EARNEST PARTNERS GLOBAL FUNDS P.L.C.

Transcription

1 EARNEST PARTNERS GLOBAL FUNDS P.L.C. An open-ended umbrella investment company with variable capital and segregated liability between sub-funds incorporated with limited liability in Ireland under the Companies Acts 1963 to 2013 with registration number SUPPLEMENT GLOBAL EMERGING MARKETS FUND EARNEST Partners, LLC Dated 27 March, 2014

2 IMPORTANT INFORMATION The Directors (whose names appear under the heading Management of the Company Directors of the Company in the Prospectus), accept responsibility for the information contained in this Supplement and the Prospectus. To the best of the knowledge and belief of the Directors (who have taken reasonable care to confirm that such is the case) the information contained in this Supplement and in the Prospectus is in accordance with the facts and does not, in the Directors judgment, omit anything likely to materially affect the import of such information. The Directors accept responsibility accordingly. This Supplement contains information relating specifically to Global Emerging Markets Fund (the Fund ), a Fund of EARNEST Partners Global Funds p.l.c. (the Company ), an open-ended umbrella fund with segregated liability between sub-funds authorised by the Central Bank as a UCITS pursuant to the Regulations. This Supplement forms part of and should be read in the context of and in conjunction with the Prospectus for the Company dated 27 March 2014 (the Prospectus ). As the price of Shares in each Fund may fall as well as rise, the Company shall not be a suitable investment for an investor who cannot sustain a loss on their investment. A typical investor will be seeking to achieve a return on their investment in the medium to long term. An investment in the Company should not constitute a substantial proportion of an investment portfolio and may not be appropriate for all investors. Distribution of this Supplement and Selling Restrictions Distribution of this Supplement is not authorised unless accompanied by a copy of the Prospectus (other than to prior recipients of the Prospectus). The distribution of this Supplement and the offering or purchase of the Shares may be restricted in certain jurisdictions. If you receive a copy of this Supplement and/or the Prospectus you may not treat such document(s) as constituting an offer, invitation or solicitation to you to subscribe for any Shares unless, in the relevant jurisdiction, such an offer, invitation or solicitation could lawfully be made to you without compliance with any registration or other legal requirement. If you wish to apply for the opportunity to purchase any Shares, it is your duty to inform yourself of, and to observe, all applicable laws and regulations of any relevant jurisdiction. In particular, you should inform yourself as to the legal requirements of so applying, and any applicable exchange control regulations and taxes in the countries of your respective citizenship, residence or domicile. EGH/ / v11 2

3 DEFINITIONS Base Currency means US Dollar. Business Day means any day (other than a Saturday or Sunday) on which commercial banks are open for business in Dublin and/or such other day or days as may be determined by the Directors in their absolute discretion from time to time and as notified to Shareholders in advance. Dealing Day means each Business Day and/or such other day or days as the Directors may in their absolute discretion determine and notify in advance to Shareholders provided that there shall be at least two Dealing Days in each Month (with at least one Dealing Day per two week period). Dealing Deadline means noon (Irish time) on the Dealing Day or such other time for the relevant Dealing Day as may be determined by Directors in their absolute discretion and notified in advance to Shareholders provided always that the Dealing Deadline is no later than the Valuation Point. Initial Offer Period means 9.00 a.m. (Irish time) on 28 March 2014 to 5.00 p.m. (Irish time) on 28 September 2014 or such earlier or later date as the Directors may in their absolute discretion determine. The Initial Offer Period may be shortened or extended by the Directors in their absolute discretion. The Central Bank will be notified in advance of any such shortening or extension if subscriptions for Shares have been received and otherwise shall be notified subsequently, on an annual basis. Minimum Fund Size means US$1,000,000 or such other amount as the Directors may in their absolute discretion determine. Redemption Settlement Date means payment of Repurchase Proceeds will normally be made by electronic transfer to the account of the redeeming Shareholder at the risk and expense of the Shareholder within three Business Days of the relevant Dealing Day and, in all cases, will be paid within six (6) Business Days of the Dealing Deadline for the relevant Dealing Day, provided that all the required documentation has been furnished to and received by the Administrator. Subscription Settlement Date means subscription monies should be paid to the account specified in the Application Form (or such other account specified by the Administrator) so as to be received in cleared funds by no later than three Business Days after the relevant Dealing Day. If payment in full and/or a properly completed Application Form have not been received by the relevant times stipulated above, the application may be refused. Valuation Point means the close of business in the relevant market where assets are listed or traded on the relevant Dealing Day by reference to which the Net Asset Value per Share of the Fund is determined provided such point will in no case precede the close of business in the relevant market that closes first on the relevant Dealing Day. All other defined terms used in this Supplement shall have the same meaning as in the Prospectus. EGH/ / v11 3

4 INFORMATION ON THE FUND 1 Investment Objective, Investment Policies and Investment Strategy 1.1 Investment Objective: The investment objective of the Fund is to seek income and capital appreciation by investing principally in equity and equity-linked securities of global emerging markets companies as defined by the Investment Manager. There can be no assurance that the Fund will achieve its investment objective or that an investor will not lose some or all of the assets invested in the Fund. Investors should read and consider the sections of the Prospectus and this Supplement entitled "Risk Factors" before investing in the Fund. 1.2 Investment Policies: The Fund seeks to achieve its investment objective by investing primarily in publicly-traded equity and equity-linked securities of global emerging markets companies listed or traded on one or more permitted markets as set out in Appendix II of the Prospectus. The Fund may invest in, without limitation, European Depository Receipts ("EDRs"), Global Depository Receipts ("GDRs"), American Depository Receipts ("ADRs"), directly in global emerging markets equity securities, and listed collective investment schemes such as Exchange Traded Funds ( ETFs ). Such collective investment schemes will generally have investment objectives which are materially similar to the Fund. Collective investment schemes which invest in other asset classes (for example, cash funds or bond funds) may also be invested in, on a short term basis, if market factors require and if considered appropriate to the investment objective. Any investment in collective investment schemes shall not exceed, in aggregate, ten per cent (10%) of the Net Asset Value of the Fund. A depository receipt (i.e. EDR, GDR, ADR) is a negotiable certificate held in a bank of one country representing an ownership interest in a specific number of shares in a corporation of another country which is traded independently from the underlying shares on an exchange or otherwise. The Fund will generally seek to diversify investments among regions and countries of emerging markets countries. The Fund will generally seek to invest at least 50% of its assets (at market value) in securities of emerging markets companies. The Fund generally will not hedge currency exposure in order to retain the diversification benefit and the potential to maximize returns. The Fund may also, pending reinvestment, or if this is considered appropriate to the investment objective, invest on a short term basis in cash and/or cash deposits in one or more currencies. The Fund will not invest directly in derivative instruments such as options, futures contracts, forward contracts, swaps, options on the foregoing, or caps, floors, and collars. The Fund may indirectly acquire a variety of derivative securities such as related rights and warrants, pursuant to its investment in a particular equity or equity-linked security and, in such cases, will sell these securities or exercise any such rights or warrants a soon as possible after receipt thereof. The Fund will not engage in securities lending. EGH/ / v11 4

5 The Fund s performance will be measured against the MSCI EM Index (the "Reference Index"). As of the date of this Supplement, the Reference Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging market. 1.3 Investment Strategy: The strategy of the Investment Manager is based on investing principally in equity and equitylinked securities of global emerging markets companies as defined by the Investment Manager. The Investment Manager s investment process has three principal steps: (i) (ii) (iii) screening a broad universe; fundamental research; and seeking to control risk. The Investment Manager screens stocks that are displaying the financial characteristics that have been in place prior to historical periods of outperformance relative to the Reference Index. The screen focuses on fundamental factors such as valuation, growth, profitability, and operating trends, as well as certain macro-economic considerations that have historically suggested good performance. The Investment Manager also performs a fundamental review implemented through its in-house investment professionals and outside network of analysts and industry specialists. The Investment Manager evaluates the unique economic, regulatory, and socio-political factors impacting international securities. Additionally, it assesses the reliability of the accounting conventions used by each company and attempts to normalize the financial reporting to more accurately compare valuations across borders. Finally, the Investment Manager seeks to control risk. The Investment Manager does not target country allocations according to any benchmark. Instead, it selects those stocks within the relevant universe that it believes have the greatest potential for excess return, regardless of domicile. The Investment Manager seeks to control country allocation risk by using statistics. The Investment Manager statistically measures the portfolio s downside risk, and if necessary, adjusts the portfolio weightings and/or selects other stocks with potential for excess return. The foregoing descriptions are not intended to be exhaustive. The exact details of the Investment Manager s investment strategies are proprietary. 2 Borrowing and Leverage The Company may only borrow on a temporary basis for the account of the Fund and the aggregate amount of such borrowings may not exceed 10% of the Net Asset Value of the Fund. In accordance with the provisions of the Regulations, the Company may charge the assets of the Fund as security for borrowings of the Fund. The Fund will not be leveraged. The Company will, on request, provide supplementary information to Shareholders relating to the risk management methods employed, including the quantitative limits that are applied and any recent developments in the risk and yield characteristics of the main categories of investments. 3 Investment Restrictions EGH/ / v11 5

6 Investors must note that the Company and the Fund adheres to the restrictions and requirements set out under the Regulations, as may be amended from time to time. These are set out in Appendix I to the Prospectus. With regard to investment in securities listed in Russia, the Fund may only invest in Russian listed securities which are listed on MICEX and/or the RTS Stock Exchange. Exposure to such Russian securities will not exceed 10% of the Fund's Net Asset Value. In accordance with the requirements of the Central Bank, the Fund will apply for a derogation from some of the investment restrictions for six months following the date of the first issue of Shares of the Fund pursuant to the Regulations but will observe the principle of risk-spreading. 4 Cross Investing Subject to the requirements of the Central Bank, and if this is considered appropriate to the investment objective and policies of the Fund, the Fund may invest in the other Funds of the Company, provided such other Funds are listed on one or more permitted markets as set out in Appendix II of the Prospectus and track the Reference Index. Any commission received by the Investment Manager in respect of such investment will be paid into the assets of the Fund. In addition, no Preliminary Charge, Repurchase Charge or Exchange Charge may be charged on the cross-investing Fund s investment. In order to avoid double-charging of management and/or performance fees, the Fund may not be charged an Investment Management Fee or performance fee in respect of that part of its assets invested in other Funds of the Company unless such investment in another Fund is made into a Class of Shares that does not attract any Investment Management Fee or performance fee. Investment may not be made by the Fund in a Fund which itself cross-invests in another Fund within the Company. 5 Risk Factors Investors should read and consider the section of the Prospectus entitled Risk Factors before investing in the Fund. In addition, investors should also consider the particular implications of the following risks that are relevant to an investment in the Fund: No assurance can be given that the target level of volatility will be met and the Investment Manager makes no representation that the performance of the Fund will fall within the volatility range at any given time. An investment in this Fund is speculative and involves a substantial degree of risk. Investment in this Fund should be made only after consulting with independent, qualified sources of accounting, investment, legal, tax and other advice. Among the risks of investing in this Fund are the following: Foreign Exchanges and Markets The Investment Manager may engage in trading on foreign exchanges and markets. Trading on such exchanges and markets involves certain risks not applicable to trading on domestic exchanges and is frequently less regulated. For example, certain of such exchanges may not provide the same assurances of the integrity (financial and otherwise) of the marketplace and its participants as do domestic exchanges. There also may be less regulatory oversight and supervision by the exchanges themselves over transactions and participants in such transactions on such exchanges. Some non-domestic exchanges, are principals markets in which performance is the responsibility only of the individual member with whom the trader has dealt and is not the responsibility of an exchange or clearing association. Furthermore, trading on certain non-domestic exchanges may be conducted in such a manner that all participants are not afforded an equal opportunity to execute certain trades and may also be subject to a variety of political influences and the possibility of direct governmental intervention. Certain markets and exchanges in non-domestic countries have different clearance and settlement procedures than domestic markets for trades and transactions and in certain markets, there have been times EGH/ / v11 6

7 when settlement procedures have been unable to keep pace with the volume of transactions, thereby making it difficult to conduct such transactions. Any difficulty with clearance or settlement procedures may expose the Fund to losses. Such trading activities on non-domestic markets would also be subject to the risk of fluctuations in the exchange rate between the local currency and the domestic currency and to the possibility of exchange controls. Trading in Securities of Foreign Issuers The Investment Manager intends to trade in securities of foreign issuers which may be traded outside of the investor s home jurisdiction. In addition to currency exchange risks, such trading requires consideration of certain other risks not typically associated with investing in securities of local issuers. There may be less publicly available information regarding issuers located in certain countries. In addition, certain countries may have no laws or regulations prohibiting insider trading. Furthermore, the economies of certain countries often do not compare favourably with the economy of the investor s home jurisdiction with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. Certain of such economies may rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments, the imposition of economic sanctions against a particular country or countries, changes in international trading patterns, trade barriers and other protectionist or retaliatory measures. Investments in foreign markets also may be adversely affected by governmental actions such as the imposition of capital controls (e.g. certain countries such as China may impose limitations and restrictions on the repatriation of capital), nationalization of companies or industries, expropriation of assets or the imposition of punitive taxes. In addition, the governments of certain countries may prohibit or impose substantial restrictions on foreign investing in their capital markets or in certain industries. Any such action could severely affect security prices, impair the Investment Manager s abilities to purchase or sell foreign securities or otherwise adversely affect this Fund s investment results. Other foreign market risks include difficulties in pricing securities, difficulties in enforcing favorable legal judgments in foreign courts, and political and social instability. Legal remedies available to investors in certain countries may be less extensive than those available to investors in certain other countries. Emerging Markets Investment Risks This Fund will invest in equity and equity-linked securities of emerging markets companies. The World Bank defines emerging markets as countries with low-to-middle per capita income whose economies can be large (such as China) or small in size (such as Morocco). They are emerging because they are experiencing rapid growth but have not yet reached their full potential. Accordingly, the securities of emerging markets companies can be highly volatile and investing in them entail unique risks including but not limited to: (i) increased risk of nationalization or expropriation of assets or confiscatory taxation; (ii) greater social, economic and political uncertainty including war; (iii) higher dependence on exports and the corresponding importance of international trade; (iv) greater volatility, less liquidity and smaller capitalization of securities markets; (v) greater volatility in currency exchange rates; (vi) greater risk of inflation; (vii) greater controls on foreign investment and limitations on repatriation of invested capital and on the ability to exchange local currencies for fund currency denominations; (viii) increased likelihood of governmental involvement in and control over the economy; (ix) governmental decisions to cease support of economic reform programs or to impose centrally planned economies; (x) differences in auditing and financial reporting standards which may result in the unavailability of material information about issuers; (xi) less extensive regulation of the securities markets; (xii) longer settlement periods for securities transactions and less reliable clearance and custody arrangements; (xiii) less developed corporate laws regarding fiduciary duties of officers and directors and the protection of investors; and (xiv) certain considerations regarding the maintenance of Fund securities and cash with foreign brokers and securities depositories. Accordingly, this Fund will be exposed to greater risks than if its investments were in securities of companies located in fully developed countries. EGH/ / v11 7

8 Currency Exchange Rate Risks Share Classes of the Fund are denominated in various currencies. However, certain investments to be made by the Investment Manager may be denominated in currencies that are different from the Share Classes. Accordingly, the value of such investments may decline due to fluctuations in the exchange rates between currencies of the Share Classes and the currencies in which such investments are made. The risk to the Fund of a decline in value of the investments due to foreign exchange fluctuations may not be hedged. Market Capitalisation Risk Share Classes of the Fund may invest in the securities of small-to-medium-sized (by market capitalisation) companies. Such securities may have a more limited market than the securities of larger companies. Accordingly, it may be more difficult to effect sales of such securities at an advantageous time or without a substantial drop in price than securities of a company with a large market capitalisation and broad trading market. In addition, securities of small-to-mediumsized companies may have greater price volatility as they are generally more vulnerable to adverse market factors such as unfavourable economic reports. Additional risk factors associated with companies whose market capitalisation is small or mid-cap may include but are not limited to the following: limited or unproven operating history; weak or leveraged balance sheets, limited borrowing capacity; low or negative profit margins; high concentration of sales from limited number of customers; competition from more established companies; and key-man management risk. The foregoing list of risk factors does not purport to be a complete explanation of the risks involved in investing in this Fund. Prospective investors should read the entire Prospectus before determining to invest in the Fund. The risks described in the Prospectus and this Supplement should not be considered to be an exhaustive list of the risks which potential investors should consider before investing in the Fund. Potential investors should be aware that an investment in the Fund may be exposed to other risks from time to time. 6 Key Information for Buying and Selling Shares Class Initial Issue Price Minimum Initial Minimum Additional Minimum Shareholding** Class A USD Class A YEN*** Class A EUR*** Class A STG*** US$1, ,000 1,000 1,000 $25,000,000 2,500,000,000 25,000,000 25,000,000 $25,000 2,500,000 25,000 25,000 $50,000 5,000,000 50,000 50,000 Class Initial Issue Price Class B USD Class B YEN*** Class B EUR*** Class B STG*** US$1, ,000 1,000 1,000 EGH/ / v11 8

9 Minimum Initial Minimum Additional Minimum Shareholding** $3,000, ,000,000 3,000,000 3,000,000 $25,000 2,500,000 25,000 25,000 $5, ,000 5,000 5,000 Class Class Founders USD (Non-Voting) Class Founders YEN*** (Non-Voting) Class Founders EUR*** (Non-Voting) Class Founders STG*** (Non-Voting) Initial Issue Price Minimum Initial Minimum Additional Minimum Shareholding** US$1, ,000 1,000 1,000 $40,000,000 4,000,000,000 40,000,000 40,000,000 $25,000 2,500,000 25,000 25,000 $5, ,000 5,000 5,000 **Subject to the absolute discretion of the Directors (or their delegate) in each case to allow lesser amounts. ***The Company may (but is not obliged to) enter into certain currency related transactions in order to hedge the currency exposure of the Classes denominated in a currency other than the Base Currency, as described under the heading Hedged Classes in the Prospectus. The Class Founders Shares are Non-Voting Shares. Applications received after the Dealing Deadline for the relevant Dealing Day shall be deemed to have been received by the next Dealing Deadline, save in exceptional circumstances where the Directors may in their absolute discretion (reasons to be documented) determine and provided the Applications are received before the Valuation Point for the relevant Dealing Day. Repurchase requests received after the Dealing Deadline shall be treated as having been received by the following Dealing Deadline, save in exceptional circumstances where the Directors may in their absolute discretion (reasons to be documented) determine and provided they are received before the Valuation Point for the relevant Dealing Day. 7 Dividend Policy The Fund is an accumulating Fund and, therefore, it is not currently intended to distribute dividends to the Shareholders. The income and earnings and gains of each Class in the Fund will be accumulated and reinvested on behalf of Shareholders. If the Directors propose to change the dividend policy and declare a dividend at any time in the future, full details of the revised dividend policy (including details of method of payment of such dividends) will be disclosed in an updated Supplement and will be notified to Shareholders in advance. EGH/ / v11 9

10 8 Fees and Expenses The following fees and expenses will be incurred by the Company on behalf of the Fund and will affect the Net Asset Value of the relevant Share Class of the Fund. Class A B Founders Investment Management Fee 0.85% 1.15% 0.69% Preliminary Charge 0% 0% 0% Repurchase Charge 0% 0% 0% Exchange Charge 0% 0% 0% The Investment Manager shall be entitled to an annual Investment Management Fee equal to a percentage of the Net Asset Value of the relevant Class (see the investment management fee as outlined in the table above). Such fee shall be calculated and accrued at each Valuation Point and payable monthly in arrears. The Investment Manager has agreed to voluntarily waive or reduce any or all of its Investment Management Fee, to the extent necessary, to ensure that the aggregate ordinary annual expenses of Class Founders Shares shall not exceed 0.69% of the Net Asset Value of such Class. 9 Other Fees and Expenses This section should be read in conjunction with the section entitled Fees and Expenses in the Prospectus. 10 Anti-Dilution Levy The Directors reserve the right to impose an Anti-Dilution Levy in the case of net subscriptions and/or net repurchases on a transaction basis as a percentage adjustment (to be communicated to the Administrator) on the value of the relevant subscription/repurchase calculated for the purposes of determining a subscription price or repurchase price to reflect the impact of duties and charges and other dealing costs relating to the acquisition or disposal of assets and to preserve value of the underlying assets of the Fund where they consider such a provision to be in the best interests of a Fund. Such amount will be added to the price at which Shares will be issued in the case of net subscription requests and deducted from the price at which Shares will be repurchased in the case of net repurchase requests. Any such sum will be paid into the account of the Fund. 11 Establishment Expenses All fees and expenses relating to the establishment and organisation of the Fund as detailed in the section of the Prospectus entitled Establishment Expenses shall be borne by the Company and amortised in accordance with the provisions of the Prospectus. 12 Miscellaneous There are currently five other funds of the Company in existence, namely: (i) Global Equities ex US Fund; EGH/ / v11 10

11 (ii) (iii) (iv) (v) Global Equities Fund; Global Small Cap Equities Fund; Pan-Asia Fund; and Frontier Fund. Additional funds of the Company may be added in the future with the prior approval of the Central Bank. EGH/ / v11 11