Quick facts St. James s Place Unit Trust Group Limited

Transcription

1 PRODUCT KEY FACTS St. James s Place Index Linked Gilts Unit Trust # # This is an index fund. December 2017 This statement provides you with key information about this product. This statement is a part of the Hong Kong offering document. You should not invest in this product based on this statement alone. Quick facts Manager: Investment Adviser: St. James s Place Unit Trust Group Limited BlackRock Investment Management (UK) Limited (external delegation, in the United Kingdom) Trustee: National Westminster Bank Plc Ongoing charges over a year*: Class L Accumulation Units # 1.22% Class H Accumulation Units 1.72% Dealing frequency: Daily Underlying index (Index): FTSE Custom UK Index-linked Gilts Composite (50% FTSE Actuaries UK Index-linked Gilts up to 5 Years Index and 50% FTSE Actuaries UK Index-linked Gilts 5-15 Years Index) Index Tracking Difference of the last calendar year: 1.38% Base currency: Dividend policy: Financial year end of the Scheme: GBP Accumulation Units: No income will be distributed. 31 March Minimum investment: GBP 1,500 (initial) GBP 1,000 (additional) # Any units held by Hong Kong investors on or before 10 October 2016 have been renamed Class L Accumulation Units. * The ongoing charges figure is an annualised figure based on expenses for the period from 1 April 2017 to 30 September This figure may vary from year to year. 1

2 What is this product? St. James s Place Index Linked Gilts Unit Trust (the Scheme ) is a fund constituted in the form of a unit trust. It is domiciled in the United Kingdom and its home regulator is the Financial Conduct Authority. The Scheme is an index fund. Objectives and Investment Strategy Objectives The investment objective of the Scheme is to provide a combination of growth and income. The Scheme aims to replicate the FTSE Custom UK Index-linked Gilts Composite (50% FTSE Actuaries UK Index-linked Gilts up to 5 Years Index and 50% FTSE Actuaries UK Index-linked Gilts 5-15 Years Index) Index (the Index ). The performance of the Scheme, before permitted fees and charges, is intended to correspond closely to that of the Index. Strategy The Scheme will adopt full replication strategy and aim to achieve its objective by investing substantially all of its assets in the same constituent securities of the Index with substantially the same weighting. The Scheme may also invest in units and/or shares in collective investment schemes, money market instruments, cash and near cash, and deposits (collectively Liquid Investments ). The Scheme is permitted to invest in derivatives and forward transactions (collectively Derivatives ) for the purposes of efficient portfolio management and hedging. It is currently intended that the Scheme may invest into (i) Liquid Investments, up to a maximum of 10% of the Scheme s net asset value for the purpose of efficiently managing the Scheme, for example liquidity management and to minimize transaction costs e.g. where the Scheme is experiencing a period of unusually high subscriptions or redemptions; (ii) Derivatives, up to a maximum of 10% of the Scheme s net asset value, the Derivatives may comprise e.g. the purchase of contracts (such as futures, forwards and options contracts) based upon the underlying constituent securities of the Index. Derivatives however will not be used extensively for investment purposes. The Scheme will not enter into securities lending and repo contracts, reverse repo, or similar OTC transactions. If there is a change in the investment policy, the Scheme will seek prior approval from the SFC and at least one month s prior notice will be given to Unitholders. Investors should note that index-linked gilts are United Kingdom ( UK ) Government liabilities denominated in Sterling (GBP). They differ from conventional gilts in that both the semiannual coupon payments and the principal payment are adjusted in line with movements in the General Index of Retail Prices in the UK (also known as the RPI). For the avoidance of doubt, index linked gilts are a form of UK Treasury securities. 2

3 Index The Index aims to replicate an equally weighted (50%:50%) composite of, the following component indices (a) FTSE Actuaries UK Index-linked Gilts up to 5 Years Index; and (b) FTSE Actuaries UK Index-linked Gilts 5-15 Years Index (the Component Indices ). These Component Indices are part of the FTSE Actuaries UK Index-linked Gilts Index Series (the Series ); the Series is the most widely used and representative set of benchmarks for UK inflation-linked bonds. The FTSE Actuaries UK Index-linked Gilts up to 5 Years Index consists of securities with an up to 5 year maturity, and aims to track the market for short term index linked gilts. The FTSE Actuaries UK Index-linked Gilts 5-15 Years Index consists of securities with a maturity between 5 and 15 years, and aims to track the performance of the market for index linked securities in this range. Due to the current number of UK index linked gilts in issuance that are eligible for the Scheme, it is expected that the number of constituents within the Index will not be large. The constituent securities of the Component Indices (which are also constituent securities of the Index) comprise of all eligible UK index linked gilts in issue with remaining maturities of up to 15 years. The constituents of the Index and the Component Indices are investible via the UK Debt Management Office ( or through a stockbroker. Investors should take their own professional advice in this respect. Each of the Component Indices is a total return, market capitalisation weighted index. The Index itself has an equal weighting to each Component Index at the start of each month. The weighting to each Component Index will fluctuate throughout the month depending on the performance of the Component Indices. The Index is denominated in GBP. The Index was launched on 14 September As at 30 November 2017, it comprised of 10 securities with total market capitalisation of GBP 209 billion. It is currently designed to measure the performance of the UK index linked gilts market for securities with remaining maturities of up to 15 years. The base date of the Index is set at 31 August FTSE International Limited (as provider of the Index and Component Indices), the Manager (and its connected persons) and the Investment Adviser (and its connected persons) are independent of each other. As at 30 November 2017, the composition and weightings of the 10 largest constituents of the Index were: Index constituent Weighting in Index 1. UK Treasury I-L 1.875% % 2. UK Treasury I-L 2.5% % 3. UK Treasury I-L 1.25% % 4. UK Treasury I-L 1.25% % 5. UK Treasury I-L 2.5% % 6. UK Treasury I-L 0.125% % 7. UK Treasury I-L 0.125% % 8. UK Treasury I-L 0.125% % 9. UK Treasury I-L 4.125% % 10. UK Treasury I-L 0.125% % The price of each Component Index and the Index will be calculated and published on the FTSE Russell website ( on a daily basis (i.e. by 3

4 5:00 p.m. (United Kingdom time) on each business day, with a lag of one business day). That means in the normal course this information will be published on the said FTSE Russell website by 9:00 a.m. (Hong Kong time) on the second Hong Kong business day following calculation. Important news on the Index and Component Indices shall be made available from the said FTSE Russell website. For details of the methodology used for calculating the Index and the Component Indices, Hong Kong investors should refer to the FTSE Russell website ( FTSE International Limited is responsible for the operation of the Series, including the daily calculation of the values of the Index and the Component Indices. FTSE International Limited maintains records of all the constituents and is responsible for the addition and deletion of UK index linked gilts to and from the Component Indices and changes in nominal amounts of UK index linked gilts in the Component Indices. Note: FTSE International Limited is a limited liability company registered in England and Wales under registered number with its registered office at 10 Paternoster Square, London, England, EC4M 7LS. It is a member of the London Stock Exchange Group plc group. What are the key risks? Investment involves risks. Please refer to the offering document for details including the risk factors. 1. General Investment Risk The Scheme s investment portfolio may fall in value due to any of the key risk factors below and therefore your investment in the Scheme may suffer losses. There is no guarantee of the repayment of principal. 2. Interest Rate Risk Interest rate fluctuations may affect the capital value of investments. When long term interest rates rise, the capital value of units is likely to fall and vice versa and in turn, ultimately adversely affect the net asset value of the Scheme. 3. Concentration Risk The Scheme has significant exposure to the UK economy. The value of the Scheme may therefore experience more volatility as it is more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax legal or regulatory event affecting the UK market resulting from a limited number of holdings than a fund with a broader, geographically diversified portfolio. In seeking to reflect the weightings of constituent securities of the Index, investments of the Scheme may be concentrated in a single constituent security or several constituent securities. The performance of the index and the Scheme may be significantly affected by the price fluctuation of one or several of the constituent securities of the Index. 4. Counterparty and Credit Risk The value of units may fall in the event of the default or reduced credit rating of an issuer. To the extent that a counterparty defaults on its obligations and the Scheme is prevented from exercising its rights with respect to the investment in its portfolio, the Scheme may experience a decline in its net asset value. With regard to the credit downgrading of an issuer, the value of the relevant debt securities may decline rapidly, which will adversely affect the net asset value of the Scheme. Credit ratings are based on the perceived likelihood of issuer default. 4

5 5. Sovereign Debt Risk The Scheme may invest in sovereign debt securities. The Scheme will be exposed to the direct or indirect consequences of political, social and economic changes in the UK by investing in the bonds of governmental entities. The governmental entity that controls the repayment of sovereign debt may be affected by these changes and may not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt in adverse situations. Holders may be requested to participate in the rescheduling of such sovereign debt and to extend further loans to the issuers. The value of investments of the Scheme may be adversely affected when there is a default of sovereign debt issuers. 6. Brexit Risk The Scheme may face potential risks associated with the referendum which resulted in a vote for the UK to leave the European Union ( EU ) ( Brexit ). There may be detrimental implications for the value of certain of the Scheme s investments, its ability to enter into transactions, to value or realise certain of its investments or otherwise to implement its investment policy due to various reasons. Such events, as well as an exit or expulsion of a member state other than the UK from the EU, could have a material adverse effect on the Scheme. 7. Passive Investment Risk The Scheme is passively managed. The Manager and the Investment Adviser will not have the discretion to adapt to market changes due to the inherent investment nature of the Scheme. Falls in the Index are expected to result in corresponding falls in the value of the Scheme. 8. Tracking Error Risk The Scheme may be subject to tracking error risk, which is the risk that its performance may not track the Index exactly. This tracking error may result from investment strategy used, and/or fees and charges. The Manager and Investment Adviser will monitor and seek to manage such risk in minimising tracking error. However, there can be no assurance of exact or identical replication at any time of the performance of the Index. 9. Volatility and Liquidity Risk The Scheme may invest in certain securities that subsequently become difficult to sell because of reduced liquidity which may be driven by market event or determined in the creditworthiness of the issuer. The debt securities in certain markets may be subject to higher volatility. The price of securities traded in such markets may be subject to fluctuations. The bid and offer spreads of the price of such securities may be large and the Scheme may incur significant trading costs. The market value of such securities may be adversely affected. This would ultimately affect the net asset value of the Scheme. 10. Financial Derivative Instruments Risk The use of financial derivative instruments by the Scheme may expose the Scheme to higher risks including counterparty credit risk, liquidity risk, valuation risk, volatility risk, over-the-counter transaction risk and leverage risk. The leverage element/component of a financial derivative instrument can result in a loss significantly greater than the amount invested in the financial derivative instrument by the Scheme. In adverse situation, the use of financial derivative instruments for efficient portfolio management and hedging purposes may become ineffective and the Scheme may suffer significant losses. 5

6 How has the Scheme performed? Past performance information is not indicative of future performance. Investors may not get back the full amount invested. The computation basis of the performance is based on the calendar year end, NAV-to- NAV, with dividend reinvested. These figures show by how much the Class L Accumulation Units # increased or decreased in value during the calendar year being shown. Performance data has been calculated in GBP including ongoing charges and excluding subscription fee and redemption fee you might have to pay. Class L Accumulation Units # has been selected as the representative class as it is the class with the longest history and longest track record in the Scheme. Where no past performance is shown there was insufficient data available in that year to provide performance. Scheme launch date: 2012 Class L Accumulation Units # launch date: 2012 The past performance of the underlying Index prior to 31 August 2016 is calculated based on the performance of the Component Indices for the relevant period. Investors may obtain the past performance information (if available) of other classes of units offered to Hong Kong investors at the Hong Kong Representative s website # Any units held by Hong Kong investors on or before 10 October 2016 have been renamed Class L Accumulation Units. Is there any guarantee? 6

7 This Scheme does not have any guarantees. You may not get back the full amount of money you invest. What are the fees and charges? Charges which may be payable by you You may have to pay the following fees when dealing in the units of the Scheme. Fee Subscription Fee (Preliminary Charge) Switching Fee Redemption Fee (Redemption Charge) What you pay Class L Accumulation Units # and Class H Accumulation Units: 5% of the amount subscribed Not applicable Nil Ongoing fees payable by the Scheme The following expenses will be paid out of the Scheme. They affect you because they reduce the return you get on your investments. Annual rate (unless otherwise specified, as a % of the Scheme s net asset value) Annual Management Charge Trustee Charge (subject to UK VAT) Investment Adviser Fee Performance Fee Administration Fee Class L Accumulation Units # 1.12% per annum Class H Accumulation Units 1.62% per annum Included in Annual Management Charge Class L Accumulation Units # and Class H Accumulation Units: 0.05% per annum Not applicable Not applicable # Any units held by Hong Kong investors on or before 10 October 2016 have been renamed Class L Accumulation Units. Other fees You may have to pay other fees when dealing in the units of the Scheme. Additional Information You generally buy units at the offer price and redeem units at the bid price based on the Scheme s next-determined net asset value after the Hong Kong representative receives your request in good order on or before 5:00 p.m. on each Hong Kong business day, being the Scheme s dealing cut-off time on each dealing day. Distributors may impose 7

8 earlier dealing deadlines for receiving requests from investors in Hong Kong in order to meet the Scheme s dealing cut-off time. The net asset value of the Scheme is calculated, and the offer and bid price of units is published, every business day. Investors may obtain information on the most recent offer and bid prices from the Hong Kong Representative, St. James s Place (Hong Kong) Limited by telephone hotline at Investors should note that the aforementioned websites have not been reviewed by the SFC and may contain information on schemes not authorized by the SFC. Important If you are in doubt, you should seek professional advice. The SFC takes no responsibility for the contents of this statement and makes no representation as to its accuracy or completeness. 8