MARLBOROUgH US MULTI-CAP INCOME FUND...Cogent earns high incremental margins on increased traffic and we expect profits to inflect meaningfully in coming quarters. Longer term, the

ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS

for the year ended 10 September 2020

MARLBOROUgHUS MULTI-CAP INCOME FUND

MARLBOROUGH US MULTI-CAP INCOME FUND

CONTACT INFORMATION

Authorised Fund Manager and Registrar

Marlborough Fund Managers LtdMarlborough House59 Chorley New RoadBolton BL1 4QP

Investor Support: (0808) 145 2500 (FREEPHONE)

Authorised and regulated by the Financial Conduct Authority.

Trustee

HSBC Bank plc8 Canada SquareLondonE14 5HQ

Investment Adviser

Boston Financial Management LLC255 State Street6th FloorBostonMA 02109USA

Auditor

Ernst & Young LLPAtria One144 Morrison StreetEdinburghEH3 8EX

Directors of Marlborough Fund Managers Ltd

Andrew Staley (Non-Executive)Nicholas F J CoolingAllan HamerWayne D GreenDom ClarkeHelen DerbyshireRichard GoodallGeoffrey Hitchin (Non-Executive)Guy Sears (Independent Non-Executive)David Kiddie (Independent Non-Executive)Sarah Peaston (Independent Non-Executive)

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential RegulationAuthority.


CONTENTS PAGE

AUTHORISED INVESTMENT ADVISER’S REPORT 1

AUTHORISED STATUS AND GENERAL INFORMATION 3

DIRECTORS’ STATEMENT 5

STATEMENT OF AUTHORISED FUND MANAGER'S RESPONSIBILITIES 5

STATEMENT OF THE DEPOSITARY'S RESPONSIBILITIES AND REPORT OF THE DEPOSITARY 6

INDEPENDENT AUDITOR'S REPORT 7

COMPARATIVE TABLE 9

SYNTHETIC RISK AND REWARD INDICATOR 10

PORTFOLIO STATEMENT 11

FINANCIAL STATEMENTS

STATEMENT OF TOTAL RETURN 12

STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 12

BALANCE SHEET 13

NOTES TO THE INTERIM FINANCIAL STATEMENTS 14

DISTRIBUTION TABLE 20


AUTHORISED INVESTMENT ADVISER'S REPORTfor the year ended 10 September 2020

Percentage change and sector position to 10 September 2020

Six months 1 year 3 years 5 yearsMarlborough US Multi-Cap Income Fund 20.06% 10.45% 60.25% 132.13%IA North American Sector 19.74% 8.71% 41.19% 105.72%Quartile Ranking* 2 2 1 1* Based on ranking within The Investment Association North America sector.External Source of Economic Data: Morningstar (P - mid to mid, net income reinvested).

Brad Weafer / Tim Farina / Tim RobinsonBoston Financial Management LLC18 November 2020

It is difficult to describe the last 12 months for daily life and equity markets without using hyperbole. The year started benign, with theUS economy in the latter innings of the longest economic expansion in history. The S&P 500 finished calendar year 2019 with a totalreturn over 30%. Entering calendar year 2020, investors were confident and with many gauges of sentiment in near euphoric territory.That complacency was broken when a novel coronavirus started an outbreak that quickly spread across the world and created a globalpandemic. The U.S. economy was effectively shutdown in March, as officials struggled to contain the spread of the virus and manycorporations encountered an environment with revenue reductions few thought possible. Companies with previously-thought solidbalance sheets were forced to consider whether they had enough liquidity to wait out the crisis. The S&P 500 plummeted over 35% inonly just over a month. The Fund was not immune to the greater equity market struggles, but as you would expect of our portfolio ofhigh-quality companies with better balance sheets, it significantly outperformed during the decline. The decline in U.S. markets wasswift, but so too was the response from policy makers. The Federal Reserve acted quickly to step-up bond purchasing and kept creditmarkets from seizing up. This was crucial to support companies who needed access to financing. Fiscal policy makers were also quickto provide stimulus for the influx of workers that were put out of work by raising unemployment assistance to help the consumereconomy stay afloat. The stock market reacted to the confidence of the monetary and fiscal backstop and began a strong rally off theMarch lows. From the low on March 23, the S&P returned over 50% in USD through September 10, 35% in local currency. For the fullyear, the Fund returned 10.45%, slightly ahead of its peers.

The Fund’s best performer during the last year was Apple (AAPL +111%). Throughout the shutdown, technology has been a clearwinner and Apple was a leader much of that time. There has been a growing appreciation for their installed base of iPhones, which isincreasingly being leveraged to drive business to the company’s array of services. In addition, the coming iPhone replacement cycle islining up as very lucrative for the already cash rich company.

On the downside of the ledger, KAR Auction Services (KAR -36%) was one of the Fund’s worst performing holdings. KAR is a leadingprovider of used vehicle auctions. The lockdown significantly curtailed the ability to hold successful auctions. In addition, the company’sfinance unit was a drag on liquidity, forcing it to raise equity in a difficult environment. With limited ability to judge the health of thecompany’s balance sheet, we exited the position.

During the year, we initiated new positions in FirstService (FSV), a diversified business services company that has been driving stronggrowth behind their new commercial restoration platform and Brown and Brown (BRO), a well-run insurance brokerage we think is well-positioned to take advantage of a strengthening insurance pricing environment. We also exited several positions, including Qualcomm(QCOM), KAR Auction Services (KAR), JPM Morgan (JPM), Carters (CRI), and IAA (IAA).

Looking ahead, we are still constructive on the path forward for the U.S. stock market. While he has yet to concede defeat officially,Donald Trump lost the Presidential election to Joe Biden in what was a bitterly fought battle for the White House. The U.S. Senate,pending a runoff election in one State, did not transition from Republican control. A democratic President and controlled House ofRepresentatives thus leaves the country with divided government. We expect tougher negotiation on any Covid related stimulus, butthe status quo also significantly lowers the odds of a tax increase for corporations or individuals. More importantly than politicshowever, in recent weeks we have seen impressive clinical trial results from two Covid-19 vaccine candidates. Our view is thatprogress with these and related treatments is likely to have a bigger impact on the shape of economic growth and expectations for itgoing forward. It is difficult to envision an environment 12 to 18 months from today that is not better for the U.S. economy andcorporate profit levels.

1


AUTHORISED INVESTMENT ADVISER'S REPORTfor the year ended 10 September 2020

Distributions (pence per unit)

Year 2020 Year 2019 Year 2018 Year 2017A IncomeNet income paid 10 November 8.3407 8.3024 2.4536 2.3216B IncomeNet income paid 10 November 8.4200 8.3351 4.2573 4.4085P IncomeNet income paid 10 November 8.4575 8.3478 5.1579 5.4442

Portfolio changes

Largest purchases Cost (£) Largest sales Proceeds (£)

W R Berkley 2,314,083 Qualcomm 2,449,533Becton, Dickinson and Company 1,719,697 IAA 1,781,854Watsco 1,545,710 JPMorgan Chase & Co 1,584,749Brown & Brown 1,544,175 Carter's 1,131,724Crown Castle International 1,360,979 UnitedHealth Group 1,076,845FirstService 1,293,545 KAR Auction Services 997,551Amphenol 'A' 1,194,911 BlackRock 692,800Cogent Communications 1,138,176 Apple 612,278STERIS 1,086,637 The Hershey Company 451,755Broadridge Financial Solutions 990,541

Other purchases 3,564,100 Other sales 3,896

Total purchases for the year 17,752,554 Total sales for the year 10,782,985

2


AUTHORISED STATUS AND GENERAL INFORMATION

Authorised status

Investment objective and policy

Rights and terms attaching to each unit class

Assessment of value

Changes in prospectus

The Manager is required to carry out an assessment of value at least annually and publish its findings in a report to investors. TheManager should publish the report in the annual report of the Fund, except where the assessment and report are provided as acomposite, that is, with other funds that may have a different year end date. Marlborough US Multi-Cap Income Fund was assessedand reported on, in a composite report, dated 30 November 2020, which the Manager has published on the website.

Since the last annual report, the investment objective and policy has been updated, and there has been a change of auditor fromBarlow Andrews LLP to Ernst & Young LLP. Details of these changes can be found in the latest Prospectus dated 14 August 2020.

Up to date Key Investor Information Documents, Prospectus and Long Reports and Financial Statements for any fund within the AFM’srange, can be requested by the investor at any time.

Marlborough US Multi-Cap Income Fund (the Fund) is an authorised unit trust scheme within the meaning of the Financial Servicesand Markets Act 2000 and is a UCITS scheme operating under the Collective Investment Schemes Sourcebook (COLL) as issued bythe Financial Conduct Authority.

A unit of each class represents a proportional entitlement to the assets of the Fund. The allocation of income and taxation and therights of each unit in the event the Fund is wound up are on the same proportional basis.

The investment objective of the Fund is to provide income, that is, money paid out of an investment such as dividends from shares,with the potential for some increase in the value of an investment, over a minimum of 5 years.

At least 80% of the Fund will be invested in the shares of companies which are listed on stock markets or domiciled in the UnitedStates of America.

The Fund is actively managed, which means the investment manager decides which investments to buy or sell and when. Whilst theInvestment Manager may invest in small, medium and large companies, in order to meet the income objective, there will typically be abias towards larger companies.

The Fund may also invest in other types of security which are linked to the performance of a company, such as; investment gradebonds, which are loans typically issued by companies and governments, where the issuer has a higher capacity to repay the debt;bonds which may be converted into shares (known as convertible bonds); and preference shares.

In addition, the Fund may invest in other funds (including investment trusts) which offer exposure to North American companies andfrom time to time, may hold a small amount in investment grade bonds.

The Fund will normally hold an amount of cash to enable ready settlement of liabilities (including redemption of shares) and efficientmanagement of the Fund both generally and in relation to strategic objectives however may hold higher cash balances in certaincircumstances, such as volatile market conditions.

The Fund may also hold money market instruments, a type of short-term loan, and funds that invest in these instruments as analternative to holding cash.

The Fund’s investment policy puts it in the IA North America Sector.

3


AUTHORISED STATUS AND GENERAL INFORMATION

Remuneration policy

The quantitative remuneration disclosures as at 30 September 2019 are set out below:

£ £ £

9 741,229 551,303 189,9263 101,261 85,233 16,028

0.05 8,150 6,062 2,0880.02 1,113 937 176

Senior managementRisk takers and other identified staff

The total number of staff employed by the AFM was 172 as at 30 September 2019. The total remuneration paid to those staff was£7,294,016, of which £3,707,059 is attributable to the AFM.

The allocation of remuneration to the AFM is based on Assets Under Management (AUM), as staff work for two AFM’s. The allocationof remuneration to the Fund is based on AUM where staff are not directly allocated to the Fund. The way these disclosures arecalculated may change in the future.

Senior managementRisk takers and other identified staffAllocation of total remuneration of the employees of the AFMto the Fund

Remuneration paid to staff of the Authorised Fund Manager(AFM) who have a material impact on the risk profile of theFund

In line with the requirements of UCITS V, Marlborough Fund Managers Ltd is subject to a remuneration policy which is consistent withthe principles outlined in the European Securities and Markets Authority guidelines on sound remuneration policies under UCITS V.The remuneration policies are designed to ensure that any relevant conflicts of interest can be managed appropriately at all times andthat the remuneration of its senior staff is in line with the risk policies and objectives of the UCITS funds it manages.

Number of identified staff

Total remuneration

paid

Fixed remuneration

paid

Variable remuneration

paid

4


DIRECTORS' STATEMENT

ALLAN HAMERJOINT MANAGING DIRECTOR

WAYNE D GREENJOINT MANAGING DIRECTOR

MARLBOROUGH FUND MANAGERS LTD

STATEMENT OF AUTHORISED FUND MANAGER'S RESPONSIBILITIES

In preparing those financial statements the AFM is required to:

●

●

●

●

●

make judgements and estimates that are reasonable and prudent; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Fund willcontinue in operation.

The AFM is required to keep proper accounting records and to manage the Fund in accordance with the COLL rules, the Trust Deedand the Prospectus. The AFM is responsible for taking reasonable steps for the prevention and detection of fraud and otherirregularities.

The AFM is responsible for ensuring that, to the best of its knowledge and belief, there is no relevant audit information of which theauditor is unaware. It is the responsibility of the AFM to take all necessary steps to familiarise itself with any relevant audit informationand to establish that the auditor is aware of that information.

This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued andamended by the Financial Conduct Authority.

6 January 2021

The Financial Conduct Authority’s Collective Investment Schemes Sourcebook (COLL) requires the Authorised Fund Manager (AFM)to prepare financial statements for each accounting year which give a true and fair view of the financial position of the Fund and of thenet revenue and net capital gains on the property of the Fund for the year.

comply with the disclosure requirements of the Statement of Recommended Practice relating to UK Authorised Fundsissued in May 2014 and amended in June 2017;

follow United Kingdom Generally Accepted Accounting Practice and applicable accounting standards;

select suitable accounting policies and then apply them consistently;

5


STATEMENT OF THE DEPOSITARY’S RESPONSIBILITIES AND REPORT OF THE DEPOSITARY

The Depositary must ensure that:

●

● ● ● ● ●

HSBC BANK PLC LONDON

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Trust’s units and the application ofthe Trust’s income in accordance with the Regulations and the Scheme documents of the Trust; and

(ii) has observed the investment and borrowing powers and restrictions applicable to the Trust in accordance with the Regulations andthe Scheme documents of the Trust.

6 January 2021

the value of units of the Trust are calculated in accordance with the Regulations;any consideration relating to transactions in the Trust’s assets is remitted to the Trust within the usual time limits;the Trust’s income is applied in accordance with the Regulations; andthe instructions of the Authorised Fund Manager (‘’the AFM’’), which is the UCITS Management Company, are carriedout (unless they conflict with the Regulations).

The Depositary also has a duty to take reasonable care to ensure that the Trust is managed in accordance with the Regulations andthe Scheme documents of the Trust in relation to the investment and borrowing powers applicable to the Trust.

Having carried out such procedures as we consider necessary to discharge our responsibilities as Depositary of the Trust, it is ouropinion, based on the information available to us and the explanations provided, that in all material respects, the Trust, acting throughthe AFM:

the sale, issue, repurchase, redemption and cancellation of units are carried out in accordance with the Regulations;

Statement of the Depositary’s Responsibilities in Respect of the Scheme and Report of the Depositary to the Unitholders ofMarlborough US Multi-Cap Income Fund (‘’the Trust’’) for the period ended 10 September 2020

The Depositary must in the context of its role act honestly, fairly, professionally, independently and in the interests of the Trust and itsinvestors.

The Depositary is responsible for the safekeeping of all custodial assets and maintaining a record of all other assets of the Trust inaccordance with the Regulations.

the Trust’s cash flows are properly monitored and that cash of the Trust is booked in the cash accounts in accordancewith the Regulations;

The Depositary in its capacity of Trustee of Marlborough US Multi-Cap Income Fund must ensure that the Trust is managed inaccordance with the Financial Conduct Authority’s Collective Investment Schemes Sourcebook, the Financial Services and MarketsAct 2000, as amended, (together ‘’the Regulations’’), the Trust Deed and Prospectus (together ‘’the Scheme documents’’) as detailedbelow.

6


INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF MARLBOROUGH US MULTI-CAP INCOME FUND

Opinion

In our opinion, the financial statements:●

●

Basis for opinion

Conclusions relating to going concern

●

●

Other information

We have nothing to report in this regard.

In our opinion:●

●

●

the Manager’s use of the going concern basis of accounting in the preparation of the financial statements is notappropriate; orthe Manager has not disclosed in the financial statements any identified material uncertainties that may castsignificant doubt about the Fund’s ability to continue to adopt the going concern basis of accounting for the period ofat least twelve months from the date when the financial statements are authorised for issue.

The other information comprises the information included in the annual report, other than the financial statements and our auditor’sreport thereon. The Manager is responsible for the other information.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in thisreport, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, considerwhether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we arerequired to determine whether there is a material misstatement in the financial statements or a material misstatement of the otherinformation. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, weare required to report that fact.

Opinions on other matters prescribed by the rules of the Collective Investment Schemes Sourcebook of the FinancialConduct Authority

the financial statements have been properly prepared in accordance with the Statement of Recommended Practicerelating to Authorised Funds, the rules of the Collective Investment Schemes Sourcebook of the Financial ConductAuthority and the Instrument of Incorporation;the information given in the Manager’s report for the financial year for which the financial statements are prepared isconsistent with the financial statements; andthere is nothing to indicate that proper accounting records have not been kept or that the financial statements are notin agreement with those records.

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

We have audited the financial statements of Marlborough US Multi-Cap Income Fund (“the Fund”) for the year ended 10 September2020 which comprise the Statement of Total Return, Statement of Change in Net Assets Attributable to Unitholders together with theBalance Sheet, the accounting policies and risk profile, the related notes and the Distribution Table, including a summary of significantaccounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United KingdomAccounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 ‘The Financial ReportingStandard applicable to the UK and Republic of Ireland’.

give a true and fair view of the financial position of the Fund as at 10 September 2020 and of the net revenue and thenet capital gains on the scheme property of the Fund for the year then ended; andhave been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice includingFRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Ourresponsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statementssection of our report below. We are independent of the Fund in accordance with the ethical requirements that are relevant to our auditof the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities inaccordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

7


INDEPENDENT AUDITOR’S REPORT TO THE UNITHOLDERS OF MARLBOROUGH US MULTI-CAP INCOME FUND

Matters on which we are required to report by exception

●

Responsibilities of the Manager

Auditor’s responsibilities for the audit of the financial statements

Use of our report

Ernst & Young LLPStatutory AuditorEdinburgh

Notes:1.

2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ fromlegislation in other jurisdictions.

In preparing the financial statements, the Manager is responsible for assessing the Fund’s ability to continue as a going concern,disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager eitherintends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financialstatements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’swebsite at https://www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.

This report is made solely to the Fund’s unitholders, as a body, pursuant to Paragraph 4.5.12 of the rules of the Collective InvestmentSchemes Sourcebook of the Financial Conduct Authority. Our audit work has been undertaken so that we might state to the Fund’sunitholders those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other than the Fund and the Fund’s unitholders as a body, forour audit work, for this report, or for the opinions we have formed.

6 January 2021

The maintenance and integrity of the Marlborough Fund Managers Ltd website is the responsibility of the Manager;the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditorsaccept no responsibility for any changes that may have occurred to the financial statements since they were initiallypresented on the website.

As explained more fully in the Manager’s responsibilities statement set out on page 5, the Manager is responsible for the preparation ofthe financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Managerdetermines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due tofraud or error.

We have nothing to report in respect of the following matter in relation to which the Collective Investment Schemes Sourcebook of theFinancial Conduct Authority rules requires us to report to you if, in our opinion:

we have not received all the information and explanations which, to the best of our knowledge and belief, arenecessary for the purpose of our audit.

8


COMPARATIVE TABLE

A Income units Year to Year to Year toChange in net assets per unit 10.09.2020 10.09.2019 10.09.2018

pence pence penceOpening net asset value per unit 588.97 511.47 419.91Return before operating charges* 66.12 93.92 101.39Operating charges (9.46) (8.12) (7.38)Return after operating charges* 56.66 85.80 94.01Distributions on income units (8.34) (8.30) (2.45)Closing net asset value per unit 637.29 588.97 511.47

* after direct transaction costs of: 0.07 0.06 0.07

PerformanceReturn after charges 9.62% 16.78% 22.39%

Other informationClosing net asset value £48,318,759 £45,002,782 £36,920,115Closing number of units 7,581,923 7,640,934 7,218,421Operating charges 1.59% 1.58% 1.60%Direct transaction costs 0.01% 0.01% 0.01%

PricesHighest unit price 661.88p 610.55p 521.13pLowest unit price 485.53p 442.71p 412.91p

B Income units Year to Year to Year toChange in net assets per unit 10.09.2020 10.09.2019 10.09.2018




Other informationClosing net asset value £60,011 £117,859 £102,801Closing number of units 9,304 19,871 20,059Operating charges 1.09% 1.08% 1.10%Direct transaction costs 0.01% 0.01% 0.01%


9


COMPARATIVE TABLE

P Income units Year to Year to Year toChange in net assets per unit 10.09.2020 10.09.2019 10.09.2018




Other informationClosing net asset value £31,084,402 £20,103,395 £13,482,029Closing number of units 4,791,396 3,377,985 2,628,330Operating charges 0.84% 0.83% 0.85%Direct transaction costs 0.01% 0.01% 0.01%


SYNTHETIC RISK AND REWARD INDICATOR

Lower risk

Typically lower rewards

1 2 3 4 5 6 7

Operating charges are the same as the ongoing charges and are the total expenses paid by each unit class in the year. Directtransaction costs are the total charges for the year, included in the purchase and sale of investments in the portfolio of the Fund.These amounts are expressed as a percentage of the average net asset value over the year and the average units in issue for thepence per unit figures.

The synthetic risk and reward indicator above aims to provide you with an indication of the overall risk and reward profile of the Fund.It is calculated based on the volatility of the Fund using weekly historic returns over the last five years. If five years data is notavailable, the returns of a representative portfolio are used.

The Fund has been measured as 5 because it has experienced moderate to high volatility historically. During the year the syntheticrisk and reward indicator has remained unchanged.

10


PORTFOLIO STATEMENTas at 10 September 2020

Holding or Bid Percentage ofnominal value value total net assets

£ %BASIC MATERIALS (10 September 2019 - 3.91%)

14,545 Air Products & Chemicals 3,383,800 4.26Total Basic Materials 3,383,800 4.26

CONSUMER GOODS (10 September 2019 - 3.78%)3,930 The Hershey Company 445,797 0.56

Total Consumer Goods 445,797 0.56

CONSUMER SERVICES (10 September 2019 - 11.40%)7,860 Costco Wholesale 2,090,226 2.636,565 Home Depot (The) 1,397,189 1.76

Total Consumer Services 3,487,415 4.39

FINANCIALS (10 September 2019 - 28.87%)45,725 Brown & Brown 1,594,099 2.0120,185 CME Group 'A' 2,602,776 3.2827,105 Crown Castle International 3,356,046 4.225,700 Equinix 3,296,524 4.15

26,775 First Republic Bank 2,251,382 2.8318,500 FirstService 1,832,455 2.3112,640 Mastercard 'A' 3,293,534 4.1517,565 Visa 'A' 2,752,266 3.4679,185 W R Berkley 3,863,024 4.86

Total Financials 24,842,106 31.27

HEALTH CARE (10 September 2019 - 10.54%)17,020 Becton, Dickinson and Company 3,078,826 3.8727,810 Gilead Sciences 1,377,206 1.738,975 Johnson & Johnson 1,031,720 1.30

24,545 STERIS 3,070,175 3.86Total Health Care 8,557,927 10.76

INDUSTRIALS (10 September 2019 - 21.31%)34,985 A O Smith 1,295,970 1.6344,250 Broadridge Financial Solutions 4,633,805 5.833,685 Expeditors International of Washington 253,401 0.32

24,320 Fastenal Company 844,500 1.067,500 Lennox International 1,573,891 1.989,580 Lockheed Martin 2,834,018 3.578,675 Nordson 1,263,163 1.59

17,060 Republic Services 1,246,634 1.576,640 The Sherwin-Williams Company 3,539,430 4.45

24,550 Watsco 4,463,019 5.62Total Industrials 21,947,831 27.62

TECHNOLOGY (10 September 2019 - 15.65%)14,365 Amphenol 'A' 1,177,770 1.4849,600 Apple 4,463,905 5.6252,905 Cogent Communications 2,673,180 3.3634,325 Microsoft 5,566,330 7.01

Total Technology 13,881,185 17.47

Portfolio of investments 76,546,061 96.33Net current assets 2,917,111 3.67Total net assets 79,463,172 100.00

11


STATEMENT OF TOTAL RETURNfor the year ended 10 September 2020

Notes 10 September 2020 10 September 2019£ £ £ £

Income:Net capital gains 4 7,145,288 9,600,647Revenue 6 1,174,656 1,073,363

Expenses 7 (898,665) (753,974)Net revenue before taxation 275,991 319,389

Taxation 8 (166,389) (150,981)

Net revenue after taxation 109,602 168,408

Total return before distributions 7,254,890 9,769,055

Distributions 9 (950,236) (877,965)

Change in net assets attributable to unitholders frominvestment activities 6,304,654 8,891,090

STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERSfor the year ended 10 September 2020

10 September 2020 10 September 2019£ £ £ £

Opening net assets attributable to unitholders 65,224,036 50,504,945

Amounts receivable on issue of units 51,226,689 21,388,151Amounts payable on cancellation of units (43,292,402) (15,560,433)Amounts payable on unit class conversions - (7)

7,934,287 5,827,711

Change in net assets attributable to unitholders frominvestment activities 6,304,654 8,891,090

Unclaimed distributions 195 290

Closing net assets attributable to unitholders 79,463,172 65,224,036

12


BALANCE SHEETas at 10 September 2020

Notes 10 September 2020 10 September 2019£ £

Assets:Fixed Assets:Investments 17 76,546,061 62,260,977

Current Assets:Debtors 10 840,279 535,263Cash and bank balances 4,876,871 3,613,879Total assets 82,263,211 66,410,119

Liabilities:Creditors:Distribution payable 1,038,407 918,033Other creditors 11 1,761,632 268,050Total liabilities 2,800,039 1,186,083

Net assets attributable to unitholders 79,463,172 65,224,036

13


NOTES TO THE FINANCIAL STATEMENTSfor the year ended 10 September 2020

1 ACCOUNTING POLICIES

Basis of preparation

RevenueDividends from quoted ordinary securities are recognised when the security is quoted ex-dividend.

Dividends from non-quoted securities are recognised when the right to receive payment is established.

Bank interest is accounted for on an accruals basis.

Allocation of revenue

Expenses

Valuation The valuation point was 12:00 on 10 September 2020 being the last valuation point of the accounting year.

Listed investments are valued at fair value which is the bid price.

Taxation

Exchange rates

2 DISTRIBUTION POLICIES

Equalisation

All expenses, other than those relating to purchase and sale of investments, are charged against revenue on an accruals basis.

The financial statements have been prepared in compliance with Financial Reporting Standard 102 (FRS102) and in accordancewith the Statement of Recommended Practice for UK Authorised Funds issued by The Investment Association in May 2014 andamended in June 2017.

The financial statements are prepared in sterling, which is the functional currency of the Fund. Monetary amounts in these financialstatements are rounded to the nearest pound.

The financial statements have been prepared on the historical cost convention, modified to include the revaluation of investmentsand certain financial instruments at fair value.

Revenue, attributable after expenses to multiple unit classes, with the exception of the authorised fund manager's periodic charge,which is directly attributable to individual unit classes, is allocated to unit classes pro-rata to the value of the net assets of therelevant unit class on the day that the revenue is incurred.

There are no material events that have been identified that may cast significant doubt about the Fund’s ability to continue as agoing concern for at least the next twelve months from the date these financial statements are authorised for issue. The authorisedfund manager believes that the Fund has adequate resources to continue in operational existence for the foreseeable future and,following the consideration of the impact of COVID-19, they continue to adopt the going concern basis in preparing the financialstatements.

Unlisted, unapproved, illiquid or suspended securities are valued at the authorised fund manager's best estimate of the amountthat would be received from the immediate transfer at arm's length in a manner designed to show fair value. This modelling takesinto account, where appropriate, latest dealing prices, valuations from reliable sources, financial performance, maturity of thecompany and other relevant factors.

Corporation tax has been provided for at 20% on taxable income less expenses. Deferred taxation is provided on a full provisionbasis on timing differences arising from the different treatment of items for accounting and tax purposes. Potential future liabilitiesand assets are recognised where the transactions, or events giving rise to them, occurred before the balance sheet date.

Assets and liabilities denominated in foreign currencies are translated into sterling at the exchange rates prevailing at 12:00 on 10September 2020 being the last valuation point of the accounting year. Revenue and expenditure transactions are translated at therates of exchange ruling on the dates of the transactions. Exchange differences on such transactions follow the same treatment asthe principal amounts.

The distribution policy of the Fund is to distribute all available revenue, after deduction of expenses properly chargeable againstrevenue. Gains and losses on non-derivative instruments and currencies, whether realised or unrealised, are taken to capital andare not available for distribution.

Equalisation applies only to units purchased during the distribution period. It is the average amount of income included in thepurchase price of all group 2 units and is refunded to holders of these units as a return of capital. Being capital it is not liable to UKincome tax but must be deducted from the cost of the units for UK capital gains tax purposes.

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DISTRIBUTION POLICIES

Stock and special dividends

3 RISK MANAGEMENT POLICIES

Market price risk

Foreign currency risk

Credit and counterparty risk

Interest rate risk

Liquidity risk

Investment limits set out in the Trust Deed, Prospectus and in the rules contained in the Collective Investment SchemesSourcebook mitigate the risk of excessive exposure to any particular security or issuer.

The ordinary element of stock received in lieu of cash dividends is credited to capital in the first instance followed by a transfer torevenue of the cash equivalent being offered and this forms part of the distributable revenue of the Fund. In the case of anenhanced stock dividend, the value of the enhancement is treated as capital and does not form part of any distribution.

Special dividends are reviewed on a case by case basis in determining whether the dividend is to be treated as revenue or capital.Amounts recognised as revenue will form part of the distributable revenue of the Fund. Amounts recognised as capital arededucted from the cost of the investment. The tax accounting treatment follows the treatment of the principal amount.

In pursuing its investment objective as stated on page 3, the Fund holds a number of financial instruments. The Fund's financialinstruments comprise securities held in accordance with the investment objectives and policies together with cash balances,debtors and creditors that arise directly from its operations, for example, in respect of sales and purchases awaiting settlement,amounts receivable for issues and payable for redemptions and debtors for accrued income.

The main risks arising from the Fund's financial instruments and the authorised fund manager's policies for managing these risksare summarised below. These policies have been applied throughout the year.

The Fund is managed according to COLL 5, 'Investment and Borrowing Powers' which helps achieve the statutory objective ofprotecting consumers by laying down the minimum standards for the investments that may be held by an authorised fund. Inparticular: (a) the proportion of transferable securities and derivatives that may be held by the authorised fund is restricted if thosetransferable securities and derivatives are not listed on an eligible market. The intention of this is to restrict the transferablesecurities and derivatives that cannot be accurately valued and readily disposed of; and (b) the authorised funds are required tocomply with a number of investment rules that require the spreading of risk.

Market price risk is the risk that the value of the Fund's investment holdings will fluctuate as a result of changes in market pricescaused by factors other than interest rate or foreign currency movement. Market price risk arises mainly from uncertainty aboutfuture prices of financial instruments the Fund holds. It represents the potential loss the Fund might suffer through holding marketpositions in the face of price movements. The Fund's investment portfolio is exposed to market price fluctuations which aremonitored by the authorised fund manager in pursuance of the investment objective and policy as set out in the Prospectus.

The income and capital value of the Fund's investments can be affected by foreign currency translation movements as most of theFund's assets and income are denominated in currencies other than sterling which is the Fund's functional currency.

The authorised fund manager has identified three principal areas where foreign currency risk could impact the Fund. These are,movements in exchange rates affecting the value of investments, short-term timing differences such as exposure to exchange ratemovements during the period between when an investment purchase or sale is entered into and the date when settlement of theinvestment occurs, and finally movements in exchange rates affecting income received by the Fund. The Fund converts allreceipts of income received in currency into sterling on the day of receipt.

Certain transactions in securities that the Fund enters into expose it to the risk that the counterparty will not deliver the investmentfor a purchase, or cash for a sale after the Fund has fulfilled its responsibilities. The Fund only buys and sells investments throughbrokers which have been approved by the authorised fund manager as an acceptable counterparty.

Interest receivable on bank deposits or payable on bank overdraft positions will be affected by fluctuations in interest rates. TheFund's cash holdings are held in deposit accounts, whose rates are determined by the banks concerned on a daily basis.

The Fund's assets comprise mainly of readily realisable securities. The main liability of the Fund is the redemption of any units thatinvestors wish to sell. Assets of the Fund may need to be sold if insufficient cash is available to finance such redemptions. Theliquidity of the Fund's assets is regularly reviewed by the authorised fund manager.

15



4 NET CAPITAL GAINS 10 September 2020 10 September 2019£ £

The net gains on investments during the year comprise:

Non-derivative securities gains 7,315,516 9,621,402Currency losses (169,528) (19,840)Transaction charges (700) (915)Net capital gains 7,145,288 9,600,647

5 PURCHASES, SALES AND TRANSACTION COSTS 10 September 2020 10 September 2019(All purchases and sales are in the equity asset class) £ £

Purchases excluding transaction costs 17,748,373 14,596,75017,748,373 14,596,750

Commissions 4,181 3,468Total purchase transaction costs 4,181 3,468Purchases including transaction costs 17,752,554 14,600,218

Purchase transaction costs expressed as a percentage of the principal amount:Commissions 0.02% 0.02%

Sales excluding transaction costs 10,787,211 9,346,84010,787,211 9,346,840

Commissions (4,226) (2,925)Total sale transaction costs (4,226) (2,925)Sales net of transaction costs 10,782,985 9,343,915

Sale transaction costs expressed as a percentage of the principal amount:Commissions 0.04% 0.03%

Total purchases and sales transaction costs expressed as a percentage of the average net asset value over the year: Commissions 0.01% 0.01%

Transaction handling charges £700 £915

Average portfolio dealing spread

Average portfolio dealing spread at the balance sheet date 0.04% 0.03%

6 REVENUE 10 September 2020 10 September 2019£ £

Overseas dividends 1,061,618 1,058,128Overseas dividends (unfranked) 107,275 -Bank interest 5,763 15,235Total revenue 1,174,656 1,073,363

7 EXPENSES 10 September 2020 10 September 2019£ £

Payable to the authorised fund manager or associate:Manager's periodic charge 840,634 709,404Registration fees 10,837 11,073

851,471 720,477Other expenses:Trustee's fees 24,472 19,534Safe custody fees 14,718 9,966Financial Conduct Authority fee 124 158Audit fee 7,880 3,839

47,194 33,497

Total expenses 898,665 753,974

This spread represents the difference between the values determined respectively by reference to the bid and offer prices ofinvestments expressed as a percentage of the value determined by reference to the offer price.

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8 TAXATION 10 September 2020 10 September 2019£ £

a Analysis of the tax charge for the yearOverseas tax 166,389 150,981Total tax charge (see note 8(b)) 166,389 150,981

b Factors affecting the tax charge for the year

Net revenue before taxation 275,991 319,389Corporation tax at 20% (2019: 20%) 55,198 63,878Effects of:

Revenue not subject to taxation (212,323) (211,626)Unrelieved excess management expenses 157,125 147,748Overseas tax 166,389 150,981Total tax charge (see note 8(a)) 166,389 150,981

9 DISTRIBUTIONS 10 September 2020 10 September 2019£ £

Final 1,038,407 918,033

Add: Revenue deducted on cancellation of units 397,605 133,156Deduct: Revenue received on issue of units (485,767) (173,215)Equalisation on conversions - (7)Revenue brought forward (9) (2)Distributions 950,236 877,965

Movement between net revenue and distributions:Net revenue after taxation 109,602 168,408Manager's periodic charge borne by capital 840,634 709,557

950,236 877,965

10 DEBTORS 10 September 2020 10 September 2019£ £

Amounts receivable for issue of units 763,026 449,924Accrued income 76,147 85,127Taxation recoverable 1,106 212Total debtors 840,279 535,263

11 OTHER CREDITORS 10 September 2020 10 September 2019£ £

Amounts payable for cancellation of units 1,714,750 233,010Manager's periodic charge and registration fees 28,966 24,478Accrued expenses 17,916 10,562Total other creditors 1,761,632 268,050

12 CONTINGENT ASSETS AND LIABILITIESThere were no contingent assets or liabilities as at 10 September 2020 (2019: nil).

The taxation assessed for the year is lower than the standard rate of corporation tax in the UK for a unit trust (20%). Thedifferences are explained below.

At 10 September 2020 the Fund has deferred tax assets of £1,153,033 (2019: £1,013,174) arising from surplus managementexpenses, which have not been recognised due to uncertainty over the availability of future taxable profits.

The distributions take account of revenue received on the issue of units and revenue deducted on the cancellation of units, andcomprise:

17



13 RELATED PARTIES

10 September 2020 10 September 2019Proportion of units owned by directors of Marlborough Fund Managers Ltd orUFC Fund Management plc 0.04% 0.04%

Distributions were payable on the above holdings at the rates applicable to other unitholders.

14 UNIT CLASSES

A Income 1.50%B Income 1.00%P Income 0.75%

15 UNITHOLDERS' FUND RECONCILIATION

A Income B Income P IncomeOpening units in issue at 11 September 2019 7,640,934 19,871 3,377,985Units issues 2,369,829 14 6,132,522Units cancellations (2,424,884) (10,581) (4,723,009)Units conversions (3,956) - 3,898Closing units in issue at 10 September 2020 7,581,923 9,304 4,791,396

16 RISK DISCLOSURES

Market price risk sensitivity

Foreign currency risk

Foreign currency exposure at 10 September 2020Net current

Investments assets Total £ £ £

US Dollar 76,546,061 2,486,968 79,033,02976,546,061 2,486,968 79,033,029

Foreign currency exposure at 10 September 2019Net current

Investments assets Total £ £ £

US Dollar 62,260,977 1,042,111 63,303,08862,260,977 1,042,111 63,303,088

Foreign currency risk sensitivity

The unit classes in issue for the Fund and the annual management charge for each unit class is as follows:

The authorised fund manager is involved in all transactions in the shares of the Fund, the aggregate values of which are set out inthe statement of change in net assets attributable to unitholders on page 12 and note 9. Amounts due to/from the authorised fundmanager in respect of unit transactions at the year end are disclosed in notes 10 and 11. Amounts paid to the authorised fundmanager in respect of the manager's periodic charge and registration fees are disclosed in note 7. Amounts due to/(from) theauthorised fund manager at the year end are £980,690 (2019: £(192,436)).

In addition to the above, some units in the Fund are owned by directors of Marlborough Fund Managers Ltd or directors of UFCFund Management plc, the ultimate parent company of Marlborough Fund Managers Ltd, as set out below:

During the year the authorised fund manager has issued, cancelled and converted units from one unit class to another as set outbelow:

A five per cent increase in the market prices of the Fund's portfolio would have the effect of increasing the return and net assets by£3,827,303 (2019: £3,113,049). A five per cent decrease would have an equal and opposite effect.

At the year end date a portion of the net assets of the Fund were denominated in currencies other than sterling with the effect thatthe balance sheet and total return can be affected by exchange rate movements.

A five per cent decrease in the value of sterling relative to the foreign currencies above would have the effect of increasing thereturn and net assets by £3,951,651 (2019: £3,165,154). A five per cent increase would have an equal and opposite effect.

18



RISK DISCLOSURES

Interest rate risk

10 September 2020 10 September 2019£ £

Financial assets floating rate 4,876,871 3,613,879Financial assets non-interest bearing instruments 77,386,340 62,796,240Financial liabilities non-interest bearing instruments (2,800,039) (1,186,083)

79,463,172 65,224,036

As most of the Fund's financial assets are non-interest bearing, an interest rate sensitivity analysis has not been included.

Liquidity risk The following table provides a maturity analysis of the Fund's financial liabilities:

10 September 2020 10 September 2019£ £

Within one year:Distribution payable 1,038,407 918,033Other creditors 1,761,632 268,050

2,800,039 1,186,083

17 FAIR VALUE HIERARCHY FOR INVESTMENTS

10 September 2020 10 September 2019Basis of valuation Assets (£) Liabilities (£) Assets (£) Liabilities (£)Level 1 - Quoted prices 76,546,061 - 62,260,977 -Level 2 - Observable market data - - - -Level 3 - Unobservable data - - - -

76,546,061 - 62,260,977 -

In accordance with FRS102 the Fund classifies fair value measurement under the following levels:Level 1 - Unadjusted quoted price in an active market for an identical instrument;Level 2 - Valuation techniques using observable inputs other than quoted prices within level 1; andLevel 3 - Valuation techniques using unobservable inputs.

18 POST BALANCE SHEET EVENTSSince 10 September 2020, the Net Asset Value per unit has changed as follows:

10 September 2020 * 31 December 2020 Movement (%)A Income 645.75 628.17 -2.72%B Income 653.52 636.71 -2.57%P Income 657.34 640.94 -2.49%

* These Net Asset Values differ from those in the Comparative Table as they are the quoted Net Asset Values.

Net Asset Value per unit (pence)

The interest rate risk profile of financial assets and liabilities for the year ended 10 September 2020 consists of the following:

The intention of a fair value measurement is to estimate the price at which an asset or liability could be exchanged in the marketconditions prevailing at the measurement date. The measurement assumes the exchange is an orderly transaction (that is, it is nota forced transaction, involuntary liquidation or distress sale) between knowledgeable, willing participants on an independent basis.

The purpose of the fair value hierarchy is to prioritise the inputs that should be used to measure the fair value of assets andliabilities. The highest priority is given to quoted prices at which a transaction can be entered into and the lowest priority tounobservable inputs.

19


DISTRIBUTION TABLE

Final distribution for the period from 11 September 2019 to 10 September 2020

Group 1: units purchased prior to 11 September 2019Group 2: units purchased on or after 11 September 2019

Net revenue Equalisation Distribution paid Distribution paid10 September 2020 10 September 2020 10 November 2020 10 November 2019

pence per unit pence per unit pence per unit pence per unit

A Income Group 1 8.3407p - 8.3407p 8.3024pGroup 2 2.9923p 5.3484p 8.3407p 8.3024p

B Income Group 1 8.4200p - 8.4200p 8.3351pGroup 2 4.2692p 4.1508p 8.4200p 8.3351p

P Income Group 1 8.4575p - 8.4575p 8.3478pGroup 2 3.0060p 5.4515p 8.4575p 8.3478p

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Marlborough Fund Managers LtdMarlborough House,59 Chorley New Road,Bolton BL1 4QP

Investor Support: 0808 145 2500 (FREEPHONE)Dealing: 0808 145 2501 (FREEPHONE)Fax: 01204 533045

Email: [email protected]: www.marlboroughfunds.com

Marlborough Fund Managers Ltd. Registered in England No. 2061177Authorised and regulated by the Financial Conduct Authority and a member of The Investment Association