A. C. N u c l e a r O p p o r t u n i t i e s F u n d

Transcription

1 A. C. N u c l e a r O p p o r t u n i t i e s F u n d Investment fund pursuant to Liechtenstein law of the type Investment undertakings for transferable securities (hereinafter: the fund) Full Prospectus April 1, 2010 Investment Consultant: Asset Manager: Management Company: Dr Andrey Cherkasenko

2 C O N T E N T S 1 Key fund data Organization General information on the fund Investment principles Investment regulations Risks and risk profiles Participation in the fund Use of proceeds Taxation Commissions and costs Information for investors Duration, dissolution, and restructuring of the fund Applicable law and jurisdiction and binding language Calculation examples for the performance fee...22 The German versions of the full and the simplified prospectus and the terms of contract are binding. Full Prospectus - 2 -

3 1 Key fund data A.C. Nuclear Opportunities Fund Basic data Security No ISIN No. Suitable as UCITS III target fund Duration of fund Listing Accounting currency 1 Minimum investment LI Yes Unlimited No US Dollar (USD) 10 units Initial issue price USD 100 Valuation day 2 Valuation frequency Acceptance of subcription and redemption requests Close of accounting year Use of proceeds Thuesday Weekly no later than at 4 p.m. (Central European Time) on the day prior to the next valuation day 31 December Reinvested Commissions and costs borne by the investors Max. issue commission 3 3% Redemption commission 0.25% in favour of fund s assets Commissions and costs payable with the fund s assets 4 Management commission 1.5% p.a. Performance fee 15% Hurdle Rate Yes, 10% High Watermark Yes Administration fee Custodian bank fee 0.2% p.a. or min. CHF 25,000 per year 0.15% p.a. 1 The accounting currency is the currency in which the performance and the net assets of the fund are reported. 2 If the valuation day should coincide with a bank holiday in Liechtenstein, the valuation day shall be rescheduled to the next following banking business day in Liechtenstein. 3 The actual fee charged is indicated in the semi-annual and annual reports. 4 Plus taxes and other costs: transaction costs as well as expenses incurred by the management company and the custodian bank in the fulfillment of their functions. The details are provided in sections 9 (Tax regulations) and 10.2 (Commissions and costs payable with the fund s assets). Full Prospectus - 3 -

4 2 Organization 2.1 Domicile country / Responsible supervisory authority Liechtenstein / Finanzmarktaufsicht Liechtenstein (FMA); Contractual terms The contractual terms determine the legal relationship between the investor and the management company. The legally relevant content of the simplified prospectus constitutes the contractual terms and at the same time is sufficient as a trusteeship deed pursuant to the Liechtenstein Person and Company Law (PGR). 2.3 Avoidance of conflicts of interest Due to the multiple business activities of the management company, the custodian bank, their authorized agents, and the companies affiliated with them, conflicts of interest may arise. The parties involved In the management of the fund are required to take suitable organizational and employment precautions in order to avoid as far as possible any risk of curtailing investor interests due to conflicts of interest. If this is not possible, the parties involved attempt, to the best of their abilities and with the appropriate expertise, to adequately resolve the conflict or deal with it on just and equitable principles. 2.4 Management company IFM Independent Fund Management Aktiengesellschaft, Austrasse 9, FL-9490 Vaduz, Public Register Number FL IFM Independent Fund Management AG was incorporated on 29 October 1996 for an unlimited period in the form of a joint-stock corporation domiciled and headquartered in Vaduz, Fürstentum Liechtenstein. The Government issued the operating license to the management company on 26 November The share capital of the management company amounts to CHF 1 million and is fully paid up. An overview of all investment undertakings managed by the management company is provided on the web site of the LAFV Liechtensteinischer Anlagefondsverband under Board of Directors Chairman: Vice-Chairman: Member: Executive Board Chairman: Members: Fritz Kaiser, President and Chairman of Kaiser Ritter Partner Holding Anstalt, Vaduz Heimo Quaderer, Managing Partner of Principal Vermögensverwaltung AG, Vaduz HRH Simeon von Habsburg, Archduke of Austria, Managing Partner of Principal Vermögensverwaltung AG, Vaduz Luis Ott, Managing Director Alexander Wymann, Deputy Managing Director Michael Oehry Full Prospectus - 4 -

5 2.5 Asset Manager Asset Management has been delegated to HighValue Partners AG, Mälsner Dorf 17-19, FL-9496 Balzers. HighValue Partners AG is focused on investment consulting and asset management for institutional and private clients. The implementation of the operations is governed by an asset management contract concluded between the management company and HighValue Partners AG. 2.6 Investment Consultants Investment consultancy is delegated to Dr. Andrey Cherkasenko, 3/14 Glazovsky Pereulok, Moskau , Russland. Dr. Andrey I. Cherkasenko, Ph.D. - Political Science and Economy. Dr. Cherkasenko was on active military duty in the Russian Army from , during which time ( ) he earned his doctorate from the Russian Military Academy. In June 2002, he completed a full course of education in international economics and external economic affairs at the Russian Diplomatic Academy of the Russian Ministry of Foreign Affairs. In Dr. Cherkasenko worked in the State Committee of the Russian Federation on Defense and Security, dealing with the Russian nuclear industry. At the same time he was a member of the team developing the "Bill on Closed Nuclear Cities". From he worked at the Council on Foreign and Defense Policy as Executive Manager, where he also headed the Closed Nuclear Cities Program, the purpose of which was conversion and investment in the Federal Atomic Energy Agency s (Rosatom s) enterprises within the ten closed atomic cities. Now, he is still an active member of the said Council. Dr. Cherkasenko worked from for the Mining Chemical Combine as Chief Specialist and Head of the Moscow Representation Office. In , he was CEO of the National Agency for Financial Policy and Conversion, consulting on nuclear fuel issues. In Dr. Cherkasenko was Deputy General Manager of the Siberian Chemical Combine one of the four commercial uranium enrichment facilities in Russia, which is also the world largest radiochemical facility, and one of two such Russian facilities dedicated for blending down former Soviet nuclear warheads to commercial nuclear fuel (the HEU-LEU Program). In recent years Dr. Cherkasenko worked for several large financial establishments and institutions (for example, Alfa-Bank, Vneshtorgbank and other) as a consultant on investments to the Russian nuclear industry. Today Dr. Cherkasenko is Chairman of the Board of ATOMPROMRESURSY (Nuclear Industry Resources) Holding, which provides machinery and logistics supply to Rosatom, and consults on nuclear fuel cycle issues, private investment, market and financial situation on Rosatom s projects. Dr. Cherkasenko is also a founder and the Chairman of the Tutorial Board of Nuclear.Ru Internet news agency, which is a leading media resource and the sole Russian independent nuclear proponent. Its publications list Nuclear Renaissance and Uranium Project reviews and extensive information related to entrepreneurship, management and consultancy in nuclear power and nuclear fuel cycle issues, private investments, related finance and markets. Dr. Cherkasenko regularly addresses issues of nuclear renaissance and development, nuclear industry economy and policies in his comments and interviews and provides advice to media on the matter. Full Prospectus - 5 -

6 2.7 Authorized distributor Fund unit distribution has been delegated to HighValue Partners AG, Mälsner Dorf 17-19, FL-9496 Balzers. The implementation of the operations is governed by an asset management contract concluded between the management company and HighValue Partners AG. 2.8 Custodian bank The Liechtensteinische Landesbank AG, Städtle 44, FL-9490 Vaduz, is the custodian bank. The custodian bank maintains the unit register. The Liechtensteinische Landesbank Aktiengesellschaft was established in The bank s principal activities are investment consulting, asset management, and lending. As at the end of 2008, the equity capital of the Landesbank amounted to CHF 1.57 billion. The custodian bank is responsible for safekeeping the fund s assets within the scope of general custodianship practices. It furthermore executes all obligations assigned to it by the Liechtenstein Law on Investment Companies of 19 May 2005 in the current applicable edition (Investment Undertakings Act, IUA). 2.9 Auditors of the fund and the management company Ernst & Young AG, Belpstrasse 23, CH-3001 Bern The investment and management companies are obliged to submit their business activities annually to independent Auditors approved by the FMA. 3 General information on the fund 3.1 Fund structure The securities and other assets of the investment fund are to be administrated by the management company in the interest of and for the account of the investor. The fund s total net assets are the shared property of all investors, who enjoy equal rights in proportion to their units. They are separate from the assets of the management company. Claims by investors and creditors against the fund, whether originating from the establishment, during the existence, or at the liquidation of the fund, are limited to the net assets of this fund. The specific properties of the fund are defined in the present prospectus. The fund was created according to art. 4 para. 1 lit. a IUA as dependent, open investment fund with the legal status of a collective trust. The fund was approved by the FMA on May 10, 2007 and was entered in the Liechtenstein Public Registry on May 11, The full prospectus as well as the simplified prospectus and the terms of contract were deposited with the Liechtenstein Land Registry and Public Registry Office. The current applicable edition is available on the web site of the LAFV Liechtensteinischer Anlagefondsverband under and can also be obtained free of charge from the management company and the custodian bank. This full prospectus as well as the simplified prospectus and the contractual terms were most recently amended on April 1, 2010, with the approval of the FMA. The amendments were published in the fund s official gazette on April 9, 2010, and went into effect on April 12, The current applicable edition is available on the web site Full Prospectus - 6 -

7 of the LAFV Liechtenstein Investment Fund Association under and can also be obtained free of charge from the management company and the custodian bank. The purchase of units is made on the basis of the present full prospectus as well as the most current annual and semi-annual reports published. Only information contained in the full prospectus or a document referred to therein is valid. With the purchase of the units, the investor is considered as having approved of these. 3.2 Historic performance The historic performance of the fund is shown on the web site of the LAFV Liechtensteinischer Anlagefondsverband under The historic performance of a unit is no guarantee of similar current and future performance. The value of a unit may rise or fall at any time. The shown performance development does not take into account the commissions and fees payable at issue and redemption. 3.3 Total Expense Ratio (TER) The TER is calculated according to general principles approved by the FMA and comprises all commissions and costs debited to the fund s assets with the exception of the transaction costs. The TER of the fund is documented on the web site of the LAFV Liechtensteinischer Anlagefondsverband under as well as in the most current annual and semi-annual reports published. 3.4 Paybacks In conjunction with the purchase and sale of goods and rights on behalf of the fund, the management company, the custodian bank as well as authorized agents, if any, ensure that particularly commission paybacks accrue directly or indirectly to the benefit of the investment company. 4 Investment principles 4.1 Investment objective and investment policy of the fund The investment objective of the fund is mainly to achieve a long-term capital gain through investments made on the principle of risk diversification in securities and other instruments as described below. To the extent that no deviating investment principles for the fund are determined in section 4, the general investment regulations pursuant to section 5 apply. No guarantee can be given that the investment objective will be attained. The fund shall invest predominantly (at least 51%) in equities and securities of companies worldwide that operate in the nuclear industry, i.e. in nuclear fuel cycle, nuclear power, in building and installing works for nuclear utility companies and companies that render services to nuclear industry. The fund invests its assets mainly in equities and securities that are traded on a stock exchange or on another regulated, publicly accessible market. In addition, the fund may also invest its assets in non-listed securities in due consideration of the investment regulations. To attain the investment objective, it is intended to invest the fund s assets on the principle of risk diversification predominantly (at least 51%) in equities and securities (equities, cooperative certificates, participation certificates, preferred shares, equities with warrants, etc.) of companies worldwide that are active in the nuclear industry. There are no geographical limitations with regard to the domicile of the issuers. It is permissible to purchase equities of companies with small market capitalization (small caps), equities of companies with medium market capitalization (mid caps), or equities of substantial, large, internationally renowned and important companies (blue chips). Full Prospectus - 7 -

8 The investments are made predominantly in assets denominated in US dollars (USD) or euros (EUR). In addition, assets denominated in other freely convertible currencies may also be held. To minimize the currency translation risk, assets denominated in currencies other than US dollars may be hedged against the US dollar. In the interest of efficient management, the fund may deploy derivative financial instruments based on securities, stock and annuity indices, currencies and Exchange Traded Funds as well as future exchange transactions and swaps. Moreover, the fund is authorized to invest in other permitted investments within the limits of the Investment restrictions set forth in the Investment regulations in section 5. The fund-specific and generals risks mentioned in section 6 must be taken into consideration. 4.2 Accounting currency The accounting currency is the currency in which the performance and the net assets of the fund are reported. The accounting currency is indicated in section 1 Key fund data. 4.3 Profile of a typical investor The A.C. Nuclear Opportunities Fund is suitable for investors with a long-term investment horizon who wish to invest in a diversified portfolio consisting of companies that operate in the nuclear industry. It must be pointed out that investments in this fund are intended only as an addition within a custody account. 5 Investment regulations The following regulations apply generally to investments of the fund: 5.1 Permitted investments The investments of the fund must consist to at least 90% of the assets of the following instruments: a) Securities, equities and money-market instruments that are traded on a stock exchange or on another regulated, publicly accessible market; b) Securities from new issues that are to be traded on a stock exchange or on another regulated, publicly accessible market and are admitted to trading within one year; c) Sight deposits or callable deposits of a maximum duration of twelve months with banks domiciled in an EEC member state or in another state, provided that they are subject in these states to supervision equivalent to Liechtenstein s; d) Money-market instruments that are not traded on a regulated market, are liquid, and whose value can be determined at any time, if the issue or the issuer is already subject to the regulations on asset and investor protection, and if: 1. the issue has been made or guaranteed by an EEC member state, a regional or local corporation, the central bank of an EEC member state, the European Central Bank, the European Union, the European Investment Bank, a third-party state, or, if this is a federal state, a member state of the federation, or an international public-sector institution with which at least one EEC member state is affiliated; 2. the issue has been made by a company whose securities are traded on the regulated markets listed in paragraph a); 3. the issuer is subject to supervision equivalent to Liechtenstein s; 4. the issuer belongs to a category admitted by the FMA, provided that investments in these instruments are subject to investor protection regulations equivalent to those listed in sections 1 to 3, and the issuer owns an equity capital of at least CHF 15 million, and the issuer prepares and publishes the Full Prospectus - 8 -

9 annual financial statement according to the provisions of Guideline 78/660/EWG, provided that the issuer is a legal entity which is, within a corporate group comprising one or several listed companies, responsible for the financing of that group; or is intended to finance the securities collateralization of accounts payable by using a credit line granted by a bank; e) units of investment companies for securities or equivalent investment companies, if: 1. these companies are subject to a supervisory authority equivalent to Liechtenstein s and sufficient guarantee exists for cooperation between the authorities; 2. equivalent investor protection exists and the regulations regarding the separate custodianship of the assets, credit raising and credit granting as well as shortselling are equivalent; 3. public access to qualitatively equivalent annual and semi-annual reports is guaranteed; and 4. these companies are authorized to invest no more than 10% of their assets in other investment companies for securities or equivalent investment companies; f) derivative financial instruments that are traded on a stock exchange or on another regulated, publicly accessible market; g) derivative financial instruments not traded on a regulated market (OTC derivatives), if: 1. the opposite party is subject to a supervisory authority equivalent to Liechtenstein s; and 2. they can at any time be reproducibly valued, sold, liquidated, or balanced by an offset transaction; h) derivative financial instruments embedded in a security or a money-market instrument (structured financial instruments). The fund is allowed to hold up to 10% of its assets in other securities and money-market instruments than listed in section 5.1, paragraphs a) to h). 5.2 Cash and cash equivalents The fund is allowed to maintain adequate cash and cash equivalents. 5.3 Investment restrictions The fund is subject to the following investment restrictions: a) An investment company for securities may invest no more than 10% of its assets in securities or money-market instruments of the same issuer. Paragraphs d) to f) remain applicable; b) Investments in one and the same institution may not exceed 20% of the total assets; c) The sum of all securities, money-market instruments, or deposits and positions in OTC derivatives invested in the same issuer or the same corporate group may not exceed 20% of the total assets; d) Investment instruments issued or guaranteed by a state, a public-sector institution from the OECD, or international public-sector organizations may not comprise more than 35% of the total assets per issuer; e) Investments in debentures of banks domiciled in the EEC which are subjected a supervisory authority based on legal regulations for the protection of the owners of these debentures may not exceed 25% of the total assets. The sum of such investments exceeding 5% of the same issuers capital may not be greater than 80% of the total assets; f) Companies issuing consolidated financial statements according to the applicable provisions of the banking law or the corresponding recognized international accounting regulations are considered as corporate groups in which no more than 20% of the total assets may be invested; g) Cumulation of the investment limits indicated in paragraphs a) to f) is not permissible. The sum of investments in securities, money-market instruments, deposits Full Prospectus - 9 -

10 and OTC derivatives with the same issuer may in no case exceed 35% of the total assets h) The sum of securities and money-market instruments exceeding 5% with the same issuer may not be greater than 40% of the total assets, however: 1. this limit is not applicable to deposits and transactions with OTC derivatives effected with financial institutes that are subject to a supervisory authority equivalent to Liechtenstein s; 2. the sum of investments pursuant to paragraphs d) and e) is not taken into consideration; and 3. of the rest of the assets, no more than 5% may be invested in a single issuer. i) Investments in units of other investment companies for securities or equivalent investment companies may not exceed 10% of the fund s assets; j) Up to a maximum of 10% of the fund s assets may be invested in units of investment companies administrated by the same management company or a management company affiliated with it; k) Investments in derivative financial instruments must be included in the limits stated above; l) If a derivative financial instrument is embedded in a security or a money-market instrument (structured financial instrument), it must also be included in the limits; m) A participating interest in a company may not exceed 10% of the voting stock. Investment companies for securities administrated by the same management company or by two joint management companies may collectively own no more than 10% of the voting stock; n) the management company may not acquire more than 10% of the non-voting shares of a single issuer; o) the management company may acquire no more than: 1. 10% each of the debentures of money-market instruments of a single issuer; and 2. 25% of the shares of one and the same investment company for securities or equivalent investment company. The limits are not applicable if the calculation is not possible at the time of the purchase; p) when exercising subscription rights linked with securities or money-market instruments that are part of separate assets, the investment limitations of this paragraph may be disregarded; q) in deviation from section 5.3 para. a) and in accord with article 45 IUO, up to 100% of the assets may be invested in securities and money-market instruments of the same issuer, provided that these instruments are issued or guaranteed by a state, a public-sector institution from the OECD, or international public-sector organizations. These securities or money-market instruments must be subdivided into at least six different issues, where securities or money-market instruments from one and the same issue may not exceed 30% of the assets. The above-mentioned securities and money-market instruments are not taken into consideration when the limit of 40% pursuant to section 5.3 para. h) is applied. Public-sector institutions and international organizations comprise, e.g., all public-sector institutions of the OECD member states; and r) the limits stated are applicable insofar as no fund-specific investment principles are determined in section Non-permitted investments The following investments are not permitted: a) Precious metals and precious-metal certificates; b) Short sales and constructions that amount to short sales; and c) The deployment of derivative financial instruments for speculative purposes. 5.5 Borrowing and granting of loans For A.C. Nuclear Opportunities Fund, the following restrictions apply: Full Prospectus

11 a) The fund may neither take out loans (except as provided in lit b of this section) nor grant loans nor offer surety to third parties. Securities lending is not a granting of credit; b) In exceptional cases and if this is in the interest of the investors, the fund may take out a short-term loan equivalent to no more than 10% of its net assets; and c) The properties and rights of the fund that constitute the assets must not be pledged except for permissible borrowing transactions and for business with derivative financial instruments. 5.6 Instruments and techniques Derivative financial instruments As derivative financial instruments are considered instruments whose value is derived from a underlying value in the form of another financial instrument or a reference index (financial index, interest rate, exchange rate or currency, etc.) and which constitute futures or options transactions governed by contracts. In the interest of efficient management, the fund may deploy derivative financial instruments for hedging and investment purposes insofar as such transactions do not deviate from the investment objective of the fund and the provisions of sections 5.1 to 5.5 are complied with. This also applies when a security or money market instrument is embedded in a derivative financial instrument. Index-based derivative financial instruments are considered an entity. The individual index components are not taken into consideration. The risk associated with derivative financial instruments must not exceed 100% of net assets. Hereby, the total risk must not exceed 200% of net assets. When taking out a loan permissible under the IUO (section 5.5 para. b), the total risk may not exceed 210% of the net assets Risk management procedure The management company uses a basic model to calculate the risks associated with the investment instruments, especially with respect to derivative financial instruments, and uses for this purpose generally established calculation methods. It is obliged to ensure that the risk from derivative financial instruments at no time exceeds the total value of the portfolio, and that in particular no positions are acquired that constitute an unlimited risk to the assets. When calculating the total risk, it is mandatory to take into consideration both its default risk and the leverage associated with derivative financial instruments. Combinations of derivative financial instruments and securities must also comply with these regulations at any point in time Securities lending The management company is entitled to lend securities within the scope of its ordinary business. It may lend securities via its custodian bank, recognized clearinghouses, and first-class financial institutions specialized in such activities. However, securities lending may remain in effect for no more than 30 calendar days and the value of the securities lent must not exceed 50% of the fund s security inventory. These limitations do not apply if the management company is entitled to cancel the securities lending contract and recover the securities at any time. The management company may lend securities only against collateral whose value must correspond at any time to at least 105% of the market value of the loaned securities. The collateral must be issued in the form of cash, securities and/or irrevocable letters of credit, guarantees and sureties of third-party banks having a long-term current rating by an FMA-accredited rating agency of at least A-, A3 or equivalent and must be either pledged in favor of the fund s Full Prospectus

12 assets or transferred to its property by the time the securities lending contract elapses. Loaned securities continue to be subject to compliance with investment regulations Annuities transactions The management company does not carry out annuities transactions Investments in investment companies for securities or equivalent investment companies The fund may, based on its special investment policy, invest its assets in investment companies for securities or equivalent investment companies. For such investments, the investment restrictions pursuant to section 5.3 are applicable. However, the fund may in no case invest a majority of assets in the above-mentioned investment companies. Thus, the fund does not have an umbrella fund structure. Investors must take into account that at the level of indirect investments, further indirect costs and charges are incurred and that fees and remunerations are paid these expenses are debited directly to the individual indirect investments. If an investment company for securities purchases units of other investment companies that are directly or indirectly administrated by the same management company or another company connected with the management company by shared administration or by control via a significant direct or indirect participating interest, the management company or the other company may not charge any fees for the subscription or redemption of units of the other investment company for securities or equivalent investment company, or for the conversion of individual segments by the investment company. 6 Risks and risk profiles 6.1 Fund-specific risks The performance of the units depends on the investment policy and on the development of the individual instruments in which the fund invests and cannot be determined in advance. In this context, it must be pointed out that the value of the units can rise or fall versus the issue price at any time. The fund cannot guarantee that the investor will be able to recover his invested capital. Because the A.C. Nuclear Opportunities Fund invests its assets predominantly in securities and equities, it is exposed to a market and issuer risk which may have a negative impact on its net assets. Additionally, other risks may be incurred, such as the foreign currency translation risk and the interest-rate risk. Increased risks may be incurred with the deployment of derivative financial instruments that are not used for hedging purposes. Due to its focus on assets of companies active in the nuclear industry, the fund s performance may deviate from the general market trend as expressed by broadly based market indices. Investors should have adequate risk tolerance and a long-term investment horizon. 6.2 General risks In addition to the fund-specific risks, the investments of the fund may incur general risks. Full Prospectus

13 All investments in investment companies incur risks. Risk may include, or be associated with, stock and bond market risks, foreign currency translation risks, interest-rate risks, credit risks, volatility risks, and political risks. Any of these risks may occur together with other risks. Some of these risks are briefly discussed in this section. It should be noted, however, that this is not an inclusive list of all possible risks. Potential investors should be clearly aware of the risks incurred by an investment in units and not make any investment decisions before having received comprehensive advice by their legal, fiscal, and financial consultants, auditors or other experts on the suitability of an investment in units of this fund, taking into consideration their personal financial and fiscal situation as well as other circumstances, and on the information contained in the present full prospectus and the investment policy of the fund. Derivative financial instruments The fund may deploy derivative financial instruments. These may be used not only for hedging purposes but may be also deployed as part of the investment strategy. The deployment of derivative financial instruments for hedging purposes may change the general risk profile as a result of smaller opportunities and risks. The deployment of derivative financial instruments for investment purposes may change the general risk profile as a result of additional opportunities and risks. Derivative financial instruments also incur the risk of a loss to the fund s assets because another party participating in the derivative financial instrument (usually an opposite party ) does not meet its obligations. This risk is particularly high with warrants, OTC options and futures, structured products, exotic options, etc. Issuer risk (solvency risk) A drop in solvency or even the bankruptcy of an issuer entail at least a partial loss of the assets. Counterparty risk The risks arises when the delivery on transactions concluded for the account of the assets is jeopardized by liquidity problems or bankruptcy of the issuer. Inflation risk Inflation may diminish the value of the invested assets. The purchasing power of the invested capital decreases when the inflation rate exceeds the yield of the investments. Cyclical risks These refer to the risk of price losses arising when at the time of the investment decision, the development of the economic cycle is not, or not correctly, taken into consideration, so that securities investments are made at the wrong time or securities are being held during an unfavorable phase of the economic cycle. Country-specific risks investments in countries in politically unstable conditions incur special risks. These may quickly lead to large price swings. Such risks include, for example, foreign currency restrictions, transfer risks, moratoriums, or embargoes. Liquidity risk Equities of smaller companies (small caps) incur the risk that the market may not be liquid during some phases. The result may be that equities cannot be traded at the desired time and/or in the desired quantities and/or the expected price. Market risk (price risk) This is a general risk associated with all investments which implies a possible change of the value of a certain investment against the interests of the fund. Full Prospectus

14 Psychological market risk Sentiment, opinions, and rumors may cause a significant price drop although the profit situation and future prospects of the companies under investment has not necessarily changed in any sustainable way. Equities are especially vulnerable to psychological market risks. Settlement risk This refers to the fund s risk of loss due to the failure of settlement of concluded transactions because an opposite party fails to pay or deliver, or due to errors in the operational execution of a transaction. Tax risk Purchasing, holding, or selling of investments may be subject to fiscal regulations (e.g. source taxation) outside the fund s country of domicile. Entrepreneurial risk investments in equities represent a direct participation in the business success or failure of a company. In the extreme case bankruptcy this may mean the total loss of value of such an investment. Currency translation risk If the fund holds assets denominated in a foreign currency or currencies, it is exposed to a direct currency translation risk (unless the foreign currency positions are hedged). Falling exchange rates lead to a value reduction of the foreign currency investments. Conversely, the foreign exchange market also offers opportunities of gains. In addition to the direct currency translation risks, there are also indirect currency translation risks. Internationally active companies depend to a more or less significant degree on the development of exchange rates, and this may have an indirect effect on the price development of investments. Interest-rate risk To the extent that the fund invests in securities that yield an interest, it is exposed to an interest-rate risk. When the market level of the interest rate rises, the price value of the interest-yielding securities of the assets may fall substantially. This is even more the case if the portfolio also contains interest-yielding securities with longer maturities and lower nominal interest. 7 Participation in the fund 7.1 Sales restrictions The fund is not admitted for distribution in all countries. Local regulations shall apply in cases where units of this fund are issued and redeemed abroad. In particular, the units of the fund have not been registered under the United States Securities Act of 1933 and cannot, except in conjunction with a transaction that does not violate this Act, be directly or indirectly offered, sold, resold or delivered in the United States, to citizens or residents of the United States, to corporations or other legal entities established or administrated under U.S. law. The term United States for the purpose of this document comprises the United States of America, all member states, territories and possessions, as well as all territories under U.S. jurisdiction. Citizens of the United States residing outside of the United States are permitted to become beneficial owners of the units of this fund under the provisions of Regulation 5 of the Securities Act Release No (May 2, 1990). 7.2 General information on the units The units exist only on the company s books. Full Prospectus

15 7.3 Issue of units Units can be purchased on a weekly basis at the net asset value per unit. This net asset value is calculated on the valuation day on the basis of the last known market prices (using the calculation method described in section 7.8), plus issue commission and taxation, if any. The amount of the maximum issue commission charged in conjunction with the issue of units is stated in section 1, Key fund data. Purchase requests must be submitted to the custodian bank until no later than at 4 p.m. (Central European Time) on the day prior to the next valuation day. If a purchase request arrives after this deadline, it is treated like a purchase request for issue on the next following valuation day. For requests placed with authorized distributors in Switzerland or abroad, earlier closing dates may apply in order to guarantee timely forwarding to the custodian bank in Liechtenstein. Such deadline information is available from the respective authorized distributor. Payment must arrive within three bank business days following the valuation day on which the issue price of the units was determined. Any taxation resulting from the issue of units is also charged to the investor. If units are purchased via banks that are not entrusted with the distribution of the units, it cannot be excluded that such banks charge additional transaction costs. The custodian bank, the management company and/or the authorized distributors may refuse purchase requests at their own discretion. If the payment is made in another currency than the accounting currency, the equivalent resulting from the conversion of the payment currency into the accounting currency, less charges, is used for the purchase of units. The minimum investment an investor must hold is stated in section 1, Key fund data. At the discretion of the management company, a minimum investment limit may be waived. The management company may, in addition, take a decision to permanently or temporarily suspend the issue of units if new investments may impair the achievement of the investment objective. 7.4 Redemption of units Units can be redeemed on a weekly basis at the net asset value per unit. This net asset value is calculated on the valuation day on the basis of the last known market prices (using the calculation method described in section 7.8), plus redemption commission and taxation, if any. The amount of the maximum redemption commission charged in conjunction with the issue of units is stated in section 1, Key fund data. Redemption requests must be submitted to the custodian bank until no later than at 4 p.m. (Central European Time) on the day prior to the next valuation day. If a redemption request arrives after this deadline, it is treated like a redemption request for the subsequent valuation day. For requests placed with authorized distributors in Switzerland or abroad, earlier deadlines may apply in order to guarantee timely forwarding to the custodian bank in Liechtenstein. Such deadline information is available from the respective authorized distributor. In order to maintain an adequate proportion of cash and cash equivalents in the fund s assets, the repayment of fund units must, under normal circumstances, occur within five bank business days after calculation of the redemption price, unless the transfer of the redemption sum proves impossible due to legal constraints such as currency export and cross-border payment restrictions or due to other circumstances beyond the control of the custodian bank. Full Prospectus

16 In case of large redemption requests, the management company may decide to settle a redemption request only when, without unnecessary delay, equivalent assets of the fund can be sold. If such a measure is necessary, all redemption requests received on the same day shall be settled at the same price. The custodian bank and/or the management company may at any time independently effectuate the redemption of units if these are held by investors who are not authorized to purchase or own these units. If, on request by the investor rather than at the discretion of the custodian bank, the payment is to be made in another currency than the currency of the units denomination, the payable amount shall be calculated from the proceeds of the conversion from the accounting currency into the payment currency less charges. After payment of the redemption price, the respective unit becomes invalid. 7.5 Market Timing The custodian bank and/or the management company do not permit market timing (the unfair exploitation of value differentials at investment companies by short-term and systematic trading of fund units). The custodian bank and/or the management company therefore reserve the right to refuse, at their discretion, any suspect subscription, redemption, and conversion requests, as well as to take appropriate measures for the protection of the other investors. 7.6 Suspension of the calculation of the fund s net assets and of the issue and redemption of units The management company may suspend the calculation of the fund s net assets and/or the issue and redemption of units a) if a market which forms the basis for the calculation of a substantial part of the fund s assets is unexpectedly closed, or if trading on such a market is restricted or suspended; b) in case of political, economic, or other emergencies; or c) if transactions are not executable by the fund due to restrictions on the transfer of assets. The management company shall immediately notify the delay to the FMA, the external auditors, and in suitable form to the investors. If an orderly valuation of the assets is not possible, the management company shall immediately notify the FMA and propose suitable measures. 7.7 Measures to prevent money laundering Domestic authorized distributors are obliged vis-à-vis the management company to comply with the provisions of the law and ordinance on occupational diligence and due care (Sorgfaltspflichtgesetz, Sorgfaltspflichtverordnung) applicable in the Principality of Liechtenstein, as well as the FMA guidelines in the edition in force. To the extent that domestic authorized distributors receive monies from investors, they are obliged, in their capacity as agents subject to due diligence obligations and in compliance with the Due Diligence Act and the Due Diligence Ordinance, to identify the subscriber and the beneficiary, to prepare a dossier on the business relationship, and to abide by all local laws related to the prevention on money laundering. 7.8 Net asset value, issue and redemption price The net asset value (NAV) per unit shall be calculated by the management company at the end of the accounting year as well as on the valuation day on the basis of the last known prices. If the valuation day should coincide with a bank holiday in Full Prospectus

17 Liechtenstein, the valuation day shall be rescheduled to the next following banking business day in Liechtenstein. Information with regard to the valuation day as well as the valuation frequency is stated in section 1, Key fund data. The NAV of a unit is expressed in the accounting currency of the fund and results from the fund s asset value minus any liabilities, divided by the number of circulating units. It shall be rounded to USD 0.01 when units are issued or redeemed. The asset value of the fund is calculated as follows: a) investments listed on a stock exchange or traded on another regulated market shall, as a rule, be valued at the closing price on the respective issue and redemption day. If an investment is traded at several stock exchanges, the price of the market representing the main market for this investment shall be applicable. Paragraph b) below remains applicable; b) for investments in securities or money-market instruments with an effective maturity of less than 12 months, the difference between the acquisition price (purchase price) and the redemption price (price at maturity) may be linearly extrapolated, and the valuation at the current market price may be omitted, if the redemption price is known and has been fixed. Credit-rating changes, if any, shall be accounted for additionally; c) investments whose price is not in conformity with the market, and assets that do not fall under paragraphs a) and b) above, are calculated at the price that would have most likely been attained if the investment had been sold with due diligence at the time of valuation and is determined in good faith by the executive board of the management company or under their direction or supervision by authorized agents; d) Cash and cash equivalents shall be valued on the basis of their face value plus accumulated interest; and e) investments denominated in another currency than the fund s accounting currency shall be converted using the mean between the buying and selling prices offered in Liechtenstein or, if not available, on the market most representative of that currency. The management company shall be entitled to use other reasonable valuation principles to value the assets of the fund if, as a result of extraordinary circumstances, valuation on the basis of the criteria described above should become impossible or impracticable. In the case of very large numbers of redemption requests, the management company may value the units on the basis of the prices at which the necessary securities have to be sold. In this case, the same calculation method shall be used for simultaneously submitted issue and redemption requests. 8 Use of proceeds The generated income is reinvested on an ongoing basis according to section 1, Key fund data. Realized capital gains from the sale of goods and rights shall be retained by the management company for reinvestment. 9 Taxation The assets of a Liechtenstein fund are tax-exempt. Full Prospectus

18 The establishment (issue) of fund units does not entail an issue charge. The free transfer of title to units is subject to revenue taxation provided one party or agent is a domestic broker 5. Investors domiciled in the Principality of Liechtenstein must declare their units as property. Income distributed by the fund, if any, shall be deemed capital gains and are thus not subject to income tax. The capital gains incurred when the units are sold shall be taxed as income. With respect to the units of the fund, a Liechtenstein paying agent may be obligated to levy a withholding amount in view of certain interest payments, both in the case of distributions and in the event of a sale or redemption of units where amounts are due to a natural person domiciled in an EU member nation (EU interest taxation). If applicable, a Liechtenstein paying agent may, if explicitly requested by the beneficiary, report income as described above instead of withholding amounts for taxes due. The fund is not subject to any further source tax obligations in the Principality of Liechtenstein, especially not to withholding taxes. Foreign income and capital gains generated by the fund may be subject to withholding tax in the country in which the respective investments were made. Double-taxation agreements may apply. The fiscal considerations are based on the currently applicable legal situation and practice. They are explicitly subject to change due to changes of legislation, jurisdiction, edicts, and the practices adopted by the tax authorities. Taxation and other fiscal consequences for the investor who holds or buys or sells units of the fund depend on the fiscal legislation in place in the investor s country of domicile as well as, particularly as regards EU interest taxation, the country of domicile of the paying agent. Investors are urged to consult their own professional advisors with respect to fiscal consequences. Neither the management company nor the custodian bank nor their authorized agents can assume any responsibility for the investor s personal fiscal consequences arising from the purchase, ownership, or sales of units. 10 Commissions and costs 10.1 Commissions and costs borne by the investors Issue commission To cover the costs incurred by the placement of units, the management company may charge an issue commission on the net asset value of the newly issued units to be credited to the management company, the custodian bank, and/or authorized domestic or foreign distributors according to section 1, Key fund data Redemption commission For the redemption of repurchased units, the management company may charge a redemption commission on the net asset value of the redeemed units to be credited to the fund s assets as set forth in section 1, Key fund data. When paying out the liquidation proceeds in the event of a liquidation of the fund, the management company may charge to its credit a redemption commission on the net asset value as set forth in section 1, Key fund data. 5 Under the customs affiliation agreement between Switzerland and Liechtenstein, Swiss stamp duty jurisdiction also extends to Liechtenstein. For the purposes of Swiss stamp duty law, the Principality of Liechtenstein is therefore considered as domestic territory. For this reason, funds domiciled in Liechtenstein are exempt from the value added tax. Full Prospectus