1
th
Semi-Annual report as at 28 February 2014
KBC Eco Fund
Public open-ended investment company under Belgian law (bevek)
with a variable number of units/shares opting for Investments
complying with the conditions of Directive 2009/65/EC
UCITS
No subscriptions will be accepted on the basis of this report. Subscriptions will only be valid if
effected after a free copy of the key investor information or prospectus has been provided.
2
TABLE OF CONTENTS
1.
General information on the bevek
1.1. Organization of the bevek
1.2. Management report
1.2.1. Information for shareholders
1.2.2. General market overview
1.3. Aggregate balance sheet
1.4. Aggregate profit and loss account
1.5. Summary of recognition and valuation rules
1.5.1. Summary of the rules
1.5.2. Exchange Rates
3
1.
GENERAL INFORMATION ON THE BEVEK
1.1
ORGANIZATION OF THE BEVEK
REGISTERED OFFICE :
2 Havenlaan - B-1080 Brussels, Belgium.
DATE OF INCORPORATION:
27 March 1992
LIFE:
Unlimited.
BOARD OF DIRECTORS OF THE BEVEK:
Wouter Vanden Eynde, Managing Director KBC Asset Management NV
Luc Vanbriel, Head of Management Structured Products and Money Market Funds KBC Asset
Management NV
Marleen Willekens, Independent Manager
Olivier Morel, Financial Manager CBC Banque SA
Jef Vuchelen, Independent Manager
Chairman:
Olivier Morel, Financial Manager CBC Banque SA
Natural persons to whom the executive management of the bevek has been entrusted:
Wouter Vanden Eynde, Managing Director KBC Asset Management NV
Luc Vanbriel, Head of Management Structured Products and Money Market Funds KBC Asset
Management NV
M ANAGEMENT TYPE:
Bevek that has appointed a company for the management of undertakings for collective investments.
The appointed management company is KBC Asset Management NV, Havenlaan 2,
B-1080 Brussels.
DATE OF INCORPORATION OF THE MANAGEMENT COMPANY:
30 December 1999.
NAMES AND POSITIONS OF THE DIRECTORS OF THE MANAGEMENT COMPANY:
Chairman:
L. Gijsens
Directors:
D. Mampaey, President of the Executive Committee
J. Peeters, Independent Director
P. Buelens, Managing Director
J. Daemen, Non-Executive Director
P. Konings, Non-Executive Director
J. Verschaeve, Managing Director
G. Rammeloo, Managing Director
O. Morel, Non-Executive Director
K. Mattelaer, Non-Executive Director
K. Van Eeckhoutte, Non-Executive Director
W. Vanden Eynde, Managing Director
C. Sterckx, Managing Director
D. Cuypers, Managing Director
L. Demunter, Managing Director
4
NAMES AND POSITIONS OF THE NATURAL PERSONS TO WHOM THE EXECUTIVE MANAGEMENT OF
THE MANAGEMENT COMPANY HAS BEEN ENTRUSTED:
D. Mampaey, President of the Executive Committee
J. Verschaeve, Managing Director
G. Rammeloo, Managing Director
W. Vanden Eynde, Managing Director
C. Sterckx, Managing Director
D. Cuypers, Managing Director
L. Demunter, Managing Director
These persons may also be directors of various beveks.
AUDITOR OF THE MANAGEMENT COMPANY:
Ernst & Young Bedrijfsrevisoren BCVBA, represented by Christel Weymeersch, company auditor
and recognized auditor, De Kleetlaan 2, 1831 Diegem.
STATUS OF THE BEVEK:
Bevek with various sub-funds that has opted for investments complying with the conditions of
Directive 2009/65/EC and which, as far as its operations and investments are concerned, is
governed by the Act of 3 August 2012 on certain forms of collective management of investment
portfolios.
FINANCIAL PORTFOLIO MANAGEMENT:
In this regard, please see ‘Information concerning the sub-fund’.
FINANCIAL-SERVICES PROVIDERS:
The financial services providers in Belgium are:
KBC Bank NV, Havenlaan 2, B-1080 Brussels
CBC Banque SA, Grand Place 5, B-1000 Brussels
CUSTODIAN:
KBC Bank N.V., 2 Havenlaan - B-1080 Brussels, Belgium.
ADMINISTRATION AND ACCOUNTING MANAGEMENT:
KBC Asset Management N.V., 2 Havenlaan - B-1080 Brussels, Belgium.
ACCREDITED AUDITOR OF THE BEVEK:
Deloitte Bedrijfsrevisoren BV o.v.v.e. CVBA, in the form of a CVBA (co-operative limited liability
company), Berkenlaan 8b, B-1831 Diegem, represented by partner Frank Verhaegen, company
auditor and recognized auditor.
DISTRIBUTOR:
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
PROMOTER:
KBC
The official text of the articles of association has been filed with the registry of the Commercial Court.
5
LIST OF SUB-FUNDS OF KBC ECO FUND
1.
Agri
2.
Alternative Energy
3.
Climate Change
4.
CSOB Water
5.
Sustainable Euroland
6.
Water
7.
World
SHARE CLASSES
The characteristics of the different share classes are given in the prospectus.
The following sub-funds have a share class called ‘Classic Shares’:
Agri
Alternative Energy
Climate Change
Water
The following sub-funds have a share class called ‘Institutional B Shares’:
Agri
Alternative Energy
Climate Change
Water
In the event of discrepancies between the Dutch and the other language versions of the (Semi)Annual report, the Dutch will prevail.
6
1.2
MANAGEMENT REPORT
1.2.1
INFORMATION FOR THE SHAREHOLDERS
Reclaims of foreign withholding taxes on dividends.
In some Member States of the European Union domestic investment funds benefit from exemptions
or refunds of withholding taxes when they receive dividends from a domestic entity. The same tax
benefits do not apply to non-resident investment funds investing cross-border. Such tax system is
not in accordance with the free movement of capital within the European Union.
Since 2006 KBC investment funds yearly file requests for a refund of discriminatory withholding tax
paid on dividends in France, Spain, Italy, Germany, The Netherlands, Finland, Sweden, Norway and
Austria. Refunds have already been received from French, Norwegian, Swedish and Austrian fiscal
administration.
1.2.2
GENERAL MARKET OVERVIEW
1 September 2013 – 28 February 2014
Doubts about the sustainability of the economic recovery shaped investor sentiment for a long time.
But sentiment began to turn more positive during the summer months of 2013. Europe shook off the
recession, the euro crisis lost its stranglehold, the US easily digested a severe austerity programme
and Japan broke out of its negative deflation spiral. The share markets responded warmly to the
economic optimism. The bond markets were dominated by the prospect of tapering – the technical
jargon for the US central bank’s programme gradually to scale back its purchases of debt paper.
The economic tightrope
Although more jobs have been created than lost in the US since 2010, the rate of employment
growth remained on the thin side for some considerable time. The unemployment rate came down,
but for the wrong reasons: not because employment was growing strongly but because many
Americans dropped out of the labour market in disillusionment. Things improved in the course of
2013. The growth in employment picked up to an average of 187 000 new jobs per month, thereby
enabling the natural growth of the labour force to be absorbed – but no more than that. Pay rises
barely outstripped inflation. Taken together, these two factors ensured that household purchasing
power in the US only grew to a limited extent and so contributed very modestly to economic growth.
The latter was therefore limited (+2.7% growth year-on-year in the four quarters to the last quarter of
2013).
However, the US economy is fundamentally much stronger than this growth figure might suggest. As
from 1 January 2013 an impressive programme of tax hikes and spending cuts came into force
which it had been feared at the end of 2012 might plunge the US into a new recession (the notorious
fiscal cliff). The reality turned out very differently. Growth was unaffected, though remaining modest,
while the budget deficit reduced spectacularly.
In the EMU the recession that had been precipitated by the euro crisis and went back as far as the
fourth quarter of 2011 came to an end. From the second quarter of 2013 onwards a positive growth
figure was at last recorded again and the overall unemployment rate stopped rising. Consumer and
producer confidence are recovering quite strongly, surprisingly even in the hard-hit countries of
Southern Europe.
Japan managed to break out of the negative deflation spiral. The recently inaugurated Abe
government changed course in December 2012, while in April 2013 the Bank of Japan announced
that it had set a target for inflation of 2% and would be doubling the monetary base with that in mind.
In anticipation of the policy turnaround the yen had already been weakening sharply since August
2012. This ensured that exports recovered in 2013 and that inflation moved into positive territory.
The weak growth in the Western economies also had an impact on the export performance in
emerging countries. This was translated in the year under review into a marked cooling in growth,
especially in countries such as Brazil and South Africa with their large commodity industries. The
slowdown in growth in China brought the problems of the excessive debt burden of Chinese banks
to the foreground from time to time. On two occasions (in June and December) the interbank market
briefly ended up in a crisis, which the Bank of China managed to suppress by means of massive
injections of liquidity.
7
Talking down the euro crisis
When bond investors began to question Greece’s creditworthiness in October 2009, the euro crisis
erupted in full force. Greece was forced in 2012 to reschedule its sovereign bond debts and Cyprus
in 2013. Portugal and Ireland have also been under the curatorship of the troika consisting of the
ECB, EU and IMF since 2011. The interlinked nature of the solvency risk of the European banks,
which traditionally hold an extensive portfolio of government bonds and emerged weakened from the
credit crisis of 2008/09, with the fate of the national governments, which act as moral guarantor of
the survival of the banking sector and emerged from the recession with dislocated public finances,
left the euro system tottering.
During the storms, a number of rules of the currency union were reformed. But once the sense of
urgency had subsided, it proved almost impossible to get all the members of the euro-orchestra
playing the same tune. The European Stability Mechanism (ESM) became operational after much
delay. The new budget treaty, which only came into force on 1 January 2013, is already being
questioned. The compromise over the banking union bears witness to the lack of any shared vision.
The ECB therefore stood alone in its task of defending the euro. The central bank launched several
programmes to secure and strengthen the flow of liquidity to the banking sector. In September 2012
the ECB issued a solid assurance that it would pump liquidity into the market on an unlimited scale
and for an unlimited period if necessary. Those words alone were enough to dampen the euro crisis.
Confidence returned. The interbank market began functioning once again. Interest rate spreads
between the EMU partners narrowed. The debt restructuring in Greece, the debacle in Cyprus and a
deep political crisis in Italy were all unable to cause lasting damage to the trend of growing
confidence. Instead of pumping liquidity into the market, the ECB was able to largely unwind earlier
liquidity injections.
New record for corporate earnings
The recovery in corporate earnings as from Q4 2009 was just as impressive as the decline in
earnings during the recession. So although the economic recovery in the West may be modest, the
same was certainly not true of corporate earnings. After going from negative to positive in the last
quarter of 2009, earnings per share of the S&P 500 companies as a whole rose by an average 48%
in 2010, 14% in 2011, 4.8% in 2012 and 6.1% in 2013 (for all the companies in the S&P 500). The
lacklustre economic situation in the West was clearly not an obstacle to a strong increase in
turnover. The emerging economies, which are booming, are becoming an increasingly significant
market outlet for Western companies. However, the increase in earnings was due even more to a
sharp reduction in (wage) cost pressure.
The spectacular recovery in profits also experienced by the companies in the MSCI Europe until
2011 failed to hold up. The euro crisis, the accompanying recession in Europe, the devaluation of
government bond portfolios held by banks and the strong euro all left their mark. Earnings per share
were down by an average of 23% at the end of 2013 compared with the middle of 2011.
Commodity markets correction continues
The Arab Spring and the power struggle in Libya meant a barrel of Brent crude cost 126 US dollars
at the end of April 2011. The balance of supply and demand over the past three years (weak global
demand, high stocks and rising supplies) has caused the oil price to fall since then, apart from an
occasional increase due to a flare-up in geopolitical tensions (e.g. the embargo on Iranian oil exports
and, more recently, the interruptions to deliveries from Libya and Nigeria and the threat of war in
Syria). At the end of February 2014 the price of a barrel of crude oil was 109 USD.
The steep price rises on most other commodity markets had already come to an end earlier. The
prices of many industrial metals and agricultural products peaked around mid-February 2011. This
was followed by a correction, amounting in the course of 2013 to 10-15% and rising to 30-35% since
the peak levels of early 2011. This too could be interpreted as a sign of increasing doubts about the
economy.
Inflation cooled as a result. In the US the annual increase in the consumer price index fell from a
peak of 3.9% in September 2011 to 1.6% in January 2014. Over the same period inflation in the euro
area fell from 3% to 0.8%.
8
A policy of (almost) free money and other unconventional measures
The US central bank (the Fed) had already cut its key rate very early on in the crisis. Since
December 2008 the rate has been a symbolic 0.25%. The ECB waited much longer before cutting
rates. In 2013 it twice cut the key policy rate, which now stands at 0.25%.
That policy of (virtually) free money was not sufficient to guarantee the economic recovery would
prove lasting. The Fed therefore explored the scope for other measures, intervening directly on the
bond markets and buying up large amounts of debt paper in an attempt to keep the long-term rate
low as well. Until the end of 2013 the Fed was buying up 85 billion US dollars of Treasuries and
mortgage-backed debt each month. In January 2014 this programme was reduced to 75 billion
dollars per month. From February onwards the figure is 65 billion. This introduced a new trend
known as tapering, whereby the tap of excessive liquidity provision was gradually turned off. In the
following months the purchasing programmes will be scaled back further, coming to an end towards
the end of this year – provided economic circumstances remain favourable.
The Fed is not the only central bank to have turned on the money tap. In the case of the Bank of
England, British banks are able to obtain free money against the collateral of commercial credits. On
4 April 2013 the Bank of Japan unveiled its version of ‘quantitative easing’ in the form of its ‘Triple 2’
plan. In order to get inflation above 2% the monetary base will be doubled in the space of two years
by means of massive purchases. The ECB began pursuing a similar policy, though much later and
for a shorter period.
Bond markets volatile
Serious doubts about the economy and the ongoing euro crisis have pushed US and German bond
rates down since March 2011. On 1 June 2012, US and German ten-year rates reached lows of
1.45% and 1.15% respectively. For nearly a full year the 10-year rate remained close to these low
levels (below inflation), but after the Fed chairman, Ben Bernanke, sent up a trial balloon at the end
of May 2013 about the tapering of the government bond purchasing programmes, bond rates shot
up in June. As time went by, however, the Fed failed to put its words into action, as it was concerned
about the negative impact on the economy of the higher interest rates. Bond rates headed back
down. When the US central bank did after all embark on tapering in December, the effect on bond
rates was limited. At the end of the reporting period, ten-year rates in the US and Germany stood at
2.65% and 1.65%, respectively.
Bond portfolios were restructured substantially during the euro crisis. Debt paper issued by underfire European governments was dumped, in spite of the international guarantees, and replaced by
German paper. When the ECB president managed to restore confidence in the euro in September
2012, the intra-EMU spreads in interest rates began to narrow. This trend continued virtually
uninterrupted in 2013.
The tensions within the euro area also had an impact on Belgian-German yield spreads. The days
when Belgium could borrow money at the same terms as Germany are long gone. The BelgiumGerman spread peaked at 365 basis points on 25 November 2011, but fell thereafter more steeply
than the average in the euro area. On 28 February 2014, bond investors were satisfied with a
premium of 70 basis points for the Belgian risk.
There have been no significant bankruptcies in the business sector in recent years. The solvency
and liquidity of non-financial companies have seldom been as strong as they are at present. This
has led to a spectacular fall in credit spreads in recent years, and this trend continued in the
reporting period.
Euro the strongest currency
The euro crisis has been off the radar for nearly 18 months. During that period the central banks of
the US and the EMU have each placed their own particular stamp on monetary policy, with different
emphases. Despite these two important changes, the EUR/USD exchange rate has been no more
volatile than in other years. At the end of the period under review the euro was trading at 1.380 US
dollars, an appreciation of 5.6% on the year before.
9
Consolidation of the stock-market rally
The first phase of the economic recovery was associated with a fine stock-market rally which, by the
end of April 2010, had lifted the S&P 500 to a level 75% above its low of 9 March 2009. The euro
crisis and the fear that the European banking sector would collapse as a result cast an almost
permanent shadow over the market during the period April 2010 – October 2011. The complete
chaos in Greece and the threat of a Grexit even resulted in a correction of the S&P 500 of 19%
between 29 April and 3 October 2011. On top of that there were doubts about the durability of the
economic recovery. It was only in the course of 2012 that the mood changed, with better reports on
the US labour market. In recent months reasonably firm PMIs (barometers of business confidence)
have strengthened the economic optimism. From June 2012 onwards the underlying trend in the
international stock-markets has been unmistakably positive. Overall, the MSCI All Countries (the
broadest global index) was up 12.3% in euro terms at the end of February 2014 compared with the
same time in 2013.
Western Europe continued its catching-up exercise in the traditional markets which had begun in
2012, albeit with varying success (the return of the MSCI Europe Index in euros over this period was
+20.5%). Fears that the EMU problems harboured a systemic risk disappeared completely. The
cheaper valuation of Europe (compared with the US) also provided only limited support. Since the
first quarter of 2012 corporate earnings in Europe have lagged behind considerably, both in relation
to the forecasts and in comparison with the earnings performance in the US. At the end of February
2014 Wall Street was sharply higher than at the year before (S&P 500: +22.5%, Dow Jones:
+15.8%). The S&P 500 even concluded the period under review at an all-time high.
Outlook
The US and European barometers of business confidence had fallen in the spring of 2013 to just
above (US) or far below (EMU) freezing point. In recent months they have risen sharply from these
low levels. The barometer in the US has already reached a level that equates to a growth rate of
more than 3.5%. The IFO, the leading index of business confidence in Germany, has risen to a level
that is among the top 10% of observations in the last 30 years. Business confidence in Southern
Europe has also begun to thaw. What is surprising is that consumer confidence is following this
trend so early in the cycle, and also going through a strong recovery.
We are therefore expecting US growth to remain positive but rather modest (2-2.5% y-o-y in the
coming quarters) as pay increases are barely keeping pace with inflation and budgetary policy has
now finally (and probably for several years) struck down the path of austerity. The recovery of the
housing market and corporate investment could be sustained. How strong growth will turn out to be
in 2014 will depend to a large extent on two factors: the dynamic of the labour market and inflation.
In recent months employment in the US has grown by around 185 000 new jobs each month. That is
an absolute minimum and would need to be higher to achieve growth of +2%. Low inflation is
underpinning the purchasing power of consumers. The rate of inflation fell in 2013, and this trend
must not be allowed to reverse.
Europe is creeping out of recession. The budgetary plans, tighter lending policy of the banks and
major uncertainty among consumers and producers will continue to depress growth. Annualised
growth of 1–1.5% is being forecast for the coming months. This is not a reason for euphoria, but
better than negative growth. Deflation or depression scenarios, which frequently dominate bond
market sentiment, are not however justified.
The foundations for more sustainable growth in 2014 and beyond have been laid in recent years. US
households have trimmed back their debt level significantly, the savings rate has already increased
considerably and loan servicing (instalments and interest payments combined) now accounts for
only 10% of household budgets (the lowest level in fifteen years – it was at 12,5% three years ago).
Households are gradually moving towards a position where they can spend more of their money on
consumption. The explosive growth in earnings between 2009 and 2013 bolstered companies’
already substantial cash positions. During the crisis investments were scaled back heavily, with the
foundations being laid for a catch-up process.
In the US Republicans and Democrats have reached a compromise over fiscal policy. The funding of
the federal government is assured until March 2015. The sharpest edges of the multi-year austerity
plan have been filed down. More important than the direct effects of the cutbacks on economic
growth – which are certainly not exaggerated – is probably that a source of uncertainty has been
eliminated and that the US central bank is at liberty to conduct the monetary policy it deems to be
suitable.
10
The Fed is conducting a highly flexible monetary policy. Its purchase programme for government
bonds and other debt paper means unprecedented amounts of liquidity are being injected into the
market, thus avoiding the banks having to think too much about their own solvency and applying
overly strict lending criteria as a result, which would undermine economic growth. These cash
injections will either find their way into the real economy or generate inflationary expectations. The
fact that the purchase programme is to be scaled back in 2014 means only that the policy will
become less extreme, but will still remain focused on growth. In any case they will keep long rates
low and banish any fears of deflation.
Today’s world is one of two-speed economies. The mature industrialised economies (US, Europe,
Japan) still find themselves in a low-growth environment, with no underlying inflationary pressure,
persistently low interest rates and runaway public finances. The picture in the emerging markets is
altogether different. The strong economic growth has already created inflationary pressure in Asia,
where monetary policy has accordingly had to be modified – sometimes acting as a break (as in
2011) and sometimes providing stimulus (as at present).
One of the major challenges for this decade will be the further development of consumption in China
and the rest of Asia. That could help bring about a more balanced economic world order. It will not
only reduce the region’s dependence on exports but, at least as importantly, will have an effect on
international capital flows. More consumption in China will mean lower savings and higher imports,
including from the US and Europe. That will help the West to ‘grow out’ of its debt problems.
The euro crisis has receded into the background, but many problems remain to be resolved. The
support funds for Greece, Portugal and Ireland will be exhausted by 2014. Ireland might be able to
begin financing itself via the capital market again, but that option seems to be ruled out for Portugal
and Greece. There is even open talk of a possible second debt restructuring programme for Greece.
European banks’ balance sheets will be screened in the spring, to be followed later in the year by
stress tests. This is being done at a time at which the banking union, whose rules of the game lack
transparency, has not yet become operational. Control over national budgets has been tightened,
but the standards are not absolute and allow considerable room for manoeuvre. National sovereignty
is a difficult fortress to conquer, and as soon as the immediate urgency of a crisis has faded, reforms
are kicked into the long grass.
The present level of money market interest rates, at (virtually) zero, will continue for a long time to
come. There is no urgent macroeconomic reason to adopt a more restrictive policy so long as the
economic situation in the West remains weak and there is no sign of any real inflationary pressure.
The central banks are conducting a policy of low interest rates and have totally given up their
resistance towards quantitative easing measures. They are intervening directly on the capital
markets on a large scale. By buying bonds and other debt instruments, they are having a direct
influence on the bond yield in certain market segments, ensuring secondary trading (for instance, in
paper issued by governments in which the market could lose confidence) and flooding the financial
system with cash.
Inflation has long ceased to be a reason for concern. Anxiety about growth and, as far as the ECB is
concerned, dampening down the euro crisis all the more. The ECB is probably still striving for a
normal short rate of 3% for the euro area (its official target for inflation in the euro area is 2%), but
that has now become a very long-term objective and is totally ruled out in the short term. The ECB’s
main concern at present is not the level of its interest rates but how to ensure that these low rates
percolate through into market rates in Southern Europe. It is here that low interest rates are the most
needed – and also where market rates remain the highest.
We think the central banks in the US, the UK and Japan will wait a long time before raising their key
rates. The US Federal Reserve has already officially postponed the earliest date for a rate hike to
mid-2015. The official standpoint is that even if the unemployment rate (currently 6.7% of the labour
force) falls below 6.5%, inflation (currently 1.6%) would have to rise permanently above 2.5% before
the key rate is raised. It is highly questionable whether these conditions will have been satisfied by
mid-2015.
11
Bond yields may well have bottomed out, at least as regards issues of German Bunds or US
Treasuries. It would be logical for yields to increase again from the current record lows, on the back
of an improved economic environment (or an ongoing reduction in the downside risks to growth). As
a result, the market might, in the months ahead, start to anticipate tighter monetary policy in 2015 or
later. A number of unconventional measures will first be withdrawn in the US; only after that can the
market begin to anticipate a normalisation of the key rate. No significant increase in interest rates is
likely in the course of 2014, however. Fearful of the negative consequences for growth, the central
banks will avoid any such hike by scaling back their asset-purchasing programmes.
The default risk premium in the corporate bond market has fallen very steeply in recent years. At its
present level, it provides appropriate compensation for the debtor risk. Much more narrowing of
spreads is therefore not on the cards, even though most companies have a very healthy financial
structure. Rate spreads in the euro area will probably remain volatile for a long time yet due to the
many problems that have yet to be solved.
Thanks to the continuing strength of the emerging markets, the global economy could post growth of
3% in 2013, reaching 3.6% in 2014. This is one of the reasons why corporate earnings could
continue to grow in the coming quarters at a rate of around 10%.
It looks paradoxical: companies have come out of the 2008-2009 crisis on top. They are now reaping
the benefits of the considerable restructuring measures pushed through during the recession. Cost
controls go beyond (one-off and in some cases spectacular) restructuring measures and have now
become an integral part of business culture. The recession of 2008-2009 has induced companies to
deal even more consciously with risks (i.e. money, and hence costs). Investment projects are subject
to a more thorough profitability study. A combination of debt reduction and low interest rates has
resulted in a steep drop in financial charges. Globalisation (pressure of relocation) and ongoing high
unemployment have made employees powerless to demand high pay increases. Maintaining
purchasing power is now about all that is on offer. There is no question of real wage rises. In brief,
every one-cent increase in revenue translates (almost) entirely into an extra cent of profit, rather
than into higher pay.
The money market rate won’t increase rapidly and bond yields are close to historical lows.
Everything seems to point to shares being the most attractive investment option for the months
ahead. The lack of alternatives is not, of course, sufficient reason to increase the market valuation.
For that to happen, investors will need to be more predisposed to taking risk. Shares are no longer
as cheap as they were a while ago. Based on forecast earnings for the coming 12 months, the priceearnings ratio is 16.5 for the US S&P 500 index and 14.0 for the MSCI Europe. That may be
regarded as reasonable – not decidedly cheap, but not expensive either. In comparison with bonds
shares however remain dirt-cheap. The earnings yield – the inverse of the price/earnings ratio – is
currently 7.15% for the MSCI Europe, an unprecedented premium of 550 basis points above
German bond yields.
Edited to 4 March 2014.
12
1.3
AGGREGATED BALANCE SHEET (IN EUR)
Balance sheet layout
28/02/2014
(in the currency of the bevek)
28/02/2013
(in the currency of the bevek)
280.458.724,68
280.011.151,67
274.762.771,63
1,20
273.987.144,56
154.385,24
-308.636,96
817.119,90
23.445,42
833.074,14
13.860,16
-470.045,13
-1.168.495,51
-549.070,20
-11.740.730,75
6.286.159,47
17.842.369,93
191.290,15
263.924,58
-401.832,28
189.163,49
89.467,97
-345.490,68
TOTAL SHAREHOLDERS' EQUITY
280.458.724,68
280.011.151,67
A.
Capital
238.743.520,47
244.840.732,91
B.
Income equalization
64.577,06
17.196,50
D.
Result for the period
41.650.627,16
35.153.222,25
12.638.648,88
-1.333.617,08
8.552.887,50
-1.880.989,89
TOTAL NET ASSETS
II.
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
D. Other securities
F. Derivative financial instruments
j) Foreign exchange
Futures and forward contracts (+/-)
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
b) Tax assets
Payables
a) Accounts payable (-)
c) Borrowings (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
Off-balance-sheet headings
III
Notional amounts of futures and forward contracts
III.A Purchased futures and forward contracts
III.B Written futures and forward contracts
13
1.4
AGGREGATED PROFIT AND LOSS ACCOUNT (IN EUR)
Income Statement
I.
50.967.986,00
1.039,20
49.529.874,40
-50,46
-0,13
-0,26
167.412,78
-327.858,28
-8.402.633,57
-12.721.305,21
1.924.762,56
1.353.212,60
5.984,48
-31.823,57
10,18
4.158,39
-15.902,04
84.769,66
62.293,81
Investment income and expenses
A.
B.
Dividends
Interests
a) Securities and money market instruments
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
A.
Income received to cover the acquisition and
realizaion of assets, to discourage withdrawals
and for delivery charges
Other
B.
28/02/2013
(in the currency of the bevek)
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
D. Other securities
G. Receivables, deposits, cash at bank and in hand
and payables
H. Foreign exchange positions and transactions
a) Derivative financial instruments
Futures and forward contracts
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the bevek)
16.244,35
IV. Operating expenses
-391.136,01
-5.031,35
-107.663,93
-392.400,05
-7.708,08
-81.537,07
-2.190.459,38
-145.087,26
-2.601,63
-27.085,66
-1.911.139,00
-132.232,05
-25,61
-29.078,55
-8.233,77
-7.443,71
-75.573,76
-97.308,61
-32.933,26
-51.563,73
-91.431,77
-26.651,23
Subtotal II + III + IV
-1.083.177,13
-1.327.437,93
Profit (loss) on ordinary activities before tax
41.650.627,16
35.153.222,25
41.650.627,16
35.153.222,25
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
b) Administration and accounting management
E. Administrative expenses (-)
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
K. Other expenses (-)
Income and expenditure for the period
V.
VII. Result for the period
14
1.5
SUMMARY OF ACCOUNTING POLICIES
1.5.1
SUMMARY OF RULES
Summary of the valuation rules pursuant to the Royal Decree of 10 November 2006 on the
accounting, annual accounts and periodic reports of certain open-ended undertakings for collective
investment.
The assets of the various sub-funds are valued as follows:
 When purchased or sold, securities, money market instruments, units in undertakings for
collective investment and financial derivatives are recorded in the accounts at their
acquisition price or sale price, respectively. Any additional expenses, such as trading and
delivery costs, are charged directly to the profit and loss account.
 After initial recognition, securities, money market instruments and financial derivatives are
measured at fair value on the basis of the following rules:
o Securities that are traded on an active market without the involvement of third-party
financial institutions are measured at fair value using the closing price;
o Assets that have an active market which functions through third-party financial
institutions that guarantee continuous bid and ask prices are measured using the
current bid price set on that market. However, since most international benchmarks
use mid-prices, and the data providers cannot supply bid prices (e.g., JP Morgan,
iBoxx, MSCI, etc.), the mid-prices are used to measure debt instruments, as provided
for in the Notes to the aforementioned Royal Decree. The method to correct these
mid-prices and generate the bid price is not used, as it is not reliable enough and
could result in major fluctuations.
o Securities whose last known price is not representative and securities that are not
admitted to official listing or admitted to another organised market are valued as
follows:
 When measuring these securities at fair value, use is made of the current fair value
of similar assets for which there is an active market, provided this fair value is
adjusted to take account of the differences between the assets concerned.
 If no fair value for similar assets exists, the fair value is calculated on the basis of
other valuation techniques which make maximum use of market data, which are
consistent with generally accepted economic methods and which are verified and
tested on a regular basis.
 If no organised or unofficial market exists for the assets being valued, account is
also taken of the uncertain character of these assets, based on the risk that the
counterparties involved might not meet their obligations.
o Shares for which there is no organised or unofficial market, and whose fair value
cannot be calculated reliably as set out above, are measured at cost. Impairment is
applied to these shares if there are objective instructions to this end.
o Units in undertakings for collective investment (for which there is no organised market)
are measured at fair value using their last net asset value.
 Liquid assets, including assets on demand at credit institutions, obligations on current
account vis-à-vis credit institutions, amounts payable and receivable in the short term that
are not represented by negotiable securities or money market instruments (other than vis-àvis credit institutions), tax assets and liabilities, are measured at nominal value.
Other amounts receivable in the longer term that are not represented by negotiable
securities are measured at fair value.
Impairment is applied to assets, amounts to be received and receivables if there is
uncertainty that they will be paid in full or in part at maturity, or if the realisation value of this
asset is less than its acquisition value. Additional impairment is recorded on the assets,
amounts to be received and receivables referred to in the previous paragraph to ensure that
any change in their value, or risks inherent in the asset in question, are taken into account.
 The income arising from securities lending is recognised as the lending rate and is included
on an accruals basis in the profit and loss account over the term of the transaction.
 Securities issued in a currency other than that of the relevant sub-fund are converted into
the currency of the sub-fund at the last known mid-market exchange rate.
15
DIFFERENCES
A minor difference may appear from time to time between the net asset value as published in the
press and the net asset value shown in this report. These are minimal differences in the net asset
value calculated that are identified after publication.
If these differences reach or exceed a certain tolerance limit, the difference will be compensated. For
those buying or selling shares in the bevek and for the bevek itself, this tolerance limit will be a
certain percentage of the net asset value and the net assets, respectively.
This tolerance limit is:
o money market funds: 0.25%
o bond funds, balanced funds and funds offering capital guarantee: 0.50%
o equity funds: 1%
o other funds (real estate funds, etc.): 0.50%
1.5.2
EXCHANGE RATES
28/02/2014
1 EUR =
1,54345
3,2264
1,52885
1,21655
27,325
7,4625
1,00
0,82415
10,7192
16.033,80
4,8171
140,97
1.474,38
8,2745
1,6438
53,1520
8,8471
1,7495
45,06
3,046
1,3812
14,836
28/02/2013
AUD
BRL
CAD
CHF
CZK
DKK
EUR
GBP
HKD
IDR
ILS
JPY
KRW
NOK
NZD
PHP
SEK
SGD
THB
TRY
USD
ZAR
1,27705
2,5848
1,344
1,22005
25,698
7,4558
1,00
0,86125
10,1383
12.633,60
4,8552
120,62
1.415,63
7,4803
1,5769
53,1569
8,4265
1,6182
38,8937
2,3515
1,3074
11,7305
AUD
BRL
CAD
CHF
CZK
DKK
EUR
GBP
HKD
IDR
ILS
JPY
KRW
NOK
NZD
PHP
SEK
SGD
THB
TRY
USD
ZAR
16
EXISTENCE OF COMMISSION SHARING AGREEMENTS
What the Commission Sharing Agreement entails
The Management Company, or where appropriate, the appointed manager can ask the broker to pay
invoices on their behalf for a number of goods and services provided. The broker will then pay those
invoices using the savings that have been built up to a certain percentage above the gross
commission that it receives from the sub-funds for carrying out transactions.
N.B.:
Only goods and services that assist the Management Company, or where applicable, the appointed
manager in managing the sub-funds in the interest of this sub-fund can be covered by a Commission
Sharing Agreement.
Goods and services eligible for a Commission Sharing Agreement:

Research-related and advice-related services;

Portfolio valuation and analysis;

Market information and related services;

Return analysis;

Services related to market prices;

Computer hardware linked to specialised computer software or research services;

Dedicated telephone lines;

Fees for seminars when the topic is relevant to investment services;

Publications when the topic is relevant to investment services;

All other goods and services that contribute directly or indirectly to achieving the sub-funds'
investment objectives.
The Management Company, or where appropriate, the appointed manager has laid down an internal
policy as regards entering into Commission Sharing Agreements and avoiding possible conflicts of
interest in this respect, and has put appropriate internal controls in place to ensure this policy is
observed.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
Broker
Percentage
28-02-14
28-02-14
CITI
7,593
3,761
49.54%
CSFBSAS
33,372
15,216
45.60%
DEUTSCHE
2,746
1,131
41.18%
HSBC
66
25
37.50%
INSTINET
21,838
8,628
39.51%
JP MORGAN
4,572
1,996
43.65%
MACQUARIE
23,689
10,790
45.55%
MERRILL
37,519
18,407
49.06%
MORGAN STANLEY
31,185
13,619
43.67%
SOCGEN
1,199
445
37.11%
UBSWDR
57,170
27,676
48.41%
17
th
Semi-Annual report as at 28 February 2014
TABLE OF CONTENTS
2.
Information on KBC Eco Fund Sustainable Euroland
2.1. Management report
2.1.1. Launch date and subscription price
2.1.2. Stock exchange listing
2.1.3. Aim and distinctive features of the investment policy
2.1.4. Financial portfolio management
2.1.5. Distributors
2.1.6. Index and benchmark
2.1.7. Policy conducted during the financial year
2.1.8. Future policy
2.1.9. Synthetic risk and reward indicator (SRRI)
2.2. Balance sheet
2.3. Profit and loss account
2.4. Composition of the assets and key figures
2.4.1. Composition of the assets
2.4.2. Change in the composition of the assets
2.4.3. Value of commitments in respect of financial derivatives positions
2.4.4. Evolution of the number of subscriptions, repayments and the net asset value
2.4.5. Return figures
2.4.6. Expenses
2.4.7. Notes to the financial statements and other data
18
19
2
INFORMATION ON KBC ECO FUND SUSTAINABLE EUROLAND
2.1
MANAGEMENT REPORT
2.1.1
LAUNCH DATE AND SUBSCRIPTION PRICE
Launch date: 29 December 2000
Initial subscription price: 500 EUR
Currency: EUR
2.1.2
STOCK EXCHANGE LISTING
Not applicable.
2.1.3
GOAL AND KEY PRINCIPLES OF THE INVESTMENT POLICY
SUB-FUND’S OBJECT:
The main objective of this sub-fund is to generate the highest possible return for its shareholders by
investing directly or indirectly in transferable securities. This is reflected in its pursuit of capital gains
and income. To this end, the assets are invested, either directly or indirectly via correlated financial
instruments, primarily in shares.
SUB-FUND’S INVESTMENT POLICY:
PERMITTED ASSET CLASSES:
The sub-fund may invest in securities, money market instruments, units in undertakings for collective
investment, deposits, financial derivatives, liquid assets and all other instruments insofar as
permitted by the applicable laws and regulations and consistent with the sub-fund’s object
The sub-fund shall invest no more than 10% of its assets in units of other undertakings for collective
investment.
RESTRICTIONS OF THE INVESTMENT POLICY:
The investment policy will be implemented within the limits set by law and regulations.
The sub-fund may borrow up to 10% of its net assets, insofar as these are short-term borrowings
aimed at solving temporary liquidity problems.
PERMITTED DERIVATIVES TRANSACTIONS:
Derivatives may be used to achieve the investment objectives as well as to hedge in risks.
It is possible to work with either listed or unlisted derivatives: these may be forward contracts,
options or swaps on securities, indices, currencies or interest rates or other transactions involving
derivatives. Unlisted derivatives transactions may only be concluded with prime financial institutions
specialised in such transactions. Subject to the applicable laws and regulations and the articles of
association, the sub-fund will always seek to conclude the most effective transactions. All costs
associated with the transactions will be charged to the sub-fund and all income generated will be
paid to the sub-fund.
If the transactions result in a risk in respect of the counterparty, this risk can be hedged by using a
margin management system that ensures that the sub-fund is the beneficiary of security (collateral)
in the form of cash or investment grade bonds. When calculating the value of the bonds, a margin
will be applied that varies depending on their residual term to maturity and the currency in which they
are denominated. The relationship with the counterparty or counterparties is governed by standard
international agreements.
Derivatives can also be used to hedge the assets of the sub-fund against open exchange risks in
relation to the currency.
Where derivatives are used, they must be easily transferable and liquid instruments. Using
derivatives does not, therefore, affect liquidity risk. Furthermore, using derivatives does not affect the
portfolio's allocation across regions, industry sectors or themes. As a result, they have no effect on
concentration risk. Derivatives may not be used to protect capital, either fully or partially. They
neither increase nor decrease capital risk. In addition, using derivatives has no effect on credit risk,
settlement risk, custody risk, flexibility risk or inflation risk or risk dependent on external factors.
20
STRATEGY SELECTED:
At least 75% of the assets are invested in the shares of sustainable companies in the euro area.
The shares must satisfy the following criteria:
1) the companies must be considered the ‘best in class’ in terms of sustainability: This means that
the companies have to be screened based on the following criteria:
economic policy and role in society
business ethics and corporate governance
environment
internal social relations
human rights
socially controversial practices and technologies
2) the companies must be based in the euro area
Each criterion is sub-divided into measurable indicators.
The requirements, criteria and indicators are set out by KBC Asset Management in co-operation with
the External Advisory Board for Sustainability Analysis. These requirements, criteria and indicators
are constantly checked to ensure their relevance. Accordingly, the method used to conduct the
sustainability screening may be changed, subject to approval by the External Advisory Board for
Sustainability Analysis.
The shares are screened by KBC Asset Management’s Sustainable and Socially Responsible
Investment Department and the External Advisory Board for Sustainability Analysis.
Because the External Advisory Board for Sustainability Analysis works independently, the
assessment of companies is objective, assuring the credibility of the sustainability screening. The
Board’s task consists in overseeing the quality of the methods used and the research carried out by
KBC Asset Management.
LENDING FINANCIAL INSTRUMENTS:
The subfund is not allowed to lend financial instruments.
VOLATILITY OF THE NET ASSET VALUE:
The volatility of the net asset value may be high due to the composition of the portfolio.
GENERAL STRATEGY FOR HEDGING THE EXCHANGE RATE RISK:
In order to protect its assets against exchange rate fluctuations and within the limitations laid down in
the articles of association, the sub-fund may perform transactions relating to the sale of forward
currency contracts, as well as the sale of call options and the purchase of put options on currencies.
The transactions in question may relate solely to contracts traded on a regulated market that
operates regularly, is recognised and is open to the public or that are traded with a recognised,
prime financial institution specialising in such transactions and dealing in the over-the-counter (OTC)
market in options. With the same objective, the sub-fund may also sell currencies forward or
exchange them in private transactions with prime financial institutions specialising in such
transactions.
SOCIAL, ETHICAL AND ENVIRONMENTAL ASPECTS:
Investments may not be made in financial instruments issued by manufacturers of controversial
weapons whose use over the past five decades, according to international consensus, has led to
disproportionate human suffering among the civilian population. This involves the manufacturers of
anti-personnel mines, cluster bombs and munitions and weapons containing depleted uranium.
In addition, as of 31 March 2014 no new investments may be made in financial instruments issued
by companies that do not have an anti-corruption policy and that have been given a negative score
in a thorough screening for corruption in the last two years. A company has no anti-corruption policy
if it cannot be demonstrated that it has an acceptable policy concerning the fight against corruption.
An acceptable policy should be made public and must at least state that bribery will not be tolerated
and that the law will be followed in this respect. The screening will be based on a generally accepted
and independent 'Social, ethical and environmental factors' database.
In this way, not only is a purely financial reality represented, but also the social reality of the sector
or region.
21
Where relevant, please refer to 'Information concerning the Bevek – Tax treatment' in the prospectus
to find out more about the application of European and Belgian tax provisions.
2.1.4
FINANCIAL PORTFOLIO MANAGEMENT
The management company has delegated the intellectual management, with the exception of the
sustainability screening described in the prospectus, to KBC Fund Management Limited, Joshua
Dawson House, Dawson Street , Dublin 2, IRELAND..
2.1.5
DISTRIBUTORS
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
2.1.6
INDEX AND BENCHMARK
See ‘Sub-fund’s investment policy’.
2.1.7
POLICY PERSUED DURING THE FINANCIAL YEAR
KBC Equity Fund Eco Sustainable Euroland invests solely in shares of sustainable companies in the
euro area. The investment policy pursued regarding sector allocation is comparable to that of an
actively managed euro-area portfolio with no restrictions regarding sustainability. The fund achieved a
positive performance over the half year, slightly underperforming the benchmark.
Doubts about the sustainability of the economic recovery have long dominated the investment climate.
But during the summer of 2013 the mood began to turn positive. Europe shook off the recession itself,
the euro crisis eased its stranglehold, the U.S. began a heavy restructuring and Japan broke the
negative deflationary spiral. The equity markets cherished this economic optimism. Since 2010 more
jobs were created than lost in the U.S but the pace of employment growth has long remained on the
thin side. The unemployment rate declined, but for the wrong reasons. Not because employment grew
strongly, but because many disillusioned Americans got out of the labour market. In the course of
2013 there was improvement in employment growth which accelerated to an average of 187 000 new
jobs a month, so that the natural growth of the labour force could be absorbed, but no more than that.
Wages increased slightly more than inflation. Both factors meant that the purchasing power of
American families was very modest and only offered a modest support to economic growth together,
which remained limited. Underlying the U.S. economy, however, much stronger than the growth rate
suggests. As of January 1, 2013 is an impressive program of tax increases and spending cuts took
effect despite fears towards the end of 2012 that it would collapse (the famous fiscal cliff). The U.S.
entered into a new recession that was very different. Growth remained intact, albeit moderately.
In EMU, the recession which was triggered by the euro crisis came to an end. From the second
quarter of 2013 a positive growth rate was recorded. Consumer and business confidence are
recovering quite well, surprisingly even in the hard-hit southern Europe. Japan managed to break
through its negative deflationary spiral. The newly formed government-Abe had in December 2012
changed course and announced in April 2013 that the Japanese central bank would pursue an
inflation rate of 2%. Since August 2012 in anticipation of the policy reversal the yen was already
weakening sharply. That meant that in 2013 exports recovered and inflation figures were positive. The
weak growth in the West also had an impact on the export performance of the emerging countries.
Which translated into weakening growth, especially in countries like Brazil and South Africa with an
extensive resource industry. The slowdown in China brought the problem of excessive indebtedness
of Chinese banks to the forefront. Both in June and December the interbank market ended briefly in
crisis, the Bank of China failed to suppress this despite their substantial liquidity injections.
Over the third quarter KBC Eco Sustainable Euroland increased from 397.78 to 445.94. In terms of
sector performance financials, consumer discretionary and industrials led the gains. Energy was the
only sector that disappointed over the quarter. Banking stocks such as Banco Santander, Societe
Generale, Banco Bilbao Vizcaya Argenta and BNP Paribas all contributed positively to the fund’s
performance. Banco Santander saw its share price increased from EUR 5.34 to EUR 6.543 after their
third quarter profit rose as net income increased and the bank prepares itself for a new period of
increased profitability. Both Daimler and BMW from the consumer discretionary sector performed well
as both companies plan large scale expansions of their high performance units due to increasing
demand in emerging countries. In terms of laggard stocks Technip SA from the energy sector
disappointed as its share price decreased from EUR 88.00 to EUR 73.68.
22
Over the fourth quarter KBC Eco Sustainable Euroland increased from 445.94 to 457.80. The financial
sector continued on its positive trend for the fourth quarter with the industrials and utilities sector
following closely. Intesa Sanpaolo, Vinci Sa and Basf SE all made strong contributions to the positive
performance over the quarter. The energy, consumer staples and information technology sectors were
less impressed and all ended the fourth quarter in negative territory. SBM Offshore was the most
disappointing stock for the fund with its share price decreasing from EUR 14.72 to EUR 11.22 after an
investigation was launched into a former employee leaking documents in an extortion attempt.
2.1.8
FUTURE POLICY
The U.S. and European barometers measuring confidence among business leaders, were in the
spring of 2013 slipped to just above (US) or well below (EMU) freezing. From these low levels it is
expected that they will rise sharply in the coming months. In the US, the measure has already
achieved a level compatible with a growth rate of more than 3.5 %. While in Germany, the IFO, the
leading index of business confidence indicator is currently at a level corresponding to the top decile
which is the best observation of the last thirty years. In Southern Europe, business confidence has
reached the melting zone. It is surprising that so early in this cycle consumer confidence has changed
so positively and is also experiencing a sharp recovery. Europe is now emerging slowly out of
recessionary territory. The budget planning, stricter credit policies of banks and the great uncertainty
among consumers and producers will continue to weigh. In the coming months, growth rates foresees
an improvement of +1 to +1.5 % YoY. However this is not a cause for celebration rather a better
alternative to negative growth. Deflation or depression scenarios that regularly dominate the vote on
the bond markets, however, are not justified.
Recent years have laid the foundation for a more sustainable growth in 2014 and beyond. American
families have reduced their debt significantly, the savings rate has risen sharply and loan servicing
(principal and interest payments together) absorbs only 10% of household budgets (the lowest level in
fifteen years. This will gradually all Americans breathing room to spend a greater proportion of their
income on consumption. The explosive growth in profits during 2009-2013 enhances the extensive
cash positions of the companies further. During the crisis, investments were sharply reduced. The
foundations are now laid for the recovery process. In the US, Republicans and Democrats came
together to compromise on fiscal policy. The current funding from the federal government is insured up
to March 2015. The sharpest points of the long-term plan of fiscal consolidation were agreed. The Fed
is conducting an extremely loose monetary policy by providing a purchase program for government
bonds and other debt liquidity injections.
Today's world is one with two speeds. The classic, industrialized economies ( US, Europe , Japan)
stuck in a slump, with no underlying inflationary pressures, with continued low interest rates and
runaway public finances. In emerging markets, the picture looks quite different. The strong economic
growth in Asia has sometimes led to inflationary pressures. An appropriate monetary policy is
necessary: sometimes decelerating (as in 2011), then stimulating (like now). One of the great
challenges of this decade is the development of consumption in China and the rest of Asia. This can
contribute to a more balanced world economic order. It not only reduces dependence on exports of the
region. Equally important is the impact on international capital flows . More consumption in China
means less savings and more imports, including from the U.S. and Europe. That will help the West to
grow and reduce its debt problems. The euro crisis has been driven into the background, but many
problems are still awaiting a solution. In 2014, the support funds for Greece, Portugal and Ireland will
be exhausted. Ireland will be able to return to the markets to finance their capital, but for Portugal and
Greece this is not an option. There is even talk of a second debt restructuring for Greece.
23
2.1.9
SYNTHETIC RISK AND REWARD INDICATOR
6 on a scale of 1 (lowest risk) to 7 (highest risk).
The value of a share can decrease or increase and the investor may not get back the amount
invested.
In accordance with Commission Regulation (EU) No. 583/2010, a synthetic risk and reward indicator
has been calculated. This indicator provides a quantitative measure of the sub-fund's potential return
and the risk involved, calculated in the currency in which the sub-fund is denominated. It is given as
a figure between 1 and 7. The higher the figure, the greater the potential return, but also the more
difficult it is to predict this return. Losses are possible too. The lowest figure does not mean that the
investment is entirely free of risk. However, it does indicate that, compared with the higher figures,
this product will generally provide a lower, but more predictable return.
The synthetic risk and reward indicator is assessed regularly and can therefore go up or down based
on data from the past. Data from the past is not always a reliable indicator of future risk and return.
24
2.2
BALANCE SHEET
Balance sheet layout
TOTAL NET ASSETS
II.
28/02/2014
28/02/2013
(in the currency of the sub-fundt)
(in the currency of the sub-fund )
4.165.773,82
4.761.613,34
4.152.934,16
4.708.033,34
24.696,41
2.931,86
2.782,34
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
b) Tax assets
Payables
a) Accounts payable (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
-13.654,71
1.148,12
52.203,91
2.814,81
976,37
-6.073,20
3.262,22
2.489,50
-7.157,97
TOTAL SHAREHOLDERS' EQUITY
4.165.773,82
4.761.613,34
A.
Capital
3.601.087,61
4.335.474,87
B.
Income equalization
595,69
-680,65
D.
Result for the period
564.090,52
426.819,12
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
25
2.3
PROFIT AND LOSS ACCOUNT
Income Statement
I.
28/02/2013
(in the currency of the sub-fund)
591.171,32
794,77
455.657,61
-27,79
22,86
447,59
15.803,35
19.178,00
1,79
-16,93
10,18
7,92
-3,09
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
D. Other securities
H. Foreign exchange positions and transactions
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the sub-fund)
Investment income and expenses
A.
B.
Dividends
Interests
a) Securities and money market instruments
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
B.
Other
311,51
IV. Operating expenses
-3.354,32
-98,57
-1.794,16
-6.132,72
-74,90
-1.369,71
-30.718,74
-2.047,78
-55,92
-977,49
-33.372,68
-2.227,23
-16,97
-446,83
-116,11
-120,19
-1.992,50
-2.382,74
-459,82
-1.642,05
-2.093,03
-954,99
Subtotal II + III + IV
-27.898,43
-29.258,29
Profit (loss) on ordinary activities before tax
564.090,52
426.819,12
564.090,52
426.819,12
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
b) Administration and accounting management
E. Administrative expenses (-)
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
K. Other expenses (-)
Income and expenditure for the period
V.
VII. Result for the period
26
2.4
COMPOSITION OF THE ASSETS AND KEY FIGURES
2.4.1
COMPOSITIONS OF THE ASSETS OF KBC ECO FUND SUSTAINABLE EUROLAND
Name
Quantity on
28/02/2014
Cur
rency
Price in
currency
Evaluation
(in the currency of the
sub-fund)
%
%
owned by
portfolio
UCI
%
Net
assets
NET ASSETS
SECURITIES PORTFOLIO
Shares
Exchange-listed shares
Austria
OMV AG (WIEN)
1.812,00
EUR
32,970
59.741,64
1,44
1,43
Belgium
ANHEUSER-BUSCH INBEV NV -
1.780,00
EUR
75,950
135.191,00
3,26
3,25
BELGACOM -
81,00
EUR
21,855
1.770,26
0,04
0,04
KBC GROUP -
1.212,00
EUR
45,980
55.727,76
1,34
1,34
SOLVAY -
69,00
EUR
112,400
7.755,60
0,19
0,19
TELENET -
565,00
EUR
46,240
26.125,60
0,63
0,63
UMICORE -
125,00
EUR
35,620
4.452,50
0,11
0,11
Finland
KONE CORP. -
466,00
EUR
29,510
13.751,66
0,33
0,33
NESTE OIL OYJ -
2.732,00
EUR
15,510
42.373,32
1,02
1,02
NOKIA "A"
6.771,00
EUR
5,585
37.816,04
0,91
0,91
OUTOKUMPU A -
5.914,00
EUR
0,428
2.529,42
0,06
0,06
RAUTORUUKI FIMIO -
1.732,00
EUR
8,490
14.704,68
0,35
0,35
UPM-KYMMENE CORP -
2.224,00
EUR
13,160
29.267,84
0,71
0,70
132,00
EUR
42,830
5.653,56
0,14
0,14
ADP -
295,00
EUR
87,940
25.942,30
0,63
0,62
AIR LIQUIDE (L') -
297,00
EUR
99,760
29.628,72
0,71
0,71
ATOS SA -
665,00
EUR
70,450
46.849,25
1,13
1,13
3.455,00
EUR
18,940
65.437,70
1,58
1,57
107,00
EUR
92,880
9.938,16
0,24
0,24
1.705,00
EUR
59,460
101.379,30
2,44
2,43
BUREAU VERITAS SA -
462,00
EUR
19,990
9.235,38
0,22
0,22
CHRISTIAN DIOR -
121,00
EUR
143,300
17.339,30
0,42
0,42
CNP ASSURANCE (PAR)
367,00
EUR
15,620
5.732,54
0,14
0,14
2.108,00
EUR
11,520
24.284,16
0,59
0,58
DANONE -
337,00
EUR
51,180
17.247,66
0,42
0,41
DASSAULT SYSTEMES -
113,00
EUR
83,280
9.410,64
0,23
0,23
ESSILOR (PAR)
161,00
EUR
75,660
12.181,26
0,29
0,29
ETAB ECON CASINO GUICH-P (PAR)
234,00
EUR
82,340
19.267,56
0,46
0,46
1.880,00
EUR
18,590
34.949,20
0,84
0,84
WARTSILA CORPORATION "B"
France
AXA BIC (PAR)
BNP PARIBAS -
CREDIT AGRICOLE -
GDF SUEZ GEMALTO NV -
233,00
EUR
81,500
18.989,50
0,46
0,46
GROUPE FNAC -
19,00
EUR
30,760
584,44
0,01
0,01
KERING -
32,00
EUR
148,600
4.755,20
0,12
0,11
L'OREAL -
539,00
EUR
122,750
66.162,25
1,59
1,59
LAFARGE -
388,00
EUR
54,470
21.134,36
0,51
0,51
LEGRAND (PAR)
763,00
EUR
44,930
34.281,59
0,83
0,82
LVMH-MOET H.L.VUIT. -
353,00
EUR
134,850
47.602,05
1,15
1,14
MICHELIN (PAR)
404,00
EUR
88,570
35.782,28
0,86
0,86
3.821,00
EUR
5,227
19.972,37
0,48
0,48
NATIXIS (PAR)
27
PERNOD-RICARD -
284,00
EUR
85,290
24.222,36
0,58
0,58
1.012,00
EUR
68,800
69.625,60
1,68
1,67
RENAULT (PAR)
542,00
EUR
72,210
39.137,82
0,94
0,94
SAINT GOBAIN -
733,00
EUR
43,500
31.885,50
0,77
0,77
1.160,00
EUR
75,330
87.382,80
2,10
2,10
PUBLICIS GROUPE SA -
SANOFI SCHNEIDER ELECTRIC SA -
202,00
EUR
64,750
13.079,50
0,32
0,31
SOCIETE GENERALE -
1.411,00
EUR
48,375
68.257,13
1,64
1,64
SODEXHO ALLIANCE -
181,00
EUR
77,300
13.991,30
0,34
0,34
1.500,00
EUR
14,480
21.720,00
0,52
0,52
921,00
EUR
71,190
65.565,99
1,58
1,57
VINCI S.A. -
1.133,00
EUR
54,130
61.329,29
1,48
1,47
VIVENDI -
2.692,00
EUR
20,715
55.764,78
1,34
1,34
ADIDAS AG -
565,00
EUR
84,400
47.686,00
1,15
1,15
ALLIANZ AG REG
690,00
EUR
129,700
89.493,00
2,16
2,15
AXEL SPRINGER SE -
138,00
EUR
51,210
7.066,98
0,17
0,17
BASF SE -
1.462,00
EUR
83,420
121.960,04
2,94
2,93
BAYER AG -
1.497,00
EUR
102,900
154.041,30
3,71
3,70
BAYERISCHE MOTOREN WERKE AG -
564,00
EUR
84,200
47.488,80
1,14
1,14
CELESIO AG (FRA)
466,00
EUR
25,580
11.920,28
0,29
0,29
1.970,00
EUR
13,140
25.885,80
0,62
0,62
SUEZ ENVIRONNEMENT SA TECHNIP SA (PAR)
Germany
COMMERZBANK AG CONTINENTAL AG -
350,00
EUR
176,350
61.722,50
1,49
1,48
DAIMLER AG -
1.735,00
EUR
67,520
117.147,20
2,82
2,81
DEUTSCHE BANK AG REG
1.658,00
EUR
35,240
58.427,92
1,41
1,40
533,00
EUR
59,440
31.681,52
0,76
0,76
DEUTSCHE LUFTHANSA AG REG
1.582,00
EUR
18,790
29.725,78
0,72
0,71
DEUTSCHE POST AG -
3.481,00
EUR
27,210
94.718,01
2,28
2,27
DEUTSCHE TELEKOM INT FIN REG
4.902,00
EUR
12,295
60.270,09
1,45
1,45
542,00
EUR
13,820
7.490,44
0,18
0,18
DEUTSCHE BOERSE AG -
E.ON SE INFINEON TECHNOLOGIES AG -
1.722,00
EUR
8,220
14.154,84
0,34
0,34
LANXESS -
173,00
EUR
53,780
9.303,94
0,22
0,22
MAN AG -
144,00
EUR
93,500
13.464,00
0,32
0,32
MUNCHENER RUCKVERSICHERUNG AG REG
257,00
EUR
158,650
40.773,05
0,98
0,98
OSRAM LICHT AG -
879,00
EUR
49,255
43.295,15
1,04
1,04
RWE AG -
555,00
EUR
29,015
16.103,33
0,39
0,39
SAP AG -
901,00
EUR
58,520
52.726,52
1,27
1,27
1.488,00
EUR
96,760
143.978,88
3,47
3,46
SYMRISE AG -
446,00
EUR
35,590
15.873,14
0,38
0,38
VOLKSWAGEN AG PREF
284,00
EUR
189,000
53.676,00
1,29
1,29
1.226,00
EUR
21,450
26.297,70
0,63
0,63
ASSICURAZIONI GENERALI -
2.367,00
EUR
16,290
38.558,43
0,93
0,93
FIAT SPA -
2.183,00
EUR
7,585
16.558,06
0,40
0,40
19.404,00
EUR
2,246
43.581,38
1,05
1,05
933,00
EUR
17,040
15.898,32
0,38
0,38
SIEMENS AG REG
Ireland
C.R.H. PLC -
Italy
INTESA SANPAOLO SPA SAIPEM (MIL)
SNAM RETE GAS S.P.A. -
2.985,00
EUR
4,124
12.310,14
0,30
0,30
60.706,00
EUR
0,824
49.991,39
1,20
1,20
TERNA RETE ELETTRICA NAZIONALE -
6.279,00
EUR
3,700
23.232,30
0,56
0,56
UNICREDIT SPA -
8.320,00
EUR
5,765
47.964,80
1,16
1,15
TELECOM ITALIA (MIL)
Netherlands
A.K.Z.O. NOBEL -
390,00
EUR
60,010
23.403,90
0,56
0,56
2.511,00
EUR
6,529
16.394,32
0,40
0,39
ASML HOLDING NV -
934,00
EUR
63,050
58.888,70
1,42
1,41
HEINEKEN -
412,00
EUR
48,990
20.183,88
0,49
0,49
AEGON -
28
ING GROEP NV -
6.508,00
EUR
10,570
68.789,56
1,66
1,65
269,00
EUR
46,295
12.453,36
0,30
0,30
KONINKLIJKE KPN NV -
8.092,00
EUR
2,585
20.917,82
0,50
0,50
KONINKLIJKE PHILIPS ELECTRONICS N.V. -
2.260,00
EUR
25,360
57.313,60
1,38
1,38
REED ELSEVIER NV -
2.444,00
EUR
15,880
38.810,72
0,94
0,93
SBM OFFSHORE NV (AMS)
2.470,00
EUR
11,220
27.713,40
0,67
0,67
UNILEVER CVA
1.748,00
EUR
28,730
50.220,04
1,21
1,21
607,00
EUR
20,930
12.704,51
0,31
0,31
801,00
EUR
12,315
9.864,32
0,24
0,24
KONINKLIJKE D.S.M. NV (AMS)
WOLTERS KLUWER -
Portugal
JERONIMO MARTINS -
Spain
ACCIONA SA -
84,00
EUR
57,750
4.851,00
0,12
0,12
AMADEUS IT HOLDING SA -
1.116,00
EUR
31,865
35.561,34
0,86
0,85
BANCO BILBAO VIZCAYA ARGENTARIA -
8.367,00
EUR
8,995
75.261,17
1,81
1,81
12.727,00
EUR
6,566
83.565,48
2,01
2,01
381,00
EUR
30,215
11.511,92
0,28
0,28
2.644,00
EUR
4,681
12.376,56
0,30
0,30
ENAGAS -
229,00
EUR
21,085
4.828,47
0,12
0,12
ENDESA -
284,00
EUR
23,830
6.767,72
0,16
0,16
1.997,00
EUR
15,300
30.554,10
0,74
0,73
GAS NATURAL SDG -
403,00
EUR
18,595
7.493,79
0,18
0,18
GRIFOLS SA -
649,00
EUR
41,300
26.803,70
0,65
0,64
GRIFOLS SA B
190,00
EUR
30,710
5.834,90
0,14
0,14
INDUSTRIA DE DISENO TEXTIL SA -
382,00
EUR
104,300
39.842,60
0,96
0,96
RED ELECTRICA DE ESPANA -
338,00
EUR
56,400
19.063,20
0,46
0,46
5.363,00
EUR
11,110
59.582,93
4.152.934,16
1,44
100,00
1,43
99,69
4.152.934,16
100,00
99,69
BANCO SANTANDER CENTRAL HISPANO SA BOLSAS Y MERCADOS ESPANOLES EDP RENOVAVEIS SA -
FERROVIAL SA -
TELEFONICA SA -
Total shares
TOTAL SECURITIES PORTFOLIO
CASH AT BANK AND IN HAND
Demand accounts
Belgium
KBC GROUP EURO
986,62
EUR
1,000
986,62
0,02
KBC GROUP GBP
88,71
GBP
1,000
107,64
0,00
KBC GROUP USD
74,39
USD
1,000
53,86
1.148,12
0,00
0,03
1.148,12
0,03
Total demand accounts
TOTAL CASH AT BANK AND IN HAND
OTHER RECEIVABLES AND PAYABLES
Receivables
Belgium
KBC GROUP EUR RECEIVABLE
KBC GROUP WHT TO BE RECOVERED EUR
24.696,41
EUR
1,000
24.696,41
0,59
2.931,86
EUR
1,000
2.931,86
27.628,27
0,07
0,66
-13.654,71
EUR
1,000
-13.654,71
-13.654,71
-0,33
-0,33
13.973,56
0,34
976,37
0,02
Total receivables
Payables
Belgium
KBC GROUP EUR PAYABLE
Payables
TOTAL RECEIVABLES AND PAYABLES
OTHER
Interest receivable
EUR
29
Expenses payable
EUR
-6.073,20
-0,15
Expenses to be carried forward
EUR
2.814,81
0,07
-2.282,02
-0,06
4.165.773,82
100,00
TOTAL OTHER
TOTAL NET ASSETS
30
Geographic breakdown (as a % of securities portfolio)
Austria
Belgium
Germany
Spain
Finland
France
Ireland
Italy
Netherlands
Portugal
Total
31/08/2012
2,49
8,26
26,83
6,92
3,73
32,54
0,57
6,65
11,60
0,41
100,00
28/02/2013
2,48
6,74
30,30
8,54
3,67
31,59
0,63
4,54
11,16
0,35
100,00
31/08/2013
1,69
5,43
30,08
9,02
3,53
32,29
0,63
4,58
12,49
0,26
100,00
28/02/2014
1,44
5,56
32,99
10,21
3,52
29,62
0,63
5,97
9,82
0,24
100,00
28/02/2013
29,41
18,36
13,99
5,14
19,54
6,07
3,56
3,93
0,00
100,00
31/08/2013
25,78
23,59
10,27
5,51
21,28
6,65
3,27
3,64
0,01
100,00
28/02/2014
25,57
24,22
7,72
3,47
23,42
6,61
5,27
3,71
0,01
100,00
28/02/2013
100,00
100,00
31/08/2013
100,00
100,00
28/02/2014
100,00
100,00
Sector breakdown (as a % of securities portfolio)
Cyclicals
Consum(cycl)
Cons.goods
Pharma
Financials
Technology
Telecomm.
Utilities
Various
Total
31/08/2012
30,20
17,03
13,02
6,31
17,71
5,45
3,49
6,79
0,00
100,00
Currency breakdown (as a % of net assets)
EUR
Total
31/08/2012
100,00
100,00
31
2.4.2
CHANGES IN THE COMPOSITION OF THE ASSETS OF KBC ECO FUND SUSTAINABLE
EUROLAND (IN THE CURRENCY OF THE SUB-FUND)
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Turnover rate
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Corrected turnover rate
1st half of year
819.371,83
1.011.601,05
1.830.972,88
374.627,27
561.118,50
935.745,77
4.107.580,23
Year
819.371,83
1.011.601,05
1.830.972,88
374.627,27
561.118,50
935.745,77
4.107.580,23
21,79 %
21,79 %
1st half of year
819.371,83
1.011.601,05
1.830.972,88
374.627,27
561.118,50
935.745,77
4.081.830,69
Year
819.371,83
1.011.601,05
1.830.972,88
374.627,27
561.118,50
935.745,77
4.081.830,69
21,93 %
21,93 %
The table above shows the capital volume of portfolio transactions. This volume (adjusted to take
account of total subscriptions and redemptions) is also compared to the average net assets at the
beginning and end of the period.
A figure close to 0% implies that the transactions relating to the securities or transactions relating to
the assets (excluding deposits and cash) in a given period only involve subscriptions and
redemptions.
A negative percentage shows that subscriptions and redemptions entailed few, if any, transactions in
the portfolio.
Active asset management may result in high turnover rates (monthly percentage >50%).
The detailed list of transactions is available for consultation free of charge at the registered office of
the Bevek or fund at Havenlaan 2, 1080 Brussels.
32
2.4.3
AMOUNT OF COMMITMENTS IN RESPECT OF FINANCIAL DERIVATIVES POSITIONS
Nil
2.4.4
CHANGES OF THE NUMBER OF SUBSCRIPTIONS AND REDEMPTIONS AND THE NET ASSET
VALUE
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Cap.
Dis.
84,73
2.283,25
361,00
10.271,04
1.686,70
11.957,74
Dis.
Cap.
Dis.
Total
2012 - 02*
418,55
2013 - 02*
15.119,87
47,10
14.047,55
278,63
11.343,37
1.455,17
12.798,54
2014 - 02*
717,92
451,33
4.084,23
521,97
7.977,06
1.384,53
9.361,59
Amounts received and paid by the UCI
(in the currency of the sub-fund)
Period
Subscriptions
Year
Redemptions
Capitalization
Distribution
Capitalization
Distribution
2012 - 02*
147.548,12
25.779,50
775.126,83
107.396,01
2013 - 02*
4.959.718,86
15.134,74
4.698.144,62
74.783,17
2014 - 02*
312.128,64
159.440,96
1.637.633,58
169.801,82
Period
Year
Net asset value
End of period (in the currency of the sub-fund)
Of one share
Of the sub-fund
Capitalization
Distribution
2012 - 02*
3.990.392,78
341,24
287,85
2013 - 02*
4.761.613,34
379,17
316,48
2014 - 02*
4.165.773,82
457,80
371,16
* The financial year does not coincide with the calender year.
33
2.4.5
PERFORMANCE FIGURES
1 Year
Cap
Div
ISIN code
Currency
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
CAP BE0175718510
EUR
20.74%
5.39%
13.29%
2.59%
29/12/2000
-0.67%
DIV BE0175717504
EUR
20.68%
5.35%
13.26%
2.56%
29/12/2000
-0.68%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
34








The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
the return is calculated as the change in the net asset value between two dates expressed
as a percentage. In the case of units that pay dividends, the dividend is incorporated
geometrically in the return.
Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NAV(D) / NAV(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NAV(D) / NAV(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
Distribution units (DIV)
Return on date D over a period of X years:
[ C * NAV(D) / NAV(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[ C * NAV(D) / NAV(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
where C is a factor that is determined for all N dividends between the calculation date D
and the reference date.
For dividend i on date Di with value Wi:
Ci = [Wi / NAV(Di)] + 1
i = 1 ... N
from which C = C0 * .... * CN.
If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.
The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalisation and distribution shares.
35
2.4.6
COSTS
Ongoing charges: *
Distribution: 2.009%
Capitalization: 1.957%
* The following are not included in the charges shown: entry and exit charges, performance fees,
transaction costs paid when buying or selling assets, interest paid, payments made with a view to
providing collateral in the context of derivative financial instruments, or commissions relating to
Commission Sharing Agreements or similar fees received by the Management Company or any
person associated with it.
EXISTENCE OF COMMISSION SHARING AGREEMENTS
The Management Company, or where applicable, the appointed manager has entered into a
Commission Sharing Agreement with one or more brokers for transactions in shares on behalf of
one or more sub-funds. This agreement specifically concerns the execution of orders and the
delivery of research reports.
For more information, please see the ‘General’ section of the annual report.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
28-02-14
28-02-14
Broker
Percentage
DEUTSCHE
24
18
76.91%
INSTINET
156
62
40.00%
MACQUARIE
146
73
50.01%
MORGAN STANLEY
666
333
50.00%
UBSWDR
21
8
37.50%
FEE-SHARING AGREEMENTS AND REBATES:
The management company may share its fee with the distributor, and institutional and/or
professional parties.
In principle, the percentage share amounts to between 35% and 60% if the distributor is an entity of
KBC Group NV or to between 35% and 70% if the distributor is not an entity of KBC Group NV.
However, in a small number of cases, the distributor’s fee is less than 35%. Investors may, on
request, obtain more information on these cases.
If the management company invests the assets of the undertaking for collective investment in units
of undertakings for collective investment that are not managed by an entity of KBC Group NV, and
receives a fee for doing so, it will pay this fee to the undertaking for collective investment.
Fee-sharing does not affect the amount of the management fee paid by the sub-fund to the
management company. This management fee is subject to the limitations laid down in the articles of
association. The limitations may only be amended after approval by the general meeting of
shareholders.
The management company has concluded a distribution agreement with the distributor in order to
facilitate the wider distribution of the sub-fund's units by using multiple distribution channels.
It is in the interests of the holders of units, the sub-fund and of the distributor for the largest possible
number of units to be sold and for the assets of the sub-fund to be maximised in this way. In this
respect, there is therefore no question of any conflict of interest.
36
2.4.7
NOTES TO THE FINANCIAL STATEMENTS AND OTHER DATA
Fee for managing the investment portfolio: 1.5% per annum (0.1% of which for the sustainability
screening referred to in the prospectus) calculated on the basis of the average total net assets of the
sub-fund, no management fee is charged on assets assets invested in investment undertakings
managed by a financial institution of the KBC group.
KBC Fund Management Limited receives a fee from the management company of max. 1.4%
calculated on that part of the portfolio that it manages, without the total management fee received by
the management company being exceeded.
The administration agent’s fee is payable at the end of each month and is calculated on the basis of
the average total net assets of the sub-fund.
Auditor's fee: 1 700 EUR per year. This fee is not including VAT and can be indexed on an annual
basis in accordance with the decisions of the general meeting.
The custody fee is calculated on the value of the securities held in custody by the custodian on the
final banking day of the preceding calendar year, except on those assets invested in investment
undertakings managed by a financial institution of the KBC group. The custody fee is paid at the
beginning of the calendar year.
Social, ethical and environmental aspects:
No manufacturers of controversial weapons whose use over the past five decades, according to the
international consensus, has led to disproportionate human suffering among the civilian population
will be included in the portfolio of investments. This involves the manufacturers of anti-personnel
mines, cluster bombs and munitions and weapons containing depleted uranium. In this way, the subfund seeks to reflect not only simple financial reality but also the social reality of the sector or region
in question.
Exercising voting rights.
If necessary, relevant and in the interest of the shareholders, the management company will
exercise the voting rights attached to the shares in the Bevek’s portfolio.
The management company will adhere to the following criteria when determining how it stands
relative to the items on the agenda that are put to the vote:
- Shareholder value may not be adversely affected.
- Corporate governance rules, especially with regard to the rights of minority shareholders, must be
respected.
- The minimum standards with regard to sustainable business and corporate social responsibility
must be met.
The list of companies for which voting rights are exercised is available at the registered office of the
Bevek.
37
th
Semi-Annual report as at 28 February 2014
TABLE OF CONTENTS
2.
Information on KBC Eco Fund CSOB Water
2.1. Management report
2.1.1. Launch date and subscription price
2.1.2. Stock exchange listing
2.1.3. Aim and distinctive features of the investment policy
2.1.4. Financial portfolio management
2.1.5. Distributors
2.1.6. Index and benchmark
2.1.7. Policy conducted during the financial year
2.1.8. Future policy
2.1.9. Synthetic risk and reward indicator (SRRI)
2.2. Balance sheet
2.3. Profit and loss account
2.4. Composition of the assets and key figures
2.4.1. Composition of the assets
2.4.2. Change in the composition of the assets
2.4.3. Value of commitments in respect of financial derivatives positions
2.4.4. Evolution of the number of subscriptions, repayments and the net asset value
2.4.5. Return figures
2.4.6. Expenses
2.4.7. Notes to the financial statements and other data
38
39
2
INFORMATION ON KBC ECO FUND CSOB WATER
2.1
MANAGEMENT REPORT
2.1.1
LAUNCH DATE AND SUBSCRIPTION PRICE
Launch date: 31 July 2007
Initial subscription price: 1000 CZK
Currency: CZK
2.1.2
STOCK EXCHANGE LISTING
Not applicable.
2.1.3
GOAL AND KEY PRINCIPLES OF THE INVESTMENT POLICY
SUB-FUND’S OBJECT:
The main objective of this sub-fund is to generate the highest possible return for its shareholders by
investing directly or indirectly in transferable securities. This is reflected in its pursuit of capital gains
and income. To this end, the assets are invested, either directly or indirectly via correlated financial
instruments, primarily in shares.
SUB-FUND’S INVESTMENT POLICY:
PERMITTED ASSET CLASSES:
The sub-fund may invest in securities, money market instruments, units in undertakings for collective
investment, deposits, financial derivatives, liquid assets and all other instruments insofar as
permitted by the applicable laws and regulations and consistent with the sub-fund’s object
The sub-fund shall invest no more than 10% of its assets in units of other undertakings for collective
investment.
RESTRICTIONS OF THE INVESTMENT POLICY:
The investment policy will be implemented within the limits set by law and regulations.
The sub-fund may borrow up to 10% of its net assets, insofar as these are short-term borrowings
aimed at solving temporary liquidity problems.
PERMITTED DERIVATIVES TRANSACTIONS:
Derivatives may be used to achieve the investment objectives as well as to hedge in risks.
It is possible to work with either listed or unlisted derivatives: these may be forward contracts,
options or swaps on securities, indices, currencies or interest rates or other transactions involving
derivatives. Unlisted derivatives transactions may only be concluded with prime financial institutions
specialised in such transactions. Subject to the applicable laws and regulations and the articles of
association, the sub-fund will always seek to conclude the most effective transactions. All costs
associated with the transactions will be charged to the sub-fund and all income generated will be
paid to the sub-fund.
If the transactions result in a risk in respect of the counterparty, this risk can be hedged by using a
margin management system that ensures that the sub-fund is the beneficiary of security (collateral)
in the form of cash or investment grade bonds. When calculating the value of the bonds, a margin
will be applied that varies depending on their residual term to maturity and the currency in which they
are denominated. The relationship with the counterparty or counterparties is governed by standard
international agreements.
Derivatives can also be used to hedge the assets of the sub-fund against open exchange risks in
relation to the currency.
Where derivatives are used, they must be easily transferable and liquid instruments. Using
derivatives does not, therefore, affect liquidity risk. Furthermore, using derivatives does not affect the
portfolio's allocation across regions, industry sectors or themes. As a result, they have no effect on
concentration risk. Derivatives may not be used to protect capital, either fully or partially. They
neither increase nor decrease capital risk. In addition, using derivatives has no effect on credit risk,
settlement risk, custody risk, flexibility risk or inflation risk or risk dependent on external factors.
40
Strategy selected:
The sub-fund invests at least 75% of its assets in companies that operate on a sustainable basis and
that generate a substantial proportion of their turnover in the water sector.
The companies have to satisfy a number of basic criteria regarding the environment, human rights,
the trade and manufacture of arms, and nuclear energy. The basic criteria are set out by KBC Asset
Management in co-operation with the Independent Environmental Advisory Committee. They may
also change the method used to perform the sustainability screening, based on new trends in
society.
Screening is carried out by KBC Asset Management’s Sustainable and Socially Responsible
Investment Department and the Environmental Advisory Committee.
Risk concentration:
Shares of companies in the water industry.
LENDING FINANCIAL INSTRUMENTS:
The subfund is not allowed to lend financial instruments.
VOLATILITY OF THE NET ASSET VALUE:
The volatility of the net asset value may be high due to the composition of the portfolio.
GENERAL STRATEGY FOR HEDGING THE EXCHANGE RATE RISK:
In order to protect its assets against exchange rate fluctuations and within the limitations laid down in
the articles of association, the sub-fund may perform transactions relating to the sale of forward
currency contracts, as well as the sale of call options and the purchase of put options on currencies.
The transactions in question may relate solely to contracts traded on a regulated market that
operates regularly, is recognised and is open to the public or that are traded with a recognised,
prime financial institution specialising in such transactions and dealing in the over-the-counter (OTC)
market in options. With the same objective, the sub-fund may also sell currencies forward or
exchange them in private transactions with prime financial institutions specialising in such
transactions.
SOCIAL, ETHICAL AND ENVIRONMENTAL ASPECTS:
Investments may not be made in financial instruments issued by manufacturers of controversial
weapons whose use over the past five decades, according to international consensus, has led to
disproportionate human suffering among the civilian population. This involves the manufacturers of
anti-personnel mines, cluster bombs and munitions and weapons containing depleted uranium.
In addition, as of 31 March 2014 no new investments may be made in financial instruments issued
by companies that do not have an anti-corruption policy and that have been given a negative score
in a thorough screening for corruption in the last two years. A company has no anti-corruption policy
if it cannot be demonstrated that it has an acceptable policy concerning the fight against corruption.
An acceptable policy should be made public and must at least state that bribery will not be tolerated
and that the law will be followed in this respect. The screening will be based on a generally accepted
and independent 'Social, ethical and environmental factors' database.
In this way, not only is a purely financial reality represented, but also the social reality of the sector
or region.
Where relevant, please refer to 'Information concerning the Bevek – Tax treatment' in the prospectus
to find out more about the application of European and Belgian tax provisions.
2.1.4
FINANCIAL PORTFOLIO MANAGEMENT
The management company has delegated the intellectual management, with the exception of the
sustainability screening described in the prospectus, to KBC Fund Management Limited, Joshua
Dawson House, Dawson Street , Dublin 2, IRELAND..
KBC Fund Management Limited has delegated the intellectual management, with the exception of
the sustainability screening described in the prospectus, to Kleinwort Benson Investors Dublin Ltd,
Joshua Dawson House Dawson Street , Dublin 2, IRELAND.
41
2.1.5
DISTRIBUTORS
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
2.1.6
INDEX AND BENCHMARK
See ‘Sub-fund’s investment policy’.
2.1.7
POLICY PERSUED DURING THE FINANCIAL YEAR
The KBC Eco Water Fund performed very strongly over the six month period, significantly
outperforming the broad equity market.
This outperformance was driven primarily by significant outperformance in our Water Infrastructure
sector, a sector in which we have been overweight for some time now due to attractive valuations and
expected strong multi-year earnings growth. More specifically it has been the engineered pump
companies, such as Flowserve and Ebara, which contributed most to performance, as strong growth in
their order books due to the pick-up in large industrial project activity continues to fuel expectations on
earnings growth looking out the next two years. Outside of the engineered pump companies, our
conviction surrounding the outlook for certain key end markets, which are very relevant to companies
in the Infrastructure sector, namely US municipal, US residential and US non residential, continues to
grow.
The Water Utility sector was the next best performing sector. This is a sector which we started to
increase further in December and into the start of 2014 as we moved to take some risk off the table by
reducing the Infrastructure weighting.
This was mostly a result of bottom up risk reward
characteristics, with the underperformance of UK utilities ahead of their next 5 year regulatory review
period providing an opportunity to increase our exposure there. Post clarity on the allowed return for
the industry from Ofwat in January the UK utilities have performed strongly and United Utilities has
been one of the strongest contributors to performance in the period. Similarly concerns around the
impact of tapering in the US gave us the opportunity to increase exposure to the US regulated utilities
during Q4’13. Elsewhere, of note was Suez, who also made a strong contribution in the period amid
an improving industrial backdrop in Europe and a continuing solid execution on its cost cutting agenda.
The Technology sector was more of a mixed bag in terms of performance. Strong contributors in that
group included Danaher, Calgon Carbon and Pure Technologies. Danaher has been a beneficiary of
broadly positive industrial market trends and leading indicators and remains one of the highest quality
holdings in the fund. The relatively new CEO at Calgon Carbon continues to deliver impressive results
operationally and the stock was helped by an activist investor getting involved mid-year, while Pure
Technology continues to execute well in its home market while winning a significant international
project in the period. Our Water Technology weighting is currently around the low end of its historic
range.
Since the beginning of 2014, we have shifted the portfolio gradually to a more neutral stance (i.e. beta
of approximately 1), taking advantage of the market rally to sell stocks as they hit our targets and buy
the stocks that have lagged. We have also aimed to improve the quality of the portfolio, increase its
purity to the water theme, and are favouring position size changes that, all else equal, trade high beta
for low beta. We have continued to intentionally structure the portfolio to benefit from areas we are
most optimistic about (eg. US construction sectors) while minimizing exposure to where we see
potential tail risk that is not priced in (eg. EM currencies & infrastructure spend).
To summarise, from a sector perspective, this has primarily manifested itself in a reduction in Water
Infrastructure and Technology stocks and an increase in Utilities. We maintain our largest sector
weight in the Infrastructure sector as we continue to be bullish about the cyclical end markets into
which our companies sell and their subsequent earnings power over the next few years.
42
2.1.8
FUTURE POLICY
Similar to how we felt entering 2012 and 2013, we are optimistic about the return potential in the water
strategy as we enter 2014. We continue to hold an overweight position in water infrastructure stocks,
consistent with our views about some specific cyclical end markets. Unfortunately, the valuations are
no longer depressed and we are increasingly relying on “total return stories” versus “rerating stories,”
but the upside is still attractive.
The water strategy naturally has a later cycle bias to it due to exposures to construction and capital
spending cycles. The best period of relative performance came in the 2004 to 2008 timeframe – the
last time that the end markets we discussed above were functioning well. (Note that in the non-“best
period”, we still generally modestly outperform.) We believe that we might currently be in the early
stages of a similar market environment, which, if true, would further support our positive outlook for
2014.
In addition to the more cyclical infrastructure companies, we need to point out that we continue to
simultaneous play defence in the portfolio, both through lower risk investments and portfolio risk
management. Interestingly, we are finding our best defence ideas not only in regulated utilities, but
also in companies with unique business models such as Enercare in the Technology sector (water
heater rental and sub-metering).
The portfolio is expected to have mid-teens earnings growth in 2014 and 2015 combined with an
approximate 2% dividend yield, which can provide a strong total return next year. Obviously market
multiples and the degree to which company specific investment theses play out will impact the result.
For 2014, we enter with a wider breadth of exposures and investment theses than in the previous few
years, giving us multiple ways to generate performance.
2.1.9
SYNTHETIC RISK AND REWARD INDICATOR
6 on a scale of 1 (lowest risk) to 7 (highest risk).
The value of a share can decrease or increase and the investor may not get back the amount
invested.
In accordance with Commission Regulation (EU) No. 583/2010, a synthetic risk and reward indicator
has been calculated. This indicator provides a quantitative measure of the sub-fund's potential return
and the risk involved, calculated in the currency in which the sub-fund is denominated. It is given as
a figure between 1 and 7. The higher the figure, the greater the potential return, but also the more
difficult it is to predict this return. Losses are possible too. The lowest figure does not mean that the
investment is entirely free of risk. However, it does indicate that, compared with the higher figures,
this product will generally provide a lower, but more predictable return.
The synthetic risk and reward indicator is assessed regularly and can therefore go up or down based
on data from the past. Data from the past is not always a reliable indicator of future risk and return.
43
2.2
BALANCE SHEET
Balance sheet layout
28/02/2014
28/02/2013
(in the currency of the sub-fundt)
(in the currency of the sub-fund )
497.294.136,02
346.744.670,24
474.324.641,59
343.522.919,50
4.218.576,77
-7.931.352,47
1.599.985,31
1.978.326,23
-488.216,64
-907.757,51
-1.112.512,50
-20.691.780,10
18.080.298,20
30.858.348,91
318.484,73
476.065,50
-327.941,93
214.284,65
49.358,48
-142.922,46
TOTAL SHAREHOLDERS' EQUITY
497.294.136,02
346.744.670,24
A.
Capital
418.958.352,09
290.415.552,95
B.
Income equalization
-39.760,11
-40.400,49
D.
Result for the period
78.375.544,04
56.369.517,78
345.351.080,72
-36.441.086,76
219.792.103,02
-48.337.678,08
TOTAL NET ASSETS
II.
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
F. Derivative financial instruments
j) Foreign exchange
Futures and forward contracts (+/-)
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
Payables
a) Accounts payable (-)
c) Borrowings (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
Off-balance-sheet headings
III
Notional amounts of futures and forward
contracts
III.A
III.B
Purchased futures and forward contracts
Written futures and forward contracts
44
2.3
PROFIT AND LOSS ACCOUNT
Income Statement
I.
28/02/2013
(in the currency of the sub-fund)
83.706.443,53
59.022.367,88
-3,29
-0,59
4.574.554,35
-8.425.302,14
-7.974.185,08
7.745.573,29
3.182.709,67
1.306.763,29
3.076,21
-111.608,43
7.017,91
-15.690,36
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
G. Receivables, deposits, cash at bank and in hand
and payables
H. Foreign exchange positions and transactions
a) Derivative financial instruments
Futures and forward contracts
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the sub-fund)
Investment income and expenses
A.
B.
Dividends
Interests
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
B.
Other
6.327,15
IV. Operating expenses
-728.724,78
-9.073,62
-136.156,93
-676.711,20
-18.685,02
-100.549,67
-3.685.154,05
-218.455,63
-67.561,75
-2.174.344,42
-150.914,19
-32.365,38
-13.019,47
-8.328,53
-135.700,26
60.163,43
-78.087,01
-73.190,58
-7.681,23
-28.441,28
Subtotal II + III + IV
-1.931.265,47
-1.973.120,66
Profit (loss) on ordinary activities before tax
78.375.544,04
56.369.517,78
78.375.544,04
56.369.517,78
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
b) Administration and accounting management
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
K. Other expenses (-)
Income and expenditure for the period
V.
VII. Result for the period
45
2.4
COMPOSITION OF THE ASSETS AND KEY FIGURES
2.4.1
COMPOSITIONS OF THE ASSETS OF KBC ECO FUND CSOB WATER
Name
Quantity on
28/02/2014
Cur
rency
Price in
currency
Evaluation
(in the currency of the
sub-fund)
%
%
owned by
portfolio
UCI
%
Net
assets
NET ASSETS
SECURITIES PORTFOLIO
Shares
Exchange-listed shares
Brazil
CIA DE SANEAMENTO DE MINAS GER CIA SANEAMENTO BASICO -
24.900,00
BRL
33,300
7.022.399,71
1,47
1,41
127.478,00
USD
9,270
23.378.604,10
4,89
4,70
Canada
CAPSTONE INFRASTRUCTURE CORP -
171.490,00
CAD
3,840
11.769.698,10
2,46
2,37
ENERCARE INC -
74.651,00
CAD
10,250
13.675.864,64
2,86
2,75
GWR GLOBAL WATER RESOURCES COR -
13.654,00
CAD
4,030
983.468,02
0,21
0,20
PURE TECHNOLOGIES LTD -
85.792,00
CAD
7,950
12.190.154,76
2,55
2,45
24.179,00
EUR
11,220
7.412.955,05
1,55
1,49
SUEZ ENVIRONNEMENT SA -
51.217,00
EUR
14,480
20.264.825,70
4,24
4,08
VEOLIA ENVIRONNEMENT (PAR)
29.396,00
EUR
13,710
11.012.498,65
2,30
2,21
Finland
KEMIRA (HEL)
France
Japan
EBARA CORP -
197.000,00
JPY
688,000
26.271.697,53
5,49
5,28
KURITA WATER INDUSTR. -
5.800,00
JPY
2.148,000
2.414.881,04
0,51
0,49
ORGANO CORPORATION -
65.000,00
JPY
475,000
5.984.673,16
1,25
1,20
TORISHIMA PUMP MANUFACTURING CO -
12.200,00
JPY
1.295,000
3.062.408,14
0,64
0,62
17.730,00
GBP
34,760
20.433.483,96
4,27
4,11
PENTAIR LTD - REGISTERED -
9.318,00
USD
80,810
14.896.746,04
3,11
3,00
SULZER FRERES (NOM)
9.683,00
CHF
124,500
27.077.558,03
5,66
5,45
AMIAD FILTRATION SYSTEMS LTD -
46.399,00
GBP
2,765
4.253.610,06
0,89
0,86
PENNON GROUP PLC -
20.307,00
GBP
7,430
5.002.516,16
1,05
1,01
2.814,00
GBP
26,820
2.502.285,07
0,52
0,50
Jersey/The Channel Islands
WOLSELEY PLC -
Switzerland
U.K.
ROTORK PLC SEVERN TRENT -
21.595,00
GBP
18,500
13.245.820,17
2,77
2,66
125.998,00
GBP
7,795
32.563.695,78
7,69
6,55
AECOM TECHNOLOGY CORP -
24.484,00
USD
31,940
15.471.088,97
3,23
3,11
AMERICAN WATER WORKS INC. -
24.502,00
USD
44,840
21.735.555,33
4,54
4,37
AQUA AMERICA INC -
17.146,00
USD
25,190
8.544.656,10
1,79
1,72
ASHLAND, INC. -
1.264,00
USD
94,370
2.359.851,26
0,49
0,48
BADGER METER INC -
2.914,00
USD
54,920
3.166.093,07
0,66
0,64
CALGON CARBON CORP -
51.255,00
USD
20,130
20.411.908,55
4,27
4,11
CALIFORNIA WATER SERVICE GROUP -
10.519,00
USD
23,510
4.892.498,32
1,02
0,98
8.898,00
USD
76,490
13.464.823,45
2,81
2,71
UNITED UTILITIES WATER PLC -
U.S.A.
DANAHER CORPORATION -
46
FLOWSERVE CORP -
7.892,00
USD
81,210
12.679.443,37
2,65
2,55
FRANKLIN ELECTRIC CO INC -
3.124,00
USD
43,590
2.694.024,22
0,56
0,54
HD SUPPLY HOLDINGS INC -
50.303,00
USD
23,270
23.157.617,22
4,84
4,66
INSITUFORM TECHN. CORP. -
30.383,00
USD
23,150
13.915.065,35
2,91
2,80
ITRON INC -
18.024,00
USD
35,000
12.480.236,76
2,61
2,51
NUVERRA ENVIRONMENTAL SOLUTION -
12.183,00
USD
17,000
4.097.384,94
0,86
0,82
PICO HOLDINGS INC -
28.530,00
USD
25,110
14.172.683,40
2,96
2,85
REXNORD HOLDINGS INC -
23.642,00
USD
29,990
14.026.983,30
2,93
2,82
7.291,00
USD
29,590
4.268.110,60
0,89
0,86
21.680,00
USD
28,880
12.386.826,88
2,59
2,49
6.397,00
USD
39,350
4.979.946,63
474.324.641,59
1,04
99,12
1,00
95,38
SJW CORP TETRA TECH INC. XYLEM INC/NY -
Total shares
Forward contracts
CZK
4.218.576,77
TOTAL SECURITIES PORTFOLIO
478.543.218,36
0,85
100,00
96,23
CASH AT BANK AND IN HAND
Demand accounts
Belgium
KBC GROUP AUD
49,35
AUD
1,000
873,68
KBC GROUP CAD
-2.744,37
CAD
1,000
-49.049,88
-0,01
KBC GROUP CHF
137,00
CHF
1,000
3.077,16
0,00
KBC GROUP CZK
17.004.041,61
CZK
1,000
17.004.041,61
3,42
-964,26
EUR
1,000
-26.348,40
-0,01
KBC GROUP GBP
29.731,60
GBP
1,000
985.762,29
0,20
KBC GROUP JPY
440.715,00
JPY
1,000
85.426,24
0,02
KBC GROUP SEK
354,75
SEK
1,000
1.095,67
KBC GROUP SGD
1,38
SGD
1,000
21,55
KBC GROUP USD
-42.073,36
USD
1,000
-832.359,23
17.172.540,69
-0,17
3,45
17.172.540,69
3,45
KBC GROUP EURO
Total demand accounts
TOTAL CASH AT BANK AND IN HAND
OTHER RECEIVABLES AND PAYABLES
Receivables
Belgium
KBC GROUP CZK RECEIVABLE
1.599.985,31
CZK
1,000
1.599.985,31
1.599.985,31
0,32
0,32
-488.216,64
CZK
1,000
-488.216,64
-488.216,64
-0,10
-0,10
1.111.768,67
0,22
Total receivables
Payables
Belgium
KBC GROUP CZK PAYABLE
Payables
TOTAL RECEIVABLES AND PAYABLES
OTHER
Interest receivable
CZK
476.065,50
0,10
Expenses payable
CZK
-327.941,93
-0,07
Expenses to be carried forward
CZK
318.484,73
0,06
466.608,30
0,09
497.294.136,02
100,00
TOTAL OTHER
TOTAL NET ASSETS
47
Geographic breakdown (as a % of securities portfolio)
Belgium
Brazil
Canada
Switzerland
Germany
Finland
France
U.K.
Hong Kong
Jersey/The Channel Islands
Japan
South Korea
Netherlands
Philippines
Singapore
U.S.A.
Total
31/08/2012
0,18
1,25
1,80
4,84
0,41
1,48
8,70
8,26
3,25
0,00
14,72
3,51
2,02
1,03
1,44
47,11
100,00
28/02/2013
-2,37
3,92
1,97
10,36
0,41
0,00
9,41
10,81
4,71
0,00
14,11
1,38
1,61
0,72
0,53
42,43
100,00
31/08/2013
-0,10
7,96
7,29
11,37
0,48
0,00
8,76
5,15
0,35
0,00
13,32
0,00
0,00
0,63
0,00
44,79
100,00
28/02/2014
0,88
6,35
8,07
8,77
0,00
1,55
6,54
12,03
0,00
4,27
7,89
0,00
0,00
0,00
0,00
43,65
100,00
28/02/2013
60,03
1,43
0,00
-0,75
4,33
34,96
100,00
31/08/2013
55,56
6,36
0,00
3,15
3,97
30,96
100,00
28/02/2014
49,96
5,45
0,00
3,84
3,73
37,02
100,00
28/02/2013
1,34
1,60
5,59
82,87
1,06
-2,74
4,22
-2,50
1,33
0,85
0,98
5,40
100,00
31/08/2013
2,48
7,09
8,13
81,24
0,22
0,31
0,88
1,04
0,00
0,61
0,00
-2,00
100,00
28/02/2014
1,41
7,76
5,45
80,59
1,20
0,95
0,00
0,28
0,00
0,00
0,00
2,36
100,00
Sector breakdown (as a % of securities portfolio)
Cyclicals
Consum(cycl)
Cons.goods
Financials
Technology
Utilities
Total
31/08/2012
62,28
0,41
0,81
0,66
3,72
32,12
100,00
Currency breakdown (as a % of net assets)
BRL
CAD
CHF
CZK
EUR
GBP
HKD
JPY
KRW
PHP
SGD
USD
Total
31/08/2012
1,21
1,74
4,69
82,87
0,13
0,00
3,59
0,04
3,40
1,00
1,17
0,16
100,00
48
2.4.2
CHANGES IN THE COMPOSITION OF THE ASSETS OF KBC ECO FUND CSOB WATER (IN THE
CURRENCY OF THE SUB-FUND)
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Turnover rate
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Corrected turnover rate
1st half of year
260.614.406,35
245.017.626,46
505.632.032,82
129.136.036,57
86.804.705,49
215.940.742,06
437.417.462,68
Year
260.614.406,35
245.017.626,46
505.632.032,82
129.136.036,57
86.804.705,49
215.940.742,06
437.417.462,68
66,23 %
66,23 %
1st half of year
260.614.406,35
245.017.626,46
505.632.032,82
129.136.036,57
86.804.705,49
215.940.742,06
409.417.147,08
Year
260.614.406,35
245.017.626,46
505.632.032,82
129.136.036,57
86.804.705,49
215.940.742,06
409.417.147,08
70,76 %
70,76 %
The table above shows the capital volume of portfolio transactions. This volume (adjusted to take
account of total subscriptions and redemptions) is also compared to the average net assets at the
beginning and end of the period.
A figure close to 0% implies that the transactions relating to the securities or transactions relating to
the assets (excluding deposits and cash) in a given period only involve subscriptions and
redemptions.
A negative percentage shows that subscriptions and redemptions entailed few, if any, transactions in
the portfolio.
Active asset management may result in high turnover rates (monthly percentage >50%).
The detailed list of transactions is available for consultation free of charge at the registered office of
the Bevek or fund at Havenlaan 2, 1080 Brussels.
49
2.4.3
AMOUNT OF COMMITMENTS IN RESPECT OF FINANCIAL DERIVATIVES POSITIONS
Currency
Value in
currency
KBC AK-VK CZK-USD
140314-140211 20.096
CZK
238.338.560,00
238.338.560,00
N/A
11.02.2014
KBC AK-VK CZK-GBP
140314-140211 33.09066
CZK
74.123.078,40
74.123.078,40
N/A
11.02.2014
KBC AK-VK CZK-EUR
140314-140211 27.47656
CZK
32.889.442,32
32.889.442,32
N/A
11.02.2014
KBC VK-AK JPY-CZK
140314-140211 5.095788
JPY
188.000.000,00
-36.441.086,76
N/A
11.02.2014
NAME
2.4.4
In the currency of
the sub-fund
Transaction
date
Lotsize
CHANGES OF THE NUMBER OF SUBSCRIPTIONS AND REDEMPTIONS AND THE NET ASSET
VALUE
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
57.467,39
0,00
65.062,61
0,00
377.422,62
0,00
377.422,62
2013 - 02*
75.952,76
0,00
69.886,56
0,00
383.488,82
0,00
383.488,82
2014 - 02*
198.581,23
0,00
136.449,42
0,00
445.620,63
0,00
445.620,63
Amounts received and paid by the UCI
(in the currency of the sub-fund)
Period
Subscriptions
Year
Redemptions
Capitalization
Distribution
Capitalization
Distribution
2012 - 02*
40.040.797,42
0,00
44.608.090,14
0,00
2013 - 02*
60.211.605,12
0,00
54.492.902,51
0,00
2014 - 02*
201.184.776,86
0,00
136.824.336,05
0,00
Period
Year
Net asset value
End of period (in the currency of the sub-fund)
Of one share
Of the sub-fund
Capitalization
Distribution
2012 - 02*
280.704.844,76
743,74
N/A
2013 - 02*
346.744.658,24
904,18
N/A
2014 - 02*
497.293.980,02
1.115,96
N/A
* The financial year does not coincide with the calender year.
50
2.4.5
PERFORMANCE FIGURES
51
1 Year
Cap
Div
ISIN code
Currency
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
CAP BE0947250453
EUR
16.07%
10.80%
17.44%
31/07/2007
2.09%
CAP BE0947250453
CZK
23.42%
15.09%
16.78%
31/07/2007
1.68%
DIV BE0947249448
EUR
31/07/2007
DIV BE0947249448
CZK
31/07/2007
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
52








The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in CZK and in EUR.
the return is calculated as the change in the net asset value between two dates expressed
as a percentage. In the case of units that pay dividends, the dividend is incorporated
geometrically in the return.
Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NAV(D) / NAV(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NAV(D) / NAV(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
Distribution units (DIV)
Return on date D over a period of X years:
[ C * NAV(D) / NAV(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[ C * NAV(D) / NAV(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
where C is a factor that is determined for all N dividends between the calculation date D
and the reference date.
For dividend i on date Di with value Wi:
Ci = [Wi / NAV(Di)] + 1
i = 1 ... N
from which C = C0 * .... * CN.
If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.
The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalisation and distribution shares.
53
2.4.6
COSTS
Ongoing charges: *
Distribution: Not applicable
Capitalization: 1.906%
* The following are not included in the charges shown: entry and exit charges, performance fees,
transaction costs paid when buying or selling assets, interest paid, payments made with a view to
providing collateral in the context of derivative financial instruments, or commissions relating to
Commission Sharing Agreements or similar fees received by the Management Company or any
person associated with it.
EXISTENCE OF COMMISSION SHARING AGREEMENTS
The Management Company, or where applicable, the appointed manager has entered into a
Commission Sharing Agreement with one or more brokers for transactions in shares on behalf of
one or more sub-funds. This agreement specifically concerns the execution of orders and the
delivery of research reports.
For more information, please see the ‘General’ section of the annual report.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
Broker
Percentage
28-02-14
28-02-14
CITI
491
243
49.49%
CSFBSAS
1,471
696
47.36%
DEUTSCHE
177
75
42.36%
INSTINET
1,617
655
40.51%
JP MORGAN
290
116
40.00%
MACQUARIE
1,273
572
44.96%
MERRILL
2,314
1,135
49.03%
MORGAN STANLEY
1,731
770
44.49%
SOCGEN
55
21
38.35%
UBSWDR
1,935
913
47.19%
FEE-SHARING AGREEMENTS AND REBATES:
The management company may share its fee with the distributor, and institutional and/or
professional parties.
In principle, the percentage share amounts to between 35% and 60% if the distributor is an entity of
KBC Group NV or to between 35% and 70% if the distributor is not an entity of KBC Group NV.
However, in a small number of cases, the distributor’s fee is less than 35%. Investors may, on
request, obtain more information on these cases.
If the management company invests the assets of the undertaking for collective investment in units
of undertakings for collective investment that are not managed by an entity of KBC Group NV, and
receives a fee for doing so, it will pay this fee to the undertaking for collective investment.
Fee-sharing does not affect the amount of the management fee paid by the sub-fund to the
management company. This management fee is subject to the limitations laid down in the articles of
association. The limitations may only be amended after approval by the general meeting of
shareholders.
The management company has concluded a distribution agreement with the distributor in order to
facilitate the wider distribution of the sub-fund's units by using multiple distribution channels.
It is in the interests of the holders of units, the sub-fund and of the distributor for the largest possible
number of units to be sold and for the assets of the sub-fund to be maximised in this way. In this
respect, there is therefore no question of any conflict of interest.
54
2.4.7
NOTES TO THE FINANCIAL STATEMENTS AND OTHER DATA
Fee for managing the investment portfolio: 2% per annum (0.1% of which for the sustainability
screening referred to in the prospectus) calculated on the basis of the average total net assets of the
sub-fund, no management fee is charged on assets assets invested in investment undertakings
managed by a financial institution of the KBC group.
KBC Fund Management Limited receives a fee from the management company of max. 1.9%
calculated on that part of the portfolio that it manages, without the total management fee received by
the management company being exceeded.
Kleinwort Benson Investors Dublin Ltd receives a fee of max. 0.5% from KBC Fund Management
Limited calculated on that part of the portfolio that it manages, without the total management fee
received by KBC Fund Management Limited being exceeded.
The administration agent’s fee is payable at the end of each month and is calculated on the basis of
the average total net assets of the sub-fund.
Auditor's fee: 1 700 EUR per year. This fee is not including VAT and can be indexed on an annual
basis in accordance with the decisions of the general meeting.
The custody fee is calculated on the value of the securities held in custody by the custodian on the
final banking day of the preceding calendar year, except on those assets invested in investment
undertakings managed by a financial institution of the KBC group. The custody fee is paid at the
beginning of the calendar year.
Social, ethical and environmental aspects:
No manufacturers of controversial weapons whose use over the past five decades, according to the
international consensus, has led to disproportionate human suffering among the civilian population
will be included in the portfolio of investments. This involves the manufacturers of anti-personnel
mines, cluster bombs and munitions and weapons containing depleted uranium. In this way, the subfund seeks to reflect not only simple financial reality but also the social reality of the sector or region
in question.
Exercising voting rights.
If necessary, relevant and in the interest of the shareholders, the management company will
exercise the voting rights attached to the shares in the Bevek’s portfolio.
The management company will adhere to the following criteria when determining how it stands
relative to the items on the agenda that are put to the vote:
- Shareholder value may not be adversely affected.
- Corporate governance rules, especially with regard to the rights of minority shareholders, must be
respected.
- The minimum standards with regard to sustainable business and corporate social responsibility
must be met.
The list of companies for which voting rights are exercised is available at the registered office of the
Bevek.
55
th
Semi-Annual report as at 28 February 2014
TABLE OF CONTENTS
2.
Information on KBC Eco Fund Agri
2.1. Management report
2.1.1. Launch date and subscription price
2.1.2. Stock exchange listing
2.1.3. Aim and distinctive features of the investment policy
2.1.4. Financial portfolio management
2.1.5. Distributors
2.1.6. Index and benchmark
2.1.7. Policy conducted during the financial year
2.1.8. Future policy
2.1.9. Synthetic risk and reward indicator (SRRI)
2.2. Balance sheet
2.3. Profit and loss account
2.4. Composition of the assets and key figures
2.4.1. Composition of the assets
2.4.2. Change in the composition of the assets
2.4.3. Value of commitments in respect of financial derivatives positions
2.4.4. Evolution of the number of subscriptions, repayments and the net asset value
2.4.5. Return figures
2.4.6. Expenses
2.4.7. Notes to the financial statements and other data
56
57
2
INFORMATION ON KBC ECO FUND AGRI
2.1
MANAGEMENT REPORT
2.1.1
LAUNCH DATE AND SUBSCRIPTION PRICE
Classic Shares :
Launch date: 25 July 2011
Initial subscription price: 1000 EUR
Currency: EUR
Institutional B Shares :
Launch date: 25 November 2011
Initial subscription price: 861.55 EUR
Currency: EUR
2.1.2
STOCK EXCHANGE LISTING
Not applicable.
2.1.3
GOAL AND KEY PRINCIPLES OF THE INVESTMENT POLICY
SUB-FUND’S OBJECT:
The main objective of this sub-fund is to generate the highest possible return for its shareholders by
investing directly or indirectly in transferable securities. This is reflected in its pursuit of capital gains
and income. To this end, the assets are invested, either directly or indirectly via correlated financial
instruments, primarily in shares. The indirect investments may be made through derivatives and
units in other undertakings for collective investment.
SUB-FUND’S INVESTMENT POLICY:
PERMITTED ASSET CLASSES:
The sub-fund may invest in securities, money market instruments, units in undertakings for collective
investment, deposits, financial derivatives, liquid assets and all other instruments insofar as
permitted by the applicable laws and regulations and consistent with the sub-fund’s object
The sub-fund shall invest no more than 10% of its assets in units of other undertakings for collective
investment.
RESTRICTIONS OF THE INVESTMENT POLICY:
The investment policy will be implemented within the limits set by law and regulations.
The sub-fund may borrow up to 10% of its net assets, insofar as these are short-term borrowings
aimed at solving temporary liquidity problems.
PERMITTED DERIVATIVES TRANSACTIONS:
Derivatives may be used to achieve the investment objectives as well as to hedge in risks.
It is possible to work with either listed or unlisted derivatives: these may be forward contracts,
options or swaps on securities, indices, currencies or interest rates or other transactions involving
derivatives. Unlisted derivatives transactions may only be concluded with prime financial institutions
specialised in such transactions. Subject to the applicable laws and regulations and the articles of
association, the sub-fund will always seek to conclude the most effective transactions. All costs
associated with the transactions will be charged to the sub-fund and all income generated will be
paid to the sub-fund.
If the transactions result in a risk in respect of the counterparty, this risk can be hedged by using a
margin management system that ensures that the sub-fund is the beneficiary of security (collateral)
in the form of cash or investment grade bonds. When calculating the value of the bonds, a margin
will be applied that varies depending on their residual term to maturity and the currency in which they
are denominated. The relationship with the counterparty or counterparties is governed by standard
international agreements.
Derivatives can also be used to hedge the assets of the sub-fund against open exchange risks in
relation to the currency.
58
Where derivatives are used, they must be easily transferable and liquid instruments. Using
derivatives does not, therefore, affect liquidity risk. Furthermore, using derivatives does not affect the
portfolio's allocation across regions, industry sectors or themes. As a result, they have no effect on
concentration risk. Derivatives may not be used to protect capital, either fully or partially. They
neither increase nor decrease capital risk. In addition, using derivatives has no effect on credit risk,
settlement risk, custody risk, flexibility risk or inflation risk or risk dependent on external factors.
Strategy selected
At least 75% of the sub-fund’s total assets are invested at all times in the shares of companies that
operate in a socially responsible way in the agricultural sector. The companies in question must
derive a substantial proportion of their sales from that sector. The sub-fund shall invest in all aspects
of the agricultural sector, including – but not limited to – producers of crops, seeds, fertilizers and
machinery, acquaculture, irrigation systems, biofuels, and the agri/biochemical industry. The subfund is not subject to any specific geographic restrictions, except that it will not invest more than 40%
of the net assets in emerging markets.
The companies must satisfy a number of basic criteria in relation to the environment, human rights,
the trade and production of arms, and nuclear energy. The basic criteria are set by KBC Asset
Management in co-operation with the independent Environmental Advisory Committee. These
bodies may also change the methodology used in the sustainability screening, based on new trends
in society.
The shares are screened by KBC Asset Management’s Sustainable & Socially Responsible
Investment Department and the Environmental Advisory Committee.
KBC Asset Management has had an independent Environmental Advisory Committee since the
early 1990s. The committee is made up of academics who specialise in the four themes of
alternative energy, agriculture, water, and climate change.
Risk concentration
Shares of companies in the agricultural industry.
LENDING FINANCIAL INSTRUMENTS:
The subfund is not allowed to lend financial instruments.
VOLATILITY OF THE NET ASSET VALUE:
The volatility of the net asset value may be high due to the composition of the portfolio.
GENERAL STRATEGY FOR HEDGING THE EXCHANGE RATE RISK:
In order to protect its assets against exchange rate fluctuations and within the limitations laid down in
the articles of association, the sub-fund may perform transactions relating to the sale of forward
currency contracts, as well as the sale of call options and the purchase of put options on currencies.
The transactions in question may relate solely to contracts traded on a regulated market that
operates regularly, is recognised and is open to the public or that are traded with a recognised,
prime financial institution specialising in such transactions and dealing in the over-the-counter (OTC)
market in options. With the same objective, the sub-fund may also sell currencies forward or
exchange them in private transactions with prime financial institutions specialising in such
transactions.
SOCIAL, ETHICAL AND ENVIRONMENTAL ASPECTS:
Investments may not be made in financial instruments issued by manufacturers of controversial
weapons whose use over the past five decades, according to international consensus, has led to
disproportionate human suffering among the civilian population. This involves the manufacturers of
anti-personnel mines, cluster bombs and munitions and weapons containing depleted uranium.
In addition, as of 31 March 2014 no new investments may be made in financial instruments issued
by companies that do not have an anti-corruption policy and that have been given a negative score
in a thorough screening for corruption in the last two years. A company has no anti-corruption policy
if it cannot be demonstrated that it has an acceptable policy concerning the fight against corruption.
An acceptable policy should be made public and must at least state that bribery will not be tolerated
and that the law will be followed in this respect. The screening will be based on a generally accepted
and independent 'Social, ethical and environmental factors' database.
59
In this way, not only is a purely financial reality represented, but also the social reality of the sector
or region.
Where relevant, please refer to 'Information concerning the Bevek – Tax treatment' in the prospectus
to find out more about the application of European and Belgian tax provisions.
2.1.4
FINANCIAL PORTFOLIO MANAGEMENT
The management company has delegated the intellectual management, with the exception of the
sustainability screening described in the prospectus, to KBC Fund Management Limited, Joshua
Dawson House, Dawson Street , Dublin 2, IRELAND..
2.1.5
DISTRIBUTORS
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
2.1.6
INDEX AND BENCHMARK
See ‘Sub-fund’s investment policy’.
2.1.7
POLICY PERSUED DURING THE FINANCIAL YEAR
KBC Eco Agri Fund invests in an internationally diversified portfolio of shares in Agriculture-related
companies pursuing sustainable policies. At least 75% of this fund’s assets are invested in shares of
companies that generate a substantial portion of their turnover from the agricultural sector. These are
companies contributing sustainably to solutions for increased agriculture efficiency: e.g., producers of
crops, seeds, fertilizer, agricultural machinery, irrigation systems and the agri/biochemical industry.
The companies are the best-in-class as regards to their overall score (economic policy and internal
social relations, corporate governance, human rights and socially questionable practices) and their
score for the environmental criterion. These companies are screened by KBC Asset Management’s
Sustainability Desk. The External Advisory Board for Sustainability Analysis assists KBC Asset
Management in developing the research method used and guarantees the objectivity of the research.
Doubts about the sustainability of the economic recovery have long dominated the investment climate.
But during the summer of 2013 the mood began to turn positive. Europe shook off the recession itself,
the euro crisis eased its stranglehold, the U.S. began a heavy restructuring and Japan broke the
negative deflationary spiral. The equity markets cherished this economic optimism. Since 2010 more
jobs were created than lost in the U.S but the pace of employment growth has long remained on the
thin side. The unemployment rate declined, but for the wrong reasons. Not because employment grew
strongly, but because many disillusioned Americans got out of the labour market. In the course of
2013 there was improvement in employment growth which accelerated to an average of 187 000 new
jobs a month, so that the natural growth of the labour force could be absorbed, but no more than that.
Wages increased slightly more than inflation. Both factors meant that the purchasing power of
American families was very modest and only offered a modest support to economic growth together,
which remained limited. Underlying the U.S. economy, however, much stronger than the growth rate
suggests. As of January 1, 2013 is an impressive program of tax increases and spending cuts took
effect despite fears towards the end of 2012 that it would collapse (the famous fiscal cliff). The U.S.
entered into a new recession that was very different. Growth remained intact, albeit moderately.
In EMU, the recession which was triggered by the euro crisis came to an end. From the second
quarter of 2013 a positive growth rate was recorded. Consumer and business confidence are
recovering quite well, surprisingly even in the hard-hit southern Europe. Japan managed to break
through its negative deflationary spiral. The newly formed government-Abe had in December 2012
changed course and announced in April 2013 that the Japanese central bank would pursue an
inflation rate of 2%. Since August 2012 in anticipation of the policy reversal the yen was already
weakening sharply. That meant that in 2013 exports recovered and inflation figures were positive. The
weak growth in the West also had an impact on the export performance of the emerging countries.
Which translated into weakening growth, especially in countries like Brazil and South Africa with an
extensive resource industry. The slowdown in China brought the problem of excessive indebtedness
of Chinese banks to the forefront. Both in June and December the interbank market ended briefly in
crisis, the Bank of China failed to suppress this despite their substantial liquidity injections.
60
Over the third quarter KBC Eco Fund Agri increased from 1064.85 to 1112.72. The fund
underperformed the broad world market during the third quarter. Agricultural processors performed
best over the third quarter with stocks such as Purecircle Ltd, Meiji Holdings Co Ltd and Aryzta leading
the gains. On a fund level the best performing stock for the period was Purecircle whose share price
increased from GBP 346.00 to GBP 462.50. This was followed by Meiji Holdings strong performance
with an increase from JPY 5090 to JPY 5720 after the company announced an increase to their full
year profit forecast. The packaged foods & meats sector was the top performing for the fund with the
three top performing stocks listed above belonging to this theme. Other noteworthy names were Select
Harvests Ltd from the agricultural products sector. Select Harvests Ltd increased from AUD 4.25 to
AUD 4.80 after the company acquired a large quantity of vacant farming land in South Australia. The
acquisition increased the companies medium term production profile along with their geographic
dispersion.
Over the fourth quarter KBC Eco Fund Agri decreased from 1112.72 to 1100.56, also underperforming
the broad world market. Agricultural processors and Agricultural services were the best performing
themes within the fund over the quarter, while Agricultural suppliers and Agricultural producers
disappointed. In terms of the positive performing stocks, Purecircle Ltd and Meiji Holdings once again
led the gains followed by Tyson Foods Co Ltd. Novosymes from the Agricultural services theme was
also a strong positive performer with its share price increasing from DKK 212.30 to DKK 251.50. In
terms of laggard performers both First Tractor Co and Avangardco Investments disappointed the most.
Avangardco saw its share price decrease from USD 12.00 to 9.995 after JP Morgan downgraded their
view on the company from overweight to neutral due to concerns surrounding Ukraine’s macro and
political uncertainties. This is despite the fact that Avangardco’s production and revenue increased
year on year.
2.1.8
FUTURE POLICY
The U.S. and European barometers measuring confidence among business leaders, were in the
spring of 2013 slipped to just above (US) or well below (EMU) freezing. From these low levels it is
expected that they will rise sharply in the coming months. In the US, the measure has already
achieved a level compatible with a growth rate of more than 3.5 %. While in Germany, the IFO, the
leading index of business confidence indicator is currently at a level corresponding to the top decile
which is the best observation of the last thirty years. In Southern Europe, business confidence has
reached the melting zone. It is surprising that so early in this cycle consumer confidence has changed
so positively and is also experiencing a sharp recovery. Europe is now emerging slowly out of
recessionary territory. The budget planning, stricter credit policies of banks and the great uncertainty
among consumers and producers will continue to weigh. In the coming months, growth rates foresees
an improvement of +1 to +1.5 % YoY . However this is not a cause for celebration rather a better
alternative to negative growth. Deflation or depression scenarios that regularly dominate the vote on
the bond markets, however, are not justified.
Recent years have laid the foundation for a more sustainable growth in 2014 and beyond. American
families have reduced their debt significantly, the savings rate has risen sharply and loan servicing
(principal and interest payments together) absorbs only 10% of household budgets (the lowest level in
fifteen years. This will gradually all Americans breathing room to spend a greater proportion of their
income on consumption. The explosive growth in profits during 2009-2013 enhances the extensive
cash positions of the companies further. During the crisis, investments were sharply reduced. The
foundations are now laid for the recovery process. In the US, Republicans and Democrats came
together to compromise on fiscal policy. The current funding from the federal government is insured up
to March 2015. The sharpest points of the long-term plan of fiscal consolidation were agreed. The Fed
is conducting an extremely loose monetary policy by providing a purchase program for government
bonds and other debt liquidity injections.
61
Today's world is one with two speeds. The classic, industrialized economies ( US, Europe , Japan)
stuck in a slump, with no underlying inflationary pressures, with continued low interest rates and
runaway public finances. In emerging markets, the picture looks quite different. The strong economic
growth in Asia has sometimes led to inflationary pressures. An appropriate monetary policy is
necessary: sometimes decelerating (as in 2011), then stimulating (like now). One of the great
challenges of this decade is the development of consumption in China and the rest of Asia. This can
contribute to a more balanced world economic order. It not only reduces dependence on exports of the
region. Equally important is the impact on international capital flows . More consumption in China
means less savings and more imports, including from the U.S. and Europe. That will help the West to
grow and reduce its debt problems. The euro crisis has been driven into the background, but many
problems are still awaiting a solution. In 2014, the support funds for Greece, Portugal and Ireland will
be exhausted. Ireland will be able to return to the markets to finance their capital, but for Portugal and
Greece this is not an option. There is even talk of a second debt restructuring for Greece.
In line with the theme, KBC Eco Agri Fund will continue to invest in a portfolio of global shares in
Agriculture-related companies pursuing sustainable policies. We will continue to ensure that the
portfolio is diversified, with sector allocation in line with the MSCI World AC Index.
2.1.9
SYNTHETIC RISK AND REWARD INDICATOR
Classic Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
Institutional B Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
The value of a share can decrease or increase and the investor may not get back the amount
invested.
In accordance with Commission Regulation (EU) No. 583/2010, a synthetic risk and reward indicator
has been calculated. This indicator provides a quantitative measure of the sub-fund's potential return
and the risk involved, calculated in the currency in which the sub-fund is denominated. It is given as
a figure between 1 and 7. The higher the figure, the greater the potential return, but also the more
difficult it is to predict this return. Losses are possible too. The lowest figure does not mean that the
investment is entirely free of risk. However, it does indicate that, compared with the higher figures,
this product will generally provide a lower, but more predictable return.
The synthetic risk and reward indicator is assessed regularly and can therefore go up or down based
on data from the past. Data from the past is not always a reliable indicator of future risk and return.
62
2.2
BALANCE SHEET
Balance sheet layout
28/02/2014
28/02/2013
(in the currency of the sub-fundt)
(in the currency of the sub-fund )
13.974.835,73
17.396.701,31
14.125.899,87
1,20
17.437.133,38
6.405,26
760,32
30.954,28
495,98
-198.860,08
-83.856,44
45.292,85
18.557,74
10.437,33
3.807,27
-18.908,29
14.365,11
4.363,94
-25.312,68
TOTAL SHAREHOLDERS' EQUITY
13.974.835,73
17.396.701,31
A.
Capital
13.496.789,15
15.611.579,67
B.
Income equalization
1.871,85
1.872,88
D.
Result for the period
476.174,73
1.783.248,76
TOTAL NET ASSETS
II.
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
D. Other securities
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
b) Tax assets
Payables
c) Borrowings (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
63
2.3
PROFIT AND LOSS ACCOUNT
Income Statement
I.
1.029.048,85
1,20
2.786.883,56
-20,59
-0,17
-486.118,46
-939.896,23
70.668,19
117.598,72
242,82
-579,67
268,86
-918,09
2.114,47
15.372,77
Investment income and expenses
A.
B.
Dividends
Interests
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
A.
Income received to cover the acquisition and
realizaion of assets, to discourage withdrawals
and for delivery charges
Other
B.
28/02/2013
(in the currency of the sub-fund)
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
D. Other securities
G. Receivables, deposits, cash at bank and in hand
and payables
H. Foreign exchange positions and transactions
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the sub-fund)
173,12
IV. Operating expenses
-3.547,42
-271,40
-7.631,78
-31.887,06
-269,66
-3.929,91
-72.447,22
-36.082,42
-7.288,27
-271,90
-1.802,70
-43.951,51
-92.630,63
-9.201,56
-422,47
-507,79
-4.075,48
-4.126,75
-4.753,21
559,79
-1.341,31
-3.122,79
-1.144,31
-3.247,52
Subtotal II + III + IV
-66.756,86
-63.717,81
Profit (loss) on ordinary activities before tax
476.174,73
1.783.248,76
476.174,73
1.783.248,76
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
Classic Shares
Institutional B Shares
b) Administration and accounting management
E. Administrative expenses (-)
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
Classic Shares
Institutional B Shares
K. Other expenses (-)
-2.020,58
Income and expenditure for the period
V.
VII. Result for the period
64
2.4
COMPOSITION OF THE ASSETS AND KEY FIGURES
2.4.1
COMPOSITIONS OF THE ASSETS OF KBC ECO FUND AGRI
Name
Quantity on
28/02/2014
Cur
rency
Price in
currency
Evaluation
(in the currency of the
sub-fund)
%
%
owned by
portfolio
UCI
%
Net
assets
NET ASSETS
SECURITIES PORTFOLIO
Shares
Exchange-listed shares
Australia
AUSTRALIAN AGRICULTURAL CO LTD -
174.307,00
AUD
1,265
142.860,70
1,01
1,02
GRAINCORP LTD -
15.436,00
AUD
8,030
80.307,80
0,57
0,58
INCITEC PIVOT LTD -
43.782,00
AUD
3,140
89.070,25
0,63
0,64
NUFARM LTD -
24.629,00
AUD
3,900
62.232,73
0,44
0,45
153.698,00
AUD
0,835
83.149,98
0,59
0,60
32.211,00
AUD
6,870
143.373,33
1,02
1,03
COLRUYT -
4.931,00
EUR
40,225
198.349,48
1,40
1,42
SIPEF (BRU)
1.789,00
EUR
60,000
107.340,00
0,76
0,77
494.000,00
HKD
1,180
54.380,92
0,39
0,39
RIDLEY CORP LTD SELECT HARVESTS LTD -
Belgium
Bermuda
SINOCHEM HONG KONG HOLDINGS -
Brazil
ALL AMERICA LATINA LOGISTICA -
23.684,00
BRL
6,750
49.549,65
0,35
0,36
BRF - BRASIL FOODS SA -
5.260,00
USD
18,260
69.539,24
0,49
0,50
COSAN SA INDUSTRIA COMERCIO -
5.100,00
BRL
34,690
54.834,80
0,39
0,39
MARFRIG GLOBAL FOODS SA -
35.500,00
BRL
4,100
45.112,20
0,32
0,32
MINERVA SA / BRAZIL -
26.300,00
BRL
10,550
85.998,33
0,61
0,62
SLC AGRICOLA SA -
12.800,00
BRL
18,050
71.609,22
0,51
0,51
TEREOS INTERNACIONAL SA -
83.311,00
BRL
2,100
54.225,48
0,38
0,39
AG GROWTH INTERNATIONAL INC -
2.747,00
CAD
46,970
84.394,54
0,60
0,60
AGRIUM INC -
1.252,00
CAD
101,990
83.521,26
0,59
0,60
ALLIANCE GRAIN TRADERS -
8.690,00
CAD
19,240
109.360,37
0,77
0,78
CANADIAN NATIONAL RAILWAY CO -
3.264,00
CAD
62,560
133.561,72
0,95
0,96
Canada
CANADIAN PACIFIC RAILWAY LTD -
877,00
CAD
173,750
99.668,87
0,71
0,71
13.538,00
CAD
16,250
143.894,10
1,02
1,03
SAPUTO INC -
4.312,00
CAD
54,640
154.107,78
1,09
1,10
SUNOPTA INC -
14.599,00
CAD
10,680
101.983,40
0,72
0,73
76.000,00
HKD
0,000
0,00
2.857,00
USD
30,800
63.709,53
0,45
0,46
AURIGA INDUSTRIES -
5.205,00
DKK
173,000
120.665,33
0,85
0,86
NOVOZYMES A/S "B"
5.935,00
DKK
251,500
200.020,44
1,42
1,43
3.349,00
EUR
51,180
171.401,82
1,21
1,23
MAPLE LEAF FOODS INC -
Cayman Islands
CHAODA MODERN AGRICULTURE HLDS -
Chile
SOC QUIMICA MINERA CHILE SA ADR "B"
Denmark
France
DANONE -
65
MANITOU BF SA -
4.968,00
EUR
13,000
64.584,00
0,46
0,46
NATUREX -
3.028,00
EUR
64,310
194.730,68
1,38
1,39
VILMORIN & CIE -
2.119,00
EUR
99,170
210.141,23
1,49
1,50
19.950,00
EUR
1,750
34.912,50
0,25
0,25
BASF SE -
1.425,00
EUR
83,420
118.873,50
0,84
0,85
BAYER AG -
1.422,00
EUR
102,900
146.323,80
1,04
1,05
BAYWA AG -
3.636,00
EUR
40,805
148.366,98
1,05
1,06
10.469,00
EUR
7,901
82.715,57
0,59
0,59
GEA AG -
2.659,00
EUR
35,140
93.437,26
0,66
0,67
K+S AG (FRA)
4.000,00
EUR
24,495
97.980,00
0,69
0,70
KTG AGRAR SE BR
7.315,00
EUR
13,980
102.263,70
0,72
0,73
766,00
EUR
266,000
203.756,00
1,44
1,46
735.000,00
HKD
0,750
51.426,41
0,36
0,37
40.000,00
HKD
39,800
148.518,55
1,05
1,06
CHINA MODERN DAIRY HOLDINGS LTD -
295.000,00
HKD
3,810
104.853,91
0,74
0,75
CHINA YURUN FOOD GROUP LTD -
150.000,00
HKD
4,700
65.769,83
0,47
0,47
FIRST TRACTOR COMP "H"
150.000,00
HKD
4,920
68.848,42
0,49
0,49
485.000,00
IDR
1.875,000
56.716,12
0,40
0,41
Germany
ASIAN BAMBOO AG -
DEUTZ AG (FRA)
KWS SAAT AG -
Hong Kong
CHINA GREEN HOLDINGS LTD/BERMUDA CHINA MENGNIU DAIRY CO LTD -
India
SAMPOERNA AGRO PT TBK
Indonesia
ASTRA AGRO LESTARI TBK PT -
72.500,00
IDR
25.500,000
115.303,30
0,82
0,83
10.816.500,00
IDR
50,000
33.730,31
0,24
0,24
1.161.500,00
IDR
1.365,000
98.881,58
0,70
0,71
867.500,00
IDR
2.070,000
111.996,22
0,79
0,80
1.519.000,00
IDR
815,000
77.210,95
0,55
0,55
19.682,00
EUR
10,955
215.616,31
1,53
1,54
14.896,00
ILS
29,500
91.223,35
0,65
0,65
71.638,00
EUR
2,476
177.375,69
1,26
1,27
FUJI OIL CO LTD -
24.900,00
JPY
1.378,000
243.400,72
1,72
1,74
ITOHAM FOODS INC. -
96.000,00
JPY
439,000
298.957,22
2,12
2,14
KUBOTA CORP -
9.000,00
JPY
1.423,000
90.849,12
0,64
0,65
MEIJI HOLDINGS CO LTD -
3.200,00
JPY
6.700,000
152.089,10
1,08
1,09
NIPPON MEAT PACKERS -
12.000,00
JPY
1.632,000
138.923,18
0,98
0,99
NIPPON SUISAN KAISHA LTD -
96.600,00
JPY
226,000
154.866,99
1,10
1,11
AMSTERDAM COMMODITIES NV -
6.941,00
EUR
16,980
117.858,18
0,83
0,84
CNH INDUSTRIAL NV -
7.969,00
USD
10,920
63.004,26
0,45
0,45
CORBION NV (AMS)NRC
7.040,00
EUR
16,325
114.928,00
0,81
0,82
KONINKLIJKE D.S.M. NV (AMS)
1.973,00
EUR
46,295
91.340,04
0,65
0,65
NUTRECO NV -
4.224,00
EUR
32,985
139.328,64
0,99
1,00
BAKRIE SUMATERA PLANTATIONS TBK PT BW PLANTATION TBK PT PP LONDON SUMATRA INDONES PT SALIM IVOMAS -
Ireland
GLANBIA PLC -
Israel
ISRAEL CHEMICALS LTD -
Italy
PARMALAT SPA -
Japan
Netherlands
Norway
AUSTEVOLL SEAFOOD ASA -
22.344,00
NOK
35,600
96.132,26
0,68
0,69
LEROY SEAFOOD GROUP ASA -
5.199,00
NOK
187,000
117.495,08
0,83
0,84
SALMAR ASA -
9.795,00
NOK
77,750
92.037,13
0,65
0,66
YARA INTL ASA -
2.799,00
NOK
243,400
82.334,47
0,58
0,59
66
Russia
URALKALI -
3.833,00
USD
22,720
63.050,80
0,45
0,45
CHINA MINZHONG FOOD CORP LTD -
108.000,00
SGD
0,940
58.028,01
0,41
0,42
GOLDEN AGRI-RESOURCES LTD -
307.000,00
SGD
0,555
97.390,68
0,69
0,70
INDOFOOD AGRI RESOURCES LTD -
170.000,00
SGD
0,870
84.538,44
0,60
0,61
MEWAH INTERNATIONAL -
218.000,00
SGD
0,470
58.565,30
0,42
0,42
OLAM INTERNATIONAL LTD -
95.000,00
SGD
1,775
96.384,68
0,68
0,69
PETRA FOODS LTD -
49.000,00
SGD
3,610
101.108,89
0,72
0,72
ASTRAL FOODS LTD -
15.522,00
ZAR
83,000
86.837,83
0,62
0,62
ILLOVO SUGAR LTD -
56.517,00
ZAR
26,000
99.045,70
0,70
0,71
RCL FOODS LTD -
80.299,00
ZAR
14,150
76.586,06
0,54
0,55
TONGAAT HULETT LTD -
13.197,00
ZAR
109,500
97.403,04
0,69
0,70
3.039,00
KRW
45.750,000
94.300,15
0,67
0,68
CAMPOFRIO FOOD GROUP SA -
14.832,00
EUR
6,910
102.489,12
0,73
0,73
EBRO FOODS SA (MAD)
11.818,00
EUR
15,965
188.674,37
1,34
1,35
Singapore
South Africa
South Korea
MAEIL DAIRY INDUSTRY CO LTD -
Spain
Switzerland
ARYZTA AG -
3.757,00
EUR
59,550
223.729,35
1,58
1,60
BUCHER INDUSTRIES PLC -
481,00
CHF
269,250
106.456,17
0,75
0,76
EMMI AG -
885,00
CHF
310,000
225.514,78
1,60
1,61
SYNGENTA (NOM)
487,00
CHF
320,000
128.099,95
0,91
0,92
CHAROEN POKHAND FOODS PCL -
188.400,00
THB
27,250
113.934,75
0,81
0,82
KHON KAEN SUGAR INDUSTRY PCL -
314.400,00
THB
13,100
91.403,46
0,65
0,65
3.138,00
TRY
56,000
57.691,40
0,41
0,41
Thailand
Turkey
TURK TRAKTOR VE ZIRAAT MAKINELERI AS -
U.K.
ASIAN CITRUS HOLDINGS LTD -
321.000,00
HKD
1,880
56.298,98
0,40
0,40
AVANGARDCO INVESTMENTS PUBLIC -
15.898,00
USD
9,995
115.045,26
0,81
0,82
DAIRY CREST GROUP PLC -
32.381,00
GBP
5,315
208.827,29
1,48
1,49
GENUS PLC -
8.325,00
GBP
11,680
117.983,38
0,84
0,84
MP EVANS GROUP PLC -
11.716,00
GBP
4,700
66.814,54
0,47
0,48
NEW BRITAIN PALM OIL LTD -
17.902,00
GBP
3,600
78.198,39
0,55
0,56
PREMIER FOODS PLC -
30.548,00
GBP
1,440
53.375,14
0,38
0,38
PURECIRCLE LTD -
16.554,00
GBP
5,975
120.014,74
0,85
0,86
SAINSBURY PLC -
34.985,00
GBP
3,426
145.433,00
1,03
1,04
TATE&LYLE PLC -
17.426,00
GBP
6,420
135.745,82
0,96
0,97
U.S.A.
ADECOAGRO SA -
17.006,00
USD
7,840
96.529,86
0,68
0,69
AGCO CORP -
1.894,00
USD
52,480
71.964,32
0,51
0,52
ALAMO GROUP INC -
2.988,00
USD
52,580
113.748,22
0,81
0,81
ALICO INC -
3.661,00
USD
37,960
100.616,54
0,71
0,72
BUNGE LTD. -
2.414,00
USD
79,610
139.138,82
0,99
1,00
20.931,00
USD
7,460
113.050,43
0,80
0,81
CALAVO GROWERS INC -
6.707,00
USD
31,140
151.213,42
1,07
1,08
CATERPILLAR INC -
1.318,00
USD
96,970
92.532,91
0,66
0,66
DEERE & COMPANY -
1.535,00
USD
85,930
95.498,52
0,68
0,68
FMC CORPORATION -
1.923,00
USD
77,180
107.455,21
0,76
0,77
FRESH DEL MONTE PRODUCE INC -
7.916,00
USD
26,460
151.648,83
1,07
1,09
CADIZ INC -
67
INGREDION INC -
2.346,00
USD
65,840
111.830,76
0,79
0,80
KELLOGG CO. -
5.014,00
USD
60,690
220.315,42
1,56
1,58
LIMONEIRA CO -
5.436,00
USD
21,060
82.886,01
0,59
0,59
LINDSAY MANUFACTURING CO -
1.512,00
USD
84,860
92.896,26
0,66
0,67
MONSANTO NEW
1.520,00
USD
110,020
121.076,17
0,86
0,87
PLUM CREEK TIMBER CO INC -
3.056,00
USD
43,290
95.782,10
0,68
0,69
POTLATCH CORPORATION -
3.624,00
USD
39,640
104.007,65
0,74
0,74
RAYONIER INC -
2.938,00
USD
47,090
100.166,83
0,71
0,72
THE MOSAIC COMPANY -
2.252,00
USD
48,860
79.664,58
0,56
0,57
TITAN INTERNATIONAL INC -
5.439,00
USD
18,960
74.662,21
0,53
0,53
TRIMBLE NAVIGATION LTD -
3.991,00
USD
38,150
110.235,05
0,78
0,79
TYSON FOODS INC -A-
6.025,00
USD
39,450
172.086,77
1,22
1,23
UNITED NATURAL FOODS INC -
2.487,00
USD
72,380
130.328,02
0,92
0,93
VALMONT INDUSTRIES -
901,00
USD
145,630
94.999,01
0,67
0,68
WEYERHAEUSER COMPANY -
4.779,00
USD
29,510
102.105,63
0,72
0,73
YONGYE INTERNATIONAL INC -
17.431,00
USD
6,590
83.167,02
14.125.899,87
0,59
100,00
0,60
101,08
14,00
BRL
0,210
0,91
42.646,00
ZAR
0,000
0,29
1,20
100,00
101,08
Total shares
Rights
Brazil
MARFRIG GLOBAL FOODS SA CP 27/01/14
South Africa
RCL FOODS LTD CP 27/01/14
Total rights
TOTAL SECURITIES PORTFOLIO
14.125.901,07
CASH AT BANK AND IN HAND
Demand accounts
Belgium
KBC GROUP AUD
20.407,89
AUD
1,000
13.222,26
0,10
KBC GROUP CAD
4.484,02
CAD
1,000
2.932,94
0,02
KBC GROUP CHF
2.540,85
CHF
1,000
2.088,57
0,02
KBC GROUP DKK
74.101,09
DKK
1,000
9.929,79
0,07
-180.069,46
EUR
1,000
-180.069,46
-1,29
KBC GROUP GBP
1.209,18
GBP
1,000
1.467,18
0,01
KBC GROUP HKD
-15.855,54
HKD
1,000
-1.479,17
-0,01
KBC GROUP ILS
13.389,95
ILS
1,000
2.779,67
0,02
KBC GROUP JPY
-1.423.714,00
JPY
1,000
-10.099,41
-0,07
KBC GROUP NOK
8.486,92
NOK
1,000
1.025,67
0,01
KBC GROUP SEK
2.730,96
SEK
1,000
308,68
0,00
KBC GROUP SGD
5.097,54
SGD
1,000
2.913,71
0,02
KBC GROUP TRY
-21.967,88
TRY
1,000
-7.212,04
-0,05
KBC GROUP USD
4.028,62
USD
1,000
2.916,75
0,02
KBC GROUP ZAR
84.678,35
ZAR
1,000
5.707,63
-153.567,23
0,04
-1,10
-153.567,23
-1,10
6.405,26
0,05
KBC GROUP EURO
Total demand accounts
TOTAL CASH AT BANK AND IN HAND
OTHER RECEIVABLES AND PAYABLES
Receivables
Belgium
KBC GROUP EUR RECEIVABLE
6.405,26
EUR
1,000
68
KBC GROUP WHT TO BE RECOVERED EUR
760,32
EUR
Total receivables
TOTAL RECEIVABLES AND PAYABLES
1,000
760,32
7.165,58
0,01
0,05
7.165,58
0,05
OTHER
Interest receivable
EUR
3.807,27
0,03
Expenses payable
EUR
-18.908,29
-0,14
Expenses to be carried forward
EUR
10.437,33
0,08
-4.663,69
-0,03
13.974.835,73
100,00
TOTAL OTHER
TOTAL NET ASSETS
69
Geographic breakdown (as a % of securities portfolio)
Australia
Belgium
Bermuda
Brazil
Canada
Switzerland
Chile
China
Cayman Islands
Germany
Denmark
Spain
France
U.K.
Hong Kong
India
Indonesia
Ireland
Israel
Italy
Japan
South Korea
Malaysia
Netherlands
Norway
Russia
Singapore
Thailand
Turkey
U.S.A.
South Africa
Total
31/08/2012
2,33
1,79
0,26
3,64
6,67
3,29
1,04
0,54
0,05
5,72
1,93
1,49
4,33
8,25
2,45
0,40
2,07
1,24
1,07
1,07
12,38
0,71
0,00
3,28
3,66
1,08
4,22
2,56
0,81
19,30
2,37
100,00
28/02/2013
2,77
0,61
0,31
4,10
6,04
3,37
0,87
0,71
0,05
5,76
2,48
1,31
4,06
7,04
2,91
0,43
2,37
1,17
1,38
0,90
11,58
0,43
0,00
3,22
4,64
0,88
4,04
2,25
0,60
21,95
1,77
100,00
31/08/2013
3,41
1,83
0,41
3,60
5,85
4,34
0,39
0,00
0,00
6,61
2,18
1,89
4,34
8,53
3,78
0,42
2,79
1,39
0,55
1,22
10,48
0,39
0,60
3,84
2,41
0,48
3,58
1,37
0,38
20,19
2,75
100,00
28/02/2014
4,25
2,16
0,38
3,05
6,45
4,84
0,45
0,00
0,00
7,28
2,27
2,06
4,54
7,77
3,11
0,40
3,09
1,53
0,65
1,26
7,64
0,67
0,00
3,73
2,75
0,45
3,51
1,45
0,41
21,30
2,55
100,00
31/08/2013
26,68
2,55
68,23
0,83
0,53
0,35
0,83
100,00
28/02/2014
28,18
2,59
66,13
0,84
0,78
0,80
0,68
100,00
Sector breakdown (as a % of securities portfolio)
Cyclicals
Consum(cycl)
Cons.goods
Pharma
Technology
Utilities
Real est.
Total
31/08/2012
27,71
4,05
64,45
2,37
0,56
0,00
0,86
100,00
28/02/2013
28,55
3,83
65,20
0,88
0,53
0,00
1,01
100,00
70
Currency breakdown (as a % of net assets)
AUD
BRL
CAD
CHF
DKK
EUR
GBP
HKD
IDR
ILS
JPY
KRW
MYR
NOK
SGD
THB
TRY
USD
ZAR
Total
31/08/2012
2,23
3,29
6,68
1,91
1,93
19,78
6,70
3,31
2,92
1,29
12,41
0,71
0,00
3,67
4,23
3,05
0,81
22,70
2,38
100,00
28/02/2013
2,77
3,43
6,06
2,12
2,49
17,72
5,59
3,83
2,81
1,40
11,61
0,43
0,00
4,65
4,06
2,26
0,61
26,36
1,80
100,00
31/08/2013
3,42
2,97
5,89
2,89
2,19
21,56
7,16
4,85
3,23
0,57
10,47
0,39
0,60
2,42
3,61
1,38
0,40
23,22
2,78
100,00
28/02/2014
4,39
2,58
6,53
3,31
2,37
22,70
6,64
3,92
3,53
0,67
7,65
0,67
0,00
2,78
3,57
1,47
0,36
24,24
2,62
100,00
71
2.4.2
CHANGES IN THE COMPOSITION OF THE ASSETS OF KBC ECO FUND AGRI (IN THE
CURRENCY OF THE SUB-FUND)
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Turnover rate
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Corrected turnover rate
1st half of year
816.590,32
1.552.603,12
2.369.193,44
1.568.962,36
2.260.366,57
3.829.328,93
14.583.363,05
Year
816.590,32
1.552.603,12
2.369.193,44
1.568.962,36
2.260.366,57
3.829.328,93
14.583.363,05
-10,01 %
-10,01 %
1st half of year
816.590,32
1.552.603,12
2.369.193,44
1.568.962,36
2.260.366,57
3.829.328,93
14.334.728,97
Year
816.590,32
1.552.603,12
2.369.193,44
1.568.962,36
2.260.366,57
3.829.328,93
14.334.728,97
-10,19 %
-10,19 %
The table above shows the capital volume of portfolio transactions. This volume (adjusted to take
account of total subscriptions and redemptions) is also compared to the average net assets at the
beginning and end of the period.
A figure close to 0% implies that the transactions relating to the securities or transactions relating to
the assets (excluding deposits and cash) in a given period only involve subscriptions and
redemptions.
A negative percentage shows that subscriptions and redemptions entailed few, if any, transactions in
the portfolio.
Active asset management may result in high turnover rates (monthly percentage >50%).
The detailed list of transactions is available for consultation free of charge at the registered office of
the Bevek or fund at Havenlaan 2, 1080 Brussels.
2.4.3
AMOUNT OF COMMITMENTS IN RESPECT OF FINANCIAL DERIVATIVES POSITIONS
Nil
72
2.4.4
CHANGES OF THE NUMBER OF SUBSCRIPTIONS AND REDEMPTIONS AND THE NET ASSET
VALUE
Classic Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Total
Dis.
Cap.
2012 - 02*
10.275,29
1.430,03
7.710,26
112,00
2.565,03
1.318,03
3.883,06
2013 - 02*
2.498,90
1.175,00
349,41
508,00
4.714,52
1.985,03
6.699,56
2014 - 02*
1.862,35
1.695,30
782,54
455,78
5.794,33
3.224,56
9.018,89
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Redemptions
Capitalization
Distribution
Capitalization
2012 - 02*
10.155.340,35
1.377.315,76
6.677.099,30
99.310,38
2013 - 02*
2.586.362,95
1.222.129,27
365.782,57
510.069,88
2014 - 02*
2.062.403,26
1.866.567,45
860.373,65
494.619,47
Period
Year
Distribution
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
Distribution
2012 - 02*
3.823.562,36
984,90
984,24
2013 - 02*
7.512.770,04
1.121,66
1.120,72
2014 - 02*
9.851.788,36
1.100,56
1.077,60
* The financial year does not coincide with the calender year.
73
Institutional B Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
12.302,00
307,00
11.995,00
11.995,00
2013 - 02*
17.009,00
20.208,00
8.796,00
8.796,00
2014 - 02*
184,00
5.245,00
3.735,00
3.735,00
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Capitalization
Redemptions
Distribution
Capitalization
2012 - 02*
11.370.777,42
292.259,25
2013 - 02*
17.319.340,43
20.593.774,12
2014 - 02*
205.976,45
5.863.116,37
Period
Year
Distribution
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
2012 - 02*
11.820.315,24
985,44
2013 - 02*
9.883.931,27
1.123,68
2014 - 02*
4.123.047,37
1.103,89
* The financial year does not coincide with the calender year.
Distribution
74
2.4.5
PERFORMANCE FIGURES
Classic Shares
1 Year
Cap
Div
ISIN code
Currency
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
CAP BE6222656090
EUR
-1.88%
25/07/2011
3.76%
DIV BE6222657106
EUR
-1.91%
25/07/2011
3.71%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
75
Institutional B Shares
1 Year
Cap
Div
ISIN code
CAP BE6228913586
Currency
EUR
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
-1.76%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
25/11/2011
11.58%
76
Classic Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
The return is calculated as the change in the net asset value between two dates expressed
as a percentage. In the case of units that pay dividends, the dividend is incorporated
geometrically in the return.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
Distribution units (DIV)
Return on date D over a period of X years:
[ C * NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[ C * NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
where C is a factor that is determined for all N dividends between the calculation
date D and the reference date.
For dividend i on date Di with value Wi:
Ci = [Wi / NIW(Di)] + 1
i = 1 ... N
from whichC = C0 * .... * CN.

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalisation and distribution shares.




Institutional B Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
The return is calculated as the change in the net asset value between two dates expressed
as a percentage.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalization shares.




77
2.4.6
COSTS
Ongoing Charges: *
Classic Shares Distribution: 1.933%
Classic Shares Capitalization: 1.909%
Institutional B Shares Capitalization: 1.783%
* The following are not included in the charges shown: entry and exit charges, performance fees,
transaction costs paid when buying or selling assets, interest paid, payments made with a view to
providing collateral in the context of derivative financial instruments, or commissions relating to
Commission Sharing Agreements or similar fees received by the Management Company or any
person associated with it.
EXISTENCE OF COMMISSION SHARING AGREEMENTS
The Management Company, or where applicable, the appointed manager has entered into a
Commission Sharing Agreement with one or more brokers for transactions in shares on behalf of
one or more sub-funds. This agreement specifically concerns the execution of orders and the
delivery of research reports.
For more information, please see the ‘General’ section of the annual report.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
28-02-14
28-02-14
Broker
Percentage
CITI
353
175
49.67%
CSFBSAS
155
65
41.93%
DEUTSCHE
88
33
37.50%
INSTINET
334
124
37.25%
MORGAN STANLEY
450
131
29.12%
FEE-SHARING AGREEMENTS AND REBATES:
The management company may share its fee with the distributor, and institutional and/or
professional parties.
In principle, the percentage share amounts to between 35% and 60% if the distributor is an entity of
KBC Group NV or to between 35% and 70% if the distributor is not an entity of KBC Group NV.
However, in a small number of cases, the distributor’s fee is less than 35%. Investors may, on
request, obtain more information on these cases.
If the management company invests the assets of the undertaking for collective investment in units
of undertakings for collective investment that are not managed by an entity of KBC Group NV, and
receives a fee for doing so, it will pay this fee to the undertaking for collective investment.
Fee-sharing does not affect the amount of the management fee paid by the sub-fund to the
management company. This management fee is subject to the limitations laid down in the articles of
association. The limitations may only be amended after approval by the general meeting of
shareholders.
The management company has concluded a distribution agreement with the distributor in order to
facilitate the wider distribution of the sub-fund's units by using multiple distribution channels.
It is in the interests of the holders of units, the sub-fund and of the distributor for the largest possible
number of units to be sold and for the assets of the sub-fund to be maximised in this way. In this
respect, there is therefore no question of any conflict of interest.
78
2.4.7
NOTES TO THE FINANCIAL STATEMENTS AND OTHER DATA
Fee for managing the investment portfolio: 1.5% per annum (0.1% of which for the sustainability
screening referred to in the prospectus) calculated on the basis of the average total net assets of the
sub-fund, no management fee is charged on assets assets invested in investment undertakings
managed by a financial institution of the KBC group.
KBC Fund Management Limited receives a fee from the management company of max. 1.45%
calculated on that part of the portfolio that it manages, without the total management fee received by
the management company being exceeded.
The administration agent’s fee is payable at the end of each month and is calculated on the basis of
the average total net assets of the sub-fund.
Auditor's fee: 1 700 EUR per year. This fee is not including VAT and can be indexed on an annual
basis in accordance with the decisions of the general meeting.
The custody fee is calculated on the value of the securities held in custody by the custodian on the
final banking day of the preceding calendar year, except on those assets invested in investment
undertakings managed by a financial institution of the KBC group. The custody fee is paid at the
beginning of the calendar year.
Social, ethical and environmental aspects:
No manufacturers of controversial weapons whose use over the past five decades, according to the
international consensus, has led to disproportionate human suffering among the civilian population
will be included in the portfolio of investments. This involves the manufacturers of anti-personnel
mines, cluster bombs and munitions and weapons containing depleted uranium. In this way, the subfund seeks to reflect not only simple financial reality but also the social reality of the sector or region
in question.
Exercising voting rights.
If necessary, relevant and in the interest of the shareholders, the management company will
exercise the voting rights attached to the shares in the Bevek’s portfolio.
The management company will adhere to the following criteria when determining how it stands
relative to the items on the agenda that are put to the vote:
- Shareholder value may not be adversely affected.
- Corporate governance rules, especially with regard to the rights of minority shareholders, must be
respected.
- The minimum standards with regard to sustainable business and corporate social responsibility
must be met.
The list of companies for which voting rights are exercised is available at the registered office of the
Bevek.
79
th
Semi-Annual report as at 28 February 2014
TABLE OF CONTENTS
2.
Information on KBC Eco Fund World
2.1. Management report
2.1.1. Launch date and subscription price
2.1.2. Stock exchange listing
2.1.3. Aim and distinctive features of the investment policy
2.1.4. Financial portfolio management
2.1.5. Distributors
2.1.6. Index and benchmark
2.1.7. Policy conducted during the financial year
2.1.8. Future policy
2.1.9. Synthetic risk and reward indicator (SRRI)
2.2. Balance sheet
2.3. Profit and loss account
2.4. Composition of the assets and key figures
2.4.1. Composition of the assets
2.4.2. Change in the composition of the assets
2.4.3. Value of commitments in respect of financial derivatives positions
2.4.4. Evolution of the number of subscriptions, repayments and the net asset value
2.4.5. Return figures
2.4.6. Expenses
2.4.7. Notes to the financial statements and other data
80
81
2
INFORMATION ON KBC ECO FUND WORLD
2.1
MANAGEMENT REPORT
2.1.1
LAUNCH DATE AND SUBSCRIPTION PRICE
Classic Shares :
Launch date: 30 April 1992
Initial subscription price: 10000 BEF
Currency: EUR
Institutional B Shares :
Launch date: 25 September 2013
Initial subscription price: 1000 EUR
Currency: EUR
2.1.2
STOCK EXCHANGE LISTING
Not applicable.
2.1.3
GOAL AND KEY PRINCIPLES OF THE INVESTMENT POLICY
SUB-FUND’S OBJECT:
The main objective of this sub-fund is to generate the highest possible return for its shareholders by
investing directly or indirectly in transferable securities. This is reflected in its pursuit of capital gains
and income. To this end, the assets are invested, either directly or indirectly via correlated financial
instruments, primarily in shares.
SUB-FUND’S INVESTMENT POLICY:
PERMITTED ASSET CLASSES:
The sub-fund may invest in securities, money market instruments, units in undertakings for collective
investment, deposits, financial derivatives, liquid assets and all other instruments insofar as
permitted by the applicable laws and regulations and consistent with the sub-fund’s object
The sub-fund shall invest no more than 10% of its assets in units of other undertakings for collective
investment.
RESTRICTIONS OF THE INVESTMENT POLICY:
The investment policy will be implemented within the limits set by law and regulations.
The sub-fund may borrow up to 10% of its net assets, insofar as these are short-term borrowings
aimed at solving temporary liquidity problems.
PERMITTED DERIVATIVES TRANSACTIONS:
Derivatives may be used to achieve the investment objectives as well as to hedge in risks.
It is possible to work with either listed or unlisted derivatives: these may be forward contracts,
options or swaps on securities, indices, currencies or interest rates or other transactions involving
derivatives. Unlisted derivatives transactions may only be concluded with prime financial institutions
specialised in such transactions. Subject to the applicable laws and regulations and the articles of
association, the sub-fund will always seek to conclude the most effective transactions. All costs
associated with the transactions will be charged to the sub-fund and all income generated will be
paid to the sub-fund.
If the transactions result in a risk in respect of the counterparty, this risk can be hedged by using a
margin management system that ensures that the sub-fund is the beneficiary of security (collateral)
in the form of cash or investment grade bonds. When calculating the value of the bonds, a margin
will be applied that varies depending on their residual term to maturity and the currency in which they
are denominated. The relationship with the counterparty or counterparties is governed by standard
international agreements.
Derivatives can also be used to hedge the assets of the sub-fund against open exchange risks in
relation to the currency.
82
Where derivatives are used, they must be easily transferable and liquid instruments. Using
derivatives does not, therefore, affect liquidity risk. Furthermore, using derivatives does not affect the
portfolio's allocation across regions, industry sectors or themes. As a result, they have no effect on
concentration risk. Derivatives may not be used to protect capital, either fully or partially. They
neither increase nor decrease capital risk. In addition, using derivatives has no effect on credit risk,
settlement risk, custody risk, flexibility risk or inflation risk or risk dependent on external factors.
Strategy selected:
At least 75% of the assets are invested in the shares of companies in all sectors worldwide that
outperform their peers in managing the environmental impact of both their production process and
their end product. These companies must also have been approved by KBC Asset Management’s
Sustainable and Socially Responsible Investment Department and the Independent Environmental
Advisory Committee.
The shares must satisfy the following criteria:
1) the companies must be considered the ‘best in class’ in terms of sustainability: This means that
the companies have to be screened based on the following criteria:
economic policy and role in society
business ethics and corporate governance
environment
internal social relations
human rights
socially controversial practices and technologies
2) the companies must be considered the ‘best in class’ in environmental terms.
Each criterion is sub-divided into measurable indicators.
The requirements, criteria and indicators are set out by KBC Asset Management in co-operation with
the External Advisory Board for Sustainability Analysis and the Independent Environmental Advisory
Committee. These requirements, criteria and indicators are constantly checked to ensure their
relevance. Accordingly, the method used to conduct the sustainability screening may be changed,
subject to approval by the External Advisory Board for Sustainability Analysis and the Independent
Environmental Advisory Committee.
The shares are screened by KBC Asset Management’s Sustainable and Socially Responsible
Investment Department, in co-operation with the External Advisory Board for Sustainability Analysis
and the Independent Environmental Advisory Committee.
Because the External Advisory Board for Sustainability Analysis and the Independent Environmental
Advisory Committee work independently, the assessment of companies is objective, assuring the
credibility of the sustainability screening. Their task also consists in overseeing the quality of the
methods used and the research carried out by KBC Asset Management.
LENDING FINANCIAL INSTRUMENTS:
The subfund is not allowed to lend financial instruments.
VOLATILITY OF THE NET ASSET VALUE:
The volatility of the net asset value may be high due to the composition of the portfolio.
GENERAL STRATEGY FOR HEDGING THE EXCHANGE RATE RISK:
In order to protect its assets against exchange rate fluctuations and within the limitations laid down in
the articles of association, the sub-fund may perform transactions relating to the sale of forward
currency contracts, as well as the sale of call options and the purchase of put options on currencies.
The transactions in question may relate solely to contracts traded on a regulated market that
operates regularly, is recognised and is open to the public or that are traded with a recognised,
prime financial institution specialising in such transactions and dealing in the over-the-counter (OTC)
market in options. With the same objective, the sub-fund may also sell currencies forward or
exchange them in private transactions with prime financial institutions specialising in such
transactions.
83
SOCIAL, ETHICAL AND ENVIRONMENTAL ASPECTS:
Investments may not be made in financial instruments issued by manufacturers of controversial
weapons whose use over the past five decades, according to international consensus, has led to
disproportionate human suffering among the civilian population. This involves the manufacturers of
anti-personnel mines, cluster bombs and munitions and weapons containing depleted uranium.
In addition, as of 31 March 2014 no new investments may be made in financial instruments issued
by companies that do not have an anti-corruption policy and that have been given a negative score
in a thorough screening for corruption in the last two years. A company has no anti-corruption policy
if it cannot be demonstrated that it has an acceptable policy concerning the fight against corruption.
An acceptable policy should be made public and must at least state that bribery will not be tolerated
and that the law will be followed in this respect. The screening will be based on a generally accepted
and independent 'Social, ethical and environmental factors' database.
In this way, not only is a purely financial reality represented, but also the social reality of the sector
or region.
Where relevant, please refer to 'Information concerning the Bevek – Tax treatment' in the prospectus
to find out more about the application of European and Belgian tax provisions.
2.1.4
FINANCIAL PORTFOLIO MANAGEMENT
The management company has delegated the intellectual management, with the exception of the
sustainability screening described in the prospectus, to KBC Fund Management Limited, Joshua
Dawson House, Dawson Street , Dublin 2, IRELAND..
2.1.5
DISTRIBUTORS
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
2.1.6
INDEX AND BENCHMARK
See ‘Sub-fund’s investment policy’.
2.1.7
POLICY PERSUED DURING THE FINANCIAL YEAR
KBC Eco Fund World invests in an internationally diversified portfolio of shares in companies pursuing
sustainable policies. The companies are the best-in-class as regards to their overall score (economic
policy and internal social relations, corporate governance, human rights and socially questionable
practices) and their score for the environmental criterion. These companies are screened by KBC
Asset Management’s Sustainability Desk. The External Advisory Board for Sustainability Analysis
assists KBC Asset Management in developing the research method used and guarantees the
objectivity of the research. The Fund aims to be sector and region neutral.
Doubts about the sustainability of the economic recovery have long dominated the investment climate.
During the summer of 2013 the mood began to turn positive. Europe shook off the recession itself, the
euro crisis eased its stranglehold, the U.S. began a heavy restructuring and Japan broke the negative
deflationary spiral. The equity markets cherished this economic optimism. Since 2010 more jobs were
created than lost in the U.S but the pace of employment growth has long remained on the thin side.
The unemployment rate declined, but for the wrong reasons. Not because employment grew strongly,
but because many disillusioned Americans got out of the labour market. In the course of 2013 there
was an improvement in employment growth which accelerated to an average of 187000 new jobs a
month, so that the natural growth of the labour force could be absorbed, but no more than that. Wages
increased slightly more than inflation. Both factors meant that the purchasing power of American
families was very modest and only offered a modest support to economic growth together which
remained limited. Underlying, the U.S. economy was however much stronger than the growth rate
suggests.
84
In EMU, the recession which was triggered by the euro crisis came to an end. From the second
quarter of 2013 a positive growth rate was recorded. Consumer and business confidence are
recovering quite well, surprisingly even in the hard-hit southern Europe. Japan managed to break
through its negative deflationary spiral. The newly formed government-Abe had in December 2012
changed course and announced in April 2013 that the Japanese central bank would pursue an
inflation rate of 2%. Since August 2012 in anticipation of the policy reversal the yen was already
weakening sharply. That meant that in 2013 exports recovered and inflation figures were positive. The
weak growth in the West also had an impact on the export performance of the emerging countries
which translated into weakening growth, especially in countries like Brazil and South Africa with an
extensive resource industry. The slowdown in China brought the problem of excessive indebtedness
of Chinese banks to the forefront. In June and December the interbank market ended briefly in crisis,
with the Bank of China failing to suppress this despite their substantial liquidity injections.
2.1.8
FUTURE POLICY
The U.S. and European barometers measuring confidence among business leaders were in the spring
of 2013 just above (US) or well below (EMU) freezing. From these low levels it is expected that they
will rise sharply in the coming months. In the US, the measure has already achieved a level
compatible with a growth rate of more than 3.5%. While in Germany, the IFO, the leading index of
business confidence indicator is currently at a level corresponding to the top decile which is the best
observation of the last thirty years. It is surprising that so early in this cycle consumer confidence has
changed so positively and is also experiencing a sharp recovery. Europe is now emerging slowly out
of recessionary territory. The budget planning, stricter credit policies of banks and the great
uncertainty among consumers and producers will continue to weigh. In the coming months, growth
rates foresee an improvement of +1 to +1.5% year-on-year. However this is not a cause for
celebration rather a better alternative to negative growth.
Recent years have laid the foundation for a more sustainable growth in 2014 and beyond. American
families have reduced their debt significantly, the savings rate has risen sharply and loan servicing
(principal and interest payments together) absorbs only 10% of household budgets which is the lowest
level in fifteen years. This will gradually provide all Americans with breathing room to spend a greater
proportion of their income on consumption. The explosive growth in profits during 2009-2013
enhances the extensive cash positions of the companies further. During the crisis, investments were
sharply reduced. The foundations are now laid for the recovery process. In the US, Republicans and
Democrats came together to compromise on fiscal policy. The current funding from the federal
government is insured up to March 2015. The sharpest points of the long-term plan of fiscal
consolidation were agreed. The Fed is conducting an extremely loose monetary policy by providing a
purchase program for government bonds and other debt liquidity injections.
One of the great challenges of this decade is the development of consumption in China and the rest of
Asia. This development of consumption not only reduces dependence on exports of the region but it
also impacts on international capital flows (which is considered of equal importance).More
consumption in China means less savings and more imports, including from the U.S. and Europe. That
will help the West to grow and reduce its debt problems. The euro crisis has been driven into the
background, but many problems are still awaiting a solution. In 2014, the support funds for Greece,
Portugal and Ireland will be exhausted. Ireland will be able to return to the markets to finance their
capital, but for Portugal and Greece this is not an option. There is even talk of a second debt
restructuring for Greece.
In line with the theme, KBC Eco Fund World will continue to invest in a portfolio of global shares
pursuing sustainable policies. We will continue to ensure that the portfolio is diversified, with sector
allocation in line with the MSCI World Index.
2.1.9
SYNTHETIC RISK AND REWARD INDICATOR
Classic Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
Institutional B Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
The value of a share can decrease or increase and the investor may not get back the amount
invested.
In accordance with Commission Regulation (EU) No. 583/2010, a synthetic risk and reward indicator
has been calculated. This indicator provides a quantitative measure of the sub-fund's potential return
and the risk involved, calculated in the currency in which the sub-fund is denominated. It is given as
a figure between 1 and 7. The higher the figure, the greater the potential return, but also the more
difficult it is to predict this return. Losses are possible too. The lowest figure does not mean that the
investment is entirely free of risk. However, it does indicate that, compared with the higher figures,
this product will generally provide a lower, but more predictable return.
The synthetic risk and reward indicator is assessed regularly and can therefore go up or down based
on data from the past. Data from the past is not always a reliable indicator of future risk and return.
85
2.2
BALANCE SHEET
Balance sheet layout
28/02/2014
28/02/2013
(in the currency of the sub-fundt)
(in the currency of the sub-fund )
18.942.376,77
15.584.857,44
18.961.587,56
15.600.491,59
507.712,50
6.633,80
1.243,34
1.122,42
-180.041,29
-399.817,91
-38.393,20
-18.114,83
28.232,08
17.315,85
11.476,52
32.396,98
-25.803,47
10.136,89
32.166,42
-21.111,04
TOTAL SHAREHOLDERS' EQUITY
18.942.376,77
15.584.857,44
A.
Capital
17.107.638,75
14.144.212,59
B.
Income equalization
316,19
-100,29
D.
Result for the period
1.834.421,83
1.440.745,14
TOTAL NET ASSETS
II.
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
b) Tax assets
Payables
a) Accounts payable (-)
c) Borrowings (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
86
2.3
PROFIT AND LOSS ACCOUNT
Income Statement
I.
2.344.507,52
2.128.851,48
-0,01
-0,01
-479.496,08
-691.700,52
147.152,08
152.567,39
109,27
-158,52
94,02
-127,62
Investment income and expenses
A.
B.
Dividends
Interests
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
A.
Income received to cover the acquisition and
realizaion of assets, to discourage withdrawals
and for delivery charges
Other
B.
28/02/2013
(in the currency of the sub-fund)
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
G. Receivables, deposits, cash at bank and in hand
and payables
H. Foreign exchange positions and transactions
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the sub-fund)
1.843,53
652,82
IV. Operating expenses
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
Classic Shares
Institutional B Shares
b) Administration and accounting management
E. Administrative expenses (-)
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
Classic Shares
Institutional B Shares
K. Other expenses (-)
-22.974,80
-333,65
-5.949,09
-19.704,66
-349,04
-4.282,64
-121.568,85
-3.633,95
-8.346,77
-38,32
-1.918,13
-103.884,11
-476,42
-395,75
-4.964,31
-3.330,87
-6.213,44
-122,05
-3.649,00
-6.740,59
-30.589,60
3.594,19
1.834.421,83
1.440.745,14
1.834.421,83
1.440.745,14
-7.216,81
-8,64
-1.577,53
-1.448,96
Income and expenditure for the period
Subtotal II + III + IV
V.
Profit (loss) on ordinary activities before tax
VII. Result for the period
87
2.4
COMPOSITION OF THE ASSETS AND KEY FIGURES
2.4.1
COMPOSITIONS OF THE ASSETS OF KBC ECO FUND WORLD
Name
Quantity on
28/02/2014
Cur
rency
Price in
currency
Evaluation
(in the currency of the
sub-fund)
%
%
owned by
portfolio
UCI
%
Net
assets
NET ASSETS
SECURITIES PORTFOLIO
Shares
Exchange-listed shares
Australia
AGL ENERGY LIMITED -
4.743,00
AUD
15,650
48.092,23
0,25
0,25
ANZ BANKING GROUP -
2.022,00
AUD
32,140
42.105,08
0,22
0,22
INSURANCE AUSTRALIA GR LTD -
2.511,00
AUD
5,430
8.833,93
0,05
0,05
418,00
AUD
34,740
9.408,35
0,05
0,05
17.159,00
AUD
14,440
160.533,84
0,85
0,85
79,00
AUD
66,840
3.421,14
0,02
0,02
TELSTRA CORP -
14.941,00
AUD
5,050
48.885,32
0,26
0,26
WESFARMERS -
1.603,00
AUD
42,950
44.607,11
0,24
0,24
WESTPAC BANKING -
2.068,00
AUD
33,470
44.844,96
0,24
0,24
WOODSIDE PETROLEUM LTD -
4.081,00
AUD
37,950
100.342,71
0,53
0,53
WOOLWORTH CORP -
1.489,00
AUD
36,070
34.797,52
0,18
0,18
4.725,00
EUR
32,970
155.783,25
0,82
0,82
3.139,00
EUR
21,855
68.602,85
0,36
0,36
545,00
EUR
112,400
61.258,00
0,32
0,32
BANK OF MONTREAL -
8.925,00
CAD
72,940
425.803,38
2,25
2,26
BCE INC -
8.678,00
CAD
48,300
274.158,62
1,45
1,45
BROOKFIELD OFFICES PROPERTIES -
8.745,00
CAD
21,140
120.920,50
0,64
0,64
C.I.B.C. -
408,00
CAD
92,680
24.733,26
0,13
0,13
CANADIAN TIRE CORP "A" NON VOTING
324,00
CAD
99,850
21.160,61
0,11
0,11
14.975,00
CAD
21,000
205.693,82
1,09
1,09
NAT. BK CANADA -
1.068,00
CAD
44,440
31.044,20
0,16
0,16
ROYAL BK CANADA -
1.165,00
CAD
71,950
54.826,67
0,29
0,29
TALISMAN ENERGY INC. -
1.867,00
CAD
11,400
13.921,44
0,07
0,07
997,00
USD
52,190
37.672,63
0,20
0,20
963,00
DKK
251,500
32.454,87
0,17
0,17
NESTE OIL OYJ -
9.112,00
EUR
15,510
141.327,12
0,75
0,75
NOKIA "A"
8.576,00
EUR
5,585
47.896,96
0,25
0,25
14.026,00
EUR
5,540
77.704,04
0,41
0,41
4.496,00
EUR
13,160
59.167,36
0,31
0,31
ALSTOM -
1.706,00
EUR
19,555
33.360,83
0,18
0,18
CAP GEMINI SOGETI -
2.582,00
EUR
56,730
146.476,86
0,77
0,77
NATIONAL AUSTRALIA BANK ORIGIN ENERGY LTD RIO TINTO LTD -
Austria
OMV AG (WIEN)
Belgium
BELGACOM SOLVAY -
Canada
ENCANA CORP -
Cayman Islands
SEAGATE TECHNOLOGY -
Denmark
NOVOZYMES A/S "B"
Finland
SANOMAWSOY OYJ UPM-KYMMENE CORP -
France
88
CHRISTIAN DIOR -
481,00
EUR
143,300
68.927,30
0,36
0,36
6.202,00
EUR
11,520
71.447,04
0,38
0,38
285,00
EUR
56,810
16.190,85
0,09
0,09
2.701,00
EUR
29,095
78.585,60
0,41
0,42
526,00
EUR
101,450
53.362,70
0,28
0,28
AURUBIS AG (FRA)
34,00
EUR
40,330
1.371,22
0,01
0,01
CONTINENTAL AG -
161,00
EUR
176,350
28.392,35
0,15
0,15
DAIMLER AG -
1.097,00
EUR
67,520
74.069,44
0,39
0,39
DEUTSCHE LUFTHANSA AG REG
2.810,00
EUR
18,790
52.799,90
0,28
0,28
DEUTSCHE TELEKOM INT FIN REG
5.802,00
EUR
12,295
71.335,59
0,38
0,38
573,00
EUR
158,650
90.906,45
0,48
0,48
6.995,00
EUR
35,590
248.952,05
1,31
1,31
CREDIT AGRICOLE EURAZEO (PAR)
LAGARDERE S.C.A. VALEO -
Germany
MUNCHENER RUCKVERSICHERUNG AG REG
SYMRISE AG -
Hong Kong
CLP -
8.000,00
HKD
60,550
45.189,94
0,24
0,24
44.514,00
HKD
21,550
89.491,45
0,47
0,47
4.500,00
HKD
125,800
52.811,78
0,28
0,28
7.771,00
USD
61,140
343.989,97
1,81
1,82
7.426,00
ILS
29,500
45.476,95
0,24
0,24
911,00
ILS
142,600
26.968,22
0,14
0,14
A2A SPA -
22.318,00
EUR
0,941
20.990,08
0,11
0,11
TERNA RETE ELETTRICA NAZIONALE -
27.964,00
EUR
3,700
103.466,80
0,55
0,55
AEON CO LTD. -
18.300,00
JPY
1.244,000
161.489,68
0,85
0,85
AJINOMOTO -
15.421,00
JPY
1.577,000
172.511,29
0,91
0,91
2.100,00
JPY
3.825,000
56.980,21
0,30
0,30
900,00
JPY
3.162,000
20.187,27
0,11
0,11
DAI NIPPON PRINTNG -
2.000,00
JPY
1.022,000
14.499,54
0,08
0,08
DAIWA HOUSE -
9.000,00
JPY
1.846,000
117.854,86
0,62
0,62
FUJI PHOTO FILM -
2.400,00
JPY
2.924,000
49.780,80
0,26
0,26
ITOCHU CORP -
11.700,00
JPY
1.264,000
104.907,43
0,55
0,55
MAZDA MOTOR CORP. -
22.680,00
JPY
489,000
78.672,91
0,42
0,42
MITSUI OSK LINES LTD -
31.000,00
JPY
422,000
92.799,89
0,49
0,49
NISSAN MOTOR -
14.200,00
JPY
911,000
91.765,62
0,48
0,48
RESONA HOLDINGS INC -
5.400,00
JPY
530,000
20.302,19
0,11
0,11
SEKISUI HOUSE LTD -
3.000,00
JPY
1.274,000
27.112,15
0,14
0,14
SHOWA SHELL (OIL) SEKIYU -
10.600,00
JPY
999,000
75.118,11
0,40
0,40
SUMITOMO CORP -
10.546,00
JPY
1.342,000
100.395,35
0,53
0,53
SUMITOMO RUBBER IND. -
1.600,00
JPY
1.369,000
15.538,06
0,08
0,08
T&D HOLDINGS INC -
5.500,00
JPY
1.246,000
48.613,18
0,26
0,26
TANABE SEIYAKU CO LTD -
5.800,00
JPY
1.498,000
61.632,97
0,33
0,33
58.643,00
JPY
510,000
212.158,12
1,12
1,12
7.000,00
JPY
1.438,000
71.405,26
0,38
0,38
14.776,00
GBP
2,549
45.700,45
0,24
0,24
7.256,00
GBP
33,200
292.300,19
1,54
1,54
17.612,00
EUR
3,466
61.043,19
0,32
0,32
3.681,00
EUR
11,220
41.300,82
0,22
0,22
HANG LUNG PROPERTIES LTD HANG SENG BANK LTD. -
Ireland
INGERSOLL RAND PLC -
Israel
ISRAEL CHEMICALS LTD NICE SYSTEMS LTD -
Italy
Japan
BENESSE CANON INC -
TOKYO GAS CO. LTD TOTO -
Jersey/The Channel Islands
HENDERSON GROUP PLC SHIRE LTD -
Netherlands
POSTNL NV SBM OFFSHORE NV (AMS)
89
New Zealand
CONTACT ENERGY LTD -
15.727,00
NZD
5,350
51.185,94
0,27
0,27
DNB ASA -
12.294,00
NOK
108,900
161.800,30
0,85
0,85
STATOIL -
15.760,00
NOK
158,400
301.696,05
1,59
1,59
Norway
TELENOR A/S -
976,00
NOK
132,600
15.640,53
0,08
0,08
1.056,00
NOK
243,400
31.062,95
0,16
0,16
17.271,00
EUR
5,873
101.432,58
0,54
0,54
7.192,00
EUR
15,300
110.037,60
0,58
0,58
710,00
EUR
56,400
40.044,00
0,21
0,21
SWEDBANK -
10.883,00
SEK
181,000
222.651,83
1,17
1,18
TELIASONERA AB -
13.066,00
SEK
49,410
72.972,05
0,39
0,39
YARA INTL ASA -
Spain
BANKINTER S.A. (MAD)
FERROVIAL SA RED ELECTRICA DE ESPANA -
Sweden
Switzerland
GEORG.FISCHER (NAAM)
GIVAUDAN (NOM)
LONZA AG STRAUMANN HOLDING AG REG
SWISS RE -
89,00
CHF
705,000
51.576,18
0,27
0,27
101,00
CHF
1.380,000
114.569,89
0,60
0,61
1.794,00
CHF
93,000
137.143,56
0,72
0,72
119,00
CHF
189,400
18.526,65
0,10
0,10
3.843,00
CHF
82,200
259.664,30
1,37
1,37
U.K.
AMEC -
16.980,00
GBP
11,230
231.372,20
1,22
1,22
BARRATT DEVELOPMENTS PLC -
6.676,00
GBP
4,400
35.642,06
0,19
0,19
BG GROUP PLC -
2.996,00
GBP
10,885
39.569,81
0,21
0,21
BOVIS HOME GROUP PLC -
5.465,00
GBP
9,325
61.834,77
0,33
0,33
BRITISH SKY BROADCAST -
8.184,00
GBP
9,400
93.344,17
0,49
0,49
14.601,00
GBP
4,098
72.601,95
0,38
0,38
BTG PLC -
8.207,00
GBP
6,000
59.748,83
0,32
0,32
CLOSE BROTHERS GROUP PLC -
2.422,00
GBP
14,660
43.082,59
0,23
0,23
COMPUTACENTER PLC -
2.138,00
GBP
6,850
17.770,19
0,09
0,09
DEBENHAM PLC -
25.819,00
GBP
0,757
23.715,32
0,13
0,13
GRAINGER TRUST PLC -
22.053,00
GBP
2,458
65.772,34
0,35
0,35
4.053,00
GBP
5,350
26.310,20
0,14
0,14
INVESTEC PLC -
33.698,00
GBP
4,447
181.829,77
0,96
0,96
ITV PLC -
19.481,00
GBP
2,019
47.724,49
0,25
0,25
JOHNSON MATTHEY PLC -
1.186,00
GBP
32,620
46.942,09
0,25
0,25
MONDI PLC -
3.443,00
GBP
10,960
45.786,91
0,24
0,24
MORRISON SUPERMARKETS -
14.474,00
GBP
2,353
41.324,18
0,22
0,22
PREMIER OIL PLC -
34.568,00
GBP
3,155
132.332,75
0,70
0,70
REXAM PLC -
BT GROUP PLC -
INTERNATIONAL PERSONAL FINANCE -
20.744,00
GBP
4,937
124.265,16
0,66
0,66
SCHRODERS PLC -
2.527,00
GBP
27,130
83.185,72
0,44
0,44
SCOTTISH & SOUTHERN ENERGY -
1.138,00
GBP
14,030
19.372,86
0,10
0,10
13.925,00
GBP
6,420
108.473,58
0,57
0,57
117.999,00
GBP
1,250
178.970,76
0,94
0,95
UNITED UTILITIES WATER PLC -
3.163,00
GBP
7,795
29.916,38
0,16
0,16
WORKSPACE GROUP PLC -
7.062,00
GBP
5,930
50.813,15
0,27
0,27
ABBOTT LAB. -
5.274,00
USD
39,780
151.896,70
0,80
0,80
ABBVIE INC -
3.115,00
USD
50,910
114.816,57
0,61
0,61
ACCENTURE LTD "A"
1.959,00
USD
83,350
118.217,96
0,62
0,62
364,00
USD
56,930
15.003,27
0,08
0,08
16.579,00
USD
11,740
140.919,10
0,74
0,74
1.106,00
USD
54,350
43.520,92
0,23
0,23
TATE&LYLE PLC TAYLOR WIMPEY PLC -
U.S.A.
AGILENT TECHNOLOGIES ALCOA INCORPORATED ALLEGION PLC -
90
APPLIED MATERIALS -
2.479,00
USD
18,960
34.029,71
0,18
0,18
BALL CORPORATION -
7.668,00
USD
55,560
308.452,13
1,63
1,63
BECTON DICKINSON -
1.630,00
USD
115,220
135.974,95
0,72
0,72
BED BATH & BEYOND -
2.284,00
USD
67,820
112.149,49
0,59
0,59
CA INC -
9.456,00
USD
33,500
229.348,39
1,21
1,21
CAMPBELL SOUP CO -
2.578,00
USD
43,310
80.837,81
0,43
0,43
CITIGROUP INC -
2.358,00
USD
48,630
83.021,68
0,44
0,44
CLOROX COMPANY -
1.819,00
USD
87,280
114.945,21
0,61
0,61
COCA-COLA CO -
2.172,00
USD
38,200
60.071,24
0,32
0,32
COCA-COLA ENTERPRISE -
9.982,00
USD
47,080
340.249,46
1,79
1,80
COGNIZANT TECHNOLOGY SOLUTIONS CORP. -
1.190,00
USD
104,060
89.654,94
0,47
0,47
COMERICA INC -
7.488,00
USD
48,180
261.201,74
1,38
1,38
CUMMINS INC. -
290,00
USD
145,920
30.637,71
0,16
0,16
FORD MOTOR CY -
3.664,00
USD
15,390
40.826,06
0,22
0,22
GAP INC -
4.164,00
USD
43,750
131.896,18
0,70
0,70
GENERAL ELEC CAP CORP -
3.944,00
USD
25,470
72.729,28
0,38
0,38
GENERAL MILLS IN -
1.763,00
USD
50,030
63.859,61
0,34
0,34
HEWLETT PACKARD -
3.738,00
USD
29,880
80.865,51
0,43
0,43
I.B.M. -
1.487,00
USD
185,170
199.354,03
1,05
1,05
15.430,00
USD
24,760
276.604,98
1,46
1,46
INTL PAPER COMP. -
1.948,00
USD
48,890
68.952,88
0,36
0,36
JOHNSON & JOHNSON -
6.263,00
USD
92,120
417.714,71
2,20
2,21
JPMORGAN CHASE & CO -
2.764,00
USD
56,820
113.705,82
0,60
0,60
191,00
USD
60,690
8.392,55
0,04
0,04
KIMBERLEY-CLARK CORP -
1.362,00
USD
110,350
108.816,03
0,57
0,57
KOHL'S CORPORATION -
1.707,00
USD
56,190
69.444,20
0,37
0,37
L.S.I.LOGIC CORP -
8.121,00
USD
11,090
65.205,54
0,34
0,34
LEGG MASON INC. -
8.769,00
USD
45,960
291.792,09
1,54
1,54
LEXMARK INTERNATIONAL INC "A"
3.096,00
USD
42,140
94.458,04
0,50
0,50
MARRIOTT INTERNATIONAL -
9.049,00
USD
54,230
355.290,52
1,87
1,88
MASCO CORP -
9.424,00
USD
23,350
159.318,27
0,84
0,84
MCKESSON CORP -
1.846,00
USD
177,050
236.630,68
1,25
1,25
MERCK & CO -
8.198,00
USD
56,990
338.259,50
1,78
1,79
MICROSOFT CORP -
6.947,00
USD
38,310
192.687,21
1,02
1,02
MOHAWK INDUSTRIES INC -
668,00
USD
141,530
68.449,20
0,36
0,36
MONDELEZ INTERNATIONAL INC "A"
980,00
USD
34,030
24.145,24
0,13
0,13
MOTOROLA SOLUTIONS INC -
6.838,00
USD
66,200
327.740,81
1,73
1,73
OCCID. PETROLEUM -
2.938,00
USD
96,520
205.311,15
1,08
1,08
ORACLE CORP -
6.086,00
USD
39,110
172.330,92
0,91
0,91
PEPSICO -
2.671,00
USD
80,070
154.841,42
0,82
0,82
PERKINELMER, INC. -
4.567,00
USD
45,320
149.852,62
0,79
0,79
112,00
USD
67,060
5.437,82
0,03
0,03
PRUDENTIAL FINANCIAL INC -
4.569,00
USD
84,580
279.790,05
1,48
1,48
ROCKWELL AUTOMATION CORP -
1.619,00
USD
122,840
143.989,26
0,76
0,76
SEI INVESTMENTS CO -
2.155,00
USD
33,570
52.377,17
0,28
0,28
SOUTHWEST AIRLINES -
15.366,00
USD
22,440
249.647,44
1,32
1,32
ST JUDE MEDICAL INC. -
1.085,00
USD
67,320
52.883,15
0,28
0,28
STAPLES INC -
2.245,00
USD
13,590
22.089,16
0,12
0,12
TERADATA CORP -
536,00
USD
45,920
17.820,10
0,09
0,09
TEXAS INSTRUMENTS -
980,00
USD
44,960
31.900,38
0,17
0,17
TIME WARNER INC -
6.803,00
USD
67,130
330.643,93
1,74
1,75
TJX COMPANIES INC. -
7.271,00
USD
61,460
323.541,60
1,71
1,71
INTEL CORP -
KELLOGG CO. -
PETSMART INC -
UNITED PARCEL SERVICE "B"
187,00
USD
95,770
12.966,25
0,07
0,07
UNUM GROUP -
5.500,00
USD
34,780
138.495,51
0,73
0,73
WELLS FARGO COMPANY -
3.588,00
USD
46,420
120.587,14
0,64
0,64
WEYERHAEUSER COMPANY -
1.718,00
USD
29,510
36.705,89
0,19
0,19
20.800,00
USD
10,990
165.502,46
0,87
0,87
XEROX CORPORATION -
91
3M CO -
2.793,00
USD
134,730
Total shares
TOTAL SECURITIES PORTFOLIO
272.444,90
18.961.587,56
1,44
100,00
1,44
100,10
18.961.587,56
100,00
100,10
CASH AT BANK AND IN HAND
Demand accounts
Belgium
KBC GROUP AUD
1.279,44
AUD
1,000
828,95
KBC GROUP CAD
6.838,99
CAD
1,000
4.473,29
0,02
KBC GROUP CHF
-118.993,89
CHF
1,000
-97.812,58
-0,52
KBC GROUP DKK
0,00
4.114,08
DKK
1,000
551,30
0,00
-227.258,53
EUR
1,000
-227.258,53
-1,20
KBC GROUP GBP
1.478,94
GBP
1,000
1.794,50
0,01
KBC GROUP HKD
10.640,87
HKD
1,000
992,69
0,01
KBC GROUP ILS
63.713,56
ILS
1,000
13.226,54
0,07
KBC GROUP JPY
-10.537.056,00
JPY
1,000
-74.746,80
-0,40
KBC GROUP NOK
7.129,09
NOK
1,000
861,57
0,01
KBC GROUP NZD
5.003,68
NZD
1,000
3.043,97
0,02
KBC GROUP SEK
2.975,50
SEK
1,000
336,32
0,00
KBC GROUP SGD
3.141,41
SGD
1,000
1.795,60
0,01
KBC GROUP USD
452,13
USD
1,000
327,35
-371.585,83
0,00
-1,96
-371.585,83
-1,96
KBC GROUP EURO
Total demand accounts
TOTAL CASH AT BANK AND IN HAND
OTHER RECEIVABLES AND PAYABLES
Receivables
Belgium
KBC GROUP CHF RECEIVABLE
121.000,00
CHF
1,000
99.461,59
0,53
KBC GROUP EUR RECEIVABLE
333.412,29
EUR
1,000
333.412,29
1,76
KBC GROUP JPY RECEIVABLE
10.550.000,00
JPY
1,000
74.838,62
0,40
6.633,80
EUR
1,000
6.633,80
514.346,30
0,04
2,72
-180.041,29
EUR
1,000
-180.041,29
-180.041,29
-0,95
-0,95
334.305,01
1,77
KBC GROUP WHT TO BE RECOVERED EUR
Total receivables
Payables
Belgium
KBC GROUP EUR PAYABLE
Payables
TOTAL RECEIVABLES AND PAYABLES
OTHER
Interest receivable
EUR
32.396,98
0,17
Expenses payable
EUR
-25.803,47
-0,14
Expenses to be carried forward
EUR
11.476,52
0,06
18.070,03
0,10
18.942.376,77
100,00
TOTAL OTHER
TOTAL NET ASSETS
92
Geographic breakdown (as a % of securities portfolio)
Australia
Austria
Belgium
Bermuda
Canada
Switzerland
Germany
Denmark
Spain
Finland
France
U.K.
Hong Kong
Ireland
Israel
Italy
Jersey/The Channel Islands
Japan
Netherlands
Norway
New Zealand
Portugal
Singapore
Sweden
U.S.A.
Total
31/08/2012
4,66
0,99
1,18
0,38
5,50
1,51
1,42
0,00
0,22
0,27
3,66
11,16
0,04
0,00
0,77
0,29
0,44
8,30
1,58
2,42
0,48
1,01
0,17
0,83
52,72
100,00
28/02/2013
3,60
1,19
0,95
0,00
5,56
1,84
2,55
0,00
1,00
0,88
2,82
11,44
1,49
1,02
0,71
0,00
0,00
8,34
0,94
2,39
0,34
1,02
0,09
1,19
50,64
100,00
31/08/2013
3,39
1,65
1,28
0,00
5,48
1,60
2,99
0,00
1,33
1,47
1,96
11,12
1,30
0,92
0,51
0,64
0,00
9,10
0,37
2,27
0,33
0,00
0,00
0,88
51,41
100,00
28/02/2014
2,88
0,82
0,68
0,00
6,18
3,07
2,99
0,17
1,33
1,72
2,47
9,82
0,99
1,81
0,38
0,66
1,78
8,41
0,54
2,69
0,27
0,00
0,00
1,56
48,78
100,00
31/08/2013
23,60
14,58
11,23
10,28
18,41
13,51
3,72
2,43
2,24
100,00
28/02/2014
24,62
15,34
10,34
9,60
18,36
13,72
3,56
2,74
1,72
100,00
Sector breakdown (as a % of securities portfolio)
Cyclicals
Consum(cycl)
Cons.goods
Pharma
Financials
Technology
Telecomm.
Utilities
Real est.
Total
31/08/2012
23,79
15,44
12,25
10,10
16,62
13,69
4,12
2,76
1,23
100,00
28/02/2013
23,90
16,61
11,52
8,85
17,16
12,39
3,87
2,56
3,14
100,00
93
Currency breakdown (as a % of net assets)
AUD
CAD
CHF
DKK
EUR
GBP
HKD
ILS
JPY
NOK
NZD
SEK
SGD
USD
Total
31/08/2012
4,71
5,52
1,55
0,00
10,30
11,63
0,05
0,77
8,29
2,43
0,48
0,84
0,17
53,26
100,00
28/02/2013
3,61
5,58
1,85
0,00
11,02
11,49
1,49
0,71
8,37
2,41
0,35
1,20
0,09
51,83
100,00
31/08/2013
3,43
5,50
1,62
0,00
11,48
11,13
1,30
0,51
9,12
2,27
0,34
0,88
0,01
52,41
100,00
28/02/2014
2,89
6,22
3,08
0,17
10,88
11,63
1,00
0,45
8,42
2,70
0,29
1,56
0,01
50,70
100,00
94
2.4.2
CHANGES IN THE COMPOSITION OF THE ASSETS OF KBC ECO FUND WORLD (IN THE
CURRENCY OF THE SUB-FUND)
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Turnover rate
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Corrected turnover rate
1st half of year
9.836.090,19
7.697.613,77
17.533.703,96
7.004.701,24
4.896.718,94
11.901.420,18
16.759.001,74
Year
9.836.090,19
7.697.613,77
17.533.703,96
7.004.701,24
4.896.718,94
11.901.420,18
16.759.001,74
33,61 %
33,61 %
1st half of year
9.836.090,19
7.697.613,77
17.533.703,96
7.004.701,24
4.896.718,94
11.901.420,18
16.812.285,54
Year
9.836.090,19
7.697.613,77
17.533.703,96
7.004.701,24
4.896.718,94
11.901.420,18
16.812.285,54
33,50 %
33,50 %
The table above shows the capital volume of portfolio transactions. This volume (adjusted to take
account of total subscriptions and redemptions) is also compared to the average net assets at the
beginning and end of the period.
A figure close to 0% implies that the transactions relating to the securities or transactions relating to
the assets (excluding deposits and cash) in a given period only involve subscriptions and
redemptions.
A negative percentage shows that subscriptions and redemptions entailed few, if any, transactions in
the portfolio.
Active asset management may result in high turnover rates (monthly percentage >50%).
The detailed list of transactions is available for consultation free of charge at the registered office of
the Bevek or fund at Havenlaan 2, 1080 Brussels.
2.4.3
AMOUNT OF COMMITMENTS IN RESPECT OF FINANCIAL DERIVATIVES POSITIONS
Nil
95
2.4.4
CHANGES OF THE NUMBER OF SUBSCRIPTIONS AND REDEMPTIONS AND THE NET ASSET
VALUE
Classic Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
9.627,25
28,39
29.210,64
47,00
25.897,10
714,39
26.611,49
2013 - 02*
14.648,46
58,40
13.278,98
173,00
27.266,59
599,79
27.866,37
2014 - 02*
12.711,16
356,63
14.313,07
23,51
25.664,67
932,91
26.597,58
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Redemptions
Capitalization
Distribution
Capitalization
Distribution
2012 - 02*
4.666.369,12
11.338,86
13.636.200,81
17.138,08
2013 - 02*
7.311.811,01
25.356,22
6.599.952,99
74.006,72
2014 - 02*
7.753.905,40
183.638,34
8.792.177,66
12.265,37
Period
Year
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
Distribution
2012 - 02*
13.064.124,57
492,88
419,80
2013 - 02*
15.584.857,44
561,14
474,21
2014 - 02*
17.217.339,64
651,32
537,43
* The financial year does not coincide with the calender year.
96
Institutional B Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
2014 - 02*
Dis.
Cap.
2.650,00
Dis.
0,00
Subscriptions
Capitalization
2014 - 02*
Period
Year
Dis.
2.650,00
Total
2.650,00
Redemptions
Distribution
1.682.683,00
Capitalization
Distribution
0,00
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
2014 - 02*
Cap.
Amounts received and paid by the UCI
(in the currency of the class)
Period
Year
End of period
Redemptions
Capitalization
1.725.037,13
* The financial year does not coincide with the calender year.
650,96
Distribution
97
2.4.5
PERFORMANCE FIGURES
Classic Shares
1 Year
Cap
Div
ISIN code
Currency
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
CAP BE0133741752
EUR
16.07%
9.01%
17.93%
3.85%
30/04/1992
4.52%
DIV BE0177657500
EUR
16.04%
9.00%
17.89%
3.82%
03/09/2001
1.58%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
Institutional B Shares
The cumulative returns are shown where they relate to a period of at least one year.
98
Classic Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR (ex BEF).
The return is calculated as the change in the net asset value between two dates expressed
as a percentage. In the case of units that pay dividends, the dividend is incorporated
geometrically in the return.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
Distribution units (DIV)
Return on date D over a period of X years:
[ C * NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[ C * NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
where C is a factor that is determined for all N dividends between the calculation
date D and the reference date.
For dividend i on date Di with value Wi:
Ci = [Wi / NIW(Di)] + 1
i = 1 ... N
from whichC = C0 * .... * CN.

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalisation and distribution shares.




Institutional B Shares
The cumulative returns are shown where they relate to a period of at least one year.
99
2.4.6
COSTS
Ongoing Charges: *
Classic Shares Distribution: 1.879%
Classic Shares Capitalization: 1.856%
Institutional B Shares Capitalization: Not applicable
* The following are not included in the charges shown: entry and exit charges, performance fees,
transaction costs paid when buying or selling assets, interest paid, payments made with a view to
providing collateral in the context of derivative financial instruments, or commissions relating to
Commission Sharing Agreements or similar fees received by the Management Company or any
person associated with it.
EXISTENCE OF COMMISSION SHARING AGREEMENTS
The Management Company, or where applicable, the appointed manager has entered into a
Commission Sharing Agreement with one or more brokers for transactions in shares on behalf of
one or more sub-funds. This agreement specifically concerns the execution of orders and the
delivery of research reports.
For more information, please see the ‘General’ section of the annual report.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
Broker
28-02-14
28-02-14
Percentage
CSFBSAS
591
225
38.13%
JP MORGAN
240
120
50.00%
MACQUARIE
871
436
50.00%
MERRILL
3,931
1,935
49.23%
MORGAN STANLEY
2,631
1,221
46.42%
UBSWDR
2,101
980
46.63%
FEE-SHARING AGREEMENTS AND REBATES:
The management company may share its fee with the distributor, and institutional and/or
professional parties.
In principle, the percentage share amounts to between 35% and 60% if the distributor is an entity of
KBC Group NV or to between 35% and 70% if the distributor is not an entity of KBC Group NV.
However, in a small number of cases, the distributor’s fee is less than 35%. Investors may, on
request, obtain more information on these cases.
If the management company invests the assets of the undertaking for collective investment in units
of undertakings for collective investment that are not managed by an entity of KBC Group NV, and
receives a fee for doing so, it will pay this fee to the undertaking for collective investment.
Fee-sharing does not affect the amount of the management fee paid by the sub-fund to the
management company. This management fee is subject to the limitations laid down in the articles of
association. The limitations may only be amended after approval by the general meeting of
shareholders.
The management company has concluded a distribution agreement with the distributor in order to
facilitate the wider distribution of the sub-fund's units by using multiple distribution channels.
It is in the interests of the holders of units, the sub-fund and of the distributor for the largest possible
number of units to be sold and for the assets of the sub-fund to be maximised in this way. In this
respect, there is therefore no question of any conflict of interest.
100
2.4.7
NOTES TO THE FINANCIAL STATEMENTS AND OTHER DATA
Fee for managing the investment portfolio: 1.5% per annum (0.1% of which for the sustainability
screening referred to in the prospectus) calculated on the basis of the average total net assets of the
sub-fund, no management fee is charged on assets assets invested in investment undertakings
managed by a financial institution of the KBC group.
KBC Fund Management Limited receives a fee from the management company of max. 1.4%
calculated on that part of the portfolio that it manages, without the total management fee received by
the management company being exceeded.
The administration agent’s fee is payable at the end of each month and is calculated on the basis of
the average total net assets of the sub-fund.
Auditor's fee: 1 700 EUR per year. This fee is not including VAT and can be indexed on an annual
basis in accordance with the decisions of the general meeting.
The custody fee is calculated on the value of the securities held in custody by the custodian on the
final banking day of the preceding calendar year, except on those assets invested in investment
undertakings managed by a financial institution of the KBC group. The custody fee is paid at the
beginning of the calendar year.
Social, ethical and environmental aspects:
No manufacturers of controversial weapons whose use over the past five decades, according to the
international consensus, has led to disproportionate human suffering among the civilian population
will be included in the portfolio of investments. This involves the manufacturers of anti-personnel
mines, cluster bombs and munitions and weapons containing depleted uranium. In this way, the subfund seeks to reflect not only simple financial reality but also the social reality of the sector or region
in question.
Exercising voting rights.
If necessary, relevant and in the interest of the shareholders, the management company will
exercise the voting rights attached to the shares in the Bevek’s portfolio.
The management company will adhere to the following criteria when determining how it stands
relative to the items on the agenda that are put to the vote:
- Shareholder value may not be adversely affected.
- Corporate governance rules, especially with regard to the rights of minority shareholders, must be
respected.
- The minimum standards with regard to sustainable business and corporate social responsibility
must be met.
The list of companies for which voting rights are exercised is available at the registered office of the
Bevek.
101
th
Semi-Annual report as at 28 February 2014
TABLE OF CONTENTS
2.
Information on KBC Eco Fund Alternative Energy
2.1. Management report
2.1.1. Launch date and subscription price
2.1.2. Stock exchange listing
2.1.3. Aim and distinctive features of the investment policy
2.1.4. Financial portfolio management
2.1.5. Distributors
2.1.6. Index and benchmark
2.1.7. Policy conducted during the financial year
2.1.8. Future policy
2.1.9. Synthetic risk and reward indicator (SRRI)
2.2. Balance sheet
2.3. Profit and loss account
2.4. Composition of the assets and key figures
2.4.1. Composition of the assets
2.4.2. Change in the composition of the assets
2.4.3. Value of commitments in respect of financial derivatives positions
2.4.4. Evolution of the number of subscriptions, repayments and the net asset value
2.4.5. Return figures
2.4.6. Expenses
2.4.7. Notes to the financial statements and other data
102
103
2
INFORMATION ON KBC ECO FUND ALTERNATIVE ENERGY
2.1
MANAGEMENT REPORT
2.1.1
LAUNCH DATE AND SUBSCRIPTION PRICE
Classic Shares :
Launch date: 31 October 2000
Initial subscription price: 500 EUR
Currency: EUR
Institutional B Shares :
Launch date: 25 November 2011
Initial subscription price: 160.81 EUR
Currency: EUR
2.1.2
STOCK EXCHANGE LISTING
Not applicable.
2.1.3
GOAL AND KEY PRINCIPLES OF THE INVESTMENT POLICY
SUB-FUND’S OBJECT:
The main objective of this sub-fund is to generate the highest possible return for its shareholders by
investing directly or indirectly in transferable securities. This is reflected in its pursuit of capital gains
and income. To this end, the assets are invested, either directly or indirectly via correlated financial
instruments, primarily in shares.
SUB-FUND’S INVESTMENT POLICY:
PERMITTED ASSET CLASSES:
The sub-fund may invest in securities, money market instruments, units in undertakings for collective
investment, deposits, financial derivatives, liquid assets and all other instruments insofar as
permitted by the applicable laws and regulations and consistent with the sub-fund’s object
The sub-fund shall invest no more than 10% of its assets in units of other undertakings for collective
investment.
RESTRICTIONS OF THE INVESTMENT POLICY:
The investment policy will be implemented within the limits set by law and regulations.
The sub-fund may borrow up to 10% of its net assets, insofar as these are short-term borrowings
aimed at solving temporary liquidity problems.
PERMITTED DERIVATIVES TRANSACTIONS:
Derivatives may be used to achieve the investment objectives as well as to hedge in risks.
It is possible to work with either listed or unlisted derivatives: these may be forward contracts,
options or swaps on securities, indices, currencies or interest rates or other transactions involving
derivatives. Unlisted derivatives transactions may only be concluded with prime financial institutions
specialised in such transactions. Subject to the applicable laws and regulations and the articles of
association, the sub-fund will always seek to conclude the most effective transactions. All costs
associated with the transactions will be charged to the sub-fund and all income generated will be
paid to the sub-fund.
If the transactions result in a risk in respect of the counterparty, this risk can be hedged by using a
margin management system that ensures that the sub-fund is the beneficiary of security (collateral)
in the form of cash or investment grade bonds. When calculating the value of the bonds, a margin
will be applied that varies depending on their residual term to maturity and the currency in which they
are denominated. The relationship with the counterparty or counterparties is governed by standard
international agreements.
Derivatives can also be used to hedge the assets of the sub-fund against open exchange risks in
relation to the currency.
104
Where derivatives are used, they must be easily transferable and liquid instruments. Using
derivatives does not, therefore, affect liquidity risk. Furthermore, using derivatives does not affect the
portfolio's allocation across regions, industry sectors or themes. As a result, they have no effect on
concentration risk. Derivatives may not be used to protect capital, either fully or partially. They
neither increase nor decrease capital risk. In addition, using derivatives has no effect on credit risk,
settlement risk, custody risk, flexibility risk or inflation risk or risk dependent on external factors.
Strategy selected:
At any time, at least 75% of the assets are invested in the shares of companies that that operate on
a sustainable basis in the alternative energy sector. These companies have to realize a substantial
proportion of their turnover in this sector.
The companies have to satisfy a number of basic criteria regarding the environment, human rights,
the trade and manufacture of arms, and nuclear energy. The basic criteria are set out by KBC Asset
Management in co-operation with the Independent Environmental Advisory Committee. They may
also change the method used to perform the sustainability screening, based on new trends in
society.
The shares are screened by KBC Asset Management’s Sustainable and Socially Responsible
Investment Department and the independent Environmental Advisory Committee.
Risk concentration:
Shares of companies in the alternative energy sector.
LENDING FINANCIAL INSTRUMENTS:
The subfund is not allowed to lend financial instruments.
VOLATILITY OF THE NET ASSET VALUE:
The volatility of the net asset value may be high due to the composition of the portfolio.
GENERAL STRATEGY FOR HEDGING THE EXCHANGE RATE RISK:
In order to protect its assets against exchange rate fluctuations and within the limitations laid down in
the articles of association, the sub-fund may perform transactions relating to the sale of forward
currency contracts, as well as the sale of call options and the purchase of put options on currencies.
The transactions in question may relate solely to contracts traded on a regulated market that
operates regularly, is recognised and is open to the public or that are traded with a recognised,
prime financial institution specialising in such transactions and dealing in the over-the-counter (OTC)
market in options. With the same objective, the sub-fund may also sell currencies forward or
exchange them in private transactions with prime financial institutions specialising in such
transactions.
SOCIAL, ETHICAL AND ENVIRONMENTAL ASPECTS:
Investments may not be made in financial instruments issued by manufacturers of controversial
weapons whose use over the past five decades, according to international consensus, has led to
disproportionate human suffering among the civilian population. This involves the manufacturers of
anti-personnel mines, cluster bombs and munitions and weapons containing depleted uranium.
In addition, as of 31 March 2014 no new investments may be made in financial instruments issued
by companies that do not have an anti-corruption policy and that have been given a negative score
in a thorough screening for corruption in the last two years. A company has no anti-corruption policy
if it cannot be demonstrated that it has an acceptable policy concerning the fight against corruption.
An acceptable policy should be made public and must at least state that bribery will not be tolerated
and that the law will be followed in this respect. The screening will be based on a generally accepted
and independent 'Social, ethical and environmental factors' database.
In this way, not only is a purely financial reality represented, but also the social reality of the sector
or region.
Where relevant, please refer to 'Information concerning the Bevek – Tax treatment' in the prospectus
to find out more about the application of European and Belgian tax provisions.
105
2.1.4
FINANCIAL PORTFOLIO MANAGEMENT
The management company has delegated the intellectual management, with the exception of the
sustainability screening described in the prospectus, to KBC Fund Management Limited, Joshua
Dawson House, Dawson Street , Dublin 2, IRELAND..
KBC Fund Management Limited has delegated the intellectual management, with the exception of
the sustainability screening described in the prospectus, to Kleinwort Benson Investors Dublin Ltd,
Joshua Dawson House Dawson Street , Dublin 2, IRELAND.
2.1.5
DISTRIBUTORS
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
2.1.6
INDEX AND BENCHMARK
See ‘Sub-fund’s investment policy’.
2.1.7
POLICY PERSUED DURING THE FINANCIAL YEAR
The KBC Eco Alternative Energy Fund performed very strongly over the six month period producing a
return in line with the broad equity market.
The strategy’s largest sector - Energy Efficiency - was the biggest positive contributor to performance
in the period, as it posted above market returns. The Energy Efficiency sector’s best performers were
the industrials with exposure to improving end markets such as auto and construction. Johnson
Controls, active in both Building & Transport Efficiency, announced a large share buyback program
and increased dividend highlighting management confidence in their outlook. In Europe, ABB issued a
supportive set of 3Q results, stating that early-cycle macroeconomic indicators remain positive.
During the period, we increased our exposure to the solar sector. It was the next best performing
sector after Energy Efficiency, rallying on improving fundamentals for manufacturers, although shares
sold off early December on profit-taking. A number of solar companies announced better than
expected quarterly results with management citing stable module prices and robust demand from
Japan and China as tailwinds. The solar developers were also strong as they explore new financing
structures such as securitisation of assets and yield structures to lower their cost of financing.
Fuel Cells and Biomass were the laggards in the period having a negative impact on performance.
Within Biomass, the funds high exposure to emerging markets, in particular Cosan acted as a drag on
performance. The wind sector had very mixed performance in the period. The European developers
EDP Renovaveis and Enel Green Power were boosted by continuing operational strength and capital
rotation strategies while renewable developers with exposure to UK power prices were tempered by
political noise on potential freeze on domestic power prices.
2.1.8
FUTURE POLICY
The strategy has increased its exposure to companies that would benefit from an upturn cycle in the
construction and automotive markets. A recovery in the European construction market in combination
with a favourable regulatory framework in Germany should help to improve the top line growth for
companies such as Centrotec which offers energy efficiency and heat products. Similarly, in the US
we favour companies with strong backlogs in building efficiency such as Johnson Controls and
Ameresco. As macro uncertainties and fiscal cliff issues roll off, we expect revenue growth rates for
these companies to recover during the year. Legislative mandates driving demand for more fuel
efficient and cleaner emissions solutions continues to come into place in 2014/15. These higher
revenue/higher margins solutions can drive earnings growth for market leaders such as Johnson
Matthey and Johnson Controls. We expect continued gradual adoption of LEDs in general lighting in
2014 as the industry transitions away from traditional lighting options.
Due to the increasing improvement in cost competitiveness, renewables continue to become an
increasing portion of the global energy mix. However established supportive policies remain key driver
of global growth from Japan, US to Europe, therefore the sector remains very sensitive to any policy
news flow. With strengthening solar fundamentals, we prefer the low cost manufacturers in China as
they are well poised to take advantage of a potential 12GW domestic market - as targeted by central
government for 2014. As the leading polysilicon/wafer producer, we expect GCL to see further margin
expansion on its cost-reduction measures. The module manufacturer Trina is well-positioned given its
competitive cost structure as it expands it solar project development business. We continue to favour
solar developers with valuable pipelines such as SunEdison which has taken steps towards launching
a YieldCo and approaching the ABS market to reduce its cost of capital.
106
Following the success of a number of yield co launches in the renewable energy sector in 2013, we
expect additional consideration of YieldCo as well as other securitization of assets throughout 2014.
These financing structures help to lower companies cost of capital, further enabling the lower cost of
renewable development throughout the world. We would look for opportunities that offer strong cashgenerating assets in secure regulatory environments, growth visibility and attractive dividend yields.
2.1.9
SYNTHETIC RISK AND REWARD INDICATOR
Classic Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
Institutional B Shares: 7 on a scale of 1 (lowest risk) to 7 (highest risk).
The value of a share can decrease or increase and the investor may not get back the amount
invested.
In accordance with Commission Regulation (EU) No. 583/2010, a synthetic risk and reward indicator
has been calculated. This indicator provides a quantitative measure of the sub-fund's potential return
and the risk involved, calculated in the currency in which the sub-fund is denominated. It is given as
a figure between 1 and 7. The higher the figure, the greater the potential return, but also the more
difficult it is to predict this return. Losses are possible too. The lowest figure does not mean that the
investment is entirely free of risk. However, it does indicate that, compared with the higher figures,
this product will generally provide a lower, but more predictable return.
The synthetic risk and reward indicator is assessed regularly and can therefore go up or down based
on data from the past. Data from the past is not always a reliable indicator of future risk and return.
107
2.2
BALANCE SHEET
Balance sheet layout
28/02/2014
28/02/2013
(in the currency of the sub-fundt)
(in the currency of the sub-fund )
35.386.518,18
32.153.896,21
35.171.442,54
31.679.716,10
24.275,18
10.007,76
36.799,66
8.184,22
-14.429,84
-242.840,36
-44.951,81
-113.913,73
441.226,76
600.750,90
24.434,17
23.834,04
-51.432,07
20.625,03
8.814,80
-42.128,96
TOTAL SHAREHOLDERS' EQUITY
35.386.518,18
32.153.896,21
A.
Capital
31.195.476,63
27.395.995,73
B.
Income equalization
10.306,51
1.319,73
D.
Result for the period
4.180.735,04
4.756.580,75
TOTAL NET ASSETS
II.
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
b) Tax assets
Payables
a) Accounts payable (-)
c) Borrowings (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
108
2.3
PROFIT AND LOSS ACCOUNT
Income Statement
I.
28/02/2013
(in the currency of the sub-fund)
5.032.937,97
243,23
6.192.671,32
-2,08
-649.183,87
-1.262.298,95
156.297,94
122.413,71
1.132,45
-1.872,60
644,58
-93,47
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
D. Other securities
H. Foreign exchange positions and transactions
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the sub-fund)
Investment income and expenses
A.
B.
Dividends
Interests
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
B.
Other
4.970,18
IV. Operating expenses
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
Classic Shares
b) Administration and accounting management
E. Administrative expenses (-)
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
Classic Shares
K. Other expenses (-)
-32.129,94
-621,45
-12.252,59
-28.173,52
-961,44
-11.299,51
-269.570,21
-17.971,34
-351,26
-3.465,46
-216.807,02
-15.074,86
-1.042,76
-861,32
-9.668,13
-6.389,13
-14.287,24
-2.429,88
-12.160,86
-1.719,86
-203.262,29
-173.789,54
4.180.735,04
4.756.580,75
4.180.735,04
4.756.580,75
-3.306,84
Income and expenditure for the period
Subtotal II + III + IV
V.
Profit (loss) on ordinary activities before tax
VII. Result for the period
109
2.4
COMPOSITION OF THE ASSETS AND KEY FIGURES
2.4.1
COMPOSITIONS OF THE ASSETS OF KBC ECO FUND ALTERNATIVE ENERGY
Name
Quantity on
28/02/2014
Cur
rency
Price in
currency
Evaluation
(in the currency of the
sub-fund)
%
%
owned by
portfolio
UCI
%
Net
assets
NET ASSETS
SECURITIES PORTFOLIO
Shares
Exchange-listed shares
Australia
CERAMIC FUEL CELLS LTD -
15.623.618,00
GBP
0,009
175.354,57
0,50
0,50
10.600,00
EUR
34,850
369.410,00
1,05
1,04
404.159,00
CAD
3,840
1.015.122,84
2,89
2,87
52.228,00
CAD
11,200
382.610,20
1,09
1,08
27.004,00
USD
16,030
313.404,37
0,89
0,89
2.386.000,00
HKD
2,920
649.966,42
1,85
1,84
ALBIOMA -
46.364,00
EUR
18,750
869.325,00
2,47
2,46
SAINT GOBAIN -
22.964,00
EUR
43,500
998.934,00
2,84
2,82
Belgium
ELIA SYSTEM OPERATOR -
Canada
CAPSTONE INFRASTRUCTURE CORP TRANSALTA RENEWABLES INC -
Cayman Islands
TRINA SOLAR LTD -SP0N ADR-
China
GCL POLY ENERGY HOLDINGS LTD -
France
Germany
CAPITAL STAGE AG -
231.551,00
EUR
3,680
852.107,68
2,42
2,41
CENTROTEC SUSTAINABLE AG -
24.432,00
EUR
19,870
485.463,84
1,38
1,37
PLAMBECK NEUE ENERGIEN AG -
349.349,00
EUR
2,605
910.054,15
2,59
2,57
47.721,00
EUR
14,250
680.024,25
1,93
1,92
719.461,00
GBP
1,020
890.432,83
2,53
2,52
PSI AG GESELLSCHAFT FUER PRODUKTE -
Guernsey The Channel Islands
RENEWABLES INFRASTRUCTURE GROUP LTD -
Hong Kong
CHIANE LONGYUAN POWER GROUP CORP CHINA SUNTIEN GREEN ENERGY CORP WASION GROUP HOLDINGS LTD -
434.000,00
HKD
9,260
374.919,77
1,07
1,06
3.310.000,00
HKD
3,290
1.015.924,70
2,89
2,87
546.000,00
HKD
4,570
232.780,43
0,66
0,66
305.579,00
EUR
2,020
617.269,58
1,76
1,74
34.332,00
EUR
18,740
643.381,68
1,83
1,82
50.280,00
EUR
25,360
1.275.100,80
3,63
3,60
259.913,00
EUR
4,681
1.216.652,75
3,46
3,44
100.303,00
CHF
22,490
1.854.271,89
5,28
5,24
Italy
ENEL GREEN POWER SPA PRYSMIAN SPA -
Netherlands
KONINKLIJKE PHILIPS ELECTRONICS N.V. -
Spain
EDP RENOVAVEIS SA -
Switzerland
ABB LTD -
110
U.K.
DIALIGHT PLC GREENCOAT UK WIND PLC JOHNSON MATTHEY PLC LAMPRELL PLC NAT. GRID PLC SIG PLC -
42.443,00
GBP
8,560
440.832,47
1,25
1,25
1.052.097,00
GBP
1,025
1.308.498,97
3,72
3,70
13.905,00
GBP
32,620
550.362,31
1,57
1,56
187.759,00
GBP
1,438
327.493,25
0,93
0,93
56.645,00
GBP
8,345
573.563,70
1,63
1,62
194.297,00
GBP
2,115
498.620,58
1,42
1,41
U.S.A.
ADVANCED ENERGY INDUSTRIES -
37.816,00
USD
27,440
751.282,25
2,14
2,12
AMERESCO INC -
149.112,00
USD
10,260
1.107.652,13
3,15
3,13
COSAN LTD -
188.536,00
USD
11,790
1.609.353,78
4,58
4,55
COVANTA HOLD CORP -
79.615,00
USD
18,000
1.037.554,30
2,95
2,93
CREE RESEARCH INC -
26.887,00
USD
61,430
1.195.821,32
3,40
3,38
EATON CORP. -
30.053,00
USD
74,710
1.625.586,18
4,62
4,59
FUELCELL ENERGY LTD -
293.282,00
USD
1,950
414.060,17
1,18
1,17
ITRON INC -
33.994,00
USD
35,000
861.417,61
2,45
2,43
JOHNSON CONTROLS -
49.375,00
USD
49,400
1.765.946,28
5,02
4,99
OWENS CORNING -
35.536,00
USD
45,760
1.177.329,39
3,35
3,33
QUANTA SERVICES INC -
44.153,00
USD
35,210
1.125.562,65
3,20
3,18
REGAL-BELDIT CORP -
17.402,00
USD
73,690
928.434,25
2,64
2,62
7.257,00
USD
78,880
414.445,53
1,18
1,17
SOLAZYME INC -
49.199,00
USD
12,270
437.063,23
1,24
1,24
SUNEDISON INC -
68.091,00
USD
18,360
905.119,29
2,57
2,56
VEECO INSTRUMENTS INC -
10.230,00
USD
39,550
292.931,15
35.171.442,54
0,83
100,00
0,83
99,39
35.171.442,54
100,00
99,39
ROCKWOOD HOLDINGS INC -
Total shares
TOTAL SECURITIES PORTFOLIO
CASH AT BANK AND IN HAND
Demand accounts
Belgium
KBC GROUP AUD
198.722,08
AUD
1,000
128.751,87
0,36
KBC GROUP CAD
-14.827,74
CAD
1,000
-9.698,62
-0,03
KBC GROUP CHF
-203.989,28
CHF
1,000
-167.678,50
-0,47
KBC GROUP DKK
37.085,57
DKK
1,000
4.969,59
0,01
KBC GROUP EURO
155.960,00
EUR
1,000
155.960,00
0,44
KBC GROUP GBP
-53.951,53
GBP
1,000
-65.463,24
-0,19
KBC GROUP HKD
342.713,75
HKD
1,000
31.971,95
0,09
KBC GROUP JPY
16.560.234,00
JPY
1,000
117.473,46
0,33
KBC GROUP NOK
4.389,36
NOK
1,000
530,47
0,00
KBC GROUP SEK
856,49
SEK
1,000
96,81
KBC GROUP USD
2.033,97
USD
1,000
1.472,61
198.386,40
0,00
0,56
198.386,40
0,56
Total demand accounts
TOTAL CASH AT BANK AND IN HAND
OTHER RECEIVABLES AND PAYABLES
Receivables
Belgium
KBC GROUP EUR RECEIVABLE
24.275,18
EUR
1,000
24.275,18
0,07
KBC GROUP WHT TO BE RECOVERED EUR
10.007,76
EUR
1,000
10.007,76
34.282,94
0,03
0,10
Total receivables
111
Payables
Belgium
KBC GROUP EUR PAYABLE
-14.429,84
EUR
Payables
TOTAL RECEIVABLES AND PAYABLES
1,000
-14.429,84
-14.429,84
-0,04
-0,04
19.853,10
0,06
OTHER
Interest receivable
EUR
23.834,04
0,07
Expenses payable
EUR
-51.432,07
-0,15
Expenses to be carried forward
EUR
TOTAL OTHER
TOTAL NET ASSETS
24.434,17
0,07
-3.163,86
-0,01
35.386.518,18
100,00
112
Geographic breakdown (as a % of securities portfolio)
Australia
Austria
Belgium
Canada
Switzerland
Chile
China
Cayman Islands
Germany
Denmark
Spain
France
U.K.
Hong Kong
Italy
Japan
South Korea
Netherlands
U.S.A.
Guernsey The Channel Islands
Total
31/08/2012
4,12
2,45
2,98
0,54
4,21
0,85
0,00
1,33
1,36
3,44
5,92
7,52
8,30
7,85
6,61
3,40
1,56
0,00
37,56
0,00
100,00
28/02/2013
2,70
1,64
2,15
0,37
5,06
0,00
1,19
2,09
1,51
3,39
4,03
5,83
12,95
8,12
6,38
2,83
1,08
0,00
38,68
0,00
100,00
31/08/2013
1,89
0,99
3,07
1,32
4,86
0,00
1,88
0,91
6,12
0,70
5,70
9,06
10,08
5,47
4,71
3,52
0,00
1,61
34,82
3,29
100,00
28/02/2014
0,50
0,00
1,05
3,97
5,27
0,00
1,85
0,89
8,32
0,00
3,46
5,31
10,52
4,62
3,58
0,00
0,00
3,63
44,50
2,53
100,00
28/02/2013
60,57
4,90
3,65
4,41
13,10
13,37
100,00
31/08/2013
59,82
6,53
4,76
7,43
12,39
9,07
100,00
28/02/2014
49,71
11,85
4,58
9,58
11,82
12,46
100,00
28/02/2013
0,65
0,00
5,34
3,36
20,86
14,88
10,05
2,78
1,06
41,02
100,00
31/08/2013
0,50
1,30
4,77
0,99
32,04
15,93
7,21
3,45
0,00
33,81
100,00
28/02/2014
0,36
3,92
4,77
0,01
25,70
13,28
6,51
0,33
0,00
45,12
100,00
Sector breakdown (as a % of securities portfolio)
Cyclicals
Consum(cycl)
Cons.goods
Financials
Technology
Utilities
Total
31/08/2012
57,98
4,62
4,34
0,85
13,03
19,18
100,00
Currency breakdown (as a % of net assets)
AUD
CAD
CHF
DKK
EUR
GBP
HKD
JPY
KRW
USD
Total
31/08/2012
0,74
0,00
3,41
3,58
29,83
11,02
7,17
3,23
1,49
39,53
100,00
113
2.4.2
CHANGES IN THE COMPOSITION OF THE ASSETS OF KBC ECO FUND ALTERNATIVE ENERGY
(IN THE CURRENCY OF THE SUB-FUND)
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Turnover rate
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Corrected turnover rate
1st half of year
13.937.994,97
17.488.360,73
31.426.355,69
1.659.130,16
5.399.211,80
7.058.341,96
36.019.006,26
Year
13.937.994,97
17.488.360,73
31.426.355,69
1.659.130,16
5.399.211,80
7.058.341,96
36.019.006,26
67,65 %
67,65 %
1st half of year
13.937.994,97
17.488.360,73
31.426.355,69
1.659.130,16
5.399.211,80
7.058.341,96
35.737.561,57
Year
13.937.994,97
17.488.360,73
31.426.355,69
1.659.130,16
5.399.211,80
7.058.341,96
35.737.561,57
68,19 %
68,19 %
The table above shows the capital volume of portfolio transactions. This volume (adjusted to take
account of total subscriptions and redemptions) is also compared to the average net assets at the
beginning and end of the period.
A figure close to 0% implies that the transactions relating to the securities or transactions relating to
the assets (excluding deposits and cash) in a given period only involve subscriptions and
redemptions.
A negative percentage shows that subscriptions and redemptions entailed few, if any, transactions in
the portfolio.
Active asset management may result in high turnover rates (monthly percentage >50%).
The detailed list of transactions is available for consultation free of charge at the registered office of
the Bevek or fund at Havenlaan 2, 1080 Brussels.
2.4.3
AMOUNT OF COMMITMENTS IN RESPECT OF FINANCIAL DERIVATIVES POSITIONS
Nil
114
2.4.4
CHANGES OF THE NUMBER OF SUBSCRIPTIONS AND REDEMPTIONS AND THE NET ASSET
VALUE
Classic Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
41.721,06
4.831,95
69.269,59
8.245,00
163.955,14
32.054,62
196.009,76
2013 - 02*
34.482,50
3.980,23
55.904,19
7.959,00
142.533,44
28.075,85
170.609,29
2014 - 02*
19.858,63
3.414,52
35.374,27
5.092,68
127.017,80
26.397,69
153.415,49
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Redemptions
Capitalization
Distribution
Capitalization
Distribution
2012 - 02*
9.812.107,78
1.055.188,33
14.427.221,05
1.535.644,99
2013 - 02*
5.800.107,25
635.670,85
9.481.086,45
1.237.347,54
2014 - 02*
4.276.257,29
655.666,14
7.663.803,62
973.783,82
Period
Year
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
Distribution
2012 - 02*
36.161.659,88
187,37
169,75
2013 - 02*
32.153.529,00
191,43
173,42
2014 - 02*
35.386.150,97
235,08
209,36
* The financial year does not coincide with the calender year.
115
Institutional B Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
5.117,00
229,00
4.888,00
4.888,00
2013 - 02*
1.071,00
5.959,00
0,00
0,00
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Capitalization
Redemptions
Distribution
Capitalization
2012 - 02*
908.016,48
41.268,33
2013 - 02*
193.442,54
999.503,90
Period
Year
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
2012 - 02*
Distribution
Capitalization
915.758,64
* The financial year does not coincide with the calender year.
187,35
Distribution
116
2.4.5
PERFORMANCE FIGURES
Classic Shares
1 Year
Cap
Div
ISIN code
Currency
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
CAP BE0175280016
EUR
22.80%
-3.16%
1.16%
0.92%
31/10/2000
-5.51%
DIV BE0175279976
EUR
22.78%
-3.17%
1.14%
0.91%
31/10/2000
-5.51%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
Institutional B Shares
The cumulative returns are shown where they relate to a period of at least one year.
117
Classic Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
The return is calculated as the change in the net asset value between two dates expressed
as a percentage. In the case of units that pay dividends, the dividend is incorporated
geometrically in the return.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
Distribution units (DIV)
Return on date D over a period of X years:
[ C * NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[ C * NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
where C is a factor that is determined for all N dividends between the calculation
date D and the reference date.
For dividend i on date Di with value Wi:
Ci = [Wi / NIW(Di)] + 1
i = 1 ... N
from whichC = C0 * .... * CN.

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalisation and distribution shares.




Institutional B Shares
The cumulative returns are shown where they relate to a period of at least one year.
118
2.4.6
COSTS
Ongoing Charges: *
Classic Shares Distribution: 1.857%
Classic Shares Capitalization: 1.840%
Institutional B Shares Capitalization: Not applicable
* The following are not included in the charges shown: entry and exit charges, performance fees,
transaction costs paid when buying or selling assets, interest paid, payments made with a view to
providing collateral in the context of derivative financial instruments, or commissions relating to
Commission Sharing Agreements or similar fees received by the Management Company or any
person associated with it.
EXISTENCE OF COMMISSION SHARING AGREEMENTS
The Management Company, or where applicable, the appointed manager has entered into a
Commission Sharing Agreement with one or more brokers for transactions in shares on behalf of
one or more sub-funds. This agreement specifically concerns the execution of orders and the
delivery of research reports.
For more information, please see the ‘General’ section of the annual report.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
Broker
Percentage
28-02-14
28-02-14
CITI
1,066
533
50.00%
CSFBSAS
5,572
2,486
44.61%
DEUTSCHE
571
214
37.50%
INSTINET
1,914
687
35.92%
JP MORGAN
772
386
50.00%
MACQUARIE
2,913
1,347
46.26%
MERRILL
696
298
42.86%
MORGAN STANLEY
2,937
1,152
39.24%
SOCGEN
311
117
37.50%
UBSWDR
1,885
888
47.09%
FEE-SHARING AGREEMENTS AND REBATES:
The management company may share its fee with the distributor, and institutional and/or
professional parties.
In principle, the percentage share amounts to between 35% and 60% if the distributor is an entity of
KBC Group NV or to between 35% and 70% if the distributor is not an entity of KBC Group NV.
However, in a small number of cases, the distributor’s fee is less than 35%. Investors may, on
request, obtain more information on these cases.
If the management company invests the assets of the undertaking for collective investment in units
of undertakings for collective investment that are not managed by an entity of KBC Group NV, and
receives a fee for doing so, it will pay this fee to the undertaking for collective investment.
Fee-sharing does not affect the amount of the management fee paid by the sub-fund to the
management company. This management fee is subject to the limitations laid down in the articles of
association. The limitations may only be amended after approval by the general meeting of
shareholders.
The management company has concluded a distribution agreement with the distributor in order to
facilitate the wider distribution of the sub-fund's units by using multiple distribution channels.
It is in the interests of the holders of units, the sub-fund and of the distributor for the largest possible
number of units to be sold and for the assets of the sub-fund to be maximised in this way. In this
respect, there is therefore no question of any conflict of interest.
119
2.4.7
NOTES TO THE FINANCIAL STATEMENTS AND OTHER DATA
Fee for managing the investment portfolio: 1.5% per annum (0.1% of which for the sustainability
screening referred to in the prospectus) calculated on the basis of the average total net assets of the
sub-fund, no management fee is charged on assets assets invested in investment undertakings
managed by a financial institution of the KBC group.
KBC Fund Management Limited receives a fee from the management company of max. 1.4%
calculated on that part of the portfolio that it manages, without the total management fee received by
the management company being exceeded.
Kleinwort Benson Investors Dublin Ltd receives a fee of max. 0.5% from KBC Fund Management
Limited calculated on that part of the portfolio that it manages, without the total management fee
received by KBC Fund Management Limited being exceeded.
The administration agent’s fee is payable at the end of each month and is calculated on the basis of
the average total net assets of the sub-fund.
Auditor's fee: 1 700 EUR per year. This fee is not including VAT and can be indexed on an annual
basis in accordance with the decisions of the general meeting.
The custody fee is calculated on the value of the securities held in custody by the custodian on the
final banking day of the preceding calendar year, except on those assets invested in investment
undertakings managed by a financial institution of the KBC group. The custody fee is paid at the
beginning of the calendar year.
Social, ethical and environmental aspects:
No manufacturers of controversial weapons whose use over the past five decades, according to the
international consensus, has led to disproportionate human suffering among the civilian population
will be included in the portfolio of investments. This involves the manufacturers of anti-personnel
mines, cluster bombs and munitions and weapons containing depleted uranium. In this way, the subfund seeks to reflect not only simple financial reality but also the social reality of the sector or region
in question.
Exercising voting rights.
If necessary, relevant and in the interest of the shareholders, the management company will
exercise the voting rights attached to the shares in the Bevek’s portfolio.
The management company will adhere to the following criteria when determining how it stands
relative to the items on the agenda that are put to the vote:
- Shareholder value may not be adversely affected.
- Corporate governance rules, especially with regard to the rights of minority shareholders, must be
respected.
- The minimum standards with regard to sustainable business and corporate social responsibility
must be met.
The list of companies for which voting rights are exercised is available at the registered office of the
Bevek.
120
th
Semi-Annual report as at 28 February 2014
TABLE OF CONTENTS
2.
Information on KBC Eco Fund Water
2.1. Management report
2.1.1. Launch date and subscription price
2.1.2. Stock exchange listing
2.1.3. Aim and distinctive features of the investment policy
2.1.4. Financial portfolio management
2.1.5. Distributors
2.1.6. Index and benchmark
2.1.7. Policy conducted during the financial year
2.1.8. Future policy
2.1.9. Synthetic risk and reward indicator (SRRI)
2.2. Balance sheet
2.3. Profit and loss account
2.4. Composition of the assets and key figures
2.4.1. Composition of the assets
2.4.2. Change in the composition of the assets
2.4.3. Value of commitments in respect of financial derivatives positions
2.4.4. Evolution of the number of subscriptions, repayments and the net asset value
2.4.5. Return figures
2.4.6. Expenses
2.4.7. Notes to the financial statements and other data
121
122
2
INFORMATION ON KBC ECO FUND WATER
2.1
MANAGEMENT REPORT
2.1.1
LAUNCH DATE AND SUBSCRIPTION PRICE
Classic Shares :
Launch date: 1 December 2000
Initial subscription price: 500 EUR
Currency: EUR
Institutional B Shares :
Launch date: 25 November 2011
Initial subscription price: 549.15 EUR
Currency: EUR
2.1.2
STOCK EXCHANGE LISTING
Not applicable.
2.1.3
GOAL AND KEY PRINCIPLES OF THE INVESTMENT POLICY
SUB-FUND’S OBJECT:
The main objective of this sub-fund is to generate the highest possible return for its shareholders by
investing directly or indirectly in transferable securities. This is reflected in its pursuit of capital gains
and income. To this end, the assets are invested, either directly or indirectly via correlated financial
instruments, primarily in shares.
SUB-FUND’S INVESTMENT POLICY:
PERMITTED ASSET CLASSES:
The sub-fund may invest in securities, money market instruments, units in undertakings for collective
investment, deposits, financial derivatives, liquid assets and all other instruments insofar as
permitted by the applicable laws and regulations and consistent with the sub-fund’s object
The sub-fund shall invest no more than 10% of its assets in units of other undertakings for collective
investment.
RESTRICTIONS OF THE INVESTMENT POLICY:
The investment policy will be implemented within the limits set by law and regulations.
The sub-fund may borrow up to 10% of its net assets, insofar as these are short-term borrowings
aimed at solving temporary liquidity problems.
PERMITTED DERIVATIVES TRANSACTIONS:
Derivatives may be used to achieve the investment objectives as well as to hedge in risks.
It is possible to work with either listed or unlisted derivatives: these may be forward contracts,
options or swaps on securities, indices, currencies or interest rates or other transactions involving
derivatives. Unlisted derivatives transactions may only be concluded with prime financial institutions
specialised in such transactions. Subject to the applicable laws and regulations and the articles of
association, the sub-fund will always seek to conclude the most effective transactions. All costs
associated with the transactions will be charged to the sub-fund and all income generated will be
paid to the sub-fund.
If the transactions result in a risk in respect of the counterparty, this risk can be hedged by using a
margin management system that ensures that the sub-fund is the beneficiary of security (collateral)
in the form of cash or investment grade bonds. When calculating the value of the bonds, a margin
will be applied that varies depending on their residual term to maturity and the currency in which they
are denominated. The relationship with the counterparty or counterparties is governed by standard
international agreements.
Derivatives can also be used to hedge the assets of the sub-fund against open exchange risks in
relation to the currency.
123
Where derivatives are used, they must be easily transferable and liquid instruments. Using
derivatives does not, therefore, affect liquidity risk. Furthermore, using derivatives does not affect the
portfolio's allocation across regions, industry sectors or themes. As a result, they have no effect on
concentration risk. Derivatives may not be used to protect capital, either fully or partially. They
neither increase nor decrease capital risk. In addition, using derivatives has no effect on credit risk,
settlement risk, custody risk, flexibility risk or inflation risk or risk dependent on external factors.
STRATEGY SELECTED:
At any time, at least 75% of the assets are invested, in the shares of companies that operate on
a sustainable basis in the water sector. These companies have to realize a substantial
proportion of their turnover in this sector.
The companies have to satisfy a number of basic criteria regarding the environment, human rights,
the trade and manufacture of arms, and nuclear energy. The basic criteria are set out by KBC Asset
Management in co-operation with the Independent Environmental Advisory Committee. They may
also change the method used to perform the sustainability screening, based on new trends in
society.
The shares are screened by KBC Asset Management’s Sustainable and Socially Responsible
Investment Department and the External Advisory Board for Sustainability Analysis.
RISK CONCENTRATION:
Shares of companies in the water industry.
LENDING FINANCIAL INSTRUMENTS:
The subfund is not allowed to lend financial instruments.
GENERAL STRATEGY FOR HEDGING THE EXCHANGE RATE RISK:
In order to protect its assets against exchange rate fluctuations and within the limitations laid down in
the articles of association, the sub-fund may perform transactions relating to the sale of forward
currency contracts, as well as the sale of call options and the purchase of put options on currencies.
The transactions in question may relate solely to contracts traded on a regulated market that
operates regularly, is recognised and is open to the public or that are traded with a recognised,
prime financial institution specialising in such transactions and dealing in the over-the-counter (OTC)
market in options. With the same objective, the sub-fund may also sell currencies forward or
exchange them in private transactions with prime financial institutions specialising in such
transactions.
SOCIAL, ETHICAL AND ENVIRONMENTAL ASPECTS:
Investments may not be made in financial instruments issued by manufacturers of controversial
weapons whose use over the past five decades, according to international consensus, has led to
disproportionate human suffering among the civilian population. This involves the manufacturers of
anti-personnel mines, cluster bombs and munitions and weapons containing depleted uranium.
In addition, as of 31 March 2014 no new investments may be made in financial instruments issued
by companies that do not have an anti-corruption policy and that have been given a negative score
in a thorough screening for corruption in the last two years. A company has no anti-corruption policy
if it cannot be demonstrated that it has an acceptable policy concerning the fight against corruption.
An acceptable policy should be made public and must at least state that bribery will not be tolerated
and that the law will be followed in this respect. The screening will be based on a generally accepted
and independent 'Social, ethical and environmental factors' database.
In this way, not only is a purely financial reality represented, but also the social reality of the sector
or region.
Where relevant, please refer to 'Information concerning the Bevek – Tax treatment' in the prospectus
to find out more about the application of European and Belgian tax provisions.
124
2.1.4
FINANCIAL PORTFOLIO MANAGEMENT
The management company has delegated the intellectual management, with the exception of the
sustainability screening described in the prospectus, to KBC Fund Management Limited, Joshua
Dawson House, Dawson Street , Dublin 2, IRELAND..
KBC Fund Management Limited has delegated the intellectual management, with the exception of
the sustainability screening described in the prospectus, to Kleinwort Benson Investors Dublin Ltd,
Joshua Dawson House Dawson Street , Dublin 2, IRELAND.
2.1.5
DISTRIBUTORS
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
2.1.6
INDEX AND BENCHMARK
See ‘Sub-fund’s investment policy’.
2.1.7
POLICY PERSUED DURING THE FINANCIAL YEAR
The KBC Eco Water Fund performed very strongly over the six month period, significantly
outperforming the broad equity market.
This outperformance was driven primarily by significant outperformance in our Water Infrastructure
sector, a sector in which we have been overweight for some time now due to attractive valuations and
expected strong multi-year earnings growth. More specifically it has been the engineered pump
companies, such as Flowserve and Ebara, which contributed most to performance, as strong growth in
their order books due to the pick-up in large industrial project activity continues to fuel expectations on
earnings growth looking out the next two years. Outside of the engineered pump companies, our
conviction surrounding the outlook for certain key end markets, which are very relevant to companies
in the Infrastructure sector, namely US municipal, US residential and US non residential, continues to
grow.
The Water Utility sector was the next best performing sector. This is a sector which we started to
increase further in December and into the start of 2014 as we moved to take some risk off the table by
reducing the Infrastructure weighting.
This was mostly a result of bottom up risk reward
characteristics, with the underperformance of UK utilities ahead of their next 5 year regulatory review
period providing an opportunity to increase our exposure there. Post clarity on the allowed return for
the industry from Ofwat in January the UK utilities have performed strongly and United Utilities has
been one of the strongest contributors to performance in the period. Similarly concerns around the
impact of tapering in the US gave us the opportunity to increase exposure to the US regulated utilities
during Q4’13. Elsewhere, of note was Suez, who also made a strong contribution in the period amid
an improving industrial backdrop in Europe and a continuing solid execution on its cost cutting agenda.
The Technology sector was more of a mixed bag in terms of performance. Strong contributors in that
group included Danaher, Calgon Carbon and Pure Technologies. Danaher has been a beneficiary of
broadly positive industrial market trends and leading indicators and remains one of the highest quality
holdings in the fund. The relatively new CEO at Calgon Carbon continues to deliver impressive results
operationally and the stock was helped by an activist investor getting involved mid-year, while Pure
Technology continues to execute well in its home market while winning a significant international
project in the period. Our Water Technology weighting is currently around the low end of its historic
range.
Since the beginning of 2014, we have shifted the portfolio gradually to a more neutral stance (i.e. beta
of approximately 1), taking advantage of the market rally to sell stocks as they hit our targets and buy
the stocks that have lagged. We have also aimed to improve the quality of the portfolio, increase its
purity to the water theme, and are favouring position size changes that, all else equal, trade high beta
for low beta. We have continued to intentionally structure the portfolio to benefit from areas we are
most optimistic about (eg. US construction sectors) while minimizing exposure to where we see
potential tail risk that is not priced in (eg. EM currencies & infrastructure spend).
To summarise, from a sector perspective, this has primarily manifested itself in a reduction in Water
Infrastructure and Technology stocks and an increase in Utilities. We maintain our largest sector
weight in the Infrastructure sector as we continue to be bullish about the cyclical end markets into
which our companies sell and their subsequent earnings power over the next few years.
125
2.1.8
FUTURE POLICY
Similar to how we felt entering 2012 and 2013, we are optimistic about the return potential in the water
strategy as we enter 2014. We continue to hold an overweight position in water infrastructure stocks,
consistent with our views about some specific cyclical end markets. Unfortunately, the valuations are
no longer depressed and we are increasingly relying on “total return stories” versus “rerating stories,”
but the upside is still attractive.
The water strategy naturally has a later cycle bias to it due to exposures to construction and capital
spending cycles. The best period of relative performance came in the 2004 to 2008 timeframe – the
last time that the end markets we discussed above were functioning well. (Note that in the non-“best
period”, we still generally modestly outperform.) We believe that we might currently be in the early
stages of a similar market environment, which, if true, would further support our positive outlook for
2014.
In addition to the more cyclical infrastructure companies, we need to point out that we continue to
simultaneous play defence in the portfolio, both through lower risk investments and portfolio risk
management. Interestingly, we are finding our best defence ideas not only in regulated utilities, but
also in companies with unique business models such as Enercare in the Technology sector (water
heater rental and sub-metering).
The portfolio is expected to have mid-teens earnings growth in 2014 and 2015 combined with an
approximate 2% dividend yield, which can provide a strong total return next year. Obviously market
multiples and the degree to which company specific investment theses play out will impact the result.
For 2014, we enter with a wider breadth of exposures and investment theses than in the previous few
years, giving us multiple ways to generate performance.
2.1.9
SYNTHETIC RISK AND REWARD INDICATOR
Classic Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
Institutional B Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
The value of a share can decrease or increase and the investor may not get back the amount
invested.
In accordance with Commission Regulation (EU) No. 583/2010, a synthetic risk and reward indicator
has been calculated. This indicator provides a quantitative measure of the sub-fund's potential return
and the risk involved, calculated in the currency in which the sub-fund is denominated. It is given as
a figure between 1 and 7. The higher the figure, the greater the potential return, but also the more
difficult it is to predict this return. Losses are possible too. The lowest figure does not mean that the
investment is entirely free of risk. However, it does indicate that, compared with the higher figures,
this product will generally provide a lower, but more predictable return.
The synthetic risk and reward indicator is assessed regularly and can therefore go up or down based
on data from the past. Data from the past is not always a reliable indicator of future risk and return.
126
2.2
BALANCE SHEET
Balance sheet layout
28/02/2014
28/02/2013
(in the currency of the sub-fundt)
(in the currency of the sub-fund )
166.806.233,20
172.653.680,56
162.406.996,99
167.671.889,80
164.421,57
618.478,99
-222.099,69
-19.388,67
-404.217,87
-9.259.550,90
4.456.455,19
14.097.960,50
112.986,52
165.659,68
-258.798,39
116.034,06
24.727,14
-211.641,16
TOTAL SHAREHOLDERS' EQUITY
166.806.233,20
172.653.680,56
A.
Capital
137.974.828,45
151.378.393,89
B.
Income equalization
41.446,91
12.846,73
D.
Result for the period
28.789.957,84
21.262.439,94
TOTAL NET ASSETS
II.
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
Payables
a) Accounts payable (-)
c) Borrowings (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
127
2.3
PROFIT AND LOSS ACCOUNT
Income Statement
I.
35.244.533,46
31.269.724,84
-0,05
-5.922.355,53
-9.122.440,89
1.304.886,60
763.895,10
3.977,28
-24.221,40
2.601,77
-13.798,26
79.498,69
42.771,25
Investment income and expenses
A.
B.
Dividends
Interests
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
A.
Income received to cover the acquisition and
realizaion of assets, to discourage withdrawals
and for delivery charges
Other
B.
28/02/2013
(in the currency of the sub-fund)
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
G. Receivables, deposits, cash at bank and in hand
and payables
H. Foreign exchange positions and transactions
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the sub-fund)
9.012,94
IV. Operating expenses
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
Classic Shares
Institutional B Shares
b) Administration and accounting management
E. Administrative expenses (-)
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
Classic Shares
Institutional B Shares
K. Other expenses (-)
-263.401,20
-2.944,37
-65.576,41
-256.602,58
-4.997,88
-47.783,53
-1.159.901,37
-177.991,85
-89.193,04
-1.736,33
-13.842,77
-892.789,01
-273.388,12
-81.090,13
-4.967,74
-4.578,21
-42.843,79
-27.982,54
-73.592,75
10.345,90
-19.728,48
-53.190,58
-3.310,84
-16.689,01
-532.220,09
-884.843,96
28.789.957,84
21.262.439,94
28.789.957,84
21.262.439,94
-17.911,39
Income and expenditure for the period
Subtotal II + III + IV
V.
Profit (loss) on ordinary activities before tax
VII. Result for the period
128
2.4
COMPOSITION OF THE ASSETS AND KEY FIGURES
2.4.1
COMPOSITIONS OF THE ASSETS OF KBC ECO FUND WATER
Name
Quantity on
28/02/2014
Cur
rency
Price in
currency
Evaluation
(in the currency of the
sub-fund)
%
%
owned by
portfolio
UCI
%
Net
assets
NET ASSETS
SECURITIES PORTFOLIO
Shares
Exchange-listed shares
Brazil
CIA DE SANEAMENTO DE MINAS GER CIA SANEAMENTO BASICO -
233.200,00
BRL
33,300
2.406.880,73
1,48
1,44
1.191.955,00
USD
9,270
7.999.871,74
4,93
4,80
Canada
CAPSTONE INFRASTRUCTURE CORP -
1.618.036,00
CAD
3,840
4.064.007,74
2,50
2,44
ENERCARE INC -
698.007,00
CAD
10,250
4.679.708,11
2,88
2,81
GWR GLOBAL WATER RESOURCES COR -
130.034,00
CAD
4,030
342.765,49
0,21
0,21
PURE TECHNOLOGIES LTD -
806.616,00
CAD
7,950
4.194.392,65
2,58
2,52
219.532,00
EUR
11,220
2.463.149,04
1,52
1,48
SUEZ ENVIRONNEMENT SA -
478.896,00
EUR
14,480
6.934.414,08
4,27
4,16
VEOLIA ENVIRONNEMENT (PAR)
278.804,00
EUR
13,710
3.822.402,84
2,35
2,29
Finland
KEMIRA (HEL)
France
Japan
EBARA CORP -
1.818.000,00
JPY
688,000
8.872.696,32
5,46
5,32
KURITA WATER INDUSTR. -
52.300,00
JPY
2.148,000
796.909,98
0,49
0,48
ORGANO CORPORATION -
565.000,00
JPY
475,000
1.903.773,85
1,17
1,14
TORISHIMA PUMP MANUFACTURING CO -
124.800,00
JPY
1.295,000
1.146.456,69
0,71
0,69
168.164,00
GBP
34,760
7.092.617,41
4,37
4,25
PENTAIR LTD - REGISTERED -
85.887,00
USD
80,810
5.024.998,89
3,09
3,01
SULZER FRERES (NOM)
91.363,00
CHF
124,500
9.349.959,72
5,76
5,61
AMIAD FILTRATION SYSTEMS LTD -
457.442,00
GBP
2,765
1.534.705,01
0,95
0,92
PENNON GROUP PLC -
187.929,00
GBP
7,430
1.694.245,55
1,04
1,02
26.298,00
GBP
26,820
855.805,81
0,53
0,51
Jersey/The Channel Islands
WOLSELEY PLC -
Switzerland
U.K.
ROTORK PLC SEVERN TRENT -
204.018,00
GBP
18,500
4.579.667,54
2,82
2,75
1.173.278,00
GBP
7,795
11.097.132,82
6,83
6,65
AECOM TECHNOLOGY CORP -
226.583,00
USD
31,940
5.239.690,86
3,23
3,14
AMERICAN WATER WORKS INC. -
231.483,00
USD
44,840
7.514.985,32
4,63
4,51
AQUA AMERICA INC -
158.878,00
USD
25,190
2.897.579,51
1,78
1,74
ASHLAND, INC. -
11.823,00
USD
94,370
807.802,28
0,50
0,48
BADGER METER INC -
26.867,00
USD
54,920
1.068.299,77
0,66
0,64
UNITED UTILITIES WATER PLC -
U.S.A.
CALGON CARBON CORP -
474.328,00
USD
20,130
6.912.990,62
4,26
4,14
CALIFORNIA WATER SERVICE GROUP -
99.767,00
USD
23,510
1.698.177,07
1,05
1,02
DANAHER CORPORATION -
84.390,00
USD
76,490
4.673.465,90
2,88
2,80
129
FLOWSERVE CORP -
74.856,00
USD
81,210
4.401.285,66
2,71
2,64
FRANKLIN ELECTRIC CO INC -
29.384,00
USD
43,590
927.344,74
0,57
0,56
HD SUPPLY HOLDINGS INC -
465.511,00
USD
23,270
7.842.775,10
4,83
4,70
INSITUFORM TECHN. CORP. -
290.911,00
USD
23,150
4.875.897,52
3,00
2,92
ITRON INC -
170.739,00
USD
35,000
4.326.574,72
2,66
2,59
NUVERRA ENVIRONMENTAL SOLUTION -
112.739,00
USD
17,000
1.387.607,15
0,85
0,83
PICO HOLDINGS INC -
266.761,00
USD
25,110
4.849.673,26
2,99
2,91
REXNORD HOLDINGS INC -
221.059,00
USD
29,990
4.799.854,77
2,96
2,88
67.443,00
USD
29,590
1.444.858,36
0,89
0,87
200.627,00
USD
28,880
4.194.981,00
2,58
2,52
59.200,00
USD
39,350
1.686.591,37
162.406.996,99
1,04
100,00
1,01
97,36
162.406.996,99
100,00
97,36
SJW CORP TETRA TECH INC. XYLEM INC/NY -
Total shares
TOTAL SECURITIES PORTFOLIO
CASH AT BANK AND IN HAND
Demand accounts
Belgium
KBC GROUP AUD
116,44
AUD
1,000
75,44
KBC GROUP CAD
-29.642,37
CAD
1,000
-19.388,67
-0,01
KBC GROUP CHF
4.730,66
CHF
1,000
3.888,59
0,00
2.737.537,97
EUR
1,000
2.737.537,97
1,64
KBC GROUP GBP
504.306,16
GBP
1,000
611.910,65
0,37
KBC GROUP HKD
6.349.290,61
HKD
1,000
592.328,78
0,36
KBC GROUP JPY
36.789.460,00
JPY
1,000
260.973,68
0,16
KBC GROUP SEK
6,27
SEK
1,000
0,71
KBC GROUP SGD
4,55
SGD
1,000
2,60
KBC GROUP USD
344.936,43
USD
1,000
249.736,77
4.437.066,52
0,15
2,66
4.437.066,52
2,66
KBC GROUP EURO
Total demand accounts
TOTAL CASH AT BANK AND IN HAND
OTHER RECEIVABLES AND PAYABLES
Receivables
Belgium
KBC GROUP EUR RECEIVABLE
164.421,57
EUR
1,000
164.421,57
164.421,57
0,10
0,10
-222.099,69
EUR
1,000
-222.099,69
-222.099,69
-0,13
-0,13
-57.678,12
-0,04
Total receivables
Payables
Belgium
KBC GROUP EUR PAYABLE
Payables
TOTAL RECEIVABLES AND PAYABLES
OTHER
Interest receivable
EUR
165.659,68
0,10
Expenses payable
EUR
-258.798,39
-0,16
Expenses to be carried forward
EUR
112.986,52
0,07
19.847,81
0,01
166.806.233,20
100,00
TOTAL OTHER
TOTAL NET ASSETS
130
Geographic breakdown (as a % of securities portfolio)
Brazil
Canada
Switzerland
Germany
Finland
France
U.K.
Hong Kong
Jersey/The Channel Islands
Japan
South Korea
Netherlands
Philippines
Singapore
U.S.A.
Total
31/08/2012
1,27
1,88
4,84
0,39
1,44
8,67
8,33
3,30
0,00
14,67
3,59
2,09
1,02
1,43
47,08
100,00
28/02/2013
3,83
2,04
10,11
0,39
0,00
9,17
10,48
4,56
0,00
13,76
1,34
1,57
0,70
0,51
41,54
100,00
31/08/2013
7,97
7,33
11,33
0,40
0,00
8,59
5,13
0,35
0,00
13,37
0,00
0,00
0,63
0,00
44,90
100,00
28/02/2014
6,41
8,18
8,85
0,00
1,52
6,62
12,17
0,00
4,37
7,83
0,00
0,00
0,00
0,00
44,05
100,00
28/02/2013
58,52
1,42
0,00
1,58
4,27
34,21
100,00
31/08/2013
55,59
6,30
0,00
3,26
4,00
30,85
100,00
28/02/2014
50,33
5,46
0,00
2,99
3,77
37,45
100,00
28/02/2013
1,35
1,68
5,69
8,40
8,28
4,78
12,55
1,30
0,84
0,57
54,56
100,00
31/08/2013
2,51
7,17
8,16
9,95
5,22
0,88
13,03
0,00
0,62
0,00
52,46
100,00
28/02/2014
1,44
7,95
5,61
9,53
16,47
0,36
7,78
0,00
0,00
0,00
50,86
100,00
Sector breakdown (as a % of securities portfolio)
Cyclicals
Consum(cycl)
Cons.goods
Financials
Technology
Utilities
Total
31/08/2012
62,23
0,39
0,86
0,46
3,86
32,20
100,00
Currency breakdown (as a % of net assets)
BRL
CAD
CHF
EUR
GBP
HKD
JPY
KRW
PHP
SGD
USD
Total
31/08/2012
1,25
1,76
4,73
14,39
8,14
3,23
14,41
3,51
1,00
1,16
46,42
100,00
131
2.4.2
CHANGES IN THE COMPOSITION OF THE ASSETS OF KBC ECO FUND WATER (IN THE
CURRENCY OF THE SUB-FUND)
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Turnover rate
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Corrected turnover rate
1st half of year
108.238.948,16
151.272.182,59
259.511.130,74
35.246.859,23
75.316.233,89
110.563.093,12
179.012.088,25
Year
108.238.948,16
151.272.182,59
259.511.130,74
35.246.859,23
75.316.233,89
110.563.093,12
179.012.088,25
83,20 %
83,20 %
1st half of year
108.238.948,16
151.272.182,59
259.511.130,74
35.246.859,23
75.316.233,89
110.563.093,12
170.945.275,70
Year
108.238.948,16
151.272.182,59
259.511.130,74
35.246.859,23
75.316.233,89
110.563.093,12
170.945.275,70
87,13 %
87,13 %
The table above shows the capital volume of portfolio transactions. This volume (adjusted to take
account of total subscriptions and redemptions) is also compared to the average net assets at the
beginning and end of the period.
A figure close to 0% implies that the transactions relating to the securities or transactions relating to
the assets (excluding deposits and cash) in a given period only involve subscriptions and
redemptions.
A negative percentage shows that subscriptions and redemptions entailed few, if any, transactions in
the portfolio.
Active asset management may result in high turnover rates (monthly percentage >50%).
The detailed list of transactions is available for consultation free of charge at the registered office of
the Bevek or fund at Havenlaan 2, 1080 Brussels.
2.4.3
AMOUNT OF COMMITMENTS IN RESPECT OF FINANCIAL DERIVATIVES POSITIONS
Nil
132
2.4.4
CHANGES OF THE NUMBER OF SUBSCRIPTIONS AND REDEMPTIONS AND THE NET ASSET
VALUE
Classic Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
60.779,32
1.448,06
148.486,22
6.595,03
172.058,75
24.121,66
196.180,41
2013 - 02*
27.090,21
5.133,00
49.051,49
7.974,07
150.097,47
21.280,59
171.378,06
2014 - 02*
47.938,39
13.446,13
46.490,24
8.192,64
151.545,62
26.534,08
178.079,69
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Redemptions
Capitalization
Distribution
Capitalization
Distribution
2012 - 02*
36.718.463,16
737.964,95
87.134.475,04
3.306.295,71
2013 - 02*
19.115.223,62
3.057.747,50
34.381.619,71
4.714.513,20
2014 - 02*
41.262.995,01
9.643.448,33
39.867.213,91
5.951.233,41
Period
Year
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
Distribution
2012 - 02*
126.690.765,29
658,54
554,82
2013 - 02*
134.465.535,22
800,27
674,21
2014 - 02*
163.052.657,42
940,53
773,34
* The financial year does not coincide with the calender year.
133
Institutional B Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
48.851,00
1.357,00
47.494,00
47.494,00
2013 - 02*
55.365,87
55.187,01
47.672,86
47.672,86
2014 - 02*
48.665,00
92.353,86
3.984,00
3.984,00
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Capitalization
Redemptions
Distribution
Capitalization
2012 - 02*
29.362.107,22
821.034,66
2013 - 02*
38.864.072,89
38.356.727,14
2014 - 02*
41.472.610,23
80.753.796,80
Period
Year
Distribution
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
2012 - 02*
31.297.512,80
658,98
2013 - 02*
38.188.145,34
801,05
2014 - 02*
3.753.575,78
942,16
* The financial year does not coincide with the calender year.
Distribution
134
2.4.5
PERFORMANCE FIGURES
Classic Shares
1 Year
Cap
Div
ISIN code
Currency
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
CAP BE0175479063
EUR
17.53%
14.15%
19.82%
9.37%
01/12/2000
4.89%
DIV BE0175478057
EUR
17.49%
14.13%
19.80%
9.35%
01/12/2000
4.87%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
135
Institutional B Shares
1 Year
Cap
Div
ISIN code
CAP BE6228912570
Currency
EUR
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
17.62%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
25/11/2011
26.96%
136
Classic Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
The return is calculated as the change in the net asset value between two dates expressed
as a percentage. In the case of units that pay dividends, the dividend is incorporated
geometrically in the return.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
Distribution units (DIV)
Return on date D over a period of X years:
[ C * NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[ C * NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
where C is a factor that is determined for all N dividends between the calculation
date D and the reference date.
For dividend i on date Di with value Wi:
Ci = [Wi / NIW(Di)] + 1
i = 1 ... N
from whichC = C0 * .... * CN.

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalisation and distribution shares.




Institutional B Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
The return is calculated as the change in the net asset value between two dates expressed
as a percentage.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalization shares.




137
2.4.6
COSTS
Ongoing Charges: *
Classic Shares Distribution: 1.901%
Classic Shares Capitalization: 1.874%
Institutional B Shares Capitalization: 1.745%
* The following are not included in the charges shown: entry and exit charges, performance fees,
transaction costs paid when buying or selling assets, interest paid, payments made with a view to
providing collateral in the context of derivative financial instruments, or commissions relating to
Commission Sharing Agreements or similar fees received by the Management Company or any
person associated with it.
EXISTENCE OF COMMISSION SHARING AGREEMENTS
The Management Company, or where applicable, the appointed manager has entered into a
Commission Sharing Agreement with one or more brokers for transactions in shares on behalf of
one or more sub-funds. This agreement specifically concerns the execution of orders and the
delivery of research reports.
For more information, please see the ‘General’ section of the annual report.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
Broker
Percentage
28-02-14
28-02-14
CITI
4,194
2,065
49.25%
CSFBSAS
16,275
7,864
48.32%
DEUTSCHE
1,606
685
42.67%
INSTINET
17,607
7,023
39.89%
JP MORGAN
2,614
1,046
40.00%
MACQUARIE
14,549
6,506
44.72%
MERRILL
30,389
14,958
49.22%
MORGAN STANLEY
20,126
8,871
44.08%
SOCGEN
659
251
38.06%
UBSWDR
48,556
23,615
48.63%
FEE-SHARING AGREEMENTS AND REBATES:
The management company may share its fee with the distributor, and institutional and/or
professional parties.
In principle, the percentage share amounts to between 35% and 60% if the distributor is an entity of
KBC Group NV or to between 35% and 70% if the distributor is not an entity of KBC Group NV.
However, in a small number of cases, the distributor’s fee is less than 35%. Investors may, on
request, obtain more information on these cases.
If the management company invests the assets of the undertaking for collective investment in units
of undertakings for collective investment that are not managed by an entity of KBC Group NV, and
receives a fee for doing so, it will pay this fee to the undertaking for collective investment.
Fee-sharing does not affect the amount of the management fee paid by the sub-fund to the
management company. This management fee is subject to the limitations laid down in the articles of
association. The limitations may only be amended after approval by the general meeting of
shareholders.
The management company has concluded a distribution agreement with the distributor in order to
facilitate the wider distribution of the sub-fund's units by using multiple distribution channels.
It is in the interests of the holders of units, the sub-fund and of the distributor for the largest possible
number of units to be sold and for the assets of the sub-fund to be maximised in this way. In this
respect, there is therefore no question of any conflict of interest.
138
2.4.7
NOTES TO THE FINANCIAL STATEMENTS AND OTHER DATA
Fee for managing the investment portfolio: 1.5% per annum (0.1% of which for the sustainability
screening referred to in the prospectus) calculated on the basis of the average total net assets of the
sub-fund, no management fee is charged on assets assets invested in investment undertakings
managed by a financial institution of the KBC group.
KBC Fund Management Limited receives a fee from the management company of max. 1.4%
calculated on that part of the portfolio that it manages, without the total management fee received by
the management company being exceeded.
Kleinwort Benson Investors Dublin Ltd receives a fee of max. 0.5% from KBC Fund Management
Limited calculated on that part of the portfolio that it manages, without the total management fee
received by KBC Fund Management Limited being exceeded.
The administration agent’s fee is payable at the end of each month and is calculated on the basis of
the average total net assets of the sub-fund.
Auditor's fee: 1 700 EUR per year. This fee is not including VAT and can be indexed on an annual
basis in accordance with the decisions of the general meeting.
The custody fee is calculated on the value of the securities held in custody by the custodian on the
final banking day of the preceding calendar year, except on those assets invested in investment
undertakings managed by a financial institution of the KBC group. The custody fee is paid at the
beginning of the calendar year.
Social, ethical and environmental aspects:
No manufacturers of controversial weapons whose use over the past five decades, according to the
international consensus, has led to disproportionate human suffering among the civilian population
will be included in the portfolio of investments. This involves the manufacturers of anti-personnel
mines, cluster bombs and munitions and weapons containing depleted uranium. In this way, the subfund seeks to reflect not only simple financial reality but also the social reality of the sector or region
in question.
Exercising voting rights.
If necessary, relevant and in the interest of the shareholders, the management company will
exercise the voting rights attached to the shares in the Bevek’s portfolio.
The management company will adhere to the following criteria when determining how it stands
relative to the items on the agenda that are put to the vote:
- Shareholder value may not be adversely affected.
- Corporate governance rules, especially with regard to the rights of minority shareholders, must be
respected.
- The minimum standards with regard to sustainable business and corporate social responsibility
must be met.
The list of companies for which voting rights are exercised is available at the registered office of the
Bevek.
139
th
Semi-Annual report as at 28 February 2014
TABLE OF CONTENTS
2.
Information on KBC Eco Fund Climate Change
2.1. Management report
2.1.1. Launch date and subscription price
2.1.2. Stock exchange listing
2.1.3. Aim and distinctive features of the investment policy
2.1.4. Financial portfolio management
2.1.5. Distributors
2.1.6. Index and benchmark
2.1.7. Policy conducted during the financial year
2.1.8. Future policy
2.1.9. Synthetic risk and reward indicator (SRRI)
2.2. Balance sheet
2.3. Profit and loss account
2.4. Composition of the assets and key figures
2.4.1. Composition of the assets
2.4.2. Change in the composition of the assets
2.4.3. Value of commitments in respect of financial derivatives positions
2.4.4. Evolution of the number of subscriptions, repayments and the net asset value
2.4.5. Return figures
2.4.6. Expenses
2.4.7. Notes to the financial statements and other data
140
141
2
INFORMATION ON KBC ECO FUND CLIMATE CHANGE
2.1
MANAGEMENT REPORT
2.1.1
LAUNCH DATE AND SUBSCRIPTION PRICE
Classic Shares :
Launch date: 2 February 2007
Initial subscription price: 500 EUR
Currency: EUR
Institutional B Shares :
Launch date: 25 November 2011
Initial subscription price: 296.94 EUR
Currency: EUR
2.1.2
STOCK EXCHANGE LISTING
Not applicable.
2.1.3
GOAL AND KEY PRINCIPLES OF THE INVESTMENT POLICY
SUB-FUND’S OBJECT:
The main objective of this sub-fund is to generate the highest possible return for its shareholders by
investing directly or indirectly in transferable securities. This is reflected in its pursuit of capital gains
and income. To this end, the assets are invested, either directly or indirectly via correlated financial
instruments, primarily in shares.
SUB-FUND’S INVESTMENT POLICY:
PERMITTED ASSET CLASSES:
The sub-fund may invest in securities, money market instruments, units in undertakings for collective
investment, deposits, financial derivatives, liquid assets and all other instruments insofar as
permitted by the applicable laws and regulations and consistent with the sub-fund’s object
The sub-fund shall invest no more than 10% of its assets in units of other undertakings for collective
investment.
RESTRICTIONS OF THE INVESTMENT POLICY:
The investment policy will be implemented within the limits set by law and regulations.
The sub-fund may borrow up to 10% of its net assets, insofar as these are short-term borrowings
aimed at solving temporary liquidity problems.
PERMITTED DERIVATIVES TRANSACTIONS:
Derivatives may be used to achieve the investment objectives as well as to hedge in risks.
It is possible to work with either listed or unlisted derivatives: these may be forward contracts,
options or swaps on securities, indices, currencies or interest rates or other transactions involving
derivatives. Unlisted derivatives transactions may only be concluded with prime financial institutions
specialised in such transactions. Subject to the applicable laws and regulations and the articles of
association, the sub-fund will always seek to conclude the most effective transactions. All costs
associated with the transactions will be charged to the sub-fund and all income generated will be
paid to the sub-fund.
If the transactions result in a risk in respect of the counterparty, this risk can be hedged by using a
margin management system that ensures that the sub-fund is the beneficiary of security (collateral)
in the form of cash or investment grade bonds. When calculating the value of the bonds, a margin
will be applied that varies depending on their residual term to maturity and the currency in which they
are denominated. The relationship with the counterparty or counterparties is governed by standard
international agreements.
Derivatives can also be used to hedge the assets of the sub-fund against open exchange risks in
relation to the currency.
142
Where derivatives are used, they must be easily transferable and liquid instruments. Using
derivatives does not, therefore, affect liquidity risk. Furthermore, using derivatives does not affect the
portfolio's allocation across regions, industry sectors or themes. As a result, they have no effect on
concentration risk. Derivatives may not be used to protect capital, either fully or partially. They
neither increase nor decrease capital risk. In addition, using derivatives has no effect on credit risk,
settlement risk, custody risk, flexibility risk or inflation risk or risk dependent on external factors.
Strategy selected:
At any time, at least 75% of the assets are invested, directly or indirectly, in companies that operate
on a sustainable basis in combating climate change and/or focus on reducing greenhouse gas
emissions. These companies have to realize a substantial proportion of their turnover in this sector.
The companies have to satisfy a number of basic criteria regarding the environment, human rights,
the trade and manufacture of arms, and nuclear energy. The basic criteria are set out by KBC Asset
Management in co-operation with the Independent Environmental Advisory Committee. They may
also change the method used to perform the sustainability screening, based on new trends in
society.
Screening is carried out by KBC Asset Management’s Sustainable and Socially Responsible
Investment Department and the independent Environmental Advisory Committee.
Risk concentration:
Shares of companies whose business may grow as a result of policy measures taken to reduce
climate change.
LENDING FINANCIAL INSTRUMENTS:
The subfund is not allowed to lend financial instruments.
VOLATILITY OF THE NET ASSET VALUE:
The volatility of the net asset value may be high due to the composition of the portfolio.
GENERAL STRATEGY FOR HEDGING THE EXCHANGE RATE RISK:
In order to protect its assets against exchange rate fluctuations and within the limitations laid down in
the articles of association, the sub-fund may perform transactions relating to the sale of forward
currency contracts, as well as the sale of call options and the purchase of put options on currencies.
The transactions in question may relate solely to contracts traded on a regulated market that
operates regularly, is recognised and is open to the public or that are traded with a recognised,
prime financial institution specialising in such transactions and dealing in the over-the-counter (OTC)
market in options. With the same objective, the sub-fund may also sell currencies forward or
exchange them in private transactions with prime financial institutions specialising in such
transactions.
SOCIAL, ETHICAL AND ENVIRONMENTAL ASPECTS:
Investments may not be made in financial instruments issued by manufacturers of controversial
weapons whose use over the past five decades, according to international consensus, has led to
disproportionate human suffering among the civilian population. This involves the manufacturers of
anti-personnel mines, cluster bombs and munitions.
In addition, as of 31 March 2014 no new investments may be made in financial instruments issued
by companies that do not have an anti-corruption policy and that have been given a negative score
in a thorough screening for corruption in the last two years. A company has no anti-corruption policy
if it cannot be demonstrated that it has an acceptable policy concerning the fight against corruption.
An acceptable policy should be made public and must at least state that bribery will not be tolerated
and that the law will be followed in this respect. The screening will be based on a generally accepted
and independent 'Social, ethical and environmental factors' database.
In this way, not only is a purely financial reality represented, but also the social reality of the sector
or region.
Where relevant, please refer to 'Information concerning the Bevek – Tax treatment' in the prospectus
to find out more about the application of European and Belgian tax provisions.
143
2.1.4
FINANCIAL PORTFOLIO MANAGEMENT
The management company has delegated the intellectual management, with the exception of the
sustainability screening described in the prospectus, to KBC Fund Management Limited, Joshua
Dawson House, Dawson Street , Dublin 2, IRELAND..
KBC Fund Management Limited has delegated the intellectual management, with the exception of
the sustainability screening described in the prospectus, to Kleinwort Benson Investors Dublin Ltd,
Joshua Dawson House Dawson Street , Dublin 2, IRELAND.
2.1.5
DISTRIBUTORS
KBC Asset Management S.A., 5, Place de la Gare, L-1616 Luxembourg.
2.1.6
INDEX AND BENCHMARK
See ‘Sub-fund’s investment policy’.
2.1.7
POLICY PERSUED DURING THE FINANCIAL YEAR
The KBC Eco Climate Change Fund performed very strongly over the six month period producing a
return more than double that of the broad equity market.
The 6 month period to end February 2013 was a strong period for financial assets. Improving
economic data from North America coupled with robust corporate earnings helped to propel equity
bourses higher.
The strategy’s largest sector - Energy Efficiency - was the biggest positive contributor to performance
in the period, as it posted above market returns. The Energy Efficiency sector’s best performers were
the industrials with exposure to improving end markets such as auto and construction. Johnson
Controls, active in both Building & Transport Efficiency, announced a large share buyback program
and increased dividend highlighting management confidence in their outlook. In Europe, ABB issued a
supportive set of 3Q results, stating that early-cycle macroeconomic indicators remain positive.
Performance across the Renewable Energy sector was generally positive with the solar sector rallying
during the period on improving fundamentals for manufacturers. A number of solar companies
announced better than expected quarterly results with management citing stable module prices and
robust demand from Japan and China as tailwinds. The solar developers were also strong as they
explore new financing structures such as securitisation of assets and yield structures to lower their
cost of financing.
Within the Water sector, outperformance was driven primarily by returns within the Infrastructure sub
sector. More specifically it has been the engineered pump companies, such as Flowserve and Ebara,
which contributed most to performance, as strong growth in their order books due to the pick-up in
large industrial project activity continues to fuel expectations on earnings growth looking out the next
two years. Outside of the engineered pump companies, our conviction surrounding the outlook for
certain key end markets, which are very relevant to companies in the Infrastructure sector, namely US
municipal, US residential and US non residential, continues to grow. The Water Utility sector also
performed strongly. This is a sector which we started to increase further in December and into the
start of 2014 as we moved to take some risk off the table by reducing the Infrastructure weighting.
This was mostly a result of bottom up risk reward characteristics, with the underperformance of UK
utilities ahead of their next 5 year regulatory review period providing an opportunity to increase our
exposure there. Post clarity on the allowed return for the industry from Ofwat in January the UK
utilities have performed strongly and United Utilities has been one of the strongest contributors to
performance in the period. Similarly concerns around the impact of tapering in the US gave us the
opportunity to increase exposure to the US regulated utilities during Q4’13.
144
2.1.8
FUTURE POLICY
Energy Efficiency is the largest sector in the fund ; The strategy has plays into several end markets
including residential and non residential construction markets, Utilties capex, multi industrial capex and
LED lighting. During the latter half of 2013 we increased ours exposure to companies that would
benefit from an upturn cycle in the construction and automotive markets. A recovery in the European
construction market in combination with a favourable regulatory framework in Germany should help to
improve the top line growth for companies such as Centrotec which offers energy efficiency and heat
products. Similarly, in the US we favour companies with strong backlogs in building efficiency such as
Johnson Controls and Ameresco. As macro uncertainties and fiscal cliff issues roll off, we expect
revenue growth rates for these companies to recover during the year. Legislative mandates driving
demand for more fuel efficient and cleaner emissions solutions continues to come into place in
2014/15. These higher revenue/higher margins solutions can drive earnings growth for market leaders
such as Johnson Matthey and Johnson Controls. We expect continued gradual adoption of LEDs in
general lighting in 2014 as the industry transitions away from traditional lighting options.
Due to the increasing improvement in cost competitiveness, renewables continue to become an
increasing portion of the global energy mix. However established supportive policies remain key driver
of global growth from Japan, US to Europe, therefore the sector remains very sensitive to any policy
news flow. With strengthening solar fundamentals, we prefer the low cost manufacturers in China as
they are well poised to take advantage of a potential 12GW domestic market - as targeted by central
government for 2014. As the leading polysilicon/wafer producer, we expect GCL to see further margin
expansion on its cost-reduction measures. The module manufacturer Trina is well-positioned given its
competitive cost structure as it expands it solar project development business. We continue to favour
solar developers with valuable pipelines such as SunEdison which has taken steps towards launching
a YieldCo and approaching the ABS market to reduce its cost of capital.
Within Water we continue to hold an overweight position in water infrastructure stocks, consistent with
our views about some specific cyclical end markets. Unfortunately, the valuations are no longer
depressed and we are increasingly relying on “total return stories” versus “rerating stories,” but the
upside is still attractive.
The water strategy naturally has a later cycle bias to it due to exposures to construction and capital
spending cycles. The best period of relative performance came in the 2004 to 2008 timeframe – the
last time that the end markets we discussed above were functioning well. (Note that in the non-“best
period”, we still generally modestly outperform.) We believe that we might currently be in the early
stages of a similar market environment, which, if true, would further support our positive outlook for
2014.
In addition to the more cyclical infrastructure companies, we need to point out that we continue to
simultaneous play defence in the portfolio, both through lower risk investments and portfolio risk
management. Interestingly, we are finding our best defence ideas not only in regulated utilities, but
also in companies with unique business models such as Enercare in the Technology sector (water
heater rental and sub-metering).
2.1.9
SYNTHETIC RISK AND REWARD INDICATOR
Classic Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
Institutional B Shares: 6 on a scale of 1 (lowest risk) to 7 (highest risk).
The value of a share can decrease or increase and the investor may not get back the amount
invested.
In accordance with Commission Regulation (EU) No. 583/2010, a synthetic risk and reward indicator
has been calculated. This indicator provides a quantitative measure of the sub-fund's potential return
and the risk involved, calculated in the currency in which the sub-fund is denominated. It is given as
a figure between 1 and 7. The higher the figure, the greater the potential return, but also the more
difficult it is to predict this return. Losses are possible too. The lowest figure does not mean that the
investment is entirely free of risk. However, it does indicate that, compared with the higher figures,
this product will generally provide a lower, but more predictable return.
The synthetic risk and reward indicator is assessed regularly and can therefore go up or down based
on data from the past. Data from the past is not always a reliable indicator of future risk and return.
145
2.2
BALANCE SHEET
Balance sheet layout
28/02/2014
28/02/2013
(in the currency of the sub-fundt)
(in the currency of the sub-fund )
22.983.750,53
23.967.342,25
22.585.277,70
23.522.189,50
31.055,08
3.111,68
68.614,20
1.275,20
-21.952,57
-274.367,72
-18.215,53
-1.460.104,56
652.128,42
1.854.773,62
17.485,37
19.827,90
-28.815,33
16.401,61
14.985,46
-32.577,25
TOTAL SHAREHOLDERS' EQUITY
22.983.750,53
23.967.342,25
A.
Capital
20.035.280,77
20.673.980,63
B.
Income equalization
11.494,99
3.510,23
D.
Result for the period
2.936.974,77
3.289.851,39
TOTAL NET ASSETS
II.
Securities, money market instruments, UCIs and
derivatives
C. Shares and similar instruments
a) Shares
IV. Receivables and payables within one year
A.
B.
Receivables
a) Accounts receivable
b) Tax assets
Payables
a) Accounts payable (-)
c) Borrowings (-)
V.
Deposits and cash at bank and in hand
A.
Demand balances at banks
VI. Accruals and deferrals
A. Expense to be carried forward
B. Accrued income
C. Accrued expense (-)
146
2.3
PROFIT AND LOSS ACCOUNT
Income Statement
I.
3.662.422,07
4.399.316,66
-0,01
-573.675,04
-1.006.823,84
113.478,29
126.708,90
408,29
-889,97
268,15
-350,94
1.312,97
4.149,79
Investment income and expenses
A.
B.
Dividends
Interests
b) Cash at bank and in hand and deposits
C. Interest on borrowings (-)
III.
Other income
A.
Income received to cover the acquisition and
realizaion of assets, to discourage withdrawals
and for delivery charges
Other
B.
28/02/2013
(in the currency of the sub-fund)
Net gains(losses) on investments
C. Shares and similar instruments
a) Shares
G. Receivables, deposits, cash at bank and in hand
and payables
H. Foreign exchange positions and transactions
b) Other foreign exchange positions and
transactions
II.
28/02/2014
(in the currency of the sub-fund)
892,23
IV. Operating expenses
A.
B.
C.
D.
Investment transaction and delivery costs (-)
Financial expenses (-)
Custodian's fee (-)
Manager's fee (-)
a) Financial management
Classic Shares
Institutional B Shares
b) Administration and accounting management
E. Administrative expenses (-)
F. Formation and organisation expenses (-)
G. Remuneration, social security charges and
pension
H. Services and sundry goods (-)
J. Taxes
Classic Shares
Institutional B Shares
K. Other expenses (-)
-39.059,54
-429,85
-9.477,03
-23.566,29
-328,06
-8.959,03
-171.679,95
-12.000,99
-12.245,34
-147,90
-2.606,58
-144.278,26
-25.426,23
-11.548,86
-731,80
-656,36
-7.063,39
-5.244,29
-9.199,96
135,32
-2.467,06
-9.053,12
-316,75
-1.484,14
-151.772,26
-102.641,42
2.936.974,77
3.289.851,39
2.936.974,77
3.289.851,39
-2.555,93
Income and expenditure for the period
Subtotal II + III + IV
V.
Profit (loss) on ordinary activities before tax
VII. Result for the period
147
2.4
COMPOSITION OF THE ASSETS AND KEY FIGURES
2.4.1
COMPOSITIONS OF THE ASSETS OF KBC ECO FUND CLIMATE CHANGE
Name
Quantity on
28/02/2014
Cur
rency
Price in
currency
Evaluation
(in the currency of the
sub-fund)
%
%
owned by
portfolio
UCI
%
Net
assets
NET ASSETS
SECURITIES PORTFOLIO
Shares
Exchange-listed shares
Australia
CERAMIC FUEL CELLS LTD -
6.924.313,00
GBP
0,009
77.716,31
0,34
0,34
5.693,00
EUR
34,850
198.401,05
0,88
0,86
66.447,00
USD
9,270
445.962,71
1,98
1,94
Belgium
ELIA SYSTEM OPERATOR -
Brazil
CIA SANEAMENTO BASICO -
Canada
CAPSTONE INFRASTRUCTURE CORP -
281.777,00
CAD
3,840
707.736,98
3,13
3,08
ENERCARE INC -
89.929,00
CAD
10,250
602.918,70
2,67
2,62
PURE TECHNOLOGIES LTD -
73.111,00
CAD
7,950
380.176,24
1,68
1,65
TRANSALTA RENEWABLES INC -
26.414,00
CAD
11,200
193.502,83
0,86
0,84
12.319,00
USD
16,030
142.972,47
0,63
0,62
1.096.000,00
HKD
2,920
298.559,59
1,32
1,30
ALBIOMA -
20.226,00
EUR
18,750
379.237,50
1,68
1,65
SAINT GOBAIN -
10.601,00
EUR
43,500
461.143,50
2,04
2,01
SUEZ ENVIRONNEMENT SA -
27.292,00
EUR
14,480
395.188,16
1,75
1,72
Cayman Islands
TRINA SOLAR LTD -SP0N ADR-
China
GCL POLY ENERGY HOLDINGS LTD -
France
Germany
CAPITAL STAGE AG -
111.408,00
EUR
3,680
409.981,44
1,82
1,78
CENTROTEC SUSTAINABLE AG -
12.554,00
EUR
19,870
249.447,98
1,10
1,09
PLAMBECK NEUE ENERGIEN AG -
151.522,00
EUR
2,605
394.714,81
1,75
1,72
22.819,00
EUR
14,250
325.170,75
1,44
1,42
267.348,00
GBP
1,020
330.880,25
1,47
1,44
216.000,00
HKD
9,260
186.596,01
0,83
0,81
1.369.000,00
HKD
3,290
420.181,54
1,86
1,83
296.000,00
HKD
4,570
126.195,98
0,56
0,55
149.287,00
EUR
2,020
301.559,74
1,34
1,31
16.072,00
EUR
18,740
301.189,28
1,33
1,31
95.000,00
JPY
688,000
463.644,75
2,05
2,02
PSI AG GESELLSCHAFT FUER PRODUKTE -
Guernsey The Channel Islands
RENEWABLES INFRASTRUCTURE GROUP LTD -
Hong Kong
CHIANE LONGYUAN POWER GROUP CORP CHINA SUNTIEN GREEN ENERGY CORP WASION GROUP HOLDINGS LTD -
Italy
ENEL GREEN POWER SPA PRYSMIAN SPA -
Japan
EBARA CORP -
148
Jersey/The Channel Islands
WOLSELEY PLC -
8.793,00
GBP
34,760
370.860,50
1,64
1,61
22.790,00
EUR
25,360
577.954,40
2,56
2,52
118.939,00
EUR
4,681
556.753,46
2,47
2,42
47.003,00
CHF
22,490
868.930,56
3,85
3,78
4.318,00
CHF
124,500
441.897,99
1,96
1,92
DIALIGHT PLC -
19.400,00
GBP
8,560
201.497,30
0,89
0,88
GREENCOAT UK WIND PLC -
97.857,00
GBP
1,025
121.705,30
0,54
0,53
7.092,00
GBP
32,620
280.702,59
1,24
1,22
LAMPRELL PLC -
90.116,00
GBP
1,438
157.182,25
0,70
0,68
NAT. GRID PLC -
27.045,00
GBP
8,345
273.846,42
1,21
1,19
Netherlands
KONINKLIJKE PHILIPS ELECTRONICS N.V. -
Spain
EDP RENOVAVEIS SA -
Switzerland
ABB LTD SULZER FRERES (NOM)
U.K.
JOHNSON MATTHEY PLC -
SHANKS GROUP PLC -
139.436,00
GBP
1,178
199.218,46
0,88
0,87
SIG PLC -
94.344,00
GBP
2,115
242.113,16
1,07
1,05
UNITED UTILITIES WATER PLC -
52.054,00
GBP
7,795
492.338,69
2,18
2,14
ADVANCED ENERGY INDUSTRIES -
17.017,00
USD
27,440
338.073,04
1,50
1,47
AMERESCO INC -
67.590,00
USD
10,260
502.080,36
2,22
2,19
AMERICAN WATER WORKS INC. -
11.335,00
USD
44,840
367.985,38
1,63
1,60
CALGON CARBON CORP -
31.542,00
USD
20,130
459.702,04
2,04
2,00
COSAN LTD -
87.600,00
USD
11,790
747.758,47
3,31
3,25
COVANTA HOLD CORP -
36.772,00
USD
18,000
479.218,07
2,12
2,09
CREE RESEARCH INC -
12.130,00
USD
61,430
539.491,67
2,39
2,35
CSX -
18.056,00
USD
27,710
362.244,25
1,60
1,58
EATON CORP. -
13.659,00
USD
74,710
738.824,13
3,27
3,22
132.250,00
USD
1,950
186.712,64
0,83
0,81
HD SUPPLY HOLDINGS INC -
30.501,00
USD
23,270
513.870,74
2,28
2,24
INSITUFORM TECHN. CORP. -
23.187,00
USD
23,150
388.632,38
1,72
1,69
ITRON INC -
16.589,00
USD
35,000
420.369,97
1,86
1,83
JOHNSON CONTROLS -
22.626,00
USD
49,400
809.241,53
3,58
3,52
9.410,00
USD
27,890
190.012,24
0,84
0,83
16.777,00
USD
45,760
555.832,26
2,46
2,42
9.608,00
USD
25,110
174.671,94
0,77
0,76
20.720,00
USD
35,210
528.200,98
2,34
2,30
8.304,00
USD
73,690
443.036,32
1,96
1,93
14.294,00
USD
29,990
310.365,67
1,37
1,35
U.S.A.
FUELCELL ENERGY LTD -
LKQ CORP OWENS CORNING PICO HOLDINGS INC QUANTA SERVICES INC REGAL-BELDIT CORP REXNORD HOLDINGS INC ROCKWOOD HOLDINGS INC -
3.684,00
USD
78,880
210.392,35
0,93
0,92
SOLAZYME INC -
21.712,00
USD
12,270
192.880,28
0,85
0,84
SUNEDISON INC -
31.142,00
USD
18,360
413.964,03
1,83
1,80
4.667,00
USD
39,550
133.637,31
22.585.277,70
0,59
100,00
0,58
98,27
22.585.277,70
100,00
98,27
VEECO INSTRUMENTS INC -
Total shares
TOTAL SECURITIES PORTFOLIO
CASH AT BANK AND IN HAND
Demand accounts
Belgium
KBC GROUP CAD
-232,68
CAD
1,000
-152,19
0,00
KBC GROUP CHF
1.408,23
CHF
1,000
1.157,56
0,01
KBC GROUP DKK
8,90
DKK
1,000
1,19
-274.178,81
EUR
1,000
-274.178,81
KBC GROUP EURO
-1,19
149
KBC GROUP GBP
261.698,67
GBP
1,000
317.537,67
KBC GROUP HKD
-393,59
HKD
1,000
-36,72
KBC GROUP JPY
14.973.932,00
JPY
1,000
106.220,70
0,46
KBC GROUP NOK
5.501,29
NOK
1,000
664,85
0,00
KBC GROUP SEK
6.641,31
SEK
1,000
750,68
0,00
KBC GROUP USD
311.869,12
USD
1,000
225.795,77
377.760,70
0,98
1,64
377.760,70
1,64
Total demand accounts
TOTAL CASH AT BANK AND IN HAND
1,38
OTHER RECEIVABLES AND PAYABLES
Receivables
Belgium
KBC GROUP EUR RECEIVABLE
31.055,08
EUR
1,000
31.055,08
0,14
3.111,68
EUR
1,000
3.111,68
34.166,76
0,01
0,15
KBC GROUP EUR PAYABLE
-21.935,45
EUR
1,000
-21.935,45
-0,10
KBC GROUP GBP PAYABLE
-14,11
GBP
1,000
-17,12
-21.952,57
-0,10
12.214,19
0,05
KBC GROUP WHT TO BE RECOVERED EUR
Total receivables
Payables
Belgium
Payables
TOTAL RECEIVABLES AND PAYABLES
OTHER
Interest receivable
EUR
19.827,90
0,09
Expenses payable
EUR
-28.815,33
-0,13
Expenses to be carried forward
EUR
17.485,37
0,08
8.497,94
0,04
22.983.750,53
100,00
TOTAL OTHER
TOTAL NET ASSETS
150
Geographic breakdown (as a % of securities portfolio)
Australia
Belgium
Brazil
Canada
Switzerland
China
Cayman Islands
Germany
Spain
France
U.K.
Hong Kong
Italy
Jersey/The Channel Islands
Japan
South Korea
Netherlands
Singapore
U.S.A.
Guernsey The Channel Islands
Total
31/08/2012
1,85
1,12
0,00
0,00
5,00
0,00
1,15
3,76
1,05
9,04
13,35
2,45
4,86
0,00
6,01
1,13
1,28
1,07
46,88
0,00
100,00
28/02/2013
1,32
0,88
1,33
1,47
8,10
0,00
0,93
3,61
1,25
7,38
14,45
4,67
5,35
0,00
4,61
0,00
0,00
0,00
44,65
0,00
100,00
31/08/2013
1,00
0,84
2,35
4,34
8,83
0,00
0,00
6,76
1,55
5,14
8,23
2,09
5,52
0,00
4,79
0,00
1,56
0,00
45,89
1,11
100,00
28/02/2014
0,34
0,88
1,97
8,34
5,80
1,32
0,63
6,11
2,47
5,47
8,72
3,25
2,67
1,64
2,05
0,00
2,56
0,00
44,31
1,47
100,00
28/02/2013
57,04
17,72
2,19
1,78
4,58
3,34
13,35
100,00
31/08/2013
52,20
20,14
2,96
1,97
7,45
6,99
8,29
100,00
28/02/2014
47,17
12,75
4,15
0,88
7,32
10,16
17,57
100,00
28/02/2013
0,00
6,80
14,14
16,06
4,15
6,08
0,00
0,00
52,77
100,00
31/08/2013
4,34
8,80
21,58
10,33
2,08
4,77
0,00
0,00
48,10
100,00
28/02/2014
8,20
5,71
18,67
13,34
4,49
2,48
0,00
0,00
47,11
100,00
Sector breakdown (as a % of securities portfolio)
Cyclicals
Consum(cycl)
Cons.goods
Pharma
Financials
Technology
Utilities
Total
31/08/2012
54,59
21,41
2,73
1,28
4,77
2,26
12,96
100,00
Currency breakdown (as a % of net assets)
CAD
CHF
EUR
GBP
HKD
JPY
KRW
SGD
USD
Total
31/08/2012
0,00
5,01
20,96
15,31
2,45
6,01
1,13
1,08
48,05
100,00
151
2.4.2
CHANGES IN THE COMPOSITION OF THE ASSETS OF KBC ECO FUND CLIMATE CHANGE (IN
THE CURRENCY OF THE SUB-FUND)
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Turnover rate
Purchases
Sales
Total 1
Subscriptions
Redemptions
Total 2
Monthly average of total
assets
Corrected turnover rate
1st half of year
17.822.389,27
21.437.792,00
39.260.181,27
3.252.223,09
6.368.627,42
9.620.850,51
24.509.319,73
Year
17.822.389,27
21.437.792,00
39.260.181,27
3.252.223,09
6.368.627,42
9.620.850,51
24.509.319,73
120,93 %
120,93 %
1st half of year
17.822.389,27
21.437.792,00
39.260.181,27
3.252.223,09
6.368.627,42
9.620.850,51
23.949.619,63
Year
17.822.389,27
21.437.792,00
39.260.181,27
3.252.223,09
6.368.627,42
9.620.850,51
23.949.619,63
123,76 %
123,76 %
The table above shows the capital volume of portfolio transactions. This volume (adjusted to take
account of total subscriptions and redemptions) is also compared to the average net assets at the
beginning and end of the period.
A figure close to 0% implies that the transactions relating to the securities or transactions relating to
the assets (excluding deposits and cash) in a given period only involve subscriptions and
redemptions.
A negative percentage shows that subscriptions and redemptions entailed few, if any, transactions in
the portfolio.
Active asset management may result in high turnover rates (monthly percentage >50%).
The detailed list of transactions is available for consultation free of charge at the registered office of
the Bevek or fund at Havenlaan 2, 1080 Brussels.
2.4.3
AMOUNT OF COMMITMENTS IN RESPECT OF FINANCIAL DERIVATIVES POSITIONS
Nil
152
2.4.4
CHANGES OF THE NUMBER OF SUBSCRIPTIONS AND REDEMPTIONS AND THE NET ASSET
VALUE
Classic Shares
Period
Change in number of shares in circulation
Subscriptions
Year
End of period
Redemptions
Cap.
Dis.
2012 - 02*
14.508,09
614,42
28.612,41
905,65
59.687,10
5.192,74
64.879,84
2013 - 02*
15.884,37
256,00
26.645,54
866,00
48.925,93
4.582,74
53.508,67
2014 - 02*
6.642,25
437,00
15.016,21
806,15
40.551,97
4.213,59
44.765,55
Cap.
Dis.
Cap.
Dis.
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Total
Redemptions
Capitalization
Distribution
Capitalization
Distribution
2012 - 02*
5.122.308,83
220.621,00
9.703.594,81
302.059,28
2013 - 02*
5.448.930,18
90.834,07
9.096.194,23
296.351,52
2014 - 02*
2.971.924,00
187.829,27
6.776.679,13
341.551,49
Period
Year
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
Distribution
2012 - 02*
22.864.841,50
352,90
346,83
2013 - 02*
21.310.078,07
398,85
391,90
2014 - 02*
20.869.616,52
467,85
450,33
* The financial year does not coincide with the calender year.
153
Institutional B Shares
Period
Change in number of shares in circulation
Subscriptions
Year
Cap.
End of period
Redemptions
Dis.
Cap.
Dis.
Cap.
Dis.
Total
2012 - 02*
10.928,00
310,00
10.618,00
10.618,00
2013 - 02*
13.772,00
17.725,00
6.665,00
6.665,00
2014 - 02*
1.476,00
3.623,00
4.518,00
4.518,00
Amounts received and paid by the UCI
(in the currency of the class)
Period
Subscriptions
Year
Capitalization
Redemptions
Distribution
Capitalization
2012 - 02*
3.615.469,07
106.718,51
2013 - 02*
4.823.410,51
6.260.817,25
2014 - 02*
653.605,98
1.497.903,54
Period
Year
Distribution
Net asset value
End of period (in the currency of the class)
Of one share
Of the class
Capitalization
2012 - 02*
3.749.045,34
353,08
2013 - 02*
2.657.264,17
398,69
2014 - 02*
2.114.134,00
467,94
* The financial year does not coincide with the calender year.
Distribution
154
2.4.5
PERFORMANCE FIGURES
Classic Shares
1 Year
Cap
Div
ISIN code
Currency
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
CAP BE0946844272
EUR
17.30%
6.68%
13.10%
02/02/2007
-0.94%
DIV BE0946843266
EUR
17.25%
6.66%
13.08%
02/02/2007
-0.95%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
155
Institutional B Shares
1 Year
Cap
Div
ISIN code
CAP BE6228923684
Currency
EUR
Share
classes
Bench
mark
3 Years*
Share
classes
Bench
mark
5 Years*
Share
classes
Bench
mark
17.37%
Risk warning: Past performance is not a guide to future performance.
* Return on annual basis.
10 Years*
Share
classes
Bench
mark
Since launch*
Launch
Date
Share
classes
25/11/2011
22.28%
156
Classic Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
The return is calculated as the change in the net asset value between two dates expressed
as a percentage. In the case of units that pay dividends, the dividend is incorporated
geometrically in the return.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
Distribution units (DIV)
Return on date D over a period of X years:
[ C * NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[ C * NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D
where C is a factor that is determined for all N dividends between the calculation
date D and the reference date.
For dividend i on date Di with value Wi:
Ci = [Wi / NIW(Di)] + 1
i = 1 ... N
from whichC = C0 * .... * CN.

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalisation and distribution shares.




Institutional B Shares
The bar chart shows the performance for full financial years.
The figures do not take account of any restructuring.
Calculated in EUR.
The return is calculated as the change in the net asset value between two dates expressed
as a percentage.

Calculation method for date D, where NAV stands for net asset value:
Capitalisation units (CAP)
Return on date D over a period of X years:
[NIW(D) / NIW(Y)] ^ [1 / X] - 1
where Y = D-X
Return on date D since the start date S of the unit:
[NIW(D) / NIW(S)] ^ [1 / F] - 1
where F = 1 if the unit has existed for less than one year on date D
where F = (D-S) / 365.25 if the unit has existed for longer than one year on date D

If the interval between the two dates exceeds one year, the ordinary return calculation is
th
converted into a return on an annual basis by taking the n square root of 1 plus the total
return of the unit.

The return figures shown above do not take account of the fees and charges associated
with the issue and redemption of units.
These are the performance figures for capitalization shares.




157
2.4.6
COSTS
Ongoing Charges: *
Classic Shares Distribution: 1.875%
Classic Shares Capitalization: 1.832%
Institutional B Shares Capitalization: 1.780%
* The following are not included in the charges shown: entry and exit charges, performance fees,
transaction costs paid when buying or selling assets, interest paid, payments made with a view to
providing collateral in the context of derivative financial instruments, or commissions relating to
Commission Sharing Agreements or similar fees received by the Management Company or any
person associated with it.
EXISTENCE OF COMMISSION SHARING AGREEMENTS
The Management Company, or where applicable, the appointed manager has entered into a
Commission Sharing Agreement with one or more brokers for transactions in shares on behalf of
one or more sub-funds. This agreement specifically concerns the execution of orders and the
delivery of research reports.
For more information, please see the ‘General’ section of the annual report.
Commission gross
CSA Credits
in EUR
in EUR
paid during the period: accrued during the period:
1-09-13
1-09-13
Broker
Percentage
28-02-14
28-02-14
CITI
1,490
745
50.00%
CSFBSAS
9,308
3,880
41.69%
DEUTSCHE
279
105
37.50%
HSBC
66
25
37.50%
INSTINET
211
76
36.12%
JP MORGAN
656
328
50.00%
MACQUARIE
3,937
1,855
47.12%
MERRILL
189
81
42.86%
MORGAN STANLEY
2,644
1,139
43.09%
SOCGEN
174
57
32.45%
UBSWDR
2,673
1,273
47.61%
FEE-SHARING AGREEMENTS AND REBATES:
The management company may share its fee with the distributor, and institutional and/or
professional parties.
In principle, the percentage share amounts to between 35% and 60% if the distributor is an entity of
KBC Group NV or to between 35% and 70% if the distributor is not an entity of KBC Group NV.
However, in a small number of cases, the distributor’s fee is less than 35%. Investors may, on
request, obtain more information on these cases.
If the management company invests the assets of the undertaking for collective investment in units
of undertakings for collective investment that are not managed by an entity of KBC Group NV, and
receives a fee for doing so, it will pay this fee to the undertaking for collective investment.
Fee-sharing does not affect the amount of the management fee paid by the sub-fund to the
management company. This management fee is subject to the limitations laid down in the articles of
association. The limitations may only be amended after approval by the general meeting of
shareholders.
The management company has concluded a distribution agreement with the distributor in order to
facilitate the wider distribution of the sub-fund's units by using multiple distribution channels.
It is in the interests of the holders of units, the sub-fund and of the distributor for the largest possible
number of units to be sold and for the assets of the sub-fund to be maximised in this way. In this
respect, there is therefore no question of any conflict of interest.
158
2.4.7
NOTES TO THE FINANCIAL STATEMENTS AND OTHER DATA
Fee for managing the investment portfolio: 1.5% per annum (0.1% of which for the sustainability
screening referred to in the prospectus) calculated on the basis of the average total net assets of the
sub-fund, no management fee is charged on assets assets invested in investment undertakings
managed by a financial institution of the KBC group.
KBC Fund Management Limited receives a fee from the management company of max. 1.4%
calculated on that part of the portfolio that it manages, without the total management fee received by
the management company being exceeded.
Kleinwort Benson Investors Dublin Ltd receives a fee of max. 0.5% from KBC Fund Management
Limited calculated on that part of the portfolio that it manages, without the total management fee
received by KBC Fund Management Limited being exceeded.
The administration agent’s fee is payable at the end of each month and is calculated on the basis of
the average total net assets of the sub-fund.
Auditor's fee: 1 700 EUR per year. This fee is not including VAT and can be indexed on an annual
basis in accordance with the decisions of the general meeting.
The custody fee is calculated on the value of the securities held in custody by the custodian on the
final banking day of the preceding calendar year, except on those assets invested in investment
undertakings managed by a financial institution of the KBC group. The custody fee is paid at the
beginning of the calendar year.
Social, ethical and environmental aspects:
No manufacturers of controversial weapons whose use over the past five decades, according to the
international consensus, has led to disproportionate human suffering among the civilian population
will be included in the portfolio of investments. This involves the manufacturers of anti-personnel
mines, cluster bombs and munitions and weapons containing depleted uranium. In this way, the subfund seeks to reflect not only simple financial reality but also the social reality of the sector or region
in question.
Exercising voting rights.
If necessary, relevant and in the interest of the shareholders, the management company will
exercise the voting rights attached to the shares in the Bevek’s portfolio.
The management company will adhere to the following criteria when determining how it stands
relative to the items on the agenda that are put to the vote:
- Shareholder value may not be adversely affected.
- Corporate governance rules, especially with regard to the rights of minority shareholders, must be
respected.
- The minimum standards with regard to sustainable business and corporate social responsibility
must be met.
The list of companies for which voting rights are exercised is available at the registered office of the
Bevek.
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KBC Eco Fund