FUNDLOGIC GLOBAL SOLUTIONS p.l.c. Supplement dated 4 November 2009 for VALUE DRIVEN ALPHA EUROPE FUND

Transcription

1 FUNDLOGIC GLOBAL SOLUTIONS p.l.c. Supplement dated 4 November 2009 for VALUE DRIVEN ALPHA EUROPE FUND This Supplement contains specific information in relation to the Value Driven Alpha Europe Fund (the Sub- Fund), a sub-fund of FundLogic Global Solutions p.l.c. (the Fund), an umbrella fund with segregated liability between sub-funds and authorised by the Financial Regulator pursuant to the Regulations. The Sub-Fund will invest principally in financial derivative instruments. This Supplement forms part of and should be read in conjunction with the Prospectus for the Fund dated 31 July 2009 (the Prospectus). The Directors of the Fund whose names appear in the section entitled Directors of the Fund in the Prospectus accept responsibility for the information contained in this Supplement. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. Words and expressions defined in the Prospectus shall, unless the context otherwise requires, have the same meaning when used in this Supplement. M

2 TABLE OF CONTENTS 1. INVESTMENT OBJECTIVE AND POLICIES INVESTMENT RESTRICTIONS INFORMATION ON THE INDICES INFORMATION ON THE FINANCIAL DERIVATIVE INSTRUMENTS INDEX SPONSOR BORROWING AND LEVERAGE RISK FACTORS DIVIDEND POLICY KEY INFORMATION FOR PURCHASING AND SELLING CHARGES AND EXPENSES HOW TO SUBSCRIBE FOR SHARES HOW TO REPURCHASE SHARES HOW TO EXCHANGE SHARES ESTABLISHMENT CHARGES AND EXPENSES OTHER CHARGES AND EXPENSES OTHER INFORMATION...10 M

3 1. INVESTMENT OBJECTIVE AND POLICIES 1.1. Investment Objective The Sub-Fund s investment objective is to provide Shareholders with a return equivalent to the net positive performance of a long position on the Value Driven Long Index (net dividend reinvested) denominated in Euro (the Long Index) and of a short position of equal amount on the Value Driven Short Index (gross dividend reinvested) denominated in Euro (the Short Index) before all fees and expenses charged to, or incurred by, the Sub-Fund. This return is intended to be equivalent to those which could be obtained by the Sub-Fund buying securities which are identified as being likely to increase in value and selling securities which are likely to decrease in value. For a further description of the Long Index and the Short Index (together the Indices) see the section entitled Information on the Indices below Investment Policy The Sub-Fund will seek to achieve its objective by investing in Fund Assets and entering into one or more total return index swaps (the Swap) in respect of the Fund Assets. The net effect of the Swap will be to provide the Sub-Fund with the net positive performance of a long position on the Long Index and a short position of equal an amount on the Short Index in exchange for the Sub-Fund transferring its economic interest in the Fund Assets to the Approved Counterparty. It is not accordingly anticipated that the Sub-Fund will be exposed to the performance or risks of the Fund Assets other than in the event of a default by an Approved Counterparty under the terms of a Swap. The Swap which sells exposure to the Short Index is also expected to generate additional interest payments to the Sub-Fund and, subject to the Long Index increasing in value by more than the Short Index, those payments to the Sub-Fund will generate an additional return which will be reflected in the value of in the Sub-Fund and is expected to be similar to a money market return. Fund Assets include equity securities or other securities with equity characteristics, including, but not limited, to preferred stocks, warrants on equities and depository receipts for such securities (ADRs traded in the United States markets and GDRs traded in other world markets), issued by companies worldwide which are unlikely to be, though they may be, constituents of the Indices. They also include debt securities which may include, without limitation, government and corporate bonds and notes (fixed and floating interest rate) and commercial paper and may be rated either above or below investment grade by Standard & Poor's and/or Moody's or, if unrated, determined to be of equivalent credit quality by the Investment Manager. They also include units in collective investment schemes. The Fund Assets acquired will be those which, in the opinion of the Investment Manager, are required pursuant to the terms of the Swap and will, in combination with the Swap, assist the Sub-Fund in seeking to achieve its objective. The Swap counterparty will be Morgan Stanley & Co International plc, which is an acceptable counterparty under the terms of the Financial Regulator s Notices (the Approved Counterparty). Shareholders are referred to the section of the Prospectus entitled Sub-Fund Transactions and Conflicts of Interest in this regard. The Sub-Fund may be leveraged through the use of FDI. The Sub-Fund s global exposure (as prescribed in the Financial Regulator s Notices) relating to FDI must not exceed its Net Asset Value. The Approved Counterparty may provide collateral to the Sub-Fund so that the Sub-Fund's risk exposure to the Approved Counterparty is reduced to the extent required by the Financial Regulator. Collateral will be in the form required by the Financial Regulator. In addition to the Swap, the Sub-Fund may, subject to the requirements laid down by the Financial Regulator, enter into other financial derivative instrument transactions and acquire when issued and forward commitment securities both for investment and efficient portfolio management purposes. For example, they may be used to seek to hedge against the risk of adverse currency movements between the Currency Hedged Share Classes as described under Classes of below. These may include other swaps, options, futures and options on futures, and forward currency exchange contracts. For further information on the types of financial derivative instruments that the Sub-Fund may enter into please see the section entitled Information on the Financial Derivative Instruments below. M

4 The Sub-Fund may invest in ancillary liquid assets which may include bank deposits, certificates of deposit, fixed or floating rate instruments, commercial paper, floating rate notes and freely transferable promissory notes. Fund Assets (other than permitted unlisted investments) will be listed or traded on the Markets referred to in Appendix II of the Prospectus. The Sub-Fund may enter into repurchase, reverse repurchase and stock lending agreements in relation to Fund Assets subject to the conditions and limits laid down by the Financial Regulator for efficient portfolio management purposes. 2. INVESTMENT RESTRICTIONS The general investment restrictions as set out in the Prospectus shall apply. The Directors may from time to time impose such further investment restrictions as shall be compatible with or in the interests of Shareholders, in order to comply with the laws and regulations of the countries where Shareholders are located. 3. INFORMATION ON THE INDICES The performance of the Sub-Fund is linked to the performance spread between the Indices. Therefore, the Sub-Fund has a different objective and risk and return profile to that of each of the Indices. The Long Index is a quantitative rules-based equity index, aiming to reflect the performance of company securities identified as under valued or high quality companies. The Short Index is a quantitative rules-based equity index, aiming to reflect the performance of company securities identified as overvalued, low quality companies. The Indices have been developed by Morgan Stanley & Co. International plc (the Index Sponsor) and are calculated, published and rebalanced by Standard & Poor s (the Calculation Agent). The Indices are designed to be used in combination, as a long/short strategy equivalent to buying securities identified as under valued or high quality companies and selling those identified as being overvalued, low quality companies. This can be achieved by taking a long position in the Value Driven Long Index and a short position in the Value Driven Short Index. Each Index is a quantitative rules-based index. Each Index consists of a basket of securities selected using a pre-defined screening methodology which selects a fixed number of securities (50) for inclusion in each Index. Securities are selected from a selection universe (the Selection Universe). The Selection Universe consists of companies and their respective securities that are incorporated and listed on a regulated exchange in Europe. Only listed equity securities or listed securities that exhibit the characteristics of equity securities are generally eligible for inclusion in the Selection Universe. Securities will only be included in the Selection Universe if the Index Sponsor has access to sufficient information about the securities to enable it to apply its methodology (described below) to it. Financial stocks are excluded from the Selection Universe. In relation to the Short Index only, the Index Sponsor will also exclude any stocks which cannot be borrowed (the Stock Loan Filter) in order to facilitate a short position on that stocks being taken. In relation to the Long Index only, the Index Sponsor will exclude any stocks which have a market capitalization of less than US$ 2 billion. The Index Sponsor excludes any shares that are held by individuals closely connected with a company from the calculation of market capitalization. The Index Sponsor uses a proprietary methodology, based on valuation measures pre-determined by the Index Sponsor, to score and rank the securities in the Selection Universe. This takes into account factors including return on capital, cost of capital, revenue and expenses. Each security is scored, and the top 50 securities are selected as constituents of the Long Index and the bottom 50 securities for the Short Index. For Long Index constituents, the liquidity of each constituent is screened, with those constituents which fall below a certain liquidity threshold being allocated a 1% weighting. All other Long Index constituents are equally weighted. Each Short Index constituent is equally weighted at 2%. The methodology used to construct and maintain the Indices aims to produce investable Indices in which all constituent securities are readily accessible and tradeable. M

5 Each Index is re-balanced semi-annually. From time to time there may be situations requiring adjustments to an Index outside of the scheduled semi-annual review. The adjustments will ensure that each Index continues to reflect, as closely as possible, the value of the underlying securities in the sole determination of the Calculation Agent. If at any time any security in the Short Index does not pass the Stock Loan Filter, there will be an interim rebalance of the Short Index by the Index Sponsor and that security will be removed and replaced by the Calculation Agent. More detail of typical adjustment situations, including market disruption events, are contained in the official description for each Index. The Value Driven Long Index Bloomberg Ticker is MSIQVDLT. The Value Driven Short Index Bloomberg Ticker is MSIQVDST. The official Index descriptions and more information on the Indices generally can be obtained by making a written request to the Investment Manager at 61 Rue de Monceau, Paris, France. 4. INFORMATION ON THE FINANCIAL DERIVATIVE INSTRUMENTS Swaps. These include credit default swaps, interest rate swaps, total return swaps, swaptions, currency swaps and spread locks. The Sub-Fund may be either the buyer or seller in a credit default swap transaction. The buyer in a credit default contract is obligated to pay the seller a periodic stream of payments over the term of the contract provided that no event of default on an underlying reference obligation has occurred. As a seller, the Sub-Fund receives a fixed rate of income throughout the term of the contract. An interest rate swap involves the exchange by the Sub-Fund with another party of their respective commitments to pay or receive cash flows. A total return swap is a bilateral financial contract, which allows the Sub-Fund to enjoy all of the cash flow benefits of an asset without actually owning this asset. A swaption is an option granting its owner the right but not the obligation to enter into an underlying swap. A currency swap is a foreign exchange agreement between two parties to exchange principal and fixed rate interest payments on a loan in one currency for principal and fixed rate interest payments on an equal loan in another currency. Spread locks are contracts that guarantee the ability to enter into an interest rate swap at a predetermined rate above some benchmark rate. Options. The Sub-Fund may also enter into options traded over-the-counter (or OTC options). Unlike exchange traded options, which are standardised with respect to the underlying instrument, expiration date, contract size, and strike price, the terms of OTC options are generally established through negotiation with the other party to the option contract. A call option on an investment is a contract under which the purchaser, in return for a premium paid, has the right to buy the securities underlying the option at the specified exercise price at any time during the term of the option. A put option is a contract that gives the purchaser, in return for a premium paid, the right to sell the underlying securities at the specified exercise price during the term of the option. Index put options may be purchased provided that all of the assets of the Sub-Fund, or a proportion of such assets which may not be less in value than the exercise value of the put option purchased, can reasonably be expected to behave in terms of price movement in the same manner as the options contract. Futures and Options on Futures. The sale of a futures contract creates an obligation by the seller to deliver the type of financial instrument called for in the contract in a specified delivery month for a stated price. The purchase of a futures contract creates an obligation by the purchaser to pay for and take delivery of the type of financial instrument called for in the contract in a specified delivery month, at a stated price. Forward Currency Exchange Contracts. The Sub-Fund may buy and sell currencies on a spot and forward basis. A forward currency exchange contract involves an obligation to purchase or sell a specific currency at a future date at a price set at the time of the contract. 5. INDEX SPONSOR The Indices have been developed by Morgan Stanley & Co International plc. and are independently calculated, published and rebalanced by Standard & Poor s (the Calculation Agent). Morgan Stanley & Co International plc acts as the Index Sponsor and the Approved Counterparty Shareholders are referred to the section of the Prospectus entitled Sub-Fund Transactions and Conflicts of Interest in this regard. M

6 6. BORROWING AND LEVERAGE The Sub-Fund may borrow money in an amount up to 10% of the net assets at any time for the account of any Sub-Fund and the Custodian may charge the assets of the Sub-Fund as security for any such borrowing, provided that such borrowing is only for temporary purposes. The Sub-Fund may be leveraged through the use of FDI. The Sub-Fund s global exposure (as prescribed in the Financial Regulator s Notices) relating to FDI must not exceed its Net Asset Value. 7. RISK FACTORS 7.1. The risk factors set out in the section entitled Risk Factors in the Prospectus apply The following additional risk factors also apply: 7.3. Absence of Prior Active Market The Sub-Fund is new and thus has no operating history Calculation Agent and Index Sponsor Standard & Poor s (S&P) is the Calculation Agent. They are appointed pursuant to a contract with the Index Sponsor, which contract may be terminated subject to and in accordance with its terms, and the Index Sponsor retains the discretion to appoint an alternative calculation agent in lieu of S&P. S&P expressly disclaims all liability for any inaccuracy in share prices, calculations and the publication of the Indices, the information used for making adjustments to the Indices and the actual adjustments. More generally, the Index Sponsor retains the final discretion as to the manner in which the Indices are calculated and constructed. Furthermore, the Index Sponsor is the final authority on the Indices and the interpretation and application of the rules Index Methodology The methodology employed by the Index Sponsor in selecting the components of the Indices seeks to identify those securities the methodology deems to be undervalued or overvalued as the case may be. There is no guarantee that the securities identified as such are in fact undervalued or overvalued and other persons may have different views to those produced through the Value Driven methodology. Furthermore, there is no guarantee that any such security will rise or fall in value. The information used by the Index Sponsor to undertake the selection procedure will be the most up-todate information available. However, in some cases, the information may not be current and may rely on data that was initially published several months previously and may not reflect the performance of the relevant issuer at the time of the selection procedure. The Index Sponsor does not undertake any independent investigation or review in respect of the data. When considering any investment, the return on which is linked to the performance of an index, prospective investors should be aware that the level of that index can go down as well as up and that the performance of the index in any future period may not mirror its past performance. Any investment linked or related to an index may not necessarily be the same as an investment in the constituents of that Index at that time. The index represents a collective valuation represented by a number of underlying securities. Prospective investors should be experienced with respect to transactions in investments with a value derived from underlying securities. The value of any underlying security may vary over time and may increase or decrease by reference to a variety of factors which may include corporate actions, macro economic factors and speculation. The level of the index and the underlying securities may be affected by market volatility Calculations and Determinations by the Calculation Agent The Calculation Agent's calculations and determinations in relation to the Indices shall be binding on all parties in the absence of manifest error. No party (whether the Sub-Fund or otherwise) will be entitled to proceed against the Calculation Agent in connection with any such calculations or determinations or any failure to make any calculations or determinations in relation to the Indices. For so long as the M

7 Calculation Agent constitutes and calculates the Indices, calculations and determinations by the Calculation Agent in connection with the Indices will be made in reliance upon the information of various publicly available sources that the Calculation Agent has not independently verified. The Calculation Agent does not accept any liability for loss or damage of any kind arising from the use of such information in any such calculation or determination. The Calculation Agent makes no representation (implied or otherwise) as to the performance of any constituent of the Indices and/or the Indices themselves Weighting Although the Sub-Fund seeks to take exposure to the performance of the Long Index and the Short Index by equal weighting, it may not always do so with perfect accuracy. Price movements of underlying index components may cause the Sub-Fund weighting to be higher or lower to either the Long Index or the Short Index.The Sub-Fund may adjust the proportions of its investment from time to time or take such other steps as considered appropriate in order to maintain an equal weighting. 8. DIVIDEND POLICY It is not the intention of the Directors to declare a dividend in respect of any Share class. Any distributable profits will remain in the Sub-Fund s assets and be reflected in the Net Asset Value of the relevant class of. 9. KEY INFORMATION FOR PURCHASING AND SELLING Base Currency Euro Classes of in the Sub-Fund will be available in different classes as follows: Class Currency Denomination Currency Hedged? Initial Issue Price per Share Minimum Initial Subscription Minimum Subsequent Subscription Minimum Repurchase Amount Class A EUR Class A USD Class A GBP Class A CHF Class I EUR Class I USD Class I GBP Class I CHF Euro No N/A US Dollar Yes $100 $1000 $1000 $1000 Pound Sterling Yes Swiss Franc Yes CHF 100 CHF 1000 CHF 1000 CHF 1000 Euro No N/A 100, , ,000 US Dollar Yes $100 $100,000 $100,000 $100,000 Pound Sterling Yes , , ,000 Swiss Franc Yes CHF 100 CHF 100,000 CHF100,000 CHF100,000 M

8 Currency Hedged Share Classes are denominated in currencies other than Euro, the Base Currency of the Sub-Fund. The Investment Manager will seek to hedge against the risk of currency movements between the Base Currency of the Sub-Fund and the currency in which each of the Currency Hedged Share Classes is denominated. Investors are referred to the description and risks related to Currency Hedged Share Classes in section 16.5 of the Prospectus. Investors must subscribe into a Share Class in the currency in which that Share Class is denominated. Repurchase payments are also made in the currency in which the relevant Share Class is denominated. The Directors may, in their discretion, waive the minimum initial amounts above either generally or in relation to any specific subscription or repurchase. Initial Offer Period in respect of all Share Classes other than Class A EUR and Class I EUR From 9.00am (Irish time) on 13 August 2009 until 5:30 p.m. (Irish time) on 29 January 2010 as may be shortened and extended by the Directors in accordance with the requirements of the Financial Regulator. Dealing Day and Business Day Every day (except a Saturday or Sunday, legal public holidays in France, the United Kingdom, Ireland, days on which the stock markets in Paris or London are closed or when the Indices are not published) during which banks in Ireland, France and the United Kingdom are open for normal business and when the Indices are valued and such other day or days as the Directors may from time to time determine and notify in advance to Shareholders, provided that in any event there shall be at least one Dealing Day per fortnight. Dealing Deadline 12 midday Irish time on the Dealing Day. The Directors may, in their discretion, waive the Dealing Deadline either generally or in relation to any specific subscription provided that applications are received prior to the Valuation Point for that particular Dealing Day. Settlement Date In the case of subscriptions and repurchases, within 3 Business Days after the relevant Dealing Day. In respect of subscriptions investors will be liable for any interest, losses or other costs incurred as a result of failing to settle an order within these time frames. Valuation Point Close of business on the relevant Dealing Day. Website CHARGES AND EXPENSES Initial and Repurchase Charges The Sub-Fund may on any Dealing Day require a Shareholder to pay an initial charge of up to 5% of M

9 the issue price of of the relevant class on that Dealing Day. Any initial charge received by the Sub-Fund may be paid to the Distributor, who has the discretion to waive or rebate such charge. The Sub-Fund may on any Dealing Day require a Shareholder to pay a charge for the exchange of of any class of up to 2% of the total repurchase price of the of the Original Class on that Dealing Day. The Sub-Fund may on any Dealing Day require a Shareholder to pay a repurchase charge of up to 3% of the repurchase price of of the relevant class on that Dealing Day. The amount of any such charge will be deducted from the amount to be paid by the Sub-Fund to the Shareholder in respect of to be repurchased. The Sub-Fund may also impose an anti-dilution levy or adjustment on repurchase of as further described in the section of the Prospectus entitled Issue and Repurchase Prices/Calculation of Net Asset Value/Valuation of Assets. Management Charge The Company will pay to the Investment Manager from the assets attributable to each class of of the Sub-Fund the following fees which are based on a percentage of net assets attributable to such class of, which is accrued daily and paid monthly in arrears at an annual rate set out below:- Up to 0.75% per Class I Share Up to 1.50% per Class A Share The Investment Manager will pay the fees of the Distributor (if any) out of its own management fee. Administrator s and Custodian s Fees The Company will pay out of the assets of the Sub-Fund an aggregate fee in respect of the services provided by the Administrator and Custodian including transaction and other charges which will not exceed 0.20% per annum of the net assets of the Sub-Fund and which is accrued daily and paid monthly in arrears. Ongoing Charges and Expenses The additional charges and expenses specified in the section entitled Ongoing Charges and Expenses in the Prospectus will, save in respect of the fees of the Distributor, be paid out of the assets of the Sub-Fund. 11. HOW TO SUBSCRIBE FOR SHARES Requests for the purchase of should be made in accordance with the provisions set out in the section entitled Applications for in the Prospectus. 12. HOW TO REPURCHASE SHARES Requests for the sale of should be made in accordance with the provisions set out in the section entitled Repurchase of in the Prospectus. 13. HOW TO EXCHANGE SHARES Requests for the exchange of should be made in accordance with the provisions set out in the section entitled Exchange of in the Prospectus. 14. ESTABLISHMENT CHARGES AND EXPENSES The cost and expenses of establishing the Sub-Fund will be paid by Morgan Stanley & Co International plc. 15. OTHER CHARGES AND EXPENSES M

10 Further details of charges and expenses payable out of the assets of the Sub-Fund are set out in the Prospectus under the headings Management Charges and Expenses and General Charges and Expenses. 16. OTHER INFORMATION As at the date of this Supplement there are seven other sub-funds of the Fund currently in existence: Europe Target Equity Fund, World Target Equity Fund, Emerging Markets Equity Fund, Asia Target Equity Fund, China Acclaim Fund, Defined Payoff Fund 1 and MSCI World Fund. Disclaimer: The Indices are the exclusive property of Morgan Stanley & Co. International plc (Morgan Stanley). Morgan Stanley and the Value Driven Long and Short Indices are service marks of Morgan Stanley or its affiliates and have been licensed for use for certain purposes by FundLogic. Morgan Stanley or its affiliates are the licensors to certain trademarks, service marks and trade names and of the Indices. Neither Morgan Stanley, any of affiliates nor any other party involved in, or related to, making or compiling the Indices makes any representation of warranty (express or implied) to investors in the Fund or any member of the public regarding the advisability of investing in financial securities generally or in the Fund, or the ability of the Indices to track corresponding underlying performance. Neither Morgan Stanley, any of its affiliates nor any other party involved in, or related to, making or compiling the Indices has any obligation to take the needs of the Fund or its investors into consideration when making determinations or exercising its rights in connection with the Indices. The application of the Indices methodology by Morgan Stanley acting as the sponsor of the Indices shall be conclusive and binding. However, Morgan Stanley may supplement, amend (in whole or in part), revise or withdraw the rules governing the construction and calculation of the Indices at any time. Such a supplement, amendment, revision or withdrawal may lead to a change in the way the Indices are calculated or constructed and may affect the Indices in other ways. Without prejudice to the generality of the foregoing, Morgan Stanley may determine that a change to the rules is required or desirable in order to update the rules or to address an error, ambiguity or omission. The rules may change without prior notice. All of the above may affect the level of the Indices and the value of any financial products linked to the Indices (including an investment in the Fund). Morgan Stanley as the sponsor of the Indices shall have the right, in its sole discretion, to cease compiling, calculating and publishing values of the Indices if at any time Morgan Stanley determines that the Indices no longer meet or will not be capable of meeting the criteria established by Morgan Stanley or otherwise determines that the Indices shall no longer be calculated. The Indices are quantitative and is not actively managed by Morgan Stanley or any of its affiliates or any third party. None of Morgan Stanley, its affiliates or any third party is acting as a fiduciary for, or an advisor to, any investor in respect of the Indices. Morgan Stanley (and its affiliates) may engage in transactions (including derivative transactions and transactions for hedging purposes) involving the underlying components of the Indices for its proprietary accounts and/or for the accounts of its clients and may act as market maker in instruments linked to the underlying components of the Indices. Such activities will not be for the benefit of investors in the Fund or holders of any financial product linked to the performance of the Indices. Further, such activities may have a negative or positive impact on the underlying components of the Indices and therefore on the level of the Indices. Morgan Stanley may act in other capacities including issuer of securities, calculation agent and index sponsor in connection with the Indices. These and other activities may present conflicts of interest and may affect the level of the Indices in ways detrimental to holders of financial products linked to the Indices (including investors in the Fund). Morgan Stanley shall not be held liable to account to investors for any such conflicts of interest. Morgan Stanley may issue research reports on securities that are, or may become, constituents of the Indices. These reports are entirely independent of the Index Sponsor and Calculation Agent s obligations in connection with the Indices. Although Morgan Stanley shall obtain information for inclusion in or for use in the calculation of the Indices from sources they consider reliable, neither Morgan Stanley, any of its affiliates nor any other party involved in, or related to, making or compiling the Indices represents, warrants or guarantees the originality, accuracy and/or completeness of any Index or any data included therein. Neither Morgan Stanley, any of its affiliates nor any other party involved in, or related to, making or compiling the Indices shall have any liability for any errors, omissions or interruptions of or in connection with the Indices or any data included therein. Any reference in this disclaimer to affiliates of Morgan Stanley expressly excludes reference to FUNDLOGIC GLOBAL SOLUTIONS plc. IMPORTANT INFORMATION RELATING TO THE CALCULATION AGENT STANDARD & POOR s The Indices are the exclusive property of Morgan Stanley & Co International plc, which has contracted with Standard & Poor s, a division of The McGraw-Hill Companies Inc. (S&P) to maintain and calculate the Indices. The Indices are not sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the Indices to track general stock market performance. S&P is not responsible for and has not participated in the determination of the prices and amount of the Fund or the timing of the issuance or sale of the Fund or in the determination or calculation of the equation by which the Fund is then converted into cash. S&P shall have no liability, direct or indirect for the Fund and/or the Indices, including any errors or omissions in the calculation thereof. M

11 M

12 FUNDLOGIC GLOBAL SOLUTIONS PLC APPENDIX FOR UK INVESTORS (25 November 2009) FundLogic Global Solutions plc (the Company ) is a company incorporated with limited liability as an open-ended investment company with variable capital under the laws of Ireland, with registered number The Company is an umbrella fund with segregated liability between its sub-funds. The Company is regulated and authorized by the Irish Financial Services Regulatory Authority. The Company and certain of its sub-funds are recognised in accordance with section 264 of the Financial Services and Markets Act As at the date of this Appendix the following sub-funds (the Sub-Funds ) are recognized: Europe Target Equity Fund World Target Equity Fund MSCI World Fund Value Driven Alpha Europe Fund Asia Target Equity Fund China Acclaim Fund Defined Payoff Fund 1 Emerging Markets Equity Fund FTSE 100 Accumulated Capital Fund 1 There are specific risks associated with an investment in any of the Sub-Funds. The attention of potential investors in the United Kingdom ( UK ) is drawn to the description of risk factors connected with each Sub-Fund. These are detailed in the prospectus of the Company, and the relevant prospectus supplement applicable to the Sub-Fund in question. UK investors are advised that the rules made by the UK Financial Services Authority ( FSA ) under the Financial Services and Markets Act 2000 (the Act ) do not in general apply to the Company in relation to its investment business. In particular the rules made under the Act for the protection of private customers (for example, those conferring rights to cancel or withdraw from certain investment agreements) do not apply, and the Financial Services Compensation Scheme will not be available, in connection with an investment in the Company. This Appendix for UK Investors form part of, and should be read in conjunction with, the Prospectus and, unless otherwise stated, capitalised terms in this Appendix for UK Investors shall have the same meaning as in the Prospectus. Nothing in this Appendix for UK Investors or the Prospectus should be construed as advice on the merits of an investment in the Sub-funds. This Prospectus may be distributed in the UK without restriction. Copies of this Prospectus have been delivered to the FSA as required under the Act. The Company is required under the rules of the FSA to maintain certain facilities for UK investors at an address in the UK. The Company has appointed Morgan Stanley & Co International plc to maintain the relevant facilities at its offices in the UK. Its contact details are as follows: Morgan Stanley & Co International plc 25 Cabot Square Canary Wharf London E14 4QA Tel: +44 (0) At the above address, during normal business hours, persons in the UK may inspect and obtain copies of the incorporation documents of the Company and the Sub-Funds, the latest Prospectus, Simplified Prospectuses and the latest annual and interim reports. Information can be obtained either orally or in writing about the latest sale and purchase prices of shares and investors may apply to redeem their shares and through this facility or obtain payment of any redemption price. Complaints regarding the operation of the Company or any Sub-Funds can be submitted at the above address for onward transmission to the Company.

13 Particulars of the procedure to be followed in connection with the subscription and purchase and with the redemption and sale of shares are set out in the Prospectus. TAXATION IN THE UK The tax consequences for each Shareholder of acquiring, holding, redeeming or disposing of depend upon the relevant laws of any jurisdiction to which the Shareholder is subject. Shareholders in the Fund should seek their own professional advice as to this, as well as to any relevant exchange control or other relevant laws and regulations. The statements below are intended to be a general guide to the anticipated tax treatment in the UK of the Fund, the Sub- Funds and their Shareholders. The statements relate to Shareholders holding as an investment (as opposed to as a dealer) and who are not subject to special tax rules. They are based on the law and practice in force at the date of this Supplement, but refer to changes which have been announced by the UK government. There can be no guarantee that the proposed changes will be enacted in their present form or that the tax position otherwise prevailing at the time when an investment in a Sub-Fund is made will continue indefinitely (and tax law may change with retrospective effect). The Fund The Directors intend to conduct the affairs of the Fund so that it does not become resident in the UK for tax purposes. The Sub-Funds If a Sub-Fund should invest in UK investments, any UK source income arising may be subject to UK withholding tax, depending on the nature of those investments. The Shareholders Income The UK government intends to introduce a reporting funds regime (described below under the heading Gains ), under which investors would be liable to pay income or corporation tax by reference to the income accrued and shown in the accounts of the reporting fund and reported to them, rather than on the amount of any income actually distributed to them by the offshore fund. Income reported for the offshore fund will be deemed for UK income and corporation tax purposes to be dividends paid, except where over 60% of that offshore fund s investments are invested throughout a distribution period in interest-paying and related investments, in which case the reported income will be deemed for UK income and corporation tax purposes to be interest for UK taxpayers. Income reported for classes of in the Sub-Funds should generally be treated for UK income tax purposes as dividends paid with dividend tax credits attached. Where this is the case, individuals liable to UK income tax at the basic rate would have no further liability to tax on the income. Individuals liable to UK income tax at the higher rate would have to pay income tax (equivalent to 25% of their net receipt). From 6 April 2010, taxpayers subject to the new additional rate of income tax would have a further income tax liability approximately equivalent to 36% of their net receipt. Individuals who are exempt from UK tax would not be liable to tax on the dividends, but would not be able to claim a repayment of their dividend tax credits. UK corporate investors would generally be exempt from corporation tax on any income reported for these Sub-Funds, unless the recipient is a small company (as defined in the legislation) or certain anti-avoidance legislation applies. In the event that over 60% of a Sub-Fund s investments are invested throughout a distribution period in interest-paying and related investments, which is not expected to be the case, then the income reported for classes of in it should be treated for UK income tax purposes as gross interest payments, that is, payments of interest from which no tax has been withheld. Individuals liable to UK income tax at the starting rate on savings income would then be liable to income tax at 10% on the income, basic rate taxpayers would be liable to 20% income tax on it and higher rate payers to 40% income tax on it. From 6 April 2010, taxpayers subject to the new additional rate of income tax would have a tax liability of 50% on it. UK non-taxpayers would be exempt from tax on the income. UK corporate investors would generally be liable to corporation tax on any interest income reported for classes of in these Sub-Funds. Gains

14 The UK government is in the process of modernising the offshore funds legislation. As at the date of this Supplement, the regime set out in the Income and Corporation Taxes Act 1988 applies, but this is to be replaced by regulations which the government intends to come into effect on 1 December Each class of in the Sub-Funds constitutes an offshore fund for the purposes of the offshore funds legislation. Under this legislation, any gain arising on the sale, redemption or other disposal of shares, including switches between classes of share, in an offshore fund held by persons who are resident or ordinarily resident in the UK for tax purposes will be taxed at the time of that sale, disposal or redemption as income and not as a capital gain. This income tax treatment will not apply, however, where a share class is certified by HM Revenue & Customs as a reporting fund throughout the period during which the investor holds the. The Directors intend to apply to HM Revenue & Customs for each of classes of Share in the Sub-Funds to be certified as a reporting fund, and to maintain their reporting fund status. UK taxpaying individuals will be liable to capital gains tax on gains realised on disposals of and UK corporation tax-paying companies will be similarly be subject to corporation tax on their chargeable gains, depending in each case on their personal circumstances and provided that the relevant class of has been certified throughout their period of ownership. If, for whatever reason, a class of in a Sub-Fund is not certified as a reporting fund for an accounting period, then the UK tax position of any UK-taxpaying investors who hold in it at the time would be affected. Any gain arising on the sale, redemption or other disposal of shares (including on death) held by persons who are resident or ordinarily resident in the UK for tax purposes would be taxed at the time of that sale, redemption or disposal as income and not as a capital gain. Accordingly, they would be liable to income tax on the gain, not capital gains tax. Transitional If the classes of in the Sub-Funds are marketed in the UK before they are able to be certified as reporting funds, the Directors intend to run them as distributing funds and to apply for distributing fund status for them for any period before they can be certified as reporting funds. Provided that they are certified as distributing funds for any such period, then investors in them will benefit from capital gains tax treatment when they dispose of their. UK Corporate Investors If a Sub-Fund s investments in interest-paying and related investments exceed 60% of the market value of all its investments at any time in a UK corporate Shareholder s accounting period, then that Shareholder should treat the holding as if it were a loan relationship for that accounting period. The Shareholder will generally be liable to corporation tax on any increase in the open market value of its holding over that accounting period (or obtain relief for any loss). UK Shareholders which fall within these provisions are not liable to pay corporation tax on gains as described under the heading Gains above. Individual Shareholders are not affected by these provisions. If a UK corporate Shareholder holds shares in a Sub-Fund and during an accounting period of the investor the balance of the Sub-Fund s aggregated investment holdings change so that interest-paying and related investments begin to exceed 60% of its total investments at some time in that accounting period, then that Shareholder must apply the loan relationship rules to its holding as from the beginning of that accounting period. Any chargeable gain on the holding computed for the period up to the end of the previous accounting period will be taxable only when the holding is actually realised. If a Sub- Fund that has exceeded the 60% floor in a corporate Shareholder s accounting period or periods should cease to do so in a subsequent one, then corporation tax on chargeable gains will apply as if that corporate Shareholder s shares were acquired for their fair value at the beginning of the first accounting period in which it does not breach the 60% test. Anti-Avoidance Provisions The UK tax rules contain a number of anti-avoidance codes that can apply to UK investors in offshore funds in particular circumstances. It is not anticipated that they will normally apply to Shareholders. Any UK taxpaying investor who (together with connected persons) holds over 10% of the Fund should take specific advice. EU Savings Tax Directive On 3 June, 2003 the Council of the European Union (ECOFIN) adopted a directive regarding the taxation of interest income. Each EU Member State must implement the directive by enacting legislation that requires paying agents (within the meaning of the directive) established within its territory to provide to the relevant competent authority details of interest payments (which includes certain payments made by collective investment undertakings) made to any individual and certain intermediate entities resident in another EU Member State. The competent authority of the EU Member State of the paying agent (within the meaning of the directive) is then required to communicate this information to the competent authority of the EU Member State of which the beneficial owner of the interest is a resident.

15 Austria, Belgium and Luxembourg may opt instead to withhold tax from interest payments within the meaning of the directive. Ireland has implemented the directive into national law. Any Irish paying agent making an interest payment on behalf of the Fund to an individual, and certain residual entities defined in the Irish Taxes Consolidation Act 1997 (as amended from time to time), resident in another Relevant Territory may have to provide details of the payment to the Irish Revenue Commissioners who in turn will provide such information to the competent authorities of the Relevant Territory of residence of the individual or residual entity concerned. Broadly speaking, for income distributions, it is only if the relevant Sub-Fund has invested more than 15% of its assets directly or indirectly in interest-bearing securities and for capital distributions, it is only if the Sub-Fund has invested more than 40% of its assets directly or indirectly in interest-bearing securities, that payments received from the Sub-Fund would be subject to reporting obligations.