Throughout this letter, and in the enclosed documents, we refer to these funds as the Existing Funds.

Transcription

1 Please address any replies to: Columbia Threadneedle Investments PO Box Chelmsford Essex CM99 2AL United Kingdom columbiathreadneedle.com 27 July 2018 Dear Investor Important: Changes to the following Threadneedle funds We are informing you about a proposed change to the following funds. It is important that you read this letter, as well as the enclosed Shareholder Circular. n European Corporate Bond Fund n European High Yield Bond Fund n Pan European Fund n Pan European Smaller Companies Fund n Pan European Equity Dividend Fund n Credit Opportunities Fund 1 Throughout this letter, and in the enclosed documents, we refer to these funds as the Existing Funds. What is changing? We are planning to transfer the assets of each fund listed above into an equivalent fund within our established Luxembourg fund range (the Lux Funds ). The transfer will be made by a process called a cross-border merger. The Lux Funds are managed in the same way as the Existing Funds, by the same fund managers. Full details of the proposed merger can be found in the enclosed Shareholder Circular. Why is Columbia Threadneedle Investments proposing the transfers? As UK-based funds, the Existing Funds currently enjoy UCITS status 2 within the European Union (EU). However, when the UK leaves the EU, it is highly likely that these funds will lose their UCITS status. By transferring the assets to an equivalent Luxembourg-based fund, we can provide certainty for investors and ensure they will remain in a UCITS-compliant fund, regardless of the final agreement between the UK and the EU. 1 The full name of this fund is Threadneedle Credit Opportunities Fund. 2 UCITS stands for Undertakings for Collective Investment in Transferable Securities. UCITS provides a harmonised regulatory regime for the management and sale of mutual funds within the European Union.

2 How will investors be affected by the transfer? The Existing Funds and the Lux Funds are very similar, and will be managed in the same way by the same fund manager. There are, however, some changes resulting from the transfers. They include the following: 1. While the Existing Funds are subject to UK regulations under the supervision of the Financial Conduct Authority (FCA), the Lux Funds are overseen by the Commission de Surveillance du Secteur Financier (CSSF) in the Grand Duchy of Luxembourg. Importantly, the level of regulatory supervision provided by the CSSF is considered equivalent to that of the FCA. 2. Some differences in the wording of the investment objectives and policies. 3. Changes to the fee structure and to the way certain fees are applied. The Annual Management Charge for the New Shares will be the same as it was for the Existing Shares. In addition to our fees and charges, a subscription tax (taxe d abonnement) of 0.05% per annum applies to retail share classes in funds based in Luxembourg. For qualifying institutional investors investing into an institutional share class (as defined by Luxembourg law and regulations) this tax reduces to 0.01% per annum. As a result, the ongoing charges figure for the Lux Funds will be correspondingly higher than the current ongoing charges figure for the Existing Funds. Please refer to Section (Fee Structure) of the Shareholder Circular for further information. 4. Operational changes including the timing of Net Asset Value calculations, the impact of different bank holidays on settlement periods, accounting dates and dates on which income will be paid for the Lux Funds. 5. Contact points for the servicing of clients holdings, for deal instructions and payments will be changing. New client reference details will be provided. We will provide detailed guidance on these points in follow up correspondence, before the relevant transfer takes place. 6. The Lux Funds will not be available through a Threadneedle ISA. Further information on how investors can keep their ISA status is included with this document. 7. The Lux Funds are covered by the Lux Company s formal complaint process. Investments in the Lux Funds are not covered by the UK Financial Services Compensation Scheme, and compensation arrangements may be different from the Existing Funds. Complaints regarding the Lux Funds will not come under the scope of the UK Financial Ombudsman Service. There may be additional tax implications depending on investors individual circumstances. We are unable to provide tax advice and we therefore suggest that clients seek professional advice about any potential tax implications. Full details of the differences between the Existing Funds and the Lux Funds can be found in Section 2 and Appendix 1 of the Shareholder Circular. The proposed mergers are shown in the following table: Existing Funds Lux Funds European Corporate Bond Fund into Threadneedle (Lux) European Corporate Bond European High Yield Bond Fund into Threadneedle (Lux) European High Yield Bond Pan European Fund into Threadneedle (Lux) Pan European Equities Pan European Smaller Companies Fund into Threadneedle (Lux) Pan European Smaller Companies Pan European Equity Dividend Fund into Threadneedle (Lux) Pan European Equity Dividend Credit Opportunities Fund into Threadneedle (Lux) Credit Opportunities

3 When will the transfers take place? In order for the transfers to proceed, at least 75% of votes cast at an Extraordinary General Meeting (EGM) for each fund must be in favour of the transfers. For the dates of each EGM please consult the Shareholder Circular. Investors can vote for or against this proposal for the Existing Funds they are invested in, either in person at the EGM or by completing the enclosed proxy form. If the merger proposal for a fund is not approved, the Existing Fund will continue in its current form. The results of the votes will be published on our website following each EGM. What happens if the transfers are approved and an investor does not want their investment to be transferred? If the transfers are approved and an investor does not wish to have their investment transferred to the Lux Funds, they have the following options: n Switch their investment free of charge into another Threadneedle fund(s) over the telephone or in writing. n Sell their units in the Existing Funds over the telephone or in writing and receive the proceeds in cash. Please be aware that if they choose this option and their units are held in an ISA, then their investment will lose its ISA status. There may be additional tax implications depending on individual circumstances. We are unable to provide tax advice and we therefore suggest that clients seek professional advice about any potential tax implications. Further information If you are unclear about any of the details relating to this proposal, or have any further questions, please call us on *. Our team is available from 8.00am to 6.00pm UK time, Monday to Friday. Yours sincerely Gary Collins Co-Head of Distribution EMEA Columbia Threadneedle Investments *Calls may be recorded. Threadneedle Investment Services Limited. Registered in England and Wales No Registered address Cannon Place, 78 Cannon Street, London EC4N 6AG. Authorised and regulated by the Financial Conduct Authority. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies J

4 FORM OF PROXY This form is for use at the extraordinary general meetings of Shareholders of the Existing Funds, to be held at the dates and times below, and at any adjournments of the meetings: Fund Date and time of meeting If voting by form of proxy, please return by: 1 European Corporate Bond Fund 11:00am CET (10:00am UK time) on 24th August European High Yield Bond Fund 11:20am CET (10:20am UK time) on 24th August Pan European Fund 11:40am CET (10:40am UK time) on 24th August Pan European Smaller Companies Fund 12:00pm CET (11:00am UK time) on 24th August Pan European Equity Dividend Fund 12:20pm CET (11:20am UK time) on 24th August Credit Opportunities Fund 12:40pm CET (11:40am UK time) on 24th August 2018 Full Name (capitals): Address: 11:00am CET (10:00am UK time) on 22nd August :20am CET (10:20am UK time) on 22nd August :40am CET (10:40am UK time) on 22nd August :00pm CET (11:00am UK time) on 22nd August :20pm CET (11:20am UK time) on 22nd August :40pm CET (11:40am UK time) on 22nd August 2018 Account Number (if known): I/We being a Shareholder/s of the above mentioned Existing Fund hereby appoint the chairman of the meeting or (see Note 1 overleaf) to act as my/our proxy at the meeting of Shareholders to be held at, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom on 24th August 2018 (and at any adjournment thereof). I/We authorise my/our proxy to attend and vote on a poll for me/us and in my/our name(s) on the extraordinary resolution set out in the Notice of Meeting dated 24th August 2018 as indicated below. 1. European Corporate Bond Fund Please indicate with X to mark the appropriate box. EXTRAORDINARY RESOLUTION FOR AGAINST The scheme of arrangement (the Scheme ) for the transfer of the European Corporate Bond Fund (the Existing Fund ) into Threadneedle (Lux) European Corporate Bond (the Lux Fund ), a sub-fund of Threadneedle (Lux), the terms of which are set out in a document dated 27th July 2018 and addressed by Threadneedle Investment Services Limited ( TISL ) to shareholders in the Existing Fund, is hereby approved and that TISL and Citibank Europe plc, UK Branch are hereby instructed to implement the Scheme in accordance with its terms. 2. European High Yield Bond Fund EXTRAORDINARY RESOLUTION FOR AGAINST The scheme of arrangement (the Scheme ) for the transfer of the European High Yield Bond Fund (the Existing Fund ) into Threadneedle (Lux) European High Yield Bond (the Lux Fund ), a sub-fund of Threadneedle (Lux), the terms of which are set out in a document dated 27th July 2018 and addressed by Threadneedle Investment Services Limited ( TISL ) to shareholders in the Existing Fund, is hereby approved and that TISL Limited and Citibank Europe plc, UK Branch are hereby instructed to implement the Scheme in accordance with its terms. 3. Pan European Fund EXTRAORDINARY RESOLUTION FOR AGAINST The scheme of arrangement (the Scheme ) for the transfer of the Pan European Fund (the Existing Fund ) into Threadneedle (Lux) Pan European Equities (the Lux Fund ), a sub-fund of Threadneedle (Lux), the terms of which are set out in a document dated 27th July 2018 and addressed by Threadneedle Investment Services Limited ( TISL ) to shareholders in the Existing Fund, is hereby approved and that TISL and Citibank Europe plc, UK Branch are hereby instructed to implement the Scheme in accordance with its terms. ABC Page 1 of 2

5 4. Pan European Smaller Companies Fund Please indicate with X to mark the appropriate box. EXTRAORDINARY RESOLUTION FOR AGAINST The scheme of arrangement (the Scheme ) for the transfer of the Pan European Smaller Companies Fund (the Existing Fund ) into Threadneedle (Lux) Pan European Smaller Companies (the Lux Fund ), a sub-fund of Threadneedle (Lux), the terms of which are set out in a document dated 27th July 2018 and addressed by Threadneedle Investment Services Limited ( TISL ) to shareholders in the Existing Fund, is hereby approved and that TISL and Citibank Europe plc, UK Branch are hereby instructed to implement the Scheme in accordance with its terms. 5. Pan European Equity Dividend Fund EXTRAORDINARY RESOLUTION FOR AGAINST The scheme of arrangement (the Scheme ) for the transfer of the Pan European Equity Dividend Fund (the Existing Fund ) into Threadneedle (Lux) Pan European Equity Dividend (the Lux Fund ), a sub-fund of Threadneedle (Lux), the terms of which are set out in a document dated 27th July 2018 and addressed by Threadneedle Investment Services Limited ( TISL ) to shareholders in the Existing Fund, is hereby approved and that TISL and Citibank Europe plc, UK Branch are hereby instructed to implement the Scheme in accordance with its terms. 6. Credit Opportunities Fund EXTRAORDINARY RESOLUTION FOR AGAINST The scheme of arrangement (the Scheme ) for the transfer of the Credit Opportunities Fund (the Existing Fund ) into Threadneedle (Lux) Credit Opportunities (the Lux Fund ), a sub-fund of Threadneedle (Lux), the terms of which are set out in a document dated 27th July 2018 and addressed by Threadneedle Investment Services Limited ( TISL ) to shareholders in the Existing Fund, is hereby approved and that TISL and Citibank Europe plc, UK Branch are hereby instructed to implement the Scheme in accordance with its terms. Signature: Signature: (see Notes 3 & 4 below) Dated: Dated: NOTES ON FORM OF PROXY: 1) If you wish to appoint someone other than the chairman of the meeting, please delete the words the chairman of the meeting or and insert in the place provided the name and address of your appointee. A proxy need not be a Shareholder but must attend the meeting or any adjourned meeting in person to represent you. The amendment must be initialled. To allow the meeting to run effectively, if it is apparent to the chairman that no Shareholders will be present in person or by proxy other than by proxy in the chairman s favour then the chairman may appoint a substitute to act as proxy in his stead for any Shareholder, provided that such substitute proxy shall vote on the same basis as the chairman. 2) Please indicate with a cross in the appropriate box how you wish your votes to be cast in respect of the extraordinary resolution. If you do not do so, your proxy will vote or abstain at his discretion. 3) In the case of a corporate body, this Form of Proxy must be executed under seal or under the hand of an officer or attorney authorised in writing to sign on its behalf. 4) In the case of joint Shareholders, any such Shareholder may sign. However, in the event of more than one vote is tendered, the vote of the Shareholder whose name stands first in the register of Shareholders of the Fund will be accepted to the exclusion of the others. 5) To be valid, this Form of Proxy must be completed and, together with any power of attorney or other authority under which it is signed (or a copy of that authority certified by a solicitor), and returned to: Electoral Reform Services, The Election Centre, 33 Clarendon Road, London N8 0NW, United Kingdom at least 48 hours before the time of the meeting or any adjourned meeting. 6) Appointing a proxy does not preclude you from attending and voting in person at the meeting or any adjournment thereof. Important information. Issued by Threadneedle Investment Services Limited. Registered in England and Wales, No Registered Office: Cannon Place, 78 Cannon Street, London, EC4N 6AG. Authorised and regulated in the UK by the Financial Conduct Authority. Columbia Threadneedle Investments (Columbia Threadneedle) is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com Issued J ABC Page 2 of 2

6 Please address any replies to: Columbia Threadneedle Investments PO Box Chelmsford Essex CM99 2AL United Kingdom columbiathreadneedle.com 31 August 2018 Dear Investor Important: Changes to the following Threadneedle funds We recently informed you of our proposal to transfer the assets of each fund listed below (the Existing Funds ) into an equivalent fund within our established Luxembourg fund range (the Lux Funds ). Following the shareholder vote at the extraordinary general meetings (EGMs) held on 24 August 2018, we can confirm that the transfers have been approved for all the affected funds. n European Corporate Bond Fund n European High Yield Bond Fund n Pan European Fund n Pan European Smaller Companies Fund n Pan European Equity Dividend Fund n Credit Opportunities Fund 1 What is changing? We will transfer the assets of each fund listed above into an equivalent fund within our established Luxembourg fund range. The transfers will be made by a process called a cross-border merger. Following this, the Existing Funds will be wound up. How will investors be affected by the transfers? The Existing Funds and the Lux Funds are very similar, and will be managed in the same way by the same fund manager. There are, however, some changes resulting from the transfers. Full details of the differences between the Existing Funds and the Lux Funds can be found in Section 2 and Appendix 1 of the Shareholder Circular. A soft copy of the document is available at 1 The full name of this fund is Threadneedle Credit Opportunities Fund.

7 What options do investors have if they do not want their investment to be transferred? If an investor does not want to have their investment transferred to the Lux Funds, they have the following options: n Switch their investment free of charge into another Threadneedle fund by calling us on (calls may be recorded) or by writing to us at Columbia Threadneedle Investments, PO Box 10033, Chelmsford, Essex CM99 2AL, United Kingdom. n Instruct us to sell their units over the telephone or in writing and receive the proceeds in cash. Please be aware that if they choose this option and their units are held in an ISA, then their investment will lose its ISA status. Further information is included in the accompanying Q&A document. There may be additional tax implications depending on individual circumstances. We are unable to provide tax advice and we therefore suggest that clients seek professional advice about any potential tax implications. Further information If you are unclear about any of the details relating to the mergers, or have any further questions, please call us on *. Our team is available from 8.00am to 6.00pm UK time, Monday to Friday. Yours sincerely Gary Collins Co-Head of Distribution EMEA Columbia Threadneedle Investments *Calls may be recorded. Threadneedle Investment Services Limited. Registered in England and Wales No Registered address Cannon Place, 78 Cannon Street, London EC4N 6AG. Authorised and regulated by the Financial Conduct Authority. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies J

8 SHAREHOLDER CIRCULAR RELATING TO THE FOLLOWING PROPOSED CROSS-BORDER MERGER (INCORPORATING COMMON DRAFT TERMS OF MERGER) 1 : Existing Funds Lux Funds European Corporate Bond Fund into Threadneedle (Lux) European Corporate Bond European High Yield Bond Fund into Threadneedle (Lux) European High Yield Bond Pan European Fund into Threadneedle (Lux) Pan European Equities Pan European Smaller Companies Fund into Threadneedle (Lux) Pan European Smaller Companies Pan European Equity Dividend Fund into Threadneedle (Lux) Pan European Equity Dividend Credit Opportunities Fund 2 into Threadneedle (Lux) Credit Opportunities (each, an Existing Fund, and together the Existing Funds ) THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt about the contents of this document and the action to be taken you should consult your financial adviser. If you are unclear about the contents of this letter, have any further questions, or would like a copy of the new key investor information document (KIID) for the Lux Funds, please call us on (calls may be recorded) for shareholders located within the UK or on (calls may be recorded) for shareholders located outside of the UK. The new KIIDs are also available on our website at and are enclosed with this circular 3. into (each a Lux Fund, and together the Lux Funds ) EXISTING FUNDS: The European Corporate Bond Fund, European High Yield Bond Fund, Pan European Fund and Pan European Smaller Companies Fund are sub-funds of Threadneedle Investment Funds ICVC, a UCITS umbrella open-ended investment company established in the United Kingdom. The Pan European Equity Dividend Fund is a sub-fund of Threadneedle Specialist Investment Funds ICVC, a UCITS umbrella open-ended investment company established in the United Kingdom. The Credit Opportunities Fund is a sub-fund of Threadneedle Focus Investment Funds ICVC, a UCITS umbrella open-ended investment company established in the United Kingdom. LUX FUNDS: The Lux Funds are sub-funds of Threadneedle (Lux), a Société Anonyme qualifying as a Société d investissement à capital variable established in the Grand Duchy of Luxembourg. nthis document contains a Notice of Meeting of Shareholders in respect of each of the Existing Funds (the Meetings ). nthe Meetings will be held at the offices of Columbia Threadneedle Investments at Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom at the time set out in the relevant notice and in the section of this letter with the heading Timetable. nplease complete and return the Form of Proxy for the Fund(s) in the pre-paid return envelope provided to Electoral Reform Services, The Election Centre, 33 Clarendon Road, London N8 0NW, United Kingdom in accordance with the instructions printed on the Form of Proxy as soon as possible and in any event so that it arrives at least 48 hours before the time fixed for the Meeting. The Forms of Proxy for the Existing Funds are enclosed with this document. ncompletion of Forms of Proxy will not prevent Shareholders from attending and voting at the Meetings or any adjourned meeting, in person. 1 In accordance with the merger technique provided for in Article 2(1)(p)(iii) of the Directive 2009/65/EC. 2 The full name of this fund is Threadneedle Credit Opportunities Fund. 3 Please note that the KIIDs we have enclosed show one share class of each of the Lux Funds, and are provided as an example. Note that they may show a share class that is different from the one that you hold. As a result, the ongoing charges figure and performance may be different from the share class you are invested in. COLUMBIATHREADNEEDLE.COM

9 TABLE OF CONTENTS Timetable Glossary of Terms Shareholder Letter... 8 Appendix 1 Comparison between the Existing Funds and the Lux Funds Part A: Differences between OEICs and SICAVs Part B: Comparison of the main features of the Existing Funds and Lux Funds Part C: Share class codes Appendix 2 Scheme of arrangement for the transfer of the Existing Funds into the Lux Funds Appendix 3 Procedure for the Shareholder Meetings Appendix 4 Consents and Clearances Appendix 5 Notice of Meeting

10 TIMETABLE Below is our proposed timetable for the scheme of arrangement in relation to the Existing Fund. Action Date Qualification date for Shareholder voting 12th July 2018 Documentation to be sent to Shareholders 27th July 2018 Forms of Proxy to be returned by Shareholders Meeting of the European Corporate Bond Fund Meeting of the European High Yield Bond Fund Meeting of the Pan European Fund Meeting of the Pan European Smaller Companies Fund Meeting of the Pan European Equity Dividend Fund Meeting of the Credit Opportunities Fund by no less than 48 hours before the time of the Meeting 11:00am Luxembourg time (10:00 am UK time) on 24th August :20am Luxembourg time (10:20 am UK time) on 24th August am Luxembourg time (10:40 am UK time) on 24th August :00 noon Luxembourg time (11:00 am UK time) on 24th August :20pm Luxembourg time (11:20 am UK time) on 24th August :40pm Luxembourg time (11:40 am UK time) on 24th August 2018 If the resolution for a scheme of arrangement is passed at the Meeting for the Existing Fund, the timetable for the Merger is as set out for each Existing Fund below: For the European Corporate Bond Fund Action Last Dealing Day of the European Corporate Bond Fund before the Effective Date Suspend dealing in Shares in the European Corporate Bond Fund Valuation of the European Corporate Bond Fund and end of accounting period for final distribution of income in relation to the European Corporate Bond Fund Effective Date of the Merger 4 First day of dealing in New Shares in Threadneedle (Lux) European Corporate Bond Date 20th September :00pm Luxembourg time (12 noon UK time) on 20th September :01am Luxembourg time (00:01am London time) on 22nd September 2018 Immediately after 01:01am Luxembourg time (00:01am London time) on 22nd September th September 2018 Dispatch confirmation of number of New Shares By 5th October 2018 Final distribution payment for income paying Existing Shares Within 3 months of the Merger 4 Note that this will also be the date for calculating the exchange ratio of shares. 1

11 For the European High Yield Bond Fund Action Launch of Threadneedle (Lux) European High Yield Bond Last Dealing Day of the European High Yield Bond Fund before the Effective Date Suspend dealing in Shares in the European High Yield Bond Fund Valuation of the European High Yield Bond Fund and end of accounting period for final distribution of income in relation to the European High Yield Bond Fund Effective Date of the Merger 5 First day of dealing in New Shares in Threadneedle (Lux) European High Yield Bond Date Threadneedle (Lux) European High Yield Bond will launch in advance of the Merger on 29th August th October :00pm Luxembourg time (12 noon UK time) on 4th October :01am Luxembourg time (00:01am London time) on 6th October 2018 Immediately after 01:01am Luxembourg time (00:01am London time) on 6th October th October 2018 Dispatch confirmation of number of New Shares By 19th October 2018 Final distribution payment for income paying Existing Shares For the Pan European Fund Action Last Dealing Day of the Pan European Fund before the Effective Date Suspend dealing in Shares in the Pan European Fund Valuation of the Pan European Fund and end of accounting period for final distribution of income in relation to the Pan European Fund Effective Date of the Merger 6 First day of dealing in New Shares in Threadneedle (Lux) Pan European Equities Within 3 months of the Merger Date 4th October :00pm Luxembourg time (12 noon UK time) on 4th October :01am Luxembourg time (00:01am London time) on 6th October 2018 Immediately after 01:01am Luxembourg time (00:01am London time) on 6th October th October 2018 Dispatch confirmation of number of New Shares By 19th October 2018 Final distribution payment for income paying Existing Shares Within 3 months of the Merger 2 5 Note that this will also be the date for calculating the exchange ratio of shares. 6 Note that this will also be the date for calculating the exchange ratio of shares.

12 For the Pan European Smaller Companies Fund Action Launch of Threadneedle (Lux) Pan European Smaller Companies Last Dealing Day of the Pan European Smaller Companies Fund before the Effective Date Suspend dealing in Shares in the Pan European Smaller Companies Fund Valuation of the Pan European Smaller Companies Fund and end of accounting period for final distribution of income in relation to the Pan European Smaller Companies Fund Effective Date of the Merger 7 First day of dealing in New Shares in Threadneedle (Lux) Pan European Smaller Companies Date Threadneedle (Lux) Pan European Smaller Companies will launch in advance of the Merger on 29th August th October :01am Luxembourg time (00:01am London time) Luxembourg time (12 noon UK time) on 4th October :01am Luxembourg time (00:01am London time) on 6th October 2018 Immediately after 01:01am Luxembourg time (00:01am London time) on 6th October th October 2018 Dispatch confirmation of number of New Shares By 19th October 2018 Final distribution payment for income paying Existing Shares For the Pan European Equity Dividend Fund Action Last Dealing Day of the Pan European Equity Dividend Fund before the Effective Date Suspend dealing in Shares in the Pan European Equity Dividend Fund Valuation of the Pan European Equity Dividend Fund and end of accounting period for final distribution of income in relation to the Pan European Equity Dividend Fund Effective Date of the Merger 8 First day of dealing in New Shares in Threadneedle (Lux) Pan European Equity Dividend Within 3 months of the Merger Date 4th October :00pm Luxembourg time (12 noon UK time) on 4th October :01am Luxembourg time (00:01am London time) on 6th October 2018 Immediately after 01:01am Luxembourg time (00:01am London time) on 6th October th October 2018 Dispatch confirmation of number of New Shares By 19th October 2018 Final distribution payment for income paying Existing Shares Within 3 months of the Merger 7 Note that this will also be the date for calculating the exchange ratio of shares. 8 Note that this will also be the date for calculating the exchange ratio of shares. 3

13 For the Credit Opportunities Fund Action Launch of Threadneedle (Lux) Credit Opportunities Threadneedle (Lux) Last Dealing Day of the Credit Opportunities Fund before the Effective Date Suspend dealing in Shares in the Credit Opportunities Fund Valuation of the Credit Opportunities Fund and end of accounting period for final distribution of income in relation to the Threadneedle Credit Opportunities Fund Effective Date of the Merger 9 First day of dealing in New Shares in Threadneedle (Lux) Credit Opportunities Date Credit Opportunities will launch in advance of the Merger on 29th August th October :00pm Luxembourg time (12 noon UK time) on 18th October :01am Luxembourg time (00:01am London time) on 20th October 2018 Immediately after 01:01am Luxembourg time (00:01am London time) on 20th October nd October 2018 Dispatch confirmation of number of New Shares By 2nd November 2018 Final distribution payment for income paying Existing Shares Within 3 months of the Merger The Effective Dates are subject to change at the discretion of the ACD, with the agreement of Citibank UK. In the event of any of the Effective Dates being other than the above-mentioned dates for any of the Funds, we may make some changes to these dates. See Appendices 2 and 4 for further details. 4 9 Note that this will also be the date for calculating the exchange ratio of shares.

14 GLOSSARY OF TERMS The following definitions apply throughout this document unless the context otherwise requires. Articles Authorised Corporate Director (ACD) Business Day The articles of incorporation of the Lux Company TISL is the authorised corporate director (ACD) of TFIF, TIF and TSIF For the Existing Funds: Monday to Friday excluding public holidays and bank holidays in England and Wales and any other days at TISL s discretion For the Lux Funds: any day on which banks are open for normal banking business in Luxembourg and when the directors of the Lux Company believe that sufficient markets in which the Fund invested are also open and permit sufficient trading and liquidity to enable such Lux Fund to be managed efficiently Citibank Luxembourg Citibank UK COLL Citibank Europe plc, Luxembourg Branch, the depositary of the Lux Company Citibank Europe plc, UK Branch, the depositary of the Company the Collective Investment Schemes Sourcebook which forms part of the FCA Rules Company or Companies TFIF, TIF and/or TSIF, as the case may be Dealing Day CSSF Effective Date Existing Fund(s) Existing Fund s Value Extraordinary Resolution(s) FCA FCA Rules Monday to Friday excluding public holidays and bank holidays in England and Wales and any other days at TISL s discretion The Commission de Surveillance du Secteur Financier, the financial services regulator in the Grand Duchy of Luxembourg The effective date of the relevant Scheme, which shall be the date set out in the Timetable for the relevant Fund, or such other date as may be agreed in accordance with paragraph 12 (contained in Appendix 2 of this document) of the Scheme European Corporate Bond Fund, a sub-fund of TIF European High Yield Bond Fund, a sub-fund of TIF Pan European Fund, a sub-fund of TIF Pan European Smaller Companies Fund, a sub-fund of TIF Pan European Equity Dividend Fund, a sub-fund of TSIF Threadneedle Credit Opportunities Fund, a sub-fund of TFIF The value of the property of the Existing Fund calculated in accordance with the Instrument on the Effective Date, less the Retained Amount An extraordinary resolution set out in a Notice of Meeting for the relevant Existing Fund (contained in Appendix 5 of this document) approving the Scheme The Financial Conduct Authority, the financial services regulator for funds in the United Kingdom The FCA Handbook of Rules and Guidance (as amended) 5

15 Form of Proxy Funds Global Close ICVC Instrument Investment Manager KIID Lux Company Lux Fund(s) Luxembourg Regulations Meeting(s) Merger New Shares OEIC Regulations Prospectus The form enclosed with this Shareholder circular, which are to be completed by Shareholders and returned to TISL The Existing Funds and the Lux Funds A Valuation Point that determines a Fund s valuation based upon the last available prices pertaining to the relevant date. For equities, this will be the last exchange price in the relevant market at the time of closure of the market Investment Company with Variable Capital The instrument of incorporation of the relevant Company Threadneedle Asset Management Limited, the investment manager of the Existing Funds and the Lux Funds Key Investor Information Document Threadneedle (Lux), a UCITS umbrella open-ended investment company Threadneedle (Lux) European Corporate Bond Threadneedle (Lux) European High Yield Bond Threadneedle (Lux) Pan European Equities Threadneedle (Lux) Pan European Smaller Companies Threadneedle (Lux) Pan European Equity Dividend Threadneedle (Lux) Credit Opportunities The Law of 17 December 2010 relating to undertakings for collective investment, as amended and the law of 10 August 1915 on commercial companies as amended from time to time The extraordinary general meetings of Shareholders of the Existing Funds to be held on 24th August 2018 to consider and vote on the proposal for the Scheme (or any adjourned meeting for those purposes) The merger of the Existing Funds into the Lux Funds as detailed in this Circular. Each is classified as a cross-border merger to be carried out by a scheme of arrangement in accordance with Part 4 of the UCITS Regulations and in accordance with the Scheme Shares in the Lux Funds to be issued to Shareholders pursuant to the transfer of the Existing Funds on the terms set out in the Scheme The Open-Ended Investment Companies Regulations 2001 (as amended) The current prospectus of the relevant Company or the Lux Company as appropriate 6

16 Retained Amount Scheme Shareholder Shares TFIF TIF TSIF TISL TML S.A. UCITS UCITS Regulations UK Regulations Valuation Point A retention from the value of the Existing Funds, which is a sum estimated by TISL and agreed with Citibank UK to be necessary to meet all the actual and contingent liabilities of that Existing Fund. The retention is to be retained by Citibank UK as attributable to the relevant Existing Fund for the purposes of discharging such liabilities The scheme of arrangement for the transfer of the Existing Funds to the Lux Funds as set out in Appendix 2 in this document A holder of Shares Shares in the Existing Funds and/or the Lux Funds Threadneedle Focus Investment Funds ICVC Threadneedle Investment Funds ICVC Threadneedle Specialist Investment Funds ICVC Threadneedle Investment Services Limited, the authorised corporate director (ACD) of the Companies Threadneedle Management Luxembourg S.A., the management company of the Lux Company An undertaking for collective investment in transferable securities under Article 1(2) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 The Undertakings for Collective Investment in Transferable Securities Regulations 2011 The FCA Rules, the Financial Services and Markets Act 2000, the UCITS Regulations and/or the Open-Ended Investment Companies Regulations 2001 as amended The point at which the valuation of a Fund is determined for the purposes of determining the price at which Shares of a Class may be issued, cancelled, sold, redeemed, or transferred In addition, where relevant in the context, terms which are defined in the UK Regulations have the same meaning in this document and the Scheme. 7

17 Threadneedle Investment Services Limited 27th July 2018 To: Investors in the Existing Funds Dear Shareholder PO Box Chelmsford CM99 2AL T: +44 (0) * F: +44 (0) (for non-uk residents): T: +44 (0) * F: +44 (0) columbiathreadneedle.com Proposed scheme of arrangement for the mergers of the Existing Funds into the Lux Funds. In this document, unless the context requires otherwise, the terms used shall have the meaning set out in the Glossary on pages 5 to 7. I am writing to you as a Shareholder in one or more of the Existing Funds, to explain our proposal to merge the Existing Funds into the Lux Funds as follows: Existing Fund Lux Fund European Corporate Bond Fund into Threadneedle (Lux) European Corporate Bond European High Yield Bond Fund into Threadneedle (Lux) European High Yield Bond Pan European Fund into Threadneedle (Lux) Pan European Equities Pan European Smaller Companies Fund into Threadneedle (Lux) Pan European Smaller Companies Pan European Equity Dividend Fund into Threadneedle (Lux) Pan European Equity Dividend Credit Opportunities Fund into Threadneedle (Lux) Credit Opportunities (each an Existing Fund, and together the Existing Funds ) into (each a Lux Fund, and together the Lux Funds ) The proposal is to merge the Existing Funds into the Lux Funds by way of schemes of arrangement (each a Scheme ), which is set out in detail in Appendix 2. The proposed Mergers each require the passing of an Extraordinary Resolution at an extraordinary general meeting of Shareholders of the relevant Existing Fund (the Meeting ). To be passed, each Extraordinary Resolution requires a majority in favour of not less than 75% of the votes cast. The notices of the Meetings and resolution for each of the Existing Funds are set out in Appendix 5. Threadneedle (Lux) European Corporate Bond and Threadneedle (Lux) Pan European Equity Dividend will be launched on the Effective Date set out in the Timetable. Threadneedle (Lux) European High Yield Bond, Threadneedle (Lux) Pan European Smaller Companies and Threadneedle (Lux) Credit Opportunities will be launched before the Effective Date for the Mergers on the dates set out in the Timetable. The Threadneedle (Lux) Pan European Equities is already a sub-fund of the Lux Company and is managed in the same way as the Existing Fund. The Lux Funds will be managed in the same way as their corresponding Existing Fund. The Existing Funds will be terminated once the Mergers have taken place. 8 *Calls may be recorded.

18 This document describes the background to the mergers, the procedure by which the proposed Scheme will be carried out, the options available to you, and the implications of the proposal for you as a Shareholder. We would encourage you to read the key investor information document(s) (KIID) (enclosed with this Circular 10 ) for the Lux Fund(s) that correspond to the Existing Fund(s) you are invested in. KIIDs for the Lux Funds are also available from Columbia Threadneedle Investments on request, by calling us on for shareholders located within the UK or on (calls may be recorded). The new KIIDs are also available on our website at How to Vote: You can vote for or against these proposals for the Funds you are invested in, either in person at the Meeting or by completing the enclosed proxy form. If you wish to vote, but do not plan to vote in person, please complete the Form of Proxy, and return it/them in the pre-paid return envelope enclosed with this document, to enable your vote to be counted. Your proxy can be a person you choose or the chair of the Meeting and you can instruct them how you wish to cast your vote or allow them to choose. You should return the completed Form of Proxy in the pre-paid return envelope provided to Electoral Reform Services, The Election Centre, 33 Clarendon Road, London N8 0NW, United Kingdom to reach us no less than 48 hours before the time of the relevant Meeting. The Form of Proxy can be found enclosed with this document. You can attend and vote at the Meeting(s) for the Existing Fund(s) you hold Shares in (and any adjourned meeting(s)) regardless of whether you have completed and returned the Form of Proxy (we will simply disregard the Form of Proxy if you vote in person). Failure to return the Form of Proxy by the required time will result in it being void so that your proxy will not be entitled to vote on your behalf as directed. 1. WHY ARE WE PROPOSING THE MERGERS? As UK-based funds, the Existing Funds currently enjoy UCITS 11 status within the European Union. This means that funds in one EU country can be accessed by investors in other EU countries, with those investors benefitting from common investment restrictions and regulatory supervision. However, when the UK leaves the EU, it is likely that UK-based funds will lose this status. As well as managing UK-based funds, Columbia Threadneedle Investments offers a broad range of funds based in Luxembourg. By assets under management, Luxembourg is the largest fund domicile in Europe, and the second largest in the world after the United States. Many of our customers invest in both our UK and Luxembourg fund ranges. We are planning to merge the assets of each Existing fund into an equivalent fund within our established Luxembourg fund range. By merging the assets of the Existing Funds to an equivalent Luxembourg-based fund, we can provide certainty for investors and ensure you will remain in a UCITS-compliant fund, regardless of the final agreement between the UK and the EU. Our aim is to provide continuity and certainty for investors in our funds. For EU investors, the merger will remove uncertainty regarding the future status of your investment in your home country. Following the merger, your investment in our funds in Luxembourg will continue to benefit from UCITS status and regulatory supervision by the Commission Surveillance du Secteur Financier ( CSSF ). Importantly, the level of regulatory supervision provided by the CSSF is equivalent to that of the Financial Conduct Authority in the UK. 10 Please note that the KIIDs we have enclosed show one share class of each of the Lux Funds, and are provided as an example. Note that they may show a share class that is different from the one that you hold. As a result, the ongoing charges figure and performance may be different from the share class you are invested in. 11 UCITS stands for Undertakings for Collective Investment in Transferable Securities. UCITS provides a harmonised regulatory regime for the management and sale of mutual funds within the European Union. 9

19 The proposed mergers are shown in the following table: Existing Fund Lux Fund European Corporate Bond Fund into Threadneedle (Lux) European Corporate Bond European High Yield Bond Fund into Threadneedle (Lux) European High Yield Bond Pan European Fund into Threadneedle (Lux) Pan European Equities Pan European Smaller Companies Fund into Threadneedle (Lux) Pan European Smaller Companies Pan European Equity Dividend into Threadneedle (Lux) Pan European Equity Dividend Credit Opportunities Fund into Threadneedle (Lux) Credit Opportunities The Existing Funds and the Lux Funds are very similar, and will be managed in the same way by the same investment manager. The fees payable by you in the Lux Fund will remain at a similar level to your Existing Fund. For these reasons, we consider the merging of the Existing Funds with the Lux Funds to be in the best interests of Shareholders in the Existing Funds. There are, however, some changes resulting from the mergers. They are explained in the next section, which you should read carefully. 2. WHAT ARE THE MAIN SIMILARITIES AND DIFFERENCES BETWEEN THE EXISTING FUNDS AND THE LUX FUNDS? The Existing Funds are subject to UK regulations under the supervision of the Financial Conduct Authority (FCA). The Lux Funds will be overseen by the Commission de Surveillance du Secteur Financier (CSSF) in the Grand Duchy of Luxembourg. This means there will be many similarities and some differences as a result of slightly different fund structures and their respective regulators. Importantly, the level of regulatory supervision provided by the CSSF is considered equivalent to that of the FCA. For a comparison of the features and regulations of the two types of fund in the United Kingdom and the Grand Duchy of Luxembourg please refer to Appendix 1. The Lux Funds will follow the same or a very similar investment process to that currently used to manage your investment. However, despite having the same investment strategy, process and associated risks as the Existing Funds, the Lux Funds do have some differently worded investment objectives and policies. The most significant changes are: nadditional information about the instruments that the fund manager will use and their investment limits; ninformation about a reference index that the fund manager uses as part of the investment process; nthe removal of references to investment in assets other than equities for Threadneedle (Lux) Pan European Equity Dividend, and in assets other than bonds for Threadneedle (Lux) European Corporate Bond and Threadneedle (Lux) European High Yield Bond. The revised wording provides additional information about the way the Lux Funds will be managed, but does not affect the way they will be managed in practice. There are also some differences between the operational and administrative features of the Existing Funds and the Lux Funds. These are described below. There will be no re-balancing of the Funds as a result of the Mergers. For a detailed comparison of the Existing Funds and the Lux Funds, please refer to the relevant section of Appendix 1. 10

20 2.1 COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES The investment objective and policy for each of the Existing Funds and the Lux Funds are set out in Appendix 1. The revised wording provides additional information about the way the Lux Funds will be managed, but does not affect the way they will be managed in practice. Please refer to Appendix 1 for the full investment objectives and policies of the Existing Funds and the Lux Funds. 2.2 RISK FACTORS The risks relating to the Existing Funds are largely the same as the risks relating to their corresponding Lux Funds. As evidence of this, the Lux Funds will have the same Synthetic Risk Reward Indicator (SRRI) as the Existing Funds. Any additional risks in the Lux Funds that we consider to be potentially significant are set out in the draft Key Investor Information Document (KIID) for the Lux Funds. 2.3 COMPARISON OF OPERATIONAL FEATURES Fee structure The Annual Management Charge for your New Shares will be the same as it was for your Existing Shares. However, there is a different charging structure for the Existing Funds and the Lux Funds. For the Existing Funds, in addition to the Annual Management Charge, a limited number of fees and expenses may also be paid out of the Existing Funds property. With the Lux Funds, fees and expenses over and above the Annual Management Charge are not paid out of the Lux Funds property. Instead, those funds charge fixed operating expenses. Investors should note that a subscription tax (taxe d abonnement) of 0.05% per annum applies to retail share classes in funds based in Luxembourg and this will be included in the Lux Funds operating expenses. For qualifying institutional investors investing into an institutional share class (as defined under the Luxembourg Regulations) this tax reduces to 0.01% per annum. As a result, the ongoing charges figure for the Lux Funds will be correspondingly higher than the current ongoing charges figure for the Existing Funds. Please refer to Appendix 1 for further information. Please contact us if you believe that you qualify as an institutional investor according to the Luxembourg Regulations and would like to move your investment into an institutional share class. We will need you to complete the appropriate declaration, so you can instruct us to transfer your investment into an institutional share class if the Mergers are approved Dealing cut-off For both the Existing Funds and the Lux Funds, all subscriptions, redemptions or exchanges will be applied using the Net Asset Value calculated after the order is received (e.g. an unknown Net Asset Value). For the Existing Funds, if we receive your instructions before 1:00pm Luxembourg time (12 noon UK time) on a Business Day, we will process your order using the price for Shares for that day. This is known as the Dealing Cut-Off Time. For the Lux Funds, the Dealing Cut-Off Time is 3:00pm Luxembourg time (2:00pm UK time) on each Business Day Valuation Point Shares of the Funds (and their underlying assets) are valued at different times each day. The price for the shares of each Fund is determined using that Fund s Valuation Point. The Valuation Point for the Existing Funds is 1:00pm Luxembourg time (12 noon UK time). The Valuation Point for the Lux Funds is Global Close. 11

21 2.3.4 Accounting dates and income allocation dates There will be different accounting dates and dates on which income will be paid for the Lux Fund, as set out below: Existing Fund Lux Fund Fund name Accounting dates XD dates Income payment Fund name Accounting dates Income payment European Corporate Bond Fund 7 March (annual) 7 September (semi-annual) 8 March (annual) 8 September (semi-annual) 7 May (annual) 7 November (semi-annual) Threadneedle (Lux) European Corporate Bond 31 March (annual) 30 September (semi-annual) March and September, one Business Day before month-end. European High Yield Bond Fund 7 March (annual) 7 September (semi-annual) 8 March (annual) 7 May Threadneedle (Lux) European High Yield Bond 31 March (annual) 30 September (semi-annual) March and September, one Business Day before month-end. Pan European Fund 7 March (annual) 7 September (semi-annual) 8 March (annual) 7 May Threadneedle (Lux) Pan European Equities 31 March (annual) 30 September (semi-annual) March and September, one Business Day before month-end. Pan European Smaller Companies Fund 7 March (annual) 7 September (semi-annual) 8 March (annual) 7 May Threadneedle (Lux) Pan European Smaller Companies 31 March (annual) 30 September (semi-annual) March and September, one Business Day before month-end. Pan European Equity Dividend Fund 30 April (annual) 31 October (interim) 1 May (annual) 1 November (semi-annual) 30 June (annual) 31 December (semi-annual) Threadneedle (Lux) Pan European Equity Dividend 31 March (annual) 30 September (semi-annual) March and September, one Business Day before month-end. Credit Opportunities Fund 21 January (annual) 21 July (semi-annual) 22 January (annual) 21 March Threadneedle (Lux) Credit Opportunities 31 March (annual) 30 September (semi-annual) March and September, one Business Day before month-end Base currency The base currency (the currency in which the sub-funds are accounted) of the Existing Funds is pounds sterling, except for Credit Opportunities Fund where the base currency is euros. The base currency of the Lux Funds is different for each of the funds and is set out in Appendix 1. However, the fund managers of each of the Existing Funds and their corresponding Lux Fund refer to the same investment currency when they make investments so there is no significant change to the currency movement risks in each Existing Fund and the Lux Funds Settlement periods Trades for the Existing Funds settle four Business Days after we receive your instructions, whereas trades for the Lux Funds settle after three Business Days. This means that you will receive your money from us more quickly if you sell your Shares in the Lux Funds, but we will need to receive money from you more quickly if you buy new Shares in the Lux Funds after the Mergers have taken place. 12