NEW STAR GLOBAL INVESTMENT FUNDS PLC

Transcription

1 NST164_E2.qxd 3/10/08 8:09 PM Page 101 NEW STAR INTERNATIONAL HONG KONG OFFERING DOCUMENT DECEMBER 2007 NEW STAR GLOBAL INVESTMENT FUNDS PLC WARNING: THIS OFFERING DOCUMENT CONTAINS INFORMATION WHICH IS NECESSARY FOR HONG KONG INVESTORS TO FORM AN INFORMED DECISION IN RELATION TO THE SUBSCRIPTION FOR SHARES IN THE COMPANY AND IS THE ONLY DOCUMENT ON WHICH PROSPECTIVE INVESTORS SHOULD RELY TO MAKE ANY INVESTMENT DECISION.

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3 IMPORTANT INFORMATION If you are in any doubt about the contents of this Offering Document, you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser. The Manager accepts responsibility for the accuracy of the information contained in this Offering Document as at the date of publication. No action has been taken to permit the distribution of this Offering Document, in any jurisdiction where action would be required for such purpose, other than Hong Kong. This Offering Document does not constitute an offer or solicitation in any country where such offer or solicitation is unlawful or unauthorised, or the person receiving the offer or solicitation may not lawfully receive it. The SFC has authorised, under section 104 of the Securities and Futures Ordinance, only Shares representing the Sub-Funds contained in this Offering Document or any supplement hereto. The SFC authorization does not imply any official approval or recommendation. Furthermore the SFC does not take any responsibility for the financial soundness of the Company or the correctness of any statement made or opinion expressed in this Offering Document and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or part of the contents of this Offering Document. This Offering Document must be accompanied by the Company s most recent audited annual report and accounts together with its semi-annual report if published after the annual report. The Company will, on request, provide supplementary information to Shareholders relating to the risk management methods employed including the quantitative limits that are applied and any recent developments in the risk and yield characteristics of the main categories of investments. Investors should note that the price of Shares and any income from them may fall as well as rise and they may not get back the full amount invested. Past performance is not necessarily a guide to future performance and Shares should be regarded as a medium to long-term investment. Other than the New Star Euro High Yield Fund, Shareholders should note that management fees may be charged to the capital of the Sub-Fund only if the Sub-Fund has insufficient income or realized capital gains and that this will have the effect of lowering the capital value of your investment. Thus, on redemptions, Shareholders may not receive back the full amount invested. Shareholders of New Star Euro High Yield Fund should note that management fees will be charged to the capital of the Sub- Fund. Thus on redemptions of holdings, Shareholders may not receive back the full amount invested. For all Sub-Funds, Shareholders should note that all or part of all other fees and expenses may be charged to the capital of the Sub-Fund only if the Sub-Fund has insufficient income or realised capital gains and that this will have the effect of lowering the capital value of your investment. Thus on redemptions, Shareholders may not receive back the full amount invested. The Company has been authorised in Hong Kong by the Securities and Futures Commission on the basis that the Company was authorised as a UCITS by the Financial Regulator under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (the 1989 Regulations ) on 2 May, The European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 revoked the 1989 Regulations and as and from 13 February, 2004 the Company came within the scope of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003, as amended by the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations, 2003 ( UCITS Regulations ). Notwithstanding the incorporation into this Offering Document of the availability of investment powers under the UCITS Directive 2001/108/EC, it is the intention of the Directors of the Company to operate the Company in accordance with the investment restrictions relating to the use of derivatives under UCITS I regulations (which implemented UCITS Directive 1985/611/EC) (the UCITS I Regulations ) so long as the Company remains authorized under the Securities and Futures Ordinance. Prior written notification of not less than one month will be given and this Offering Document will be updated should there be any changes in the investment objectives, policy and/or restrictions applicable to the Company in future. If such changes involve an amendment to the Articles, an extraordinary general meeting of the Shareholders will be held to seek approval for such changes. Details of the investment restrictions relating to the use of derivatives set out in the UCITS I Regulations are available from the office of the HK Representative. New Star Global Investment Funds PLC 1

4 CONTENTS IMPORTANT INFORMATION 1 DEFINITIONS 3 THE COMPANY 6 Established and Duration 6 Structure 6 Investment Objectives and Strategies 7 Permitted Investment and Borrowing Restrictions 10 Efficient Portfolio Management 12 Distribution Policy 14 RISK FACTORS 14 APPLICATION, REDEMPTION AND VALUATION 18 Application for Shares 18 Redemption of Shares 19 Anti-Dilution Levy 19 Circumstances In Which An Anti-Dilution Levy May Be Imposed 20 Restrictions on Ownership, Compulsory Redemption and Transfer of Shares 20 Switching of Shares 21 Transfer of Shares 21 Calculation of Net Asset Value 21 Publication of Net Asset Value per Share 22 FEES AND EXPENSES 22 TAXATION 24 GENERAL INFORMATION Incorporation, Registered Office and Share Capital Accounts and Information Borrowing Powers General Meetings Winding Up Provisions Documents Available for Inspection 26 DIRECTORY 27 APPENDIX I 29 Share Class Details 29 2 New Star Global Investment Funds PLC

5 Accounting Date Accounting Period Administration Agreement Administrator Articles Base Currency of the Company Base Currency of a Sub-Fund Board or Directors Business Day Company DEFINITIONS the date by reference to which the annual accounts of the Company shall be prepared and which shall be 31 May in each year, commencing with 31 May 2003 or such other date as the Directors may from time to time decide. a period ending on an Accounting Date and commencing (in the case of the first such period) on the date of the first issue of Shares or (in any other case) from the end of the last Accounting Period. an agreement dated 2nd May 2002 between the Manager and the Administrator, as amended. State Street Fund Services (Ireland) Limited or any successor company appointed by the Manager as administrator of the Company and of each Sub-Fund in accordance with the requirements of the Financial Regulator Notices. the Memorandum and Articles of Association of the Company, as amended from time to time. US$ the base currency of a Sub-Fund as set out in Appendix 1 or in any Supplement hereto. the board of directors of the Company, including duly authorized committees of the board of directors. every day which is a bank business day in Dublin and London or such other day as the Directors may from time to time determine and notify in advance to Shareholders. New Star Global Investment Funds PLC. Custodian Custodian Agreement Dealing Day Distributor Financial Regulator Financial Regulator Notices FSA Hong Kong HK Business Day HK Dealing Day HK$ HK Representative HK Representative Agreement Intermediary State Street Custodial Services (Ireland) Limited or any successor company appointed by the Company with the prior approval of the Financial Regulator as custodian of the assets of the Company and of each Sub-Fund. an agreement dated 2nd May 2002 between the Company and the Custodian. every Business Day or such other day as the Directors may from time to time determine provided there shall be at least one Dealing Day in every fortnight and all Shareholders will be notified in advance. any one or more persons or companies or any successor persons or company appointed by the Manager to act as distributor of one or more classes of Shares of a Sub-Fund. the Irish Financial Services Regulatory Authority. any notices issued by the Financial Regulator from time to time pursuant to the UCITS Regulations concerning the regulation of undertakings for the collective investment in transferable securities established under the UCITS Regulations. the Financial Services Authority of the United Kingdom. the Hong Kong Special Administrative Region of the People s Republic of China. a day other than a Saturday or Sunday on which the banks in Hong Kong are open for normal banking business provided that where as a result of a severe weather warning or other similar event, the period during which banks in Hong Kong are open on any day is reduced, such day shall not be a Business Day unless the Manager and the Board otherwise agree. a day which is both a Dealing Day and a HK Business Day. Hong Kong dollars. HSBC Institutional Trust Services (Asia) Limited or any successor company appointed by the Company and the Manager as their representative in Hong Kong. an Agreement dated 21st January 2003 between the Manager, the Company and the HK Representative. means a person who: (a) carries on a business which consists of, or includes, the receipt of payments from an investment undertaking on behalf of other persons; or (b) holds units/shares in an investment undertaking on behalf of other persons. New Star Global Investment Funds PLC 3

6 Investment Manager Investment Management Agreement Manager Management Agreement Management Share Member State Net Asset Value of the Company Net Asset Value of the Sub-Fund Net Asset Value per Share Offering Document Promoter Promotion Agreement Prospectus Recognised Exchange Redemption Price Register Regulations Relevant Declaration Securities Act SFC Shareholder Share Soft Commission Arrangement Sub-Fund Subscription Price Supplement New Star Asset Management Limited or any successor company appointed by the Manager from time to time, to act as investment manager of the Sub-Funds in accordance with the requirements of the Financial Regulator Notices. an agreement between the Manager and the Investment Manager dated 2nd May New Star Investment Funds (Ireland) Limited appointed by the Company with the prior approval of the Financial Regulator as the manager of the Company and of each Sub-Fund. an agreement dated 2nd May 2002 between the Company and the Manager. a management share in the capital of the Company. a member state of the European Union. the aggregate net asset value of all the Sub-Funds. the net asset value of a Sub-Fund calculated in accordance with the provisions of the Articles. the net asset value per Share of a Sub-Fund or of a class calculated in accordance with the provisions of the Articles. the Hong Kong Offering Document. New Star International Investment Products (Asia) Limited or any successor company appointed by the Manager as the promoter of sales in Hong Kong of one or more classes of Shares of a Sub-Fund. an agreement dated 21st January 2003 between the Manager, the Company and the Promoter. the prospectus of the Company dated 22 December 2005 and any supplements or addenda thereto issued in accordance with the requirements of the Financial Regulator Notices. any regulated stock exchange or market on which a Sub-Fund may invest including (but not limited to) those of any member state of the EU, the EEA and those located in Australia, Canada, Japan, Hong Kong, New Zealand, Switzerland and the USA. the Net Asset Value per Share attributable to a particular class or Sub-Fund at the date of the redemption. the register in which the names of the Shareholders of the Company are listed. European Communities Undertakings for Collective Investment in Transferable Securities Regulations 2003 (S.I. No. 211 of 2003) (as amended, consolidated or substituted from time to time and any regulations or notice issued by the Financial Regulator pursuant thereto for the time being in force). means the declaration relevant to the Shareholders as set out in Schedule 2B Taxes Consolidation Act, the United States Securities Act of 1933, as amended. Securities and Futures Commission of Hong Kong. a person who is registered as the holder of Shares in the register for the time being kept by or on behalf of the Company. participating share of no par value in the capital of the Company which may be designated as different classes of share in one or more Sub-Funds. an arrangement entered into with brokers, whereby the broker agrees to set aside a proportion of the commission earned on transactions and to use this to discharge the cost of certain investment related services received from third parties. a sub-fund of the Company established by the Directors from time to time with the prior approval of the Financial Regulator. the initial offer price or the Net Asset Value per Share as appropriate attributable to a particular class or Sub-Fund at the date of the subscription. a document supplemental to this Offering Document which contains specific information in relation to a particular Sub-Fund. 4 New Star Global Investment Funds PLC

7 UCITS UCITS Regulations USD or US$ or US Dollars Valuation Point an undertaking for collective investment in transferable securities, the sole object of which is the collective investment in transferable securities and/or other liquid financial assets referred to in Regulation 45 of the Regulations, of capital raised from the public and which operates on the principle of risk spreading; the shares of which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of the undertaking s assets. the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (S.I. No. 211 of 2003) as amended by the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations, 2003 (S.I. No. 212 of 2003) and any further amendments thereto for the time being in force and any notices issued by the Financial Regulator from time to time. the lawful currency of the United States of America. the official close of business in Dublin on the Business Day immediately preceding the relevant Dealing Day in respect of a Sub-Fund or such other time as the Directors may from time to time determine provided there shall be one for every Dealing Day. Week Day a day other than a Saturday or Sunday. British pounds sterling. Words importing the singular shall, where the context permits, include the plural and vice versa. New Star Global Investment Funds PLC 5

8 The Company Establishment and Duration The Company was incorporated on 27 March 2002 under the laws of Ireland as an open-ended umbrella type investment company with variable capital and segregated liability between Sub-Funds and incorporated with limited liability under the laws of Ireland, registered number and was authorised by the Financial Regulator pursuant to the Regulations on 2 May The Company s share capital is at all times equal to the Net Asset Value of the Company. Although the Company has an unlimited life, it may at any time, by giving not less than four or more than twelve weeks notice to the Shareholders, expiring on a Dealing Day, redeem at the Redemption Price prevailing on such Dealing Day all (but not some of) the Shares in each or any Sub-Fund then outstanding. Structure The Company is an umbrella type collective investment vehicle comprised of various Sub-Funds with segregated liability. Additional Sub-Funds may, with the prior approval of the Financial Regulator, be created by the Directors. The name of each Sub-Fund, the terms and conditions of its initial offer of Shares, details of its investment objectives, strategies and restrictions and of any applicable fees and expenses will be set out in this Offering Document. The following are the current Sub-Funds of the Company which are authorized by the SFC for distribution to Hong Kong resident investors: New Star Asian Opportunities Fund New Star European Growth Fund New Star Japan Recovery Fund New Star UK Dynamic Fund New Star US Opportunities Fund New Star Global Emerging Markets Fund New Star Euro High Yield Fund New Star Pan-European Equity Fund The Directors may, whether on the establishment of a Sub-Fund or from time to time, create more than one class of Share in each Sub-Fund to which different levels of (i) subscription amounts; and/or (ii) fees and expenses; and/or (iii) designated currencies as the Directors determine may be applicable. Separate pools of assets will not be maintained for each class of Share and a class of Share may be designated in a currency other than the Base Currency of the relevant Sub-Fund. The authorization of the Sub-Funds by the SFC does not imply official approval or recommendation by the SFC. Where there are Shares of a different class in a Sub-Fund, the Net Asset Value per Share amongst such classes may differ to reflect the fact that income has been distributed or that there are differing charges of fees and expenses or that they are designated in different currencies or that the gains/losses on, and costs of, different financial instruments employed for currency hedging between the Base Currency of the Sub-Fund and a designated currency are attributed to them. All references to Shares include a fraction of a Share calculated to the nearest one-hundredth. Save as provided herein, all Shares of each class within a Sub-Fund will rank pari passu. Gains/losses of the hedging transactions will accrue solely to the relevant Class. Currency Share Classes may not be leveraged as a result of these transactions. Any currency exposure of a Class may not be combined with or offset against that of any other Class of a Sub-Fund. The currency exposure of the assets attributable to a Class may not be allocated to other Classes. For any unhedged Class of Share, a currency conversion will take place on subscription, redemption, switching and distributions at prevailing exchange rates. The value of any share expressed in a non base currency which is unhedged will be subject to exchange risk in relation to the Base Currency. The assets and liabilities of the Company shall be allocated to each Sub-Fund in the following manner: (a) for each Sub-Fund, the Company shall keep separate books and records in which all transactions relating to the relevant Sub- Fund shall be recorded and, in particular, the proceeds from the issue of Shares in each Sub-Fund shall be applied in the books of the Company to that Sub-Fund, and the assets and liabilities and income and expenditure attributable thereto shall be applied to such Sub-Fund subject to the provisions of this section; (b) any asset derived from another asset of a Sub-Fund shall be applied in the books of the relevant Sub-Fund as the asset from which it was derived and on each valuation of an asset, the increase or diminution in value thereof shall be applied to the relevant Sub-Fund; (c) where the Company incurs a liability which relates to any asset of a particular Sub-Fund or to any action taken in connection with an asset of a particular Sub-Fund, such liability shall be allocated to the relevant Sub-Fund and shall not be applied in satisfaction of any liability incurred on behalf of or attributable to any other Sub-Fund, liabilities of or attributable to a Sub- Fund to be allocated solely to that Sub-Fund; (d) in the case where an asset or a liability of the Company cannot be considered as being attributable to a particular Sub-Fund, the Directors shall have the discretion to determine the basis upon which such asset or liability shall be allocated between the Sub-Funds and the Directors shall have power at any time and from time to time to vary such basis; (e) where hedging strategies are used in relation to a class of Shares, the financial instruments used to implement such strategies shall be deemed to be assets or liabilities (as the case may be) of the relevant Sub-Fund as a whole but the gains/losses on and the costs of the relevant financial instruments will accrue solely to the relevant class of Shares. 6 New Star Global Investment Funds PLC

9 Investment Objectives and Strategies The assets of each Sub-Fund will be invested separately in accordance with the investment objectives and strategies of the relevant Sub-Fund and the specific investment objective of each Sub-Fund is set out below. New Star Asian Opportunities Fund Investment Objective The Sub-Fund aims to achieve long term capital growth principally through investment in companies located in Asia (excluding Japan) or in the opinion of the Investment Manager deriving a preponderant part of their income therefrom. Investment Strategy The Sub-Fund will invest primarily and at least two thirds of its assets, in a portfolio of equities of companies located in Asia (excluding Japan) or in the opinion of the Investment Manager deriving a preponderant part of their income from Asia (excluding Japan). This Sub-Fund will invest in emerging markets in Asia. The Sub-Fund may also invest in equity-related securities including convertible bonds (usually unrated), convertible preference shares and warrants (subject to a 5% limit of the Net Asset Value of the Sub-Fund in the case of warrants) of companies located in Asia (excluding Japan) or in the opinion of the Investment Manager deriving a preponderant part of their income from Asia (excluding Japan). The Sub-Fund may invest up to 10% of its assets in equity and equity-related securities of companies neither located in Asia nor in the opinion of the Investment Manager deriving a preponderant part of their income from Asia (excluding Japan). In particular the Sub-Fund may invest in companies located in or in the opinion of the Investment Manager deriving a preponderant part of their income from countries in the Pacific Region but not located in Asia (excluding Japan). The Pacific Region includes Australia, New Zealand, Hong Kong, Singapore, Malaysia, China, Indonesia, South Korea, Philippines, Taiwan and Thailand. Investment may be made in both developed and emerging Asian Regions. The majority of the Sub-Fund s investments shall be listed or traded on a Recognised Exchange located in Asia and the Pacific Region. Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star European Growth Fund Investment Objective The Sub-Fund aims to achieve long term capital growth principally through investment in companies located or listed in Europe (excluding the United Kingdom) or in the opinion of the Investment Manager deriving a preponderant part of their income from Europe (excluding the United Kingdom). Investment Strategy The Sub-Fund will invest primarily and at least two thirds of its assets, in a portfolio of equities of companies located in Europe (excluding the United Kingdom) or in the opinion of the Investment Manager deriving a preponderant part of their income from Europe (excluding the United Kingdom). This Sub-Fund may also invest in equity-related securities including convertible bonds (usually unrated), convertible preference shares and warrants (subject to a 5% limit of the Net Asset Value of the Sub-Fund in the case of warrants) of companies located in Europe (excluding the United Kingdom) or in the opinion of the Investment Manager deriving a preponderant part of their income from Europe (excluding the United Kingdom). The Sub-Fund may invest up to 10% of its assets in equity and equity-related securities of companies which are neither located in Europe (excluding the United Kingdom) nor in the opinion of the Investment Manager deriving a preponderant part of their income from Europe (excluding the United Kingdom). The majority of the Sub-Fund s investments shall be listed or traded on a Recognised Exchange located in Europe (excluding the United Kingdom). No more than 10% of the Sub-Fund s assets shall be listed or traded on Recognised Stock Exchanges in emerging markets. Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star Japan Recovery Fund Investment Objective The Sub-Fund aims to achieve long term capital growth principally through investment in companies located or listed in Japan or in the opinion of the Investment Manager deriving a preponderant part of their income in Japan. Investment Strategy The Sub-Fund will invest primarily and at least two-thirds of its assets, in a portfolio of equities of companies located in Japan or in the opinion of the Investment Manager deriving a preponderant part of their income in Japan. This Sub-Fund may also invest in equityrelated securities including convertible bonds (usually unrated), convertible preference shares and warrants (subject to a 5% limit of the Net Asset Value of the Sub-Fund in the case of warrants) of companies located in Japan or in the opinion of the Investment Manager deriving a preponderant part of their income in Japan. The Sub-Fund may invest up to 10% of its assets in equity and equity-related securities of companies neither located in Japan nor in the opinion of the Investment Manager deriving a preponderant part of their income in Japan. The majority of the Sub-Fund s investments shall be listed or traded on a Recognised Exchange in Japan. New Star Global Investment Funds PLC 7

10 Investors are advised that the Sub-Fund invests primarily in shares of companies which have their head office in Japan or which exercise a preponderant part of their activity in Japan. Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star UK Dynamic Fund Investment Objective The Sub-Fund aims to achieve long term capital growth principally through investment in a portfolio of equities and up to one-third of the Sub-Fund s assets in a portfolio of equity-related securities of companies located or listed in the United Kingdom or in the opinion of the Investment Manager deriving a preponderant part of their income in the United Kingdom. Investment Strategy The Sub-Fund will invest primarily and at least two-thirds of its assets, in a portfolio of equities of companies located in the United Kingdom, or in the opinion of the Investment Manager deriving a preponderant part of their income in the United Kingdom. The Sub- Fund may also invest in equity-related securities including convertible bonds (usually unrated), convertible preference shares and warrants (subject to a 5% limit of the Net Asset Value of the Sub-Fund in the case of warrants) of companies located in the United Kingdom, or in the opinion of the Investment Manager deriving a preponderant part of their income in the United Kingdom. The Sub-Fund may invest up to 10% of its assets in equity and equity-related securities of companies neither located in the United Kingdom nor in the opinion of the Investment Manager deriving a preponderant part of their income therefrom. The majority of the Sub-Fund s investments shall be listed or traded on a Recognised Exchange in the United Kingdom. Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star US Opportunities Fund (A Sub-Fund which also invests in Canada) Investment Objective The Sub-Fund aims to achieve long term capital growth principally through investment in companies located or listed in the United States or Canada or in the opinion of the Investment Manager deriving a preponderant part of their income from the United States or Canada. Investment Strategy The Sub-Fund will invest primarily and at least two-thirds of its assets, in a portfolio of equities of companies located in, or in the opinion of the Investment Manager deriving a preponderant part of their income from, the United States or Canada. This Sub-Fund may also invest in equity related securities including convertible bonds (usually unrated), convertible preference shares and warrants (subject to a 5% limit of the Net Asset Value of the Sub-Fund in the case of warrants) of companies located, or in the opinion of the Investment Manager deriving a preponderant part of their income from the United States or Canada. The Sub-Fund may invest up to 10% of its assets in equity and equity-related securities of companies which are neither located in the United States or Canada nor in the opinion of the Investment Manager deriving a preponderant part of their income therefrom. The Sub-Fund may also invest in American Depositary Receipts listed in the United States or in Canada. The majority of the Sub-Fund s investments shall be listed or traded on Recognised Exchanges in the United States or Canada. Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star Global Emerging Markets Fund Investment Objective The Sub-Fund aims to achieve long term capital growth principally through investment in the equity of companies having their head office or a preponderant part of their activity in emerging countries, considered by the Investment Manager to be "emerging markets" or in the opinion of the Investment Manager deriving a preponderant part of their income therefrom and in debt securities (usually unrated) of corporate and sovereign issuers located in emerging countries. Investment Strategy The Sub-Fund will invest primarily, and at least two thirds of its assets, in a portfolio of equities of companies having their head office or a preponderant part of their activity in emerging countries or in the opinion of the Investment Manager deriving a preponderant part of their income from emerging countries. The Sub-Fund may also invest in equity-related securities, including convertible bonds, convertible preference shares and warrants (subject to a 5% limit of Net Asset Value of the Sub-Fund in the case of warrants) of emerging market companies or in the opinion of the Investment Manager deriving a preponderant part of their income from emerging countries and no more than 10% of Net Asset Value in debt securities (which are usually expected to be below investment grade) of sovereign issuers, including government bonds, located in emerging countries. The Sub-Fund may also invest in American Depositary Receipts and/or Global Depository Receipts. The Sub-Fund may also invest up to 10% of its assets in equity and equity-related securities of companies which are neither located in emerging countries nor in the opinion of the Investment Manager deriving a preponderant part of their income therefrom or in debt securities of corporate and sovereign issuers not located in emerging countries. The majority of the Sub-Fund's investments shall be listed or traded on Recognised Exchanges located in emerging countries. Investors are advised that the Sub-Fund invests primarily in shares of companies which have their head office in emerging countries, emerging countries being defined as the countries which are listed in the MSCI Emerging Markets Index. 8 New Star Global Investment Funds PLC

11 Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star Euro High Yield Fund Investment Objective The Sub-Fund aims to achieve a high level of income with modest long-term capital growth through investing primarily in fixed and variable rate and index related debt securities which are denominated in euro and issued by corporate, government supranational institutions and local regional agencies worldwide. Investment Strategy The Sub-Fund will invest principally and at least 80% of its net assets in fixed and variable rate and index related euro denominated debt securities which are denominated in euro and issued by corporate, government, supranational institutions and local and regional agencies worldwide, as well as any other debt security issuer which the Investment Manager deems appropriate and which are listed or traded on a Recognised Exchange. The Sub-Fund may invest in fixed and variable rate and index-related debt securities which may include, but are not restricted to, treasury bills, certificates of deposit, medium-term notes, warrants (not more than 5% of net asset value), debentures, government bonds, corporate bonds, agency bonds, bonds denominated in Euro or any other currency asset, or mortgage back securities or floating rate notes. The Sub-Fund may invest, without limitation, in debt securities which are sub-investment grade, investment grade or unrated. The Investment Manager may use a composite of Standard & Poor s, Fitch and Moody s or any other internationally recognized rating agency. Equity investments may also be made. Such securities shall be listed or traded on Recognised Exchanges in Europe including the United Kingdom. Equity investments acquired for the Sub-Fund may have the same characteristics as debt securities but due to their legal structure are classified as equities, for example preference shares and convertible preference shares. The Sub-Fund may also hold equities as a result of the restructuring of debt securities. In order to optimise currency management, the Sub-Fund may use techniques to hedge currency exposure to currencies other than the denominated currency or for any other efficient portfolio management strategy which in the opinion of the Investment Manager would achieve one of the aims set out under the heading Efficient Portfolio Management below. Derivatives such as futures and forwards or such other derivatives that would behave in a similar manner or have a similar risk profile may be used where hedging is required to manage any exposures resulting from currency denomination, differential interest rates, credit exposure, or lack thereof, or for other reasons of prudent efficient portfolio management which would achieve one of the aims listed under the heading Efficient Portfolio Management below. The Sub-Fund may invest up to 10% of its assets in unlisted securities. Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star Pan-European Equity Fund Investment Objective The Sub-Fund aims to achieve long term capital growth through investing primarily in a diversified portfolio of European equities including UK securities. Investment Strategy The Sub-Fund will invest at least 80% of its assets in a diversified portfolio of European Economic Area (EEA) equities. The Sub-Fund will invest in the securities issued by companies incorporated in any country in the EEA or in companies which exercise an overriding part of their economic activity in any country in the EEA, it being noted that the percentage of investment in securities issued by companies incorporated in any country in the EEA (not including Liechtenstein) will never be lower than 75% of the Sub- Fund s assets. In addition to ordinary shares, the Sub-fund may also invest in equity related securities such as preference shares and debt securities convertible into ordinary shares. As least 90% of the Sub-Funds investments shall be listed or traded on a Recognised Exchange and the majority of the Sub-Funds investments shall be listed or traded on a Recognised Exchange in the EEA. In order to optimise currency management, the Sub-Fund may use techniques to hedge currency exposure to currencies other than the denominated currency or for any other efficient portfolio management strategy which in the opinion of the Investment Manager would achieve one of the aims mentioned under the section headed Efficient Portfolio Management below. Derivatives such as futures and forwards or such other derivatives that would behave in a similar manner or have a similar risk profile may be used where hedging is required to manage any exposures resulting from currency denomination, differential interest rates, credit exposure, or lack thereof or for other reasons of prudent efficient portfolio management which would achieve one of the aims listed under the heading Efficient Portfolio Management below. The Sub-Fund may invest up to 10% of its assets in unlisted securities. Notwithstanding the investment restrictions as set out in the Permitted Investment and Borrowing Restrictions section of this document, this Sub-Fund shall not invest more than 10% in collective investment schemes. New Star Global Investment Funds PLC 9

12 PERMITTED INVESTMENT AND BORROWING RESTRICTIONS 1 Permitted Investments Investments of each Sub-Fund are confined to: 1.1 Transferable securities and money market instruments which are either admitted to official listing on a stock exchange in a Member State or non-member State or which are dealt on a market which is regulated, operates regularly, is recognised and open to the public in a Member State or non-member State. 1.2 Recently issued transferable securities which will be admitted to official listing on a stock exchange or other market (as described above) within a year. However, a Sub-Fund may invest no more than 10% of net assets in these securities. This restriction will not apply in relation to investment by a Sub-Fund in certain US securities known as Rule 144A securities provided that: the securities are issued with an undertaking to register with the US Securities and Exchanges Commission within one year of issue; and the securities are not illiquid securities i.e. they may be realised by a Sub-Fund within seven days at the price, or approximately at the price, at which they are valued by a Sub-Fund. 1.3 Money market instruments as defined in the Financial Regulator Notices, other than those dealt on a regulated market. 1.4 Units of UCITS. 1.5 Units of non-ucits as set out in the Financial Regulator s Guidance Note 2/ Deposits with credit institutions as prescribed in the Financial Regulator Notices. 1.7 Financial derivative instruments as prescribed in the Financial Regulator Notices. 2 Investment Restrictions 2.1 A Sub-Fund may invest no more than 10% of net assets in transferable securities and money market instruments other than those referred to in paragraph A Sub-Fund may invest no more than 10% of net assets in recently issued transferable securities which will be admitted to official listing on a stock exchange or other market (as described in paragraph 1.1) within a year. This restriction will not apply in relation to investment by a Sub-Fund in certain US securities known as Rule 144A securities provided that: the securities are issued with an undertaking to register with the US Securities and Exchanges Commission within one year of issue; and the securities are not illiquid securities, i.e. they may be realised by a Sub-Fund within seven days at the price, or approximately at the price, at which they are valued by a Sub-Fund. 2.3 A Sub-Fund may invest no more than 10% of net assets in transferable securities or money market instruments issued by the same body provided that the total value of transferable securities and money market instruments held in the issuing bodies in each of which it invests more than 5% is less than 40%. 2.4 Subject to the prior approval of the Financial Regulator the limit of 10% (in 2.3) is raised to 25% in the case of bonds that are issued by a credit institution which has its registered office in a Member State and is subject by law to special public supervision designed to protect bond-holders. If a Sub-Fund invests more than 5% of its net assets in these bonds issued by one issuer, the total value of these investments may not exceed 80% of the net asset value of the Sub-Fund. 2.5 The limit of 10% (in 2.3) is raised to 35% if the transferable securities or money market instruments are issued or guaranteed by a Member State or its local authorities or by a non-member State or public international body of which one or more Member States are members. 2.6 The transferable securities and money market instruments referred to in 2.4. and 2.5 shall not be taken into account for the purpose of applying the limit of 40% referred to in A Sub-Fund may not invest more than 20% of net assets in deposits made with the same credit institution. Deposits with any one credit institution, other than credit institutions authorised in the EEA or credit institutions authorised within a signatory state (other than an EEA Member State) to the Basle Capital Convergence Agreement of July 1998, held as ancillary liquidity, must not exceed 10% of net assets or a credit institution authorized in Jersey, Guernsey, the Isle of Man, Australia or New Zealand, held as ancillary liquidity, must not exceed 10% of net assets. This limit may be raised to 20% in the case of deposits made with the Custodian. 2.8 The risk exposure of a Sub-Fund to a counterparty to an OTC derivative may not exceed 5% of net assets. This limit is raised to 10% in the case of credit institutions authorised in the EEA or credit institutions authorised within a signatory state (other than an EEA Member State) to the Basle Capital Convergence Agreement of July 1998 or a credit institution authorized in Jersey, Guernsey, the Isle of Man, Australia or New Zealand. 10 New Star Global Investment Funds PLC

13 2.9 Notwithstanding paragraphs 2.3, 2.7 and 2.8 above, a combination of two or more of the following issued by, or made or undertaken with, the same body may not exceed 20% of net assets: investments in transferable securities or money market instruments; deposits, and/or risk exposures arising from OTC derivatives transactions The limits referred to in 2.3, 2.4, 2.5, 2.7, 2.8 and 2.9 above may not be combined, so that exposure to a single body shall not exceed 35% of net assets Group companies are regarded as a single issuer for the purposes of 2.3, 2.4, 2.5, 2.7, 2.8 and 2.9. However, a limit of 20% of net assets may be applied to investment in transferable securities and money market instruments within the same group A Sub-Fund may invest up to 100% of net assets in different transferable securities and money market instruments issued or guaranteed by any Member State, its local authorities, the International Monetary Fund, the governments of Australia, Canada, Japan, New Zealand, Norway and Switzerland, the European Investment Bank, the European Union, Euratom, the World Bank, the Asian Development Bank, the Inter-American Development Bank and issues backed by the full faith and credit of the government of the United States of America and issues by the US Federal National Mortgage Association and the US Federal Home Loan Mortgage Corporation, provided that each Sub-Fund must hold securities from at least six different issues with securities from any one issue not exceeding 30% of the Net Asset Value of a Sub-Fund. 3 Investment in Collective Investment Schemes ( CIS ) 3.1 A Sub-Fund may not invest more than 20% of net assets in any one CIS. 3.2 Investment in non-ucits may not, in aggregate, exceed 30% of net assets. 3.3 Investment in a CIS which itself can invest more than 10% of its Net Asset Value in another collective investment scheme is not permitted. 3.4 When a Sub-Fund invests in the units of other CIS that are managed, directly or by delegation, by the Sub-Fund's management company or by any other company with which the Sub-Fund s management company is linked by common management or control, or by a substantial direct or indirect holding of more than 10% of the capital or of the votes, that management company or other company may not charge subscription, conversion or redemption fees on account of the Sub-Fund investment in the units of such other CIS. Furthermore, no management fee will be levied on such investment. 3.5 Where a commission (including a rebated commission) is received by the Sub-Fund's manager/investment manager/investment adviser by virtue of an investment in the units of another CIS, this commission must be paid into the property of the Sub-Fund. 4 General Provisions 4.1 An investment company or management company acting in connection with all of the CIS it manages, may not acquire any shares carrying voting rights which would enable it to exercise significant influence over the management of an issuing body. 4.2 A Sub-Fund may acquire no more than: (i) 10% of the non-voting shares of any single issuing body; (ii) 10% of the debt securities of any single issuing body; (iii) 25% of the units of any single CIS; (iv) 10% of the money market instruments of any single issuing body. NOTE: The limits laid down in (ii), (iii) and (iv) above may be disregarded at the time of acquisition if at that time the gross amount of the debt securities or of the money market instruments, or the net amount of the securities in issue cannot be calculated and 4.2 shall not be applicable to: (i) transferable securities and money market instruments issued or guaranteed by a Member State or its local authorities; (ii) transferable securities and money market instruments issued or guaranteed by a non-member State; (iii) transferable securities and money market instruments issued by public international bodies of which one or more Member States are members; (iv) shares held by a Sub-Fund in the capital of a company incorporated in a non-member State which invests its assets mainly in the securities of issuing bodies having their registered offices in that State, where under the legislation of that State such a holding represents the only way in which the Sub-Fund can invest in the securities of issuing bodies of that State. This waiver is applicable only if in its investment policies the company from the non-member State complies with the limits laid down in 2.3 to 2.11, 3.1, 4.1, 4.2, 4.4, 4.5 and 4.6, and provided that where these limits are exceeded, 4.5 and 4.6 are observed; (v) Shares held by an investment company or investment companies in the capital of subsidiary companies carrying on only the business of management, advice or marketing in the country where the subsidiary is located, in regard to the repurchase of units at unit-holders request exclusively on their behalf. New Star Global Investment Funds PLC 11

14 4.4 The Sub-Fund need not comply with the investment restrictions herein when exercising subscription rights attaching to transferable securities or money market instruments which form part of their assets. 4.5 The Financial Regulator may allow recently authorised UCITS to derogate from the provisions of 2.3 to 2.12, 3.1 and 3.2 for six months following the date of their authorisation, provided they observe the principle of risk spreading. 4.6 If the limits laid down herein are exceeded for reasons beyond the control of a Sub-Fund, or as a result of the exercise of subscription rights, the Sub-Fund must adopt as a priority objective for its sales transactions the remedying of that situation, taking due account of the interests of its unitholders. 4.7 Neither an investment company, nor a management company or a trustee/custodian acting on behalf of a unit trust or a management company of a common contractual fund, may carry out uncovered sales of: transferable securities; money market instruments; units of CIS; or financial derivative instruments. 5 Financial Derivative Instruments ( FDIs ) 5.1 A Sub-Fund may invest in FDIs dealt in over-the-counter (OTC) provided that the counterparties are institutions subject to prudential supervision and belonging to categories approved by the Financial Regulator. 5.2 Position exposure to the underlying assets of FDI, including embedded FDI in transferable securities or money market instruments, when combined where relevant with positions resulting from direct investments, may not exceed the investment limits set out in the Financial Regulator s Notices. (This provision does not apply in the case of index based FDI provided that the underlying index is one which meets with the criteria set out in the Financial Regulator s Notices). 5.3 A Sub-Fund s global exposure (as prescribed in the Financial Regulator s Notices) relating to FDI must not exceed its total net asset value. 5.4 Investment in FDIs is subject to the conditions and limits laid down by the Financial Regulator. 5.5 The use of FDIs carries high risk, and leverage risk in particular. This is the risk arising from the use of relatively small financial resources to obtain a large number of market positions. In a falling market, leverage can increase the losses on the derivatives position concerned. In a falling market, the sale of options and other derivatives may mean that their entire purchase price or premiums are lost. If leverage is used in respect of financial derivatives of a Sub-Fund it must not exceed the net asset value of such Sub-Fund, and hence the Sub-Fund s total overall risk exposure shall not exceed 200% of its net asset value. The total amount of the commitments of the Sub-Fund must not exceed 210% of its net assets Neither the Company nor any of its Sub-Funds will invest in gold, commodities or real estate (other than interests in real estate companies or REITs). 6 Borrowing Restrictions (a) A Sub-Fund may borrow up to 10% of its net assets provided such borrowing is on a temporary basis. The Custodian may give a charge over the assets of the Sub-Fund in order to secure borrowings. Credit balances (e.g. cash) may not be offset against borrowings when determining the percentage of borrowings outstanding. (b) A Sub-Fund may acquire foreign currency by means of a back-to-back loan agreement. Foreign currency obtained in this manner is not classed as borrowings for the purposes of the borrowing restrictions set out at (a) above provided that the offsetting deposit:- (i) is denominated in the base currency of the Sub-Fund; and (ii) equals or exceeds the value of the foreign currency loan outstanding. However, where foreign currency borrowings exceed the value of the back-to-back deposit, any excess is regarded as borrowing for the purpose of (a) above. Efficient Portfolio Management The Sub-Funds may employ techniques and instruments for efficient portfolio management transactions with one of the following aims:- (a) a reduction of risk; (b) a reduction of cost with no increase or a minimal increase in risk; or (c) generation of additional capital or income with no, or an acceptably low level of risk (relative to the expected return). In relation to efficient portfolio management operations, the Investment Manager will look to ensure that the transaction is economically appropriate. In addition, the Sub-Funds may, subject to the conditions and limits laid down by the Financial Regulator in the investment restrictions, employ techniques and instruments intended to provide protection against exchange rate risks and/or which may assist in the management of any exposures of the assets or liabilities of a Sub-Fund resulting from currency denomination, differential interest rates, credit exposure or lack thereof. Where hedging is required to manage any exposures resulting from currency denomination, differential interest rates, credit exposure or lack thereof, a Sub-Fund may: (i) utilise OTC contracts or (ii) hedge exposure to one currency by entering into forward currency transactions in a related currency. A description of the main techniques and instruments that may be used for efficient portfolio management and/or to provide protection against exchange rate risks are set out overleaf. 12 New Star Global Investment Funds PLC

15 Forward Currency Contracts Forward currency contracts may, at the Investment Manager s sole discretion, be used to hedge some or all of the exchange risk/currency exposure arising as a result of the fluctuation between the currency in which the Net Asset Value per Share is computed and the currencies in which the Sub-Fund s investments are denominated. In addition, forward currency contracts may be used to protect the value of the currency of each class from the adverse movements of other currencies. Other Financial Derivative Instruments Whilst other financial derivative instruments such as options, futures, swaps and repurchase/reverse repurchase agreements have not been used by the Company to date there is a possibility that in future such financial derivative instruments will be employed for hedging exposure to a market, sector or region. A Sub-Fund may sell futures on securities, currencies or interest rates to provide an efficient, liquid and effective method for the management of risks by locking in gains and/or protecting against future declines in value. A Sub-Fund may also buy futures on securities, currencies or interest rates to provide a cost effective and efficient mechanism for taking positions in securities. A sub-fund may purchase warrants, convertible bonds and convertible debentures to provide an efficient, liquid mechanism for taking positions in securities without the need to purchase and hold security. A Sub-Fund may utilize options (including equity index options, options on futures and options on swaps) to increase its current return by writing covered call options and put options on securities it owns or in which it may invest and on currencies for the purposes of efficient portfolio management only. A Sub-Fund may enter into swap agreements (including total return and credit default swaps) with respect to currencies, interest rates and securities. A Sub-Fund may use these techniques to protect against changes in interest rates and currency exchange rates. In respect of currencies, a Sub-Fund may utilise currency swap contracts where the Sub-Fund may exchange currencies at a fixed rate of exchange for currencies at a floating rate of exchange or currencies at a floating rate of exchange for currencies at a fixed rate of exchange. In respect of interest rates a Sub-Fund may utilise interest rate swap contracts where the Sub-Fund may exchange floating interest rate cash flows for fixed interest rate cash flows or fixed interest rate cash flows for floating interest rate cash flows. A Sub-Fund may use index credit default swaps to reduce the overall credit risk of the portfolio or a single name credit default swap to reduce exposure to a specific credit. In respect of securities and securities indices the Sub-Fund may utilise total return swap contracts where the Sub-Fund may exchange floating interest rate cash flows for fixed cash flows based on the total return of an equity or fixed income instrument or a securities index or fixed cash flow based on total return of an equity or fixed income instrument or a securities index for floating interest rate cash flows. These contracts allow the Sub-Fund to manage its exposures to certain securities or securities indexes. For these instruments the Sub-Fund s return is based on the movement of interest rates relative to the return on the relevant security or index. A Sub-Fund may enter into repurchase/reverse repurchase agreements for efficient portfolio management purposes. Such a transaction is an agreement whereby one party sells the other a security at a specified price with a commitment to buy the security back at a later date for another specified price. The Sub-Fund may enter into such agreements as follows (a) if a Sub- Fund has short-term funds to invest then difference between the sale and repurchase prices paid for the security represents a return to the Sub-Fund similar to interest on a loan or (b) if a Sub-Fund wishes to briefly obtain use of a particular security. The Company or Sub-Funds may also use variations of the instruments listed above as they may develop in the market in the future provided that the Investment Manager is of the view that such instrument or derivative does not significantly increase the risk profile of the Sub-Fund. Other derivatives which have a similar risk profile or behave in a manner similar to those set out above which the Investment Manager believe will achieve one of the aims mentioned above may be utilized for efficient portfolio management. A Sub-Fund will not utilise financial derivative instruments which have not been included in the risk management process until such time as a revised risk management process has been prepared and filed with the Financial Regulator. Derivatives will not be used for investment purposes. Other techniques that may be used for efficient portfolio management: The Manager and the Custodian may enter into stocklending transactions in respect of a Sub-Fund. However, the power will only be exercised where it reasonably appears to the Manager to be appropriate to do so with a view to the generation of capital or income for a Sub-Fund with an acceptable degree of risk. Briefly, such transactions are those where the Custodian delivers the securities which are the subject of the transactions, in return for which it is agreed that securities of the same kind and amount should be redelivered at a later date. The Custodian at the time of delivery of the securities receives assets as collateral to cover against the risk that the securities are not returned. Such transaction must always comply with the relevant requirements of the Financial Regulator from time to time and specify rules in the UCITS Notices. There is no limit on the value of the property of a Sub-Fund which may be the subject of stocklending transactions. The current stock lending arrangement in place provides that the Sub-Funds receive 60% of the stocklending income (except for New Star European Fund which receives 70% of the income). The Manager and stock lending agent share the residual income based on normal commercial rates, negotiated at arms length. All Sub-Funds in this document currently enter into stocklending transactions. If this position alters investors will be notified in the next report and accounts and the document will be updated in due course. New Star Global Investment Funds PLC 13

16 Distribution Policy Save as otherwise indicated in this Offering Document, the amount available for distribution shall be the net income received by the Company in respect of the relevant Sub-Fund (whether in the form of dividends, interest or otherwise) and/or net realized gains (ie realized gains net of realized and unrealized losses) or net realized and unrealized gains (ie realized and unrealized gains net of realized and unrealized losses). Unless otherwise stated in this Hong Kong Offering Document, the amount that will be distributed shall be net income received by the Company in respect of the relevant Sub-Fund. It is intended that each Sub-Fund of the Company will pursue a distribution policy so that the Company will be able to obtain certification as a Distributing Fund under the United Kingdom Income Corporation Taxes Act, 1977 for the purpose of United Kingdom Taxation. The failure of a Sub-Fund to comply with this requirement will result in the Company failing to obtain certification. The Directors shall create classes of Shares that are designated as Reinvestment Shares, in respect of which the Directors intend to reinvest the dividends for the account of the relevant Shareholders. The Directors shall also create classes of Shares that are designated as income Shares in respect of which income accruing to the relevant Share will be paid out as dividends to the Shareholder. The Shareholders will be given the option, in applying for Income Shares, to have such dividends payable to be used to purchase additional Shares in the relevant Sub-Fund for the benefit of the relevant Shareholders. The Company will distribute sufficient income to obtain certification as a Distributing Fund, after deduction of expenses, by way of dividend. Save otherwise indicated in this Offering Document, each Sub-Fund will normally go ex-dividend on the last Business Day in May in each year and the annual distribution for the relevant Sub-Fund will be paid for the benefit of Shareholders on or before the last Business Day in July in each year unless otherwise stated in this Hong Kong Offering Document. It is intended that New Star Euro High Yield Fund will pay dividends on or before the last Business Day of each quarter, commencing on the 31 May of each year, or on such other dates as may be determined at the Manager s discretion. Changes in a distribution date will be notified to Shareholders of such Sub-Fund. Dividends on Income Shares not claimed within six years from their due date will lapse and revert to the relevant Sub-Fund. No dividend will be payable to the holders of Management Shares. Dividends on Income Shares will, at the risk and expense of the Shareholder, unless otherwise agreed by the Manager, be paid by remitting the amount due by telegraphic transfer to an account nominated by and in the name of the registered Shareholder. The amount of dividend payable on classes of Shares within a Sub-Fund may vary to reflect any differing charges and expenses applicable to such classes. Risk Factors The performance of the Shares may be affected by a number of risk factors including: General The price of Shares of any of the Sub-Funds and any income from them may fall as well as rise and consequently any Shareholder may not get back the full amount invested. Past performance is not necessarily a guide to future performance. Changes in exchange rates between currencies may also cause the value of investments to diminish or increase. An investor, who realises Shares after a short period may, in addition, not realise the amount originally invested in view of the subscription fee, which may be made on the issue of Shares. Counterparty Risk A Sub-Fund may have credit exposure to counterparties by virtue of investment positions in swaps, options, repurchase transactions and forward exchange rate and other contracts held by the Sub-Fund. To the extent that a counterparty defaults on its obligations and the Sub-Fund is delayed or prevented from exercising its rights with respect to the investment in its portfolio, it may experience a decline in the value of its position, lose income and incur costs associated with its rights. Foreign Exchange/Currency Risk Although Shares may be denominated in a particular currency, the Sub-Fund may invest in securities denominated in a wide range of currencies. The Net Asset Value of the Sub-Fund as expressed in its base currency will fluctuate in accordance with the changes in the foreign exchange rate between the currency and the currencies in which the Sub-Fund s investments are denominated. The Sub-Fund may, therefore, be exposed to a foreign exchange/currency risk. It may not be possible or practicable to hedge against the consequent foreign exchange/currency risk exposure. The Investment Manager may or may not try to mitigate the risk by using financial instruments for and solely for the purposes of efficient portfolio management or protection against currency risk as set out above. The Sub-Fund may enter from time to time into currency exchange transactions either on a spot (i.e. cash) basis or by buying currency exchange forward contracts. Neither spot transactions nor forward currency exchange contracts eliminate fluctuations in the prices of a Sub-Fund s securities or in foreign exchange rates, or prevent loss if the prices of these securities should decline. Investors should note that performance of the Sub-Fund may be strongly influenced by movements in foreign exchange rates because currency positions held by a Sub-Fund may not correspond with the securities positions held. The Sub-Fund may enter into currency exchange transactions in an attempt to protect against changes in currency exchange rates between the trade and settlement dates of specific securities transactions or anticipated securities transactions or for speculative purposes. 14 New Star Global Investment Funds PLC

17 Market Capitalisation Risk The securities of small-to-medium-sized companies (by market capitalisation), or financial instruments related to such securities, may have a more limited market than the securities of larger companies. Accordingly, it may be more difficult to effect sales of such securities at an advantageous time or price. In addition, securities of small-to-medium-sized companies may have greater price volatility as they are generally more vulnerable to adverse market factors such as unfavourable economic reports. Market Risk Active risk management is an integral part of the investment process, and is incorporated into every stage of portfolio construction. Market risk or investment risk is simply a means to quantify differences in the performance of the portfolio against its underlying benchmark. This risk is primarily quantified by estimating the aggregate ex-ante (predicted) tracking error of the portfolio although the Investment Manager also considers additional common descriptive statistics, including ex-post (historic) tracking error, information ratio, alpha, beta as well as the more straightforward use of standard deviations (volatilities) and annualized returns. Liquidity Risk Not all securities invested in by the Sub-Funds will be listed or rated and consequently liquidity may be low. Moreover, the accumulation and disposal of holdings in some investments may be time consuming and may need to be conducted at unfavourable prices. The Sub-Funds may also encounter difficulties in disposing of assets at their fair price due to adverse market conditions leading to limited liquidity. Redemption Risk Large redemptions of Shares in any of the Sub-Funds might result in the Sub-Fund being forced to sell assets at a time, under circumstances and at a price where it would, instead, normally prefer not to dispose of those assets. Currency Risk Assets of a Sub-Fund may be denominated in a currency other than the Base Currency of the Sub-Fund. Changes in the exchange rate between the Base Currency and the currency of the asset may lead to a reduction of the value of the Sub-Fund s assets as expressed in the Base Currency. The Sub-Fund s Investment Manager may or may not try to mitigate this risk by using financial instruments. Sub-Funds may from time to time enter into currency exchange transactions either on a spot (i.e. cash) basis or by buying currency exchange forward contracts. Neither spot transactions nor forward currency exchange contracts eliminate fluctuations in the prices of a Sub-Fund s securities or in foreign exchange rates, or prevent loss if the prices of these securities should decline. A Sub-Fund may enter into currency exchange transactions in an attempt to protect against changes in currency exchange rates between the trade and settlement dates of specific securities transactions or anticipated securities transactions. A Sub-Fund may also enter into forward contracts to hedge against a change in such currency exchange rates that would cause a decline in the value of existing investments denominated or principally traded in a currency other than the Base Currency of that Sub-Fund. The successful execution of a hedging strategy which matches exactly the profile of the investments of any Sub-Fund cannot be assured. Share Currency Designation Risk A class of Shares of a Sub-Fund may be designated in a currency other than the Base Currency of the Sub-Fund. Changes in the exchange rate between the Base Currency and such designated currency may lead to a depreciation of the value of such Shares as expressed in the designated currency. The Sub-Fund s Investment Manager may or may not try to mitigate this risk by using financial instruments. Political and/or Regulatory Risk The value of a Sub-Fund s assets may be affected by uncertainties such as international political developments, changes in government policies, changes in taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investment may be made. Portfolio Management Risk The Investment Manager may engage in various portfolio strategies on behalf of a Sub-Fund through the use of futures and options for efficient portfolio management purposes. Due to the nature of futures, cash to meet initial and future margin deposits may be held by a broker with whom the Sub-Fund has an open position. On execution of an option the Sub-Fund may pay a premium to a counterparty. In the event of bankruptcy of the counterparty, the option premium may be lost in addition to any unrealized gains where the contract is in the money. Premium Risk Where a Sub-Fund acquires or values securities in an over-the-counter market at a premium, there is no guarantee that the Sub- Fund will be able to realise such securities at a premium due to the nature of the over-the-counter market. Counterparty and Settlement Considerations Each of the Sub-Funds may be exposed to credit risk on the counterparties with which it trades in relation to options, futures, contracts and other derivative financial instruments that are not traded on a Recognised Exchange. Each Sub-Fund will be subject to the possibility of the insolvency, bankruptcy or default of a counterparty with which the Sub-Funds trade such instruments, which could result in substantial losses to the relevant Sub-Fund or Sub-Funds. New Star Global Investment Funds PLC 15

18 Each of the Sub-Funds may also be exposed to a credit risk on counterparties with whom it trades securities, and may also bear the risk of settlement default, in particular in relation to debt securities such as bonds, notes and similar debt obligations or instruments. Settlement mechanisms in emerging markets are generally less developed and reliable than those in more developed countries and that this therefore increases the risk of settlement default which could result in substantial losses for the Company and the relevant Sub-Fund in respect to investments in emerging markets. Custody Risk As a Sub-Fund may invest in markets where custodial and/or settlement systems are not fully developed, the assets of the Sub- Fund which are traded in such markets and which have been entrusted to sub-custodians, in circumstances where the use of such sub-custodians is necessary, may be exposed to risks in circumstances whereby the Custodian will have no liability. Emerging Market Risk For Sub-Funds investing in securities located in countries with emerging securities markets, risks additional to the normal risk inherent in investing in conventional securities may be encountered. Capital Erosion Risk Shareholders should note that where a Sub-Fund provides for the payment of some or all of its management fees and other fees and expenses out of capital rather than income, this may have the effect of eroding capital and maximizing of income will be achieved by foregoing the potential for future capital growth. On redemptions of holdings Shareholders may not receive back the full amount invested. Derivatives, Techniques and Instrument Risk General The prices of derivative instruments, including futures and options prices, are highly volatile. Price movements of forward contacts, future contracts and other derivative contacts are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programmes and policies of governments, and national and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly markets in currencies and interest rate related futures and options. Such intervention often is intended directly to influence prices and may, together with other factors, cause all such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. The use of techniques and instruments also involves certain special risks, including:- (1) dependence on the ability to predict movements in the prices of securities being hedged and movements in interest rates, (2) imperfect correlation between the hedging instruments and the securities or market sectors being hedged, (3) the fact that skills needed to use these instruments are different from those needed to select the Sub-Fund s securities and (4) the possible absence of a liquid market for any particular instrument at any particular time, (5) the fact that loss may occur because of the unexpected application of a law or regulation if a contract cannot be enforced and (6) possible impediments to effective portfolio management or the ability to meet redemption. Liquidity of Futures Contracts Futures positions may be illiquid because certain commodity exchanges limit fluctuations in certain futures contract prices during a single day by regulations referred to as daily limit, positions in the future can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. This could prevent a Sub-Fund from liquidating unfavourable positions. Forward Trading Forward contracts and options thereon, unlike futures contracts, are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets, negotiating each transaction on an individual basis. Forward and cash trading is substantially unregulated; there is no limitation on daily price movements and speculative position limits are not applicable. The principals who deal in the forward markets are not required to continue to make markets in the currencies or commodities they trade and these markets can experience periods of illiquidity, sometimes of significant duration. Market illiquidity or disruption could result in major losses to a Sub-Fund. Securities Lending Risk As with any extensions of credit, there are risks of delay and recovery. Should the borrower of securities fail financially or default in any of its obligations under any securities lending transaction, the collateral provided in connection with such transaction will be called upon. The value of the collateral will be maintained to equal or exceed the value of the securities transferred. However there is a risk that the value of the collateral may fall below the value of the securities transferred. In addition, as a Sub-Fund may invest cash collateral received, subject to the conditions and within the limits laid down by the Financial Regulator, a Sub-Fund investing collateral will be exposed to the risk associated with such investments, such as failure or default of the issuer of the relevant security. Accounting, Auditing and Financial Reporting Standards The accounting, auditing and financial reporting standards of many of, if not all of, the emerging market countries in which certain Sub-Funds may invest are likely to be less extensive than those applicable to U.S. or European (including United Kingdom) companies. 16 New Star Global Investment Funds PLC

19 Liquidity Risk The Sub-Fund will endeavour to acquire only such bonds for which a liquid market exists. However, not all bonds invested in by the Sub-Fund will be listed or rated and consequently liquidity may be low. Moreover, the accumulation and disposal of holdings in some bonds may be time consuming and may need to be conducted at unfavourable prices. The Sub-Fund may also encounter difficulties in disposing of assets at their fair price due to adverse market conditions leading to limited liquidity. The financial markets of emerging market countries in general, are less liquid than those of the more developed nations. Purchases and sales of investments may take longer than would otherwise be expected on developed stockmarkets and transactions may need to be conducted at unfavourable prices. Political and/or Regulatory Risk The value of the Sub-Fund's assets may be affected by uncertainties such as international political developments, changes in government policies, changes in taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investment may be made. Furthermore, the legal infrastructure and accounting, auditing and reporting standards in certain countries in which investment may be made may not provide the same degree of investor protection or information to investors as would generally apply in major securities markets. Emerging Market Risk For the Sub-Funds investments in bonds located in countries with emerging securities markets, risks additional to the normal risk inherent in investing in conventional securities may be encountered. These include:- Currency depreciation: The Sub-Fund s assets may be invested in securities which are denominated in currencies other than those of developed countries and any income received by the Sub-Fund from those investments will be received in those currencies. Historically most of the non-developed countries currencies have experienced significant depreciation against the currencies of developed countries. Some of the emerging market currencies may continue to fall in value against currencies of developed countries. Country risk: The value of the Sub-Fund s assets may be affected by uncertainties within each individual emerging market country in which it invests such as changes in government policies, nationalisation of industry, taxation, currency repatriation restrictions and other developments in the law or regulations of the countries in which the Sub-Fund may invest and, in particular, by changes in legislation relating to the level of foreign ownership in companies in some emerging countries. Market practices: Many emerging markets are undergoing a period of rapid growth and are less regulated than many of the world s leading financial markets. In addition, market practices in relation to settlement of securities transactions and custody of assets in emerging markets can provide increased risk to the Sub-Fund and may involve delays in obtaining accurate information on the value of securities (which may as a result affect the calculation of the Net Asset Value). Information quality: Accounting, auditing and financial reporting standards, practices and disclosure requirements applicable to some companies in emerging markets in which the Sub-Fund may invest may differ from those applicable in developed countries in that less information is available to investors and such information may be out of date or carry a lower level of assurance. Sub-Custodial risk: As the Sub-Fund may invest in markets where the trading, settlement and custodial systems are not fully developed, the assets of the Sub-Fund which are traded in such markets and which have been entrusted to sub-custodians in such markets may be exposed to risk in circumstances in which the Custodian will have no liability. In addition to the above risk factors, investors to New Star Euro High Yield Fund should also note:- Default Risk Investment rated below BBB or its equivalent are known as junk bonds. They reflect a greater possibility that the issuers may be unable to make timely payments of interest and principal. If this happens, or is perceived as likely to happen, the values of those investments will usually be more volatile. A default or expect default or expected default could also make it difficult for the Investment Manager or its delegate to sell the investments at prices approximately the values the Investment Manager or its delegate had placed on them. The potential credit risk and price fluctuations are greater for investments that are issued at less than their face value and make payments of interest only at maturity rather than at intervals during the life of the investment. As the Sub-Fund may invest in securities which have low credit status (that is rated below Baa3 by Moody s or BBB by Standard & Poor s or as such other term used by accredited rating agencies) (be they rated or unrated) may represent a higher credit risk than funds which do not invest in such securities. The lower ratings of certain securities held by a Sub-Fund and the unrated nature of others reflect a greater possibility that adverse changes in the financial condition of the issuer, or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to make payments of interest and principal. Such securities carry a higher degree of default risk which may affect the capital value of an investment. Many emerging market countries have accumulated substantial debt service obligations. This may adversely affect their ability to service their debts and increase the likelihood of their defaulting on their obligations. It should also be noted that investment in securities issued by corporations may represent a higher credit risk than investment in securities issued by governments. New Star Global Investment Funds PLC 17

20 APPLICATION, REDEMPTION AND VALUATION Application for Shares Application Procedure Application for the Shares of each Sub-Fund should be in HK Dollars or the denominated currency of the relevant class. Subscription, redemption or distribution money paid or received in respect of a class denominated in a currency other than the denominated currency of the class, will be converted by the HK Representative or a delegate of the Company into or out of the denominated currency of the class at an exchange rate deemed appropriate by the Administrator or a delegate of the Company and such subscription, redemption or distribution money shall be deemed to be in the amounts so converted. The cost of the conversion will be borne by the relevant Shareholder. All applications for Shares should be made to the HK Representative directly in writing and will not normally be processed until receipt by the HK Representative of a completed application form together with relevant anti-money laundering documentation and the receipt of cleared funds. No money should be paid to any intermediary in Hong Kong who is not licensed or registered to carry on Type 1 regulated activity under Part V of the Securities and Futures Ordinance. Applications for Shares must be received by the HK Representative not later than 4.30 p.m. Hong Kong time on the HK Business Day prior to the relevant HK Dealing Day for processing on a HK Dealing Day. Applications received after 4.30 p.m. Hong Kong time will normally be executed on the next HK Dealing Day. The settlement proceeds must normally be paid in cleared funds in Hong Kong Dollars or the designated currency of the relevant class by telegraphic transfer to the bank account specified in the relevant application form prior to the relevant Valuation Point. Shares shall be issued in registered form only and shall be represented on issue by entry in the register of Shareholders. The number of Shares will be calculated to two decimal places. Fractional Shares shall not carry any voting rights. Purchase contract notes will normally be issued within 24 hours after the allocation of Shares. Statements confirming ownership of Shares and outlining all transactions on a Shareholder s account for the relevant period will be issued on a monthly basis or, if specifically requested by the Shareholder, on a quarterly basis. Share confirmations will also be available electronically at the request of the Shareholder. However Shareholders who opt for the electronic method will also be able to receive hard copies on request. Share Certificates will not be issued. Minimum Subscription Applications by way of single subscription shall be subject to a minimum subscription requirement. Different minimum subscriptions may be imposed at the discretion of the Directors on initial and subsequent subscriptions and minimum subscriptions may differ between classes and Sub-Funds. The minimum initial subscription and minimum subsequent subscription (if any) for each class in a Sub-Fund is set out in Appendix 1. In exceptional circumstances, the minimum initial or subsequent subscription may be reduced by the Directors at their discretion either generally or in respect of specific applications. Minimum Holding Shareholders shall be subject to a minimum holding requirement. Differing minimum holding requirements may be imposed at the discretion of the Directors between classes and Sub-Funds. The minimum holding requirement for each class in a Sub-Fund is set out in Appendix 1. In exceptional circumstances, the minimum holding requirement may be reduced by the Directors at their discretion either generally or in respect of specific holdings. Anti-Money Laundering Procedures Measures aimed at the prevention of money laundering may require a detailed verification of the investor's identity. Depending on the circumstances of each application, a detailed verification might not be required where (i) the investor makes payment from an account held in the investor's name at a recognised financial institution or (ii) the application is made through a recognised intermediary. These exceptions will only apply if the financial institution or intermediary referred to above is located within a country recognised in Ireland as having equivalent anti-money laundering regulations or satisfies other applicable conditions. By way of example an individual may be required to produce a copy of a passport or identification card together with evidence of his/her, address such as a utility bill or bank statement and date of birth. In the case of corporate investors, such measures may require production of a certified copy of the certificate of incorporation (and any change of name), memorandum and articles of association (or equivalent), the names, occupations, dates of birth and resident and business address of all directors. Additional information may be required at the Company or its delegate s discretion in order to verify the bank account details in relation to the subscription monies. Shares cannot be applied to an account unless full details of registration have been received and appropriate anti-money laundering requirements have been complied with. The Company or its delegate reserves the right to request such further information (including a bank reference) as they believe in their absolute discretion is necessary to verify the identity of the applicant. In the event of a delay or failure by the applicant to produce any information required for verification purposes, the Company and/or its delegate reserve the right to refuse to accept the application and subscription monies. Market Timing The Directors may refuse to accept a new subscription if, in the opinion of the Directors, they have reasonable grounds, for refusing to accept a subscription. In particular, the Directors may exercise this discretion if they reasonably believe the Shareholder has been or intends to engage in market timing activities. For these purposes, market timing activities include investment techniques which involve short term trading in and out of Shares in the Sub-Funds generally to take advantage of variations in the price of Shares between the daily Valuation Points of the Sub-Funds. 18 New Star Global Investment Funds PLC

21 Short term trading of this nature may often be detrimental to long term Shareholders, in particular the frequency of dealing may lead to additional dealing costs which can affect long term performance. Investments may be made into the Sub-Funds via nominee or similar omnibus accounts. For the purposes of monitoring and detecting potential market timing activity, the Directors' responsibilities will be restricted to the registered legal holder of Shares rather than any underlying beneficial holder. The Directors will co-operate in helping to deter any potential market timing activities that the registered legal holder has detected in his monitoring of his underlying beneficial holders. Data Protection Information Prospective investors should note that by completing the application form they are providing personal information to the Company, which may constitute personal data within the meaning of data protection legislation in Hong Kong. This data will be used for the purposes of client identification, administration, statistical analysis, market research, to comply with any applicable legal or regulatory requirements and, if an applicant's consent is given, for direct marketing purposes. Data may be disclosed to third parties including regulatory bodies, tax authorities in accordance with the European Savings Directive, delegates, advisers and service providers of the Company and their or the Company's duly authorised agents and any of their respective related, associated or affiliated companies wherever located for the purposes specified. By signing the application form, investors consent to the obtaining, holding, use, disclosure and processing of data for any one or more of the purposes set out in the application form. Investors have a right to obtain a copy of their personal data kept by the Company on payment of a fee and the right to rectify any inaccuracies in personal data held by the Company. Issue of Shares Further Issues Shares shall only be issued on a Dealing Day at the Subscription Price for the relevant class. The Subscription Price for a class is the Net Asset Value per Share of that class calculated as at the Valuation Point. A subscription fee may be imposed which may differ between classes and Sub-Funds provided that such fee shall at no time exceed 6.0% of the total subscription amount. Any such subscription fee payable in respect of any Sub-Fund may be deducted from the total subscription amount and will be paid to the Manager for its absolute use and benefit and shall not form part of the assets of the relevant Sub-Fund. The Manager may at its sole discretion reduce or waive such fee or fees or differentiate between applicants as to the amount of such fee or fees. The Manager may also at its sole discretion pay a portion of such subscription fee to the Distributor. Where the Company receives substantial net subscription requests for Shares of a Sub-Fund on any Dealing Day and the Directors or the Manager in their absolute discretion consider that the interests of the Shareholders require them to do so the Directors or the Manager may apply to the Net Asset Value per Share a sum as an anti-dilution levy, to cover actual dealing costs and to preserve the value of the underlying assets of the Sub-Fund. Any such sum will be paid to the relevant Sub-Fund. Redemption of Shares Shares may be redeemed, at the option of the relevant Shareholder, on any HK Dealing Day. Such requests will be processed on the HK Dealing Day at the Redemption Price for the relevant class of the particular Sub-Fund calculated as at the relevant Valuation Point. The Redemption Price for a class is the Net Asset Value per Share of that class. A redemption fee may be imposed, which may differ between classes and Sub-Funds and which shall at no time exceed 3.0% of the total redemption amount. Any such redemption fee will be deducted from the total redemption amount and will be paid to the Manager for its absolute use and benefit. The Manager may at its sole discretion waive such fee or differentiate between applicants as to the amount of such fee or fees. All requests for redemption must be duly authorized by the Shareholder and received (by post, by facsimile with original to be followed by post or by such other means as may be prescribed by the Directors from time to time) by the HK Representative no later than 4:30 pm on the Business Day prior to the relevant HK Dealing Day. Any requests for redemption received after that time will be dealt with on the HK Dealing Day following the next Valuation Point. Redemption orders will only be processed on receipt of faxed instructions where payment is made to the account of record. Redemption proceeds will only be returned to a bank account held in the name of the registered Shareholder(s). Subject to the prior receipt by the HK Representative of the original subscription application form and all documentation required by the HK Representative (including any documentation in connection with anti-money laundering procedures) and the completion of anti-money laundering procedures, the full redemption proceeds will be dispatched in the denominated currency of the relevant class within one month of receipt of the original redemption request and normally within seven Business Days after the HK Dealing Day on which the redemption is effected by telegraphic transfer to the bank account designated by and in the Shareholders name or such other method as the Administrator deems appropriate in its sole discretion. The Company may at its discretion and with the consent of the individual Shareholders, satisfy any request for redemption of Shares by the transfer in specie to those Shareholders of assets of the relevant Sub-Fund having a value equal to the Redemption Price for the Shares redeemed as if the redemption proceeds were paid in cash less any redemption charge and other expenses of the transfer provided that asset allocation is subject to the approval of the Custodian. A determination to provide redemption in specie may be at the discretion of the Company and with the consent of individual shareholders where the redeeming Shareholder request redemption of a number of Shares that represent 5% or more of the net asset value of the Sub-Fund. In this event, the Company will, if requested sell the asset or assets proposed to be distributed in specie and the distribution to such Shareholder of the cash proceeds of such sale, the costs of which shall be borne by the relevant Shareholder. Anti-Dilution levy When a Sub-Fund receives subscriptions the actual cost of buying may be higher than the mid-market value used in calculating the Share price. This may be caused, for example, by dealing costs, or through dealing at prices other than the mid-market price. The New Star Global Investment Funds PLC 19

22 difference between the value of the subscription and the costs of purchasing underlying investments effectively dilutes the value of existing Shareholders' holdings. A similar effect may be caused when realising investments in order to fund redemption requests. Where this dilution effect may become material, the Directors or Manager reserves the right to impose an anti-dilution levy on subscriptions or redemptions to protect the interests of existing Shareholders. The levy is received by the Sub-Fund and intended to ensure that the costs borne by the existing/continuing Shareholders are neutralised. It is therefore a transfer payment between the investor making the subscription or redemption and the existing/continuing Shareholders. Circumstances In Which An Anti-Dilution Levy May Be Imposed The need to impose an anti-dilution levy will depend on the volume of net purchases or redemptions, as described below. The Directors or Manager may charge an anti-dilution levy on any purchase or redemption of Shares if, in its opinion, the existing Shareholders for purchases) or continuing Shareholders (for redemptions) might otherwise materially be adversely affected. An antidilution levy may be imposed on all or only part of the subscriptions or redemptions at a particular Valuation Point. An anti-dilution levy must be imposed only in a manner that so far as practicable, is fair to all Shareholders or potential Shareholders. In particular, the anti-dilution levy may be charged in the following circumstances: 1. on a Sub-Fund experiencing large levels of net subscriptions (i.e. subscriptions less redemptions) relative to its size, either at a particular Valuation Point or cumulatively over a period of time; 2. on a Sub-Fund experiencing large levels of net redemptions (i.e. redemptions less purchases) relative to its size, either at a particular Valuation Point or cumulatively over a period of time; 3. on "large deals". For these purposes, a large deal is defined as a purchase or a redemption of 3% or more of the value of a Sub-Fund, or a deal in excess of US$450,000 or its equivalent in Euro or Sterling. Where a series of linked transactions are made by a single Shareholder, these may be treated a single deal for the purposes of monitoring the need to impose an anti-dilution levy; 4. in any other case where the Directors or Manager are of the opinion that the interests of existing/continuing Shareholders require the imposition of an anti-dilution levy. The Company may, at the discretion of the Directors or the Manager, satisfy any application for repurchase of Shares by the transfer to those Shareholders of assets of the relevant Sub-Fund in specie or, if requested by the Shareholder the net proceeds of sale of the relevant property to the Shareholder. The Directors have resolved that they will only exercise this discretion in exceptional circumstances where to do so would be for the benefit of Shareholders as a whole and would not materially prejudice any individual Shareholder without its consent. If the number of Shares in a Sub-Fund falling to be redeemed on any HK Dealing Day is equal to one-tenth or more of the total number of Shares in issue or deemed to be in issue in that Sub-Fund on such HK Dealing Day, the Directors may in their absolute discretion refuse to redeem any Shares in excess of one-tenth of the total number of Shares in that Sub-Fund in issue or deemed to be in issue and the Shares which are not redeemed by reason of such refusal shall be treated as if a request for redemption had been made in respect of each subsequent Valuation Day until all the Shares to which the original request related have been redeemed. The Directors have resolved that they will only exercise this discretion in exceptional circumstances when to do so would be for the benefit of Shareholders as a whole and would not materially prejudice any individual Shareholder without his/her consent. The right of any Shareholder to require the redemption of Shares will be temporarily suspended during any period when the calculation of the Net Asset Value per Share of the relevant Sub-Fund is suspended by the Company in the circumstances set out under Calculation of Net Asset Value. Requests for redemption will be irrevocable except in the event of a suspension of redemptions or at the Directors absolute discretion. All of the aforementioned payments and transfers will be made subject to any withholding tax or other deductions which may apply. Restrictions on Ownership, Compulsory Redemption and Transfer of Shares At any time the Company may, by giving neither less than four nor more than twelve weeks notice (expiring on a Dealing Day) to all Shareholders in the Company or in any Sub-Fund, redeem at the Redemption Price on such Dealing Day, all (but not some) of the Shares in the Company or in the relevant Sub-Fund not previously redeemed. It is intended that this power may be used in the following or any analogous circumstances if the Company or the relevant Sub-Fund is no longer an authorised UCITS; or if any law is passed which renders it illegal or in the reasonable opinion of the Directors, impracticable or inadvisable to continue the Company or the relevant Sub-Fund; or if within a period of three months from the date on which the Custodian notifies the Company of its desire to retire in accordance with the terms of the Custodian Agreement, or from the date on which the appointment of the Custodian is terminated by the Company in accordance with the terms of the Custodian Agreement, or from the date on which the Custodian ceases to be approved by the Financial Regulator, no new Custodian shall have been appointed; or if the Directors (with the consent of the Custodian) are of the opinion that the relevant Sub-Fund is no longer viable. The Company, the Administrator and the HK Representative each reserve the right to reject an application, for any reason, in whole or in part, in which event the application money or any balance thereof will be returned to the applicant by telegraphic transfer to the applicants designated account or by post at the applicants risk. The Directors may restrict the ownership of Shares by any person, firm or corporation where such ownership would be in breach of any regulatory or legal requirement, including without limitation, any applicable exchange control regulation or by a U.S. Person or 20 New Star Global Investment Funds PLC

23 by a person or persons in circumstances giving rise to a liability of the Company to taxation or withholding tax and such Shareholder shall indemnify the Company, the Directors, the Manager, the Custodian and Shareholders for any loss suffered by it or them as a result of such person or persons acquiring or holding Shares in the Company. If the disposal, redemption or transfer of Shares by a Shareholder or a distribution to a Shareholder gives rise to a liability to taxation or withholding tax, the Directors shall be entitled to: (i) deduct from the payment due to such Shareholder an amount sufficient to discharge the tax liability (including any interest or penalties thereon); (ii) refuse to register any transfer which gives rise to such a liability; or (iii) appropriate and cancel such number of Shares held by such Shareholder as have a value sufficient to discharge the tax liability (including interest or penalties thereon). Switching of Shares Subject to the following conditions, Shareholders have the right on any Dealing Day to switch some or all of their Shares to Shares in another class or Sub-Fund (whether in the same or a different Sub-Fund), subject to a switching charge of up to 6% as may be decided at the discretion of the Manager. Switching requests duly made cannot be withdrawn without the consent of the Directors, except in any circumstances in which the relevant Shareholder would be entitled to withdraw a redemption request for those Shares. Requests for switching should be received by the HK Representative no later than 4.30pm on the HK Business Day prior to the relevant HK Dealing Day. Switching of Shares shall be effected by the redemption of such Shares in the original class (save that the redemption monies shall not be released to the applicant) and the allotment and issue of Shares of the new class. Such redemption shall take place on the Dealing Day as at the Valuation Point for the original class and such allotment shall take place on the same Dealing Day as at the same Valuation Point for the new class, or if the Valuation Point is not the same, on the next succeeding Valuation Point for the new class. The number of Shares of the new class to be issued will be calculated in accordance with the following formula:- S = (R x RP x ER)-F SP where S is the number of Shares of the new class or Sub-Fund to be issued. R is the number of Shares in the original class or Sub-Fund to be converted. RP is the Redemption Price per Share of the original class or Sub-Fund calculated as at the relevant Valuation Point. ER is the currency conversion factor (if any) determined by the Administrator on the relevant Valuation Day as representing the effective rate of exchange applicable to the transfer of assets between relevant classes or Sub-Funds after adjusting such rate as may be necessary to reflect the effective costs of making such re-investment. SP is the Subscription Price per Share of the new class or Sub-Fund calculated as at the Valuation Point for the relevant Dealing Day. F is any fee payable on switching. The number of Shares will be calculated to two decimal places. Fractional Shares shall not carry any voting rights. A Shareholder switching from the original class or Sub-Fund to a different class or Sub-Fund must comply with the minimum initial and subsequent subscription amounts applicable to that class or Sub-Fund as set out in Appendix I. Transfer of Shares Shares may be transferred by instrument in writing on receipt of original correctly completed documentation and in accordance with the requirements of the Administrator as to anti-money laundering procedures and otherwise. Calculation of Net Asset Value The Articles provide for the Directors to calculate the Net Asset Value of each Sub-Fund and the Net Asset Value per Share on each Dealing Day. The Net Asset Value shall be calculated as at the Valuation Point. The Directors have delegated the calculation of the Net Asset Value of each Sub-Fund and the Net Asset Value per Share to the Manager who has in turn delegated this function to the Administrator The Administrator will calculate the Net Asset Value of a Sub-Fund on each Dealing Day by deducting the Sub-Fund s liabilities (other than the different costs, entitlements or liabilities which apply to each class of sub-fund), from the value of the Sub-Fund s assets as at the Valuation Point for that Dealing Day. The Net Asset Value per Share of each Sub-Fund on each Dealing Day is determined by dividing the Net Asset Value of the assets of the Sub-Fund by the number of Shares in issue of the relevant Sub-Fund, as appropriate, on the relevant Dealing Day as at the Valuation Point. The Net Asset Value per Share shall be rounded mathematically to four decimal places. Where more than one class of Share is in issue in respect of a Sub-Fund, the Net Asset Value of the relevant Sub-Fund shall be allocated between each class based on the Net Asset Value of the Shares of each class as at the immediately preceding Valuation Point plus or minus any subscriptions or redemptions. The portion of the Net Asset Value of each Sub-Fund attributable to each class shall then be divided by the number of Shares of the relevant class in issue at the relevant Valuation Point. The value per Share in each class shall then be converted into the relevant currency of denomination of the class at prevailing exchange rates applied by the Administrator in order to calculate the Net Asset Value per Share of the relevant class. New Star Global Investment Funds PLC 21

24 The Administrator, with the consent of the Custodian, at any time and from time to time may temporarily suspend the calculation of the Net Asset Value of a particular Sub-Fund and the issue, redemption and conversion of Shares. Notice of any such suspension and notice of the termination of any such suspension shall be given immediately to the Financial Regulator, issued immediately to the South China Morning Post and the Hong Kong Economic Times for publication and at least once a month thereafter during the period of suspension and, in addition, notified directly to Shareholders if, in the opinion of the Administrator, it is likely to exceed fourteen days. It will also be notified to applicants for Shares or to Shareholders requesting the redemption of Shares at the time of application or filing of the written request for such redemption. Where possible, all reasonable steps will be taken to bring any period of suspension to an end as soon as possible. The Directors, with the consent of the Custodian, at any time and from time to time may temporarily suspend the calculation of the Net Asset Value of a particular Sub-Fund and the issue, redemption and conversion of Shares in any of the following instances:- (a) during any period (other than ordinary holiday or customary weekend closings) when any market or Recognised Exchange is closed and which is the main market or Recognised Exchange for a significant part of the investments of the relevant Sub- Fund, or in which trading thereon is restricted or suspended; (b) during any period when an emergency exists as a result of which disposal by the Sub-Fund of investments which constitute a substantial portion of the assets of the Sub-Fund is not practically feasible; or it is not possible to transfer monies involved in the acquisition or disposition of investments at normal rates of exchange; or it is not practically feasible for the Directors or their delegates to fairly determine the value of any investments of the relevant Sub-Fund; (c) during any breakdown in the means of communication normally employed in determining the price of any of the investments of the relevant Sub-Fund or of current prices on any market or Recognised Exchange; (d) when for any reason the prices of any investments of the relevant Sub-Fund cannot be reasonably, promptly or accurately ascertained; or (e) during any period when the remittance of money which will or may be involved in the realisation of or in the payment for any of the investments of the relevant Sub-Fund cannot, in the opinion of the Directors or their delegate be carried out at normal rates of exchange. Notice of any such suspension and notice of the termination of any such suspension shall be given immediately to the Financial Regulator, issued immediately to the South China Morning Post and the Hong Kong Economic Times for publication and at least once a month thereafter during the period of suspension and, in addition, notified directly to Shareholders if in the opinion of the Directors or their delegate it is likely to exceed fourteen days. It will also be notified to applicants for Shares or to Shareholders requesting the redemption of Shares at the time of application or filing of the written request for such redemption. Where possible, all reasonable steps will be taken to bring any period of suspension to an end as soon as possible. Publication of Net Asset Value per Share Except where the determination of the Net Asset Value of a Sub-Fund, the Net Asset Value per Share and/or the issue and redemption of Shares has been suspended in the circumstances described above, the Net Asset Value per Share of each class on each Dealing Day will be made public at the office of the Administrator and be issued to the Financial Times, the South China Morning Post and The Hong Kong Economic Times for publication and to such other publications as the Directors may determine Fees and Expenses The Company s preliminary and organisational expenses, the costs and expenses of and those incidental to the placing or offer of Shares and the cost of preparation of the material contracts, including legal fees and expenses (exclusive of VAT, if any) will not exceed 0.25% (plus VAT, if any) of the initial Net Asset Value of the Company. Such costs and expenses will be charged to the Company as an expense in the first year of operation and borne by each of the Sub-Funds on a pro rata basis. Where fees are stated to be paid out of the assets of the Company as a whole or calculated on the Net Asset Value of the Company as a whole they shall be borne jointly by all the Sub-Funds pro rata to their respective Net Asset Values at the time when the allocation is made. Any expenses which are directly or indirectly attributable to a particular Sub-Fund shall be borne solely by that Sub-Fund. Any expenses which are directly or indirectly attributable to a particular class shall be attributed to that class. The establishment costs of the New Star Asian Opportunities Fund, New Star European Growth Fund, New Star Japan Recovery Fund, New Star UK Dynamic Fund, New Star US Opportunities Fund and New Star Global Emerging Markets Fund have already been amortised. The establishment costs of the New Star Euro High Yield Fund are expected to be in the region of 2,500 and the establishment costs of the New Star Pan-European Equity Fund are expected to be in the region of 4,000. These establishment costs will be amortised over a period of one year. Otherwise, and as stated below, fees and expenses shall be borne solely by the relevant Sub-Fund. The Manager The Manager shall be entitled to receive out of the assets of a Sub-Fund an annual management fee in respect of each class, accruing daily and payable monthly in arrears at the rate, as set out in the Appendix 1 up to 1.75% of the average daily Net Asset Value of the relevant class of the relevant Sub-Fund. The Company or the relevant Sub-Fund shall also pay the out-of-pocket expenses of the Manager incurred in carrying out its day to day activities under the Management Agreement. 22 New Star Global Investment Funds PLC

25 The Investment Manager The Manager shall pay out of the fee received by it, the fees of the Investment Manager at an annual rate agreed between the parties. In addition, the Manager shall reimburse the Investment Manager out of the assets of the relevant Sub-Fund all reasonable out of pocket expenses incurred by it pursuant to the Investment Management Agreement. The Administrator The Manager shall pay to the Administrator out of the assets of each Sub-Fund an annual fee for fund administration (plus VAT, if any) calculated as a percentage of the Net Asset Value of each Sub-Fund, which shall not exceed 0.12% of the Net Asset Value of each Sub-Fund, subject to a total minimum fee per month of 4,000 in respect of each Sub-Fund. Such total minimum fee will be allocated between the Sub-Funds based on the Net Asset Value of each Sub-Fund. In addition the Administrator will receive a fee of 500 per month per Share Class which will be allocated to the relevant Sub-Fund as a whole, plus transfer agency fees, charged at normal commercial rates. The fees shall accrue daily and be payable monthly in arrears. The Administrator shall also be entitled to be repaid by the Manager out of the assets of the Company or the relevant Sub-Fund all of its reasonable out-of-pocket expenses incurred on behalf of the Company which shall include without limitation any stamp duties, advertising fees, printing fees and registration fees. The Custodian The Company shall pay to the Custodian out of the assets of each Sub-Fund an annual fee which shall accrue daily and be payable monthly in arrears not exceeding 0.03% of the Net Asset Value of the relevant Sub-Fund (plus VAT, if any). The Company shall in addition pay to the Custodian out of the assets of the relevant Sub-Fund, the fees (plus VAT, if any) of any sub-custodian (at normal commercial rates) appointed by it in respect of that Sub-Fund. The Custodian shall also be entitled to be repaid out of the assets of each Sub-Fund all reasonable out-of-pocket expenses incurred by it on behalf of the relevant Sub-Fund, together with any transaction charges or security holding charges at a rate agreed by the Company and the Custodian (being normal commercial rates). The Hong Kong Representative The fees of the HK Representative amount to up to USD9,000 per annum and shall be out of the assets of the Company or the relevant Sub-Funds. This may increase with the registration of additional Sub-Funds in Hong Kong but shall be at normal commercial rates. The HK Representative shall also be entitled to transactional fees for specific additional services and also to be repaid, out of the assets of the Company or the relevant Sub-Fund its reasonable out of pocket expenses incurred in rendering its services pursuant to the HK Representative Agreement which shall include postage, courier, cable, telephone and facsimile charges. The Distributors The Manager may at its sole discretion pay an annual fee to the Distributors which will be payable by the Manager out of its fee. The Manager may also, at its sole discretion, pay to the Distributors a portion of any subscription fee and/or redemption fee. The Promoter The Manager may, at its sole discretion, pay an annual fee to the Promoter which will be payable by the Manager out of its fee. The Manager may also, at its sole discretion, pay to the Promoter a portion of any subscription fee and/or redemption fee. Directors The Company shall pay the Directors such annual remuneration for acting as directors of the Company as the Directors may from time to time agree, provided however that the annual remuneration of the Directors shall not, in the aggregate, exceed US$75,000. Such fees shall be payable semi-annually in arrears and shall be apportioned equally amongst the Sub-Funds. The Directors who are officers or employees within the New Star Asset Management Group Limited may assign or authorise the Company to pay any such fee to New Star Asset Management Limited. No other remuneration will be payable by the Company to the Directors except for the out-of-pocket expenses reasonably incurred by them in connection with their duties. Fund Supermarkets Where the Company is represented on fund supermarkets or other investment links to multi-manager products, fees and expenses associated with the provision of these services may be payable by the Company. Soft Commission The Manager or the Investment Manager may effect transactions by or through the agency of another person with whom the Manager or the Investment Manager and any entity related to the Manager or the Investment Manager have arrangements, under which that party will from time to time provide or procure the Manager or the Investment Manager or any party related to the Manager or the Investment Manager goods, services or other benefits such as research and advisory services, computer hardware associated with specialised software for research and performance measures etc., the nature of which is such that their provision may reasonably be expected to benefit a Sub-Fund and may contribute to an improvement in the performance of a Sub-Fund and of the Manager or the Investment Manager or any entity related to the Manager or the Investment Manager in providing services to a Sub-Fund and for which no direct payment is made but instead the Manager or the Investment Manager and any entity related to the Manager or the Investment Manager and/or any undertake to place business with that party. For the avoidance of doubt, such goods and services do not include travel, accommodation, entertainment, general administrative goods or services, general office equipment or premises, membership fees, employees salaries or direct money payments. Where the Manager or the Investment Manager enters into soft commission arrangements, it or they will ensure that: New Star Global Investment Funds PLC 23

26 (i) the broker or counterparty to the arrangement has agreed to provide best execution to the Sub-Fund; (ii) benefits provided under the arrangement must be those which assist in the provision of investment services to the Sub-Fund; and (iii) there is adequate disclosure in the periodic reports issued by the Company. General In addition, each Sub-Fund will pay certain other costs and expenses incurred in its operation, including, without limitation, taxes, government duties, expenses for legal, auditing and consulting services, bank charges, company secretarial fees, costs of preparation, printing and distribution of reports and notices, expenses of Shareholders meetings, general stationery expenses, insurance costs (including directors and officers insurance costs) and expenses of publication and distribution of Net Asset Values, costs of periodic update to the Prospectus, custody and transfer fees, registration fees (to include all fees in connection with obtaining advance treaty clearances from tax authorities in any jurisdiction for a Sub-Fund and other fees due to supervisory authorities in various jurisdictions and all expenses incurred in connection therewith), insurance, interest, brokerage costs, the fees of any paying agents appointed by the Manager (which will be at normal commercial rates) and all professional fees and expenses incurred in connection therewith and the cost of the publication of the Net Asset Value of a Sub-Fund. Each Sub-Fund will also pay its pro rata share of the issue costs, charges and expenses (including the fees of the legal advisers) in relation to the preparation of the Prospectus and all other documents and matters relating to or concerning the issue of Shares and any other fees, charges and expenses on the creation and issue of the Shares. Each Sub-Fund will pay the costs of obtaining and maintaining a listing of its Shares on any stock exchange. For so long as a Sub-Fund is authorised by the SFC expenses relating to advertising and/or promotional activities will not be charged to that Sub-Fund. Increase of Fees Any increase in the fees of the Manager will require the prior consent of the Shareholders, by way of resolution passed at a General Meeting of the Company as will an increase in the maximum amount of any subscription, redemption or switching fee. Where less than the maximum permitted subscription fee, redemption fee or switching fee is currently charged the Directors must give at least three month s notice to Shareholders of any proposed increase up to the amount of the maximum. Other Charges Your financial adviser may charge you additional fees or commissions other than those disclosed in this Offering Document. Shareholders should speak with their financial adviser regarding any additional fees or commissions which they may be charged. Taxation General The following is of a general nature and does not purport to deal with all of the tax consequences applicable to the Company, its Sub-Funds or to all categories of investors, some of whom may be subject to special rules. Shareholders and potential investors should consult their professional advisers concerning possible taxation or other consequences of purchasing, holding, selling, converting or otherwise disposing of the Shares under the laws of Hong Kong and in the light of their particular circumstances. The following general statements on taxation are based on advice received by the Directors regarding the law and practice in force in Ireland at the date of this Hong Kong Offering Document. As is the case with any investment, there can be no guarantee that the tax position or proposed tax position prevailing at the date of this Hong Kong Offering Document will apply at any other date. Taxation of the Company in Ireland The Company is an Investment Undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997, and therefore, will not be subject to Irish tax on its income or gains other than gains arising on the happening of a chargeable event as outlined below. Chargeable events Generally a chargeable event arises on any distribution, redemption, repurchase, cancellation or transfer of Shares. However the Sub-Funds will not be subject to Irish tax on chargeable events for certain types of investors including inter alia investors who are non-resident in Ireland. Rate of tax Where the Company is liable to account for Irish tax on gains arising on chargeable events the rate of tax is 20% for distributions (where payments are made annually or at more frequent intervals) and 23% for all other chargeable events. Recovery of tax by Company The Company is entitled to deduct any tax arising from payments to the Shareholder or where no payment is involved to cancel or appropriate sufficient Shares of the Shareholder to meet the tax liability. Other relevant Irish taxes As an Investment Undertaking, distributions paid by the Company are not subject to Irish dividend withholding tax in most circumstances. 24 New Star Global Investment Funds PLC

27 Dividends received by the Company from investment in Irish equities may be subject to Irish dividend withholding tax (currently 20%). However, where the Company makes an appropriate declaration, it will be entitled to receive such dividends on Irish equities without deduction of tax. Generally no stamp duty or other tax is payable in Ireland on the issue, redemption or transfer of Shares in the Company. Distributions and interest receipts on securities issued in countries other than Ireland may be subject to taxes including withholding taxes imposed by such countries. The Company may not be able to benefit from a reduction in the rate of withholding tax under any double taxation agreement in operation between Ireland and other countries. Hong Kong The Company is authorized under Section 104 of the Securities and Futures Ordinance and as a result is exempt from Hong Kong profits tax provided it is carried on in accordance with the purposes stated in its constitutive documents as approved by the SFC and provided it is carried on in accordance with the requirements of the SFC. Investors would not normally be liable to Hong Kong profits tax on gains realised on the sale or redemption of Shares except where the acquisition and disposal of Shares is or forms part of a trade, profession or business carried on by the investor in Hong Kong. Potential investors should take advice from their own professional advisers as to their particular tax position. General Information 1. Incorporation, Registered Office and Share Capital (a) The Company was incorporated in Ireland on the 27 March 2002 as an open-ended umbrella type investment company with variable capital and segregated liability between funds (registered no ) under the name of New Star Global Investment Funds PLC. The registered office of the Company is Fleming Court, Fleming Place, Dublin 4, Ireland. (b) The share capital of the Company is as follows:- Share Capital Shares Authorised and issued 38,100 Management Shares of 1 each have been issued for the purposes of incorporation. Shares Authorised and unissued: 500,000,000,000 Shares (c) No capital of the Company is under option or agreed conditionally or unconditionally to be put under option. (d) Shares carry no pre-emption rights. 2. Accounts and Information The Accounting Date will be 31 May in each year. Annual reports and audited accounts of the Company will be sent to Shareholders and sent to the Financial Regulator within four months from the end of the period to which they relate. The first annual report was dated 31 May Unaudited semi-annual reports will be prepared and will be sent to Shareholders and sent to the Financial Regulator within two months of the end of the semi annual accounting period ending on 30 November in each year. The first semi-annual report was dated 30 November Borrowing Powers Subject to the limits laid down by the Financial Regulator, the Directors may exercise all powers of the Company to borrow money, to mortgage or charge its undertaking, property, or any part thereof. 4. General Meetings The annual general meeting of the Company will be held in Dublin, normally during the month of September or such other date as the Directors may determine. Notice convening the annual general meeting in each year at which the audited financial statements of the Company will be presented (together with the Directors and auditors reports of the Company) will be sent to Shareholders at their registered addresses not less than 21 clear days before the date fixed for the meeting. Other general meetings may be convened from time to time by the Directors in such manner as provided by Irish law. 5. Winding Up Provisions If the Directors decide that it is in the best interests of Shareholders to wind up the Company, the secretary shall forthwith at the Directors request, convene an extraordinary general meeting of the Company to consider a proposal to appoint a liquidator to wind up the Company. The liquidator, on appointment, will firstly apply the assets of the Company in satisfaction of creditors claims as he deems appropriate. The assets of the Company will then be distributed amongst the Shareholders. The assets available for distribution amongst the Shareholders shall be applied as follows: (i) firstly, those assets attributable to a particular Sub-Fund shall be paid to the holders of Shares in that Sub-Fund; (ii) secondly, any balance then remaining and not attributable to any Sub-Fund shall be apportioned between the Sub-Funds pro-rata to the Net Asset Value of each Sub-Fund immediately prior to any distribution to Shareholders and the amounts so apportioned shall be paid to Shareholders pro-rata to the number of Shares in that Sub-Fund held by them; and New Star Global Investment Funds PLC 25

28 (iii) thirdly, in the payment to holders of Management Shares of sums up to the nominal amount paid thereon. In the event that there are insufficient assets as aforesaid to enable such payment in full to be made, no recourse shall be had to any of the other assets of the Company. On a winding-up, some or all of the assets of the company may be distributed to Shareholders by way of in specie distribution in accordance with the provisions of the Articles. In such circumstances, a Shareholder may elect not to accept such an in specie distribution but to be paid in cash instead, the costs of the sale of such assets being borne by the relevant Shareholder. 6. Documents Available for Inspection Copies of the following documents may be inspected during usual business hours on any Business Day at the office of the HK Representative: (a) the Memorandum and Articles of Association of the Company; (b) the Management Agreement, dated 2nd of May 2002 and entered into between the Manager and the Company; (c) the Administration Agreement, dated 2nd of May 2002 and entered into between the Manager and the Administrator; (d) the Custodian Agreement, dated 2nd of May 2002 and entered into between the Custodian and the Company; (e) the Investment Management Agreement, dated 2nd of May 2002 and entered into between the Investment Manager and the Company; (f) the HK Representative Agreement dated 21 January 2003 and entered into between HSBC Trustee (Hong Kong) Limited, the Manager and the Company and novated by way of novation agreement dated 30th of November 2005 to the HK Representative; (g) the Hong Kong Promotion Agreement dated 21st of January 2003 and entered into between the Manager, the Company and the Promoter; Copies of the Articles of Association, copies of the annual reports, the subsequent semi-annual reports (if published thereafter) and the Subscription Price and Redemption Price of Shares may also be obtained at the office of the HK Representative free of charge. Copies of the Irish Prospectus and the Simplified Prospectus of the Company are available on request free of charge from the office of the Administrator in Dublin as set out overleaf. Information in relation to the Sub-Funds is also available from the following website: This website also contains reference to collective investment schemes which are not authorized by the SFC and this website is also referred to in the Simplified Prospectus of the Company. Investors should note that the performance data of the Sub-Funds set out in the Simplified Prospectus is based on the Net Asset Value of the relevant Sub Funds. 26 New Star Global Investment Funds PLC

29 Directory Registered Office Fleming Court Fleming Place Dublin 4 Ireland Directors Donald P. Lines OBE Chairman Howard J Covington Deputy Chairman Philip A. Butt Paul D Alton David Dillon Manager New Star Investment Funds (Ireland) Limited Fleming Court Fleming Place Dublin 4 Ireland Investment Manager New Star Asset Management Limited 1 Knightsbridge Green London SW1X 7NE United Kingdom Regulated in the UK by the FSA Custodian State Street Custodial Services (Ireland) Limited Guild House Guild Street International Financial Services Centre Dublin 1 Ireland Auditors KPMG Chartered Accountants 5 George s Dock International Financial Services Centre Dublin 1 Ireland Administration, Registrar and Transfer Agent State Street Fund Services (Ireland) Limited Guild House Guild Street International Financial Services Centre Dublin 1 Ireland Secretary New Star Investment Funds (Ireland) Limited Fleming Court Fleming Place Dublin 4 Ireland New Star Global Investment Funds PLC 27

30 Legal Advisers Dillon Eustace Grand Canal House 1 Upper Grand Canal Street Dublin 4 Ireland Deacons 5th Floor Alexandra House 18 Chater Road Central Hong Kong HK Promoter New Star International Investment Products (Asia) Limited 1502 York House The Landmark 15 Queen s Road Central Hong Kong Joint Distributors New Star Asset Management (Bermuda) Limited 31 Queen Street Hamilton HMII Bermuda and New Star Asset Management Limited 1 Knightsbridge Green London SW1X 7NE United Kingdom and New Star Investment Funds (Ireland) Limited Fleming Court Fleming Place Dublin 4 Ireland HK Representative HSBC Institutional Trust Services (Asia) Limited 1 Queens Road Central Hong Kong 28 New Star Global Investment Funds PLC

31 Appendix 1 Share Class Details Each Sub-Fund has three designated classes of Reinvestment Shares with the exception of the New Star Euro High Yield Fund and the New Star Pan-European Equity Fund (full details of which are provided below) distinguished by a designated currency and the fees payable in respect of such Shares are as follows: New Star Asian Opportunities Fund New Subscriptions -- USD Shares Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee USD Up to 5.25% Nil US$5,000 per Sub-Fund US$10,000 in Company US$5,000 per Sub-Fund US$10,000 in Company 1.75% Classes closed to new Investors EUR Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company Sterling Up to 5.25% Nil 3,500 per Sub-Fund 7,000 in Company 5,000 per Sub-Fund 10,000 in Company 3,500 per Sub-Fund 7,000 in Company 1.75% 1.75% New Star European Growth Fund New Subscriptions -- Euro Shares and "Institutional" Shares (denominated in Euro) Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee EUR Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company 5,000 per Sub-Fund 10,000 in Company 1.75% USD Up to 5.25% Nil US$5,000 per Sub-Fund US$10,000 in Company US$5,000 per Sub-Fund US$10,000 in Company 1.75% Institutional Euro Institutional USD Nil Nil EUR 10 million EUR 10 million 1.00% 2 Nil Nil USD 12 million USD 12 million 1.00% 2 Classes closed to new investors Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee Sterling Up to 5.25% Nil 3,500 per Sub-Fund 7,000 in Company 3,500 per Sub-Fund 7,000 in Company 1.75% New Star Global Investment Funds PLC 29

32 New Star Japan Recovery Fund New Subscriptions -- USD Shares Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee USD Up to 5.25% Nil US$5,000 per Sub-Fund US$10,000 in Company US$5,000 per Sub-Fund US$10,000 in Company 1.75% Classes closed to new Investors EUR Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company Sterling Up to 5.25% Nil 3,500 per Sub-Fund 7,000 in Company 5,000 per Sub-Fund 10,000 in Company 3,500 per Sub-Fund 7,000 in Company 1.75% 1.75% New Star UK Dynamic Fund New Subscriptions -- Sterling Shares Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee Sterling Up to 5.25% Nil 3,500 per Sub-Fund 7,000 in Company 3,500 per Sub-Fund 7,000 in Company 1.75% Classes closed to new Investors EUR Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company USD Up to 5.25% Nil US$5,000 per Sub-Fund US$10,000 in Company 5,000 per Sub-Fund 10,000 in Company US$5,000 per Sub-Fund US$10,000 in Company 1.75% 1.75% New Star US Opportunities Fund New Subscriptions -- USD Shares Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee USD Up to 5.25% Nil US$5,000 per Sub-Fund US$10,000 in Company US$5,000 per Sub-Fund US$10,000 in Company 1.75% Classes closed to new Investors EUR Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company Sterling Up to 5.25% Nil 3,500 per Sub-Fund 7,000 in Company 5,000 per Sub-Fund 10,000 in Company 3,500 per Sub-Fund 7,000 in Company 1.75% 1.75% 30 New Star Global Investment Funds PLC

33 New Star Global Emerging Markets Fund New Subscriptions -- USD Shares Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee USD Up to 5.25% Nil US$5,000 per Sub-Fund US$10,000 in Company US$5,000 per Sub-Fund US$10,000 in Company 1.75% Classes closed to new Investors EUR Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company Sterling Up to 5.25% Nil 3,500 per Sub-Fund 7,000 in Company 5,000 per Sub-Fund 10,000 in Company 3,500 per Sub-Fund 7,000 in Company 1.75% 1.75% New Star Euro High Yield Fund Class R Shares Both Income and Reinvestment Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee R Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company 5,000 per Sub-Fund 10,000 in Company 1.25% 2 New Star Pan European Equity Fund Class R Shares Class Subscription Fee 1 Redemption Fee Minimum Initial Investment Minimum Holding Annual Management Fee R Up to 5.25% Nil 5,000 per Sub-Fund 10,000 in Company 5,000 per Sub-Fund 10,000 in Company 1.75% New Star Global Investment Funds PLC 31

34 Base Currency New Star Asian Opportunities Fund US Dollars New Star European Growth Fund Euro New Star Japan Recovery Fund US Dollars New Star UK Dynamic Fund Sterling New Star US Opportunities Fund US Dollars New Star Global Emerging Market Fund US Dollars New Star Euro High Yield Fund Euro New Star Pan-European Equity Fund Euro 1 The Subscription Fee applicable to the Sub-Funds may be deducted from the total subscription amount and shall be paid to the Manager for its absolute use and benefit and shall not form part of the assets of the relevant Sub-Fund. 2 The current level of fees set out above are less than the permitted maximum, details of which, and the notice required prior to any increase to this level, are set out in the body of the Offering Document. 32 New Star Global Investment Funds PLC 1768MM/02.08

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