds further weight to our view that combined with a weaker Euro, we will see an acceleration in the rate of foreign companies looking to invest in the region, taking up macroeconomic slack in these reforming Member States. So while we are mindful the upcoming weeks may be turbulent, we continue to remain positive on the outlook for the rest of Europe, and in particular, European companies. Market volatility will actually increase the investment opportunities for the strategy, as the alarmist headlines create improved entry points for new names on our watch list.


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Hermes US SMID Equity Fund Market Review Small and mid-caps were in positive territory over the period with the benchmark Russell 2500 index rising 2.5% in US dollar terms. Small-cap stocks outperformed large caps and growth outperformed value. Macroeconomic data was mixed over the period, and improved towards the end, adding confidence to the view that the first-quarter contraction in GDP was a one-off, related to poor weather and port shutdowns. There was a notable recovery in retail sales and consumer confidence at the end of the period. The Conference Board’s measure of consumer confidence rose back above 100 in June. Despite the mixed economic data, Treasury bonds sold off, reflecting investor’s expectation that US base rates are likely to rise later this year. At the sector level, health care was the standout performer, up 20.1%, in part due to M&A in the pharmaceuticals industry. Conversely, utilities dropped 9.4% as yielding bond-proxy stocks came under pressure as bonds declined during the period. Consumer discretionary stocks increased 5.3%, putting in a strong show amid a recovery in sentiment towards the end of Q2. Investment Strategy We added Clarcor, a manufacturer of air and liquid filtration products and systems for use in various industrial and transportation applications. Clarcor benefits from high and profitable recurring revenues but its stock has been de-rated since its 2011-12 peak due to lacklustre top-line growth, but should recover as economic activity increases. We initiated a position in Jack Henry, a provider of core processing software to its niche end-market of banks and credit unions with assets under $30 billion. The nature of the product lends itself to wide economic moats. The core operating system of a small-to-midsized bank is utterly critical and customers are loath to switch providers due to the upheaval and risk involved, resulting in extremely high retention rates. We also added CACI International, which provides IT solutions and services primarily targeting the areas of defence, intelligence and homeland security serving US government agencies and commercial markets. CACI represents an opportunity to benefit from the improving defence cycle with limited technology risk at an attractive valuation. Visibility of earnings is improving with record backlog and improving margins.

We recently added Genesee & Wyoming, which owns and operates short-line and regional freight railroads. This business has strong economic moats, a track record of stellar earnings growth (even through downturns) and an acquisition formula that can be repeated. Its position as the dominant player in the short-line rail industry was established in 2013, when it completed the acquisition of the second-largest player in the market, Rail America. We also added to our holding in West Pharmaceutical Services, a leading manufacturer of stoppers and seals for syringes, and of whole delivery systems aimed at newer intravenous drugs. West commands market shares in the 70-95% range, and regulatory and capital barriers (both to entry and exit) are becoming stronger. We closed our position in United Stationers, an industry leader in the wholesale distribution of office products, janitorial supplies and industrial supplies, given continued weakness in office products and increased investment needs in a switch for Clarcor. We sold City National after a takeover of the bank by RBC. We closed our position in Wesco Aircraft Holdings, a supplier of sub-$300 parts to the commercial and military aerospace markets following a conference call with the new management team. We were unconvinced of the effectiveness of their improvement plan against the backdrop of increased pricing headwinds.

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Hermes US SMID Equity Fund (continued) Performance Review The Fund returned 4.7% to outperform by 2.5% relative to the benchmark driven primarily by stock selection. The overweight to regional banks and underweight to REITs proved helpful as the 10-year US Treasury yield rose from 1.7% to 2.4%. Conversely, the Canadian Dollar exposure from our small non-benchmark exposure detracted. Ellie Mae (electronic mortgage origination software) was the biggest contributor given improving mortgage volumes. Good stock selection in the Health Care sector also aided returns: AMN Healthcare (temporary staffing) and Masimo (medical sensory devices) benefited from strong results and Omnicare (pharmacies) was also subject to an agreed takeover bid by CVS Health Corporation. Carpenter Technology (speciality aerospace alloys) fell as the slowing oil and gas industry impacted demand from the energy sector and led to destocking in aerospace materials in Q4 2014. MDU Resources (regulated utility, construction, and exploration and production,) fell given its Q1 earnings miss (due to mild weather) and ongoing negative investor sentiment for near-term returns from utility stocks given potential interest rate headwinds. MSC Industrial (industrial distributors) dropped after slightly missing earnings forecasts given the prevailing moderate demand environment. Outlook Recent economic data shows that confidence is returning which should translate into higher business and consumer spending. With respect to monetary tightening, it is likely that any normalisation of interest rates will be gradual and reflect a strengthening domestic economy, which should continue to be supportive of US small and mid-cap outperformance. The Fund holds profitable, cash-generative companies and these look relatively attractive compared to parts of the market that seem expensive, such as early stage technology and biotechnology stocks, where, given our focus on quality, the fund is underweight. The Fund continues to find good entry points in high quality companies to be held for the long-term. As US monetary policy normalises, we believe that the market will again focus on fundamentals and reward higher quality companies. Hermes Investment Management Limited July 2015

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Hermes Active UK Inflation-Linked Bond Fund Market Review Index-linked Gilts performed strongly in Q1. This was driven by the rally in global conventional bond markets, stemming from collapsing oil prices and geopolitical concerns, as well as the anticipated index extension due in April. The index-linked curve flattened over the period with 10-year real yields falling 0.1% whilst 50-year index-linked yields fell 0.2%. While breakevens were little changed over the period, there was considerable volatility within the quarter. Breakeven inflation rates fell to a low of 3.0% at the end of January following the 2058 syndication, before rising back to 3.2% at the end of the quarter. Thirty-year index-linked Gilt yields fell to a low of almost 1.0% at the end of January before rising to -0.5% by early March and then retracing back to -0.9% by the end of the quarter. The later rally was in part owing to the Debt Management Office (DMO) changing the Gilt issuance profile with a greater weight given to long-dated nominal Gilts and no index-linked syndication in April at the time of the large index extension. Crude oil prices fell a further 9% over the period, while the supermarket price war intensified. However there was a reversal of fortunes for the market in Q2 with index-linked Gilts performing poorly. This was largely driven by the collapse in global conventional bond markets, which were led lower by euro-zone sovereign bond markets. Over the period, the real yield curve flattened as it was the middle of the curve that led the sell off with 10-year real yields rising by approximately 0.3%, while the 50-year real yields rose by just 0.1%. Index-linked bonds markedly outperformed conventional Gilts, with breakevens rising by almost 0.3% to 3.4% in the 30-year sector. Investment Strategy The Fund moved to a small long position at the time of the 2058 syndication at the end of January. However, as the market performed poorly afterwards, with both real yields rising and breakeven inflation rates falling, this position caused some underperformance. Duration, however, proved beneficial during Q2 with the Fund having lengthened ahead of the index extension in April. The 2020 maturity fell below five years on 16 April, with the index lengthening by over a year. In March, the DMO had announced there would only be an auction of the 2040 maturity at this time rather than the expected larger syndication, which caused the market to rally. Into the extension itself, the Fund added exposure to both US TIPS and conventional Gilts as these were deemed to offer better value. However, index-linked Gilts continued to outperform and these positions detracted from performance in Q2. The Fund was also positioned for the curve to flatten over the period, which happened with 10-year real yields rising by approximately 0.1%, while the 50-year sector preformed particularly strongly, rallying by 0.2%. Performance Review During the period, the Fund returned -0.6% to underperform the benchmark by 45bps, net of fees. In Q1, the Fund’s exposure to international markets proved beneficial in January before profits were taken on these positions. Maturity selection also worked well, with the Fund underweight short-dated bonds and overweight ultra-long index-linked bonds ahead of the index extension in April. Overall, duration trading slightly detracted from performance over the period. Exposure to Network Rail also marginally hurt performance as Network Rail 2047s underperformed the 2047 index-linked Gilt by 0.1%. In Q2, the Fund benefited from a combination of duration and curve positioning. The Fund also ran a small long-duration position into the index extension in April, which proved beneficial. The Fund then came out of the extension short duration, which worked well as yields rose in June. Curve positioning also benefited the Fund with an overall flattening bias during the period. Additionally, the underweight in the 30-year sector, which cheapened into the June syndication, also contributed positively to performance. Offsetting these positive contributors to performance were the breakeven position and exposure to the US Treasury Inflation Protected Securities (TIPS) market. The Fund bought 30-year US TIPS in April around the time of the index extension as they were trading at relatively attractive levels relative to UK inflation-linked bonds. However, TIPS continued to cheapen relative to index-linked Gilts through the period, which hurt performance. The Fund also opened up a short breakeven position at the same time as index-linked Gilts appeared to be trading rich owing to the index extension, but conventional bonds continued to underperform over the period.

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Hermes Active UK Inflation-Linked Bond Fund (continued) Outlook Inflation is currently running at very low levels and, while base effects mean it will start rising in coming months, market expectations are that it will remain low. There are no expectations for a rate rise until early 2016 or until inflation or wage demands, or both, show consistent and steady signs of increasing. However, there have been comments from Monetary Policy Committee members – who are clearly more hawkish than in recent months –that suggest a rate rise is not imminent but pending. The UK index-linked market is trading at exceptionally expensive levels by many historical measures. This has largely been caused by a lack of supply until the June syndication at a time when there was a large index extension. Following the lack of supply in recent months, and after the June syndication, there will be two further index-linked syndications this calendar year in September and November. We expect the long-dated syndication in September will be an additional tranche of the existing 2068 bond. The level of risk supplied relative to the value of the sector should cause the UK index-linked market to cheapen relative to other markets and we would hope to take profits into this funding. With the recent funding of the 30-year and the expected funding of the 50-year in September, an overweight position in 30-year bonds has been taken. Furthermore, shorter dated index-linked supply will come via auctions of both the UKTI 2026s in mid-July, and the UKTI 2058s on 11 August. Hermes Investment Management Limited July 2015

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Hermes Asia Ex-Japan Equity Fund Market Review Among larger country benchmark constituents, the China H share index posted 11% as the government implemented further stimulus measures (including a rate cut and lowering of the reserve ratio requirement for banks) amid lacklustre economic indicators. The local securities regulator’s move to permit mainland investors to invest in Hong Kong stocks in April also contributed to a steep rally. The non-benchmark China A share benchmark rose 28% for the period despite falling 7% in June. Indonesia was the region’s worst performer, dropping 13% on worries over slowing growth, flagging reform momentum and disappointing corporate earnings. India returned a modest 1.4%. Investment Strategy In our early June letter to investors, we noted the striking anomaly between valuations of Chinese A shares on the one hand and US-listed Chinese American Depositary Receipts (ADRs) on the other. As a result, we added to the ADRs, while cutting our position in A shares. We were not the only ones to notice the anomaly described above. In the first half of June there were more than a dozen non-binding ‘go private’ proposals of US-listed Chinese ADRs, in which investment banker-supported management teams offered to buy out US-listed minority investors and take the company private with the probable intention of re-listing in China at a higher valuation. At the time of writing, the Chinese A share market had fallen sharply and we expect many of these deals to be cancelled as a consequence. This all goes to demonstrate what we consider to be the cynical attitudes of many management teams towards minority shareholders. They did not hesitate to exploit minorities by offering to buy them out at small premiums so that management alone could profit from the inter-market price disparity, but might now withdraw from such deals as the prospects of a quick profit have declined with the A share market. During the period, the management of one of our holdings, E-house, made a go private proposal at a very small premium to what we consider to be a depressed market price. Despite the miserliness of the premium, it remains to be seen whether they will complete the transaction given the subsequent fall in the A share market. Performance Review For the period, the Fund gained 9.1% to outperform the benchmark by 3.5%. The outperformance was attributable to positive stock selection in Korea, the overweight to China (which we have been reducing) and underweight to south east Asia. Stocks contributing most to performance were Chinese spirits maker Wuliangye A (p notes), which benefited from a rising A share market, and China Dongxiang on strong operating results and renewed investor interest in the company’s holding in and relationship with Alibaba. Beijing Capital International Airport rose following the publication of strong Q4 passenger traffic and financial results. Internet search company Baidu detracted after publishing lower-than-expected first quarter profit guidance. Casino operator Genting Singapore detracted after publishing poor results and following continued weakness among Macau casinos, against which Genting’s value is compared by many investors. India’s Sun TV fell on concerns that the government would not renew its broadcasting license because of corruption allegations levelled at its founder. Not owning Tencent, a media and mobile business, also hurt returns.

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Hermes Asia Ex-Japan Equity Fund (continued) Outlook At the end of the period, we held a (recently reduced) 7% position in Chinese A shares (through p notes). It now appears that the margin-fuelled bubble in the A share market has burst. While we do not rule out adding to select A shares on continued falls (if valuations support such additions), we are more likely to further trim positions. Further a field we continue to find opportunities in South Korea and are beginning to find some in India too. Hermes Investment Management Limited July 2015

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Hermes Global Equity ESG Fund

Market Review Global equity markets had a volatile first half of the year as investors became increasingly skittish as the period wore on. This led to a series of swings in sentiment, initially as investors became concerned that the rally in the first quarter had gone too far too fast. In this period valuation was king regardless of quality, although it was short-lived as fundamentals picked up the baton and markets recovered. The sense of unease was compounded later in the second quarter as the Greek tragedy escalated and the Chinese equity market bubble burst. Europe was the most newsworthy region with a number of notable events that kept investors on their toes. The Swiss National Bank removed its peg from the euro in January, which resulted in its currency soaring, while the Swiss stock market plummeted by an almost equal amount. The Greek electorate rejected austerity, first in the general elections and then in a referendum as the bailout negotiations with ‘the Troika’ ground to a halt. In early March, the ECB announced QE, which along with encouraging macro data gave European markets a boost, particularly in the first quarter. Japan was the strongest performer, however, despite some mixed economic news. Monetary easing and the consolidation of the yen’s dramatic weakening towards the end of last year saw investors positively disposed towards Japan cashing in on its position as a big exporter. The US did not fare as well. Partly owing to its outperformance in recent years, but supplemented by the strong currency amid signals that interest rates rises are forthcoming; some mixed economic data and the demise of QE saw investors become increasingly nervous, switching allegiances to different regions. Investment Strategy There were no enhancements to the investment process over the half year and we remained focused on stock selection, with neutral regional and sector weightings. The Global Equity ESG Fund uses systematic fundamental analysis to assess the attractiveness of over 5,000 stocks on a daily basis. This analysis involves a disciplined bottom-up stock selection process based on well-documented anomalies and trends in investor behaviour. The strategy aims to take advantage of systematic behavioural biases of market participants while remaining cognisant of the risks associated with the modelling of such behaviour. We determine fair value for a stock using metrics from the full range of a company’s financial statements, and our modelling employs a wide variety of stock characteristics (often referred to as factors) designed to proxy expected investment returns and the behaviour of market participants. The Fund’s multi-factor approach ensures we remain exposed to a range of styles and aims to generate consistent out performance in all market environments. We closely monitor the performance of each factor with the aim of building stock selection models that deliver consistent and sustainable excess returns. Portfolio modelling is utilised in the portfolio construction process to trade-off between expected return and portfolio risk, allowing for both portfolio constraints and transaction costs. The process is further supplemented by portfolio exposure analysis using our proprietary risk modelling system, MultiFRAME, which allows us to assess the fund’s exposure to any quantifiable risk factor. Unlike traditional quantitative strategies, analysis is also completed on a disciplined subjective, stock level basis. The team uses their extensive experience to challenge the output of the investment model and remove trades subject to significant non-quantifiable factors or unreliable inputs.

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Hermes Global Equity ESG Fund (continued)

Performance Review Over the period the Fund rose 3.8% to outperform the benchmark index which returned 1.8%.The first half of 2015 was characterised by some sharp swings in sentiment, highlighting the volatile nature of markets during the period. Despite the gyrations, the strategy remained consistent, outperforming the benchmark index in each quarter as the investment approach proved to be successful. Individually, the biggest contributions came from Aena, the Spanish airport operator that made its debut in February and subsequently soared as investors were attracted to its high quality, cash generative business. It was joined by NTT, which has risen steadily this year after beating earnings expectations in both of its quarterly updates. Mylan completed the trio and rose to an all-time high in April after it bid $29bn for fellow generic drug-maker, Perrigo and was itself then subject to a takeover bid from Teva. The biggest detractors in the period came from Delta Airlines, which fell along with the airlines sectors over concerns on pricing and capacity growth. It was joined by Western Digital and Micron, which both reported earnings below analyst expectations, while concerns over handset and PC sales hurt semiconductors and hardware names in the period. Outlook Japan remains the big opportunity from a regional perspective. Many companies have restructured during the difficult times making them leaner and the new stewardship code will ensure Japanese companies become more transparent. With the economy remaining in the doldrums and the currency weak, our focus is trained towards exporters such as component companies, at the expense of domestic orientated companies. Elsewhere, Europe offers too much uncertainty with the repercussions from Greece’s decision to reject austerity (or stay in the euro depending on whether you are Greek or German) yet to be realised. With Greece’s financial system perilously close to collapse, all will become clear sooner rather than later. Whatever the outcome, it is unlikely to be pain free. The thinly traded summer months are typically a time when volatility increases as the reaction to news, either good or bad, is amplified. This summer is likely to be no different and with the Greek tragedy and China adding to investor uncertainty, volatility is certain to rise. In times of uncertainty, investors tend to flock to the “safer”, higher quality section of the market, although given their good run this year many will have to justify their valuations through earnings and growth. It should, however provide a fertile hunting ground for bottom-up investors like the Hermes Global Equities team.


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Hermes Multi Strategy Credit Fund Market review The first two months of the year proved to be positive for the asset class, while volatility increased substantially over the rest of the period. Some of the most remarkable moves were seen in government bond markets. For example, the German Bund tightened by 46bps to 8bps between January and April, but then peaked at 100bps during June. While somewhat correlated, the US 10-year treasury also experienced volatility, but not to the same extent. We witnessed favourable developments in monetary policy, as well as in the calming tensions between Russia and Ukraine. However, uncertainties increased on heightened volatility in government rates, as well as in elevated sovereign risks in Greece and China. Anticipating higher future costs of capital, companies were keen to raise debt to finance anything from near-term debt maturities through to acquisitions. Supply, as a result, remained elevated. Although credit fundamentals generally remain favourable, we observed an increase in gross debt levels, relative to cash flow generation. Despite this, default and distressed-debt-exchange risk (outside of the energy space) is likely to remain muted over the next twelve months. It was difficult for the market to gain any kind of momentum in this environment. Investment strategy Our top down view increased our appetite for credit risk during the first quarter, based largely on improving technicals and relative value. However, this view was tempered by our negative view on sentiment. After the credit rally of the first quarter, we cut risk heading into the second quarter, principally predicated on concerns about supply and valuation. At the same time, we allocated the balance of our risk exposure to US and emerging market credits, at the expense of European credit. The Fund continues to run an up-in-quality bias and we reduced exposure to higher beta names. In sector terms, the strategy remains overweight in up-in-quality financials. We saw value emerge, for example, in some peripherals and in US financials issuing into European debt markets at a nice discount to existing bonds. In financials, we preferred insurance companies over banks. Credit curves experienced a decent bear flattening in the front end, which represented an attractive opportunity from a risk reward perspective. This is especially true for sterling credits. In the US, we continued to be positive on the long end of the curve as it materially cheapened. Companies have been issuing bonds at the long end to finance corporate activity. From a valuation perspective, the normalisation of call constraints on securities was a major consequence of the market correction. As such, some bonds lower in the credit spectrum offered decent prospects of capital appreciation. The portfolio gradually increased its position in the yield to call strategy within its defensive bucket, to take advantage of this change in relative value. Performance review The Fund returned 3.0% over the first half of 2015, outperforming the broader global high yield market return of 2.9%. Fund performance remains above target and both the best selection and defensive buckets are performing as anticipated. The primary driver of performance over the first quarter was the strong performance of the best selection bucket, while performance on the defensive bucket was immaterial in the supportive market environment. However, the defensive bucket acted as a cushion in more volatile second quarter conditions. Within the best selection bucket, allocation to emerging markets and the preference for high quality credits were the key drivers of performance. Emerging market investments delivered +154bps of performance. Elsewhere, the high quality bias had a very strong return, with names rated BB and above returning +288bps. We were hedged against rate moves, with the strategy retaining only the spread component of risk. This ensured we were able to capture the flight to quality, while neutralising the negative impact of rate moves.

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Hermes Multi Strategy Credit Fund (continued) Performance review (continued) Strong single name performance came from our allocation to emerging markets, where we preferred those issuers benefiting from dollar appreciation. Vimpelcom added +24bps, Severstal +21bps and Vedanta +19bps. Verso Corporation detracted -45bps on the back of negative idiosyncratic developments and further evidence of a secular decline in the paper industry. Outlook Although credit fundamentals remain good, we are concerned about the swift rise in gross debt relative to cash generation, particularly in the US. While Greece dominated news flow, other headwinds remain. These include the timing and velocity of rate rises, market technicals, depth of market liquidity, commodity/energy prices, China weaknesses and the impact of a strong dollar on emerging markets. Despite this, there are numerous opportunities to capture value across the globe, given the decompression starting to develop. In terms of fundamentals, we are encouraged by developments in Europe. Although not entirely consistent week after week, the general trend in data is positive. On a global basis, many years of structurally low rates have allowed companies to refinance maturing debt at lower rates, which has had two positive effects. Firstly, it has reduced default risk, as debt maturities have been pushed out. It has also lowered cash debt service costs. However, we are starting to witness gross debt rising, as the low rates encourage companies to borrow in order to finance equity-friendly activities. This re-levering trend, particularly in the US investment grade market, has not gone unnoticed by our team and we suspect balance sheet strength has peaked for the current cycle. Despite this, aside from the energy space, default/restructuring risk remains muted over the near term. Volatility will remain elevated in the near term. While we have reduced our overall appetite for credit risk, we view this as a great opportunity to select securities in high-quality issuers – particularly in hard currency EM and in the US. Paying the right price for the right securities will be crucial to outperformance for the remainder of 2015. Hermes Investment Management Limited July 2015

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Hermes Multi Asset Inflation Fund

Market Review The first quarter of the year registered strong performance for the most part, but cracks appeared in the second quarter, most notably late May and June. This was caused by unrelated, but rippling, global effects. The ECB’s quantitative easing positively influenced the economy in Europe during the first quarter, but there was a large drawdown in the second quarter coming from the Greek debt crisis and associated fears. Over the same three months there was an upward revision of inflation expectations, leading to a rise in yields. The Euro weakened gradually, but continually, over the first half of the year, bringing it to almost eight year lows. The removal of easing in the US, combined with the ongoing uncertainty about potential rate hikes, lead to uninspired performance. Worries about the strength of the dollar also contributed to the disappointment towards the end of the first quarter. Economic data improved over the second quarter, with Treasury yields rising along with other global bonds. US equities performed positively compared to the other global markets. Onshore China performance continued to soar through to May, but bubble fears overwhelmed markets in June and led to panic deleveraging in the region. GDP data indicated a slowdown in growth. Japan also exhibited strong returns through May – largely coming from the expansion in monetary policy, the shift in fiscal policies, and the structural changes in market level asset allocation. However, it did not remain unscathed in June. Oil prices started to stabilise at the start of the year, but tapered off once again towards the end of the period. The energy and utilities sectors both lagged. Investment Strategy The portfolio matured significantly since the start of the year, partly from the inclusion of new asset types – as well as a continuous and strategic resizing of the current positions in response to the assessment of risk levels in the portfolio. In terms of portfolio shifts, we made a decisive move out of equities into government bonds following January’s RPI. At the time, the belief was that the trend of government bonds outperforming equities would accelerate. We still expect returns from bonds to be profitable, leaving the portfolio with a larger exposure level in rates at the end of the second quarter. We reduced our real assets exposure on the view the relationship between real assets and RPI had weakened. In contrast, our allocation to commodities and to inflation linked bonds rose. Despite the fractious performance the China A share market experienced in June, our introductory investment in the A shares proved a fruitful addition to the portfolio. We also benefitted positively from the new risk factor, size, which was introduced in May. We opened the year with a long exposure of approximately 105% and ended the period with a long exposure of 115%.Overall leverage increased slightly, as we also increased the short exposure. For now, the diversification level in the portfolio remains healthy and we are confident it will remain so in the near term.

30


Hermes Multi Asset Inflation Fund (continued)

Performance Review The fund returned 1.9% over the first six months of the year. Both the enhancing and matching components were additive over the period. Our top performing allocation was the Topix futures holding, which generated +112bps. The Japanese market experienced a five-month consecutive rally through May, indicative of the impact of the Japanese central bank and the Japanese public pension fund’s commitment to a structural move out of bonds and into equities. Inflation linked bonds were the second highest contributors (+94bps), with performance driven by rates. The third top contributor was our China A share holding, which added (+81bps). The changing laws surrounding the stock market and subsequent shift of investors from property to stocks set in motion the performance of the A shares. The bottom three contributors were comprised partly of commodities. Energies lost -44bps, and was impacted by downward pressure on oil. Agris detracted by (-18bps), after being hit by underperfomance in coffee, soybeans and cotton. S&P futures also detracted (-17bps), caused by a combination of quantitative easing tapering, concerns over the mature nature of the economic cycle, and weaker than expected economic numbers. Fears over the Greek debt negotiations also had an impact towards the end of the period. There was nowhere to hide from the challenges in the market during the latter part of June. In our case, we were impacted by the reversal in the China upswing, as well as continued Greek uncertainty and associated volatility. Outlook We continue to expect a pick-up in the pace of inflation during the second half of this year, as the impact of the fall in oil prices begins to fade away. The transition from a disinflationary to a reflationary scenario is expected to benefit the Fund, as it is naturally positioned to gain from a pick-up in inflation. With regards to the European concerns surrounding Greece, and the large volatility in Chinese equities, we believe a dramatic and uncontrolled deterioration of either situation would likely have a negative impact on global risk appetite. However, we still see the development of these events as largely uncorrelated at the moment. The next significant event on the agenda is the potential rate hike by the Federal Reserve, while we remain on the lookout for other unscheduled events.


31


Hermes Global Small Cap Equity Fund Market review Top-down considerations continue to drive the market to a greater extent than normal. In North America, the focus has been on industrial production, which has been disappointing, but it has been difficult to determine the real trend given a second consecutive year of poor weather conditions in Q1. Additionally, the permanence of a recovery in the oil price has major consequences for the oil and gas industry as the sector is only at breakeven (as a whole) at the $55-$60 level. The frustration in Europe is that an earnings recovery, given a boost by the fall in the euro, has been overshadowed by the Greek debt crisis. It would appear that the stock market now sees the issue as a local one, with reactions to events in Greece insignificant compared to the general ebb and flow during Q2. The focus in Japan has been on the effectiveness of Prime Minister Shinzo Abe’s “three arrows” policy (monetary, fiscal and structural stimulus). Even though the Nikkei 400 index has moderately underperformed the main market (i.e. the Topix index), the introduction of an index that has return on equity criteria for inclusion has put low returns on the boardroom agenda and is leading the way in improving the governance of Japanese businesses. Australia continues to experience declining nominal GDP growth. Interest rate cuts have not stimulated private investment that could offset falling capital expenditure in the resources sector, but have stimulated a house-building boom financed to a large extent by Chinese capital and aided by the weakening Australian dollar. Debt levels are high and employment is falling. Little wonder Australia is among the weaker markets this year, falling 8.4% in 2015 to 21 July. The launch date for the fund was close to a high reached by the benchmark (the MSCI World Small Cap Index) following a strong rise from the low point in October 2014, and the index reaching a new high in February 2015 (a few days behind the equivalent large cap index, the MSCI World). Concerns over Greece and China saw the index fall 1.6% since the inception of the fund to 30

th June.

Investment strategy The investment objective of the Hermes Global Small Cap Fund is to outperform its benchmark, the MSCI World Small Cap Index, by 3% per annum over rolling three-year periods. Bottom-up stock-picking is the focus of the strategy. The lead manager aims to invest in high-quality stocks over the long term and runs a relatively concentrated portfolio of between 50-70 holdings. The team believes this number of holdings is adequately concentrated to provide sufficient stock-specific risk for alpha generation, and large enough to achieve a desired objective of broad sector and regional neutrality. The team looks for stocks that have high returns on equity and/or high sustainability of revenue and returns. The strategy exhibits a slight growth bias. The approach is designed to capitalise on alpha generation opportunities among smaller companies by exploiting the inefficiencies of the market, which result from a lack of information about and interest in particular companies, and uncovering undervalued quality stocks at prices below their intrinsic value. Macroeconomic factors are not taken into consideration directly (i.e. stock positions taken to reflect a macro view), but indirectly through assumptions used in valuation models. The strategy does not engage in thematic or momentum investing. The strategy is an extension of the manager’s long-standing capability in small-cap investing. Hermes Investment Management has overseen small-cap portfolios since 1987 and global small-caps specifically since July 2011.

32


Hermes Global Small Cap Equity Fund (continued)

Performance review The fund was launched on 15 May, and this section accounts for performance for that six week period. The fund fell 1.4%, less than the benchmark’s decline of 1.6%, thus outperforming the index by 28bps. Over 80% of the outperformance is attributable to stock selection, with 20% derived from currency effects and a small negative amount from asset allocation. This is aligned with the fund’s objective of deriving returns from stock selection. The three principal contributors to outperformance were DCC, a European fuels distribution business; Open House, a Japanese house builder and property trader; and Masimo Corporation, a US healthcare equipment company. DCC (+53bps gross) announced a very favourable deal to purchase Shell’s LPG retail distribution in France which was well received by the market. Open House (+30bps gross) has risen strongly this year on the back of a fast-growing real estate refurbishment and trading division, and Masimo (+20bps gross), which makes pulse measurement devices and associated disposables, reported good quarterly results. The major underperformers were IPG Photonics, Schoeller Bleckman Oilfield Services and Petra Diamonds. Analysts have reported that competitive threats are increasing for IPG (-21bps gross), a producer of fibre lasers, which caused the company’s share price to weaken by 10% towards the end of the first half. Schoeller (-20bps gross), which makes downhole equipment for oil drillers, has suffered along with the industry from the falling oil price. Similarly, Petra Diamonds (-19bps gross) has been weak recently due to soft diamond prices and, in addition, from production issues as it makes a transition from old workings to new at one of its main mines. Outlook The recent reversal in the direction of bond yields has demonstrated that the market no longer considers deflation to be a threat. While concern quickly switched to whether inflation may be taking hold, it seems that lacklustre economic and wage growth now overshadows that concern. We are, I believe, in an unusually protracted cycle given the hangover of overindebtedness from several decades of debt accumulation and seven years of suppressed interest rates, which have influenced market participants’ capital allocation decisions. Low rates have distorted asset valuations, and markets generally are above fair value and will remain so as long as rates stay low. Small-cap valuations are currently moderately above those of large caps, but they deserve such a rating given that they have inherently better growth prospects than large caps and growth is scarce. While the upside for the portfolio is lower than it has been historically, we are equally mindful of capital preservation given that markets have been reaching new highs this period. We believe that the nature of the stocks in the portfolio enables upside participation yet also provides downside protection given the high-quality nature of the stocks and the stability of their business models. We believe that any volatility stemming from the Greece debt crisis and China market rout will be local and will not spill over to the broader market. Economic growth, while spluttering, is nonetheless on a steady upward trajectory in the West and this will help support to the equity market.


33


Hermes US All Cap Equity Fund

Market Review US equities finished the period in negative territory with the benchmark Russell 3000 index down -5.0%. Small-cap stocks outperformed mid- and large-caps and growth outperformed value. Macroeconomic data was mixed over the period, and picked up towards its end, supporting the view that the first-quarter contraction in GDP was a one-off, related to the poor weather and port shutdowns. There was a notable recovery in retail sales and consumer confidence at the end of the quarter. The Conference Board’s measure of consumer confidence rose back above the 100 mark in June. At a sector level, health care was the only sector in positive territory (0.01%), helped in part by M&A in the biotechnology sector. Conversely, utilities dropped 4.8% as bond- proxy sticks came under pressure as bonds fell during the period, reflecting the rising yield on the benchmark 10-year Treasury, which ended the period at 2.3%. Investment Strategy We trimmed our position in EOG (oil producer) on expectations that the oil price would be range-bound in the mid-$60s. When the oil price recovered to this level in May /June, the company’s rig count started increasing again. Yet the share price was discounting an oil price in the mid-$70s. We increased our position in American Waterworks (utility) which is a high quality, predictable business. Regulators are supportive of pipe replacement, and bolt-on acquisitions provide a further growth outlet. The rotation out of high-dividend-yielding stocks like utilities led to an attractive entry point given the share price was already pricing in rate rises. The strategy has a quality bias and it is managed in a relatively concentrated portfolio (44 positions) resulting in a high active share. Currently, the strategy has a broadly sector neutral exposure with an overweight to information technology, where we have identified a number of attractive businesses. Performance Review The Fund returned -5.4% marginally underperforming the -5.0% loss of the benchmark Russell 3000 index; stock selection helping to counter the negative contribution from the overweight to the information technology sector. Alimentation Couche-Tard (convenience store and gas station owner, +26bps) was the biggest contributor on optimism over future acquisitions. West Pharmaceutical Services (manufacturer of pharmaceutical syringes and delivery systems for newer intravenous drugs, +16bps) reported an improved sales mix and wider gross margins. Valeant Pharmaceuticals (-18bps) fell after CNBC reported that it would not bid for a market leading animal health company. Carmax (auto retailer, -12bps) reported profits below high expectations as retail pricing in used vehicles started to moderate from all-time highs. Outlook Recent economic data shows that confidence is returning to the US economy, which should translate into higher business and consumer spending. With respect to monetary tightening, it is likely that any normalisation of interest rates will be gradual and reflect a strengthening domestic economy, which should continue to be supportive of US equities.

Our portfolio holds profitable, cash-generative companies that look attractive relative to parts of the market that seem expensive, such as early stage technology and biotechnology, where, given our focus on quality, the strategy is underweight. The strategy continues to find good entry points in high-quality companies to be held for the long term. As US monetary policy normalises, we believe that the market will again focus on fundamentals and reward higher quality companies.

34


Hermes US All Cap Equity Fund (continued)

Outlook (continued) Our portfolio holds profitable, cash-generative companies that look attractive relative to parts of the market that seem expensive, such as early stage technology and biotechnology, where, given our focus on quality, the strategy is underweight. The strategy continues to find good entry points in high-quality companies to be held for the long term. As US monetary policy normalises, we believe that the market will again focus on fundamentals and reward higher quality companies.


35


Hermes Absolute Return Credit Fund

Market review The first two months of the year proved to be positive for the asset class, while volatility increased substantially over the rest of the period. Some of the most remarkable moves were seen in government bond markets. For example, the German Bund tightened by 46bps to 8bps between January and April, but then peaked at 100bps during June. While somewhat correlated, the US 10-year treasury also experienced volatility, but not to the same extent. We witnessed favourable developments in monetary policy, as well as in the calming tensions between Russia and Ukraine. However, uncertainties increased on heightened volatility in government rates, as well as in elevated sovereign risks in Greece and China. Anticipating higher future costs of capital, companies were keen to raise debt to finance anything from near-term debt maturities through to acquisitions. Supply, as a result, remained elevated. Although credit fundamentals generally remain favourable, we observed an increase in gross debt levels, relative to cash flow generation. Despite this, default and distressed-debt-exchange risk (outside of the energy space) is likely to remain muted over the next twelve months. It was difficult for the market to gain any kind of momentum in this environment.

Investment Strategy We favoured US and emerging market credit at the expense of European instruments in June. Credit curves experienced a bearish flattening at the very front end, which presented an attractive opportunity from a risk-reward perspective. The portfolio maintained a barbell profile by being short the belly of curve. The high level of corporate activity, especially in the US, opened up investment opportunities in large liquid new issues, which are being priced to reflect strong deleveraging plans and offer a decent new issue premia. Performance Review In its debut month of June, the Fund returned -0.1%, while the wider credit market fell by -1.6%. The portfolio performed as expected in the current volatile risk-off environment. Our core long and core short positions largely offset each other, as systemic risk dominated the idiosyncratic characteristics of credit instruments. Income strategies contributed positively to the overall performance, while exhibiting minimal volatility. On a geographical basis, the highly diversified profile of the portfolio was beneficial. North America’s contribution of +15bps offset the -14bps return from Western Europe. Our capital structure trade in Dell and outright short exposure to Peugeot were the two best contributors, returning +5bps and +4bps respectively. Our exposure to financials detracted marginally from returns over the period. Debt investments in banks and insurers returned -5bps and -8bps respectively, driven by some single-name exposures, primarily Prudential (-5bps) and FCA (-5bps). Outlook Although credit fundamentals remain good, we are starting to witness gross debt rising, as the low rates encourage companies to borrow in order to finance equity-friendly activities. This re-levering trend, particularly in the US investment grade market, has not gone unnoticed by our team and we suspect balance sheet strength has peaked for the current cycle. Despite this, aside from the energy space, default/restructuring risk remains muted over the near term.

36


Hermes Absolute Return Credit Fund (continued)

Outlook (continued) In terms of fundamentals, we are encouraged by developments in Europe. Although not entirely consistent week after week, the general trend in data is positive. On a global basis, many years of structurally low rates have allowed companies to refinance maturing debt at lower rates, which has had two positive effects. Firstly, it has reduced default risk, as debt maturities have been pushed out. It has also lowered cash debt service costs. While Greece dominated news flow, other headwinds remain. These include the timing and velocity of rate rises, market technicals, depth of market liquidity, commodity/energy prices, China weaknesses and the impact of a strong dollar on emerging markets. Despite this, there are numerous opportunities to capture value across the globe, given the decompression starting to develop.


37

Hermes Investment Funds Public Limited Company Unaudited Portfolio Statement As at 30 June 2015

Hermes Global Emerging Markets Fund

Nominal Fair Value % ofHoldings Financial assets at fair value through profit or loss $ Net Assets

Equities: 88.76% (31 Dec 2014: 83.78%)

Austria: 0.00% (31 Dec 2014: 0.72%)

Brazil: 5.65% (31 Dec 2014: 5.49%)

1,038,500 BB Seguridade Participacoes 11,581,475 2.03

1,051,469 Cosan 6,413,961 1.12

51,200 Embraer ADR 1,531,392 0.27

1,052,100 Grendene 5,631,909 0.98

651,125 Itau Unibanco - Preferred 7,148,584 1.25

Total Brazil 32,307,321 5.65

Egypt: 1.62% (31 Dec 2014: 2.12%)

1,256,228 Commercial International Bank Egypt 9,294,051 1.62

Total Egypt 9,294,051 1.62

Hong Kong: 6.27% (31 Dec 2014: 7.06%)

1,496,000 Galaxy Entertainment 5,962,889 1.04

65,144,293 REXLot 3,697,394 0.65

3,440,226 Samsonite 11,892,917 2.08

4,360,500 Techtronic Industries 14,286,855 2.50

Total Hong Kong 35,840,055 6.27

Hungary: 1.70% (31 Dec 2014: 0.00%)

656,901 Richter Gedeon 9,741,692 1.70

Total Hungary 9,741,692 1.70

India: 16.54% (31 Dec 2014: 15.50%)

714,080 Bharat Forge 11,922,826 2.09

97,244 Container Corporation of India 2,562,352 0.45

750,244 HCL Technologies 10,836,007 1.90

879,609 HDFC Bank 14,740,495 2.58

308,289 Housing Development Finance 6,276,402 1.10

841,407 ICICI Bank ADR 8,573,937 1.50

1,603,902 Motherson Sumi Systems 13,064,447 2.28

728,712 Oil India 5,112,885 0.89

5,083,423 Power Grid of India 11,104,022 1.94

1,381,391 Tech Mahindra 10,364,771 1.81

Total India 94,558,144 16.54

38

Hermes Investment Funds Public Limited Company Unaudited Portfolio Statement As at 30 June 2015 (continued)

Hermes Global Emerging Markets Fund (continued)


Equities: 88.76% (31 Dec 2014: 83.78%) (continued)

Indonesia: 3.68% (31 Dec 2014: 2.34%)

17,866,500 Bank Rakyat Indonesia Persero 13,869,736 2.43

10,370,200 Tower Bersama Infrastructure 7,175,331 1.25

Total Indonesia 21,045,067 3.68

Mexico: 1.80% (31 Dec 2014: 0.00%)

1,773,303 Banregio Grupo Financiero 10,288,573 1.80

Total Mexico 10,288,573 1.80

People's Republic of China: 15.35% (31 Dec 2014: 14.20%)

99,175 Alibaba ADR 8,040,117 1.40

662,500 Anhui Conch Cement 2,324,456 0.41

74,427 Baidu ADR 14,922,614 2.61

37,448,000 China Dongxiang 9,902,597 1.73

2,704,000 China Mengniu Dairy 13,481,022 2.36

8,020,319 Shenzhen International 14,008,026 2.45

1,257,800 Tencent 25,099,699 4.39

Total People's Republic of China 87,778,531 15.35

Philippines: 0.00% (31 Dec 2014: 0.00%)

106,486 Ayala - Preferred 2,362 -

Total Philippines 2,362 -

Republic of South Korea: 7.29% (31 Dec 2014: 8.68%)

158,326 Hyundai Greenfood 2,994,916 0.52

17,755 Hyundai Motor 2,164,759 0.38

396,098 KB Financial 13,103,246 2.29

275,050 Korea Electric Power 11,293,460 1.98

45,987 Samsung Fire & Marine Insurance 12,120,828 2.12

Total Republic of South Korea 41,677,209 7.29

Russian Federation: 3.22% (31 Dec 2014: 2.42%)

451,499 Mail.ru GDR 9,368,604 1.64

530,796 Norilsk Nickel ADR 9,060,688 1.58

Total Russian Federation 18,429,292 3.22

39





South Africa: 5.92% (31 Dec 2014: 4.88%)

4,150,359 Life Healthcare 12,800,331 2.24

489,662 MTN Group 9,025,543 1.58

863,354 Shoprite 12,047,456 2.10

Total South Africa 33,873,330 5.92

Taiwan: 15.39% (31 Dec 2014: 13.79%)

284,000 Advantech 1,951,352 0.34

6,717,000 Chipbond Technology 14,520,537 2.54

3,850,321 Hon Hai Precision Industry 12,104,592 2.11

1,196,237 Phison Electronics 10,371,045 1.81

1,690,701 Siliconware Precision Industries ADR 12,561,908 2.20

1,156,370 Taiwan Semiconductor Manufacturing ADR 25,879,561 4.53

10,033,576 Tong Yang Industry 10,617,455 1.86

Total Taiwan 88,006,450 15.39

Thailand: 2.12% (31 Dec 2014: 4.84%)

786,100 Siam Cement PCL 12,102,619 2.12

Total Thailand 12,102,619 2.12

Turkey: 2.21% (31 Dec 2014: 1.74%)

1,186,034 Aygaz 4,462,262 0.78

1,785,594 Turkiye Halk Bankasi 8,148,082 1.43

Total Turkey 12,610,344 2.21

Total Equities 507,555,040 88.76

P-Notes: 2.16% (31 Dec 2014: 6.74%)

China: 0.00% (31 Dec 2014: 4.99%)

4,221 Societe Generale 0% 25/11/2015 (Huayu Automotive System) 14,533 -

9,131 Societe Generale 0% 27/11/2015 (Daquin Railway) 20,674 -

Total China 35,207 -

40




P-Notes: 2.16% (31 Dec 2014: 6.74%) (continued)

Saudi Arabia: 2.16% (31 Dec 2014: 1.75%)

337,767 Morgan Stanley 0% 25/07/2016 (Saudi Ceramic) 7,047,883 1.23

763,351 Morgan Stanley 0% 28/09/2015 (Samba Financial Group) 5,292,426 0.93

Total Saudi Arabia 12,340,309 2.16

Total P-Notes 12,375,516 2.16

Financial Derivative Instruments: 7.90% (31 Dec 2014: 8.94%)

Warrants: 7.90% (31 Dec 2014: 8.94%)

China: 6.62% (31 Dec 2014: 7.99%)

965,200 Anhui Conch Cement Class C 08/08/2019 3,338,742 0.58

447,100 Anhui Conch Cement Class C 13/11/2019 1,546,572 0.27

908,276 Daqin Railway 08/08/2019 2,056,474 0.36

456,554 Daqin Railway 13/11/2019 1,033,707 0.18

464,808 Gree Electric Appliances 4,789,749 0.84

16 Gree Electric Appliances of Zhuhai 165 -

149,054 Hangzhou Hikvision Digital Technology 1,076,862 0.19

1,157,686 Huayu Automotive Systems 3,985,905 0.70

68 Kweichow Moutai 08/08/2019 2,825 -

12,888 Kweichow Moutai 16/06/2020 535,493 0.09

1,665,614 Merrill Lynch - Daqin Railway 3,771,202 0.66

903,236 Merrill Lynch - Hangzhou Hikvision Digital Technology 6,525,556 1.14

142,463 Morgan Stanley - Gree Electric Appliances of Zhuhai 1,468,051 0.25

307,926 Morgan Stanley - Hangzhou Hikvision Digital Technology 2,224,655 0.39

353,300 Ping An Bank 4,668,505 0.82

62,800 Ping An Insurance Group 829,839 0.15

Total China 37,854,302 6.62

Curacao: 1.28% (31 Dec 2014: 0.95%)

175,585 Merrill Lynch - Kweichow Moutai 7,295,513 1.28

Total Curacao 7,295,513 1.28

Total Warrants 45,149,815 7.90

41




Financial Derivative Instruments: 7.90% (31 Dec 2014: 8.94%) (continued)

Forward Currency Contracts: 0.00% (31 Dec 2014: 0.00%)

Currency Currency Currency Maturity Unrealised % of

Counterparty Buys Sells Rate Date Gain Net Assets

$

State Street USD 44,155 GBP 27,987 1.5777 31/07/2015 182 -

State Street GBP 1,911 USD 3,002 1.5707 31/07/2015 1 -

Total Fair Value Gains on Forward Currency Contracts 183 -

Total Financial Derivative Instruments 45,149,998 7.90

Total financial assets at fair value through profit or loss 565,080,554 98.82



Counterparty Buys Sells Rate Date Loss Net Assets

$

State Street GBP 1,030,723 USD 1,626,146 1.5777 31/07/2015 (6,703) -

State Street GBP 4,292 USD 6,772 1.5777 31/07/2015 (28) -

State Street EUR 1,000 USD 1,123 1.1229 31/07/2015 (4) -

State Street GBP 357 USD 562 1.5752 31/07/2015 (1) -

Total Fair Value Losses on Forward Currency Contracts (6,736) -

Total Financial Derivative Instruments (6,736) -

Total financial liabilities at fair value through profit or loss (6,736) -


(2014: 99.46%) (Cost: $536,761,467)

Cash at bank (2014: 1.32%) 22,128,267 3.87

Other Net Liabilities (2014: (0.78%)) (15,376,603) (2.69)

Net Assets Attributable to Holders of RedeemableParticipating Shares 571,825,482 100.00

42



Financial assets at fair value through profit or loss

Portfolio Classification % of Total

Assets

Transferable securities admitted to official stock exchange listing

or traded on a regulated market 88.24

Financial derivative instruments dealt in on a regulated market 7.66

Cash 3.76

Other Assets 0.34

Total 100.00

The counterparty for the forward currency contracts is State Street Bank and Trust Company (S&P: AA-, Moody’s:Aa2).

43




Equities: 98.87% (31 Dec 2014: 99.56%)

Australia: 2.62% (31 Dec 2014: 2.64%)

217,938 APA 1,378,822 0.35

200,000 Aurizon holding 787,763 0.20

223,635 Bank of Queensland 2,192,698 0.56

108,320 BHP Billiton Ltd 2,249,697 0.57

77,042 BHP Billiton PLC 1,551,531 0.39

48,000 Caltex Australia 1,173,813 0.30

85,000 Lend Lease 980,903 0.25

Total Australia 10,315,227 2.62

Austria: 0.31% (31 Dec 2014: 0.54%)

43,450 OMV 1,196,993 0.31

Total Austria 1,196,993 0.31

Belgium: 0.34% (31 Dec 2014: 0.30%)

15,700 Delhaize Group 1,325,105 0.34

Total Belgium 1,325,105 0.34

Canada: 2.52% (31 Dec 2014: 2.30%)

21,200 Agrium 2,166,491 0.55

52,712 Alimentation Couche-Tard 2,264,651 0.57

30,000 Canadian National Railway 1,733,775 0.44

57,000 Precision Drilling 381,212 0.10

42,311 Rogers Communications 1,488,344 0.38

44,163 Toronto-Dominion Bank 1,893,082 0.48

Total Canada 9,927,555 2.52

Denmark: 1.85% (31 Dec 2014: 1.16%)

44,000 Ambu 1,170,414 0.30

77,528 Danske Bank 2,300,448 0.58

39,045 ISS 1,293,727 0.33

46,240 Novo Nordisk 2,527,908 0.64

Total Denmark 7,292,497 1.85

44


Hermes Global Equity Fund (continued)



Finland: 1.50% (31 Dec 2014: 0.39%)

82,000 Amer Sports 2,142,564 0.55

26,000 Cargotec 999,693 0.25

263,000 Stora Enso 2,743,460 0.70

Total Finland 5,885,717 1.50

France: 3.34% (31 Dec 2014: 2.38%)

45,868 BNP Paribas 2,829,780 0.72

42,212 GDF Suez 797,362 0.20

5,658 Kering 1,027,014 0.26

33,500 Legrand 1,910,938 0.49

21,600 Renault 2,278,058 0.58

19,700 Sodexo 1,900,588 0.48

14,976 Valeo 2,379,311 0.61

Total France 13,123,051 3.34

Germany: 4.40% (31 Dec 2014: 3.85%)

22,933 Adidas 1,771,997 0.45

28,114 BASF 2,499,855 0.63

19,142 Bayer 2,718,018 0.69

14,500 Duerr 1,366,162 0.35

30,800 Fresenius Medical Care 2,565,822 0.65

21,749 Henkel 2,075,897 0.53

15,545 ProSiebenSat.1 Media 778,541 0.20

26,400 SAP 1,857,475 0.47

7,200 Volkswagen 1,690,492 0.43

Total Germany 17,324,259 4.40

Hong Kong: 1.83% (31 Dec 2014: 1.70%)

390,000 AIA 2,553,097 0.65

169,000 Cheung Kong Infrastructure 1,312,350 0.33

62,000 Cheung Kong Property 514,244 0.13

62,000 CK Hutchison 910,924 0.23

18,564 Jardine Matheson 1,053,507 0.27

95,000 Power Assets 866,382 0.22


45





Ireland: 1.65% (31 Dec 2014: 1.41%)

1,018,306 Cairn Homes 1,240,984 0.32

119,000 Ryanair 1,571,962 0.40

26,268 Shire 2,103,224 0.54

55,500 Smurfit Kappa 1,551,915 0.39

Total Ireland 6,468,085 1.65

Italy: 1.27% (31 Dec 2014: 0.95%)

2,087,370 Telecom Italia 2,119,076 0.54

423,001 UniCredit 2,889,641 0.73

Total Italy 5,008,717 1.27

Japan: 8.62% (31 Dec 2014: 7.85%)

150,000 77 Bank 915,553 0.23

70,000 Daicel 899,130 0.23

28,000 Fujifilm 1,000,596 0.25

80,000 Hakuhodo 856,968 0.22

245,000 Hitachi 1,615,116 0.41

23,300 Honda Motor 754,202 0.19

10,000 Honda Motor ADR 320,000 0.08

91,700 Inpex 1,042,616 0.26

53,000 ITOCHU 700,257 0.18

55,300 Kao 2,572,398 0.65

107,400 Kirin 1,479,564 0.38

21,600 Kyocera 1,123,020 0.29

320,000 Mitsubishi Chemical 2,014,626 0.51

39,200 Mitsubishi 862,249 0.22

56,200 Nippon Telegraph & Telephone 2,035,892 0.52

20,500 Nitto Denko 1,685,092 0.43

51,400 Seiko Epson 911,790 0.23

34,400 Seven & I 1,478,482 0.38

7,000 Shimamura 735,548 0.19

46,700 Sumitomo Mitsui Financial Group 2,083,060 0.53

81,500 T&D Holdings 1,215,325 0.31

150,500 Toagosei 1,255,550 0.32

49,800 Toyota Motor 3,337,904 0.85

36,600 Yamato 708,614 0.18

24,000 Yaoko 1,115,823 0.28

59,000 Yokohama Rubber 1,184,965 0.30

Total Japan 33,904,340 8.62

46





Jersey: 0.37% (31 Dec 2014: 0.39%)

21,449 Randgold Resources 1,450,417 0.37

Total Jersey 1,450,417 0.37

Netherlands: 2.22% (31 Dec 2014: 1.97%)

21,123 ASML Holding 2,226,570 0.56

23,000 Heineken 1,772,288 0.45

285,157 ING Groep 4,752,008 1.21

Total Netherlands 8,750,866 2.22

Norway: 1.96% (31 Dec 2014: 2.72%)

163,373 Det Norske Oljeselskap 1,125,207 0.29

190,377 Europris 957,993 0.24

211,000 Nordic Semiconductor 1,449,209 0.37

256,553 Norsk Hydro 1,091,153 0.28

241,831 Petroleum Geo-Services 1,273,151 0.32

127,911 Protector Forsikring 1,101,210 0.28

65,119 XXL 719,913 0.18

Total Norway 7,717,836 1.96

Singapore: 1.04% (31 Dec 2014: 1.09%)

23,000 Avago Technologies 3,036,230 0.77

41,600 Jardine Cycle & Carriage 1,023,344 0.26

4,622 Jardine Cycle & Carriage (Rights) 24,389 0.01

Total Singapore 4,083,963 1.04

Spain: 0.58% (31 Dec 2014: 0.53%)

12,000 Aena 1,243,048 0.32

53,600 Ebro Foods 1,040,341 0.26

Total Spain 2,283,389 0.58

47





Sweden: 0.75% (31 Dec 2014: 1.23%)

202,363 Nobina 778,253 0.20

172,899 Volvo 2,183,603 0.55

Total Sweden 2,961,856 0.75

Switzerland: 3.29% (31 Dec 2014: 3.38%)

70,539 ABB 1,501,798 0.38

27,206 Nestle 1,999,495 0.51

15,600 Roche 4,438,452 1.13

26,669 TE Connectivity 1,706,816 0.44

10,629 Zurich Insurance Group 3,277,846 0.83

Total Switzerland 12,924,407 3.29

United Kingdom: 5.11% (31 Dec 2014: 7.14%)

65,057 ARM 1,084,735 0.28

30,000 Associated British Foods 1,367,205 0.35

25,784 AstraZeneca 1,647,525 0.42

70,000 BTG 687,978 0.18

145,000 Cobham 603,849 0.15

113,245 GKN 596,537 0.15

45,171 Greggs 844,736 0.22

478,000 Hays 1,232,681 0.31

253,312 HSBC 2,290,153 0.58

580,000 Lloyds Banking Group 781,677 0.20

81,873 National Grid 1,065,286 0.27

90,437 Prudential 2,192,228 0.56

83,792 Smith & Nephew 1,423,451 0.36

195,000 TSB Banking 1,039,453 0.26

885,596 Vodafone 3,240,606 0.82

Total United Kingdom 20,098,100 5.11

United States: 53.30% (31 Dec 2014: 55.64%)

53,670 Abbott Laboratories 2,630,367 0.67

29,600 Accenture 2,861,728 0.73

35,081 ACE 3,564,230 0.91

35,000 Allstate 2,263,800 0.58

15,243 Amgen 2,310,839 0.59

36,942 Analog Devices 2,363,919 0.60

48





United States: 53.30% (31 Dec 2014: 55.64%) (continued)

18,980 Apache 1,085,846 0.28

74,543 Apple 9,282,840 2.36

39,710 Axis Capital 2,110,587 0.54

114,942 Bank of America 1,941,370 0.49

37,138 Berkshire Hathaway 5,069,707 1.29

11,254 Biogen Idec 4,458,947 1.13

13,000 Boeing 1,803,490 0.46

34,034 BorgWarner 1,955,594 0.50

16,839 Bunge 1,479,475 0.38

50,518 Capital One Financial 4,432,955 1.13

71,000 Cisco Systems 1,955,340 0.50

29,800 Comcast 1,787,404 0.45

14,000 Constellation Brands 1,618,400 0.41

7,500 Cooper Companies 1,325,625 0.34

44,445 CVS Health 4,658,280 1.18

45,600 Delta Air Lines 1,875,072 0.48

42,536 Dollar Tree 3,375,232 0.86

25,357 Dr Pepper Snapple 1,859,429 0.47

27,433 Duke Energy 1,943,628 0.49

24,900 Eagle Materials 1,885,428 0.48

72,000 East West Bancorp 3,214,080 0.82

55,825 Eaton 3,736,367 0.95

52,495 EMC 1,364,345 0.35

44,300 Exxon Mobil 3,668,926 0.93

109,611 Ford Motor 1,646,357 0.42

106,852 Freeport-McMoRan Copper & Gold 2,070,792 0.53

98,826 General Electric 2,632,725 0.67

28,553 General Mills 1,600,681 0.41

3,645 Google Class A 1,972,856 0.50

3,689 Google Class C 1,923,887 0.49

69,793 Hess 4,674,036 1.19

19,921 Humana 3,842,761 0.98

27,057 Ingersoll-Rand 1,828,512 0.46

20,400 Ingredion 1,647,912 0.42

74,000 Intersil 940,540 0.24

52,654 JPMorgan Chase 3,538,349 0.90

15,700 Kirby 1,201,835 0.31

49,000 Kroger 3,560,830 0.91

32,641 Lam Research 2,617,808 0.67

11,737 Lockheed Martin 2,177,448 0.55

24,000 M&T Bank 2,991,840 0.76

49






34,600 Macy's 2,321,314 0.59

94,954 Marathon Oil 2,534,322 0.64

48,210 Marathon Petroleum 2,451,479 0.62

17,227 McKesson 3,863,672 0.98

48,002 Merck & Co 2,750,035 0.70

54,731 MetLife 3,035,928 0.77

44,982 Micron Technology 842,513 0.21

52,299 Microsoft 2,320,507 0.59

37,781 Mylan 2,555,129 0.65

33,890 Noble Energy 1,445,747 0.37

182,324 Oasis Petroleum 2,888,012 0.73

35,854 Occidental Petroleum 2,774,024 0.70

18,972 O'Reilly Automotive 4,295,830 1.09

87,298 Pfizer 2,932,340 0.74

19,292 PPG Industries 2,218,194 0.56

19,300 Robert Half International 1,070,185 0.27

23,000 RPM International 1,129,070 0.29

41,403 State Street 3,158,635 0.80

19,828 Thermo Fisher Scientific 2,566,735 0.65

62,234 TJX 4,112,422 1.04

32,539 Travelers 3,128,299 0.80

40,500 Trex 1,987,740 0.50

40,000 Tyson Foods 1,718,000 0.44

36,788 Union Pacific 3,514,358 0.89

15,940 Verizon Communications - New York 746,518 0.19

51,509 Verizon Communications 2,409,076 0.61

58,984 VF 4,060,459 1.03

35,754 Viacom 2,302,200 0.59

44,932 Visa 2,997,863 0.76

113,065 Wells Fargo 6,338,423 1.61

24,600 West Pharmaceutical Services 1,424,094 0.36

12,336 Western Digital 1,011,059 0.26

42,323 Zoetis 1,992,144 0.51

Total United States 209,648,745 53.30


50



Fair Value % ofFinancial assets at fair value through profit or loss $ Net Assets

Total financial assets at fair value through 388,901,629 98.87

profit or loss (2014: 99.56%) (Cost: $ 322,629,049)

Cash at bank (2014: 0.40%) 4,138,317 1.05

Other Net Assets (2014: 0.04%) 291,670 0.08


Portfolio Classification % of

Total Assets



Cash 1.05

Other assets 0.14 Total 100.00

51


Hermes UK Small and Mid Cap Companies Fund

Nominal Fair Value % of

Holdings Financial assets at fair value through profit or loss £ Net Assets

Equities: 96.05% (31 Dec 2014: 94.35%)

Basic Materials: 3.63% (31 Dec 2014: 3.68%)

640,935 Anglo Pacific 576,842 0.28

616,386 Elementis 1,567,470 0.75

1,309,624 Petra Diamonds 1,905,503 0.91

181,314 Victrex 3,513,865 1.69

Total Basic Materials 7,563,680 3.63

Communications: 7.40% (31 Dec 2014: 4.50%)

1,295,981 Auto Trader 3,934,598 1.89

576,502 Informa 3,124,641 1.50

4,109,341 KCOM 3,829,906 1.84

1,512,331 Sepura 2,389,483 1.14

405,192 United Business Media 2,141,440 1.03

Total Communications 15,420,068 7.40

Consumer, Cyclical: 20.13% (31 Dec 2014: 18.90%)

362,864 Bovis Homes Group 3,980,618 1.91

601,196 Brammer 1,856,151 0.89

1,057,991 Cineworld 4,875,223 2.34

435,584 Domino's Pizza 3,332,218 1.60

410,591 Galliford Try 7,115,541 3.42

988,191 Goals Soccer Centres 2,124,611 1.02

709,540 Henry Boot 1,603,560 0.77

895,751 Inchcape 7,318,285 3.51

33,397 Paddy Power 1,840,008 0.88

1,080,062 Pinewood 5,000,687 2.40

416,668 Restaurant Group 2,893,759 1.39

Total Consumer, Cyclical 41,940,661 20.13

52


Hermes UK Small and Mid Cap Companies Fund (continued)




Consumer, Non-cyclical: 13.80% (31 Dec 2014: 15.99%)

543,300 Ashtead 5,965,434 2.86

414,332 CVS 2,686,943 1.29

509,153 Dechra Pharmaceuticals 4,994,791 2.40

1,270,205 Gulf Marine Services 1,587,756 0.76

2,395,625 Lavendon 4,827,184 2.32

1,574,854 SSP Group 4,497,783 2.16

244,281 Synergy Health 4,179,648 2.01

Total Consumer, Non-cyclical 28,739,539 13.80

Energy: 1.22% (31 Dec 2014: 2.39%)

531,397 Enteq Upstream 79,922 0.04

1,842,887 Faroe Petroleum 1,584,883 0.76

800,799 Velocys 875,153 0.42

Total Energy 2,539,958 1.22

Financial: 29.16% (31 Dec 2014: 27.60%)

1,789,555 Arrow Global 4,787,060 2.30

2,071,382 Beazley 6,118,862 2.94

177,225 Close Brothers 2,715,087 1.30

289,511 CLS 5,214,093 2.50

866,600 Curtis Banks 1,967,182 0.95

3,212,571 Hansteen Reits 3,713,732 1.78

251,997 Hargreaves Lansdown 2,920,645 1.40

912,626 Helical Bar 3,666,302 1.76

1,893,006 John Laing 3,975,313 1.91

866,666 NewRiver Retail Reits 2,764,665 1.33

1,046,550 OneSavings Bank 3,300,819 1.59

1,635,125 Paragon 6,774,322 3.25

73,724 Rathbone Brothers 1,577,694 0.76

335,262 Shaftesbury 2,896,664 1.39

1,423,399 St. Modwen Properties 6,460,808 3.10

434,697 Telford Homes 1,879,239 0.90

Total Financial 60,732,487 29.16

53






Industrial: 15.62% (31 Dec 2014: 14.93%)

10,697,276 Breedon Aggregates 5,134,703 2.47

108,884 IMI 1,208,612 0.58

259,688 James Fisher & Sons 3,526,563 1.69

5,617,977 Lakehouse 5,287,219 2.54

121,236 Latchways 956,552 0.46

1,180,738 RPC 7,899,136 3.79

1,614,255 Senior 4,629,683 2.22

219,079 Ultra Electronics 3,895,225 1.87

Total Industrial 32,537,693 15.62

Technology: 5.09% (31 Dec 2014: 6.36%)

1,815,949 Anite 2,306,255 1.11

300,582 CSR 2,630,093 1.26

1,285,888 Servelec Group 3,909,100 1.88

750,000 Sophos 1,758,750 0.84

Total Technology 10,604,198 5.09


Financial Derivative Instruments: (0.04%) (31 Dec 2014: 0.17%)

Futures Contracts - Unrealised Losses: (0.04%) (31 Dec 2014: 0.17%)

Clearing Broker Description Currency No. of Unrealised % of

Contracts Loss Net Assets

£

United Kingdom: (0.04%) (31 Dec 2014: 0.17%)

Goldman Sachs FTSE 250 Index Futures September 2015 GBP 168 (94,133) (0.04)

Total United Kingdom (94,133) (0.04)

Total Futures Contracts - Unrealised Losses (94,133) (0.04)

Total Financial Derivative Instruments (94,133) (0.04)

54



Fair Value % of

Financial assets at fair value through profit or loss £ Net Assets


(31 Dec 2014: 94.52%) (Cost: £ 127,773,199)

Cash at bank (31 Dec 2014: 5.47%) 12,418,183 5.96

Other Net Liabilities (31 Dec 2014: 0.01%) (4,098,242) (1.97)

Net Assets Attributable to Holders of Redeemable

Participating Shares 208,304,092 100.00

% of Total

Portfolio Classifications Assets


or traded on a regular market 93.93

Cash 5.83

Other assets 0.24

Total 100.00

The clearing broker for the futures is Goldman Sachs (S&P: A, Moody’s: A1).

55


Hermes Sourcecap European Alpha Fund

Nominal Fair Value % ofHoldings Financial assets at fair value through profit or loss € Net Assets

Equities: 99.36% (31 Dec 2014: 99.33%)

Belgium: 1.95% (31 Dec 2014: 2.26%)

226,280 UCB 14,712,726 1.95


Denmark: 3.24% (31 Dec 2014: 2.78%)

500,397 Novo Nordisk 24,467,914 3.24


Finland: 3.08% (31 Dec 2014: 3.04%)

3,782,735 Nokia 23,244,907 3.08


France: 9.51% (31 Dec 2014: 8.85%)

313,954 Legrand 16,017,933 2.12

204,455 Renault 19,286,240 2.56

205,024 Sodexo 17,691,521 2.35

131,743 Valeo 18,720,680 2.48

Total France 71,716,374 9.51

Germany: 19.93% (31 Dec 2014: 17.22%)

283,159 Adidas 19,569,118 2.59

252,198 Bayer 32,029,146 4.25

302,140 Deutsche Boerse 22,666,543 3.00

445,473 Fresenius 25,922,074 3.44

119,097 Linde 20,431,090 2.71

205,109 Porsche Automobil 15,789,291 2.09

404,119 Wirecard 13,982,517 1.85

Total Germany 150,389,779 19.93

Ireland: 1.86% (31 Dec 2014: 2.71%)

211,593 Kerry Group 14,043,427 1.86


56


Hermes Sourcecap European Alpha Fund (continued)



Italy: 4.20% (31 Dec 2014: 4.26%)

19,755,074 Telecom Italia 17,937,607 2.38

2,255,475 UniCredit 13,780,952 1.82

Total Italy 31,718,559 4.20

Jersey: 0.00% (31 Dec 2014: 1.45%) - -

Netherlands: 8.23% (31 Dec 2014: 8.66%)

202,700 ASML Holding 19,110,556 2.53

944,011 Delta Lloyd 14,061,044 1.86

1,940,943 ING Groep 28,929,755 3.84


Norway: 4.11% (31 Dec 2014: 4.55%)

1,314,296 DnB 19,598,311 2.60

711,684 Statoil 11,388,892 1.51

Total Norway 30,987,203 4.11

Spain: 10.45% (31 Dec 2014: 6.00%)

116,951 Aena 10,835,510 1.44

580,942 Amadeus IT 20,800,628 2.76

1,783,481 GamesaTecnologica 25,334,348 3.36

741,782 Inditex 21,845,480 2.89

Total Spain 78,815,966 10.45

Sweden: 5.84% (31 Dec 2014: 6.44%)

457,759 Hennes & Mauritz 15,909,741 2.11

336,637 Investment AB Kinnevik 9,617,938 1.27

874,694 Swedbank 18,498,532 2.46

Total Sweden 44,026,211 5.84

Switzerland: 7.86% (31 Dec 2014: 10.08%)

142,749 Roche 36,326,097 4.82

1,193,776 UBS 22,961,945 3.04


57






1,328,241 ARM 19,808,219 2.63

1,095,677 BG 16,463,168 2.18

1,144,920 GlaxoSmithKline 21,523,956 2.85

443,199 SABMiller 20,700,569 2.74

395,265 Schroders 17,778,352 2.36

1,290,338 Sports Direct International 13,076,512 1.73

8,036,154 Vodafone 26,301,327 3.49

352,101 Weir 8,433,154 1.12





Currency Currency Currency Unrealised % of

Counterparty Buys Sells Rate Gain Net Assets

€

State Street USD 3,572,216 EUR 3,181,213 0.8905 12,503 -



State Street USD 480,725 EUR 428,128 0.8906 1,661 -

State Street CHF 265,054 EUR 253,448 0.9562 1,655 -

State Street USD 61,387 EUR 54,671 0.8906 212 -

State Street CHF 892 EUR 853 0.9562 5 -

State Street EUR 1,952 GBP 1,389 1.4051 1 -

State Street GBP 1 EUR 1 1.4082 - -

Total Fair Value Gains on Forward Currency Contracts 33,494 -

Total Financial Derivative Instruments 33,494 -

Total Financial assets at fair value through profit or loss 749,631,214 99.36

58



Fair Value % ofFinancial assets at fair value through profit or loss € Net Assets

Financial liabilities at fair value through profit or loss



Currency Currency Currency Unrealised % of

Counterparty Buys Sells Rate Gain Net Assets

€

State Street GBP 1,075 EUR 1,511 1.4051 - -

State Street GBP 526 EUR 740 1.4064 (1) -

State Street EUR 1,363 USD 1,527 0.8927 (2) -

State Street GBP 9,799 EUR 13,767 1.4050 (3) -

State Street EUR 909 USD 1,020 0.8906 (3) -


State Street EUR 1,610 CHF 1,683 0.9561 (11) -





State Street GBP 1,982,225 EUR 2,785,026 1.4050 (603) -

State Street GBP 5,460,983 EUR 7,672,679 1.4050 (1,662) -



Total Financial liabilities at fair value through profit or loss (2,455) -


(31 Dec 2014: 99.35%) (Cost: € 623,393,581)

Cash (31 Dec 2014: 1.26%) 4,268,821 0.52

Other Net Assets (31 Dec 2014: (0.61%)) 566,647 0.12



Assets

Transferable securities admitted to offical stock exchange listing or

traded on a regulated market 99.17

Cash 0.56



59


Hermes Global High Yield Bond Fund


Corporate Bonds: 81.58% (31 Dec 2014: 86.02%)

Australia: 0.00% (31 Dec 2014: 1.43%) - -

Brazil: 4.37% (31 Dec 2014: 2.78%)

1,647,000 Gerdau Trade 4.75% 15/04/2023 1,404,281 0.53

925,000 GTL Trade Finance 7.25% 16/04/2044 775,192 0.29

2,000,000 JBS USA 5.75% 15/06/2025 1,778,765 0.68

4,750,000 Marfrig Europe 8.375% 09/05/2018 4,315,159 1.64

205,000 Petrobras International Finance 3.875% 27/01/2016 185,004 0.07

3,200,000 Vale Overseas 6.25% 23/01/2017 3,039,641 1.16

Total Brazil 11,498,042 4.37

Canada: 0.79% (31 Dec 2014: 0.77%)

2,500,000 MEG Energy 6.375% 30/01/2023 2,086,699 0.79


Chile: 1.07% (31 Dec 2014: 0.00%)

3,071,000 VTR Finance 6.875% 15/01/2024 2,823,352 1.07

Total Chile 2,823,352 1.07

Finland: 0.46% (31 Dec 2014: 1.37%)

1,250,000 Stora Enso 7.25% 15/04/2036 1,217,241 0.46


France: 0.00% (31 Dec 2014: 4.31%) - -

Germany: 1.91% (31 Dec 2014: 3.49%)

400,000 Dresdner Funding Trust I 8.151% 30/06/2031 448,573 0.17

5,189,000 Schaeffler Finance 4.25% 15/05/2021 4,564,010 1.74


60


Hermes Global High Yield Bond Fund (continued)


Corporate Bonds: 81.58% (31 Dec 2014: 86.02%) (continued)

Greece: 0.00% (31 Dec 2014: 0.79%) - -

Hong Kong: 0.00% (31 Dec 2014: 0.89%) - -

India: 3.29% (31 Dec 2014: 4.21%)

9,700,000 Vedanta Resources Jersey 5.5% 13/07/2016 8,640,504 3.29

Total India 8,640,504 3.29

Ireland: 2.09% (31 Dec 2014: 0.97%)

5,150,000 Ardagh Packaging Finance 9.25% 15/10/2020 5,484,750 2.09


Italy: 1.03% (31 Dec 2014: 3.89%)

3,085,000 Intesa Sanpaolo 5.017% 26/06/2024 2,694,808 1.03

Total Italy 2,694,808 1.03

Luxembourg: 2.73% (31 Dec 2014: 3.15%)

4,500,000 ArcelorMittal 4.25% 05/08/2015 4,042,548 1.54

571,000 Gazprom 4.95% 02/06/2028 445,854 0.17

2,000,000 Millicom International Cellular 6% 15/03/2025 1,741,160 0.66

1,100,000 Millicom International Cellular 6% 15/03/2025 957,638 0.36

Total Luxembourg 7,187,200 2.73

Mexico: 2.54% (31 Dec 2014: 2.10%)

920,000 Cemex 4.375% 05/03/2023 888,375 0.34

450,000 Cemex 6.125% 05/05/2025 399,515 0.15

400,000 Cemex Espana 9.875% 30/04/2019 394,615 0.15

4,500,000 Cemex Espana 9.875% 30/04/2019 (not listed) 4,992,300 1.90

Total Mexico 6,674,805 2.54

Netherlands: 0.00% (31 Dec 2014: 0.58%) - -

61





Norway: 0.36% (31 Dec 2014: 0.35%)

1,688,000 Norske Skogindustrier 8% 24/02/2023 950,655 0.36

Total Norway 950,655 0.36


2,550,000 Evraz 6.75% 27/04/2018 2,208,535 0.84

3,250,000 MMC Finance 5.55% 28/10/2020 2,905,603 1.10

3,200,000 Rosneft International Finance 4.199% 06/03/2022 2,466,343 0.94

2,500,000 Steel Capital 5.9% 17/10/2022 2,114,746 0.80

1,000,000 Severstal Via Steel Capital 4.45% 19/03/2018 871,029 0.33

1,232,000 VimpelCom 5.95% 13/02/2023 981,111 0.37

4,000,000 VimpelCom 6.255% 01/03/2017 3,693,232 1.41


South Africa: 2.29% (31 Dec 2014: 3.28%)

2,855,000 AngloGold Ashanti 5.375% 15/04/2020 2,599,469 0.99

4,000,000 Sappi Papier 7.5% 15/06/2032 3,410,518 1.30


Spain: 1.25% (31 Dec 2014: 1.42%)

3,563,000 Gestamp Funding Luxembourg 5.625% 31/05/2020 3,293,744 1.25

Total Spain 3,293,744 1.25

Turkey: 0.82% (31 Dec 2014: 1.67%)

2,409,000 Turk Telekomunikasyon 4.875% 19/06/2024 2,149,398 0.82

Total Turkey 2,149,398 0.82


2,000,000 AA Bond 5.5% 31/07/2022 2,811,437 1.07

2,000,000 Jaguar Land Rover Automotive 4.125% 15/12/2018 1,824,179 0.69


62





United Kingdom: 9.29% (31 Dec 2014: 5.96%) (continued)

3,100,000 New Look Secured Issuer 6.5% 01/07/2022 4,260,807 1.62

1,400,000 New Look Senior Issuer 8% 01/07/2023 1,936,586 0.74

1,420,000 PGH Capital 5.75% 07/07/2021 2,130,311 0.81

1,488,000 PGH Capital 6.625% 18/12/2025 2,120,377 0.81

1,062,000 Tesco 2.7% 05/01/2017 961,061 0.36

6,500,000 Tesco 5.5% 15/11/2017 6,247,641 2.38



2,750,000 ADT Corp 4.875% 15/07/2042 1,900,467 0.72

4,862,000 Alcoa 5.95% 01/02/2037 4,374,578 1.66

5,750,000 Ally Financial 3.75% 18/11/2019 5,134,850 1.95

500,000 Ally Financial 4.125% 30/03/2020 449,031 0.17

4,500,000 California Resources 6% 15/11/2024 3,493,538 1.33

3,000,000 Cequel Communications I Holdings 5.125% 15/12/2021 2,455,237 0.93

2,125,000 CIT Group 5% 01/08/2023 1,883,358 0.72

4,000,000 Clearwire Communications 8.25% 01/12/2040 3,908,634 1.49

5,456,000 CNH Industrial Capital 3.875% 11/01/2015 4,921,271 1.87


6,316,000 Dell 5.4% 10/09/2040 4,704,972 1.79

3,000,000 Denbury Resources 4.625% 15/07/2023 2,275,175 0.87

7,000,000 DISH DBS 7.125% 01/02/2016 6,455,304 2.46

3,400,000 Domtar 6.75% 15/02/2044 3,235,964 1.23

1,250,000 Endo 6% 15/07/2023 1,148,526 0.44

10,300,000 Chrysler 8.25% 15/06/2021 10,099,397 3.84

3,500,000 HCA 4.75% 01/05/2023 3,188,386 1.21

3,500,000 Huntsman International 4.25% 01/04/2025 3,261,825 1.24

2,250,000 Infor US 5.75% 15/05/2022 2,283,750 0.87

2,500,000 KB Home 7.5% 15/09/2022 2,344,732 0.89

4,197,000 Lear 4.75% 15/01/2023 3,729,160 1.42

3,500,000 MarkWest Energy Partners 4.5% 15/07/2023 3,094,148 1.18



2,412,000 Peabody Energy 10% 3/15/2022 1,352,989 0.51

4,416,000 Range Resources 5% 15/08/2022 3,903,931 1.49

1,500,000 Scientific Games International 6.625% 15/05/2021 1,050,081 0.40

3,000,000 T-Mobile USA 6.375% 01/03/2025 2,759,828 1.05

63






2,000,000 Toll Brothers Finance 4.375% 15/04/2023 1,768,085 0.68

1,985,000 Transocean 5.05% 15/12/2016 1,850,529 0.70

4,200,000 Valeant Pharmaceuticals International 4.5% 15/05/2023 4,087,062 1.56

2,002,000 Verso Paper 11.75% 15/01/2019 521,073 0.20

1,000,000 Vulcan Materials 4.5% 01/04/2025 899,749 0.34

3,250,000 WPX Energy 5.25% 15/09/2024 2,701,770 1.03

4,500,000 XPO Logistics 5.75% 15/06/2021 4,443,983 1.69


Total Corporate Bonds 214,436,544 81.58

Floating Rate Notes: 6.87% (31 Dec 2014: 6.31%)

France: 1.29% (31 Dec 2014: 2.36%)

3,300,000 Groupama SA 29/05/2049 3,378,375 1.29

Total France 3,378,375 1.29

Ireland: 3.59% (31 Dec 2014: 2.61%)

9,284,000 UT2 Funding 30/06/2016 9,433,705 3.59


Italy: 0.81% (31 Dec 2014: 0.00%)

1,500,000 Generali Finance 31/12/2049 2,137,536 0.81

Total Italy 2,137,536 0.81


1,630,000 Barclays Bank 29/12/2049 1,598,254 0.61

1,100,000 Prudential 20/07/2055 1,498,950 0.57


Total Floating Rate Notes 18,046,820 6.87

64





Credit Default Swaps: 1.64% (31 Dec 2014: 1.18%)

Credit Default Swaps: Receive Fixed (Sell Protection) -

Unrealised Gains: 1.64% (31 Dec 2014: 1.18%)

European Union: 0.21% (31 Dec 2014: 0.20%)

(1,556,000) Altice Finco 5% 20/03/2020 (JP Morgan) 84,900 0.03


(2,400,000) Virgin Media Finance 5% 20/03/2023 (Credit Suisse) 318,336 0.12

(500,000) Virgin Media Finance 5% 20/03/2023 (JP Morgan) 66,320 0.03

Total European Union 548,698 0.21


(5,750,000) AES Corporation 5% 20/09/2020 (JP Morgan) 675,991 0.26

(3,000,000) American Axle & Manufacturing 5% 20/06/2021 (Barclays) 295,708 0.12

(3,000,000) Amkor Technology 5% 20/03/2020 (Goldman Sachs) 194,104 0.07

(5,000,000) Calpine Corporation 5% 20/09/2020 (Goldman Sachs) 301,792 0.11

(7,000,000) General Motors 5% 20/09/2020 (Barclays) 1,102,531 0.42

(3,000,000) International Lease 5% 20/06/2021 (Barclays) 436,880 0.17

(850,000) International Lease 5% 20/09/2020 (BNP Paribas) 115,357 0.04

(5,750,000) NRG Energy 5% 20/09/2020 (Goldman Sachs) 304,227 0.12

(4,500,000) Tenet Healthcare Corporation 5% 20/09/2020 (Goldman Sachs) 323,166 0.12


Total Credit Default Swaps: Receive Fixed

(Sell Protection) - Unrealised Gains 4,298,454 1.64

Total Credit Default Swaps 4,298,454 1.64




€

State Street GBP 13,245,138 EUR 18,614,669 1.4054 31/07/2015 71,003 0.02

65




Forward Currency Contracts: 0.05% (31 Dec 2014: 0.18%) (continued)



€

State Street USD 13,081,459 EUR 11,691,775 0.8938 31/07/2015 44,812 0.02

State Street GBP 3,056,729 EUR 4,295,916 1.4054 31/07/2015 16,386 0.01

Northern Trust EUR 6,624,990 GBP 4,700,000 1.4096 16/09/2015 1,273 -

State Street USD 188,676 EUR 168,635 0.8938 31/07/2015 643 -

State Street GBP 5,045 EUR 7,091 1.4055 31/07/2015 27 -

State Street USD 1,060 EUR 947 0.8938 31/07/2015 4 -

Total Fair Value Gains on Forward Currency Contracts 134,148 0.05

Futures Contracts - Unrealised Gains: 0.17% (31 Dec 2014: 0.00%)


Contracts Gain Net Assets

€


Goldman Sachs Ultra Bond (Cbt) Future September 2015 USD (72) 323,148 0.12

Goldman Sachs 10 Year Treasury Notes September 2015 USD (121) 119,064 0.05

Total United States 442,212 0.17

Total Futures Contracts - Unrealised Gains 442,212 0.17




Financial Derivative Instruments: (0.76%) (31 Dec 2014: (2.50%))

Credit Default Swaps: (0.16)% (31 Dec 2014: (0.42)%)

Credit Default Swaps: Pay Fixed (Buy Protection) -

Unrealised Losses: (0.05%) (31 Dec 2014: (0.30)%)

European Union: (0.05%) (31 Dec 2014: (0.30)%)

1,350,000 Banco Comercial Portugues 5% 20/09/2019 (JP Morgan) (120,352) (0.05)

Total European Union (120,352) (0.05)

Total Credit Default Swaps: Pay Fixed

(Buy Protection) - Unrealised Losses (120,352) (0.05)

66





Unrealised Losses: (0.11%) (31 Dec 2014: (0.12)%)

European Union: 0.00% (31 Dec 2014: (0.02)%) - -

United States: (0.11)% (31 Dec 2014: (0.10)%)

(2,500,000) iHeartCommunications 5% 20/03/2016 (JP Morgan) (31,222) (0.01)

(1,000,000) iHeartCommunications 5% 20/06/2016 (Goldman Sachs) (25,353) (0.01)

(1,200,000) iHeartCommunications 5% 20/06/2016 (Merrill Lynch) (30,423) (0.01)

(3,565,000) Transocean Income 1% USD 20/03/2017 (JP Morgan) (52,896) (0.02)

(6,130,000) Chesapeake Enery 5% 20/09/2020 (Goldman Sachs) (141,878) (0.06)

Total United States (281,772) (0.11)


(Sell Protection) - Unrealised Losses (281,772) (0.11)

Total Credit Default Swaps (402,124) (0.16)

Forward Currency Contracts: (0.57)% (31 Dec 2014: (1.97)%)



€

Northern Trust EUR 178,404,175 USD 200,000,000 0.8920 16/09/2015 (911,105) (0.35)

Northern Trust EUR 22,792,416 GBP 16,500,000 1.3814 16/09/2015 (461,058) (0.17)

HSBC EUR 15,565,504 USD 17,500,000 0.8895 16/09/2015 (124,583) (0.05)



State Street EUR 27,695 GBP 19,705 1.4055 31/07/2015 (104) -

State Street EUR 13 USD 15 0.8941 31/07/2015 - -

Total Fair Value Losses on Forward Currency Contracts (1,497,574) (0.57)

Futures Contracts - Unrealised Losses: (0.03)% (31 Dec 2014: (0.11)%)



€

Germany: (0.03)% (31 Dec 2014: 0.00%)

Goldman Sachs Eurex Euro-Bobl September 2015 EUR (15) (9,750) -

Goldman Sachs Euro-Bund Future September 2015 EUR (42) (66,691) (0.03)

Total Germany (76,441) (0.03)

67




Futures Contracts - Unrealised Losses: (0.03)% (31 Dec 2014: (0.11)%) (continued)

United States: 0.00% (31 Dec 2014: 0.11%) - -


Total Financial Derivatives (1,976,139) (0.76)

Total Financial Liabilities at fair value through profit or loss (1,976,139) (0.76)

Total financial assets and financial liabilities at fair value 235,382,039 89.55

through profit or loss (31 Dec 2014: 91.19%) (Cost: € 219,715,976)

Cash at bank (31 Dec 2014: 7.35%) 18,627,117 7.09

Cash at Clearing Broker (31 Dec 2014: 0.11%) - -

Other Net Assets (31 Dec 2014: 1.35%) 8,839,419 3.36



Assets

Transferable securities admitted to official stock exchange listing or

traded on a regular market 86.97

OTC financial derivative instruments 1.66

Financial derivative instruments dealt on a regulated market 0.17

Cash 6.97

Other net assets 4.23 Total 100.00

The counterparty for the forward currency contracts is Northern Trust (S&P: A+, Moody’s: A2), HSBC (S&P: AA-, Moody’s: Aa2) and State Street Bank and Trust Company (S&P: AA-, Moody’s: Aa2).

The clearing broker for the futures contracts is Goldman Sachs (S&P: A, Moody’s: A1). The counterparties for the Credit Default Swaps are: Barclays (S&P: A-, Moody’s: A2), BNP Paribas (S&P: A+, Moody’s: A1), Credit Suisse (S&P: A, Moody’s: Aa3), Goldman Sachs (S&P: A, Moody’s: A1), JP Morgan (S&P: A, Moody’s: A3), Merrill Lynch (S&P: A, Moody’s: Baa1).

68


Hermes Sourcecap Europe Ex-UK Fund


Equities: 99.89% (31 Dec 2014: 99.46%)

Belgium: 1.94% (31 Dec 2014: 2.25%)

78,268 UCB 5,088,985 1.94


Denmark: 5.11% (31 Dec 2014: 6.30%)

191,533 Novo Nordisk 9,365,390 3.57

167,765 Topdanmark 4,031,894 1.54


Finland: 2.44% (31 Dec 2014: 2.53%)

1,043,702 Nokia 6,413,549 2.44


France: 8.65% (31 Dec 2014: 9.03%)

113,655 Legrand 5,798,678 2.21

68,788 Renault 6,488,772 2.48

58,754 Sodexo 5,069,883 1.93

37,531 Valeo 5,333,155 2.03

Total France 22,690,488 8.65

Germany: 27.71% (31 Dec 2014: 25.37%)

89,292 Adidas 6,170,970 2.35

80,213 Bayer 10,187,051 3.88

73,963 Deutsche Boerse 5,548,704 2.11

63,152 Duerr 5,321,819 2.02

121,610 Fresenius 7,076,486 2.70

37,243 Linde 6,389,037 2.44

67,143 Merck 6,022,727 2.30

73,113 MTU Aero Engines 6,166,350 2.35

69,136 Porsche Automobil 5,322,089 2.03

87,442 Rocket Internet 3,507,299 1.34

31,935 Sartorius - Preferred 5,299,613 2.02

164,398 Wirecard 5,688,171 2.17


69


Hermes Sourcecap Europe Ex-UK Fund (continued)



Ireland: 2.02% (31 Dec 2014: 2.10%)

79,785 Kerry Group 5,295,330 2.02


Italy: 6.37% (31 Dec 2014: 4.43%)

343,753 Cerved Information Solutions 2,325,489 0.89

2,289,117 Intesa Sanpaolo 7,540,351 2.87

7,532,425 Telecom Italia 6,839,442 2.61

Total Italy 16,705,282 6.37

Jersey: 1.83% (31 Dec 2014: 1.85%)

79,458 Randgold Resources 4,805,761 1.83

Total Jersey 4,805,761 1.83

Netherlands: 11.80% (31 Dec 2014: 10.29%)

141,372 ASM International 5,939,038 2.26

62,741 ASML Holding 5,915,221 2.25

322,674 Delta Lloyd Groep 4,806,229 1.83

129,140 Euronext 4,585,761 1.75

652,196 ING Groep 9,720,981 3.71


Norway: 1.62% (31 Dec 2014: 2.83%)

265,194 Statoil 4,243,830 1.62


Spain: 13.87% (31 Dec 2014: 11.54%)

44,639 Aena 4,135,803 1.58

185,334 Amadeus IT Holding 6,635,884 2.53

1,165,786 Banco Popular Espanol 5,146,945 1.96

756,681 Bankinter 5,057,656 1.93

584,794 Gamesa Tecnologica 8,306,999 3.16

241,358 Inditex 7,107,993 2.71

Total Spain 36,391,280 13.87

70





Sweden: 2.83% (31 Dec 2014: 6.83%)

189,062 Hennes & Mauritz 6,570,985 2.51

40,000 Swedbank 845,943 0.32


Switzerland: 13.70% (31 Dec 2014: 14.11%)

35,138 Dufry 4,460,739 1.70

35,138 Dufry Rts - -

58,618 Roche 14,916,835 5.69

18,615 Syngenta 6,867,481 2.62

503,846 UBS 9,691,336 3.69







State Street USD 2,257,643 EUR 2,010,529 0.8905 31/07/2015 7,901 -

State Street EUR 24,667 GBP 17,555 1.4051 31/07/2015 7 -






71








State Street GBP 831 EUR 1,172 1.4100 31/07/2015 (4) -

State Street EUR 8,030 GBP 5,727 1.4022 31/07/2015 (14) -

State Street GBP 37,051 EUR 52,084 1.4058 31/07/2015 (40) -


State Street GBP 21,912,112 EUR 30,786,508 1.4050 31/07/2015 (6,668) -





(31 Dec 2014: 99.53%) (Cost: € 193,865,943)

Cash at bank (31 Dec 2014: 0.59%) 811,376 0.21

Other Net Liabilities (31 Dec 2014: (0.12%)) (532,897) (0.10)



Assets


traded on a regulated market 99.12

Cash 0.31



72


Hermes US SMID Equity Fund


Equities: 97.60% (31 Dec 2014: 96.87%)

Canada: 7.45% (31 Dec 2014: 7.29%)


236,349 Alimentation Couche-Tard 10,154,197 2.58

300,455 Gildan Activewear 10,008,156 2.53


Energy: 0.97% (31 Dec 2014: 1.02%)

131,199 ShawCor 3,844,675 0.97

Industrial: 1.37% (31 Dec 2014: 1.18%)

457,223 CAE 5,432,535 1.37

Total Canada 29,439,563 7.45



61,694 Airgas 6,507,483 1.65

115,945 Carpenter Technology Corporation 4,618,089 1.17

170,804 RPM International 8,384,768 2.13

76,009 US Silica 2,189,059 0.55

Total Basic Materials 21,699,399 5.50


119,449 John Wiley & Sons 6,520,721 1.65


76,310 Brunswick 3,842,972 0.97

99,558 CarMax 6,605,673 1.67

129,720 Jarden 6,767,492 1.71

278,713 LKQ 8,419,920 2.14

56,474 MSC Industrial Direct 3,930,026 1.00

228,753 Sally Beauty Holdings 7,027,292 1.78


73


Hermes US SMID Equity Fund (continued)





216,922 AMN Healthcare Services 6,705,059 1.70

42,128 Bio-Rad Laboratories 6,329,732 1.60

84,813 Equifax 8,264,179 2.09

120,862 Haemonetics 4,996,435 1.27

178,827 Masimo 6,893,781 1.75

114,962 Matthews International 6,092,986 1.54

97,999 MEDNAX 7,259,766 1.84

97,545 Omnicare 9,185,813 2.33

147,327 Patterson Cos 7,092,322 1.80

159,276 West Pharmaceutical Services 9,220,488 2.33

58,564 WEX 6,533,400 1.65


Energy: 2.30% (31 Dec 2014: 2.37%)

72,941 Oceaneering International 3,365,498 0.85

275,379 Superior Energy Services 5,697,592 1.45

Total Energy 9,063,090 2.30

Financial: 22.89% (31 Dec 2014: 24.11%)

131,199 Alexander & Baldwin 5,140,377 1.30

16,400 Alleghany 7,619,112 1.93

159,620 Brown & Brown 5,230,747 1.32

222,911 East West Bancorp 9,950,747 2.52

108,626 Ellie Mae 7,439,795 1.88

110,021 First Republic Bank 6,950,027 1.76

11,466 Markel 9,119,139 2.31

95,332 Reinsurance of America 9,022,220 2.29

46,956 Signature Bank 6,834,915 1.73

267,620 St Joe 4,099,938 1.04

128,447 Waddell & Reed Financial 6,052,423 1.53

6,919 White Mountains Insurance 4,533,121 1.15

158,890 Wintrust Financial 8,398,925 2.13


74






Industrial: 18.64% (31 Dec 2014: 16.94%)

62,197 AptarGroup 3,964,437 1.00

87,285 CLARCOR 5,385,485 1.36

105,640 Clean Harbors 5,642,232 1.43

112,994 Cognex 5,333,317 1.35

41,599 Eagle Materials 3,149,876 0.80

221,031 FLIR Systems 6,898,378 1.75

54,296 Genesee & Wyoming 4,160,160 1.05

91,031 Kirby 6,968,423 1.76

59,635 Martin Marietta Materials 8,475,326 2.15

155,413 Matson 6,385,920 1.62

179,742 National Instruments 5,325,755 1.35

137,585 Simpson Manufacturing 4,680,642 1.19

131,271 Woodward 7,212,029 1.83


Technology: 8.83% (31 Dec 2014: 6.13%)

72,770 ANSYS 6,622,070 1.68

53,042 CACI International 4,337,244 1.10

280,452 Intersil 3,564,545 0.90

72,709 IPG Photonics 5,981,042 1.51

97,598 Jack Henry & Associates 6,379,005 1.62

148,126 Silicon Laboratories 7,985,472 2.02


Utilities: 1.17% (31 Dec 2014: 1.51%)

237,325 MDU Resources 4,632,584 1.17



75



Fair Value % ofFinancial assets and liabilities at fair value through profit or loss $ Net Assets




Counterparty Buys Sells Rate Date Gain $ Net Assets

State Street CHF 4,754,904 USD 5,105,537 1.0737 31/07/2015 13,222 -

State Street USD 500,974 EUR 446,162 1.1229 31/07/2015 1,936 -






Counterparty Buys Sells Rate Date Loss $ Net Assets





State Street USD 11,720 CHF 10,917 1.0735 31/07/2015 (32) -





State Street GBP 199,791 USD 315,205 1.5777 31/07/2015 (1,299) -

State Street EUR 749,484 USD 841,603 1.1229 31/07/2015 (3,295) -

State Street GBP 970,467 USD 1,531,081 1.5777 31/07/2015 (6,312) -





(31 Dec 2014: 96.87%) (Cost: $ 333,562,537)

Cash at bank (31 Dec 2014: 3.16%) 10,950,847 2.78

Other Net Liabilities (31 Dec 2014: (0.03%)) (1,485,890) (0.38)



76





Assets

Transferable securities admitted to an official stock exchange listing

or traded on regular market 97.20

Cash 2.76



77


Hermes Active UK Inflation-Linked Bond Fund





703,000 Network Rail Infrastructure Finance 1.125% 22/11/2047 1,376,680 1.01



Government Bonds: 98.38% (31 Dec 2014: 98.73%)

Canada: 0.00% (31 Dec 2014: 0.36%)

New Zealand: 0.00% (31 Dec 2014: 0.11%)


2,833,000 UK Treasury Inflation Linked Bond 1.875% 22/11/2022 4,321,252 3.18





781,000 UK Treasury Inflation Linked Bond 4.125% 22/07/2030 2,588,214 1.90

















85,000 UK Treasury Inflation Linked Bond 3.5% 22/07/2068 106,416 0.08


78


Hermes Active UK Inflation-Linked Bond Fund (continued)



Government Bonds: 98.38% (31 Dec 2014: 98.73%) (continued)


5,166,500 United States Treasury Inflation Indexed Bonds 1.375% 15/02/2044 3,561,836 2.62

577,000 United States Treasury Inflation Indexed Bonds 0.75% 15/02/2045 336,756 0.25


Total Government Bonds 133,794,587 98.38




Financial Derivative Instruments: (0.01%) (31 Dec 2014: (0.02%))

Forward Currency Contracts: (0.01%) (31 Dec 2014: (0.02%))



£

Northern Trust GBP 167,110 USD 265,000 0.6306 31/07/2015 (1,554) -

Commonwealth

Bank of

Australia GBP 3,747,019 USD 5,900,000 0.6351 31/07/2015 (8,141) (0.01)

Total Fair Value Losses on Forward Currency Contracts (9,695) (0.01)


Total Financial liabilities at fair value through profit or loss


(31 Dec 2014: 99.75%) (Cost: £ 121,811,871)

Cash at bank (31 Dec 2014: 0.08%) 575,257 0.42

Other Net Assets (31 Dec 2014: 0.17%) 270,311 0.20



79


Hermes Active UK Inflation-Linked Bond Fund (continued)



assets

Transferable securities admitted to official stock exchange listing 99.35

Cash 0.42

Other Assets 0.23

Total 100.00

The counterparties for the forward currency contracts are Northern Trust (S&P: A+, Moody’s: A2) and Commonwealth Bank of Australia (S&P: AA-, Moody’s: Aa2).

80


Hermes Asia Ex-Japan Equity Fund


Holdings Financial assets at fair value through profit or loss $ Net Assets

Equities: 91.74% (31 Dec 2014: 84.82%)

Hong Kong: 5.76% (31 Dec 2014: 8.84%)


1,511,960 Ajisen China 809,385 0.05

10,829,000 Belle International 12,474,020 0.66

13,644,000 Cathay Pacific Airways 33,545,266 1.78

21,373,000 Lifestyle International 39,645,235 2.11

40,972,000 Xinyi Glass 21,774,641 1.16

Technology: 0.00% (31 Dec 2014: 0.06%) - -


India: 4.54% (31 Dec 2014: 7.31%)


3,564,629 Sun TV Network 15,813,563 0.84

Utilities: 3.70% (31 Dec 2014: 5.16%)

7,536,634 GAIL India 46,417,523 2.47

10,627,605 Power Grid Corporation of India 23,214,508 1.23

Total India 85,445,594 4.54

Japan: 5.10% (31 Dec 2014: 2.64%)


830,800 SoftBank 48,937,674 2.60

Technology: 2.50% (31 Dec 2014: 2.64%)

3,421,400 Nexon 47,077,972 2.50

Total Japan 96,015,646 5.10

Malaysia: 0.00% (31 Dec 2014: 1.07%)


447 Genting Malaysia 498 -

Total Malaysia 498 -

81


Hermes Asia Ex-Japan Equity Fund (continued)






97,038,296 China BlueChemical 35,423,888 1.88


221,036 Alibaba ADR 17,919,389 0.95

586,323 Baidu ADR 117,557,762 6.25

246,674 Qihoo 360 Technology ADR 16,554,292 0.88


177,446,000 China Dongxiang Group 46,923,101 2.49

21,536,000 Dongfeng Motor 28,891,162 1.54


75,583,908 COSCO Pacific 102,567,958 5.45

21,877,000 Wumart Stores 15,520,907 0.83

Diversified: 2.26% (31 Dec 2014: 3.02%)

9,912,656 China Merchants International 42,515,600 2.26

Energy: 1.28% (31 Dec 2014: 1.04%)

23,584,000 Kunlun Energy 24,002,755 1.28

Financial: 2.45% (31 Dec 2014: 7.74%)

6,862,005 E-House China ADR 46,112,674 2.45

Industrial: 3.59% (31 Dec 2014: 4.08%)

44,258,000 Beijing Capital International Airport 51,038,268 2.71

82,081,385 Lonking Holdings 16,411,301 0.88




181,714 LG Chem 45,369,446 2.41

1,119,499 Samsung Fine Chemicals 34,775,777 1.85

1,138,640 Soulbrain 49,865,583 2.65

82






Communications: 0.00% (31 Dec 2014: 0.38%) - -


194,306 E-Mart 40,239,084 2.14

157,328 Hyundai Mobis 29,901,417 1.59

922,461 Youngone 45,566,902 2.42


1,446,001 Hyundai Greenfood 27,352,747 1.45

Financial: 11.14% (31 Dec 2014: 9.13%)

1,590,282 Daishin Securities 16,609,248 0.88

1,596,456 Hana Financial 41,576,984 2.22

3,477,210 Hyundai Securities 28,274,055 1.51

1,196,486 KB Financial 39,580,737 2.10

267,689 KIWOOM Securities 17,734,741 0.94

656,232 Samsung Card 21,767,523 1.16

166,559 Samsung Fire & Marine Insurance 43,900,082 2.33

Industrial: 2.44% (31 Dec 2014: 2.67%)

1,249,227 Hyundai Engineering & Construction 45,973,166 2.44

Technology: 4.10% (31 Dec 2014: 3.45%)

67,773 Samsung Electronics 77,041,700 4.10

Utilities: 3.95% (31 Dec 2014: 4.26%)

1,808,561 Korea Electric Power 74,258,903 3.95


Singapore: 2.14% (31 Dec 2014: 2.90%)


60,513,900 Genting Singapore 40,251,154 2.14

Total Singapore 40,251,154 2.14

83






Taiwan: 6.23% (31 Dec 2014: 5.04%)

Financial: 1.85% (31 Dec 2014: 1.91%)

33,961,621 China Life Insurance 34,782,195 1.85

Industrial: 1.17% (31 Dec 2014: 1.26%)

14,609,320 Nan Ya Printed Circuit Board 19,247,399 1.02

6,474,000 Young Fast Optoelectronics 2,811,635 0.15

Technology: 3.21% (31 Dec 2014: 1.87%)

15,620,000 Chipbond Technology 33,766,679 1.80

12,236,990 Powertech Technology 26,493,086 1.41

Total Taiwan 117,100,994 6.23

Thailand: 1.98% (31 Dec 2014: 2.26%)


174,310,632 AP Thailand 37,158,193 1.98

Total Thailand 37,158,193 1.98

Total Equities 1,725,447,778 91.74

P-Notes: 5.78% (31 Dec 2014: 9.87%)


13,172,107 Societe Generale 0.00% 27/11/2015 (Wuliangye) 67,336,847 3.58

5,297,640 Societe Generale 0.00% 03/09/2015 (Beijing Yangjin) 8,884,931 0.47

68 Societe Generale 0.00% 03/12/2015 (SAIC Motor Corp) 248 -

8,182,911 Societe Generale 0.00% 04/12/2015 (Zhejiang Supor) 32,475,639 1.73


Total P-Notes 108,697,665 5.78

84






Warrants: 2.12% (31 Dec 2014: 4.66%)


21 Guangzhou Grandbuy 63 -

4,602,124 Qingdao Haier 22,509,663 1.19

3,411,943 Wuliangye Yibin 17,442,121 0.93


Total Warrants 39,951,847 2.12




$

State Street CHF 3,380,057 USD 3,629,307 1.0737 31/07/2015 9,399 -

State Street EUR 182,835 USD 203,460 1.1128 31/07/2015 1,044 -

State Street USD 150,706 CHF 139,507 1.0803 31/07/2015 523 -


State Street USD 159,695 EUR 142,512 1.1206 31/07/2015 293 -

State Street CHF 50,308 USD 54,038 1.0742 31/07/2015 119 -

State Street CHF 11,960 USD 12,842 1.0737 31/07/2015 34 -



Total Financial assets at fair value through profit or loss 1,874,109,018 99.64

85



Fair Value % of

Financial assets/liabilities at fair value through profit or loss $ Net Assets





$

State Street GBP 9 USD 14 1.5779 31/07/2015 - -









State Street EUR 1,500,447 USD 1,684,867 1.1229 31/07/2015 (6,596) -



State Street EUR 10,455,665 USD 11,740,771 1.1229 31/07/2015 (45,963) -




Total financial assets at fair value through profit or loss 1,874,013,128 99.64

(31 Dec 2014: 99.35%) (Cost: $ 1,810,770,080)

Cash at bank (31 Dec 2014: 1.13%) 29,626,778 1.49

Other Net Liabilities (31 Dec 2014: (0.47%)) (22,780,598) (1.13)


Participating Shares 1,880,859,308 100.00

86



Fair Value % of

Financial assets at fair value through profit or loss $ Net Assets

% of Total

Portfolio Classification Assets



Financial derivative instruments dealt in on a regulated market 2.08

Cash 1.54

Other assets 0.90

Total 100.00

The counterparty for the forward currency contracts is State Street Bank and Trust Company (S&P: AA-, Moody’s: Aa2).

87





Equities: 98.17% (31 Dec 2014: 99.63%)

Australia: 1.49% (31 Dec 2014: 1.90%)

9,500 Caltex Australia 232,317 0.50

39,700 Lend Lease Group 458,139 0.99

Total Australia 690,456 1.49

Austria: 1.19% (31 Dec 2014: 0.99%)

20,066 OMV 552,793 1.19

Total Austria 552,793 1.19

Bermuda: 0.00% (31 Dec 2014: 0.10%)

- -

Canada: 2.20% (31 Dec 2014: 2.34%)

10,001 Agrium 1,022,032 2.20


Denmark: 2.61% (31 Dec 2014: 3.07%)

20,062 Danske Bank 595,289 1.28

18,598 ISS 616,231 1.33


Finland: 2.30% (31 Dec 2014: 0.00%)

13,000 Amer Sports 339,675 0.73

69,500 Stora Enso 724,983 1.57


France: 1.13% (31 Dec 2014: 0.00%)

3,300 Valeo 524,287 1.13

Total France 524,287 1.13

88






Germany: 2.46% (31 Dec 2014: 2.84%)

6,153 Henkel 587,291 1.27

2,350 Volkswagen 551,758 1.19


Hong Kong: 2.16% (31 Dec 2014: 2.47%)

69,000 Cheung Kong Infrastructure 535,812 1.16

51,000 Power Assets 465,111 1.00


Hungary: 0.33% (31 Dec 2014: 0.28%)

7,898 OTP Bank 154,244 0.33

Total Hungary 154,244 0.33

Indonesia: 0.18% (31 Dec 2014: 0.22%)

390,000 Telekomunikasi Indonesia Persero 85,708 0.18

Total Indonesia 85,708 0.18

Ireland: 1.23% (31 Dec 2014: 0.58%)

198,624 Cairn Homes 242,058 0.52

25,000 Ryanair 330,244 0.71

Total Ireland 572,302 1.23

Japan: 8.08% (31 Dec 2014: 7.39%)

6,600 FUJIFILM 235,855 0.51

79,000 Hakuhodo 846,256 1.82

25,800 Kirin 355,426 0.77

26,000 Nippon Telegraph & Telephone 941,872 2.03

6,800 Nitto Denko 558,957 1.21

7,600 Seiko Epson 134,817 0.29

15,100 Sumitomo Mitsui Financial Group 673,538 1.45

Total Japan 3,746,721 8.08

89






Norway: 4.30% (31 Dec 2014: 3.12%)

44,780 Europris 225,337 0.49

20,367 Marine Harvest 235,646 0.51

66,500 Nordic Semiconductor 456,741 0.98

40,000 Protector Forsikring 344,367 0.74

16,280 XXL 179,981 0.39

10,600 Yara International 550,373 1.19



3,500 Alibaba ADR 283,745 0.61

24,000 China Mobile 307,262 0.66

60,000 China Resources Gas Group 178,011 0.38

109,000 CNOOC 154,663 0.33

100,000 Lenovo 138,539 0.30

57,000 Ping An Insurance Group 769,818 1.67



50 Cheil Industries 7,956 0.02

6,000 Hyundai Engineering & Construction 220,808 0.48

7,000 Hyundai Marine & Fire Insurance 185,127 0.40

300 Samsung Electronics 341,028 0.73

1,700 Samsung Fire & Marine Insurance 448,070 0.96


South Africa: 0.66% (31 Dec 2014: 0.78%)

16,641 MTN 306,730 0.66

Total South Africa 306,730 0.66

90






Sweden: 0.40% (31 Dec 2014: 2.50%)

47,637 Nobina 183,204 0.40

Total Sweden 183,204 0.40

Taiwan: 0.87% (31 Dec 2014: 0.87%)

127,680 Hon Hai Precision Industry 401,399 0.87

Total Taiwan 401,399 0.87


12,215 ARM 203,668 0.44

52,655 Cobham 219,280 0.47

55,324 GKN 291,428 0.63

12,648 Greggs 236,528 0.51

35,112 Hargreaves Lansdown 639,519 1.38

160,898 Hays 414,929 0.89

235,710 Lloyds Banking Group 317,671 0.69

32,428 Prudential 786,067 1.70

42,798 Rexam 372,604 0.80

156,000 TSB Banking 831,562 1.79



6,616 Berkshire Hathaway 903,150 1.94

2,495 Biogen Idec 988,544 2.13

23,740 Cisco Systems 653,800 1.41

5,090 Cummins 667,503 1.44

10,478 CVS Caremark 1,098,199 2.37

25,562 Delta Air Lines 1,051,109 2.27

6,172 Eagle Materials 467,344 1.01

6,616 Exxon Mobil 547,937 1.18

91







1,027 Google Class A 555,864 1.20

915 Google Class C 477,191 1.03

11,129 Hess 745,309 1.61

12,760 Ingersoll-Rand 862,321 1.86

11,109 JPMorgan Chase 746,525 1.61

10,400 Lam Research 834,080 1.80

9,000 Macy's 603,810 1.30

16,374 Marathon Petroleum 832,618 1.79

5,997 McKesson 1,345,007 2.90

12,200 Micron Technology 228,506 0.49

16,069 Mylan 1,086,746 2.34

29,130 Oasis Petroleum 461,419 0.99

4,000 Occidental Petroleum 309,480 0.67

7,270 PartnerRe 934,559 2.02

13,518 State Street 1,031,288 2.22

3,510 The Cooper Companies 620,393 1.34

7,072 Thermo Fisher Scientific 915,470 1.97

9,300 TJX Cos 614,544 1.33

8,613 Travelers 828,054 1.79

19,573 Tyson Foods 840,660 1.81

3,535 Union Pacific 337,699 0.73

8,600 VF 592,024 1.28

7,167 Viacom 461,483 1.00

10,500 Wells Fargo 588,630 1.27

3,621 Western Digital 296,777 0.64




(31 Dec 2014: 99.63%) (Cost: $43,286,464)

Cash at bank (31 Dec 2014: 0.39%) 855,679 1.84

Other Net Liabilities (31 Dec 2014: (0.02%)) (6,397) (0.01)



92





Assets



Cash 1.84

Other assets 0.14

Total 100.00

93


Hermes Multi Strategy Credit Fund




Australia: 0.00% (31 Dec 2014: 1.90%)

Brazil: 5.43% (31 Dec 2014: 3.20%)

2,478,000 Gerdau Trade 4.75% 15/04/2023 2,354,100 0.33

200,000 GTL Trade Finance 7.25% 16/04/2044 186,750 0.03

875,000 GTL Trade Finance 7.25% 16/04/2044 - Euromtf 817,031 0.11

6,000,000 GTL Trade Finance 5.893% 29/04/2024 5,883,000 0.82

9,500,000 Marfrig Holdings Europe 8.375% 09/05/2018 9,615,900 1.34

19,000,000 Vale Overseas 6.25% 23/01/2017 20,108,935 2.80

Total Brazil 38,965,716 5.43

Chile: 1.03% (31 Dec 2014: 0.00%)

7,229,000 VTR Finance 6.875% 15/01/2024 7,405,026 1.03

Total Chile 7,405,026 1.03

France: 1.58% (31 Dec 2014: 1.08%)

10,000,000 Numericable 5.375% 15/05/2022 11,346,456 1.58

Total France 11,346,456 1.58

Germany: 0.63% (31 Dec 2014: 3.35%)

600,000 Dresdner Funding Trust I 8.151% 30/06/2031 749,700 0.10

900,000 Schaeffler Finance 4.25% 15/05/2018 1,024,816 0.15

2,811,000 Schaeffler Finance 4.25% 15/05/2021 2,754,780 0.38


Greece: 0.00% (31 Dec 2014: 1.34%)

Hong Kong: 0.65% (31 Dec 2014: 0.55%)

4,750,000 Ageas Capital Asia 4.125% 25/04/2023 4,651,388 0.65


India: 2.33% (31 Dec 2014: 3.71%)

16,800,000 Vedanta Resources Jersey 5.5% 13/07/2016 16,674,000 2.33

Total India 16,674,000 2.33

94


Hermes Multi Strategy Credit Fund (continued)




Ireland: 1.36% (31 Dec 2014: 0.44%)

8,207,000 Ardagh Packaging Finance 9.25% 15/10/2020 9,738,615 1.36


Italy: 4.68% (31 Dec 2014: 2.69%)

7,801,000 Intesa Sanpaolo 5.017% 26/06/2024 7,592,522 1.06

16,250,000 Telecom Italia 5.625% 29/12/2015 26,004,122 3.62

Total Italy 33,596,644 4.68

Luxembourg: 2.64% (31 Dec 2014: 1.69%)

8,393,000 ArcelorMittal 4.25% 05/08/2015 8,400,847 1.17

4,725,000 ArcelorMittal 4.5% 01/03/2016 4,819,500 0.67

2,000,000 Millicom International Cellular 6% 15/03/2025 3,880,000 0.54

1,900,000 Millicom International Cellular 6% 15/06/2025 - Euro-Dollar 1,843,000 0.26


Mexico: 1.17% (31 Dec 2014: 0.92%)

6,600,000 Cemex Espana SA 9.875% 30/04/2019 7,254,720 1.01

1,080,000 Cemex 4.375% 05/03/2023 1,161,971 0.16

Total Mexico 8,416,691 1.17

Netherlands: 1.59% (31 Dec 2014: 0.00%)

4,000,000 AerCap Ireland Capital 4.625% 01/07/2022 4,015,000 0.56

7,269,000 NXP 3.5% 15/09/2016 7,359,863 1.03


Norway: 0.00% (31 Dec 2014: 0.10%) - -

95







3,250,000 Evraz 6.75% 27/04/2018 3,136,250 0.44

7,000,000 MMC Finance 5.55% 28/10/2020 6,972,910 0.97

500,000 MMC Finance 5.55% 28/10/2020 - Berlin 498,065 0.07

9,300,000 Rosneft International Finance 4.199% 06/03/2022 7,986,375 1.11

8,250,000 Steel Capital 5.9% 17/10/2022 7,775,625 1.08

1,000,000 Steel Capital 5.9% 17/10/2022 942,500 0.13

1,000,000 Steel Capital 4.45% 19/03/2018 970,500 0.14

7,768,000 VimpelCom 5.95% 13/02/2023 6,892,546 0.96

6,750,000 VimpelCom 6.255% 01/03/2017 6,944,063 0.97


South Africa: 0.65% (31 Dec 2014: 1.88%)

3,469,000 AngloGold Ashanti 5.375% 15/04/2020 3,519,217 0.49

1,200,000 Sappi Papier 7.5% 15/06/2032 1,140,000 0.16


Spain: 0.49% (31 Dec 2014: 3.57%)

3,441,000 Gestamp Funding Luxembourg 5.625% 31/05/2020 3,544,230 0.49

Total Spain 3,544,230 0.49

Turkey: 1.10% (31 Dec 2014: 1.38%)



Total Turkey 7,858,138 1.10


9,115,000 AA Bond 9.5% 31/07/2019 15,689,833 2.19

10,000,000 Barclays Bank 5% 22/09/2016 10,467,790 1.46


4,400,000 New Look Secured Issuer 6.5% 01/07/2022 6,738,233 0.94

2,100,000 New Look Senior Issuer 8% 01/07/2023 3,236,616 0.46

2,670,000 PGH Capital 6.625% 18/12/2025 4,239,206 0.59

2,980,000 PGH Capital 5.75% 07/07/2021 4,981,202 0.69

4,687,000 Prudential 7.75% 29/01/2049 4,897,915 0.68

96







23,500,000 Tesco 5.5% 15/11/2017 25,167,137 3.51

8,688,000 Tesco 2.7% 05/01/2017 8,760,106 1.22

4,900,000 Virgin Media Secured Finance 5.5% 15/01/2021 8,201,355 1.14



3,570,000 Air Lease 4.25% 15/09/2024 3,552,150 0.50

2,750,000 Alcoa 5.55% 01/02/2017 2,889,366 0.40

6,888,000 Alcoa 5.95% 01/02/2037 6,905,220 0.96

10,450,000 Ally Financial 3.75% 18/11/2019 10,397,750 1.44

6,000,000 Ally Financial 4.125% 30/03/2020 6,003,720 0.84

9,000,000 Ally Financial 3.5% 18/07/2016 9,157,500 1.28

10,500,000 Bank of America 3.75% 12/07/2016 10,766,653 1.50

8,000,000 Bank of America 1.125% 14/11/2016 8,003,764 1.12

21,000,000 Chrysler 8.25% 15/06/2021 22,942,500 3.20

4,875,000 CIT 5% 01/08/2023 4,814,063 0.67

11,500,000 CIT 5% 15/05/2017 11,887,550 1.66

7,500,000 Clearwire Finance 8.25% 01/12/2040 8,165,625 1.14



1,775,000 Dell 5.4% 10/09/2040 1,473,250 0.21

11,000,000 Denali Finance 5.625% 15/10/2020 11,591,250 1.62

5,255,000 Domtar 6.75% 15/02/2044 5,572,636 0.78

5,000,000 HCA 4.75% 01/05/2023 5,075,000 0.71

7,000,000 Huntsman International 4.25% 01/04/2025 7,268,651 1.01

5,915,000 MarkWest Energy Finance 4.875% 01/12/2024 5,811,488 0.81

9,700,000 MarkWest Energy Finance 4.875% 01/06/2025 9,506,000 1.33

16,507,000 Range Resources 5% 15/08/2022 16,259,395 2.27

2,500,000 Scientific Games International 6.625% 15/05/2021 1,950,000 0.27

2,765,000 Transocean 5.05% 15/12/2016 2,872,061 0.40

12,800,000 VRX Escrow 4.5% 15/05/2023 13,878,262 1.93

4,330,000 Verso Paper 11.75% 15/01/2019 1,255,700 0.18

17,000,000 Vulcan Materials 4.5% 01/04/2025 17,042,500 2.37



97





Floating Rate Notes: 9.19% (31 Dec 2014: 15.96%)

Belgium: 2.08% (31 Dec 2014: 0.00%)

13,000,000 Solvay Finance 29/05/2049 14,945,225 2.08


France: 1.67% (31 Dec 2014: 4.23%)

10,000,000 Groupama 29/10/2049 11,441,442 1.59

500,000 Groupama 29/10/2049 - Euronext 572,072 0.08

Total France 12,013,514 1.67

Ireland: 3.02% (31 Dec 2014: 4.27%)

19,160,000 UT2 Funding 30/06/2016 21,692,311 3.02


Italy: 0.77% (31 Dec 2014: 0.00%)

3,500,000 Generali Finance 29/06/2049 5,557,166 0.77

Total Italy 5,557,166 0.77

Luxembourg: 0.17% (31 Dec 2014: 0.84%)

1,429,000 Gaz Capital 06/02/2028 1,243,230 0.17


Netherlands: 0.00% (31 Dec 2014: 0.94%)

Spain: 0.50% (31 Dec 2014: 0.00%)

3,194,052 Cemex TL B2 14/02/2017 3,543,983 0.50

Total Spain 3,543,983 0.50


4,370,000 Barclays Bank 29/12/2049 4,774,225 0.67

1,450,000 Prudential 20/07/2055 2,201,535 0.31


Total Floating Rate Notes 65,971,189 9.19

98






Credit Default Swaps: 1.31% (31 Dec 2014: 0.85%)




5,450,000 Arcelormittal 1% 20/09/2020 (BNP Paribas) 515,636 0.08

950,000 Arcelormittal 1% 20/09/2020 (Barclays) 89,882 0.01

12,000,000 Glencore International 1% 20/09/2020 (BNP Paribas) 444,578 0.06

9,750,000 Safeway 1% 20/09/2020 (BNP Paribas) 89,724 0.01

Total European Union 1,139,820 0.16


15,000,000 Alcoa Income 1% 20/09/2020 (Credit Suisse) 717,780 0.10

17,000,000 Sealed Air Corporation 1% 20/09/2020 (Credit Suisse) 479,976 0.07



(Buy Protection) - Unrealised Gains 2,337,576 0.33




(9,350,000) Airbus 1% 20/06/2017 (BNP Paribas) 134,822 0.02

(10,000,000) Airbus 1% 20/09/2017 (Citigroup) 160,064 0.02

(2,000,000) Airbus 1% 20/09/2017 (Citigroup) 32,013 -

(5,000,000) Airbus 1% 20/09/2017 (Credit Suisse) 80,032 0.01

(4,000,000) Airbus 1% 20/09/2017 (Citigroup) 64,026 0.01

(3,000,000) Airbus 1% 20/09/2017 (Credit Suisse) 47,721 0.01


(5,000,000) Schaeffler Finance 5% 20/09/2020 (BNP Paribas) 873,563 0.12

(9,350,000) Volkswagen 1% 20/06/2017 (BNP Paribas) 123,140 0.02

(4,350,000) Volkswagen 1% 20/06/2017 (BNP Paribas) 57,290 0.01

(6,000,000) Volkswagen 1% 20/09/2017 (Barclays) 86,803 0.01

(3,000,000) Volkswagen 1% 20/09/2017 (Credit Suisse) 43,402 0.01


(4,000,000) Volkswagen 1% 20/09/2017 (Citigroup) 57,869 0.01


Total European Union 2,207,489 0.31

99






Unrealised Gains: 0.98% (31 Dec 2014: 0.58%) (continued)


(12,000,000) Bombardier Income 5% 20/03/2016 (Goldman Sachs) 361,380 0.05

(2,000,000) Chesapeake Energy 5% 20/03/2016 (Goldman Sachs) 47,535 0.01

(3,500,000) Chesapeake Energy 5% 20/03/2016 (Goldman Sachs) 83,186 0.01

(13,000,000) General Motors 5% 20/09/2020 (Barclays) 2,281,389 0.32

(1,400,000) International Lease 5% 20/09/2020 (BNP Paribas) 211,697 0.03

(5,000,000) International Lease 5% 06/20/2021 (Barclays) 811,285 0.11

(2,000,000) Mgm Resorts 5% 20/06/2016 (Goldman Sachs) 79,272 0.01

(8,000,000) Mgm Resorts 5% 20/06/2016 (Goldman Sachs) 319,140 0.05

(6,000,000) Sprint Communications 5% 20/06/2016 (Goldman Sachs) 224,372 0.03

(7,000,000) Sprint Communic 5% 20/09/2016 (Barclays) 325,042 0.05

(6,750,000) Weatherford International 1% 20/03/2016 (Citigroup) 22,743 -

(5,000,000) Weatherford International 1% 20/09/2016 (BNP Paribas) 21,598 -

(5,000,000) Weatherford International 1% 20/09/2016 (Merrill Lynch) 21,598 -

(2,000,000) Weatherford International 1% 20/09/2016 (Merrill Lynch) 12,094 -

(3,000,000) Weatherford International 1% 20/09/2016 (BNP Paribas) 14,600 -



(Sell Protection) - Unrealised Gains 7,044,420 0.98

Total Credit Default Swaps 9,381,996 1.31




$

Northern Trust USD 57,173,550 EUR 51,000,000 1.1211 16/09/2015 290,497 0.05

State Street GBP 50,195,600 USD 78,886,351 1.5716 31/07/2015 41,866 0.01

Northern Trust USD 5,604,975 EUR 5,000,000 1.1210 16/09/2015 28,205 -





State Street GBP 51,210,000 USD 80,516,459 1.5723 31/07/2015 6,814 -

HSBC Bank USD 6,287,600 GBP 4,000,000 1.5719 16/09/2015 120 -

100





Forward Currency Contracts: 0.06% (31 Dec 2014: 0.63%) (continued)



$


State Street EUR 110,000 USD 122,595 1.1145 31/07/2015 10 -




Contracts Gain/(loss) Net Assets

$


Goldman Sachs Treasury Bond September 2015 USD (88) 445,500 0.07

Goldman Sachs US 10 Year Note September 2015 USD (224) 248,500 0.03



Total Financial Derivative Instrument 10,514,491 1.47


Financial Derivative Instruments: (0.84)% (31 Dec 2014: (1.61)%)

Credit Default Swaps: (0.69)% (31 Dec 2014: (1.45)%)


Unrealised Losses: (0.51)% (31 Dec 2014: (1.17)%)

European Union: (0.25)% (31 Dec 2014: (0.93)%)

5,000,000 Banco Comercial Portugues 5% 20/09/2019 (Barclays) (514,588) (0.07)

900,000 Banco Comercial Portugues 5% 20/09/2019 (JP Morgan) (89,397) (0.01)

2,000,000 Banco Comercial Portugues 5% 20/09/2019 (Merrill Lynch) (198,661) (0.03)

4,250,000 Banco Popolare 5% 20/06/2020 (BNP Paribas) (704,210) (0.10)

13,000,000 Lanxess Akteingesellschaft 1% 20/09/2020 (Barclays) (200,213) (0.03)

13,000,000 Stmicroelectron 1% 20/09/2020 (Goldman Sachs) (57,150) (0.01)

Total European Union (1,764,219) (0.25)

101




Holdings Financial liabilities at fair value through profit or loss $ Net Assets

Credit Default Swaps: Pay Fixed (Buy Protection)

Unrealised Losses: (0.51)% (31 Dec 2014: (1.17)%) (continued)


13,000,000 Goodyear 5% 20/09/2020 (Barclays) (1,842,050) (0.26)

Total United States (1,842,050) (0.26)


(Buy Protection) - Unrealised Losses (3,606,269) (0.51)


Unrealised Losses: (0.18)% (31 Dec 2014: (0.28)%)

European Union: (0.05)% (31 Dec 2014: 0.00%)

(9,600,000) Anglo American 1% 20/09/2020 (BNP Paribas) (394,462) (0.05)



(9,120,000) Chesapeake Energy 5% 20/09/2020 (Goldman Sachs) (235,187) (0.03)

(3,000,000) Dell 1% 20/06/2021 (Goldman Sachs) (269,961) (0.04)

(2,000,000) Dell 1% 20/06/2021 (Goldman Sachs) (179,974) (0.03)

(4,000,000) Iheartcommunications 5% 20/03/2016 (JP Morgan) (55,660) (0.01)

(2,500,000) Iheartcommunications 5% 20/06/2016 (Goldman Sachs) (70,620) (0.01)

(800,000) Iheartcommunications 5% 20/06/2016 (Merrill Lynch) (22,598) -

(5,435,000) Transocean 1% 20/03/2017 (JP Morgan) (89,851) (0.01)

(500,000) Transocean 1% 20/03/2017 (Credit Suisse) (8,266) -



(Sell Protection) - Unrealised Losses (1,326,579) (0.18)

Total Credit Default Swaps (4,932,848) (0.69)

Forward Currency Contracts: (0.15)% (31 Dec 2014: (0.09)%)

Counterparty Currency Currency Currency Maturity Unrealised % of

Buys Sells Rate Date Loss Net Assets

$


102



Fair Value % of

Financial liabilities at fair value through profit or loss $ Net Assets

Forward Currency Contracts: (0.15)% (31 Dec 2014: (0.09)%) (continued)

Counterparty Currency Currency Currency Maturity Unrealised % of

Buys Sells Rate Date Loss Net Assets

$

State Street GBP 8,586 USD 13,501 1.5725 31/07/2015 - -

State Street EUR 982 USD 1,098 1.1189 31/07/2015 (4) -



State Street GBP 40,093,188 USD 63,043,491 1.5724 31/07/2015 (439) -


Northern Trust USD 9,430,290 GBP 6,000,000 1.5717 16/09/2015 (930) -

Northern Trust USD 1,570,925 GBP 1,000,000 1.5709 16/09/2015 (945) -

Northern Trust EUR 6,000,000 USD 6,712,260 1.1187 16/09/2015 (20,136) -

Northern Trust USD 10,982,405 GBP 7,000,000 1.5689 16/09/2015 (20,685) -


Northern Trust USD 11,106,200 EUR 10,000,000 1.1106 16/09/2015 (47,340) (0.01)

State Street EUR 13,315,342 USD 14,898,004 1.1189 31/07/2015 (56,882) (0.01)

Northern Trust USD 16,650,300 EUR 15,000,000 1.1100 16/09/2015 (80,010) (0.02)

State Street GBP 51,611,000 USD 81,241,236 1.5741 31/07/2015 (87,426) (0.01)

Barclays USD 51,132,345 GBP 33,000,000 1.5495 16/09/2015 (739,365) (0.10)

Total Fair Value Losses on Forward Currency Contracts (1,082,222) (0.15)

Futures Contracts - Unrealised Losses: 0.00% (31 Dec 2014: (0.07)%)



$

Germany: 0.00% (31 Dec 2014: 0.00%)

Goldman Sachs Eurx Euro-Bund September 2015 EUR (19) (33,121) -

Total Germany (33,121) -

United States: 0.00% (31 Dec 2014: (0.07)%)

Total Futures Contracts - Unrealised Losses (33,121) -

Total Financial Derivative Instrument (6,048,191) (0.84)

Total Financial liabilities at fair value through profit or loss (6,048,191) (0.84)

103



Fair Value % of



through profit or loss (Cost: $ 621,125,868) (31 Dec 2014: 88.84%)

Cash at bank (31 Dec 2014: 10.91%) 229,641,019 32.01

Other Net Liabilities (31 Dec 2014: 0.25%) (130,621,419) (18.21)



% of Total

Portfolio Classification Assets



OTC financial derivaive instruments 1.09


Cash 25.54

Other net assets 5.01

Total 100.00

The counterparties for the forward currency contracts are Northern Trust (S&P: A+, Moody’s: A2), State Street Bank (S&P: AA-, Moody’s: Aa2) and Trust Company, HSBC Bank (S&P: AA-, Moody’s: Aa2) and Barclays Bank (S&P: A-, Moody’s: A2). The clearing broker for the futures contracts is Goldman Sachs (S&P: A, Moody’s: A1). The counterparties for the Credit Default Swaps are: Barclays (S&P: A-, Moody’s: A2), BNP Paribas (S&P: A+, Moody’s: A1), Citigroup (S&P: A, Moody’s: Baa1 ), Credit Suisse (S&P: A, Moody’s: Aa3), Goldman Sachs (S&P: A, Moody’s: A1), JP Morgan (S&P: A, Moody’s: A3), Merrill Lynch (S&P: A, Moody’s: Baa1).

104



Nominal Fair Value % ofHolding Financial assets at fair value through profit or loss £ Net Assets

Certificates of Deposit: 14.45% (31 Dec 2014: 13.28%)

Sweden: 4.82% (31 Dec 2014: 0.00%)

1,500,000 Svenska Handelsbkn 0.50% 11/08/2015 1,500,000 4.82



1,000,000 The Bank Of Nova Scotia 0.50% 01/09/2015 1,000,000 3.21

2,000,000 The Royal Bank Of Scotland 0.60% 11/11/2015 2,000,000 6.42


Total Certificates of Deposit 4,500,000 14.45

Commercial Paper: 14.44% (31 Dec 2014: 19.90%)

Finland: 4.82% (31 Dec 2014: 6.64%)

1,500,000 Pohjola Bank 16/07/2015 1,499,742 4.82


France: 0.00% (31 Dec 2014: 3.32%) - -

Germany: 3.21% (31 Dec 2014: 6.63%)

1,000,000 FMS Wertmanagement 27/07/2015 999,637 3.21

Total Germany 999,637 3.21

Netherlands: 3.20% (31 Dec 2014: 0.00%)

1,000,000 Bank Nederlandse Gemeenten 22/10/2015 998,306 3.20

Total Netherlands 998,306 3.20

Sweden: 0.00% (31 Dec 2014: 3.31%)

United Arab Emirates: 3.21% (31 Dec 2014: 0.00%)

1,000,000 National Bank Of Abu Dhabi 02/07/2015 999,973 3.21

Total United Arab Emirates 999,973 3.21

Total Commercial Paper 4,497,658 14.44

105




Holding Financial assets at fair value through profit or loss £ Net Assets

Government Bonds: 15.05% (31 Dec 2014: 0.00%)








Total Government Bonds 4,686,808 15.05

Equities: 3.93% (31 Dec 2014: 0.00%)

Guernsey: 0.38% (31 Dec 2014: 0.00%)

76,969 HICL Infrastructure 118,763 0.38

Total Guernsey 118,763 0.38

Hong Kong: 3.55% (31 Dec 2014: 0.00%)

239,000 China Asset Management CSI 300 Index 1,104,482 3.55



Reits: 5.56% (31 Dec 2014: 8.90%)


10,932 British Land Reits 87,347 0.28

13,438 Capital & Counties Properties 58,119 0.18

48,130 Centrica 127,689 0.41

1,515 Derwent London Reits 51,601 0.17

6,603 Great Portland Estates Reits 51,503 0.17

10,055 Hammerson Reits 61,889 0.20

16,605 Intu Properties Reits 51,260 0.16

7,891 Land Securities Reits 95,481 0.31

29,350 National Grid 243,007 0.78

25,624 Pennon 210,501 0.68

13,187 Segro Reits 53,130 0.17

9,747 Severn Trent 206,052 0.66

5,532 Shaftesbury Reits 47,796 0.15

106





Reits: 5.56% (31 Dec 2014: 8.90%) (continued)


10,257 SSE 158,984 0.51

7,476 UNITE Group 42,688 0.14

20,064 United Utilities 183,084 0.59


Total Reits 1,730,131 5.56


Credit Default Swaps: Receive Fixed (Sell Protection) - Unrealised Gains: 1.51% (31 Dec 2014: 1.44%)


(2,980,000) CDX Itraxx Europe Crossover Series 5% 20/06/2020 (Barclays) 153,561 0.49

(250,000) CDX Itraxx Europe Crossover Series 5% 20/06/2020 (Barclays) 12,883 0.04

(100,000) CDX Itraxx Europe Crossover Series 5% 20/06/2020 (Barclays) 5,153 0.02


Luxembourg: 0.02% (31 Dec 2014: 0.00%)

(123,750) Baltic Investments 4,699 0.02

Total Luxembourg 4,699 0.02


(6,625,000) Cdx.Na.Hy.24 5% 20/06/2020 (JPMorgan Chase) 251,567 0.81

(99,000) Cdx.Na.Hy.24 5% 20/06/2020 (Citibank) 3,759 0.01

(346,500) Cdx.Na.Hy.24 5% 20/06/2020 (Citibank) 13,157 0.04

(643,500) Cdx.Na.Hy.24 5% 20/06/2020 (Barclays) 24,435 0.08



(Sell Protection) - Unrealised Gains 469,214 1.51

107



Nominal Fair Value % ofHolding Financial assets at fair value through profit or loss £ Net Assets

Total Return Swaps - Unrealised Gains: 0.23% (31 Dec 2014: 1.37%)


228,488 Xret Rec Dbglsnve Pay Fix 06/06/2020 (Deutsche Bank) - -

Total European Union - -


2,378,200 Xret Rec Sonia-25Bps Pay Qx6K 03/11/2015 (Deutsche Bank) 18,303 0.06

3,213,784 Xret Rec Ibxxukln Pay Sonia+20Bps 03/11/2015 (Deutsche Bank) - -

Total United Kingdom 18,303 0.06


(132,000) Xret Rec Dblcf46U Pay Fix 06/07/2015 (Deutsche Bank) - -

132,000 Xret Rec Dblcf46U Pay Fix 06/07/2015 (Deutsche Bank) 2,660 0.01

241,900 Xret Rec Dblcf47U Pay Fix 06/04/2020 (Deutsche Bank) - -

4,195,000 Xret Rec Dblcf46U Pay Fix 06/07/2020 (Deutsche Bank) 48,966 0.16


Total Total Return Swaps - Unrealised Gains 69,929 0.23




£

Germany: 0.09% (31 Dec 2014: 0.33%)

Goldman Sachs Euro Stoxx50 September 2015 EUR 57 29,643 0.09

Total Germany 29,643 0.09

Japan: 0.01% (31 Dec 2014: 0.04%)

Goldman Sachs 10 Year Bond September 2015 JPY 3 2,530 0.01

Total Japan 2,530 0.01

United Kingdom: 0.00% (31 Dec 2014: 0.01%) - -

United States: 0.00% (31 Dec 2014: 0.46%) - -


108








£

Northern Trust GBP 561,814 EUR 785,000 0.7157 17/07/2015 3,142 0.01

Northern Trust USD 110,000 GBP 69,543 0.6322 17/07/2015 461 -

Northern Trust GBP 392,130 USD 616,000 0.6366 17/07/2015 106 -

Northern Trust GBP 57,349 USD 90,000 0.6372 17/07/2015 73 -

HSBC EUR 25,000 GBP 17,792 0.7117 17/07/2015 - -


Total Financial Derivative Instruments 575,098 1.85



Financial Derivative Instruments: 0.00% (31 Dec 2014: (1.40%))

Total Return Swaps - Unrealised Losses: (0.17%)(31 Dec 2014: (1.28%))

European Union: (0.01%) (31 Dec 2014: (0.01%))

(228,488) Xret Rec Dbglsnve Pay Fix 06/07/2020 (Deutsche Bank) (2,648) (0.01)


United Kingdom: (0.15%) (31 Dec 2014: (1.08%))

(2,378,200) Xret Rec Sonia-25Bps Pay Qx6K 03/11/2015 (Deutsche Bank) - -

(3,213,784) Xret Rec Ibxxukln Pay Sonia+20Bps 03/11/2015 (Deutsche Bank) (45,482) (0.15)


United States: (0.01%) (31 Dec 2014: (0.19%))

(241,900) Xret Rec Dblcf47U Pay Fix 06/04/2020 (Deutsche Bank) (3,276) (0.01)

(4,195,000) Xret Rec Dblcf46U Pay Fix 06/07/2020 (Deutsche Bank) - -


Total Total Return Swaps - Unrealised Losses (51,406) (0.17)

109



Fair Value % of

Financial assets at fair value through profit or loss £ Net Assets

Futures Contracts - Unrealised Losses: (0.34%) (31 Dec 2014: (0.11%))



£

Germany: (0.20%) (31 Dec 2014: (0.00%))

Goldman Sachs Euro-Bund Eux September 2015 EUR 29 (63,598) (0.20)


Grand Cayman: (0.00%) (31 Dec 2014: (0.02%))

Japan: (0.03%) (31 Dec 2014: (0.08%))

Goldman Sachs OSE Topix September 2015 JPY 20 (8,556) (0.03)

Total Japan (8,556) (0.03)

United Kingdom: (0.05%) (31 Dec 2014: (0.00%))

Goldman Sachs Long Gilt September 2015 GBP (14) (8,660) (0.03)

Goldman Sachs FTSE 100 Equity Futures September 2015 GBP 9 (7,780) (0.02)


United States: (0.06%) (31 Dec 2014: (0.01%))

Goldman Sachs 10 Year Treasury Note September 2015 USD 27 (4,223) (0.02)

Goldman Sachs S&P 500 Emini September 2015 USD 16 (12,619) (0.04)

Goldman Sachs Russell 2000 Mini September 2015 USD 2 (1,242) -



Forward Currency Contracts: (0.01%) (31 Dec 2014: (0.01%))



£

Northern Trust EUR 40,000 GBP 28,549 0.7137 17/07/2015 (82) -

HSBC GBP 57,159 USD 90,000 0.6351 17/07/2015 (117) -

Northern Trust CNH 1,700,000 GBP 174,282 0.1025 17/07/2015 (159) -

110




Holding Financial liabilities at fair value through profit or loss £ Net Assets

Forward Currency Contracts: (0.01%) (31 Dec 2014: (0.01%)) (continued)



£

Northern Trust EUR 30,000 GBP 21,520 0.7173 17/07/2015 (169) -

Northern Trust GBP 35,588 CNH 350,000 0.1017 17/07/2015 (261) -

Northern Trust GBP 48,924 JPY 9,540,000 0.0051 17/07/2015 (694) -

Northern Trust GBP 1,247,439 CNH 12,190,000 0.1023 17/07/2015 (1,120) (0.01)



Total Financial liabilities at fair value through profit or loss (160,686) (0.52)


(31 December 2014: 44.34%) (Cost: £ 23,645,540)

Cash at bank (31 December 2014: 55.55%) 13,957,334 44.82

Other Net Assets (31 December 2014: 0.11%) 129,458 0.42




Assets



Certificate of Deposit 14.30

Commercial Paper 14.29



Cash 44.36

Other assets 0.94

Total 100.00

The counterparty for the forward currency contracts is Northern Trust (S&P: A+, Moody’s: A2) and HSBC Bank (S&P: AA-, Moody’s: Aa2). The clearing broker for the futures is Goldman Sachs (S&P: A, Moody’s: A1). The counterparties for the Credit Default Swaps are: Barclays (S&P: A-, Moody’s: A2), Citibank (S&P: A, Moody’s: A1), JP Morgan (S&P: A, Moody’s: A3) The counterparty for the Total Return Swaps is Deutsche Bank (S&P: BBB+, Moody’s: A3).

111


Hermes Global Small Cap Equity Fund


Equities: 93.55%

Australia: 0.53%

25,943 BT Investment Management 168,316 0.53

Total Australia 168,316 0.53

Austria: 1.25%

6,433 Schoeller-Bleckmann 395,223 1.25

Total Austria 395,223 1.25

Canada: 1.73%

31,767 CAE 377,442 1.20

5,005 Gildan Activewear 166,717 0.53

Total Canada 544,159 1.73

France: 0.99%

13,900 Mercialys 311,828 0.99


Germany: 4.41%

8,449 Jungheinrich 578,120 1.83

4,416 MTU Aero Engines 416,413 1.32

8,336 SHW 396,196 1.26


Hong Kong: 0.27%

36,000 Stella International 85,909 0.27

Total Hong Kong 85,909 0.27

Ireland: 6.96%

12,329 DCC 969,720 3.07

45,199 Glanbia 885,369 2.81

3,923 Paddy Power 339,660 1.08


112





Equities: 93.55% (continued)

Italy: 0.63%

26,471 Cerved Information Solutions 200,216 0.63

Total Italy 200,216 0.63

Japan: 9.49%

63,000 77 Bank 384,532 1.22

12,900 FP 469,580 1.49

14,800 Hitachi Capital 391,813 1.24

7,600 Hoshizaki Electric 447,114 1.42

6,600 Kintetsu World Express 296,605 0.95

23,200 Open House 392,591 1.24

13,600 TS Tech 363,933 1.15

5,300 Yaoko 246,411 0.78

Total Japan 2,992,579 9.49

Netherlands: 1.40%

14,750 Aalberts Industries 442,295 1.40

Total Netherlands 442,295 1.40

Singapore: 0.96%

592,700 Cambridge Industrial Trust 301,735 0.96

Total Singapore 301,735 0.96

South Africa: 1.15%

158,921 Petra Diamonds 363,378 1.15

Total South Africa 363,378 1.15

Sweden: 1.44%

43,192 Nobia 454,573 1.44

Total Sweden 454,573 1.44

113






Switzerland: 1.32%

2,934 Dufry 416,439 1.32

2,934 Dufry Rights - -

Total Switzerland 416,439 1.32

United Kingdom: 4.82%

105,090 Beazley 487,850 1.55

234,426 Faroe Petroleum 316,824 1.00

94,393 Paragon Group of Companies 614,567 1.95

56,125 Parkmead Group 100,328 0.32


United States: 56.20%

6,073 AptarGroup 387,093 1.23

3,251 Bio-Rad Laboratories 488,463 1.55

12,318 Brown & Brown 403,661 1.28

4,093 CACI International 334,685 1.07

8,400 Carpenter Technology Corporation 334,572 1.06

6,933 CLARCOR 427,766 1.36

8,152 Clean Harbors 435,398 1.38

15,485 Cognex 730,892 2.32

5,229 Eagle Materials 395,940 1.26

17,202 East West Bancorp 767,897 2.43

13,034 FLIR Systems 406,791 1.29

9,327 Haemonetics 385,578 1.22

21,643 Intersil 275,083 0.87

6,861 IPG Photonics 564,386 1.79

6,646 Jack Henry & Associates 434,383 1.38

11,629 Jarden 606,685 1.92

10,748 John Wiley & Sons 586,733 1.87

9,328 Kirby 714,058 2.26

10,878 LKQ 328,624 1.04

13,505 Masimo 520,618 1.65

18,314 MDU Resources 357,489 1.13

7,174 MSC Industrial Direct 499,239 1.58

18,437 National Instruments 546,288 1.73

6,105 Reinsurance of America 577,777 1.83

15,452 RPM International 758,539 2.40

17,927 Sally Beauty Holdings 550,717 1.75

3,624 Signature Bank 527,509 1.67

11,431 Silicon Laboratories 616,245 1.95

3,996 Snap-On 633,446 2.01

114





United States: 56.20% (continued)

16,554 St Joe 253,607 0.80

4,100 US Silica 118,080 0.37

9,912 Waddell & Reed Financial 467,053 1.48

5,598 WD-40 483,219 1.53

11,394 West Pharmaceutical Services 659,599 2.09

4,176 WEX 465,875 1.48

12,968 Wintrust Financial 685,489 2.17





Financial Derivative Instruments: (0.02)%

Futures Contracts - Unrealised Losses: (0.02)%


Contracts Loss Net Assets$

United States: (0.02)%

Goldman Sachs Fut. US Russell 2000 Sep 2015 USD 6 (5,760) (0.02)



Forward Currency Contracts: 0.00%


Counterparty Buys Sells Rate Date Loss Net Assets $



State Street GBP 995 USD 1,569 1.5777 31/07/2015 (7) -


Total Fair Value Losses on Forward Currency Contracts (13) -


Total financial liabilities at fair value through profit or loss (5,773) (0.02)

115



Fair Value % of



(Cost: $ 29,977,732)

Cash at bank 1,999,604 6.34

Other Net Assets 41,775 0.13



Portfolio Classification % of

Total Assets



Cash 6.34

Other assets 0.16

Total 100.00


The clearing broker for the futures contracts is Goldman Sachs (S&P: A, Moody’s: A1).

116




Equities: 97.71%

Canada: 4.41%

Consumer, Cyclical: 4.41%

7,700 Alimentation Couche-Tard 330,813 2.27

9,400 Gildan Activewear 313,114 2.14

Total Consumer, Cyclical 643,927 4.41



Basic Materials: 4.08%

2,900 Airgas 305,892 2.10

5,900 RPM International 289,631 1.98

Total Basic Materials 595,523 4.08

Communications: 5.05%

7,800 Comcast 467,844 3.20

500 Google 270,625 1.85

Total Communications 738,469 5.05

Consumer, Cyclical: 8.70%

4,100 CarMax 272,035 1.86

3,100 Costco Wholesale 420,639 2.88

5,600 Jarden 292,152 2.00

5,700 Las Vegas Sands 285,798 1.96


Consumer, Non-cyclical: 26.36%

4,400 Baxter International 310,860 2.13

5,200 Danaher 440,700 3.02

4,500 Equifax 438,480 3.00

5,000 Express Scripts 444,200 3.04

4,400 Johnson & Johnson 429,792 2.94

4,700 Kellogg 294,220 2.01

4,800 MasterCard 444,096 3.04

4,200 MEDNAX 311,136 2.13

1,900 Valeant Pharmaceuticals International 418,589 2.87

5,500 West Pharmaceutical Services 318,395 2.18


117






Energy: 5.43%

3,052 EOG Resources 263,235 1.80

7,000 Kinder Morgan 268,520 1.84

1,900 Pioneer Natural Resources 261,022 1.79

Total Energy 792,777 5.43

Financial: 15.42%

3,700 American Express 287,860 1.97

5,000 American International 307,950 2.10

3,000 Chubb Corp 284,010 1.94

6,900 East West Bancorp 308,016 2.11

2,400 Ellie Mae 164,376 1.13

4,200 Health Care REIT 276,192 1.89

400 Markel 318,128 2.18

3,200 PNC Financial Services Group 306,112 2.10


Industrial: 8.76%

6,100 Cognex 287,920 1.97

3,700 Kirby 283,235 1.94

1,600 Lockheed Martin 296,832 2.03

2,900 Martin Marietta Materials 412,148 2.82


Technology: 16.52%

4,600 Analog Devices 294,354 2.01

4,600 Apple 572,838 3.93

1,500 IPG Photonics 123,390 0.84

4,600 Jack Henry & Associates 300,656 2.06

6,400 Linear Technology 283,840 1.94

12,700 Microsoft 563,499 3.86

6,800 Oracle 274,856 1.88


Utilities: 2.98%

8,902 American Water Works 435,575 2.98



118



Fair Value % ofFinancial assets at fair value through profit or loss $ Net Assets

Financial Derivative Instruments: 0.00%



Counterparty Buys Sells Rate Date Loss $ Net Assets





Total Fair Value Losses on Forward Currency Contracts (13) -

Total Financial Derivative Instruments (13) -

Total Financial liabilities at fair value through profit or loss (13) -


(Cost: $ 14,631,832)

Cash at bank 303,113 2.07

Other Net Assets 32,100 0.22



Assets



Cash 2.07



119





Corporate Bonds: 70.81%

Belgium: 0.46%

200,000 Solvay Finance FRN 29/05/2049 229,927 0.46

Total Belgium 229,927 0.46

Brazil: 3.55%

500,000 Marfrig Europe 8.375% 09/05/2018 506,100 1.01

1,200,000 Vale Overseas 6.25% 23/01/2017 1,270,038 2.54

Total Brazil 1,776,138 3.55

Canada: 0.60%

300,000 Canadian Natural Resources 1.75% 15/1/2018 298,155 0.60


Chile: 0.41%

200,000 VTR Finance 6.875% 15/01/2024 204,870 0.41

Total Chile 204,870 0.41

France: 1.83%

700,000 Groupama FRN 29/10/2049 800,901 1.60

100,000 Pernod Ricard 4.875% 18/03/2016 114,942 0.23


Germany: 5.86%

500,000 Daimler 1.25% 01/12/2017 780,349 1.56

150,000 Deutsche Telekom International Finance 2.25% 06/03/2017 151,795 0.30

1,000,000 Fresenius US Finance II 9.00% 15/07/2015 1,002,224 2.01

100,000 Schaeffler Finance 4.25% 15/05/2018 113,868 0.23

331,000 Schaeffler Finance PIK 6.25% 15/11/2019 350,033 0.70

500,000 Siemens Financieringsmaatschappij 5.75% 17/10/2016 530,765 1.06


120





Corporate Bonds: 70.81% (continued)

India: 1.39%

700,000 Vedanta Resources Jersey 5.50% 13/07/2016 694,750 1.39

Total India 694,750 1.39

Ireland: 2.86%

250,000 Ardagh Packaging Finance 9.25% 15/10/2020 296,656 0.59

1,000,000 UT2 Funding 5.321% 30/06/2016 1,132,167 2.27


Italy: 8.13%

1,000,000 FCA Capital Ireland 2.00% 23/10/2019 1,121,845 2.24

250,000 Generali Finance FRN 29/06/2049 396,940 0.79

920,000 Intesa Sanpaolo 3.875% 16/01/2018 950,317 1.90

1,000,000 Telecom Italia 5.625% 29/12/2015 1,600,253 3.20

Total Italy 4,069,355 8.13

Luxembourg: 4.07%

1,500,000 ArcelorMittal 4.50% 05/08/2015 1,501,403 3.00

525,000 ArcelorMittal 4.50% 01/03/2016 535,500 1.07


Netherlands: 4.42%

700,000 ABN AMRO Bank FRN 29/03/2049 789,221 1.57

100,000 Cooperatieve Centrale Raiffeisen-Boerenleenbank 4.00% 10/09/2015 158,225 0.32

1,250,000 NXP/ NXP Funding 3.50% 15/09/2016 1,265,625 2.53


Russian Federation: 1.07%

350,000 MMC Finance 5.55% 28/10/2020 348,646 0.69

200,000 SeverstalVia Steel Capital 5.90% 17/10/2022 188,500 0.38

Total Russian Federation 537,146 1.07

121






Spain: 0.23%

100,000 Telefonica Emisiones 4.375% 02/02/2016 114,123 0.23

Total Spain 114,123 0.23

Switzerland: 0.21%

100,000 Credit Suisse USA 5.375% 02/03/2016 103,088 0.21

Total Switzerland 103,088 0.21

United Kingdom: 14.04%

200,000 AA Bond 9.50% 31/07/2019 344,264 0.69

100,000 Diageo Capital 1.50% 05/11/2017 100,054 0.20

900,000 FCE Bank 5.125% 16/11/2015 1,434,622 2.87

100,000 Imperial Tobacco Finance 5.50% 22/11/2016 165,356 0.34

54,800 Lloyds Bank 5.375% 07/09/2015 86,923 0.17

100,000 PGH Capital 5.75% 07/07/2021 167,154 0.33

350,000 Prudential FRN 20/07/2055 531,405 1.06

200,000 Rentokil Initial 5.75% 31/03/2016 324,501 0.65

500,000 Royal Bank of Scotland 6.935% 09/04/2018 625,122 1.25

1,000,000 SABMiller 2.45% 15/01/2017 1,015,867 2.03

1,000,000 Tesco 2.70% 05/01/2017 1,008,300 2.02

100,000 Virgin Media Secured Finance 5.50% 15/01/2021 167,375 0.33

520,000 Vodafone 5.375% 05/12/2017 882,303 1.76

100,000 WPP 6.00% 04/04/2017 169,245 0.34



100,000 AbbVie 1.20% 06/11/2015 100,100 0.20

300,000 Ally Financial 3.75% 18/11/2019 298,500 0.60

1,000,000 Ally Financial 3.50% 18/07/2016 1,017,500 2.03

100,000 AT&T 2.40% 15/08/2016 101,403 0.20

135,000 Bank of America 6.50% 01/08/2016 142,445 0.28

500,000 Chrysler Group LLC/ CG Co-Issuer 8.25% 15/06/2021 546,250 1.09

500,000 CIT 5.00% 15/05/2017 516,850 1.03

100,000 Citigroup 5.50% 18/11/2015 159,788 0.32


100,000 Cox Communications 5.50% 01/10/2015 101,133 0.20

180,000 Dell 3.10% 01/04/2016 180,450 0.36

1,000,000 Denali Borrower/Finance Coporation 5.625% 15/10/2020 1,053,750 2.11

122







100,000 Direct Holding LLC/Direct Financing 3.12% 15/02/2016 101,200 0.20

1,000,000 Dish DBS Corporation 7.125% 01/02/2016 1,027,500 2.05

116,000 GE Capital UK Funding 4.125% 28/09/2017 192,919 0.39

100,000 HJ Heinz 4.125% 01/07/2027 157,134 0.32

500,000 JPMorgan Chase 4.25% 25/1/2017 821,203 1.64

24,000 Kinder Morgan Finance LLC 5.70% 05/01/2016 24,534 0.05

110,000 LG&E and KU Energy 2.125% 15/11/2015 110,417 0.22

1,500,000 Lorillard Tobacco Company 3.50% 04/08/2016 1,534,061 3.07

500,000 MarkWest Energy Partners/Finance 4.875% 01/06/2025 490,000 0.98

100,000 Plains All American Pipeline 3.95% 15/09/2015 100,571 0.20

200,000 Range Resources 5.00% 15/08/2022 197,000 0.39

150,000 Valeant Pharmaceuticals International 4.50% 15/05/2023 162,636 0.33

100,000 Verizon Communications 2.00% 01/11/2016 101,044 0.20

100,000 Viacom 6.25% 30/04/2016 104,413 0.21

500,000 Zoetis 1.875% 01/02/2018 498,926 1.00



Asset Backed Securities: 0.59%

Brazil: 0.59%

295,000 Petrobras Global Finance 3.875% 27/01/2016 296,628 0.59

Total Brazil 296,628 0.59

Total Asset Backed Securities 296,628 0.59


European Union: 0.27%

800,000 Arcelormittal 1.00% 20/09/2020 (BNP Paribas) 75,690 0.15

150,000 Arcelormittal 1.00% 20/09/2020 (Barclays) 14,192 0.03

1,000,000 Glencore International 1.00% 20/09/2020 (BNP Paribas) 37,048 0.07

1,000,000 Safeway 1.00% 20/09/2020 (BNP Paribas) 9,202 0.02



123







1,000,000 Alcoa Income 1.00% 20/09/2020 (Credit Suisse) 47,852 0.10

1,000,000 Dell Income 1.00% 20/09/2020 (Goldman Sachs) 70,684 0.14

1,000,000 Sealed Air Corporation 1.00% 20/09/2020 (Credit Suisse) 28,234 0.06


282,902 0.57

European Union: 0.11%

(650,000) Airbus1% 20/06/2017(BNP Paribas) 9,373 0.02

(500,000) BMW Aktiengesellschaft 1.00% 20/06/2017 (BNP Paribas) 7,176 0.01

(1,000,000) BP 5.00% 20/06/2017 (BNP Paribas) 15,422 0.03

(500,000) Clariant 1.00% 20/06/2017 (BNP Paribas) 7,675 0.02

(650,000) Volkswagen Akti 1.00% 20/06/2017 (BNP Paribas) 8,561 0.02

(650,000) Volkswagen Akti 1.00% 20/06/2017 (BNP Paribas) 8,561 0.01



(1,000,000) Chesapeake Energy Corporation 5.00% 20/06/2016 (Credit Suisse) 27,696 0.06

(1,000,000) Ford Motor 5.00% 20/06/2017 (Credit Suisse) 90,916 0.18

(1,000,000) General Motors 5.00% 20/09/2020 (Credit Suisse) 175,491 0.35

(750,000) International L 5.00% 20/09/2020 (BNP Paribas) 113,409 0.23

(1,000,000) MGM Resorts 5.00% 20/06/2016 (Goldman Sachs) 39,636 0.08

(1,000,000) Sprint Communication 5.00% 20/06/2016 (Barclays) 37,395 0.07

(2,000,000) Weatherford International 1.00% 20/09/2016 (BNP Paribas) 8,639 0.02


549,950 1.10


Unrealised Gains: 0.57%

Total Credit Default Swaps: Pay Fixed (Buy Protection) -


Total Credit Default Swaps: Receive Fixed (Sell

Protection) - Unrealised Gains

124








€

Northern Trust USD 5,605,250 EUR 5,000,000 1.1211 16/09/2015 28,480 0.05

Northern Trust USD 2,830,376 GBP 1,800,000 1.5724 16/09/2015 1,010 -


Total Financial Derivative Instruments 862,342 1.72



Financial Derivative Instruments: (0.93%)

Credit Default Swaps: Pay Fixed (Buy Protection) - Unrealised Losses(0.60%)

European Union: (0.35%)

1,000,000 Lanxess Aktieng 1.00% 20/09/2020 (Barclays) (15,401) (0.03)

1,000,000 Peugeot 5.00% 20/09/2020 (Credit Suisse) (155,974) (0.31)

1,000,000 Stmicroelectron 1.00% 20/09/2020 (Goldman Sachs) (4,396) (0.01)


United States: (0.28%)

1,000,000 The Goodyear Tire & Rubber 5.00% 20/09/2020 (Credit Suisse) (141,696) (0.28)


(317,467) (0.63)

Total Credit Default Swaps: Pay Fixed (Buy Protection) -

Unrealised Losses

125





European Union: (0.11%)

(1,400,000) Anglo American 1.00% 20/09/2020 (BNP Paribas) (57,526) (0.11)



(500,000) Iheart Communications 5.00% 20/09/2016 (Credit Suisse) (14,124) (0.03)

(500,000) Transocean 1.00% 20/03/2017 (Credit Suisse) (8,266) (0.02)


(79,916) (0.16)

Futures Contracts - Unrealised Losses: (0.02%)



€

Germany: (0.01%)

Goldman Sachs Eurex Euro-Bobl September 2015 EUR (7) (5,032) (0.01)


United Kingdom: (0.00%)

Goldman Sachs Long Gilt September 2015 GBP (1) (1,417) -

Total United Kingdom (1,417) -


Goldman Sachs 10 Year Treasury Notes September 2015 USD (5) (5,703) (0.01)




Unrealised Losses: (0.16%)

Total Credit Default Swaps: Receive Fixed (Sell

Protection) - Unrealised Losses

126



Fair Value % of


Forward Currency Contracts: (0.93%)



€

State Street CHF 35 USD 38 1.0717 31/07/2015 - -


State Street CHF 3,960 USD 4,244 1.0717 31/07/2015 (3) -


Northern Trust USD 1,726,912 GBP 1,100,000 1.5699 16/09/2015 (2,145) -

Northern Trust USD 311,659 GBP 200,000 1.5583 16/09/2015 (2,715) (0.01)

Barclays USD 3,873,663 GBP 2,500,000 1.5495 16/09/2015 (56,012) (0.11)


Total Forward Currency Contracts (60,892) (0.12)


Total Financial liabilities at fair value through profit or loss (470,427) (0.93)


through profit or loss (Cost: $ 35,884,675)

Cash at bank 17,703,849 35.39

Cash at Clearing Broker 12,152 0.02

Other Net Liabilities (3,801,545) (7.60)




Assets




Cash 32.16

Other net assets 1.43

Total 100.00

The counterparty for the forward currency contracts is Barclays(S&P: A-, Moody’s: A2), Northern Trust (S&P: A+, Moody’s: A2) and State Street Bank and Trust Company (S&P: AA-, Moody’s: Aa2). The clearing broker for the futures is Goldman Sachs (S&P: A, Moody’s: A1). The counterparties for the Credit Default Swaps are: Barclays (S&P: A-, Moody’s: A2), BNP Paribas (S&P: A+, Moody’s: A1), Credit Suisse (S&P: A, Moody’s: Aa3), Goldman Sachs (S&P: A, Moody’s: A1). The counterparty for the Total Return Swaps is Deutsche Bank (S&P: BBB+, Moody’s: A3).

127

Hermes Investment Funds Public Limited Company Unaudited Balance Sheet As at 30 June 2015

Hermes Global

Emerging Markets

Fund

Hermes Global Equity

Fund

Hermes UK Small and

Mid Cap Companies

Fund

Hermes Sourcecap

European Alpha Fund

Assets Notes $ $ £ €

Financial assets at fair value through profit or loss 565,080,554 388,901,629 200,078,284 749,631,214

Cash and cash equivalents 3 22,128,267 4,138,317 12,418,183 4,268,821

Cash at clearing broker 3 - - - -

Dividends and interest receivable 1,418,920 497,630 491,870 1,191,251

Securities sold receivable 389,655 - - -

Subscriptions receivable - - 6,285 822,669

Sundry debtors 199,642 50,988 15,114 51,753

Total Assets 589,217,038 393,588,564 213,009,736 755,965,708

Liabilities

Financial liabilities at fair value through profit or loss 6,736 - 94,133 2,455

Distributions Payable 13 590 10,098 - 433,716

Securities purchased payable 12,108,269 - 4,538,556 -

Accrued Tax Liability 15 4,655,714 - - -

Sub-custody fee payable 89,285 21,486 2,827 43,041

Redemptions payable - - 748 595,556

Advisory fee payable 4 (b) 11,167 7,969 4,167 14,971

Investment Management fee payable 4 (a) 153,248 66,998 4,189 236,292

Administration fee payable 4 (c) 75,821 61,632 27,312 79,912

Custodian fee payable 4 (d) 28,981 20,486 10,568 35,263

Variation margin payable - - - -

Other accrued expenses 4 (f) 261,745 68,279 23,144 60,275

Total liabilities (excluding net assets attributable to

holders of redeemable participating shares) 17,391,556 256,948 4,705,644 1,501,481

Net assets attributable to holders of redeemable

participating shares 571,825,482 393,331,616 208,304,092 754,464,227

For information on the Net Asset Value per Share and Shares Outstanding on each share class please refer to note 14.

The accompanying notes form an integral part of these Financial Statements

128

Hermes Investment Funds Public Limited Company Unaudited Balance Sheet As at 30 June 2015 (continued)

Hermes Global High

Yield Bond Fund

Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK

Inflation-Linked Bond

Fund

Assets Notes € € $ £

Financial assets at fair value through profit or loss 237,358,178 262,060,572 385,380,695 135,171,267

Cash and cash equivalents 3 18,627,117 811,376 10,950,847 575,257

Cash at clearing broker 3 - - - -

Dividends and interest receivable 3,423,141 - 48,427 302,469

Securities sold receivable 7,872,956 745,626 - -

Subscriptions receivable - - 51,344 -

Sundry debtors 13,758 770,075 55,277 6,127

Total Assets 267,295,150 264,387,649 396,486,590 136,055,120

Liabilities

Financial liabilities at fair value through profit or loss 1,976,139 6,767 11,299 9,695

Distributions Payable 13 106,641 276,135 - -

Securities purchased payable 1,190,334 807,445 - -

Accrued Tax Liability 15 - - - -


Redemptions payable 653,438 70,141 1,399,862 -

Advisory fee payable 4 (b) 5,174 5,116 8,270 -

Investment Management fee payable 4 (a) 47,757 59,480 123,602 10



Variation margin payable 365,772 - - -



holders of redeemable participating shares) 4,446,575 2,055,365 1,652,237 47,980


participating shares 262,848,575 262,332,284 394,834,353 136,007,140



129


Hermes Asia Ex-

Japan Equity Fund


ESG Fund

Hermes Multi

Strategy Credit Fund

Hermes Multi Asset

Inflation Fund

Assets Notes $ $ $ £

Financial assets at fair value through profit or loss 1,874,109,018 45,524,797 624,341,838 17,212,940

Cash and cash equivalents 3 29,626,778 855,679 229,641,019 13,957,334

Cash at clearing broker 3 - - -

Dividends and interest receivable 5,540,188 40,537 7,402,139 41,385

Securities sold receivable 3,215,315 - 4,024,693 105,629

Subscriptions receivable 1,045,469 - - -

Sundry debtors 7,463,202 23,942 33,584,473 147,853

Total Assets 1,920,999,970 46,444,955 898,994,162 31,465,141

Liabilities

Financial liabilities at fair value through profit or loss 95,890 - 6,048,191 160,686

Distributions Payable 13 1,706,888 - 2,345,381 6

Securities purchased payable 16,701,463 - 139,057,749 -


Sub-custody fee payable 182,442 8,769 - 2,943

Redemptions payable 8,055 - 6,969 -

Advisory fee payable 4 (b) 38,397 950 8,048 622

Investment Management fee payable 4 (a) 1,345,760 1,814 95,151 9



Variation margin payable - - 660,879 -

Other accrued expenses 4 (f) 7,500,638 49,726 33,371,404 154,992


holders of redeemable participating shares) 40,140,662 70,876 181,680,915 326,095


participating shares 1,880,859,308 46,374,079 717,313,247 31,139,046



130


Hermes Global Small

Cap Equity Fund *

Hermes US All Cap

Equity Fund **

Hermes Absolute

Return Credit Fund ** Total

Assets Notes $ $ $ £***

Financial assets at fair value through profit or loss 29,511,174 14,273,575 36,579,414 3,757,685,438


Cash at clearing broker 3 - - 12,152 7,727

Dividends and interest receivable 16,222 4,620 543,587 13,968,315

Securities sold receivable - - 204,000 11,192,608

Subscriptions receivable - - - 1,286,524

Sundry debtors 35,249 33,809 41,181 27,141,029

Total Assets 31,562,249 14,615,117 55,084,183 4,056,813,260

Liabilities

Financial liabilities at fair value through profit or loss 5,773 13 470,427 5,892,045

Distributions Payable 13 - - 5 3,161,891

Securities purchased payable - - 4,582,649 115,606,153

Accrued Tax Liability 15 - - - 10,794,982

Sub-custody fee payable - - - 254,783

Redemptions payable - - - 1,834,961

Advisory fee payable 4 (b) 318 105 351 70,740

Investment Management fee payable 4 (a) 12 6 14 1,383,597

Administration fee payable 4 (c) 1,589 523 2,192 426,568

Custodian fee payable 4 (d) 596 196 658 174,191

Variation margin payable - - - 679,355

Other accrued expenses 4 (f) 7,181 5,499 4,444 27,064,771


holders of redeemable participating shares) 15,469 6,342 5,060,740 167,344,038


participating shares 31,546,780 14,608,775 50,023,443 3,889,469,222


*** Euro denominated sub-funds are converted to GBP in the company total column using the year end exchange rate of 1.4115

*** US Dollar denominated sub-funds are converted to GBP in the company total column using the year end exchange rate of 1.5727

* Hermes Global Small Cap Equity Fund launched on 15 May 2015.

** Hermes US All Cap Equity Fund and Hermes Absolute Return Credit Fund launched on 29 May 2015.


131

Hermes Investment Funds Public Limited Company Balance Sheet As at 31 December 2014

Hermes Global

Emerging Markets

Fund


Select Fund *


Fund

Hermes UK Small and

Mid Cap Companies

Fund

Assets Notes $ $ $ £

Financial assets at fair value through profit or loss 504,093,989 - 275,048,339 175,503,475


Dividends and interest receivable 558,049 - 299,844 172,344

Securities sold receivable - - - -

Subscriptions receivable - - - 5,223

Sundry debtors 10,209 8,178 5,016 3,237

Total Assets 511,366,616 211,560 276,457,000 185,848,840

Liabilities

Financial liabilities at fair value through profit or loss 3,759 - 7 -

Distributions Payable 13 - - - -

Securities purchased payable 1,674,816 - - -



Redemptions payable - 55,611 - -

Advisory fee payable 4 (b) 21,054 156 10,757 10,259

Investment Management fee payable 4 (a) 247,545 - 23,928 7,399





holders of redeemable participating shares) 4,530,632 211,560 198,829 154,242


participating shares 506,835,984 - 276,258,171 185,694,598


*Hermes Global Equity Select Fund was terminated on 11 July 2014.


132

Hermes Investment Funds Public Limited Company Balance Sheet As at 31 December 2014 (continued)

Hermes Japan Equity

Fund *

Hermes Sourcecap

European Alpha

Fund

Hermes Global High

Yield Bond Fund

Hermes Global

Investment Grade

Fund **

Assets Notes ¥ € € €

Financial assets at fair value through profit or loss - 521,145,845 225,018,600 -

Cash and cash equivalents 3 24,970,104 6,599,165 17,907,566 162,762

Dividends and interest receivable - 579,365 3,461,801 -


Subscriptions receivable - 114,892 - -

Sundry debtors 305,851 6,788 4,280 -

Total Assets 25,275,955 528,446,055 246,392,247 162,762

Liabilities

Financial liabilities at fair value through profit or loss - - 6,002,253 -

Distributions Payable 13 - - - -

Securities purchased payable - - - -

Accrued Tax Liability 15 - - - -

Sub-custody fee payable 1,486,978 47,591 16,959 9,003

Redemptions payable 6,678,453 3,276,400 - -

Advisory fee payable 4 (b) 5,050 21,490 7,878 3,170

Investment Management fee payable 4 (a) - 314,631 56,685 -

Administration fee payable 4 (c) 1,195,399 109,536 61,550 27,756


Other accrued expenses 4 (f) 15,551,056 110,514 51,620 117,299


holders of redeemable participating shares) 25,275,955 3,924,839 6,215,770 162,762


participating shares - 524,521,216 240,176,477 -


*Hermes Japan Equity Fund was terminated on 1 July 2014.

** Hermes Global Investment Grade Fund was terminated on 1 May 2014.


133


Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK


Fund

Hermes Asia Ex-

Japan Equity Fund

Assets Notes € $ £ $


Cash and cash equivalents 3 1,290,199 12,176,485 110,656 14,375,944

Dividends and interest receivable - 132,886 299,272 3,854,973


Subscriptions receivable - 85,464 - 60,387

Sundry debtors 6,220 12,975 5,014 244,175

Total Assets 218,846,202 385,545,389 136,386,470 1,286,267,273

Liabilities

Financial liabilities at fair value through profit or loss - 1,425 25,366 55,722

Distributions Payable 13 - - - 767,625

Securities purchased payable - - - 3,038,585



Redemptions payable 11,500 - - 69,298

Advisory fee payable 4 (b) 8,609 14,040 - 45,729

Investment Management fee payable 4 (a) 104,575 171,785 8 1,500,488





holders of redeemable participating shares) 270,808 369,456 95,388 10,273,354





134



ESG Fund *

Hermes Multi

Strategy Credit Fund *

Hermes Multi Asset

Inflation Fund ** Total

Assets Notes $ $ £ £***


Cash and cash equivalents 3 159,774 39,305,125 16,735,304 94,793,360

Dividends and interest receivable 50,652 5,166,544 45,152 10,111,498

Securities sold receivable - - 500 500

Subscriptions receivable - - - 188,149

Sundry debtors 1,993 153,583 44 302,836

Total Assets 40,768,780 370,562,779 30,561,544 2,966,546,497

Liabilities

Financial liabilities at fair value through profit or loss - 5,802,864 422,670 8,879,565

Distributions Payable 13 - 1,441,243 - 1,415,259

Securities purchased payable - 2,663,538 - 4,726,530


Sub-custody fee payable - - - 383,938

Redemptions payable - - - 2,676,481

Advisory fee payable 4 (b) 1,621 13,139 383 110,948

Investment Management fee payable 4 (a) 25 115,170 2 1,697,228


Custodian fee payable 4 (d) 3,509 27,427 719 242,777



holders of redeemable participating shares) 58,854 10,222,175 435,956 25,628,443




*** Yen denominated sub-funds are converted to GBP in the company total column using the year end exchange rate of 186.2445



* Hermes Global Equity ESG Fund and Hermes Multi Strategy Credit Fund launched on 1 May 2014.

** Hermes Multi Asset Inflation Fund launched on 3 November 2014.


135

Hermes Investment Funds Public Limited Company Unaudited Income Statement For the period ended 30 June 2015

Hermes Global

Emerging Markets

Fund


Fund

Hermes UK Small and

Mid Cap Companies

Fund

Hermes Sourcecap

European Alpha Fund

Investment Income Notes $ $ £ €

Dividend income 7,080,167 4,841,533 2,870,138 13,508,127

Bank interest income 1,656 3 22,932 -

Bond interest income - - - -

Other Income - - - -

Net gain/(loss) on financial assets and liabilities at fair

value through profit or loss 24,951,829 8,135,641 18,874,356 96,904,884

Investment Income/(Expense) 32,033,652 12,977,177 21,767,426 110,413,011

Expenses

General expenses 4(f) (76,069) (46,776) (13,029) (105,317)

Advisory fee 4(b) (21,214) (14,179) (7,970) (27,686)

Investment Management fee 4(a) (759,720) (279,864) (20,924) (1,190,453)

Administration fee 4(c) (102,315) (70,895) (39,848) (122,645)

Sub-custodian fee (107,585) (31,076) (4,450) (65,161)

Custodian fee 4(d) (38,838) (26,586) (14,943) (48,029)

Directors’ fees 4(e) (4,712) (3,054) (1,345) (6,570)

Audit fee 4(f) (3,682) (2,546) (2,094) (4,505)

Tax liability 15 (2,557,852) - - -

Operating Expenses (3,671,987) (474,976) (104,603) (1,570,366)

Operating Profit/(Loss) 28,361,665 12,502,201 21,662,823 108,842,645

Finance costs

Bank interest expense (4,610) (1,216) (4) (7,512)

Income distribution 13 (590) (10,098) (2) (433,716)

(5,200) (11,314) (6) (441,228)

Net Profit/(Loss) before taxation 28,356,465 12,490,887 21,662,817 108,401,417

Taxation

Withholding tax (614,150) (1,014,426) (280,176) (2,112,941)

Increase/(Decrease) in net assets attributable to holders

of redeemable participating shares from operations 27,742,315 11,476,461 21,382,641 106,288,476


136

Hermes Investment Funds Public Limited Company Unaudited Income Statement For the period ended 30 June 2015 (continued)

Hermes Global High

Yield Bond Fund

Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK


Fund

Investment Income Notes € € $ £

Dividend income - 4,408,935 1,779,179 -

Bank interest income - 2 4,978 126

Bond interest income 8,333,980 - - 516,185



value through profit or loss 1,702,151 39,589,090 22,388,599 (1,119,109)

Investment Income/(Expense) 10,036,131 43,998,027 24,172,756 (602,798)

Expenses


Advisory fee 4(b) (10,345) (10,095) (16,022) -

Investment Management fee 4(a) (247,417) (327,120) (677,712) (2)



Custodian fee 4(d) (19,397) (18,928) (30,040) (10,266)

Directors’ fees 4(e) (2,660) (2,701) (3,548) (1,301)

Audit fee 4(f) (3,476) (3,362) (2,557) (2,101)

Tax liability 15 - - - -

Operating Expenses (402,398) (485,079) (881,528) (56,079)

Operating Profit/(Loss) 9,633,733 43,512,948 23,291,228 (658,877)

Finance costs

Bank interest expense (16,604) (1,257) (673) -

Income distribution 13 (106,641) (276,135) (1)

(123,245) (277,392) (674) -

Net Profit/(Loss) before taxation 9,510,488 43,235,556 23,290,554 (658,877)

Taxation

Withholding tax - (658,834) (271,994) -

Increase/(Decrease) in net assets attributable to holders

of redeemable participating shares from operations 9,510,488 42,576,722 23,018,560 (658,877)


137


Hermes Asia Ex-

Japan Equity Fund


ESG Fund

Hermes Multi


Hermes Multi Asset

Inflation Fund

Investment Income Notes $ $ $ £

Dividend income 19,060,299 497,968 - 51,182

Bank interest income 13,793 39 1,255 66,197

Bond interest income - - 9,156,934 196,687



value through profit or loss 129,472,256 1,618,949 2,154,426 398,348

Investment Income/(Expense) 148,546,348 2,116,956 11,312,615 712,414

Expenses


Advisory fee 4(b) (66,194) (1,785) (15,364) (1,219)

Investment Management fee 4(a) (6,506,432) (6,898) (437,682) (7)



Custodian fee 4(d) (100,193) (3,347) (28,773) (2,285)

Directors’ fees 4(e) (14,786) (314) (3,216) (281)

Audit fee 4(f) (1,816) (5,403) (5,310) (2,449)

Tax liability 15 (8,380,050) - - -

Operating Expenses (15,803,081) (79,301) (853,147) (32,443)

Operating Profit/(Loss) 132,743,267 2,037,655 10,459,468 679,971

Finance costs

Bank interest expense (12,449) - (1,472) (137)

Income distribution 13 (1,706,888) - (2,345,381) (6)

(1,719,337) - (2,346,853) (143)

Net Profit/(Loss) before taxation 131,023,930 2,037,655 8,112,615 679,828

Taxation

Withholding tax (621,854) (68,626) - (5,152)

Increase in net assets attributable to holders of

redeemable participating shares from operations 130,402,076 1,969,029 8,112,615 674,676


138


Hermes Global Small

Cap Equity Fund *

Hermes US All Cap

Equity Fund **

Hermes Absolute


Investment Income Notes $ $ $ £***

Dividend income 37,272 11,932 49,529 37,938,516

Bank interest income - - 31 103,536

Bond interest income - - 49,043 12,858,896



value through profit or loss (450,973) (361,082) (82,376) 242,648,251

Investment Income/(Expense) (413,701) (349,150) 16,227 293,549,199

Expenses


Advisory fee 4(b) (318) (105) (351) (133,396)

Investment Management fee 4(a) (12) (6) (14) (7,003,330)

Administration fee 4(c) (1,589) (523) (2,192) (630,590)

Sub-custodian fee - - - (424,289)

Custodian fee 4(d) (596) (196) (658) (241,197)

Directors’ fees 4(e) (271) (39) (138) (31,407)

Audit fee 4(f) (1,735) (1,372) (1,415) (31,909)

Tax liability 15 - - - (7,179,548)

Operating Expenses (11,876) (7,794) (10,649) (16,298,721)

Operating Profit/(Loss) (425,577) (356,944) 5,578 277,250,478

Finance costs

Bank interest expense (1) - 0 (32,127)

Income distribution 13 - - (5) (3,264,852)

(1) 0 (5) (3,296,979)

Net Profit/(Loss) before taxation (425,578) (356,944) 5,573 273,953,499

Taxation

Withholding tax (4,672) (1,790) - (4,020,192)


redeemable participating shares from operations (430,250) (358,734) 5,573 269,933,307

*** Euro denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.36549

*** US Dollar denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.52348




139

Hermes Investment Funds Public Limited Company Unaudited Income Statement For the period ended 30 June 2014

Hermes Global

Emerging Markets

Fund

Hermes Global

Equity Select Fund

Hermes Global

Equity Fund

Hermes UK Small

and Mid Cap

Companies Fund

Investment Income Notes $ $ $ £

Dividend income 7,057,709 1,594,582 3,516,199 4,446,916

Bank interest income 3,146 741 132 5,008

Bond interest income - - - -

Net gain/(loss) on financial assets and liabilities at fair value

through profit or loss 25,107,840 1,953,006 11,701,389 (4,148,124)

Investment Income 32,168,695 3,548,329 15,217,720 303,800

Expenses

General expenses 4(e,f) (71,972) (170,697) (41,040) (45,005)

Advisory fee 4(b) (17,509) (7,043) (9,331) (11,155)

Investment Management fee 4(a) (503,614) (57,597) (5,476) (23,648)


Sub-custodian fee 4(d) (92,315) (16,403) (10,288) (5,692)

Custodian fee 4(d) (21,886) (8,804) (11,664) (13,943)

Operating Expenses (777,156) (295,098) (121,052) (144,219)

Operating Profit 31,391,539 3,253,231 15,096,668 159,581

Finance Costs

Bank interest expense (9,162) (10,537) (19,374) (92)

Income distribution - - (8,976) -

(9,162) (10,537) (28,350) (92)

Net Profit before taxation 31,382,377 3,242,694 15,068,318 159,489

Taxation

Withholding tax (690,302) (295,794) (500,211) (344,925)

Increase/(Decrease) in net assets attributable to holders of

redeemable participating shares from operations 30,692,075 2,946,900 14,568,107 (185,436)


140


Hermes Japan

Equity Fund

Hermes Sourcecap

European Alpha Fund

Hermes Global High

Yield Bond Fund

Hermes Global

Investment Grade

Fund *

Investment Income Notes ¥ € € €

Dividend income 312,913,750 10,080,764 - -

Bank interest income 2,040 - 458 2,148

Bond interest income - - 4,374,852 1,250,749

Net (loss)/gain on financial assets and liabilities at fair value

through profit or loss (1,595,911,874) (902,002) 9,035,230 3,666,567

Investment (Expense)/Income (1,282,996,084) 9,178,762 13,410,540 4,919,464

Expenses

General expenses 4(e,f) (19,426,089) (59,787) 3,583 (66,278)

Advisory fee 4(b) (1,159,608) (15,701) (7,029) (3,271)

Investment Management fee 4(a) (658,256) (691,264) (3,516) (51)

Administration fee 4(c) (5,150,018) (59,214) (41,058) (22,969)

Sub-custodian fee 4(d) (1,449,716) (22,033) (8,798) (3,862)

Custodian fee 4(d) (1,449,509) (19,627) (8,786) (4,089)

Operating Expenses (29,293,196) (867,626) (65,604) (100,520)

Operating (Loss)/Profit (1,312,289,280) 8,311,136 13,344,936 4,818,944

Finance costs

Bank interest expense (119) (34,907) (2,135) -

Income distribution - (1,035,670) - -

(119) (1,070,577) (2,135) -

Net (Loss)/Profit before taxation (1,312,289,399) 7,240,559 13,342,801 4,818,944

Taxation

Withholding tax (48,433,775) (1,473,164) - -

(Decrease) /Increase in net assets attributable to holders of

redeemable participating shares from operations (1,360,723,174) 5,767,395 13,342,801 4,818,944

* Hermes Global Investment Grade Fund terminated on 1 May 2014.


141


Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK


Fund

Hermes Asia

Ex-Japan

Equity Fund

Investment Income Notes € $ £ $

Dividend income 4,590,466 2,587,179 - 7,103,704

Bank interest income 30 14,612 882 5,385

Bond interest income - - 501,957 -

Net gain on financial assets and liabilities at fair value

through profit or loss 2,001,933 9,373,776 5,688,532 39,773,777

Investment Income 6,592,429 11,975,567 6,191,371 46,882,866

Expenses

General expenses 4(e,f) (38,768) (79,867) (18,167) (92,256)

Advisory fee 4(b) (8,472) (21,712) 8,982 (22,876)

Investment Management fee 4(a) (323,116) (1,226,549) (2) (1,317,115)


Sub-custodian fee 4(d) (21,985) (16,941) (1,062) (142,864)

Custodian fee 4(d) (10,591) (27,140) (5,740) (28,595)

Operating Expenses (440,706) (1,456,219) (38,168) (1,688,635)

Operating Profit 6,151,723 10,519,348 6,153,203 45,194,231

Finance costs

Bank interest expense (69) (380) - (3,727)

Income distribution (81,427) (859) - (425,483)

(81,496) (1,239) - (429,210)

Net Profit before taxation 6,070,227 10,518,109 6,153,203 44,765,021

Taxation

Withholding tax (819,058) (396,588) - (318,076)


redeemable participating shares from operations 5,251,169 10,121,521 6,153,203 44,446,945


142



ESG Fund *

Hermes Multi Strategy

Credit Fund * Total

Investment Income Notes $ $ £ **

Dividend income 228,749 7,313 31,561,163

Bank interest income 130 966 23,110

Bond interest income - 1,918,014 6,270,664

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

loss 1,021,120 4,601,535 59,571,346

Investment Income 1,249,999 6,527,828 97,426,283

Expenses

General expenses 4(e,f) (22,961) (18,843) (607,309)

Advisory fee 4(b) (422) (2,733) (86,162)

Investment Management fee 4(a) (6) (1,741) (2,727,733)

Administration fee 4(c) (2,620) (19,109) (431,978)

Sub-custodian fee 4(d) - - (228,798)

Custodian fee 4(d) (655) (4,083) (125,147)

Operating Expenses (26,664) (46,509) (4,207,127)

Operating Profit 1,223,335 6,481,319 93,219,156

Finance costs

Bank interest expense (1) (244) (56,582)

Income distribution - (26,821) (1,194,199)

(1) (27,065) (1,250,781)

Net Profit before taxation 1,223,334 6,454,254 91,968,375

Taxation

Withholding tax (24,971) - (3,843,997)

Increase in net assets attributable to holders of redeemable

participating shares from operations 1,198,363 6,454,254 88,124,378


** US Dollar denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.6693.

** Yen denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 170.9875.

** Euro denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.2177.


143

Hermes Investment Funds Public Limited Company Unaudited Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares For the period ended 30 June 2015

Notes

Hermes Global

Emerging Markets

Fund

Hermes Global

Equity Fund

Hermes UK Small

and Mid Cap

Companies Fund

Hermes Sourcecap

European Alpha

Fund

$ $ £ €

Net assets attributable to holders of redeemable participating

shares at the beginning of the period 506,835,984 276,258,171 185,694,598 524,521,216

Redeemable participating share transactions

Issue of redeemable participating shares for the period 65,546,365 114,734,282 2,363,607 197,849,319

Redemption of redeemable participating shares for the period (28,299,182) (9,137,298) (1,136,754) (74,194,784)

Net increase in net assets from redeemable participating share

transactions 37,247,183 105,596,984 1,226,853 123,654,535

Foreign exchange adjustments on aggregation 2 - - - -


redeemable participating shares from operations 27,742,315 11,476,461 21,382,641 106,288,476


shares at the end of the period 571,825,482 393,331,616 208,304,092 754,464,227


144

Hermes Investment Funds Public Limited Company Unaudited Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares For the period ended 30 June 2015 (continued)

Notes

Hermes Global High

Yield Bond Fund

Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK

Inflation-Linked

Bond Fund

€ € $ £




Issue of redeemable participating shares for the period 33,306,570 11,540,125 60,258,564 374,935

Redemption of redeemable participating shares for the period (20,144,960) (10,359,957) (73,618,704) -


transactions 13,161,610 1,180,168 (13,360,140) 374,935



redeemable participating shares from operations 9,510,488 42,576,722 23,018,560 (658,877)




145


Notes

Hermes Asia Ex-

Japan Equity Fund

Hermes Global

Equity ESG Fund

Hermes Multi


Hermes Multi Asset

Inflation Fund

$ $ $ £


shares at the beginning of the period 1,275,993,919 40,709,926 360,340,604 30,125,588


Issue of redeemable participating shares for the period 667,837,676 3,695,124 369,558,653 -

Redemption of redeemable participating shares for the period (193,374,363) - (20,698,625) 338,782


transactions 474,463,313 3,695,124 348,860,028 338,782



redeemable participating shares from operations 130,402,076 1,969,029 8,112,615 674,676


shares at the end of the period 1,880,859,308 46,374,079 717,313,247 31,139,046


146


Notes

Hermes Global

Small Cap Equity

Fund *

Hermes US All Cap

Equity Fund **

Hermes Absolute

Return Credit Fund

** Total

$ $ $ £***


shares at the beginning of the period - - - 2,940,918,054


Issue of redeemable participating shares for the period 31,977,030 14,967,509 50,017,870 1,085,371,323

Redemption of redeemable participating shares for the period - - - (290,885,068)

Net increase in net assets from redeemable participating

share transactions 31,977,030 14,967,509 50,017,870 794,486,255

Foreign exchange adjustments on aggregation 2 - - - (115,868,394)


redeemable participating shares from operations (430,250) (358,734) 5,573 269,933,307


shares at the end of the period 31,546,780 14,608,775 50,023,443 3,889,469,222

*** Euro denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.36549

*** US Dollar denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.52348




147

Hermes Investment Funds Public Limited Company Unaudited Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Shares For the period ended 30 June 2014

Hermes Global

Emerging Markets

Fund


Select Fund


Fund

Hermes UK Small and

Mid Cap Companies

Fund

$ $ $ £




Issue of redeemable participating shares for the period 120,536,264 2,071,236 22,861,472 3,100,555

Redemption of redeemable participating shares for the period (4,011,545) (33,973,055) (1,052,412) (410,085)

Net increase/(decrease) in net assets from redeemable

participating share transactions 116,524,719 (31,901,819) 21,809,060 2,690,470

Foreign exchange adjustments on aggregation (Note 2) - - - -


participating shares from operations 30,692,075 2,946,900 14,568,107 (185,436)




148


Hermes Japan Equity

Fund

Hermes Sourcecap

European Alpha Fund

Hermes Global High

Yield Bond Fund

Hermes Global

Investment Grade

Fund *

¥ € € €


shares at the beginning of the period 31,746,267,357 343,007,437 169,604,888 143,286,657


Issue of redeemable participating shares for the period 5,367,174 237,209,107 1,825,715 -

Redemption of redeemable participating shares for the period (342,208,049) (25,531,010) (5,236) (148,105,601)

Net (decrease)/increase in net assets from redeemable

participating share transactions (336,840,875) 211,678,097 1,820,479 (148,105,601)

Foreign exchange adjustments on aggregation (Note 2) - - -

(Decrease)/Increase in net assets attributable to holders of

redeemable participating shares from operations (1,360,723,174) 5,767,395 13,342,801 4,818,944


shares at the end of the period 30,048,703,308 560,452,929 184,768,168 -



149


Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK


Fund

Hermes Asia

Ex-Japan

Equity Fund

€ $ £ $




Issue of redeemable participating shares for the period 9,043,920 36,390,922 30,271 409,518,345

Redemption of redeemable participating shares for the period (7,587,675) (396,364,095) - (84,210,759)

Net increase/(decrease) in net assets from redeemable

participating share transactions 1,456,245 (359,973,173) 30,271 325,307,586

Foreign exchange adjustments on aggregation (Note 2) - - - -


participating shares from operations 5,251,169 10,121,521 6,153,203 44,446,945




150



ESG Fund *

Hermes Multi

Strategy Credit Fund * Total

$ $ £ **

Net assets attributable to holders of redeemable participating shares at the beginning

of the period - - 2,445,059,266


Issue of redeemable participating shares for the period 39,732,006 262,857,282 742,413,878

Redemption of redeemable participating shares for the period - (92,204) (462,564,647)

Net increase in net assets from redeemable participating share transactions 39,732,006 262,765,078 279,849,231

Foreign exchange adjustments on aggregation (Note 2) - - (68,930,058)

Increase in net assets attributable to holders of redeemable participating shares from

operations 1,198,363 6,454,254 88,124,378

Net assets attributable to holders of redeemable participating shares at the end of the

period 40,930,369 269,219,332 2,744,102,817


** US Dollar denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.6693.

** Yen denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 170.9875.

** Euro denominated sub-funds are converted to GBP in the company total column using the average exchange rate of 1.2177.


151

Hermes Investment Funds Public Limited Company Unaudited Cash Flow Statement For the period ended 30 June 2015

Hermes Global

Emerging Markets

Fund

Hermes Global

Equity Fund

Hermes UK Small

and Mid Cap

Companies Fund

Hermes Sourcecap

European Alpha Fund

Cash Flows from Operating Activities $ $ £ €

Dividends received 5,605,162 3,629,321 2,270,321 10,783,300

Dividends paid - - - -

Interest received 1,640 3 23,047 -

Operating expenses paid (1,457,968) (472,896) (199,595) (1,782,782)

Realised gains/(losses)on forward foreign currency contracts - - - -

Purchase of financial assets (189,392,531) (147,040,759) (27,087,947) (197,142,089)

Proceeds from sales of financial assets 163,423,927 41,323,074 26,021,257 65,551,434

Net Cash outflow from Operating Activities (21,819,770) (102,561,257) 1,027,083 (122,590,137)

Cash Flows from Financing Activities

Subscriptions 65,546,365 114,734,282 2,362,545 197,141,542

Redemptions (28,299,182) (9,137,298) (1,136,006) (76,875,628)

Interest paid (4,100) (1,211) - (6,121)

Distribution paid - - - -

Net Cash inflow from Financing Activities 37,243,083 105,595,773 1,226,539 120,259,793

Increase/(Decrease) in cash and cash equivalents 15,423,313 3,034,516 2,253,622 (2,330,344)

Foreign exchange adjustment on aggregation (Note 2) - - - -

Cash and cash equivalents at the beginning of the period 6,704,369 1,103,801 10,164,561 6,599,165

Cash and cash equivalents at the end of the period 22,127,682 4,138,317 12,418,183 4,268,821

Cash and cash equivalents at the end of the period is comprised of:

Cash at bank 22,127,682 4,138,317 12,418,183 4,268,821

Cash at clearing broker - - - -

22,127,682 4,138,317 12,418,183 4,268,821


152

Hermes Investment Funds Public Limited Company Unaudited Cash Flow Statement For the period ended 30 June 2015 (continued)

Hermes Global High

Yield Bond Fund

Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK


Fund

Cash Flows from Operating Activities € € $ £

Dividends received - 3,750,101 1,591,644 -


Interest received 8,372,640 2 4,978 513,115

Operating expenses paid (470,962) (614,153) (1,044,255) (84,957)




Net Cash (outflow)/inflow from Operating Activities (13,078,893) (1,716,388) 10,701,887 89,666


Subscriptions 33,306,570 11,540,125 60,292,684 374,935

Redemptions (19,491,522) (10,301,316) (72,218,842) -

Interest paid (16,604) (1,244) (1,367) -

Distribution paid 0 0 - -

Net Cash inflow from Financing Activities 13,798,444 1,237,565 (11,927,525) 374,935

(Decrease)/Increase in cash and cash equivalents 719,551 (478,823) (1,225,638) 464,601


Cash and cash equivalents at the beginning of the period 17,907,566 1,290,199 12,176,485 110,656

Cash and cash equivalents at the end of the period 18,627,117 811,376 10,950,847 575,257

Cash and cash equivalents at the end of the period is comprised

of:

Cash at bank 18,627,117 811,376 10,950,847 575,257


18,627,117 811,376 10,950,847 575,257


153


Hermes Asia Ex-

Japan Equity Fund


ESG Fund

Hermes Multi


Hermes Multi Asset

Inflation Fund

Cash Flows from Operating Activities $ $ $ £

Dividends received 16,753,217 439,457 (205,417) 46,683


Interest received 13,806 39 7,146,356 265,998

Operating expenses paid (7,756,244) (89,213) (800,670) (32,674)




Net Cash outflow from Operating Activities (457,386,228) (2,999,219) (157,070,043) (3,116,615)


Subscriptions 666,852,594 3,695,124 369,558,653 338,782

Redemptions (193,435,606) - (20,691,656) -

Interest paid (12,301) - (19,817) (137)

Distribution paid (767,625) - (1,441,243) -

Net Cash inflow from Financing Activities 472,637,062 3,695,124 347,405,937 338,645

(Decrease)/Increase in cash and cash equivalents 15,250,834 695,905 190,335,894 (2,777,970)


Cash and cash equivalents at the beginning of the period 14,375,944 159,774 39,305,125 16,735,304

Cash and cash equivalents at the end of the period 29,626,778 855,679 229,641,019 13,957,334


of:

Cash at bank 29,626,778 855,679 229,641,019 13,957,334


29,626,778 855,679 229,641,019 13,957,334


154


Hermes Global Small

Cap Equity Fund *

Hermes US All Cap

Equity Fund **

Hermes Absolute


Cash Flows from Operating Activities $ $ $ £**

Dividends received 16,378 5,522 43,227 30,339,914


Interest received - - (488,211) 10,980,461

Operating expenses paid (37,430) (35,274) (42,081) (9,810,995)


Purchase of financial assets (30,149,971) (14,796,581) (37,589,609) (1,793,492,391)

Proceeds from sales of financial assets 193,597 161,937 5,774,805 1,148,835,144

Net Cash outflow from Operating Activities (29,977,426) (14,664,396) (32,301,869) (613,147,867)


Subscriptions 31,977,030 14,967,509 50,017,870 1,050,488,501

Redemptions - - - (282,583,574)

Interest paid - - - (41,787)

Distribution paid - - - (1,404,507)

Net Cash inflow from Financing Activities 31,977,030 14,967,509 50,017,870 766,458,633

(Decrease)/Increase in cash and cash equivalents 1,999,604 303,113 17,716,001 153,310,767

Foreign exchange adjustment on aggregation (Note 2) - - - (2,564,781)

Cash and cash equivalents at the beginning of the period - - - 94,793,360

Cash and cash equivalents at the end of the period 1,999,604 303,113 17,716,001 245,539,346


Cash at bank 1,999,604 303,113 17,703,849 245,531,619

Cash at clearing broker - - 12,152 7,727

1,999,604 303,113 17,716,001 245,539,346



Please note that the figures for “Purchase of financial assets” and “Proceeds from sales of financial assets” on the Cash Flow Statement differ from the figures used in

the Unaudited Schedule of Significant Portfolio Movements, as the Cash Flow Statement is adjusted for any receivable or payable for financial assets at the year end.




155

Hermes Investment Funds Public Limited Company Unaudited Cash Flow Statement For the period ended 30 June 2014

Hermes Global

Emerging Markets

Fund


Select Fund


Fund

Hermes UK Small and

Mid Cap Companies

Fund

Cash Flows from Operating Activities $ $ $ £

Dividends received 5,290,711 1,078,390 2,939,293 4,033,284

Interest received 3,146 741 132 5,008

Operating expenses paid (634,170) (164,788) (106,427) (392,701)



Net Cash (outflow)/inflow from Operating Activities (112,208,005) 31,056,598 (2,740,567) (5,106,075)


Subscriptions 120,536,264 2,071,236 4,189,569 3,194,456

Redemptions (4,011,545) (34,023,055) (1,052,412) (134,038)

Interest paid (9,695) (10,537) (19,382) (38)

Distribution paid - - (8,976) -

Net Cash inflow/(outflow) from Financing Activities 116,515,024 (31,962,356) 3,108,799 3,060,380

Increase/(Decrease) in cash and cash equivalents 4,307,019 (905,758) 368,232 (2,045,695)

Foreign exchange adjustment on aggregation (Note 2)

Cash and cash equivalents at the beginning of the period 3,409,855 2,644,714 303,339 3,746,198

Cash and cash equivalents at the end of theperiod 7,716,874 1,738,956 671,571 1,700,503


of:

Cash at bank 7,716,874 1,738,956 671,571 1,700,503


7,716,874 1,738,956 671,571 1,700,503


156


Hermes Japan Equity

Fund

Hermes Sourcecap

European Alpha Fund

Hermes Global High

Yield Bond Fund

Hermes Global

Investment Grade

Fund *

Cash Flows from Operating Activities ¥ € € €

Dividends received 264,772,281 8,226,320 - -

Interest received 2,040 - 4,983,734 2,595,379

Operating expenses paid (14,342,435) (745,568) (86,263) (74,494)

Purchase of financial assets (2,018,634,575) (302,572,540) (361,333,941) (123,297,630)

Proceeds from sales of financial assets 2,637,607,510 85,621,709 367,835,926 239,790,802

Net Cash inflow/(outflow) from Operating Activities 869,404,821 (209,470,079) 11,399,456 119,014,057


Subscriptions 5,367,174 234,926,585 1,825,715 -

Redemptions (342,208,049) (25,185,099) (5,236) (148,105,601)

Interest paid (5,996) (34,997) (2,135) -

Distribution paid - (847,940) - -

Net Cash (outflow)/inflow from Financing Activities (336,846,871) 208,858,549 1,818,344 (148,105,601)

Increase/(Decrease) in cash and cash equivalents 532,557,950 (611,530) 13,217,800 (29,091,544)


Cash and cash equivalents at the beginning of the period 35,199,941 3,440,065 9,847,504 29,254,306

Cash and cash equivalents at the end of theperiod 567,757,891 2,828,535 23,065,304 162,762


of:

Cash at bank 567,757,891 2,828,535 22,624,312 162,762

Cash at clearing broker - - 440,992 -

567,757,891 2,828,535 23,065,304 162,762



157


Hermes Sourcecap

Europe Ex-UK Fund

Hermes US SMID

Equity Fund

Hermes Active UK


Fund

Hermes Asia

Ex-Japan

Equity Fund

Cash Flows from Operating Activities € $ £ $

Dividends received 3,771,407 2,499,510 - 5,097,163

Interest received 30 14,612 533,673 5,282

Operating expenses paid (432,723) (1,647,198) (36,307) (1,307,578)



Net Cash (outflow)/inflow from Operating Activities (1,463,395) 346,334,809 2,718,081 (288,409,145)


Subscriptions 9,043,920 36,668,022 30,271 409,254,556

Redemptions (7,358,265) (394,769,338) - (84,210,759)

Interest paid (58) (512) - (3,667)

Distribution paid (81,427) (859) - (425,483)

Net Cash inflow/(outflow) from Financing Activities 1,604,170 (358,102,687) 30,271 324,614,647

Increase/(Decrease) in cash and cash equivalents 140,775 (11,767,878) 2,748,352 36,205,502


Cash and cash equivalents at the beginning of the period 615,409 20,560,443 32,326 14,194,967

Cash and cash equivalents at the end of the period 756,184 8,792,565 2,780,678 50,400,469

Cash and cash equivalents at the end of the period is

comprised of:

Cash at bank 756,184 8,792,565 2,780,678 50,400,469


756,184 8,792,565 2,780,678 50,400,469


158



ESG Fund *

Hermes Multi

Strategy Credit Fund * Total

Cash Flows from Operating Activities $ $ £ **

Dividends received 177,071 7,313 25,211,852

Interest received 130 (1,750,172) 5,598,589

Operating expenses paid (3,627) (4,361) (3,855,672)

Purchase of financial assets (40,435,487) (373,296,505) (1,519,713,190)

Proceeds from sales of financial assets 614,194 169,365,756 1,271,633,394

Net Cash outflow from Operating Activities (39,647,719) (205,677,969) (221,125,027)


Subscriptions 39,732,006 262,857,282 714,025,954

Redemptions - (92,204) (451,037,545)

Interest paid (1) (349,238) (260,586)

Distribution paid - (26,821) (1,015,979)

Net Cash inflow from Financing Activities 39,732,005 262,389,019 261,711,844

Increase in cash and cash equivalents 84,286 56,711,050 40,586,817

Foreign exchange adjustment on aggregation (Note 2) (2,115,379)

Cash and cash equivalents at the beginning of the period - - 64,813,442

Cash and cash equivalents at the end of the period 84,286 56,711,050 103,284,880


Cash at bank 84,286 56,284,411 102,681,073

Cash at clearing broker - 426,639 603,807

84,286 56,711,050 103,284,880


** US Dollar denominated sub-funds are converted to GBP in the company total column using the period end exchange rate of 1.6693.

** Yen denominated sub-funds are converted to GBP in the company total column using the period end exchange rate of 170.9875.

** Euro denominated sub-funds are converted to GBP in the company total column using the period end exchange rate of 1.2177.

Please note that the figures for “Purchase of financial assets” and “Proceeds from sales of financial assets” on the Cash Flow Statement differ from the f igures used in the Unaudited Schedule of Significant Portfolio Movements, as the Cash Flow Statement is adjusted for any receivable or payable financial assets at the period end.


159

Hermes Investment Funds Public Limited Company Notes to the Financial Statements for the period ended 30 June 2015

1. Incorporation and Principal Activity

Hermes Investment Funds Public Limited Company (the “Company”) was incorporated on 23 October 2008

under the laws of the Republic of Ireland as an open-ended umbrella type investment company with

variable capital and limited liability in which different sub-funds may be created from time to time. The

Company was authorised on 24 November 2008 by the Central Bank as an Undertaking for Collective

Investment in Transferable Securities in accordance with the provisions of the European Communities

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

As at 30 June 2015 there were 15 sub-funds in existence with the following share classes:

Name of the sub-fund Share Class Launch date

Hermes Global Emerging Markets Fund Z GBP Accumulating 9 December 2008

Hermes Global Emerging Markets Fund R EUR Accumulating 12 October 2011

Hermes Global Emerging Markets Fund T GBP Accumulating 24 October 2011

Hermes Global Emerging Markets Fund F GBP Accumulating 9 November 2012

Hermes Global Emerging Markets Fund F USD Accumulating 20 September 2013

Hermes Global Emerging Markets Fund F GBP Accumulating Hedged 25 November 2013

Hermes Global Emerging Markets Fund F EUR Accumulating 4 February 2014

Hermes Global Emerging Markets Fund R USD Distributing 23 April 2015

Hermes Global Emerging Markets Fund R EUR Distributing 23 April 2015

Hermes Global Emerging Markets Fund F GBP Distributing 5 June 2015

Hermes Global Emerging Markets Fund R EUR Distributing Hedged 24 June 2015

Hermes Global Equity Fund Z GBP Accumulating 5 December 2008

Hermes Global Equity Fund R EUR Accumulating 12 October 2011

Hermes Global Equity Fund T GBP Accumulating 24 October 2011

Hermes Global Equity Fund F GBP Accumulating 9 November 2012

Hermes Global Equity Fund F USD Accumulating 6 November 2013

Hermes Global Equity Fund F GBP Distributing 30 December 2013

Hermes Global Equity Fund F EUR Accumulating 28 October 2014

Hermes Global Equity Fund F EUR Distributing 4 March 2015

Hermes UK Small and Mid Cap Companies Fund Z GBP Accumulating 7 May 2009

Hermes UK Small and Mid Cap Companies Fund R EUR Accumulating 12 October 2011

Hermes UK Small and Mid Cap Companies Fund F GBP Accumulating 9 November 2012

Hermes UK Small and Mid Cap Companies Fund T GBP Accumulating 18 July 2012

Hermes UK Small and Mid Cap Companies Fund R GBP Accumulating 14 February 2014

Hermes UK Small and Mid Cap Companies Fund F GBP Distributing 08 June 2015

Hermes Sourcecap European Alpha Fund Z GBP Accumulating 15 January 2010

Hermes Sourcecap European Alpha Fund R EUR Accumulating 13 April 2011

Hermes Sourcecap European Alpha Fund T GBP Accumulating 24 October 2011

Hermes Sourcecap European Alpha Fund Z EUR Accumulating 16 November 2011

Hermes Sourcecap European Alpha Fund F GBP Accumulating 9 November 2012

Hermes Sourcecap European Alpha Fund F EUR Accumulating 13 November 2012

Hermes Sourcecap European Alpha Fund F GBP Distributing 16 November 2012

Hermes Sourcecap European Alpha Fund R GBP Accumulating 21 February 2013

Hermes Sourcecap European Alpha Fund F EUR Distributing 14 May 2013

Hermes Sourcecap European Alpha Fund S EUR Distributing 12 August 2013

Hermes Sourcecap European Alpha Fund F USD Distributing 13 November 2013

Hermes Sourcecap European Alpha Fund S GBP Distributing 26 November 2013

Hermes Sourcecap European Alpha Fund S USD Distributing 6 December 2013

Hermes Sourcecap European Alpha Fund S USD Accumulating Hedged 9 December 2013

Hermes Sourcecap European Alpha Fund S EUR Accumulating 17 December 2013

Hermes Sourcecap European Alpha Fund S GBP Distributing Hedged 19 December 2013

Hermes Sourcecap European Alpha Fund R USD Accumulating Hedged 10 January 2014

160

Hermes Investment Funds Public Limited Company Notes to the Financial Statements for the period ended 30 June 2015 (continued)

1. Incorporation and Principal Activity (continued)


Hermes Sourcecap European Alpha Fund S GBP Accumulating 14 January 2014

Hermes Sourcecap European Alpha Fund R CHF Accumulating Hedged 4 February 2014

Hermes Sourcecap European Alpha Fund S USD Distributing Hedged 4 February 2014

Hermes Sourcecap European Alpha Fund S GBP Accumulating Hedged 10 February 2014

Hermes Sourcecap European Alpha Fund S USD Accumulating 17 February 2014

Hermes Sourcecap European Alpha Fund M EUR Distributing 31 March 2014

Hermes Sourcecap European Alpha Fund M EUR Accumulating 31 March 2014

Hermes Sourcecap European Alpha Fund R USD Accumulating 25 July 2014

Hermes Sourcecap European Alpha Fund R CHF Accumulating 12 December 2014

Hermes Sourcecap European Alpha Fund F GBP Accumulating Hedged 10 March 2015

Hermes Global High Yield Bond Fund Z GBP Accumulating 11 May 2010

Hermes Global High Yield Bond Fund R EUR Accumulating 11 October 2011

Hermes Global High Yield Bond Fund F GBP Accumulating 8 November 2012

Hermes Global High Yield Bond Fund F EUR Accumulating 16 May 2013

Hermes Global High Yield Bond Fund F GBP Accumulating Hedged 4 February 2014

Hermes Global High Yield Bond Fund F GBP Distributing Hedged 2 December 2014

Hermes Global High Yield Bond Fund F USD Distributing Hedged 10 December 2014

Hermes Global High Yield Bond Fund F USD Accumulating Hedged 11 December 2014

Hermes Global High Yield Bond Fund T GBP Accumulating 16 June 2015

Hermes Sourcecap Europe Ex-UK Fund Z GBP Accumulating 21 December 2011

Hermes Sourcecap Europe Ex-UK Fund R EUR Accumulating 9 March 2012

Hermes Sourcecap Europe Ex-UK Fund R GBP Accumulating 13 June 2012

Hermes Sourcecap Europe Ex-UK Fund F GBP Accumulating 9 November 2012

Hermes Sourcecap Europe Ex-UK Fund F EUR Accumulating 1 July 2013

Hermes Sourcecap Europe Ex-UK Fund F GBP Distributing Hedged 29 January 2014

Hermes Sourcecap Europe Ex-UK Fund F USD Distributing Hedged 8 April 2015

Hermes Sourcecap Europe Ex-UK Fund F EUR Distributing 8 May 2015

Hermes US SMID Equity Fund Z GBP Accumulating 26 September 2012

Hermes US SMID Equity Fund F GBP Accumulating 8 November 2012

Hermes US SMID Equity Fund R EUR Accumulating 8 November 2012

Hermes US SMID Equity Fund F USD Accumulating 10 April 2013

Hermes US SMID Equity Fund T GBP Accumulating 8 May 2013

Hermes US SMID Equity Fund F GBP Distributing 10 May 2013

Hermes US SMID Equity Fund F USD Distributing 14 May 2013

Hermes US SMID Equity Fund F EUR Accumulating 15 May 2013

Hermes US SMID Equity Fund F EUR Distributing 16 May 2013

Hermes US SMID Equity Fund F EUR Accumulating Hedged 19 August 2013

Hermes US SMID Equity Fund F GBP Accumulating Hedged 21 November 2013

Hermes US SMID Equity Fund F GBP Distributing Hedged 7 October 2014

Hermes US SMID Equity Fund R CHF Accumulating Hedged 10 December 2014

Hermes US SMID Equity Fund R USD Accumulating 11 December 2014

Hermes US SMID Equity Fund R EUR Accumulating Hedged 11 December 2014

Hermes Active UK Inflation-Linked Bond Fund F GBP Accumulating 9 October 2012

Hermes Active UK Inflation-Linked Bond Fund Z GBP Accumulating 9 October 2012

Hermes Active UK Inflation-Linked Bond Fund T GBP Accumulating 10 December 2013

Hermes Asia Ex-Japan Equity Fund Z GBP Accumulating 1 November 2012

Hermes Asia Ex-Japan Equity Fund F GBP Accumulating 6 December 2012

Hermes Asia Ex-Japan Equity Fund R EUR Accumulating 6 December 2012

Hermes Asia Ex-Japan Equity Fund T GBP Accumulating 8 May 2013

Hermes Asia Ex-Japan Equity Fund F EUR Distributing 21 August 2013

Hermes Asia Ex-Japan Equity Fund F EUR Accumulating 21 August 2013

Hermes Asia Ex-Japan Equity Fund F GBP Distributing 28 August 2013

Hermes Asia Ex-Japan Equity Fund F USD Accumulating 1 October 2013

161




Hermes Asia Ex-Japan Equity Fund R USD Accumulating 1 October 2013

Hermes Asia Ex-Japan Equity Fund F EUR Accumulating Hedged 21 October 2013

Hermes Asia Ex-Japan Equity Fund F GBP Distributing Hedged 7 November 2013

Hermes Asia Ex-Japan Equity Fund R EUR Accumulating Hedged 11 March 2014

Hermes Asia Ex-Japan Equity Fund R CHF Accumulating Hedged 11 March 2014

Hermes Asia Ex-Japan Equity Fund F GBP Accumulating Hedged 18 March 2014

Hermes Asia Ex-Japan Equity Fund F USD Distributing 1 September 2014

Hermes Asia Ex-Japan Equity Fund C USD Accumulating 4 November 2014

Hermes Asia Ex-Japan Equity Fund RC USD Accumulating 4 November 2014

Hermes Asia Ex-Japan Equity Fund C EUR Accumulating 9 February 2015

Hermes Asia Ex-Japan Equity Fund C EUR Distributing 10 February 2015

Hermes Asia Ex-Japan Equity Fund C GBP Distributing 10 February 2015

Hermes Asia Ex-Japan Equity Fund C USD Distributing 11 February 2015

Hermes Asia Ex-Japan Equity Fund C GBP Accumulating 20 March 2015

Hermes Asia Ex-Japan Equity Fund RC EUR Accumulating 20 March 2015

Hermes Asia Ex-Japan Equity Fund C GBP Accumulating Hedged 26 March 2015

Hermes Global Equity ESG Fund Z USD Accumulating 1 May 2014

Hermes Global Equity ESG Fund F GBP Accumulating 7 May 2014

Hermes Global Equity ESG Fund F USD Accumulating 7 May 2014

Hermes Global Equity ESG Fund R EUR Accumulating 9 May 2014

Hermes Global Equity ESG Fund F EUR Accumulating 9 May 2014

Hermes Global Equity ESG Fund T GBP Accumulating 16 June 2015

Hermes Multi Strategy Credit Fund Z USD Accumulating 1 May 2014

Hermes Multi Strategy Credit Fund F GBP Distributing Hedged 7 May 2014

Hermes Multi Strategy Credit Fund F GBP Accumulating Hedged 7 May 2014

Hermes Multi Strategy Credit Fund F EUR Accumulating 7 May 2014

Hermes Multi Strategy Credit Fund F USD Accumulating 7 May 2014

Hermes Multi Strategy Credit Fund F EUR Accumulating Hedged 8 May 2014

Hermes Multi Strategy Credit Fund R EUR Accumulating 6 June 2014

Hermes Multi Strategy Credit Fund R EUR Accumulating Hedged 6 June 2014

Hermes Multi Strategy Credit Fund F GBP Distributing 10 July 2014

Hermes Multi Strategy Credit Fund F USD Distributing 10 July 2014

Hermes Multi Strategy Credit Fund F GBP Accumulating 6 May 2015

Hermes Multi Asset Inflation Fund F GBP Accumulating Hedged 3 November 2014

Hermes Multi Asset Inflation Fund Z GBP Accumulating Hedged 3 November 2014

Hermes Multi Asset Inflation Fund F GBP Distributing Hedged 3 November 2014

Hermes Multi Asset Inflation Fund T GBP Accumulating Hedged 16 June 2015

Hermes Global Small Cap Equity Fund F EUR Accumulating 15 May 2015

Hermes Global Small Cap Equity Fund F EUR Distributing 15 May 2015

Hermes Global Small Cap Equity Fund F GBP Accumulating Hedge 15 May 2015

Hermes Global Small Cap Equity Fund F GBP Distributing Hedge 15 May 2015

Hermes Global Small Cap Equity Fund F USD Accumulating 15 May 2015

Hermes Global Small Cap Equity Fund F USD Distributing 15 May 2015

Hermes Global Small Cap Equity Fund F GBP Accumulating 15 May 2015

Hermes Global Small Cap Equity Fund R USD Accumulating 15 May 2015

Hermes Global Small Cap Equity Fund R EUR Accumulating 15 May 2015

Hermes Global Small Cap Equity Fund Z USD Accumulating 15 May 2015

Hermes Global Small Cap Equity Fund T GBP Accumulating 16 June 2015

162




Hermes US All Cap Equity Fund F EUR Accumulating 29 May 2015

Hermes US All Cap Equity Fund F EUR Distributing 29 May 2015

Hermes US All Cap Equity Fund F GBP Accumulating Hedged 29 May 2015

Hermes US All Cap Equity Fund F GBP Distributing Hedged 29 May 2015

Hermes US All Cap Equity Fund F USD Accumulating 29 May 2015

Hermes US All Cap Equity Fund F USD Distributing 29 May 2015

Hermes US All Cap Equity Fund F GBP Accumulating 29 May 2015

Hermes US All Cap Equity Fund R USD Accumulating 29 May 2015

Hermes US All Cap Equity Fund R EUR Accumulating 29 May 2015

Hermes US All Cap Equity Fund Z USD Accumulating 29 May 2015

Hermes Absolute Return Credit Fund F EUR Accumulating 29 May 2015

Hermes Absolute Return Credit Fund F EUR Accumulating Hedged 29 May 2015

Hermes Absolute Return Credit Fund F EUR Dist Hedged 29 May 2015

Hermes Absolute Return Credit Fund F CHF Acc Hedged 29 May 2015

Hermes Absolute Return Credit Fund F CHF Distributing Hedged 29 May 2015

Hermes Absolute Return Credit Fund F GBP Accumulating 29 May 2015

Hermes Absolute Return Credit Fund F GBP Accumulating Hedged 29 May 2015

Hermes Absolute Return Credit Fund F USD Accumulating 29 May 2015

Hermes Absolute Return Credit Fund F USD Distributing 29 May 2015

Hermes Absolute Return Credit Fund R EUR Accumulating 29 May 2015

Hermes Absolute Return Credit Fund R EUR Accumulating Hedged 29 May 2015

Hermes Absolute Return Credit Fund R EUR Distributing Hedged 29 May 2015

Hermes Absolute Return Credit Fund R CHF Accumulating Hedged 29 May 2015

Hermes Absolute Return Credit Fund R CHF Distributing Hedged 29 May 2015

Hermes Absolute Return Credit Fund R USD Accumlating 29 May 2015

Hermes Absolute Return Credit Fund Z USD Accumulating 29 May 2015

Investment Objective Hermes Global Emerging Markets Fund - The investment objective of the sub-fund is to provide long-term capital appreciation by investing primarily in a diversified portfolio of equity securities and equity related securities with an emerging markets bias quoted or traded on Regulated Markets in emerging market countries worldwide and the sub-fund will invest at least two-thirds of its assets in these securities. The Index this sub-fund is benchmarked against is the MSCI Emerging Markets Index. Hermes Global Equity Fund - The investment objective of the sub-fund is to provide long-term capital appreciation by investing in a portfolio of equity securities quoted or traded on Regulated Markets worldwide. The Index this sub-fund is benchmarked against is the MSCI World Index. Hermes UK Small and Mid Cap Companies Fund - The investment objective of the sub-fund is to provide long-term capital appreciation by investing primarily in equity securities of small and mid-capitalisation companies (excluding investment companies) listed in the United Kingdom. The Index this sub-fund is benchmarked against is the FTSE 250 Ex Investment Trust / FTSE Small Cap Ex Investment Trust Aggregated Index.

163


1. Incorporation and Principal Activity (continued) Investment Objective (continued) Hermes Sourcecap European Alpha Fund - The investment objective of the sub-fund is to achieve long-term capital appreciation. The sub-fund will seek to achieve its objective by investing primarily in a diversified portfolio of equity securities and equity related securities with a European bias (including Russia and Turkey) quoted or traded on Regulated Markets. The Index this sub-fund is benchmarked against is the FTSE All World Europe Index. Hermes Global High Yield Bond Fund - The investment objective of the sub-fund is to generate a high level of income. The sub-fund will seek to achieve its objective by investing primarily in a diversified portfolio of high yield bonds. The sub-fund may also use credit default swaps extensively. The Index this sub-fund is benchmarked against is the Merrill Lynch Global Non-Financial High Yield Constrained Index.

Hermes Sourcecap Europe Ex-UK Fund - The investment objective of the sub-fund is to achieve long term

capital appreciation by investing primarily in a diversified portfolio of equity securities and equity related securities with a European bias (including Russia and Turkey but excluding the United Kingdom) quoted or traded on a regulated market. The Index this sub-fund is benchmarked against is the FTSE World Europe ex-UK Index. Hermes US SMID Equity Fund - The investment objective of the sub-fund is to provide long term capital appreciation. The sub-fund will seek to achieve its objective by investing primarily in equity or equity related securities of, or relating, to small and mid-capitalisation companies domiciled in the US, or which derive a large proportion of their income from US activities, which are listed or traded in the US or Canada and which the Investment Manager has identified as being, in its view undervalued. The Index this sub-fund is benchmarked against is the Russell 2500 Index. Hermes Active UK Inflation-Linked Bond Fund - The investment objective of the sub-fund is to maximise total investment return (both income and capital appreciation) over the long term while also seeking to offer protection against the effects of inflation in the UK. The sub-fund will seek to achieve its objective by investing predominately (i.e. at least 60% of the Fund’s Net Asset Value) in UK index-linked gilts.

The Index this sub-fund is benchmarked against is the FTSE Actuaries UK Gilts Index-Linked over 5 Years Index. Hermes Asia Ex-Japan Equity Fund - The investment objective of the sub-fund is to provide long term capital appreciation. The sub-fund will seek to achieve its objective (while meeting its regulatory diversification requirements) by investing primarily in a portfolio of equity and equity related securities (such as global depository receipts and American depository receipts) issued by companies in or deriving substantial revenues from the Asia ex-Japan region which are listed or traded on regulated markets world wide. The Index this sub-fund is benchmarked against is the MSCI AC Asia ex Japan Index.

Hermes Global Equity ESG Fund - The investment objective of the sub-fund is to achieve long term capital appreciation by investing in worldwide equity securities with favourable ESG characteristics. The sub-fund will seek to achieve its objective by investing in a portfolio of equity securities quoted or traded on Regulated Markets worldwide. The sub-fund will invest primarily in equity securities which are component securities of the MSCI All Country World Index or equity securities of companies listed in the countries referenced in the MSCI All Country World Index. The Index this sub-fund is benchmarked against is the MSCI All Country World Index.

164



Investment Objective (continued) Hermes Multi Strategy Credit Fund - The investment objective of the sub-fund is to generate a high level of income targeting a high proportion of high yield credit returns while exhibiting lower volatility relative to the global high yield market. The sub-fund will seek to achieve its objective by investing in a diversified portfolio of credit securities primarily including investment grade bonds, high yield bonds, credit default swaps and money market securities (including commercial bank loans which constitute money market instruments). The sub-fund may also use equities, or equity securities (including ordinary and preference shares), bonds, futures (including futures on bonds), credit index options, equity options and equity index options. This sub-fund is not benchmarked against an index. Hermes Multi Asset Inflation Fund - The investment objective of the sub-fund is to provide capital growth by delivering a return in excess of UK inflation as measured by the Retail Price Index. The sub-fund will seek to achieve its objective by investing directly in or through the use of FDIs to gain exposure to, the categories of Investments described below; commodities, cash and foreign currencies, debt, eligible CIS, FDIs, equities, financial indices, money market instruments or indirect investments in property. A decision to invest directly or to use FDIs may be made for reasons such as efficiency (i.e. it may be cheaper to gain exposure to an underlying investment than to purchase the investment directly). The Index this sub-fund is benchmarked against is the UK Retail Price Index Hermes Global Small Cap Equity Fund - The investment objective of the Fund is to provide long-term capital appreciation. The Fund will seek to achieve its investment objective by primarily investing in equity and / or equity related securities of, or relating to, small market capitalisation companies domiciled in developed markets or which derive a large proportion of their income from developed markets. The Index this sub-fund is benchmarked against is the MSCI World Small Cap index. Hermes US All Cap Equity Fund - The investment objective of the Fund is to provide long-term capital appreciation. The Fund will seek to achieve its investment objective by primarily investing in equity and / or equity related securities of, or relating to, companies domiciled in the US or which derive a large proportion of their income from US activities. The Index this sub-fund is benchmarked against is the Russell 3000 Index. Hermes Absolute Return Credit Fund - The investment objective of the Fund is to target a positive investment return (absolute return) over a rolling 12 month period irrespective of market conditions, but there is no guarantee that this will be achieved and your capital is in fact at risk. The Fund will seek to achieve its objective primarily by investing in a diversified portfolio of debt securities and may take both long positions and / or (through the use of FDIs) generate Synthetic Short Exposure. This sub-fund is not benchmarked against an index.

165


2. Significant Accounting Policies

The significant accounting policies applied in the preparation of these Financial Statements are set out below. Basis of Preparation The condensed interim accounts have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, and should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which were prepared in accordance with International Financial Reporting Standards. Foreign exchange translation

Functional and presentation currency Items included in the Company’s Financial Statements are measured using the currency of the primary economic environment in which it operates (‘the functional currency’). The functional currency for the Hermes UK Small and Mid Cap Companies Fund, the Hermes Active UK Inflation-Linked Bond Fund and the Hermes Multi Asset Inflation Fund is Sterling, which reflects the fact that the majority of the redeemable participating shares are subscribed and redeemed in Sterling and a large number of the investments in their portfolios are denominated in Sterling. The functional currency of the Hermes Global High Yield Bond Fund, the Hermes Sourcecap European Alpha Fund and the Hermes Sourcecap Europe Ex-UK Fund is Euro, which reflects the fact that a large number of the investments in their portfolios are denominated in Euro. The functional currency of the Hermes Global Emerging Markets Fund, the Hermes Global Equity Fund, the Hermes US SMID Equity Fund, the Hermes Asia Ex-Japan Equity Fund, the Hermes Global Equity ESG Fund, the Hermes Multi Strategy Credit Fund, the Hermes Global Small Cap Equity Fund, the Hermes US All Cap Equity Fund and the Hermes Absolute Return Credit Fund is US Dollar which reflects the fact that a large number of the investments in their portfolios are denominated in US Dollar. All Sub-Funds denominated in Euro, US Dollar and Yen have been converted to Sterling in the total columns. The presentation currency of the Company is Sterling.

3. Cash and Cash Equivalents

Cash at Bank Substantially all of the cash assets of the sub-funds are held with The Northern Trust Company, London Branch (TNTC), which is a 100% indirect wholly owned subsidiary of Northern Trust Corporation which has a Standard & Poor’s credit rating of A+ and A2 from Moody’s.

Northern Trust Fiduciary Services (Ireland) Limited has appointed TNTC as its Global Sub-Custodian.

Cash at Clearing Broker The Company is exposed to counterparty risk through its Clearing Brokers, Goldman Sachs. Goldman Sachs has credit ratings of A from Standard & Poor’s and A1 from Moody’s.

166


Notes to the Financial Statements for the period ended 30 June 2015 (continued)

3. Cash and Cash Equivalents (continued) As at 30 June 2015, the cash amounts held with the various counterparties were as follows:

Hermes

Global

Emerging

Markets Fund

Hermes Global

Equity Fund

Hermes UK

Small and Mid

Cap

Companies

Fund

Hermes

Sourcecap

European Alpha

Fund

$ $ £ €

22,128,267 4,138,317 12,418,183 4,268,821

22,128,267 4,138,317 12,418,183 4,268,821

Hermes

Global High

Yield Bond

Fund

Hermes

Sourcecap

Europe Ex-UK

Fund

Hermes US

SMID Equity

Fund

Hermes Active

UK Inflation-

Linked Bond

Fund

€ € $ £

17,447,117 811,376 10,950,847 575,257

Barclays 2,030,000 - - -

Goldman Sachs (850,000) - - -

18,627,117 811,376 10,950,847 575,257

Hermes Asia

Ex-Japan

Equity Fund

Hermes Global

Equity ESG

Fund

Hermes Multi

Strategy Credit

Fund

Hermes Multi

Asset Inflation

Fund

$ $ $ £

29,626,778 855,679 230,830,719 14,627,334

Barclays - - (640,000) -

BNP Paribas - - (570,000) -

Credit Suisse - - 690,020 -

Goldman Sachs - - (669,720) -

JP Morgan - - - (670,000)

29,626,778 855,679 229,641,019 13,957,334

Hermes

Global Small

Cap Equity

Fund

Hermes US All

Cap Equity

Fund

Hermes

Absolute

Return Credit

Fund Total

$ $ $ £

1,999,604 303,113 17,941,001 246,272,894

Barclays - - - 1,031,238

BNP Paribas - - (225,000) (505,500)

Credit Suisse - - - 438,749

Goldman Sachs - - - (1,028,035)

JP Morgan - - - (670,000)

1,999,604 303,113 17,716,001 245,539,346

The Northern Trust Company, London Branch




167


3. Cash and Cash Equivalents (continued) As at 31 December 2014 the cash amounts held with the various counterparties were as follows:

Hermes

Global

Emerging

Markets Fund

Hermes Global

Equity Select

Fund

Hermes Global

Equity Fund

Hermes UK

Small and Mid

Cap Companies

Fund

$ $ $ £

6,704,369 203,382 1,103,801 10,164,561

6,704,369 203,382 1,103,801 10,164,561

Hermes

Japan Equity

Fund

Hermes

Sourcecap

European

Alpha Fund

Hermes Global

High Yield Bond

Fund

Hermes Global

Investment

Grade Fund

¥ € € €

24,970,104 6,599,165 15,836,153 162,762

Barclays - - 900,000 -

Goldman Sachs - - 709,159 -

Merrill Lynch - - (38,521) -

Morgan Stanley - - 500,775 -

24,970,104 6,599,165 17,907,566 162,762

Hermes

Sourcecap

Europe Ex-UK

Fund

Hermes US

SMID Equity

Fund

Hermes Active

UK Inflation-

Linked Bond

Fund

Hermes Asia Ex-

Japan Equity

Fund

€ $ £ $

1,290,199 12,176,485 110,656 14,375,944

1,290,199 12,176,485 110,656 14,375,944

Hermes

Global Equity

ESG Fund

Hermes Multi

Strategy

Credit Fund

Hermes Multi

Asset Inflation

Fund Total

$ $ £ £

159,774 41,974,131 7,526,133 85,681,066

Barclays - (880,000) - 137,082

BNP Paribas - 270,000 - 172,994

Citi - 300,000 (380,000) (187,785)

Credit Suisse - (270,006) - (172,997)

Goldman Sachs - (1,253,000) 189,171 (61,360)

HSBC - - 4,400,000 4,400,000

Lloyds - - 5,000,000 5,000,000

Merrill Lynch - (836,000) - (565,639)

Morgan Stanley - - - 390,000

159,774 39,305,125 16,735,304 94,793,361





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4. Fees and Other Expenses

(a) Investment Management Fees

As at 30 June 2015 there were Class Z GBP Accumulating Shares in issue on all sub-funds except the Hermes Global Equity ESG Fund, the Hermes Multi Strategy Credit Fund, the Hermes Global Small Cap Equity Fund, the Hermes US All Cap Equity Fund and the Hermes Absolute Return Credit Fund where there are Class Z USD Accumulating Shares. As per Client Agreement there are no investment management fees or expenses charged to the assets attributable to all issued Class Z Shares. Shareholders of Class Z are subject to a fee with regard to their investment in each sub-fund, based on the Client Agreement between them and the Investment Manager. This fee cannot exceed 3% per annum of the value of the Shareholder’s holding in the sub-fund. As at 30 June 2015 there were Class T GBP Accumulating Shares in issue on the following subfunds: the Hermes Global Emerging Markets Fund, the Hermes Global Equity Fund, the Hermes UK Small and Mid Cap Companies Fund, the Hermes Sourcecap European Alpha Fund, the Hermes Global High Yield Bond Fund, the Hermes US SMID Equity Fund, the Hermes Active UK Inflation-Linked Bond Fund, the Hermes Asia Ex-Japan Equity Fund, the Hermes Global Equity ESG Fund, the Hermes Multi Asset Inflation Fund and the Hermes Global Small Cap Fund. As per Client Agreement there are no investment management fees or expenses charged to the assets attributable to Class T Shares. Shareholders of Class T are subject to a fee with regard to their investment in each sub-fund, based on the Client Agreement between them and the Investment Manager. This fee cannot exceed 1% (0.20% on Hermes Active UK Inflation-Linked Bond Fund) per annum of the value of the Shareholder’s holding in the sub-fund. The Investment Manager is entitled to an annual fee in respect of the Class F Shares for the Hermes UK Small and Mid Cap Companies Fund, the Hermes Sourcecap European Alpha Fund, the Hermes Sourcecap Europe Ex-UK Fund, the Hermes US SMID Equity Fund, the Hermes Asia Ex-Japan Equity Fund, the Hermes Global Small Cap Equity Fund and the Hermes US All Cap Equity Fund at a rate of up to 0.75%, the Hermes Global Emerging Market Fund at a rate of up to 1%, the Hermes Absolute Return Credit Fund at a rate of up to 0.70%, the Hermes Global High Yield Bond Fund and the Hermes Multi Strategy Credit Fund at a rate of up to 0.65%, the Hermes Multi Asset Inflation Fund at a rate of up to 0.60%, the Hermes Global Equity ESG Fund and the Hermes Global Equity Fund at a rate of up to 0.55% and the Hermes Active UK Inflation-Linked Bond Fund at a rate of up to 0.20%. The Investment Manager is entitled to an annual fee in respect of the Class R Shares for the Hermes Global Emerging Markets Fund, the Hermes UK Small and Mid Cap Companies Fund, the Hermes Sourcecap European Alpha Fund, the Hermes Sourcecap Europe Ex-UK Fund, the Hermes US SMID Equity Fund, the Hermes Asia Ex- Japan Equity Fund, the Hermes Global Small Cap Equity Fund and the Hermes US All Cap Equity Fund at a rate of up to 1.50%; the Hermes Absolute Return Credit Fund at a rate of up to 1.40%, the Hermes Multi Strategy Credit Fund at a rate of up to 1.30%, the Hermes Global High Yield Bond Fund at a rate of up to 1.25%, the Hermes Multi Asset Inflation Fund at a rate of up to 1.20%, the Hermes Global Equity ESG Fund and the Hermes Global Equity Fund at a rate of up to 1.10%, and the Hermes Active UK Inflation Linked Fund at a rate of up to 0.40%. The Investment Manager is entitled to an annual fee at a rate of up to 0.60% of the Net Asset Value in respect of the Class S Shares and an annual fee at a rate of up to 0.45% of the Net Asset Value in respect of the Class M Shares for the Hermes Sourcecap European Alpha Fund. The Investment Manager is entitled to charge an annual investment management fee of up to 2.20% of the Net Asset Value in respect of the Class RC Shares and up to 1.10% of the Net Asset Value in respect of the Class C Shares of the Hermes Asia Ex-Japan Fund. Investment Manager fees of £7,003,330 (30 June 2014: £2,727,733) were charged during the period and fees of £1,383,597 (31 December 2014: £1,697,228) were payable at period end.

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4. Fees and Other Expenses (continued)

(b) Advisory Fees (voting and engagement services)

The fee payable to the Advisor on all Share Classes will be 0.008% per annum calculated on the value of the sub-fund at the Commencement Date and each quarter thereafter, payable quarterly in arrears commencing on the Commencement Date. VAT will be added where appropriate. This fee is effective from 21 October 2009. Advisory fees of £133,396 (30 June 2014: £86,162) were charged during the period and fees of £70,740 (31 December 2014: £110,948) were payable at period end.

(c) Administration Fees

The Company has engaged the services of Northern Trust International Fund Administration Services (Ireland) Limited, an indirect wholly-owned subsidiary of Northern Trust Corporation, to provide administration services for a fee. In respect of the Hermes Global High Yield Bond Fund, the Hermes Multi Strategy Credit Fund, the Hermes Multi Asset Inflation Fund and the Hermes Absolute Return Credit Fund, an annual fee (plus any applicable value added tax) of:

0.05% of the Net Asset Value of the relevant sub-fund on the first £300,000,000;

0.04% of the Net Asset Value of the relevant sub-fund on £300,000,000 to £500,000,000;

0.035% of the Net Asset Value of the relevant sub-fund on £500,000,000 to £700,000,000;

0.025% of the Net Asset Value of the relevant sub-fund for any amounts in excess of £700,000,000

each of the foregoing being subject to a monthly minimum fee of £4,500 per Fund.

In respect of the Hermes Global Emerging Markets Fund, the Hermes Global Equity Select ESG Fund, the Hermes Global Equity Fund, the Hermes UK Small and Mid Cap Companies Fund, the Hermes Sourcecap European Alpha Fund, the Hermes Sourcecap Europe Ex-UK Fund, the Hermes US SMID Equity Fund, the Hermes Active UK Inflation-Linked Bond Fund, the Hermes Asia Ex-Japan Equity Fund, the Hermes Global Small Cap Equity Fund and the Hermes US All Cap Equity Fund an annual fee (plus any applicable value added tax) of:


0.03% of the Net Asset Value of the relevant sub-fund on £300,000,000 to £500,000,000


0.015% of the Net Asset Value of the relevant sub-fund for any amounts in excess of £700,000,000

each of the foregoing being subject to a monthly minimum fee of £2,750 per Fund.

Administration fees of £630,590 (30 June 2014: £431,978) were charged during the period and fees of £426,568 (31 December 2014: £673,952) were payable at period end.

(d) Custodian Fees

Northern Trust Fiduciary Services (Ireland) Limited acts as a Custodian of the Company. The Custodian is a Private Limited Company incorporated in Ireland on 5 July 1990 and is an indirect wholly-owned subsidiary of Northern Trust Corporation. The Custodian is entitled, out of the assets of each sub fund to the following:




170



4. Fees and Other Expenses (continued)

(d) Custodian Fees (continued)

0.01% of the Net Asset Value of the relevant sub-fund for any amounts in excess of £700,000,000.

In addition, the Custodian shall be entitled to recover safekeeping and transaction charges as set out in the Custodian Agreement. Custodian fees of £241,197 (30 June 2014: £125,147) were charged during the period and fees of £174,191 (31 December 2014: £242,777) were payable at period end.

(e) Directors’ Fees

The Company shall pay to the Directors such annual fees for acting as Directors of the Company as the Directors may from time to time agree, provided however that the annual fees of each Director shall not exceed €50,000 without the approval of the Board of Directors. Directors’ fees will total not more than €110,000 on a per annum basis. No other remuneration will be payable by the Company to the Directors except for out-of-pocket expenses reasonably incurred by them. Michelle Green and Stephen Allen waived their rights to receive Director’s fees from the Company. Directors fees of £31,407 (30 June 2014: £43,503) were charged during the period and fees of £25,108 (31 December 2014: £18,738) were payable at period end.

(f) Other Fees and Expenses

In addition, each sub-fund will pay the costs and expenses incurred in its operation, including, without

limitation, stamp duties, taxes, the fees and expenses of the auditors, listing fees, legal expenses, the

costs of printing and distributing reports, accounts and any Prospectus, publishing prices and any

costs incurred as a result of a change in law or the introduction of any new law (including any costs

incurred as a result of compliance with any applicable code, whether or not having the force of law).

All fees and expenses will be charged to the sub-fund in respect of which they were incurred, or where

an expense is not considered by the Directors to be attributable to any one sub-fund, the expense will

normally be allocated to classes of all sub-funds pro rata to the Net Asset Value of the relevant sub-

funds. Details of each of the fees payable at the period end in respect of each sub-fund are disclosed

in the Balance Sheet on pages 129 to 132.

5. Related Party Disclosures

Parties are considered to be related if one party has the ability to control the other party or exercise

significant influence over the other party in making financial or operational decisions.

(a) Investment Management

The Company has appointed Hermes Investment Management Limited as Investment Manager,

distributor and promoter of the Company. The Investment Manager is a wholly-owned subsidiary of

Hermes Fund Managers Limited, which is a wholly-owned subsidiary of BriTel Fund Trustees Limited

and is a part of BT Pension Scheme Group. The Investment Manager was incorporated under the

laws of England and Wales and was established on 1 February 1990.

The investment management fee rates for each of the sub-funds are disclosed in note 4.

Two of the Directors of the Company, Michelle Green and Stephen Allen, are employees of Hermes

Fund Managers Limited and Directors of the Investment Manager.

171


5. Related Party Disclosures (continued)

(a) Investment Management (continued)

The majority shareholder in the sub-funds below as at 30 June 2015 and 31 December 2014 is BriTel Fund Trustees Limited who holds the following percentages of the issued shares at that date.

30 June 2015

Name % Held

Hermes Global Emerging Markets Fund 42.16

Hermes Global Equity Fund 40.58

Hermes UK Small and Mid Cap Companies Fund 97.41

Hermes Sourcecap European Alpha Fund 22.21

Hermes Global High Yield Bond Fund 49.70

Hermes Sourcecap Europe Ex-UK Fund 53.83

Hermes US SMID Equity Fund 34.79

Hermes Active UK Inflation-Linked Bond Fund 92.96

Hermes Global Equity ESG Fund 92.03

Hermes Multi Strategy Credit Fund 35.35

Hermes Multi Asset Inflation Fund 98.91

Hermes Global Small Cap Equity Fund 97.57

Hermes US All Cap Equity Fund 99.93

Hermes Absolute Return Credit Fund 99.97

31 December 2014

Name % Held

Hermes Global Emerging Markets Fund 70.57

Hermes Global Equity Fund 87.64

Hermes UK Small and Mid Cap Companies Fund 98.00

Hermes Sourcecap European Alpha Fund 37.56

Hermes Global High Yield Bond Fund 74.48

Hermes Sourcecap Europe Ex-UK Fund 76.39

Hermes US SMID Equity Fund 60.51

Hermes Active UK Inflation-Linked Bond Fund 93.22

Hermes Global Equity ESG Fund 99.99

Hermes Multi Strategy Credit Fund 68.29

Hermes Multi Asset Inflation Fund 99.99

(b) Advisor

The Company has appointed Hermes Equity Ownership Services Limited as Advisor to provide voting

and engagement services. The Advisor is a wholly-owned subsidiary of Hermes Fund Managers

Limited, which is a wholly-owned subsidiary of BriTel Fund Trustees Limited and is a part of BT

Pension Scheme Group.

The Advisory fees rate for each of the sub-funds is disclosed in note 4.

6. Share Capital On incorporation the authorised share capital of the Company was £1,000,000 divided into 1,000,000 Subscriber Shares of a par value of £1 each and 500,000,000,000 shares of no par value initially designated as participating shares. Each sub-fund may issue Class F, R, or Z Shares, each of them Distributing or Accumulating shares, in one of the following currencies: Sterling, Euro, US Dollars, Swiss Franc, Swedish Krona, Norwegian Krone, Danish Krone, Hong Kong Dollar and Singapore Dollar.

172


6. Share Capital (continued)

All sub-funds may issue Class T Shares, each of them Distributing or Accumulating shares, in Sterling, Euro and US Dollar. The Hermes Sourcecap European Alpha Fund may issue Class S and Class M Shares, each of them Distributing or Accumulating shares. Class S and Class M Shares are available in Sterling, Euro and US Dollars but hedged only in Sterling and US Dollar. All sub-funds except the Hermes Active UK Inflation-Linked Bond Fund may issue Class F, R, Z and T Hedged Shares, each of them Distributing or Accumulating shares, in Sterling, Euro, US Dollar, Swiss Franc, Swedish Krona, Norwegian Krone, Danish Krone, Hong Kong Dollar and Singapore Dollar. A hedged share class removes almost all of the currency risk between the base currency of the sub-fund and the investor subscription currency. Accumulating Share Classes are not intended to distribute dividends to Shareholders. The income and other profits will be accumulated and reinvested on behalf of Shareholders. Dividends, if paid, may be paid out of the net income of each sub-fund including interest and dividends earned by the sub-fund less expenses of the sub-fund. Distributing Share Classes are intended to declare dividends on the Shares of the Distributing Classes of the sub-fund out of the net income of the sub-fund including interest and dividends earned by the sub-fund less expenses of the sub-fund. Dividends will be declared twice yearly and paid within two months of the date on which they have been declared. The holders of Shares are entitled to one vote per whole Share and to such dividends as the Directors may from time to time declare. In respect of Class Z Shares, the Minimum Subscription, Minimum Holding and Minimum Redemption will be as agreed in the Client Agreement. In respect of Class F Shares, the Minimum Subscription and Minimum Holding amounts are each £100,000 (or its foreign currency equivalent). In respect of Class R shares, the Minimum Subscription and Minimum Holding amounts are each €1,000 (or its foreign currency equivalent). In respect of Class T shares, the Minimum Subscription and Minimum Holding amounts are each £1,000 (or its foreign currency equivalent). In respect of Class M shares, the Minimum Subscription and Minimum Holding amounts are each €200,000,000 (or its foreign currency equivalent). In respect of Class S shares, the Minimum Subscription and Minimum Holding amounts are each £50,000,000 (or its foreign currency equivalent).

The Company has the power to redeem the remaining holding of any Shareholder who redeems his

Minimum Holding of Shares to below the Minimum Holding or its foreign currency equivalent.

Every Shareholder will have the right to require the Company to redeem his Shares in the sub-fund on any Dealing Day (save during any period when the calculation of the Net Asset Value is suspended in the circumstances set out in the Prospectus) on furnishing to the Administrator a redemption request. All redemption requests are dealt with on a forward pricing basis, i.e. by reference to the price for Shares calculated at the Valuation Point on the relevant Dealing Day. The request for redemption of Shares must be received before 9.30 am (Irish time) on all sub-funds except the Hermes Global High Yield Bond Fund the Hermes Multi Strategy Credit Fund and the Hermes Absolute Return Credit Fund (where the deadline is 5 pm Irish time) on the Business Day prior to the relevant Dealing Day.

All the Shares of the sub-fund may be redeemed at the discretion of the Directors if, after the first anniversary of the first issue of Shares of the sub-fund, the Net Asset Value of the sub-fund falls below £250,000,000 for any period of time.

173



The movement in the number of redeemable participating shares during the period ended 30 June 2015 was as follows:

Class

Opening

Shares Subscriptions Redemptions

Closing

Shares

Hermes Global Emerging

Markets Fund Z GBP Accumulating 100,849,979 - - 100,849,979


Markets Fund R EUR Accumulating 500 467,060 (1,460) 466,100


Markets Fund T GBP Accumulating 1,057,238 158,315 (10,366) 1,205,187


Markets Fund F GBP Accumulating 19,528,357 29,996,235 (11,647,967) 37,876,625


Markets Fund F USD Accumulating 46,563,736 9,881,314 (5,446,801) 50,998,249


Markets Fund F EUR Accumulating 500 - - 500


Markets Fund

F GBP Accumulating

Hedged 8,047,067 574,449 (7,710,726) 910,790


Markets Fund R USD Distributing - 500 - 500


Markets Fund R EUR Distributing - 116,313 - 116,313


Markets Fund F GBP Distributing - 1,000 - 1,000


Markets Fund

R EUR Distributing

Hedged - 500 - 500

Hermes Global Equity Fund Z GBP Accumulating 62,014,932 - - 62,014,932

Hermes Global Equity Fund R EUR Accumulating 9,000 - - 9,000

Hermes Global Equity Fund T GBP Accumulating 1,571,374 242,465 - 1,813,839

Hermes Global Equity Fund F GBP Accumulating 277,913 5,938 (5,333) 278,518

Hermes Global Equity Fund F GBP Distributing 26,000 15,000 (15,000) 26,000

Hermes Global Equity Fund F USD Accumulating 13,243,732 5,053,436 (3,057,728) 15,239,440

Hermes Global Equity Fund F EUR Accumulating 500 72,282,786 (35,591,140) 36,692,146

Hermes Global Equity Fund F EUR Distributing - 770,115 - 770,115

Hermes UK Small and Mid Cap

Companies Fund Z GBP Accumulating 45,613,693 - - 45,613,693


Companies Fund R EUR Accumulating 456,984 135,677 (82,843) 509,818


Companies Fund F GBP Accumulating 1,278,688 1,199,111 (432,018) 2,045,781


Companies Fund R GBP Accumulating 1,000 2,500 - 3,500


Companies Fund T GBP Accumulating 244,200 17,940 (110,088) 152,052


Companies Fund F GBP Distributing - 1,000 - 1,000

174



Class

Opening


Closing

Shares

Hermes Sourcecap European

Alpha Fund T GBP Accumulating 874,743 105,825 (118,055) 862,513


Alpha Fund F USD Distributing 495 362,000 - 362,495


Alpha Fund S GBP Distributing 4,748,332 485,286 (3,035,543) 2,198,075


Alpha Fund S EUR Distributing 3,765,056 660,710 (2,333,896) 2,091,870


Alpha Fund S EUR Accumulating 4,764,600 2,925,186 (727,663) 6,962,123


Alpha Fund

S GBP Distributing

Hedged 3,383,539 578,476 (2,298,873) 1,663,142


Alpha Fund S USD Distributing 701,634 - (346,089) 355,545


Alpha Fund

S USD Accumulating

Hedged 920,870 595,204 (229,985) 1,286,089


Alpha Fund F EUR Accumulating 1,285,169 2,265,220 (260,300) 3,290,089


Alpha Fund F EUR Distributing 749,147 54,940 (196,450) 607,637


Alpha Fund F GBP Accumulating 396,112 53,362 (185,243) 264,231


Alpha Fund F GBP Distributing 14,907,897 10,354 (3,834,000) 11,084,251


Alpha Fund

R USD Accumulating

Hedged 1,446,634 649,036 (367,911) 1,727,759


Alpha Fund S GBP Accumulating 2,765,811 349,863 (95,065) 3,020,609


Alpha Fund

R CHF Accumulating

Hedged 34,800 71,080 - 105,880


Alpha Fund

S USD Distributing

Hedged 1,303,667 209,213 (770,604) 742,276


Alpha Fund

S GBP Accumulating

Hedged 4,098,507 1,529,428 (1,182,921) 4,445,014


Alpha Fund S USD Accumulating 407,122 41,167 (43,500) 404,789


Alpha Fund M EUR Distributing 368,245 - (49,748) 318,497


Alpha Fund M EUR Accumulating 83,016,413 72,562,071 (12,558,231) 143,020,253


Alpha Fund R USD Accumulating 25,520 337,106 - 362,626


Alpha Fund R CHF Accumulating 49,999 - (49,500) 499


Alpha Fund

F GBP Accumulating

Hedged - 9,818 - 9,818


Alpha Fund Z GBP Accumulating 100,000,000 - - 100,000,000


Alpha Fund Z EUR Accumulating 17,765,650 - (2,004,290) 15,761,360

175



Class

Opening


Closing

Shares


Alpha Fund R EUR Accumulating 11,902,293 2,446,507 (3,062,861) 11,285,939


Alpha Fund R GBP Accumulating 673,847 385,311 (160,985) 898,173

Hermes Global High Yield Bond

Fund Z GBP Accumulating 100,000,000 - - 100,000,000


Fund R EUR Accumulating 500 - - 500


Fund F EUR Accumulating 16,323,500 3,444,407 (292,000) 19,475,907


Fund F GBP Accumulating 310,996 6,830,296 (6,891,211) 250,081


Fund

F GBP Accumulating

Hedged 16,955,309 369,002 (5,006,454) 12,317,857


Fund

F GBP Distributing

Hedged 2,125,269 873,400 - 2,998,669


Fund

F USD Accumulating

Hedged 500 6,271,437 (127,000) 6,144,937


Fund

F USD Distributing

Hedged 500 - - 500


Fund T GBP Accumulating - 1,154,878 (838,120) 316,758

Hermes Sourcecap Europe Ex-

UK Fund Z GBP Accumulating 85,775,781 - - 85,775,781


UK Fund R GBP Accumulating 4,353,914 - (488,682) 3,865,232


UK Fund R EUR Accumulating 7,008,735 70,790 (1,818,978) 5,260,547


UK Fund F GBP Accumulating 1,778,650 - (46,330) 1,732,320


UK Fund

F GBP Distributing

Hedged 14,105,667 5,127,089 (1,034,427) 18,198,329


UK Fund F EUR Accumulating 1,329,336 - (578,858) 750,478


UK Fund

F USD Distributing

Hedged - 1,198,423 (62,019) 1,136,404


UK Fund F EUR Distributing - 279,967 (4,681) 275,286

Hermes US SMID Equity Fund F GBP Distributing 587,587 141,036 (26,331) 702,292

Hermes US SMID Equity Fund F GBP Accumulating 15,793,883 4,719,651 (2,755,784) 17,757,750

Hermes US SMID Equity Fund F EUR Distributing 5,183 - (4,686) 497

Hermes US SMID Equity Fund F EUR Accumulating 707,103 485,410 (519,822) 672,691

Hermes US SMID Equity Fund F USD Distributing 12,065,715 2,507,158 (375,822) 14,197,051

Hermes US SMID Equity Fund F USD Accumulating 30,099,847 8,300,181 (8,900,041) 29,499,987

Hermes US SMID Equity Fund R EUR Accumulating 29,545 1,000 (1,000) 29,545

Hermes US SMID Equity Fund T GBP Accumulating 1,003,400 91,009 (299,237) 795,172

Hermes US SMID Equity Fund Z GBP Accumulating 93,564,728 - (11,678,832) 81,885,896


F EUR Accumulating

Hedged 49,041 - (48,534) 507


F GBP Accumulating

Hedged 410,690 529,039 (120,617) 819,112

176



Class

Opening


Closing

Shares


F GBP Distributing

Hedged 1,049 175,488 - 176,537


R CHF Accumulating

Hedged 500 4,733,710 (2,564,315) 2,169,895

Hermes US SMID Equity Fund R USD Accumulating 500 2,702,897 (926,670) 1,776,727


R EUR Accumulating

Hedged 500 449,400 (308,000) 141,900

Hermes Active UK Inflation-

Linked Bond Fund Z GBP Accumulating 106,606,264 - - 106,606,264


Linked Bond Fund T GBP Accumulating 30,899 312,654 - 343,553


Linked Bond Fund F GBP Accumulating 1,943 - - 1,943

Hermes Asia Ex-Japan Equity

Fund Z GBP Accumulating 652 - - 652


Fund R EUR Accumulating 4,547,276 1,009,192 (414,250) 5,142,218


Fund R USD Accumulating 11,911,742 10,363,398 (843,785) 21,431,355


Fund T GBP Accumulating 632,037 709,864 - 1,341,901


Fund F GBP Distributing 71,606,750 33,270,286 (11,057,524) 93,819,512


Fund

F GBP Distributing

Hedged 2,540,229 111,979 (254,612) 2,397,596


Fund F GBP Accumulating 145,161,999 39,637,820 (19,203,424) 165,596,395


Fund F EUR Distributing 11,368,631 2,043,748 (2,279,281) 11,133,098


Fund F EUR Accumulating 93,829,986 19,503,704 (6,610,178) 106,723,512


Fund

F EUR Accumulating

Hedged 1,876,095 2,548,719 (107,908) 4,316,906


Fund F USD Accumulating 155,684,832 107,971,257 (32,998,749) 230,657,340


Fund

R EUR Accumulating

Hedged 165,570 642,300 (197,950) 609,920


Fund

R CHF Accumulating

Hedged 260,340 1,192,764 (23,600) 1,429,504


Fund

F GBP Accumulating

Hedged 2,581,853 596,722 (303,800) 2,874,775


Fund F USD Distributing 11,239,909 4,181,068 (57,127) 15,363,850


Fund C USD Accumulating 500 2,467,829 - 2,468,329


Fund RC USD Accumulating 500 - - 500


Fund C EUR Accumulating - 14,890,849 - 14,890,849

177



Class

Opening


Closing

Shares


Fund C EUR Distributing - 2,453 - 2,453


Fund C GBP Accumulating - 33,070,728 - 33,070,728


Fund C GBP Accumulating - Hedged - 1,479 - 1,479


Fund RC EUR Accumulating - 134,087 - 134,087


Fund C USD Distributing - 9,053 (725) 8,328


Fund C GBP Distributing - 1,403,692 (57,152) 1,346,540

Hermes Global Equity ESG Fund Z USD Accumulating 19,846,507 - - 19,846,507

Hermes Global Equity ESG Fund R EUR Accumulating 500 - - 500

Hermes Global Equity ESG Fund F GBP Accumulating 1,000 - - 1,000

Hermes Global Equity ESG Fund F EUR Accumulating 500 400,000 - 400,500

Hermes Global Equity ESG Fund F USD Accumulating 500 1,125,000 - 1,125,500

Hermes Global Equity ESG Fund T GBP Accumulating - 46,090 - 46,090

Hermes Multi Strategy Credit

Fund Z USD Accumulating 121,435,965 - - 121,435,965




Fund

R EUR Accumulating

Hedged 500 - - 500


Fund F GBP Distributing 26,714,420 9,541,133 (298,801) 35,956,752


Fund

F GBP Distributing

Hedged 37,321,376 205,963,551 (3,931,680) 239,353,247


Fund

F GBP Accumulating

Hedged 530,339 109,924 (74,105) 566,158


Fund F EUR Accumulating 500 1,549,355 - 1,549,855


Fund

F EUR Accumulating

Hedged 4,448,539 2,132,655 - 6,581,194


Fund F USD Distributing 169,890 27,060 (100,888) 96,062


Fund F USD Accumulating 500 - - 500


Fund F GBP Accumulating - 1,000 - 1,000

Hermes Multi Asset Inflation

Fund

F GBP Accumulating

Hedged 1,000 - - 1,000


Fund

Z GBP Accumulating

Hedged 30,000,000 - - 30,000,000


Fund

F GBP Distributing

Hedged 1,000 - - 1,000


Fund T GBP Accumulating - 338,782 - 338,782

178



Class

Opening


Closing

Shares

Hermes Global Small Cap

Equity Fund F EUR Accumulating - 500 - 500


Equity Fund F EUR Distributing - 500 - 500


Equity Fund F GBP Accumulating - 1,000 - 1,000


Equity Fund

F GBP Accumulating

Hedged - 1,000 - 1,000


Equity Fund

F GBP Distributing

Hedged - 1,000 - 1,000


Equity Fund F USD Accumulating - 500 - 500


Equity Fund F USD Distributing - 500 - 500


Equity Fund R USD Accumulating - 500 - 500


Equity Fund R EUR Accumulating - 500 - 500


Equity Fund T GBP Accumulating - 495,141 - 495,141


Equity Fund Z USD Accumulating - 15,599,342 - 15,599,342

Hermes US All Cap Equity Fund F EUR Accumulating - 500 - 500

Hermes US All Cap Equity Fund F EUR Distributing - 500 - 500


F GBP Accumulating

Hedged - 1,000 - 1,000

Hermes US All Cap Equity Fund F GBP Distributing - 1,000 - 1,000

Hermes US All Cap Equity Fund F USD Accumulating - 500 - 500

Hermes US All Cap Equity Fund F USD Distributing - 500 - 500

Hermes US All Cap Equity Fund F GBP Accumulating - 1,000 - 1,000

Hermes US All Cap Equity Fund R USD Accumulating - 500 - 500

Hermes US All Cap Equity Fund R EUR Accumulating - 500 - 500

Hermes US All Cap Equity Fund Z USD Accumulating - 7,478,324 - 7,478,324

179



Class

Opening


Closing

Shares

Hermes Absolute Return Credit

Fund F EUR Accumulating - 500 - 500


Fund

F EUR Accumulating

Hedged - 500 - 500


Fund F EUR Dist Hedged - 500 - 500


Fund F CHF Acc Hedged - 500 - 500


Fund

F CHF Distributing

Hedged - 500 - 500


Fund F GBP Accumulating - 1,000 - 1,000


Fund

F GBP Accumulating

Hedged - 1,000 - 1,000


Fund F USD Accumulating - 500 - 500


Fund F USD Distributing - 500 - 500


Fund R EUR Accumulating - 500 - 500


Fund

R EUR Accumulating

Hedged - 500 - 500


Fund

R EUR Distributing

Hedged - 500 - 500


Fund

R CHF Accumulating

Hedged - 500 - 500


Fund

R CHF Distributing

Hedged - 500 - 500


Fund R USD Accumlating - 500 - 500


Fund Z USD Accumulating - 25,000,500 - 25,000,500

180



The movement in the number of redeemable participating shares during the year ended 31 December 2014 was as follows:

Class

Opening


Closing

Shares


Markets Fund Z GBP Accumulating 100,849,979 - - 100,849,979


Markets Fund R EUR Accumulating 500 - - 500


Markets Fund T GBP Accumulating 699,909 377,639 (20,310) 1,057,238


Markets Fund F GBP Accumulating 7,583,814 14,860,665 (2,916,122) 19,528,357


Markets Fund F USD Accumulating 500 51,909,694 (5,346,458) 46,563,736


Markets Fund F EUR Accumulating - 500 - 500


Markets Fund

F GBP Accumulating

Hedged 3,959,410 5,824,240 (1,736,583) 8,047,067

Hermes Global Equity Select

Fund Z GBP Accumulating 61,000,000 - (61,000,000) -


Fund R EUR Accumulating 500 - (500) -


Fund T GBP Accumulating 1,255,527 114,622 (1,370,149) -


Fund F GBP Accumulating 7,813,655 407,418 (8,221,073) -


Fund F USD Accumulating 6,250,129 482,832 (6,732,961) -

Hermes Global Equity Fund Z GBP Accumulating 62,014,932 - - 62,014,932

Hermes Global Equity Fund R EUR Accumulating 9,000 - - 9,000

Hermes Global Equity Fund T GBP Accumulating 813,525 1,104,037 (346,188) 1,571,374

Hermes Global Equity Fund F GBP Accumulating 73,475 239,638 (35,200) 277,913

Hermes Global Equity Fund F GBP Distributing 1,000 691,500 (666,500) 26,000

Hermes Global Equity Fund F USD Accumulating 500 13,243,232 - 13,243,732

Hermes Global Equity Fund F EUR Accumulating - 500 - 500


Companies Fund Z GBP Accumulating 71,654,681 - (26,040,988) 45,613,693


Companies Fund R EUR Accumulating 249,593 485,319 (277,928) 456,984


Companies Fund F GBP Accumulating 1,510,320 1,590,825 (1,822,457) 1,278,688


Companies Fund R GBP Accumulating - 1,000 - 1,000


Companies Fund T GBP Accumulating 181,265 74,725 (11,790) 244,200

181



Class

Opening


Closing

Shares

Hermes Japan Equity Fund Z GBP Accumulating 135,574,084 - (135,574,084) -

Hermes Japan Equity Fund R EUR Accumulating 500 - (500) -

Hermes Japan Equity Fund T GBP Accumulating 438,659 28,630 (467,289) -

Hermes Japan Equity Fund F GBP Accumulating 1,280,375 - (1,280,375) -

Hermes Japan Equity Fund R GBP Accumulating 843 - (843) -

Hermes Japan Equity Fund F JPY Accumulating 10 - (10) -


Alpha Fund Z GBP Accumulating 100,000,000 - - 100,000,000


Alpha Fund Z EUR Accumulating 17,775,635 780,562 (790,547) 17,765,650


Alpha Fund R EUR Accumulating 17,973,225 9,421,725 (15,492,657) 11,902,293


Alpha Fund R GBP Accumulating 142,936 580,911 (50,000) 673,847


Alpha Fund T GBP Accumulating 774,818 144,907 (44,982) 874,743


Alpha Fund F USD Distributing 69,714 - (69,219) 495


Alpha Fund S GBP Distributing 2,556,324 21,255,067 (19,063,059) 4,748,332


Alpha Fund S EUR Distributing 1,088,063 3,552,296 (875,303) 3,765,056


Alpha Fund S EUR Accumulating 78,489 4,805,021 (118,910) 4,764,600


Alpha Fund

S GBP Distributing

Hedged 240,369 3,822,174 (679,004) 3,383,539


Alpha Fund S USD Distributing 120,644 1,371,679 (790,689) 701,634


Alpha Fund

S USD Accumulating

Hedged 238,980 908,516 (226,626) 920,870


Alpha Fund F EUR Accumulating 815,472 469,697 - 1,285,169


Alpha Fund F EUR Distributing 1,750,297 630,970 (1,632,120) 749,147


Alpha Fund F GBP Accumulating 292,937 502,858 (399,683) 396,112


Alpha Fund F GBP Distributing 18,079,200 82,197 (3,253,500) 14,907,897


Alpha Fund

R USD Accumulating

Hedged - 1,901,147 (454,513) 1,446,634


Alpha Fund S GBP Accumulating - 2,950,653 (184,842) 2,765,811


Alpha Fund

R CHF Accumulating

Hedged - 34,800 - 34,800


Alpha Fund

S USD Distributing

Hedged - 1,577,383 (273,716) 1,303,667


Alpha Fund

S GBP Accumulating

Hedged - 4,099,446 (939) 4,098,507


Alpha Fund S USD Accumulating - 407,122 - 407,122

182



Class

Opening


Closing

Shares


Alpha Fund M EUR Distributing - 447,293 (79,048) 368,245


Alpha Fund M EUR Accumulating - 93,165,712 (10,149,299) 83,016,413


Alpha Fund R USD Accumulating - 25,520 - 25,520


Alpha Fund R CHF Accumulating - 49,999 - 49,999

Hermes Global Investment

Grade Fund Z GBP Accumulating 100,000,000 - (100,000,000) -


Grade Fund R EUR Accumulating 500 - (500) -


Grade Fund F GBP Accumulating 30,600 - (30,600) -


Grade Fund F EUR Accumulating 522 - (522) -


Fund Z GBP Accumulating 100,000,000 - - 100,000,000




Fund F EUR Accumulating 500 16,329,000 (6,000) 16,323,500


Fund F GBP Accumulating 79,560 241,499 (10,063) 310,996


Fund

F GBP Accumulating

Hedged - 17,390,515 (435,206) 16,955,309


Fund

F GBP Distributing

Hedged - 2,125,269 - 2,125,269


Fund

F USD Accumulating

Hedged - 500 - 500


Fund

F USD Distributing

Hedged - 500 - 500


UK Fund Z GBP Accumulating 85,775,781 - - 85,775,781


UK Fund R GBP Accumulating 5,281,675 343 (928,104) 4,353,914


UK Fund R EUR Accumulating 11,754,131 582,283 (5,327,679) 7,008,735


UK Fund F GBP Accumulating 119,350 1,781,180 (121,880) 1,778,650


UK Fund

F GBP Distributing

Hedged - 14,997,743 (892,076) 14,105,667


UK Fund F EUR Accumulating 1,329,336 - - 1,329,336

Hermes US SMID Equity Fund F GBP Distributing 5,179,906 725,791 (5,318,110) 587,587

Hermes US SMID Equity Fund F GBP Accumulating 160,900,081 9,261,277 (154,367,475) 15,793,883

Hermes US SMID Equity Fund F EUR Distributing 131,988 5,610 (132,415) 5,183

Hermes US SMID Equity Fund F EUR Accumulating 2,244,702 139,411 (1,677,010) 707,103

Hermes US SMID Equity Fund F USD Distributing 10,159,607 3,888,319 (1,982,211) 12,065,715

Hermes US SMID Equity Fund F USD Accumulating 25,184,950 22,670,155 (17,755,258) 30,099,847

Hermes US SMID Equity Fund R EUR Accumulating 29,545 - - 29,545

183



Class

Opening


Closing

Shares

Hermes US SMID Equity Fund T GBP Accumulating 215,907 802,246 (14,753) 1,003,400

Hermes US SMID Equity Fund Z GBP Accumulating 93,564,728 - - 93,564,728


F EUR Accumulating

Hedged 23,027 29,000 (2,986) 49,041


F GBP Accumulating

Hedged 200,987 209,703 - 410,690


F GBP Distributing

Hedged - 1,054 (5) 1,049


R CHF Accumulating

Hedged - 500 - 500

Hermes US SMID Equity Fund R USD Accumulating - 500 - 500


R EUR Accumulating

Hedged - 500 - 500


Linked Bond Fund Z GBP Accumulating 106,606,264 - - 106,606,264


Linked Bond Fund T GBP Accumulating 1,998 28,901 - 30,899


Linked Bond Fund F GBP Accumulating 1,943 - - 1,943


Fund Z GBP Accumulating 116,918,638 652 (116,918,638) 652


Fund R EUR Accumulating 1,973,361 2,912,508 (338,593) 4,547,276


Fund R USD Accumulating 3,002,959 11,620,073 (2,711,290) 11,911,742


Fund T GBP Accumulating 50,880 581,157 - 632,037


Fund F GBP Distributing 8,604,155 67,064,827 (4,062,232) 71,606,750


Fund

F GBP Distributing

Hedged 226,712 5,506,072 (3,192,555) 2,540,229


Fund F GBP Accumulating 36,121,133 126,442,204 (17,401,338) 145,161,999


Fund F EUR Distributing 5,133,492 8,953,644 (2,718,505) 11,368,631


Fund F EUR Accumulating 11,942,359 85,751,024 (3,863,397) 93,829,986


Fund

F EUR Accumulating

Hedged 409,300 1,958,250 (491,455) 1,876,095


Fund F USD Accumulating 10,432,481 156,859,780 (11,607,429) 155,684,832


Fund

R EUR Accumulating

Hedged - 189,270 (23,700) 165,570


Fund

R CHF Accumulating

Hedged - 260,340 - 260,340


Fund

F GBP Accumulating

Hedged - 2,795,470 (213,617) 2,581,853

184



Class

Opening


Closing

Shares


Fund F USD Distributing - 11,271,992 (32,083) 11,239,909


Fund C USD Accumulating - 500 - 500


Fund RC USD Accumulating - 500 - 500

Hermes Global Equity ESG Fund Z USD Accumulating - 19,846,507 - 19,846,507

Hermes Global Equity ESG Fund R EUR Accumulating - 500 - 500

Hermes Global Equity ESG Fund F GBP Accumulating - 1,000 - 1,000

Hermes Global Equity ESG Fund F EUR Accumulating - 500 - 500

Hermes Global Equity ESG Fund F USD Accumulating - 500 - 500


Fund Z USD Accumulating - 121,482,068 (46,103) 121,435,965


Fund R EUR Accumulating - 500 - 500


Fund

R EUR Accumulating

Hedged - 500 - 500


Fund F GBP Distributing - 26,730,483 (16,063) 26,714,420


Fund

F GBP Distributing

Hedged - 40,246,493 (2,925,117) 37,321,376


Fund

F GBP Accumulating

Hedged - 530,339 - 530,339


Fund F EUR Accumulating - 500 - 500


Fund

F EUR Accumulating

Hedged - 4,448,539 - 4,448,539


Fund F USD Distributing - 169,941 (51) 169,890


Fund F USD Accumulating - 500 - 500


Fund

F GBP Accumulating

Hedged - 1,000 - 1,000


Fund

Z GBP Accumulating

Hedged - 30,000,000 - 30,000,000


Fund

F GBP Distributing

Hedged - 1,000 - 1,000

185


7. Fair Value Measurement

The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading on the period end date. The quoted market price used for financial assets and financial liabilities held by the Company is the last traded price. When the Company holds derivatives with offsetting market risks, it uses mid-market prices as a basis for establishing fair values. If a significant movement in fair value occurs subsequent to the close of trading on the period end date, valuation techniques will be applied to determine the fair value. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The Company categorises investments using the following hierarchy as defined by IFRS 13:

Level 1 - valued using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - valued using inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly or indirectly.

Level 3 - valued using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The tables below set out the fair value measurements using IFRS 13 fair value hierarchies.

Level I Level II Level III Total

Fund name $ $ $ $


P-Notes - 12,375,516 - 12,375,516

Equities 507,555,040 - - 507,555,040

Warrants 45,149,815 - - 45,149,815

Forward currency contracts (asset) - 183 - 183

Forward currency contracts (liability) - (6,736) - (6,736)

552,704,855 12,368,963 - 565,073,818


Equities 388,901,629 - - 388,901,629

388,901,629 - - 388,901,629


Equities 385,365,537 - - 385,365,537

Forward currency contracts (asset) - 15,158 - 15,158


385,365,537 3,859 - 385,369,396

Financial assets and liabilities at fair value through profit or loss

186


7. Fair Value Measurement (continued)


Fund name $ $ $ $


P-Notes - 108,697,665 - 108,697,665

Equities 1,725,447,778 - - 1,725,447,778

Warrants 39,951,847 - - 39,951,847



1,765,399,625 108,613,503 - 1,874,013,128


Equities 45,524,797 - - 45,524,797


Corporate Bonds 547,856,158 - - 547,856,158

Floating Rate Notes 65,971,189 - - 65,971,189

Credit Default Swaps (asset) - 9,381,996 - 9,381,996

Credit Default Swaps (liability) - (4,932,848) - (4,932,848)

Forward currency contracts (assets) - 438,495 - 438,495

Forward currency contracts (liability) - (1,082,222) - (1,082,222)

Futures (asset) 694,000 - - 694,000

Futures (liability) (33,121) - - (33,121)

614,488,226 3,805,421 - 618,293,647


Equities 14,273,575 - - 14,273,575

Forward currency contracts (liability) - (13) - (13)

14,273,575 (13) - 14,273,562


Corporate Bonds 35,420,444 - - 35,420,444

Asset Backed Securities 296,628 - - 296,628

Credit Default Swaps (asset) - 832,852 - 832,852

Credit Default Swaps (liability) - (397,383) - (397,383)




35,704,920 404,067 - 36,108,987



Fund name £ £ £ £

Equities 200,078,284 - - 200,078,284

Futures (94,133) - - (94,133)

199,984,151 - - 199,984,151



187






Corporate Bonds 1,376,680 - - 1,376,680

Government Bonds 133,794,587 - - 133,794,587


135,171,267 (9,695) - 135,161,572


Certificates of Deposit 4,500,000 - - 4,500,000

Commercial Paper 4,497,658 - - 4,497,658

Equities 2,953,376 - - 2,953,376

Government Bonds 4,686,808 - - 4,686,808

Swaps (asset) - 539,143 - 539,143

Swaps (liability) - (51,406) - (51,406)

Futures (asset) - 32,173 - 32,173

Futures (liability) - (106,678) - (106,678)



16,637,842 414,412 - 17,052,254


Equities 749,597,720 - - 749,597,720



749,597,720 31,039 - 749,628,759


Fund name € € € €


Corporate Bonds - 214,436,544 - 214,436,544

Floating Rate Notes - 18,046,820 - 18,046,820





Futures (asset) 442,212 - - 442,212


365,771 235,016,268 - 235,382,039


Equities 262,052,654 - - 262,052,654



262,052,654 1,151 - 262,053,805


Equities 29,511,174 - - 29,511,174

Forward currency contracts (liability) - (13) - (13)

Futures (liability) - (5,760) - (5,760)

29,511,174 (5,773) - 29,505,401



188



The following is a summary of the inputs used to value each sub-funds assets and liabilities carried at fair value as at 31 December 2014.


Fund name $ $ $ $


P-Notes - 34,201,474 - 34,201,474

Equities 424,552,633 - - 424,552,633

Warrants 45,339,786 - - 45,339,786



469,892,419 34,197,811 - 504,090,230


Equities 275,048,339 - - 275,048,339

Forward currency contracts - (7) - (7)

275,048,339 (7) - 275,048,332


Equities 373,137,562 - - 373,137,562



373,137,562 (1,408) - 373,136,154


P-Notes - 125,985,332 - 125,985,332

Equities 1,082,341,185 - - 1,082,341,185

Warrants 59,404,545 - - 59,404,545



1,141,745,730 125,930,342 - 1,267,676,072


Equities 40,556,361 - - 40,556,361


Corporate Bonds - 263,103,841 - 263,103,841



Credit Default Swaps (liability) - (5,227,864) - (5,227,864)

Forward currency contracts (assets) - 2,243,420 - 2,243,420


Futures (268,484) - - (268,484)

(268,484) 320,403,147 - 320,134,663


189





Equities 175,196,659 - - 175,196,659

Futures 306,816 - - 306,816

175,503,475 - - 175,503,475


Corporate Bonds - 1,399,248 - 1,399,248

Government Bonds - 134,562,745 - 134,562,745



- 135,946,162 - 135,946,162


Certificates of Deposit 4,000,000 - - 4,000,000

Commercial Paper 5,995,875 - - 5,995,875

Reits 2,679,775 - - 2,679,775

Credit Default Swaps (asset) - 432,993 - 432,993

Total Return Swaps (asset) - 414,018 - 414,018

Total Return Swaps (liability) - (386,224) - (386,224)

Futures (asset) 252,098 - - 252,098




12,893,564 464,310 - 13,357,874


Fund name € € € €


Equities 521,012,503 - - 521,012,503


521,012,503 133,342 - 521,145,845


Corporate Bonds - 204,392,412 - 204,392,412






Futures (259,745) - - (259,745)

(259,745) 219,276,092 - 219,016,347


Equities 217,396,554 - - 217,396,554


217,396,554 153,229 - 217,549,783




There were no transfers between levels during the period.

190


8. Exchange Rates

The 30 June 2015 period end exchange rates were as follows:

Exchange rate to £ Exchange rate to £

Australian dollar 2.0462 Mexican peso 24.6767

Brazil real 4.8854 Nigerian naira 312.8100

Canadian dollar 1.9634 Norwegian kroner 12.3732

Czech koruna 38.4769 Philippine peso 70.9130

Danish kroner 10.5297 Russian ruble 87.6228

Egyptian pound 11.9998 Singapore dollar 2.1176

Euro 1.4115 South African rand 19.0890

Hong Kong dollar 12.1924 South Korean won 1,754.2682

Hungarian forint 445.0055 Swedish krona 13.0495

Israeli shekel 5.9329 Swiss franc 1.4698

Indian rupee 100.1495 Taiwan dollar 48.5249

Indonesian rupiah 20,968.0220 Thai baht 53.1187

Japanese yen 192.4434 Turkish lira 4.2133

Malaysian ringgit 5.9338 US dollar 1.5727

Exchange rate to € Exchange rate to US$

Canadian dollar 1.3910 Canadian dollar 1.2485

Swiss franc 1.0413 Hong Kong dollar 7.7526

Danish kroner 7.4599 Malaysian ringgit 3.7730

Pound sterling 0.7085 South Korean won 1,115.4500

Japanese yen 136.3391 Taiwan dollar 30.8545

Norwegian kroner 8.7660

Swedish krona 9.2451

US dollar 1.1142

Exchange rate to ¥

Pound sterling 0.0052

Danish kroner 0.0547

Euro 0.0073

191


8. Exchange Rates (continued)

The 31 December 2014 year end exchange rates were as follows:

Exchange rate to £ Exchange rate to £

Australian dollar 1.9054 Mexican peso 22.9830

Brazil real 4.1448 Nigerian naira 285.3427

Canadian dollar 1.8060 Norwegian kroner 11.6906

Czech koruna 35.7131 Philippine peso 69.7491

Danish kroner 9.5952 Russian ruble 93.5550

Egyptian pound 11.1487 Singapore dollar 2.0662

Euro 1.2840 South African rand 5.8510

Hong Kong dollar 12.0917 South Korean won 1,713.8496

Hungarian forint 406.8701 Swedish krona 12.2062

Israeli shekel 6.0677 Swiss franc 1.5493

Indian rupee 98.4238 Taiwan dollar 49.2754

Indonesian rupiah 19,311.3105 Thai baht 51.2993

Japanese yen 186.2445 Turkish lira 3.6451

Malaysian ringgit 5.4519 US dollar 1.5608

Exchange rate to € Exchange rate to US$

Canadian dollar 1.4015 Canadian dollar 1.1580

Swiss franc 1.2024 Hong Kong dollar 7.7552

Danish kroner 7.4463 Malaysian ringgit 3.4965

Pound sterling 0.7760 South Korean won 1,099.1500

Japanese yen 145.0790 Taiwan dollar 31.6020

Norwegian kroner 9.0724

Swedish krona 9.4726

US dollar 1.2101

Exchange rate to ¥

Pound sterling 0.0053

Danish kroner 0.0513

Euro 0.0069

192


9. Connected Parties

UCITS Notices 14 requires that any transaction carried out with a UCITS by a promoter, manager, trustee, investment advisor and/or associated group companies of these (“connected parties”) must be carried out as if negotiated at arm’s length and must be in the best interests of the shareholders. The Board of Directors are satisfied that (a) there are arrangements (evidenced by written procedures) in place, to ensure that transactions with connected parties entered into during the period were carried out as if negotiated at arm’s length and in the best interests of the shareholders and (b) that transactions with connected parties entered into during the period were carried out as if negotiated at arm’s length and in the best interests of the shareholder.

10. Soft Commission Arrangements

There were no soft commission arrangements affecting the Company during the period ended 30 June

2015 or year ended 31 December 2014.

11. Taxation

Under current law and practice the Company qualifies as an investment undertaking as defined in

Section 739B of the Taxes Consolidation Act, 1997, as amended. On that basis, it is not chargeable to

Irish tax on its income or gains.

However, Irish tax may arise on the happening of a "chargeable event". A chargeable event includes

any distribution payments to shareholders or any encashment, redemption, cancellation or transfer of

redeemable participating shares. No Irish tax will arise on the Company in respect of chargeable

events in respect of:

(a) a shareholder who is neither Irish resident nor ordinarily resident in Ireland for tax purposes, at

the time of the chargeable event, provided appropriate valid declarations in accordance with the

provisions of the Taxes Consolidation Act, 1997, as amended, are held by the Company; and

(b) certain exempted Irish tax resident shareholders who have provided the Company with the

necessary signed statutory declarations.

Dividends, interest and capital gains (if any) received on investments made by the Company may be

subject to withholding taxes imposed by the country from which the investment income/gains are

received and such taxes may not be recoverable by the Company or its shareholders.

12. Net Asset Value Per Redeemable Participating Share

The Net Asset Value per redeemable participating share of each sub-fund of the Company is

determined by dividing the value of the net assets of the sub-fund by the total number of redeemable

participating shares in issue.

13. Distributions

The following distributions were declared during the period ended 30 June 2015:

Distribution Date Amount

per unit Declared Ex-date Record Date Date paid $ Relevant period

0.00902949 30/06/2015 30/06/2015 29/06/2015 04/08/2015 369 01/01/2015 - 30/06/2015

0.01135753 30/06/2015 30/06/2015 29/06/2015 04/08/2015 9,729 01/01/2015 - 30/06/2015

10,098


193


13. Distributions (continued)

Hermes Global Emerging Markets



0.00228127 30/06/2015 30/06/2015 29/06/2015 04/08/2015 4 01/01/2015 - 30/06/2015

0.00944000 30/06/2015 30/06/2015 29/06/2015 04/08/2015 5 01/01/2015 - 30/06/2015

0.00450074 30/06/2015 30/06/2015 29/06/2015 04/08/2015 579 01/01/2015 - 30/06/2015

0.00284083 30/06/2015 30/06/2015 29/06/2015 04/08/2015 2 01/01/2015 - 30/06/2015

590


per unit Declared Ex-date Record Date Date paid € Relevant period

0.02518071 30/06/2015 30/06/2015 29/06/2015 04/08/2015 106,615 01/01/2015 - 30/06/2015

0.05764813 30/06/2015 30/06/2015 29/06/2015 04/08/2015 26 01/01/2015 - 30/06/2015

106,641



0.01590483 30/06/2015 30/06/2015 29/06/2015 04/08/2015 249,013 01/01/2015 - 30/06/2015

0.01196453 30/06/2015 30/06/2015 29/06/2015 04/08/2015 37,147 01/01/2015 - 30/06/2015

0.02814391 30/06/2015 30/06/2015 29/06/2015 04/08/2015 17,108 01/01/2015 - 30/06/2015

0.02928145 30/06/2015 30/06/2015 29/06/2015 04/08/2015 61,276 01/01/2015 - 30/06/2015

0.01130428 30/06/2015 30/06/2015 29/06/2015 04/08/2015 26,556 01/01/2015 - 30/06/2015

0.02516543 30/06/2015 30/06/2015 29/06/2015 04/08/2015 8,027 01/01/2015 - 30/06/2015

0.02764858 30/06/2015 30/06/2015 29/06/2015 04/08/2015 18,412 01/01/2015 - 30/06/2015

0.03133810 30/06/2015 30/06/2015 29/06/2015 04/08/2015 9,985 01/01/2015 - 30/06/2015

0.01904141 30/06/2015 30/06/2015 29/06/2015 04/08/2015 6,192 01/01/2015 - 30/06/2015

433,716



0.00919389 30/06/2015 30/06/2015 29/06/2015 04/08/2015 9,363 01/01/2015 - 30/06/2015

0.01032809 30/06/2015 30/06/2015 29/06/2015 04/08/2015 265,196 01/01/2015 - 30/06/2015

0.00572841 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1,576 01/01/2015 - 30/06/2015

276,135

Hermes UK SMID Equity Fund


per unit Declared Ex-date Record Date Date paid £ Relevant period

0.00160000 30/06/2015 30/06/2015 29/06/2015 04/08/2015 2 01/01/2015 - 30/06/2015

2




0.00048888 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1 01/01/2015 - 30/06/2015

1




194






0.00839331 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1,237,130 01/01/2015 - 30/06/2015

0.01261155 30/06/2015 30/06/2015 29/06/2015 04/08/2015 193,349 01/01/2015 - 30/06/2015

0.01930324 30/06/2015 30/06/2015 29/06/2015 04/08/2015 239,120 01/01/2015 - 30/06/2015

0.00671501 30/06/2015 30/06/2015 29/06/2015 04/08/2015 25,294 01/01/2015 - 30/06/2015

0.01201828 30/06/2015 30/06/2015 29/06/2015 04/08/2015 33 01/01/2015 - 30/06/2015

0.00560419 30/06/2015 30/06/2015 29/06/2015 04/08/2015 11,856 01/01/2015 - 30/06/2015

0.01274519 30/06/2015 30/06/2015 29/06/2015 04/08/2015 106 01/01/2015 - 30/06/2015

1,706,888




0.01866347 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1,056,545 01/01/2015 - 30/06/2015

0.00340164 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1,281,867 01/01/2015 - 30/06/2015

0.07254298 30/06/2015 30/06/2015 29/06/2015 04/08/2015 6,969 01/01/2015 - 30/06/2015

2,345,381




0.00605000 30/06/2015 30/06/2015 29/06/2015 04/08/2015 6 01/01/2015 - 30/06/2015

6



0.00242141 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1 01/01/2015 - 30/06/2015

0.00239759 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1 01/01/2015 - 30/06/2015

0.00230000 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1 01/01/2015 - 30/06/2015

0.00123761 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1 01/01/2015 - 30/06/2015

0.00124526 30/06/2015 30/06/2015 29/06/2015 04/08/2015 1 01/01/2015 - 30/06/2015

5


195



The following distributions were declared during the year ended 31 December 2014 for the Hermes Global Equity Fund, the Hermes Global High Yield Bond Fund, the Hermes Sourcecap European Alpha Fund, the Hermes Sourcecap Europe Ex-UK Fund, the Hermes US SMID Equity Fund, the Hermes Asia Ex-Japan Equity Fund, the Hermes Multi Strategy Credit Fund and the Hermes Multi Asset Inflation Fund:



0.00916179 30/06/2014 30/06/2014 27/06/2014 01/08/2014 8,976 01/01/2014 - 30/06/2014

0.05750489 31/12/2014 31/12/2014 30/12/2014 02/02/2015 2,358 01/07/2014 - 31/12/2014

11,334



0.00428870 31/12/2014 31/12/2014 30/12/2014 02/02/2015 11,628 01/07/2014 - 31/12/2014

0.00598493 31/12/2014 31/12/2014 30/12/2014 02/02/2015 4 01/07/2014 - 31/12/2014

11,632



0.02199389 30/06/2014 30/06/2014 27/06/2014 01/08/2014 497,713 01/01/2014 - 30/06/2014

0.03478509 30/06/2014 30/06/2014 27/06/2014 01/08/2014 76,958 01/01/2014 - 30/06/2014

0.03769999 30/06/2014 30/06/2014 27/06/2014 01/08/2014 1,922 01/01/2014 - 30/06/2014

0.01238505 30/06/2014 30/06/2014 27/06/2014 01/08/2014 281,502 01/01/2014 - 30/06/2014

0.03178565 30/06/2014 30/06/2014 27/06/2014 01/08/2014 111,028 01/01/2014 - 30/06/2014

0.00464967 30/06/2014 30/06/2014 27/06/2014 01/08/2014 20,349 01/01/2014 - 30/06/2014

0.02751290 30/06/2014 30/06/2014 27/06/2014 01/08/2014 21,942 01/01/2014 - 30/06/2014

0.02485998 30/06/2014 30/06/2014 27/06/2014 01/08/2014 24,256 01/01/2014 - 30/06/2014

0.00067675 31/12/2014 31/12/2014 30/12/2014 02/02/2015 12,274 01/07/2014 - 31/12/2014

0.00266918 31/12/2014 31/12/2014 30/12/2014 02/02/2015 2,000 01/07/2014 - 31/12/2014

0.00492228 31/12/2014 31/12/2014 30/12/2014 02/02/2015 28,444 01/07/2014 - 31/12/2014

0.00238489 31/12/2014 31/12/2014 30/12/2014 02/02/2015 8,979 01/07/2014 - 31/12/2014

0.00104560 31/12/2014 31/12/2014 30/12/2014 02/02/2015 4,309 01/07/2014 - 31/12/2014

0.00460988 31/12/2014 31/12/2014 30/12/2014 02/02/2015 3,939 01/07/2014 - 31/12/2014

0.00182035 31/12/2014 31/12/2014 30/12/2014 02/02/2015 2,890 01/07/2014 - 31/12/2014

0.00446485 31/12/2014 31/12/2014 30/12/2014 02/02/2015 1,644 01/07/2014 - 31/12/2014

1,100,149



0.01330249 30/06/2014 30/06/2014 27/06/2014 01/08/2014 81,427 01/01/2014 - 30/06/2014

81,427





196






0.00126034 30/06/2014 30/06/2014 27/06/2014 01/08/2014 824 01/01/2014 - 30/06/2014

0.00532139 30/06/2014 30/06/2014 27/06/2014 01/08/2014 35 01/01/2014 - 30/06/2014

0.00008877 31/12/2014 31/12/2014 30/12/2014 02/02/2015 81 01/07/2014 - 31/12/2014

0.00144632 31/12/2014 31/12/2014 30/12/2014 02/02/2015 9 01/07/2014 - 31/12/2014

0.00047136 31/12/2014 31/12/2014 30/12/2014 02/02/2015 5,687 01/07/2014 - 31/12/2014

6,636




0.00646730 30/06/2014 30/06/2014 27/06/2014 01/08/2014 305,831 01/01/2014 - 30/06/2014

0.01222512 30/06/2014 30/06/2014 27/06/2014 01/08/2014 113,577 01/01/2014 - 30/06/2014

0.00672497 30/06/2014 30/06/2014 27/06/2014 01/08/2014 6,075 01/01/2014 - 30/06/2014

0.00478312 31/12/2014 31/12/2014 30/12/2014 02/02/2015 532,080 01/07/2014 - 31/12/2014

0.01138595 31/12/2014 31/12/2014 30/12/2014 02/02/2015 157,474 01/07/2014 - 31/12/2014

0.00549140 31/12/2014 31/12/2014 30/12/2014 02/02/2015 61,723 01/07/2014 - 31/12/2014

0.00414300 31/12/2014 31/12/2014 30/12/2014 02/02/2015 16,348 01/07/2014 - 31/12/2014

1,193,108




0.00126034 30/06/2014 30/06/2014 27/06/2014 01/08/2014 26,821 01/05/2014 - 30/06/2014

0.01493244 31/12/2014 31/12/2014 30/12/2014 02/02/2015 620,726 01/07/2014 - 31/12/2014

0.01411155 31/12/2014 31/12/2014 30/12/2014 02/02/2015 819,514 01/07/2014 - 31/12/2014

0.00590547 31/12/2014 31/12/2014 30/12/2014 02/02/2015 1,003 01/07/2014 - 31/12/2014

1,468,064




0.00325000 30/06/2014 31/12/2014 30/12/2014 02/02/2015 3 01/07/2014 - 31/12/2014

3

197


14. Comparative Net Asset Values


Markets Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £

Net Asset Value Z GBP Accumulating 241,085,312 229,168,918 209,484,043

Net Asset Value per share Z GBP Accumulating 2.3905 2.2724 2.0772

€ € €

Net Asset Value R EUR Accumulating 1,507,202 1,414 1,227

Net Asset Value per share R EUR Accumulating 3.2336 2.8285 2.4533

£ £ £

Net Asset Value T GBP Accumulating 1,694,123 1,412,694 854,785

Net Asset Value per share T GBP Accumulating 1.4057 1.3362 1.2213

£ £ £

Net Asset Value F GBP Accumulating 47,017,710 23,157,040 8,300,105

Net Asset Value per share F GBP Accumulating 1.2413 1.1858 1.0944

$ $ $

Net Asset Value F USD Accumulating 112,916,724 97,815,649 1,027

Net Asset Value per share F USD Accumulating 2.2141 2.1007 2.0530

£ £ £

Net Asset Value F GBP Accumulating Hedged 994,027 8,325,795 3,993,986

Net Asset Value per share F GBP Accumulating Hedged 1.0914 1.0346 1.0087

€ €

Net Asset Value F EUR Accumulating 1,439 1,256

Net Asset Value per share F EUR Accumulating 2.8779 2.5122

$

Net Asset Value R USD Distributing 956

Net Asset Value per share R USD Distributing 1.9123

€

Net Asset Value R EUR Distributing 214,789

Net Asset Value per share R EUR Distributing 1.8466

£

Net Asset Value F GBP Distributing 954

Net Asset Value per share F GBP Distributing 0.9537

€

Net Asset Value R EUR Distributing Hedged 977

Net Asset Value per share R EUR Distributing Hedged 1.9543

198


14. Comparative Net Asset Values (continued)

Hermes Global Equity Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



€ € €

Net Asset Value R EUR Accumulating 36,735 32,797 27,526


£ £ £

Net Asset Value T GBP Accumulating 3,172,134 2,671,087 1,226,306


£ £ £

Net Asset Value F GBP Distributing 27,795 27,319 998

Net Asset Value per share F GBP Distributing 1.0690 1.0507 0.9976

£ £ £

Net Asset Value F GBP Accumulating 420,166 408,617 96,395


$ $ $

Net Asset Value F USD Accumulating 34,762,079 29,241,966 1,043


€ €

Net Asset Value F EUR Accumulating 89,734,092 1,089


€

Net Asset Value F EUR Distributing 1,511,324

Net Asset Value per share F EUR Distributing 1.9625


Companies Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



€ € €

Net Asset Value R EUR Accumulating 2,548,043 1,885,178 922,665


199




Companies Fund (continued) Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



£ £ £

Net Asset Value F GBP Distributing 978 - -

Net Asset Value per share F GBP Distributing 0.9784 - -

£ £ £

Net Asset Value T GBP Accumulating 273,586 394,051 276,215


£ £

Net Asset Value R GBP Accumulating 3,996 1,032

Net Asset Value per share R GBP Accumulating 1.1416 1.0315


Alpha Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



€ € €

Net Asset Value Z EUR Accumulating 57,812,324 54,521,996 54,412,524

Net Asset Value per share Z EUR Accumulating 3.6680 3.0690 3.0611

€ € €

Net Asset Value R EUR Accumulating 36,633,844 32,566,203 49,793,035


£ £ £

Net Asset Value R GBP Accumulating 1,013,322 701,465 161,130

Net Asset Value per share R GBP Accumulating 1.1282 1.0410 1.1273

£ £ £

Net Asset Value T GBP Accumulating 1,320,181 1,226,274 1,158,913


$ $ $

Net Asset Value F USD Distributing 726,901 916 149,294

Net Asset Value per share F USD Distributing 2.0053 1.8484 2.1415

200




Alpha Fund (continued) Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £

Net Asset Value S GBP Distributing 2,212,039 4,442,143 2,612,712

Net Asset Value per share S GBP Distributing 1.0064 0.9355 1.0221

€ € €

Net Asset Value S EUR Distributing 5,226,917 7,987,394 2,352,649

Net Asset Value per share S EUR Distributing 2.4987 2.1215 2.1622

€ € €

Net Asset Value S EUR Accumulating 17,418,183 10,003,113 165,339

Net Asset Value per share S EUR Accumulating 2.5018 2.0995 2.1065

£ £ £

Net Asset Value S GBP Distributing Hedged 1,996,042 3,447,984 247,603

Net Asset Value per share S GBP Distributing Hedged 1.2002 1.0190 1.0301

$ $ $

Net Asset Value S USD Distributing 701,742 1,279,617 253,979

Net Asset Value per share S USD Distributing 1.9737 1.8238 2.1052

$ $ $

Net Asset Value S USD Accumulating Hedged 3,161,398 1,911,174 498,655

Net Asset Value per share S USD Accumulating Hedged 2.4581 2.0754 2.0866

€ € €

Net Asset Value F EUR Accumulating 9,006,122 2,954,326 1,883,847

Net Asset Value per share F EUR Accumulating 2.7373 2.2988 2.3101

€ € €

Net Asset Value F EUR Distributing 1,533,945 1,605,939 3,835,633

Net Asset Value per share F EUR Distributing 2.5244 2.1437 2.1914

£ £ £



£ £ £

Net Asset Value F GBP Distributing 13,991,483 17,518,272 23,257,918


$ $

Net Asset Value R USD Accumulating Hedged 3,993,210 2,835,607

Net Asset Value per share R USD Accumulating Hedged 2.3112 1.9601

201




Alpha Fund (continued) Share Class

30 June

2015

31 December

2014

31 December

2013

£ £

Net Asset Value S GBP Accumulating 3,071,882 2,583,819

Net Asset Value per share S GBP Accumulating 1.0170 0.9342

CHF CHF

Net Asset Value R CHF Accumulating Hedged 260,384 72,758

Net Asset Value per share R CHF Accumulating Hedged 2.4592 2.0907

$ $

Net Asset Value S USD Distributing Hedged 1,806,163 2,708,705

Net Asset Value per share S USD Distributing Hedged 2.4333 2.0778

£ £

Net Asset Value S GBP Accumulating Hedged 5,449,268 4,225,678

Net Asset Value per share S GBP Accumulating Hedged 1.2259 1.0310

$ $

Net Asset Value S USD Accumulating 784,187 719,552

Net Asset Value per share S USD Accumulating 1.9373 1.7674

€ €

Net Asset Value M EUR Distributing 741,958 729,033

Net Asset Value per share M EUR Distributing 2.3296 1.9797

€ €

Net Asset Value M EUR Accumulating 338,401,365 164,713,099

Net Asset Value per share M EUR Accumulating 2.3661 1.9841

$ $

Net Asset Value R USD Accumulating 698,578 45,047

Net Asset Value per share R USD Accumulating 1.9264 1.7652

.

CHF CHF

Net Asset Value R CHF Accumulating 1,030 100,483

Net Asset Value per share R CHF Accumulating 2.0630 2.0097

£

Net Asset Value F GBP Accumulating Hedged 9,958

Net Asset Value per share F GBP Accumulating Hedged 1.0142


Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



€ € €



202




Fund (continued) Share Class

30 June

2015

31 December

2014

31 December

2013

£ £

Net Asset Value F GBP Accumulating Hedged 13,246,171 17,711,000

Net Asset Value per share F GBP Accumulating Hedged 1.0754 1.0446

£ £

Net Asset Value F GBP Distributing Hedged 2,986,187 2,106,312

Net Asset Value per share F GBP Distributing Hedged 0.9958 0.9911

$ $

Net Asset Value F USD Distributing Hedged 1,002 1,000

Net Asset Value per share F USD Distributing Hedged 2.0030 2.0007

$ $

Net Asset Value F USD Accumulating Hedged 12,728,533 1,007

Net Asset Value per share F USD Accumulating Hedged 2.0714 2.0137

£

Net Asset Value T GBP Accumulating 309,096

Net Asset Value per share T GBP Accumulating 0.9758


UK Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



€ € €



£ £ £

Net Asset Value R GBP Accumulating 5,808,946 6,069,978 7,849,761

Net Asset Value per share R GBP Accumulating 1.5029 1.3941 1.4862

£ £ £

Net Asset Value F GBP Accumulating 2,329,937 2,210,934 156,968


€ € €



£ £



203





UK Fund (continued) Share Class

30 June

2015

31 December

2014

31 December

2013

$

Net Asset Value F USD Distributing Hedged 2,186,314

Net Asset Value per share F USD Distributing Hedged 1.9239

€

Net Asset Value F EUR Distributing 557,763


Hermes US SMID Equity Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



€ € €



£ £ £



£ £ £

Net Asset Value F GBP Distributing 905,033 723,203 5,669,700


€ € €

Net Asset Value F EUR Distributing 1,480 13,478 285,831


€ € €



$ $ $

Net Asset Value F USD Distributing 37,395,955 30,146,620 23,878,677

Net Asset Value per share F USD Distributing 2.6341 2.4985 2.3504

$ $ $

Net Asset Value F USD Accumulating 80,465,357 77,877,447 61,285,581


£ £ £

Net Asset Value T GBP Accumulating 1,049,907 1,260,640 239,155


204




(continued) Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £

Net Asset Value F GBP Accumulating Hedged 953,101 454,238 208,696

Net Asset Value per share F GBP Accumulating Hedged 1.1636 1.1060 1.0384

€ € €

Net Asset Value F EUR Accumulating Hedged 1,242 114,491 50,623

Net Asset Value per share F EUR Accumulating Hedged 2.4495 2.3346 2.1984

CHF CHF

Net Asset Value R CHF Accumulating Hedged 4,641,896 1,025


$ $

Net Asset Value R USD Accumulating 3,790,048 1,015

Net Asset Value per share R USD Accumulating 2.1332 2.0304

€ €

Net Asset Value R EUR Accumulating Hedged 300,981 1,015

Net Asset Value per share R EUR Accumulating Hedged 2.1211 2.0307

£ £

Net Asset Value F GBP Distributing Hedged 202,046 1,138



Linked Bond Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £



£ £ £

Net Asset Value T GBP Accumulating 411,454 37,186 1,975


£ £ £




Fund Share Class

30 June

2015

31 December

2014

31 December

2013

£ £ £

Net Asset Value Z GBP Accumulating 1,087 993 153,941,437


€ € €



205





30 June

2015

31 December

2014

31 December

2013

$ $ $

Net Asset Value R USD Accumulating 53,813,306 27,330,626 6,408,249

Net Asset Value per share R USD Accumulating 2.5110 2.2944 2.1340

£ £ £

Net Asset Value T GBP Accumulating 1,940,986 834,931 58,166


£ £ £

Net Asset Value F GBP Distributing 127,850,154 89,999,511 9,518,308


£ £ £

Net Asset Value F GBP Distributing Hedged 2,930,723 2,833,538 235,345

Net Asset Value per share F GBP Distributing Hedged 1.2224 1.1155 1.0381

£ £ £



€ € €

Net Asset Value F EUR Distributing 36,327,493 31,247,874 11,606,938


€ € €



€ € €

Net Asset Value F EUR Accumulating Hedged 10,631,828 4,207,544 847,479

Net Asset Value per share F EUR Accumulating Hedged 2.4628 2.2427 2.0706

$ $ $

Net Asset Value F USD Accumulating 586,665,324 360,498,470 22,300,638


€ €

Net Asset Value R EUR Accumulating Hedged 1,435,651 356,098


CHF CHF

Net Asset Value R CHF Accumulating Hedged 3,334,751 557,583


206





30 June

2015

31 December

2014

£ £

Net Asset Value F GBP Accumulating Hedged 3,483,587 2,841,108


$ $

Net Asset Value F USD Distributing 32,308,072 21,647,358

Net Asset Value per share F USD Distributing 2.1029 1.9259

$ $

Net Asset Value C USD Accumulating 5,503,341 1,016

Net Asset Value per share C USD Accumulating 2.2296 2.0327

$ $

Net Asset Value RC USD Accumulating 1,107 1,015

Net Asset Value per share RC USD Accumulating 2.2136 2.0292

€

Net Asset Value C EUR Accumulating 32,650,147

Net Asset Value per share C EUR Accumulating 2.1926

€

Net Asset Value C EUR Distributing 5,319

Net Asset Value per share C EUR Distributing 2.1686

£

Net Asset Value C GBP Distributing 1,397,898

Net Asset Value per share C GBP Distributing 1.0381

$

Net Asset Value C USD Distributing 17,690

Net Asset Value per share C USD Distributing 2.1242

£

Net Asset Value C GBP Accumulating 32,743,027

Net Asset Value per share C GBP Accumulating 0.9901

€

Net Asset Value RC EUR Accumulating 267,332

Net Asset Value per share RC EUR Accumulating 1.9937

£

Net Asset Value C GBP Accumulating Hedged 1,532

Net Asset Value per share C GBP Accumulating Hedged 1.0363

207



Hermes Global Equity ESG

Fund Share Class

30 June

2015

31 December

2014

$ $

Net Asset Value Z USD Accumulating 42,678,569 40,704,300

Net Asset Value per share Z USD Accumulating 2.1504 2.0510

£ £

Net Asset Value F GBP Accumulating 1,165 1,122

Net Asset Value per share F GBP Accumulating 1.1650 1.1220

$ $

Net Asset Value F USD Accumulating 2,429,590 1,032

Net Asset Value per share F USD Accumulating 2.1587 2.0647

€ €

Net Asset Value R EUR Accumulating 1,323 1,167

Net Asset Value per share R EUR Accumulating 2.6458 2.3340

€ €



£




Fund Share Class

30 June

2015

31 December

2014

$ $

Net Asset Value Z USD Accumulating 253,555,067 246,075,737

Net Asset Value per share Z USD Accumulating 2.0880 2.0264

£ £



£ £

Net Asset Value F GBP Accumulating Hedged 587,141 534,939


€ €



$ $

Net Asset Value F USD Accumulating 1,034 1,006

Net Asset Value per share F USD Accumulating 2.0673 2.0125

208





30 June

2015

31 December

2014

€ €

Net Asset Value R EUR Accumulating 1,233 1,109

Net Asset Value per share R EUR Accumulating 2.4656 2.2173

€ €

Net Asset Value R EUR Accumulating Hedged 1,007 984


€ €

Net Asset Value F EUR Accumulating Hedged 13,600,552 8,941,234

Net Asset Value per share F EUR Accumulating Hedged 2.0666 2.0099

$ $

Net Asset Value F USD Distributing 186,986 333,984

Net Asset Value per share F USD Distributing 1.9465 1.9659

£ £

Net Asset Value F GBP Distributing 38,455,989 28,547,867

Net Asset Value per share F GBP Distributing 1.0695 1.0686

£

Net Asset Value F GBP Accumulating 962

Net Asset Value per share F GBP Accumulating 0.9622


Fund Share Class

30 June

2015

31 December

2014

£ £

Net Asset Value F GBP Accumulating Hedged 1,022 1,003


£ £

Net Asset Value Z GBP Accumulating Hedged 30,800,382 30,123,585

Net Asset Value per share Z GBP Accumulating Hedged 1.0267 1.0041

£ £

Net Asset Value F GBP Distributing Hedged 1,013 1,000


£



209




Equity Fund Share Class

30 June

2015

Net Asset Value F EUR Accumulating 1,001

Net Asset Value per share F EUR Accumulating 2.0029

Net Asset Value F EUR Distributing 1,001


£



£

Net Asset Value F GBP Accumulating Hedged 986


£

Net Asset Value F GBP Distributing Hedged 986

Net Asset Value per share F GBP Distributing Hedged 0.9860

$

Net Asset Value F USD Accumulating 986

Net Asset Value per share F USD Accumulating 1.9713

$

Net Asset Value F USD Distributing 986

Net Asset Value per share F USD Distributing 1.9713

$

Net Asset Value R USD Accumulating 985

Net Asset Value per share R USD Accumulating 1.9694

Net Asset Value R EUR Accumulating 1,000

Net Asset Value per share R EUR Accumulating 2.0005



$

Net Asset Value Z USD Accumulating 30,779,921

Net Asset Value per share Z USD Accumulating 1.9732

210



Hermes US All Cap Equity Fund Share Class

30 June

2015

€

Net Asset Value F EUR Accumulating 956


€

Net Asset Value F EUR Distributing 956


£

Net Asset Value F GBP Accumulating Hedged 976


£

Net Asset Value F GBP Distributing Hedged 976

Net Asset Value per share F GBP Distributing Hedged 0.9760

$



$



£



$

Net Asset Value R USD Accumulating 976

Net Asset Value per share R USD Accumulating 1.9522

€

Net Asset Value R EUR Accumulating 957


$




Fund Share Class

30 June

2015

€

Net Asset Value F EUR Accumulating 984


211





30 June

2015

€

Net Asset Value F EUR Accumulating Hedged 999

Net Asset Value per share F EUR Accumulating Hedged 1.9982

€

Net Asset Value F EUR Dist Hedged 998

Net Asset Value per share F EUR Dist Hedged 1.9958

CHF

Net Asset Value F CHF Acc Hedged 998

Net Asset Value per share F CHF Acc Hedged 1.9969

CHF

Net Asset Value F CHF Distributing Hedged 997

Net Asset Value per share F CHF Distributing Hedged 1.9945

£



£

Net Asset Value F GBP Accumulating Hedged 1,000


$



$



€

Net Asset Value R EUR Accumulating 983


€

Net Asset Value

R EUR Accumulating

Hedged 999

Net Asset Value per share

R EUR Accumulating

Hedged 1.9970

€

Net Asset Value R EUR Distributing Hedged 998

Net Asset Value per share R EUR Distributing Hedged 1.9958

212





30 June

2015

CHF

Net Asset Value

R CHF Accumulating

Hedged 998

Net Asset Value per share

R CHF Accumulating

Hedged 1.9957

CHF

Net Asset Value R CHF Distributing Hedged 997

Net Asset Value per share R CHF Distributing Hedged 1.9945

$

Net Asset Value R USD Accumlating 999

Net Asset Value per share R USD Accumlating 1.9976

$



15. Accrued Tax Liability

These accruals relate to a capital gains tax liability in relation to the Hermes Asia Ex-Japan and the Hermes Global Emerging Markets funds’ exposure to China via the P-Notes that those Funds hold over Chinese stock. On 17 November 2014 China clarified that prior to this date realised gains would be subject to tax. They also clarified that in most cases future gains, after this date, would not be subject to tax, but did not confirm what most cases were. In light of this announcement, the Company have continued to accrue for the payment of this tax liability on both realised and unrealised gains at a rate of 10%.

16. Efficient Portfolio Management

The Company may, on behalf of each sub-fund, employ (subject to the conditions and within the limits

laid down by the Central Bank) techniques and instruments relating to transferable securities and

money market instruments, provided that such techniques and instruments are used for efficient

portfolio management purposes. Such techniques and instruments may also, on behalf of each sub-

fund, include foreign exchange transactions which alter the currency characteristics of transferable

securities held by the Company. The Company may also, on behalf of each sub-fund, employ (subject

to the conditions and within the limits laid down by the Central Bank) techniques and instruments

intended to provide protection against exchange risks in the context of the management of its assets

and liabilities.

Realised gains and losses on financial instruments used for efficient portfolio management are

included in the Income Statement.

17. Significant Events/Prospectus Changes During the Period

The Company launched three new funds in the first half of 2015. Hermes Global Small Cap Equity Fund launched on 15 May 2015, Hermes US All Cap Equity Fund and Hermes Absolute Return Credit Fund launched 29 May 2015.

213


17. Significant Events/Prospectus Changes During the Period (continued)

A capacity management notice was sent to the shareholders of Hermes Asia Ex-Japan Equity Fund on 10 March 2015 advising that from 11 May 2015 a daily limit will be imposed for new subscriptions. On the same date, all the share classes of the Fund were closed to new investors. The Company issued a new prospectus and supplements in respect of the sub-funds dated 10 March 2015. The following updates were included in the revised documents:

Reduced the detail in the supplements - some common language to all sub funds was removed from the fund supplements and included in the prospectus. A summary table was added to each supplement for the fund specific features.

Added additional investment risks to the prospectus and segmented general and fund specific risk factors. In addition, highlighted in each fund supplement which fund specific risk factors apply to each sub fund including references to the relevant prospectus page.

Added web links for financial index disclosures for the credit funds

Added a cash management policy for the credit funds to reflect the language added for the Multi Asset Inflation fund

Added local Russian equity investment disclosures for the Sourcecap European Alpha, Sourcecap ex-UK and Global Equity ESG funds

18. Subsequent Events On 17 July 2015, following her resignation from Hermes Fund Managers Limited (“Hermes”), Michelle Green resigned as a Director of the Company. Stephen Allen has given notice of his intention to resign from Hermes at the end of September 2015 and will resign as a Director of the Company at the same date. Emily Mousley and Harriet Steel, both senior employees of Hermes, have been proposed as replacement Directors of the Company, subject to Central Bank approval. The Company issued a new supplement and accompanying shareholder letter in respect of the Hermes Asia ex-Japan Equity Fund (the “Fund”) dated 13 August 2015. The following updates were included in the revised documents:

Clarified the permitted switching and transfer activities in the Fund which the Directors have determined are in the spirit of the capacity management measures.

Permitted underlying investors who invest into the Fund through a platform / nominee, to each subscribe up to the Maximum Subsequent Subscription Amount if the platform is able to provide the Company with the required undertakings and confirmations.

Up to the date of approval of these Financial Statements there have been no other events affecting the Company subsequent to the period end, which would impact on the Financial Statements for the period ended 30 June 2015.

19. Approval of Financial Statements

The Financial Statements were approved by the Board of Directors on 24 August 2015.

214

Hermes Investment Funds Public Limited Company Unaudited Schedule of Significant Portfolio Movements For the period ended 30 June 2015


Total purchases in the period $200,023,557

Major Purchases Nominal Holdings Cost $

BB Seguridade Participacoes 1,038,500 12,010,135

Gedeon Richter 656,901 10,953,088

Tower Bersama Infrastructure 14,333,400 10,435,917

Banregio Grupo Financiero 1,773,303 10,034,279

Norilsk Nickel ADR 556,574 9,952,302

Tencent 450,600 9,486,003

ICICI Bank ADR 841,407 9,446,135

Hon Hai Precision Industry 2,423,000 7,682,499

Life Healthcare 2,384,684 7,265,993

Morgan Stanley - Gree Electric Appliances of Zhuhai 956,000 5,964,221

Bank Rakyat Indonesia Persero 6,718,200 5,572,048

HDFC Bank 279,609 5,150,443

Ping An Insurance Group 322,500 4,667,665

Mail.ru GDR 223,876 4,429,045

Turkiye Halk Bankasi 937,996 4,240,910

Merrill Lynch - Hangzhou Hikvision Digital Technology 903,236 4,110,597

Morgan Stanley 0% 25/07/2016 (Saudi Ceramic) 118,170 3,677,482

China Mengniu Dairy 675,000 3,576,213

Siliconware Precision Industries ADR 453,326 3,414,258

Hyundai Motor 21,336 3,345,498

Total sales in the period $165,179,782

Major Sales Nominal Holdings Proceeds $

Bangkok Bank Receipt 2,026,678 11,688,769

Societe Generale 0% 30/11/2015 (Ping An Insurance) 754,967 8,925,720

Societe Generale 0% 25/11/2015 (Huayu Automotive System) 1,968,193 7,365,338

Morgan Stanley - Gree Electric Appliances of Zhuhai 813,537 7,165,717

Societe Generale 0% 25/11/2015 (Gree Electric Appliances) 771,419 7,030,622

Magnit 35,345 6,145,918

Hyundai Motor 45,623 6,105,453

Gree Electric Appliancesof Zhuhai 956,033 5,975,551

Daqin Railway 11/02/2016 2,896,499 5,811,965

Societe Generale 0% 18/12/2015 (Hangzhou Hikvision) 632,000 4,806,613

Huayu Automotive Systems 1,273,107 4,756,306

Ping An Insurance Group 322,500 4,548,170

Commercial International Bank Egypt 602,998 4,260,215

Youngone 51,280 4,151,863

Tower Bersama Infrastructure 5,734,300 3,974,243

Tech Mahindra 92,217 3,893,727

Itau Unibanco - Preferred 329,140 3,888,846

China Mengniu Dairy 715,000 3,829,089

China Child Care 17,575,000 3,733,531

Shenzhen International 1,979,500 3,615,042

The above represents the largest 20 purchases and sales in the period

215

Hermes Investment Funds Public Limited Company Unaudited Schedule of Significant Portfolio Movements For the period ended 30 June 2015 (continued)




Aena 115,000 7,538,767

Cairn Homes 4,500,000 5,081,850

East West Bancorp 72,000 3,024,034

Stora Enso 283,000 2,777,868

Accenture 29,600 2,725,771

Oasis Petroleum 182,324 2,691,396

Allstate 35,000 2,527,562

Hess 34,300 2,461,575

Macy's 34,600 2,254,951

Apple 17,600 2,197,563

Amer Sports 82,000 2,110,117

Canadian National Railway 30,000 2,065,641

Biogen Idec 5,000 2,004,416

VF 27,000 1,987,715

Sodexo 19,700 1,980,803

Roche 6,700 1,889,175

CVS Health 18,500 1,875,644

Marathon Oil 62,000 1,774,910

M&T Bank 13,100 1,612,792

Fresenius Medical Care 19,000 1,537,932



Aena 103,000 8,852,330

Cairn Homes 3,481,694 4,141,799

Svenska Cellulosa Aktiebolaget 87,452 2,055,946

Nokia 259,071 2,037,238

Royal Caribbean Cruises 18,953 1,442,760

Rexam 161,666 1,396,667

Yara International 25,400 1,340,117

Aberdeen Asset Management 192,065 1,334,333

Exxon Mobil 15,000 1,319,168

SanDisk 18,178 1,288,429

Multiconsult ASA 103,205 1,268,339

Western Digital 12,300 1,240,096

Entra 125,641 1,233,459

Bunge 14,500 1,185,989

Tiffany & Co. 9,500 870,632

Viscofan 14,927 866,626

Ameriprise Financial 6,903 858,092

Marine Harvest 70,011 842,114

Voestalpine 20,000 758,727

Bodycote 61,592 702,385


216



Total purchases in the period £31,630,485

Major Purchases Nominal Holdings Cost £

Lakehouse 5,617,977 5,000,000

Pinewood 1,080,062 4,050,233

John Laing 1,893,006 3,736,337

Auto Trader 1,295,981 3,474,603

NewRiver Retail Reits 866,666 2,599,998

SSP Group 736,509 2,249,318

Sepura 1,512,331 2,075,100

Sophos 750,000 1,687,500

Curtis Banks 866,600 1,651,347

Victrex 63,913 1,252,509

CVS 233,055 1,250,234

RPC 295,184 944,589

Arrow Global 205,783 459,949

Cineworld 80,639 379,106

OneSavings Bank 81,301 258,958

Petra Diamonds 145,102 238,869

Faroe Petroleum 280,923 238,410

Anglo Pacific 104,282 83,425

Total sales in the period £25,010,002

Major Sales Nominal Holdings Proceeds £

Amlin 975,420 4,720,858

Domino Printing Sciences 486,603 4,447,705

Devro 872,277 2,374,290

Babcock International 151,691 1,500,881

Salamander Energy 1,620,209 1,323,802

Goals Soccer Centres 564,033 1,233,742

Porvair 379,118 1,120,624

Bovis Homes Group 102,860 1,045,620

Hargreaves Services 224,483 1,006,780

Wentworth Resources 3,273,114 942,549

Latchways 116,596 889,367

Parkmead Group 588,287 682,364

Henry Boot 338,754 644,233

Breedon Aggregates 1,097,143 529,775

Ashtead 43,898 510,460

Hargreaves Lansdown 41,736 504,959

Xaar 127,814 456,694

Anite 343,875 438,421

Paddy Power 3,722 216,146

Enteq Upstream 530,377 91,332


217



Total purchases in the year €197,142,089

Major Purchases Nominal Holdings Cost €

Wirecard 406,949 16,173,175

Amadeus IT 279,978 10,119,298

Nokia 1,376,464 9,047,086

Aryzta 133,822 8,988,742

Roche 32,447 7,837,002

Bayer 61,379 7,753,973

Aena 116,951 7,559,557

Inditex 231,464 6,138,305

GamesaTecnologica 614,752 6,014,507

Deutsche Boerse 83,475 5,906,134

Vodafone 1,545,871 4,855,251

ARM 318,572 4,675,725

Adidas 66,071 4,625,218

Auto Trader 1,400,500 4,580,978

UBS 274,146 4,487,020

Legrand 92,022 4,444,878

ING Groep 338,382 4,380,154

DnB 290,090 4,262,348

Investment AB Kinnevik 140,430 4,232,928

GlaxoSmithKline 199,604 4,195,790

Total sales in the year €64,149,503

Major Sales Nominal Holdings Proceeds €

Syngenta 56,942 16,339,656

Randgold Resources 136,025 9,544,446

Aryzta 133,822 6,757,762

Auto Trader 1,400,500 5,253,972

Smurfit Kappa 259,163 4,728,006

Hays 2,327,849 4,302,127

Seadrill 375,580 3,447,533

Renault 34,207 3,119,705

UniCredit 339,847 1,814,765

Weir 72,281 1,798,943

GlaxoSmithKline 65,254 1,312,591

Vodafone 299,799 954,255

Roche 1,106 257,840

Bayer 1,914 236,499

ING Groep 16,071 187,506

Nokia 27,023 186,176

Fresenius 3,689 178,629

SABMiller 3,670 175,555

Linde 986 171,101

ARM 10,998 162,053


218



Total purchases in the period € 258,837,431


DISH DBS 7.125% 01/02/2016 8,000,000 7,207,846

Valeant Pharmaceuticals International 4.5% 15/05/2023 6,650,000 6,725,000

Tesco 5.5% 15/11/2017 6,500,000 6,319,946

ArcelorMittal 4.25% 05/08/2015 6,680,000 5,887,822

CNH Industrial Capital 3.875% 11/01/2015 6,456,000 5,792,156

Ardagh Packaging Finance 9.25% 15/10/2020 5,150,000 5,510,625

Vale Overseas 6.25% 23/01/2017 5,700,000 5,348,010

Ephios BondCo 6.25% 07/01/2022 5,000,000 4,995,416

XPO Logistics 5.75% 15/06/2021 4,500,000 4,500,000

Clearwire Communications 8.25% 01/12/2040 4,500,000 4,469,296

Wynn Las Vegas 5.50% 01/03/2025 5,000,000 4,412,332

New Look Secured Issuer 6.5% 01/07/2022 3,100,000 4,278,619

UT2 Funding 30/06/2016 4,000,000 4,084,688

Chrysler 8.25% 15/06/2021 3,950,000 4,065,644

HSBC Capital Funding 8.208% 30/06/2049 2,930,000 4,026,973

Huntsman International 4.25% 01/04/2025 4,000,000 4,000,000

H J Heinz 4.875% 15/02/2025 4,380,000 3,863,332

ZF North America Capital 2.75% 27/04/2023 3,700,000 3,667,366

Cerberus Nightingale 1 8.25% 01/02/2020 3,500,000 3,500,000

Paternoster Holding 8.50% 15/02/2023 3,050,000 3,047,563

Total sales in the period € 261,992,446


Telecom Italia 5.625% 29/12/2015 8,000,000 11,476,520

ArcelorMittal 4.25% 05/08/2015 9,060,000 8,365,841

Lukoil International Finance 2.625% 16/06/2015 7,100,000 6,294,798

Ephios BondCo 6.25% 07/01/2022 5,000,000 5,008,750

HSBC Capital Funding 8.208% 30/06/2049 3,529,000 4,971,758

DISH DBS 7.75% 31/05/2015 5,000,000 4,560,588

Wynn Las Vegas 5.50% 01/03/2025 5,000,000 4,407,734

MGM Resorts International 6% 15/03/2023 5,000,000 4,319,686

AA Bond 9.5% 31/07/2019 2,815,000 4,311,179

International Lease Finance 4.875% 01/04/2015 4,570,000 4,221,435

Valeant Pharmaceuticals International 6.75% 15/08/2018 4,000,000 4,010,404

H J Heinz 4.875% 15/02/2025 4,380,000 3,864,754


Banque PSA Finance 4.875% 25/09/2015 3,500,000 3,581,480

Cerberus Nightingale 1 8.25% 01/02/2020 3,500,000 3,551,925

Infor US 10% 01/04/2019 2,925,000 3,144,375

Transocean 5.05% 15/12/2016 3,565,000 3,126,779


Lear 5.25% 15/01/2025 3,400,000 3,036,228

HCA 5.375% 01/02/2025 3,250,000 2,964,357


219



Total purchases in the period €42,799,912


Aryzta 71,335 4,733,932

Euronext 129,140 4,570,103

Rocket Internet 80,204 3,947,105

Adidas 41,992 3,041,232

Aena 44,639 2,942,841

Intesa Sanpaolo 817,845 2,466,133

Cerved Information Solutions 343,753 2,325,768

MTU Aero Engines 25,858 2,121,838

Banco Popular Espanol 397,907 1,885,756

Statoil 105,467 1,748,494


Nokia 199,220 1,338,127

Sartorius - Preferred 10,698 1,218,754

Randgold Resources 16,950 1,121,864

Amadeus IT Holding 29,029 1,106,490

Wirecard 27,311 1,039,236

Dufry 7,347 961,915

ASM International 18,839 818,077

Merck 8,585 806,161

Delta Lloyd Groep 47,430 790,427

Total sales in the period €35,705,519


Kinnevik AB Investment 138,417 4,167,653

Swedbank 181,911 3,900,584

Aryzta 71,335 3,593,697


Novo Nordisk 43,644 2,047,142

Topdanmark 63,411 1,838,620

DNB 152,295 1,787,534

Seadrill 185,772 1,705,243

Telecom Italia 1,871,038 1,398,417

Valeo 10,321 1,355,034

Dufry 9,863 1,272,513

UBS 78,554 1,147,551

Renault 11,069 1,033,340

Linde 5,732 965,687

Inditex 35,907 927,883

Randgold Resources 9,811 717,951

Syngenta 2,058 651,847

Amadeus IT Holding 13,080 538,419

Wirecard 12,875 528,720

MTU Aero Engines 5,721 524,563


220





Jack Henry & Associates 105,124 7,199,714

WEX 63,681 6,007,288

CLARCOR 94,912 5,950,323

CACI International 57,677 5,148,961

Genesee & Wyoming 54,296 4,542,595

West Pharmaceutical Services 35,419 2,065,799

CAE 138,817 1,723,530

Airgas 14,285 1,550,338

Silicon Laboratories 29,719 1,499,771

Wintrust Financial 31,627 1,491,809

Kirby 19,252 1,459,208

Sally Beauty Holdings 39,193 1,322,116

RPM International 26,487 1,235,430

Oceaneering International 22,556 1,173,482

MSC Industrial Direct 14,344 1,069,442

ShawCor 32,774 1,012,658

Gildan Activewear 10,081 583,608

East West Bancorp 14,944 577,993

Alimentation Couche-Tard 14,532 562,555

Reinsurance of America 5,861 511,945



City National 81,978 7,274,672

United Stationers 167,439 6,609,382

Herman Miller 178,295 4,954,691

Wesco Aircraft 309,345 4,666,852

Matson 77,172 2,690,976

Ellie Mae 41,938 2,564,258

Brunswick 48,379 2,492,742

Jarden 39,898 2,112,409

IPG Photonics 15,895 1,515,166

MSC Industrial Direct 18,418 1,292,841

Gildan Activewear 32,949 978,091


National Instruments 27,102 874,205

Martin Marietta Materials 5,814 822,932

Alimentation Couche-Tard 2,414 91,070

Markel 117 90,614

Omnicare 996 90,372

Reinsurance of America 974 89,918

West Pharmaceutical Services 1,627 87,922

Equifax 866 84,789


221


Hermes Active UK Inflation Linked Bond Fund



UK Treasury Inflation Linked Bond 0.625% 22/11/2042 4,384,000 7,538,244




United States Treasury Inflation Indexed Bonds 1.375% 15/02/2044 5,166,500 4,034,409






UK Treasury Inflation Linked Bond 1.25% 22/11/2032 847,000 1,421,573



UK Treasury Inflation Linked Bond 0.125% 22/11/2019 763,000 835,364



United States Treasury Inflation Indexed Bonds 0.75% 15/02/2045 577,000 328,468










United States Treasury Inflation Indexed Bonds 0.125% 15/04/2018 4,250,000 2,891,629











United States Treasury Inflation Indexed Bonds 0.125% 15/07/2024 1,488,000 975,030



United States Treasury Inflation Indexed Bonds 1.375% 15/02/2044 738,000 582,356



222





Baidu ADR 328,656 67,767,278

SoftBank 989,000 63,502,392

Alibaba ADR 627,509 54,969,650

Youngone 922,461 50,453,771

Hana Financial 1,596,456 43,312,286

Samsung Electronics 31,343 38,274,468

Dongfeng Motor 21,536,000 35,583,224

Hyundai Mobis 157,328 34,402,755

E-House China ADR 4,778,848 31,328,506

Xinyi Glass 40,972,000 26,117,637

COSCO Pacific 17,112,140 25,881,840

Powertech Technology 12,236,990 24,694,029

Hyundai Greenfood 1,446,001 24,477,636

Taiwan Semiconductor 4,818,000 23,497,243

Sun TV Network 3,978,218 21,606,041

Korea Electric Power 448,543 18,207,469

Qihoo 360 Technology ADR 246,674 17,407,304

KB Financial 500,229 17,404,404

Wumart Stores 21,877,000 17,108,850

Societe Generale 0.00% 27/11/2015 (Wuliangye) 4,623,644 16,778,047



Societe Generale 0.00% 03/09/2015 (Beijing Yangjin) 20,245,473 35,075,044

Societe Generale 0.00% 03/12/2015 (Guangzhou Grandbuy) 10,528,997 34,708,772

Alibaba ADR 406,473 33,214,975

Shenergy 21,106,812 26,043,874

Societe Generale 0.00% 04/12/2015 (SAIC Motor Corp) 6,600,000 25,443,493

Aisino 3,770,676 23,484,960

Sun TV Network 4,953,006 22,751,871

Taiwan Semiconductor 4,818,000 22,047,869

Belle International 12,056,000 15,939,362

Cathay Pacific Airways 5,753,000 14,328,195

iShares MSCI All Country Asia ex Japan ETF 223,019 14,253,527

Genting Malaysia 11,740,161 13,629,429

Baidu ADR 59,784 12,580,805

Ajisen China 18,681,287 10,747,001

Xiamen International Airport (Merrill Lynch) 1,846,396 10,497,924

SoftBank 158,200 9,983,159

KIWOOM Securities 116,664 8,257,921

China Merchants International 1,932,390 7,791,657

Guangzhou Grandbuy 2,254,095 7,111,393

Lonking Holdings 24,458,022 5,871,525


223





Aena 25,000 1,638,863

Lam Research 10,400 841,634

TeliaSonera 125,000 763,222

Stora Enso 69,500 675,171

Macy's 9,000 572,878

Cairn Homes 500,000 564,650

Valeo 3,300 494,608

Oasis Petroleum 29,130 448,874

Protector Forsikring 40,000 399,508

Amer Sports 13,000 335,157

Dustin 50,000 296,866

VF 3,800 290,943

Multiconsult 25,000 259,162

Europris 44,780 257,750

Asiakastieto 15,000 240,233

Greggs 12,648 231,698

Nordic Semiconductor 31,500 219,132

XXL 20,000 213,669

Nobina 47,637 200,819

NNIT 10,000 183,486



Aena 25,000 2,102,944

Svenska Cellulosa Aktiebolaget 37,893 890,843

TeliaSonera 125,000 762,851

Western Digital 6,500 654,308

Aberdeen Asset Management 67,414 469,902

Cairn Homes 301,376 358,281

Dustin 50,000 355,527

Royal Caribbean Cruises 4,500 342,554

Com Hem 40,000 310,812

Multiconsult 25,000 307,238

Asiakastieto 15,000 243,764

Exxon Mobil 2,600 230,533

NNIT 10,000 215,987

Pandora 3,000 198,509

Entra 20,000 189,686

Mylan 2,000 147,991

Alibaba ADR 1,500 121,860

Coor Service Management Holding 23,835 110,704

Yara International 2,000 105,727

Marine Harvest 8,000 100,456


224





Tesco 5.5% 15/11/2017 23,500,000 25,200,000

Vale Overseas 6.25% 23/01/2017 22,000,000 23,369,373

ArcelorMittal 4.25% 05/08/2015 17,693,000 17,896,156

Telecom Italia 5.625% 29/12/2015 11,250,000 17,816,903

Vulcan Materials 4.5% 01/04/2025 17,000,000 17,121,875

VRX Escrow 4.5% 15/05/2023 15,350,000 16,505,806

Solvay Finance 29/05/2049 13,000,000 15,303,908

Range Resources 5% 15/08/2022 14,673,000 14,540,308


CIT 5% 15/05/2017 11,500,000 11,936,625

Denali Finance 5.625% 15/10/2020 11,000,000 11,585,000

Numericable 5.375% 15/05/2022 10,000,000 11,457,138

Bank of America 3.75% 12/07/2016 10,500,000 10,782,240

Huntsman International 4.25% 01/04/2025 10,000,000 10,586,397

UT2 Funding 30/06/2016 9,327,000 10,563,073

Barclays Bank 5% 22/09/2016 10,000,000 10,472,000

International Game Technology 7.5% 15/06/2019 9,434,000 9,988,410

MarkWest Energy Finance 4.875% 01/06/2025 9,700,000 9,584,342

Chrysler 8.25% 15/06/2021 8,050,000 8,844,000

Tesco 2.7% 05/01/2017 8,688,000 8,759,313



ArcelorMittal 4.25% 05/08/2015 15,300,000 15,473,800

International Game Technology 7.5% 15/06/2019 9,434,000 10,085,564

HSBC Capital Funding 29/06/2049 6,459,000 9,959,389

Zoetis 1.875% 01/02/2018 9,174,000 9,181,156

Lukoil International Finance 2.625% 16/06/2015 8,800,000 8,747,500

HCA 5.375% 01/02/2025 7,000,000 7,208,454

Jaguar Land Rover Automotive 8.25% 15/03/2020 4,000,000 6,855,773


WPX Energy 6% 15/01/2022 7,000,000 6,712,500

International Lease Finance 4.875% 01/04/2015 6,570,000 6,570,000

Alliance Boots (France) 09/07/2017 5,458,595 6,450,968

Chemours 6.125% 15/05/2023 5,600,000 6,335,208

Arkema 29/10/2049 5,200,000 6,246,977

Thomas Cook Finance 6.75% 15/06/2021 5,400,000 6,246,937

Infor (US) 10% 01/04/2019 5,441,000 6,205,284

Lear 4.75% 15/01/2023 5,564,000 5,670,325


FMG Resources August 2006 Pty 6% 01/04/2017 5,652,000 5,596,800

Transocean 5.05% 15/12/2016 5,435,000 5,407,825

Lear 5.25% 15/01/2025 5,100,000 5,190,733


225





The Royal Bank Of Scotland 0.60% 11/11/2015 2,000,000 2,000,000

Nationwide Building Society 0.50% 20/02/2015 2,000,000 2,000,000

NRW.Bank 05/05/2015 2,000,000 1,999,556

Bank Of America 07/04/2015 2,000,000 1,998,213

Qatar National Bank 16/06/2015 2,000,000 1,996,320

China Asset Management CSI 300 Index 383,600 1,684,101

Svenska Handelsbanken 0.50% 11/05/2015 1,500,000 1,500,000

Svenska Handelsbkn 0.50% 11/08/2015 1,500,000 1,500,000

Pohjola Bank 16/07/2015 1,500,000 1,499,565

Societe Generale (London Branch) 1,500,000 1,498,673

Bank Of America 0.54% 18/05/2015 1,000,000 1,000,038

Deutsche Bank 0.59% 26/06/2015 1,000,000 1,000,000

National Bank Of Abu Dhabi 0.52% 12/05/2015 1,000,000 1,000,000

The Bank Of Nova Scotia 0.50% 13/05/2015 1,000,000 1,000,000

Rabobank International 0.48% 30/04/2015 1,000,000 1,000,000

UBS 0.52% 23/06/2015 1,000,000 1,000,000



Credit Agricole Corporation and Invest Bank 0.45% 29/05/2015 1,000,000 1,000,000

The Toronto-Dominion Bank 0.50% 07/04/2015 1,000,000 1,000,000



Qatar National Bank 16/06/2015 2,000,000 2,000,000

The Royal Bank Of Scotland 0.61% 13/05/2015 2,000,000 2,000,000

Bank Of America 07/04/2015 2,000,000 2,000,000

Pohjola Bank 05/02/2015 2,000,000 2,000,000

NRW.Bank 05/05/2015 2,000,000 2,000,000


FMS Wertmanagement 25/03/2015 2,000,000 2,000,000

Societe Generale (London Branch) 1,500,000 1,500,000

Svenska Handelsbanken 0.50% 11/05/2015 1,500,000 1,500,000

Caisse des depots et consignations 05/01/2015 1,000,000 1,000,000

JPMorgan Chase Bank 0.62% 05/06/2015 1,000,000 1,000,000

Standard Chartered Bank 15/04/2015 1,000,000 1,000,000

Deutsche Bank 0.59% 26/06/2015 1,000,000 1,000,000

National Bank Of Abu Dhabi 0.52% 12/05/2015 1,000,000 1,000,000

Rabobank Nederland 17/03/2015 1,000,000 1,000,000

BNP Paribas 0.51% 04/03/2015 1,000,000 1,000,000

Nordea Bank 23/02/2015 1,000,000 1,000,000


Caisse des depots et consignat 30/03/2015 1,000,000 1,000,000

Bank Of America Corporation 0.54% 18/05/2015 1,000,000 1,000,000


226





DCC 14,253 987,860

Glanbia 45,199 885,603

RPM International 15,452 776,618

Cognex 15,485 756,133

Kirby 9,328 752,303


Paragon Group of Companies 94,393 677,534

IPG Photonics 6,861 663,459

Wintrust Financial 12,968 656,051

Jarden 11,629 631,687

Snap-On 3,996 629,730

Jungheinrich 8,449 622,640

West Pharmaceutical Services 11,394 620,631

John Wiley & Sons 10,748 615,323

Silicon Laboratories 11,431 593,612

Reinsurance of America 6,105 570,573

Sally Beauty Holdings 17,927 554,124

National Instruments 18,437 547,210

MSC Industrial Direct 7,174 519,756

Signature Bank 3,624 511,600

Total sales in the period $192,055


DCC 1,924 152,247

Paddy Power 435 39,808

The above represents the largest 20 purchases and all sales in the period

227





Apple 4,600 606,188

Microsoft 12,700 602,615

Comcast 7,800 460,434

Valeant Pharmaceuticals International 1,900 459,287

American Water Works 8,902 458,728

Danaher 5,200 454,064

Equifax 4,500 451,305

Costco Wholesale 3,100 447,206

Express Scripts 5,000 446,150

MasterCard 4,800 445,536

Johnson & Johnson 4,400 445,060

Martin Marietta Materials 2,900 438,103

EOG Resources 4,900 436,835

Analog Devices 4,600 314,226

Cognex 6,100 309,026

Markel 400 307,908

Linear Technology 6,400 307,424

PNC Financial Services Group 3,200 307,200

Jarden 5,600 304,808

Lockheed Martin 1,600 304,192

Total sales in the period $161,574


EOG Resources 1,848 161,574

The above represents the largest 20 purchases and all sales in the period

228





FCE Bank 5.125% 16/11/2015 1,250,000 1,982,363

Telecom Italia 5.625% 29/12/2015 1,000,000 1,553,072

Lorillard Tobacco Company 3.50% 04/08/2016 1,500,000 1,536,876

ArcelorMittal 4.50% 05/08/2015 1,500,000 1,508,550

Vale Overseas 6.25% 23/01/2017 1,200,000 1,274,235

NXP/ NXP Funding 3.50% 15/09/2016 1,250,000 1,271,875

UT2 Funding 5.321% 30/06/2016 1,000,000 1,136,498

FCA Capital Ireland 2.00% 23/10/2019 1,000,000 1,110,183

Denali Borrower/Finance Coporation 5.625% 15/10/2020 1,000,000 1,050,000

Dish DBS Corporation 7.125% 01/02/2016 1,000,000 1,035,000

SABMiller 2.45% 15/01/2017 1,000,000 1,015,850

Ally Financial 3.50% 18/07/2016 1,000,000 1,015,000

Fresenius US Finance II 9.00% 15/07/2015 1,000,000 1,008,370

Tesco 2.70% 05/01/2017 1,000,000 1,007,800


Intesa Sanpaolo 3.875% 16/01/2018 920,000 954,814

Vodafone 5.375% 05/12/2017 520,000 882,136

JPMorgan Chase 4.25% 25/01/2017 500,000 821,827

ABN AMRO Bank FRN 29/03/2049 700,000 806,010

Groupama FRN 29/10/2049 700,000 792,423



New Look Secured Issuer 6.50% 01/07/2022 500,000 772,392

Ball 5.25% 7/01/2025 650,000 649,513

FCE Bank 5.125% 16/11/2015 350,000 558,324

XPO Logistics 5.75% 15/06/2021 470,000 522,147

Ephios BondCo 6.25% 07/01/2022 417,000 468,684

Ford Motor Credit 2.24% 15/06/2018 400,000 400,116

Grupo Antolin Dut 5.125% 30/06/2022 350,000 395,870

Bank of Ireland Bank FRN 31/12/2049 300,000 337,962

Pizzaexpress Financing 2 6.625% 01/08/2021 200,000 323,368

New Look Senior Issuer 8.00% 01/07/2023 200,000 310,123

Santander UK FRN 31/12/2049 200,000 310,029

Sealed Air 4.50% 09/15/2023 250,000 284,177

Zuercher Kantonalbank 2.625% 15/06/2027 250,000 279,062

Citigroup 4.40% 10/06/2025 240,000 239,471

Endo 6.00% 15/07/2023 200,000 204,000

NXP/ NXP Funding 4.125% 15/06/2020 200,000 201,250

Meritor 6.25% 15/02/2024 120,000 121,050

Flextronics International 4.75% 15/06/2025 100,000 99,809

THC Escrow Corp II 6.75% 15/06/2023 70,000 70,700

Petrobras Global Finance 6.85% 05/06/2115 60,000 49,830


Documents

Hermes Investment Funds Public Limited Company · 2016-07-26 · 6 Hermes Investment Funds Public Limited Company Investment Manager’s Report Performance Update Returns to the period