TOCQUEVILLE MEGATRENDS

Transcription

1 TOCQUEVILLE MEGATRENDS PROSPECTUS UCITS compliant with directive 2009/65/EC General information Form of the UCITS Name TOCQUEVILLE MEGATRENDS Legal form of the UCITS Mutual fund (FCP) Member State in which the UCITS was established FCP under French law Date of creation 22 June 2005 Expected lifetime 99 years Summary of the management offer ISIN codes Income distribution Denomin ation currency Subscribers Minimum amount of first subscription Minimum amount of subsequent subscription FR (C) FR (I) capitalisation capitalisation EUR EUR All investors C: 1 unit I: 10,000 units C: one tenthousandth of a unit I: one tenthousandth of a unit Information available The latest annual and interim reports are sent within one week upon written request to: Tocqueville Finance S.A. (34, rue de la Fédération, Paris). These documents are also available on the website: Contact point where additional information can be obtained if necessary: Actors Management company TOCQUEVILLE FINANCE S.A. (34, rue de la Fédération, Paris), Portfolio management company approved by the AMF under No. GP Depositary and registrars Depositary institution in charge in charge of centralising subscription and redemption orders, institution in charge of keeping records of units or shares (liabilities of the UCITS): CM-CIC Securities, Investment firm approved par the CECEI (6, avenue de Provence , Paris) 1

2 Delegates Accounting and valuation: CM-CIC Asset Management, Portfolio management company, approved by the AMF under No , S.A. with a capital of 9,133,800 euros (4, rue Gaillon, Paris) Statutory auditors DELOITTE & ASSOCIES (185, avenue Charles de Gaulle, Neuilly-sur-Seine Cedex), represented by Olivier Galienne Marketer TOCQUEVILLE FINANCE S.A. Operating procedures and management Main features Unit features: Rights attached to the category of units: each unitholder has a right of joint ownership over the fund's assets proportional to the number of shares owned. Liability holder: liability accounting is provided by the depositary CM-CIC Securities. The administration of the units is provided by EUROCLEAR France. Voting rights: in the case of a mutual fund, no voting rights are attached to the units, decisions are taken by the management company; information on the fund s operating procedures is provided to the holders, depending on each case, either individually or through the press or through periodic reports or by any other means in accordance with AMF instructions. Form of units: bearer. Subscriptions and redemptions are possible in in ten-thousandths of units. For units I, the initial subscription is possible only in entire units with a minimum of 10,000 (ten thousand) units. Subsequent subscriptions are possible from one ten-thousandth of a unit. Closing date: last trading day of December. Taxation: the fund is not subject to corporate tax and a fiscal transparency regime applies to the bearer. The tax regime applicable to amounts distributed by the fund or to the fund s realised or unrealised gains or losses depends on the tax provisions applicable to the individual circumstances of the investor and/or the fund s investment jurisdiction. If the investor is not sure of his tax position he is advised to contact a professional tax advisor. The fund is eligible for equity savings plans (PEA). Accordingly, minimum 75% of the fund will be invested in equities of European Union countries. Special provisions The Tocqueville Megatrends fund is a mutual fund with two unit classes: Units C based on capitalisation, open to all investors and units I b a s e d o n capitalisation, more particularly intended for institutional investors. It therefore has two ISIN codes: ISIN code units C: FR ISIN code units I: FR Classification Equities of European Union countries Management objective The management objective of the Tocqueville Megatrends fund is, as part of a dynamic equity allocation decided by the management company, to outperform the STOXX EUROPE 600 benchmark over the recommended investment horizon. 2

3 Benchmark The benchmark is t h e STOXX Europe 600 index, w i t h net dividends reinvested, denominated in euro and based on closing prices. This benchmark is used for the purpose of ex post valuation. Investment strategy The Tocqueville Megatrends fund may operate in all stock markets and may be exposed to up to 100% in shares of all capitalisations, by seeking in particular stocks of companies whose growth profile corresponds to very long-term trends. These major trends show three major characteristics: they assume structural changes that are spread over long periods, they are certain or at least likely, and they are likely to generate positive stock market performances that are less volatile than the market as a whole. The selected stocks address four themes: demographic challenges, technological challenges, challenges related to natural resources and challenges related to the increase in trade. The management of this fund is discretionary and is based on complete independence with respect to indices or sectors of activity. The Tocqueville Megatrends fund may invest in all stock market capitalisation segments. The stock picking will be totally independent of indices or sectors of activity making up the markets where the fund will invest. These stocks will be selected based on financial research developed in-house by Tocqueville Finance. For the selection and monitoring of fixed-income securities, the management company does not exclusively or automatically refer to rating agencies. It gives priority to its own credit analysis, which forms the basis for the management decisions taken in the interest of the bearers. The manager may in a discretionary manner use overexposure of the portfolio up to 110% via derivative instruments. Assets used in the composition of the fund s assets Non-derivative assets included Equities Equities of regulated markets in European Union countries, for a minimum exposure of 75% of the fund s total assets on a permanent basis. Tocqueville Megatrends may operate in all European equity markets. These stocks, as indicated in the preceding paragraph, will be chosen without reference to an index, a basket of indices or a sector of activity. Furthermore, we point out that the size of the company and the amount of its market capitalisation are not particular constraints in the selection of stocks by the managers of this fund. Equities of all regulated markets in OECD countries up to a limit of 10% of the fund s total assets, in particular European countries more broadly defined Switzerland, Norway and Central European countries). Equities of all regulated markets in non-oecd countries up to a limit of 10% of the fund s total assets. Debt securities and money-market instruments Between 0% and 25% in Treasury bills and other negotiable debt securities, with a view to maintaining low volatility. These investment vehicles will be denominated in euros and have a minimum rating at the time of purchase or during their term of A3 for short-term or BBB- for long-term securities according to the Standard & Poor s scale or, failing this, an equivalent rating. The fund may, in all the geographical areas mentioned above, invest up to 5% of its assets in financial instruments listed on unregulated markets and up to 5% of its assets in unlisted financial instruments. 3

4 UCITS and AIF The fund may not hold up more than 10% in units or shares of French or European UCITS that comply with directive 2009/65/EC and AIF that comply with the four criteria of article R of the Monetary and Financial Code. These UCITS and/or AIF will be either short-term money-market funds (duration of less than 1 year, public debt only, rating higher than or equal to AA), or equity funds of European Union countries. External UCITS and/or AIF (not managed by Tocqueville Finance) will be used, in the case of equity UCITS and/or AIF, in order to expose your fund to sectors of activity that would not be covered directly in the fund (sector funds in particular), or in the case of monetary UCITS and/or AIF, in a bid to optimise your fund s cash management in relation to daily subscriptions/redemptions. Derivatives a) Type of markets where the fund may operate: The fund may operate in financial futures and options traded on regulated French and foreign markets or over-the-counter. b) Risks in which the manager wants to take positions: Equity risk and interest rate risk. c) Type of positions: The manager may take positions: - To expose the portfolio to equity risk or interest rate risk up to a maximum of 10% of net assets; - To hedge the portfolio against equity risk or interest rate risk, up to a maximum of 25% of net assets. d) Type of instruments used: The manager uses: - Futures contracts; - Options. e) Strategy for the use of derivatives to reach the management objective: Forward financial instruments are used: - To pursue the management objective; - For cash management purposes, especially in the event of significant subscription and redemption flows in the fund: - In order to adapt to certain market conditions (e.g. significant market fluctuations, better liquidity or efficiency of forward financial instruments). Deposits The fund may use deposits within the limit of 20% of its assets with the same credit institution. They will be used only for cash management. Cash borrowing: None. Temporary purchases and sales of securities The fund may use techniques of temporary purchases and sales of securities. Shares held are lent, thereby increasing their return while maintaining an unchanged economic exposure. Repurchase and reverse repurchase arrangements are preferred for the purpose of cash management. The fund may use repurchase and reverse repurchase agreements up to 100% of net assets and loans and borrowing of securities up to 10%. A portion of the revenues from these operations may be added to the operating expenses of the fund (see under heading "operating costs"). Risk profile The risk and performance indicator of the fund is 6 because of its exposure principally to equity and fixed-income markets that can fluctuate significantly. Your money will be invested in financial instruments selected by the management company. These instruments will face fluctuations and risks inherent to equity markets. 4

5 Your Tocqueville Megatrend fund is exposed to several risks that are described below in order of importance. Equity and market risk: the fund s net asset may be subject to volatility because a very large proportion of the portfolio is invested in equity markets. If equity markets fall, the fund s net asset value may decrease faster. Liquidity risk: this risk mainly applies to shares for which the transaction volume is low and for which it is, therefore, more difficult to find a buyer/seller at a reasonable price at any moment. It appears in particular during significant subscriptions/redemptions relative to the size of the portfolio. Given the investment strategies that can be used, the fund may from time to time have to invest in financial instruments that are not listed on regulated markets, which means it will be exposed to this type of risk. Risk associated with discretionary management: the discretionary management style is based on expectations of developments in equity markets. There is a risk that the fund at any time may not be invested the best-performing equities. Risk of capital loss: a capital loss occurs when a unit is sold at a lower price than that paid at the time of the subscription. This risk is related to the fact that a minimum of 75% of the fund s total assets is permanently exposed to equities and that the fund offers no protection or guarantee of the capital. Therefore, there is a risk that the invested capital may not be fully recovered. Currency risk: this is the risk of a fall in the investment currencies against the portfolio s reference currency, the euro. In the event of fall in a currency against the euro, the net asset value may decrease. The fund is mainly exposed to equities of European Union countries, with a proportion of the equities listed in euros. The currency risk linked to equities listed in currencies of non-european Union countries w i l l r e m a i n of an incidental nature and will not exceed 10% of the fund s total assets. This currency risk will not be hedged. Interest rate risk: up to 25% of the portfolio may be invested in fixed-income products. If interest rates rise, the value of fixed-income products may decline and the fund s net asset value may decrease. Credit risk: this is the risk that the price of securities issued by a private-sector issuer may fall or that the issuer may default. The value of debt securities in which the fund is invested may fall, leading to a decrease in the net asset value. Risk linked to investment in listed shares on regulated markets in non-oecd member countries: This risk will be limited to less than 10% of the fund s assets and will therefore remain of an incidental nature. Target subscribers and typical investor profile This fund is open to all subscribers (individuals and legal entities) who want to invest in a UCITS that is exposed to stock markets and who therefore accept the risks associated with the development of these markets. Institutional units are available, intended for institutional investors and for a minimum amount of the first subscription of 10,000 (ten thousand) full units. The amount to be reasonably invested in the Fund depends on your personal situation. To determine this amount, you must consider your personal wealth/assets, your needs at present and over the next five years and also your desire to take risks or, conversely, to invest cautiously. It is also strongly recommended that you diversify your investments to avoid being completely exposed to the risks of this fund. The fund can be used in unit-linked life insurance contracts with a term equal to or longer than 8 years. It is expressly stated that the UCITS concerned by this document is subject to marketing restrictions in respect of legal or natural persons who because of their nationality, residence, office / place of registration or for any other reason, are subject to a foreign jurisdiction that prohibits or restricts the offer of certain goods or services (including financial instruments). Shares and units of UCITS managed by Tocqueville Finance have not been registered with the SEC under the provisions of the US Securities Act of 1933 and are not available, directly or indirectly, in the United States (including in the territories, counties and possessions) to US persons as defined in "Regulation S". Therefore, units and shares of the fund may not be offered, sold, delivered or distributed, directly or indirectly, in the United States or to US destinations. 5

6 In accordance with the US tax regulation FATCA (Foreign Account Tax Compliance Act), the holders may have to provide the management company or its representative with information on their personal identity and place of residence (home and tax residence) in order to identify a US Person as defined by the FATCA. This information may be transmitted to US tax authorities via French tax authorities. Any failure on behalf of the bearers to comply with this requirement may result in in a 30% flat tax at source being levied on financial flows originating in the United States. Notwithstanding the verification procedures carried out by the management company under FATCA, the holders are requested to ensure that the financial intermediary they have used to invest in the UCITS itself has a Participating FFI status. For further details, the holders are advised to contact a tax advisor. Recommended investment period More than 5 years Method for calculation and allocation of distributable amounts The net income for the financial year is equal to the amount of interest, arrears, dividends, premiums and allotments, attendance fees as well as all income relative to the securities of the fund s portfolio plus income generated by temporary cash holdings, minus management fees and interest on loans. The distributable amounts are made up of: 1 Net income plus retained earnings plus the balance of the income equalisation account; 2 Realised capital gains net of expenses, minus realised capital losses net of expenses for the financial year, plus net capital gains of a similar nature relating to previous financial years that have not been distributed or capitalised plus the balance of the capital gains equalisation account. Units C and I: Net income: The fund has opted for pure capitalisation. The net result is fully capitalised each year. Distribution frequency: N/A Net realised capital gains: The fund has opted for pure capitalisation. Net realised capital gains are fully capitalised each year. Distribution frequency: N/A Unit features The units are expressed in ten thousandths and denominated in euro. Initial net asset value per unit 10 (units C and I). Subscription and redemption procedures Subscriptions and redemptions are possible in in ten-thousandths of units. Subscription and redemption orders are received at any time and are centralised by the depositary until 14:00 every business day. The institution designated to receive subscriptions and redemption orders is CM-CIC Securities (6, avenue de Provence, Paris). Subscription and redemption conditions: subscription and redemption orders are centralised at 14:00 every day and executed on the basis of the net asset value based on the closing prices of the day. The net asset value is calculated every day on which the Paris Stock Exchange is open. This valuation is carried out on the basis of the closing price of the day and calculated operationally the next day. 6

7 The net asset value is available from the management company and the depositary the next business day from the date of calculation. The net assets and the number of units are permanently available to the public on the website of Tocqueville Finance and by telephone (see page 1 of this prospectus). Fees and expenses Subscription and redemption fees Subscription and redemption fees increase the subscription price paid by the investor or decrease the redemption price. The fees charged by the fund are used to offset the costs incurred by the fund to invest or disinvest the funds entrusted to it. Fees not paid to the fund are attributed to the management company, the marketer, etc. Fees payable by the investor levied on subscriptions and redemptions Maximum subscription fee not paid to the fund Subscription fee paid to the fund Maximum redemption fee not paid to the fund Redemption fee paid to the fund Basis Rate Net asset value x number of units Units C and I: 3.5% Net asset value x number of units 0% Net asset value x number of units Units C and I: 1% Net asset value x number of units 0% Operating and management costs These fees cover all costs invoiced directly to the fund, except transaction costs. Transaction costs include intermediary fees (brokerage, stock market taxes, etc.) and transaction fees, if any, that may be invoiced, in particular by the depository and the management company. To the operating and management costs may be added: Transaction fees charged to the fund; Outperformance fees, which reward the management company when the fund exceeds its objectives. They are therefore charged to the fund. They are therefore charged to the fund; A portion of the income from temporary purchases and sales of securities. For further details about fees actually charged to the fund, please refer to the Key Investor Information Document. 1 Fees charged to the fund Basis Rate Management expenses Net assets Units C: maximum 2.392% including taxes Management expenses paid to third parties (statutory auditors, depositary, distribution, lawyers) 2 Maximum indirect costs (management expenses and fees) Net assets Net assets Units I: maximum 1.20% including taxes None None 7

8 3 Providers collecting transaction costs: Stock Exchange France - Depositary (7%) - Management company (93%) Foreign stock exchange - Depositary (10%) - Management company (90%) Charged on each transaction Stock Exchange France: maximum % including taxes Foreign stock exchange: maximum 0.884% including taxes 4 Outperformance fee Net assets None Details Transaction costs charged on purchases and sales of units are maximum % including taxes (Stock Exchange France). For further information, please refer to the annual report of the fund. Commercial information The purchase or redemption of units may be requested at any time from the depositary. The net asset value is available from the management company and the depositary. The full prospectus, periodic reports and the annual report are available from the management company and the depositary. Information on taking environmental, social and governance criteria into account in the investment policy is available on the management company s website as well as in the annual report of the fund. Investment rules The fund will comply with the eligibility rules and investment limits required by the regulations currently in force, in particular articles L and R et seq. of the French Monetary and Financial Code. Method of calculation of overall risk The overall risk of financial contracts is calculated according to the commitment method. Rules of valuation and recognition of assets Income recognition The fund recognises revenue using the method of coupon received. Recognition of portfolio entries and exits In the recognition of entries and exits of securities in the fund's portfolio, transaction costs are excluded. 8

9 Valuation methods Upon each valuation, the fund's assets are valued according to the following principles: Listed equities, bonds and similar securities (French and foreign securities) are valued at market prices The valuation is based on stock exchange prices: The price used depends on the market where the security is traded: European markets: Asian markets: Australian markets: North American markets: South American markets: last market price of the day last market price of the day last market price of the day last market price of the day last market price of the day If there has been no trading of a security by around 14:00, the last price of the previous trading day is used. For unlisted financial instruments (French and foreign securities), the valuation is made at fair value These securities are valued by the fair value method. This corresponds to the amount for which an asset could be exchanged between knowledgeable, willing parties acting under normal conditions of competition. During the period beginning on the date on which an investment was made by the fund and ending no later than 12 months after that date, the fair value is estimated according to the method of the price of a recent investment. In applying the price of a recent investment method, the management company recognises the cost of the investment itself or the price of a significant new investment made with year independent third party under normal market conditions, except in case of manifest depreciation. UCITS and/or AIF securities in the portfolio Valuation based on the last known net asset value. Temporary purchases of securities Repo purchase: contractual valuation. Repurchase agreements to purchase: contractual valuation, because the repurchase of the securities by the seller is considered to be sufficiently certain. Securities lending: valuation of the securities lent at the market price of the underlying asset. The securities are recovered by the fund at the end of the lending contract. Temporary sales of securities Securities sold under repurchase agreements: securities sold under repurchase agreements are valued at market prices; debt representing securities sold under repurchase agreements are maintained at the value set in the contract. Unlisted securities: Valuation using methods based on the asset value and return, taking into account prices applied in recent significant transactions. 9

10 Negotiable debt securities NDS that at the time of the purchase have a residual maturity of less than 3 months are valued linearly. NDS acquired with a residual maturity of more than 3 months are valued: At market value up to 3 months and 1 day before maturity. The difference between the market value recorded 3 months and 1 day before maturity and the redemption value is linearised over the last 3 months. Exception: BTANs are valued at market price until maturity. Market value used: BTAN: yield to maturity or price of the day published by the Bank of France. Other NDS: Securities with a maturity of 3 months to 1 year: NDS subject to significant transactions: application of an actuarial method, the rate of return used is that recorded each day on the market. Other NDS: application of a proportional method, the rate of return used is EURIBOR rate for the equivalent maturity, possibly corrected by a margin representing the intrinsic characteristics of the issuer Securities with a maturity of over one year: application of an actuarial method. NDS subject to significant transactions, the rate of return used is that recorded every day on the market. Other NDS: the rate of return used is the BTAN rate of equivalent maturity, possibly corrected by a margin representing the intrinsic characteristics of the issuer Futures and options transactions Futures contracts: futures contracts are valued at their market value. The market price used for the valuation of futures contracts are in line with those of the underlying securities. They vary depending on the markets where the contracts are listed: Futures traded on European markets: last market price of the day Futures traded on North American markets: last settlement price of the day. Options: options in the portfolio are valued: At market value if they are listed. At intrinsic value when no listed price is available. In case of trading, the market prices recognised follow the same principles as those governing the contracts or supporting securities. Options traded on European markets: last market price of the day. Options traded on North American markets: last market price of the day. 10

11 Valuation method for off-balance sheet transactions Futures contracts are calculated on the basis of market value. It is equal to the price (or estimate in the case of an OTC transaction) multiplied by the number of contracts multiplied by the nominal. Option contracts are calculated at market value which is the conversion of the option into the underlying equivalent. This conversion consists in multiplying the number of options by a delta. The delta is the result of a mathematical model (Black-Scholestype) whose parameters are: the price of the underlying, the term to maturity, the short-term interest rate, the option s exercise price and the volatility of the underlying. 11