LOMBARD ODIER DARIER HENTSCH INVEST NOTICE TO SHAREHOLDERS

Transcription

1 LOMBARD ODIER DARIER HENTSCH INVEST NOTICE TO SHAREHOLDERS Dear Shareholder, We wish to advise you of the proposed changes to the prospectus (the "Prospectus") of Lombard Odier Darier Hentsch Invest (the "Company" or "LODH Invest") as follows: 1 Changes to the Company's name and to the Company's sub-funds' names, investment policies and restrictions 1.1 The name of the Company is changed to Lombard Odier Funds, in short LO Funds and in relation to such change, the terms "LODH Invest" will be replaced with "LO Funds" in the denominations of all subfunds. 1.2 The limits applicable to the holding of liquidities, the holding of UCIs and the use of derivative instruments, mentioned in the Prospectus under "General Provisions Common to all Sub-Funds" (paragraph 3.1) will, when applicable, be mentioned in the investment policy description of each sub-fund. The description of the general risks and of a number of risks specific to each sub-fund has been reviewed and completed (paragraphs 5.1 and 5.2 of the Prospectus). In addition, a table with a summary of the main risks for each sub-fund will be introduced in section 5 of the Prospectus. 1.3 The definition of "Liquidities", which currently comprises cash, short-term deposits or other short term instruments (including money market UCIs) and regularly traded money-market instruments the residual maturity of which does not exceed twelve months, is amended to include bank deposits and any eligible money-market instruments, the residual maturity of which does not exceed 397 days. 1.4 All fixed-income sub-funds (except the LODH Invest Convertible Bond Asia and LODH Invest The Convertible Bond Europe) as well as the LODH Invest Alternative Beta sub-fund may hold, up to a certain percentage of their assets in Liquidities on a temporary and ancillary basis. In addition, these subfunds' investment policies authorise investments, up to a certain percentage of their assets, in some fixedincome instruments (such as bank deposits or money-market instruments) that are included in the definition of Liquidities. To avoid confusion, the investment policy of these sub-funds will be amended (i) to delete the reference to the holding of Liquidities on a temporary and ancillary basis and (ii) to replace the references to single fixed-income instruments by a reference to "Liquidities", thus allowing investments in any instrument mentioned under the definition of Liquidities but keeping the current minimum or maximum limits applicable to investments in such instruments taken altogether. 1.5 The LODH Invest Alto Europe Equity will be renamed LO Funds Systematic Europe Equity. 1.6 The LODH Invest - Sovereign Treasury 1-3 (EUR) will be renamed LO Funds - EUR Sovereign Treasury 1-3. A /0.8/15 oct 2009 R.C.S. Luxembourg B Siège social: 5 Allée Scheffer L Luxembourg 1

2 1.7 The LODH Invest - Euro-Zone Small and Mid Caps will be renamed LO Funds - Eurozone Small and Mid Caps. 1.8 The LODH Invest - GTAA (EUR) will be renamed LO Funds Tactical Alpha. Its investment policy will be amended to state that the sub-fund will invest in bank deposits and/or money markets instruments and take long and short exposures, through financial derivative instruments, on various asset classes, such as fixed income, equities, commodities (indices) and currencies. The Investment Manager will implement its global tactical asset allocation strategy using full discretion in the selection of financial derivative instruments and underlying asset classes. The Investment Manager is authorized to use financial derivative instruments not only for hedging purposes or for efficient portfolio management, but also as part of its investment strategy. The Investment Manager may use a wide range of financial derivative instruments, such as options, futures and swaps in order to increase or reduce its exposure to specific asset classes, markets (including emerging markets), securities and currencies. The sub-fund may invest up to 100% of its assets in Liquidities. 1.9 The investment policy of the LODH Invest - Diversifier will be completed to specify that (a) the exposure provided by structured financial instruments is to different categories of assets (including money market instruments and bank deposits) worldwide (including emerging markets) and (b) at least 75% of its assets will be exposed to (i) SFIs which, when issued, offer full capital protection at maturity and/or (ii) Liquidities The investment policy of the LODH Invest - Selective Global Equity will be amended to specify that the sub-fund may be invested up to 100% of its assets in Liquidities (compared to one-third (1/3 rd ) currently). Therefore, the Investment Manager will no longer be bound by the minimum investment rule providing that at least 2/3rds of the sub-fund's assets are invested in equity securities issued by companies worldwide. It is also clarified that markets in which the sub-fund invests include emerging markets The LODH Invest - Healthcare will be renamed LO Funds - Golden Age. Its investment policy will be amended to state that the Sub-Fund will invest in equity securities issued by companies worldwide, the future growth of which is significantly driven by the theme of the ageing population. Within this investment universe, the Investment Manager may invest in small and mid caps companies (as considered in their respective markets), as well as in companies incorporated or exercising a prominent part of their business activities in emerging markets. The Investment Manager may use a wide range of financial derivative instruments, such as options, futures and swaps (in particular CFDs) in order to increase or reduce its exposure to specific markets, sectors, issuers and currencies. The Reference Currency will be the USD, as opposed to the EUR, as is currently the case The investment policy of the LODH Invest - Japanese Small and Mid Caps will be amended to specify that the Investment Manager is authorised to use financial derivative instruments not only for hedging purposes or for efficient portfolio management but also as part of the investment strategy The investment policy of the LODH Invest Low Grade Credit (USD) will be amended to add short-term deposits to the list of securities in which at least 2/3rds of the sub-fund's assets are invested The LODH Invest - Investment Grade (CHF) will be renamed LO Funds - Investment Grade A-BBB (CHF). It will no longer invest in securities graded below BBB. Therefore, its investment policy will be amended to R.C.S. Luxembourg B Siège social: 5 Allée Scheffer L Luxembourg 2

3 state that the Sub-Fund will invest at least 2/3rds of its assets in debt securities denominated in CHF and graded from A to BBB or equivalent and up to 1/3rd of its assets in (i) debt securities of issuers which may be graded above A or equivalent, as well as in (ii) Liquidities The LODH Invest EU Convergence Bond will no longer invest, within its 2/3rds minimum limit, in corporate or supranational issuers. Therefore, its investment policy will be amended to state that the Sub- Fund will invest at least two-thirds (2/3 rds ) of its assets, in bonds, other fixed or floating rate debt securities and short-term debt securities of (i) sovereign Eastern European issuers or of (ii) EU Applicants, or of (iii) countries who have successfully applied for membership but whose currencies still trade independently from the EUR. In addition, this Sub-Fund will no longer invest in securities graded below BBB. Therefore, its investment policy will be amended to state that the Sub-Fund may be invested in securities with a rating of at least BBB or equivalent The investment policies of the LODH Invest - Optimum Trend (EUR) and LODH Invest - Optimum Trend (USD) will be amended to take long and short positions in financial derivative instruments on interest rate, denominated in any OECD currency. The current limitation to EUR or USD will no longer be applicable The investment policies of the LODH Invest - Systematic World Bond (EUR) and the LODH Invest - Systematic World Bond (CHF) will be clarified to state that the Investment Manager is authorised, in order to implement its systematic strategies, to use financial derivative instruments (in particular, but not limited to, swaps, futures, forwards and options) not only for hedging purposes or for efficient portfolio management but also as part of the investment strategy The investment policy of the LODH Invest - Convertible Bond will be modified to state that the Sub-Fund will invest at least 2/3rds of its assets, in bonds convertible into equities and in associated instruments such as warrants and convertible preference shares, denominated in various currencies. Up to 1/3rd of the Sub-Fund's assets may be invested in other transferable securities and/or in Liquidities In the investment policy of the LODH Invest - Convertible Bond, LODH Invest - Convertible Bond Asia and LODH Invest - Convertible Bond Europe, it is clarified that (i) financial derivative instruments that the Investment Manager is authorized to use include forwards, credit derivatives and interest rate derivatives and (ii) markets in which the sub-funds may be invested include emerging markets Section 4.2 (c) (i) of the Prospectus will be amended to allow the LODH Invest Emerging Market Bond to invest up to 35% of its net assets (currently 10%) in transferable securities and money market instruments issued by any of the following States: India, China, Thailand, Peru, Malaysia, Indonesia, Columbia and Chile. 2 Changes to charges 2.1 For the LODH Invest Europe, the benchmark used to calculate the relative performance fee will be the MSCI Europe instead of the Eurostoxx For the LODH Invest - Healthcare, the total management and distribution fees (if applicable) will be reduced from 1.00% to 0.75% for the I category of shares, from 2.00% to 1.50% for the P category of R.C.S. Luxembourg B Siège social: 5 Allée Scheffer L Luxembourg 3

4 shares and from 2.25% to 2.00% for the R category of shares. In addition to the management fee, the Investment Manager will now be entitled to a performance fee calculated on a yearly basis, amounting to 15% of the relative performance of the Sub-Fund compared to its benchmark being the MSCI World Healthcare (in USD). This performance fee will be levied over rolling periods of three years as follows: 50% in the first year, 25% in the second year and 25% in the third year. To pay the full amount of the performance fee, the sub-fund has to outperform its benchmarks over three years. 2.3 For the LODH Invest - Optimum Trend (USD), the benchmark/hurdle rate used to calculate the relative performance fee will be the Barclays Overnight USD instead of the Citigroup USD 1 Month EUR Deposit Index. 2.4 For the LODH Invest - GTAA (EUR) the total management and distribution fee will be increased from 0.30% to 1.00% for the I category of shares, from 0.60% to 1.75% for the P category of shares and from 0.80% to 2.25% for the R category of shares. In addition, for the P, R and I categories of shares, the Investment Manager is entitled to a performance fee amounting to 15% of the relative performance of the sub-fund compared to its hurdle rate Eonia on a yearly basis. This performance fee is subject to an absolute High Water Mark. 2.5 The LODH Invest - Diversifier will no longer be subject to a performance fee. The management and distribution fees will remain unchanged. 2.6 Fees paid monthly in arrears to the Custodian and to the Central Administration Agent will change as follows: maximum 0.14% per annum (Luxembourg tax not included) varying in function of the instruments (class of assets) and zone of investments or size of the sub-funds, calculated by reference to the Net Asset Value of each share class with a minimum annual fee of maximum USD 20'000 per sub-fund. 3 Changes to valuation, subscription and redemption procedures 3.1 In order to harmonise the valuation, subscription and redemption procedures across all sub-funds of the Company, the Prospectus will be amended to specify that the value of the securities which are admitted to an Official Listing or traded on any other Regulated Market will be determined, for all sub-funds, on the Valuation Day on the basis of the last available price on the principal market on which such securities are traded, as provided by a pricing service approved by the Directors. For all sub-funds, subscription, conversion or redemption requests must be received by the Company no later than 3 pm Luxembourg time on the business day before the Valuation Day, for value payment date 3 business days after the Valuation Day 3.2 Exceptions to the above mentioned valuation, subscription and redemption procedures will be the following: - for the LODH Invest Diversifier, the value of the Swap Agreements will be determined on the basis of the closing prices of the day preceding the Valuation Day; - for the LODH Invest Diversifier, LODH Invest Commodity (EUR) and LODH Invest Commodity (USD), the subscription, conversion or redemption requests must be received by the Company no later R.C.S. Luxembourg B Siège social: 5 Allée Scheffer L Luxembourg 4

5 than 3 pm Luxembourg time 2 business days before the Valuation Day, for value payment date 3 business days after the Valuation Day; - for the LODH Invest Money Market (EUR), the LODH Invest Money Market (USD) and the LODH Invest Money Market (GBP), the subscription, conversion or redemption requests must be received by the Company no later than 3 pm Luxembourg time on the Valuation Day, for value payment date 2 business days after the Valuation Day; - for the LODH Invest European Short Term and the LODH Invest Low Grade Credit (USD), the subscription, conversion or redemption requests must be received by the Company no later than 3 pm Luxembourg time on the Friday before the weekly Valuation Day (each Friday), for value payment date 3 business days after the Valuation Day; 4 Other changes 4.1 P Shares may, at the discretion of the Directors, be listed on the Luxembourg Stock Exchange (currently, P Shares are always listed). 4.2 Any reference to "investment adviser" will be replaced with a reference to "sub-investment manager" and any reference to "sub-adviser" will be replaced with a reference to "investment adviser". 4.3 Lombard Odier Darier Hentsch & Cie will act as sub-investment manager of the LODH Invest Money Market (EUR), the LODH Invest Money Market (USD) and the LODH Invest Money Market (GBP), in replacement of Aberdeen Asset Managers Limited. The Prospectus will also be amended to reflect other changes which will be introduced in the Articles of Incorporation of the Company. Such changes, as well as the change to the Company's name mentioned in point 1.1 above, have to be approved by Shareholders at the Extraordinary General Meeting to be held at 10:30 a.m. on 30 November 2009 at the registered office of the Company. Subject to the Shareholders' approval, all proposed changes will become effective on 30 November 2009 and in no way affect your right to redeem your shares without redemption charge or convert your shares into shares of another Sub-Fund of the Company. Copies of the current version of the prospectus, simplified prospectus, articles of association and the last annual and semi-annual report of LODH Invest may be obtained on request at the registered office of the Company. Yours sincerely, Your Board of Directors Luxembourg, 30 October 2009 R.C.S. Luxembourg B Siège social: 5 Allée Scheffer L Luxembourg 5