Simplified Prospectus

Transcription

1 CBK SICAV Investment company with variable capital Registered under Part I of the Luxembourg Law of 20 December 2002 Simplified Prospectus Skandia Shield Subfund Simplified prospectus dated September 2010 This simplified prospectus contains key information about the Skandia Shield Subfund (the «Subfund»), a Subfund of CBK SICAV (the «Company»), an umbrella fund existing as a «Societé d Investissement à Capital Variable» with several Subfunds. Please refer to the current full Prospectus of the Company for further information and definitions. The Prospectus as well as the annual and semi-annual reports may be obtained free of charge at the registered office of the Company and the Management Company. Detailed information about the Subfund s holdings can be found in the latest audited annual report or unaudited semi-annual report. Investment Objective Description of the Subfund's Underlying The investment objective of the Subfund is to deliver the performance of the Skandia Shield Strategy ("Underlying"), and to provide 80% protection ("Protection Element") of the highest daily (historical) net asset value of the Subfund. There is no guarantee that the investment objective of this Subfund can be realised. The Underlying will be exposed to a diversified basket of global equity and bond assets ("Basket") and to a money market component that is represented by the current BBA Overnight Libor Sterling Rate as further defined below. The composition and the weighting of the asset classes within the Basket is determined by Skandia Investment Group Services Limited ("Strategy Sponsor") using a proprietary asset allocation system which works by dynamically allocating global equity and bond assets on the basis of technical, macro-economic and sentiment indicators along with fundamental valuation ratios. For the avoidance of doubt: the Strategy Sponsor will not implement the asset allocation for the Subfund, e.g. in order to attain the investment objectives the Investment Manager will invest into the Portfolio or employ derivatives techniques as further described below under "Investment Policy". The equity and bond assets within the Basket will be represented, for the purpose of determining the asset allocation and determining the return of the Underlying, by asset classes listed in the below table underneath the heading "Asset Class". The net equity weight within the Basket may range between 25% and a maximum weighting of 75%. Skandia Investment Group Services Limited is a private limited liability company incorporated in England and Wales on 30 September Its ultimate holding company is Old Mutual plc. The Old Mutual Group is one of the world s largest asset management and insurance companies with 285bn of funds under management (31 December 2009). The composition of the Basket will be displayed on webpage and will be updated on a periodic basis. VISA 2010/ PS L'apposition du visa ne peut en aucun cas servir d'argument de publicité Luxembourg, le 06/10/2010 Commission de Surveillance du Secteur Financier

2 Initial Composition of the Basket (with maximum weightings): Asset Class Maximum Weight UK Equities 35% US Equities 12% Eurozone Equities 12% Japan Equities 4% Australia Equities 2% China Equities 5% India Equities 2% Brazil Equities 4% Russia Equities 4% UK Government Bonds 20% US Government Bonds 15% German Government Bonds 15% US Liquid Investment Grade Bonds 15% US Aggregate Investment Grade Bonds 15% US Liquid High Yield Bonds 15% Emerging Market Bonds 1 10% The assets contained in the Basket will be invested in compliance with the 5%/10%/40% diversification principle laid down under article 43 of the law of 20 December 2002, as amended from time to time. The return on the money market component will be equal to the value of BBA Overnight Libor Sterling Rate as fixed by the British Bankers Association each day at 11 am (London time). The rate is an average derived from the overnight sterling borrowing rate (offer rate) quotations provided by the banks selected by the British Bankers' Association. Details of historic GBP-LIBOR rates can be obtained from The weighting of each of the components in the Underlying (money market component and Basket) will be determined by Commerzbank AG (the "Calculation Agent") which employs a dynamic allocation model that aims to achieve a predefined annualised volatility of 9% for the Underlying. In cases of an extraordinary high volatility, the weighting of the money market component can be close to 100%. Conversely, in cases of a low volatility, the weighting of the Basket can be up to 150%. The Underlying is calculated by the Calculation Agent and published on each Valuation Date on the basis of the value of its individual components. An additional negative cost factor will be applied to the value of the Underlying which will act as a negative drag on the return of the Underlying. Such cost factor will represent in general the implied costs, if any, of generating the theoretical economic return of the Underlying in the capital markets. Such costs may include transaction, brokerage, margining costs and when the Underlying has an exposure to the Basket that exceeds 100%, the cost of leveraging. The exact value of the cost factor will be published retrospectively in the relevant financial reports of the Company. Investors may obtain a more detailed description of the Underlying upon request from the Management Company. 1 This does include inter alia the Emerging Markets Nations as defined in the General Part of the Prospectus

3 Description of the Protection Element The Subfund will invest part of its assets in a Protection Element. The Protection Element aims to protect the NAV of the Subfund on any Valuation Date from falling below 80% of its highest daily (historical) NAV observed on any prior Valuation Date beginning from the Issue Date ("Floor"). The Protection Element is established by way of one or more financial derivative(s), such as options and/or swaps. There can be no guarantee that the investment objective of the Subfund will be achieved. Investment Policy In order to attain the investment objective, the Subfund, in compliance with the investment restrictions, will invest its assets primarily in transferable securities and any other assets eligible under the 2002 Law, such as, but not limited to, money market instruments, corporate bonds, equities; cash deposits; collective investment schemes and/or financial derivative instruments dealt in on a regulated market ("Portfolio") and may also employ derivative techniques, such as the use of options and swaps. Swaps will be negotiated with a swap counterparty on prevailing market conditions ("Underlying Swaps"). It is the aim of the Underlying Swaps to exchange the partial and/or complete performance of the Portfolio for the performance of the Underlying and/or the Protection Element, respectively. This is attained by the Subfund having to make a payment to the swap counterparty or receiving such a payment, depending on the performance of the Underlying Swap. If the Subfund has to make a payment to the swap counterparty, such payment shall be made from the proceeds of and/or the partial or complete sale of the Portfolio. This Subfund may invest more than 10% of its Net Asset Value in units of target funds as defined within section 7 (i) of the General Part of this Prospectus. The performance of the Underlying may be positive or negative. As the value of the Shares in the Subfund tracks the performance of the Underlying, investors should note that the value of their investment may rise as well as fall. The Subfund aims to protect 80% of the capital invested. Risk Profile The ownership of Shares in the Subfund involves a number of risks. The following risks, in addition to those listed in section 11 of the General Part of the Prospectus, should be carefully considered. Replication of the Underlying The performance of the Subfund is indirectly linked to the performance of the Underlying. The performance of the Subfund will thus be influenced by the development of the Underlying. In addition, market conditions, performance and default of debt instruments or capital loss incurred in the Underlying as well as transaction costs and cash held for liquidity reasons may potentially impair the Investment Manager s ability to achieve the investment objective. In the event of an unfavourable performance of the Underlying, the Subfund s performance may be negative and the value of the Subfund may be reduced to the Floor. Leverage Risk The Underlying can take up to a maximum of 150 % of a leveraged position on the Basket. Investors should be aware that the leveraged performance is in percentage and not absolute terms. This means, if the Basket falls and then rises by exactly the same amount on the following day, the Underlying will not necessarily reach its level of the previous day

4 The effect of leverage risk will in some part be mitigated by the Protection Element, however it should be noted that the use of leverage will result in the Subfund performing differently to a fund that does not use leverage; this may be to the benefit or detriment of the Subfund depending on the evolution of the Basket and level of leverage utilised. Protection Element The Subfund will invest part of its assets into a financial instrument to provide the level of protection identified in paragraph 4 of the relevant Appendix to the Full Prospectus. Such investment may reduce the performance of the Subfund in the event of an increase in value of the Basket where the Protection Element would not be needed. Additionally, the costs incurred to invest in the Protection Element may reduce the value of the Subfund. Dynamic Allocation Model Due to the dynamic exposure model employed by the Underlying, the Subfund can be exposed to the money market component to a very high degree (a maximum of 100%). This means that in certain market conditions (e.g. very high volatility), investors might only participate to a very small extent (or not at all) in the performance of the Basket. This could negatively effect investors in the Subfund if the performance of Basket exceeds the return on the money market component. Credit Risk The Subfunds may invest in bonds and other debt securities. Debt securities are subject to a risk that an issuer might default with respect to principal and interest payments. Further, debt securities are subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity and movements. Counterparty Risk Counterparty Risk is the risk of default of the derivatives counterparty, which for exchange-traded derivatives is generally less than for privately negotiated derivatives ("over the counter derivatives", "OTC derivatives"). The Investment Manager must consider the creditworthiness of each counterparty to a privately negotiated derivative in evaluating potential counterparty risk. The counterparty risk may be reduced by the counterparty providing collateral in accordance with the applicable rules from time to time. The amount of collateral to be delivered will be at least equal to the value by which the relevant counterparty exposure limit has been exceeded. Currency Risk The Subfund will invest into assets denominated in a variety of currencies and the value of those assets when quoted in GBP may therefore vary due to currency movements alone. In order to mitigate some of these currency risks, the Subfund may from time to time execute forward currency transactions through OTCderivatives. However, at no time will currency risk be entirely eliminated from the Subfund. Conflicts of Interest It cannot be ruled out in connection with the composition of the Underlying, the Portfolio and the Protection Element that those will be composed in part or for the most part of derivative instruments issued by Commerzbank AG (e.g. also counterparty of the Underlying Swaps), who acts as the Calculation Agent of the Underlying, counterparty of the Underlying Swaps and the Investment Manager of the Subfund. Consequently, potential conflicts of interest are likely to arise

5 Commerzbank AG has undertaken to use its reasonable endeavours to resolve any such conflicts of interest fairly (having regard to its respective obligations and duties) and to ensure that the interests of the Subfund and the shareholders are not unfairly prejudiced. Investors should note that the Underlying Swap will not be traded on an exchange. It is also possible that the Underlying and/or the Protection Element consists of financial derivative instruments which are not dealt in on a regulated market (OTC derivatives), in which cases prices are determined by the Equity Derivatives trading unit of Commerzbank AG's central Corporates & Markets department. As Commerzbank AG acts as Calculation Agent of the Underlying and the Investment Manager of the Subfund, it might be exposed to a conflict of interest as the value of the derivative instruments is based in part or, in extreme cases, totally on prices determined by the same entity even if such prices are reviewed by a different department within Commerzbank AG. Performance Since this is a new issue, a past performance is currently not available. Generally, historical performance does not represent any guarantee of future performance. There is no guarantee that the objectives of the investment policy can be realised. Share Class(es) Initial Minimum Investment and Minimum Holding Profile of a Typical Investor Currently, only Shares pertaining to Share class A are being issued. Share class A is intended for investments by retail investors. GBP 1,000 An investment in the Subfund is suitable for those investors who are able and prepared to invest in a medium-risk Subfund, as described in greater detail under "Investor Profile" in the General Part of the Prospectus. Investors should be aware of the use of derivative instruments in the Subfund in the delivery of its objectives and policy. In relation to section 10 of the General Part of the Prospectus the relevant investor having a "sufficiently good knowledge of the derivative instruments, their usage and the associated risks" means the investor should have a good understanding of the implications and risks associated with their use. Investors should generally be prepared to take risks in relation to the invested capital and returns. Distribution Policy Base Currency and Duration Subscription/Redemption Deadline The Subfund is a reinvestment fund, i.e. any dividends and other income will not be distributed but reinvested in the Subfund s assets. A deemed distribution will be accounted for and notified to investors in jurisdiction where this is required by applicable laws or requirements. GBP and unlimited Subscription or Redemption requests which are received by the Company on a day which is a Banking Day in the Relevant Jurisdiction and a Valuation Date and (i) a day on which the New York Stock Exchange is open for regular business and Subscription or Redemption requests do not exceed the total amount of GBP 10m or (ii) a day on which the New York Stock Exchange is closed for regular business and the Subscription or Redemption requests do not exceed the total amount of GBP 1m, such requests will be accounted for on the same Valuation Date if received prior to the cut-off time (as defined in the General Part of the Prospectus). Any amount exceeding the relevant threshold (as applicable) will normally be postponed until the next Valuation Date and added to the requests received for that date (the relevant threshold applies again for the total amount to be considered)

6 All subscription and redemption requests to be accounted for the same Valuation Date will be grouped for such date (the "Request Date"). When accounting for such requests, priority will be given to each such group based on the Request Date, with the earliest being accounted for first. Where for a particular group it has not been possible to account for all the requests received due to the restrictions above, accounting for such proportion thereof as has been accounted for on such Valuation Date will be on a pro-rata basis for each request in that group. Any restrictions as to the applicable thresholds can be waived by the Management Company. Subscription or Redemption requests received after the cut-off time will be postponed to the next day on which the above defined requirements are fullfilled and will be dealt with at the then applicable Net Asset Value. Valuation Date Dealing Date Subscription Fee Redemption Fee Conversion Fee Management Fee Administration Fee Custodian Fee Taxation Each banking day in Luxembourg and London Each Valuation Date up to 5 % of the subscription amount None up to 1% of the conversion amount up to 1.00 % p.a. Currently: 0.80 % p.a. up to 0.25 % p.a. up to 0.10% p.a. The Company is not liable for capital gain or income tax in Luxembourg and no withholding tax is due on the dividends paid by the Company. Shareholders are not subject to any capital gains, income, withholding, gift or any other tax in Luxembourg (except for shareholders domiciled, resident or having a permanent establishment in Luxembourg and except for certain former residents of Luxembourg if owning more than 10% of the Shares). Investors should inform themselves of, and where appropriate consult their professional advisers on, the possible tax consequences of subscribing to, buying, holding, converting or selling Shares of the Company under the laws of their country of citizenship, residence or domicile. Prospective investors also should bear in mind that levels and bases of taxation may change. The tax consequences may vary for each investor in accordance with the laws, regulations and practices in the country of their citizenship, residence or domicile, and in accordance with the investor s personal circumstances. Investors should therefore ensure they are fully informed in this respect and should, where appropriate, seek advice. Publication of the Net Asset Value Issue, conversion and redemption of Shares The Net Asset Value, issue and redemption price per Category of Shares may be obtained from the registered office of the Company, from the Management Company or from one of the Distributors and is published on Subscription, conversion and redemption requests may be made at the registered office of the Company or with a Distributor or Subdistributor. Subscription or Redemption requests are subject to the provisions of the Subscription/Redemption Deadline (as described above)

7 Conversion requests must be received by the Company one (1) Business Day before the relevant Dealing Date. The conversion of Shares is deemed to constitute redemption of the relevant Shares and therefore the provisions relating to the Subscription/Redemption Deadline apply accordingly. For more details please refer to the General Part of the full Prospectus. ISIN-Code SEDOL-Code MEXID LU B452K20 COSHLD Launch Date 1 October 2010 Additional Important Information Legal structure: Subfund of CBK, an investment company with variable capital (SICAV), incorporated in Luxembourg, under Part I of the Luxembourg Law of 20 December Registered Office of the Company: 33, rue de Gasperich, L-5826 Hesperange, Grand Duchy of Luxembourg Management Company: Commerz Derivatives Funds Solutions S.A., 25, rue Edward Steichen, L-2540 Luxembourg Investment Manager: Commerzbank AG, London Branch Promoter: Commerzbank AG, London Branch Custodian and Paying Agent: BNP Paribas Securities Services; 33, rue de Gasperich, L-5826 Hesperange, Luxembourg Registrar and Transfer Agent: BNP Paribas Securities Services; 33, rue de Gasperich, L-5826 Hesperange, Luxembourg Administrator: BNP Paribas Securities Services; 33, rue de Gasperich, L-5826 Hesperange, Luxembourg Distributor: Commerzbank AG, London Branch Auditor: PricewaterhouseCoopers, 400, route d'esch, L-1014 Luxembourg Legal Advisors: Kremer Associés & Clifford Chance, 2-4, place de Paris, L-1011 Luxembourg Launch date of the Company: April 2008 Supervisory Authority: Commission de Surveillance du Secteur Financier (CSSF), 110, route d'arlon, L Luxembourg Further Information Further information may be obtained at: Commerz Derivatives Funds Solutions S.A. 25, rue Edward Steichen L-2540 Luxembourg - 7 -