ST. JAMES S PLACE UNIT TRUSTS. (the Schemes ) INFORMATION FOR HONG KONG INVESTORS ( IHKI )

Transcription

1 ST. JAMES S PLACE UNIT TRUSTS (the Schemes ) INFORMATION FOR HONG KONG INVESTORS ( IHKI ) This IHKI, dated January 2018 should be read in conjunction with, and forms part of the prospectus dated 18 January 2018, as amended from time to time, issued by St. James s Place Unit Trust Group Limited in relation to the Schemes (the Prospectus ) and the Product Key Facts Statement of the relevant Schemes set out below, which together form the offering documents (collectively, the Hong Kong Offering Document ) for the purpose of marketing Units of the relevant Schemes set out below in the Hong Kong Special Administrative Region of the People s Republic of China ( Hong Kong ). Investors should note that the Key Investor Information Document, referred to in the Prospectus, has not been authorized by the SFC and therefore is not available to Hong Kong investors. Unless otherwise specified, defined terms used herein bear the meanings attributed to them in the Prospectus. References to the singular include the plural and vice versa. Notwithstanding anything in the Prospectus, in Hong Kong, the English and Chinese texts of the Hong Kong Offering Document shall be equally authoritative. Important: If you are in any doubt about the contents of this Hong Kong Offering Document, you should seek professional financial advice. The manager of the Schemes, St. James s Place Unit Trust Group Limited (the Manager ), accepts full responsibility for the accuracy of the information contained in the Hong Kong Offering Document to the best of the knowledge and belief of the Manager (who has taken all reasonable care and made all reasonable enquiries to ensure that such is the case) the information contained in the Hong Kong Offering Document is accurate as at the date thereof and the Manager confirms, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement misleading. Authorisation in Hong Kong In relation to the Schemes as set out in the Prospectus, only the following Schemes are authorised by the Securities and Futures Commission of Hong Kong ( SFC ) pursuant to section 104 of the Securities and Futures Ordinance ( SFO ) and hence may be offered to the public of Hong Kong: List of SFC authorized Schemes St. James s Place Allshare Income Unit Trust St. James s Place Asia Pacific Unit Trust St. James s Place Balanced Managed St. James s Place Index Linked Gilts Unit Trust * St. James s Place International Equity Unit Trust St. James s Place Managed Growth Unit 1 MAIN\WOEMIL\ _2.doc

2 Unit Trust Trust St. James s Place Corporate Bond Unit Trust St. James s Place North American Unit Trust St. James s Place Equity Income Unit Trust St. James s Place Strategic Managed Unit Trust St. James s Place Global Equity Income Unit Trust St. James s Place UK and General Progressive Unit Trust St. James s Place Global Emerging St. James s Place UK Growth Unit Trust Markets Unit Trust St. James s Place Global Unit Trust St. James s Place UK High Income Unit Trust * This is an index fund. This Scheme is reopened to new subscriptions and switches in from Hong Kong investors on 22 December The Prospectus also refers to the following SFC authorised schemes. Hong Kong investors requiring information on these schemes should contact the Hong Kong Representative: St. James s Place Adventurous Growth Unit Trust St. James s Place Adventurous International Growth Unit Trust St. James s Place Balanced Growth Unit Trust St. James s Place Balanced International Growth Unit Trust St. James s Place Conservative Growth Unit Trust St. James s Place Conservative International Growth Unit Trust Warning: Please note that the Prospectus is a global offering document and therefore also contains information of the following Schemes which are not authorised by the SFC: St. James s Place Continental European Unit Trust St. James s Place Diversified Bond Unit Trust St. James s Place Emerging Markets Equity Unit Trust St. James s Place Ethical Unit Trust St. James s Place Gilts Unit Trust St. James's Place Global Equity Unit Trust St. James s Place Greater European Progressive Unit Trust St. James s Place International Corporate Bond Unit Trust St. James s Place Investment Grade Corporate Bond Unit Trust St. James s Place Strategic Income Unit Trust St. James s Place UK Income Unit Trust St. James s Place UK and International Income Unit Trust St. James s Place Worldwide Opportunities Unit Trust In addition, the Prospectus also makes reference to the following schemes which are not authorised by the SFC: St. James s Place Alternative Assets Unit Trust St. James s Place Equity A Unit Trust St. James s Place Equity B Unit Trust St. James s Place Equity C Unit Trust St. James s Place Global Growth Unit Trust St. James s Place Global Smaller Companies Unit Trust St. James s Place Japan Unit Trust St. James s Place Money Market Unit Trust St. James s Place Multi Asset Unit Trust St. James s Place Property Unit Trust St. James s Place UK Absolute Return Unit Trust. St. James s Place Worldwide Income Unit Trust MAIN\WOEMIL\ _2.doc 2

3 No offer shall be made to the public of Hong Kong in respect of the aforementioned unauthorised Schemes/schemes. The issue of the Hong Kong Offering Document was authorized by the SFC only in relation to the offer of the relevant SFC-authorised Schemes mentioned above to the public of Hong Kong. Intermediaries should take note of this restriction. SFC authorisation is not a recommendation or endorsement of the Scheme(s), nor does it guarantee the commercial merits of the Scheme(s) or their performance. It does not mean that the Scheme(s) are suitable for all investors, nor is it an endorsement of their suitability for any particular investor or class of investors. Dealing in Units by Hong Kong Investors The following information is in addition to the basic information on dealing set out in the Prospectus. Hong Kong investors should take note accordingly. How to Purchase Units Hong Kong investors wishing to subscribe for Units should contact the Hong Kong Representative. Currently, the following Units of the respective Schemes listed under the "List of SFC authorised Schemes" above are generally available for purchase in Hong Kong (unless stated as being closed to new investment, in Unitholders interest): For all Schemes listed above under the "List of SFC authorised Schemes": Class H Accumulation Units of each Scheme and Class L Accumulation Units* of each Scheme. *Note: Any units held by Hong Kong investors on or before 10 October 2016 have been renamed Class L Accumulation Units. With effect from 1 April 2017, Class L Accumulation Units are closed to subscriptions from new Hong Kong investors. Existing Hong Kong investors in Class L Accumulation Units of a Scheme can continue to deal in (subscribe for, redeem and switch) these units as per the terms of the Hong Kong offering documents. Class Class L Accumulation Units* Class H Accumulation Units Management and/or Investment Adviser Fees and Preliminary Charge (range) # Annual management charge: 1.11% % Investment adviser fee: 0.05% % Preliminary charge: 5% Annual management charge: 1.61% % Investment adviser fee: 0.05% % Preliminary charge: 5% Minimum investment amount (Initial and subsequent) GBP 1,500 (initial) GBP 1,000 (subsequent) GBP 1,500 (initial) GBP 1,000 (subsequent) Type of eligible investors All investors who invest directly into the relevant Scheme. Only available to investors in Asia who invest directly into the relevant Scheme. # Please refer to Appendix 1 of the Prospectus for the actual rate applicable to a particular Scheme. MAIN\WOEMIL\ _2.doc 3

4 Investors should note that the Hong Kong Offering Document is authorized by the SFC on the condition that only the aforementioned Unit class(es) of the Schemes listed above which are specified as available to Hong Kong investors are offered to the public of Hong Kong. For deals placed in Hong Kong, the dealing cut-off point is 5:00 p.m. (Hong Kong time) on each Hong Kong Business Day on which banks in Hong Kong are also open for normal banking business, or such other time, or times, as the Manager shall determine and notify to Unitholders (the Hong Kong Dealing Cut-off Point ). The Hong Kong Representative will transmit all applications it received to the Manager as soon as possible. Applications received after the Hong Kong Dealing Cut-off Point will normally be processed by the Hong Kong Representative on the next Business Day on which banks in Hong Kong are open for normal banking business. The Manager may, in its sole discretion, waive payment of and/or discount any preliminary charge payable. No money should be paid to any intermediary in Hong Kong who is not licensed or registered to carry on Type 1 (Dealing in Securities) regulated activity under Part V of the SFO or exempted therefrom. How to Redeem Units Hong Kong investors wishing to redeem Units should submit their redemption request to the Hong Kong Representative on or before the Hong Kong Dealing Cut-off Point for its onward transmission to the Manager as soon as possible. Applications received after the Hong Kong Dealing Cut-off Point will normally be processed by the Hong Kong Representative on the next Business Day on which banks in Hong Kong are open for normal banking business. The Manager may, in its sole discretion, waive payment of and/or discount any redemption charge payable. In specie redemption Investors should also note that special rules apply to a request for repurchase of Units representing not less than 5 per cent. of the total value of the property of a Scheme. These permit the Manager to serve a notice on the Unitholder not later than the close of business on the second Business Day following the day on which the request is received, requiring the Unitholder to accept a transfer of property of that Scheme instead of the repurchase price of his Units. If this is done, the Unitholder may elect instead to receive the net proceeds of the sale by the Manager of that property by serving such notice on the Manager within four Business Days of receipt of the Manager s notice. The above rules will not have effect to enable Units to be repurchased at a time when repurchase is suspended. For further details investors may refer to the Prospectus (page 36, heading In Specie Redemption ). How to Switch Units Hong Kong investors wishing to switch Units between different Schemes should submit their switching request to the Hong Kong Representative on or before the Hong Kong Dealing Cutoff Point for its onward transmission to the Manager as soon as possible. Applications received after the Hong Kong Dealing Cut-off Point will normally be processed by the Hong Kong Representative on the next Hong Kong Business Day on which banks in Hong Kong are open for normal banking business. The Manager may, in its sole discretion, waive payment of and/or discount any preliminary and/or redemption charge payable. MAIN\WOEMIL\ _2.doc 4

5 Applications for purchase, redemption or switching which are (a) received by the Hong Kong Representative before the Hong Kong Dealing Cut-off Point set out above in respect of any Hong Kong Business Day for transmission to the Manager; and (b) that are received and accepted by the Manager prior to the relevant cut-off point (as described in the Prospectus) in respect of the relevant Business Day, will normally be processed on such Business Day. Applications received after the Hong Kong Dealing Cut-off Point set out above or those which are not received and accepted by the Manager prior to the relevant cut-off point (as described in the Prospectus) will be processed in respect of the next Business Day. Unless otherwise specified and agreed with the Manager in any particular instance, any settlement for subscriptions or switching applications must be made in accordance with the terms set out in the Prospectus and will be effected pursuant to the terms thereof. And for so long as the relevant Scheme(s) are authorized by the SFC and in the absence of any suspension in dealings, redemption payments in relation to any SFC authorized Scheme(s) set out herein shall be paid no later than one calendar month after receipt of all documentation requested by, and to the satisfaction of, the Manager as more particularly set out in the Prospectus (i.e. vis-à-vis the form of payment of proceeds) in pounds sterling (i.e. the currency in which the Units of the Scheme are priced). Additional Restrictions Use of Financial Derivative Instruments As mentioned in Appendix 2 and Appendix 3 of the Prospectus, in addition to the specific objectives and policies of the Schemes as set out in Appendix 1, the Schemes listed under the List of SFC authorized Schemes above may also, as an activity ancillary to their primary investment objectives and policies and/or for temporary defensive purposes, utilize financial derivative instruments for efficient portfolio management and hedging purposes under the conditions and within the limits laid down by the Regulations. Notwithstanding the above and for the avoidance of doubt, the Manager hereby confirms that the Schemes (except for St. James s Place Asia Pacific Unit Trust for which please see the paragraph below) will not use financial derivative instruments for purposes other than efficient portfolio management of the respective Scheme(s) and/or for hedging to protect their assets and commitments. The Schemes will not invest extensively or primarily in financial derivative instruments to achieve a Scheme s investment objective or for investment purposes (i.e. as noted above, there is only limited/ancillary use of financial derivative instruments for investment purposes). With regard to St. James s Place Asia Pacific Unit Trust, Hong Kong investors should note that under United Kingdom Financial Conduct Authority ( FCA ) approvals, this Scheme may use derivatives (e.g. futures, options) for investment purposes (although it is anticipated this will be limited and/or infrequent use) and for the purposes of efficient portfolio management (including investment and hedging). However, for so long as this Scheme remains authorised by the SFC, the Manager hereby confirm that this Scheme will not use financial derivative instruments for purposes other than efficient portfolio management of the Scheme and/or for hedging to protect the Scheme s assets and commitments. The Scheme will not invest extensively or primarily in financial derivative instruments to achieve the Scheme s investment objective or for investment purposes (i.e. as noted above, there is only limited/ancillary use of financial derivative instruments for investment purposes). Prior written notification of not less than 1 month will be given to affected unitholders and the Hong Kong Offering Document will be updated should the Manager intend to change the aforesaid policy in the future in respect of any Scheme(s) authorised by the SFC in Hong Kong. MAIN\WOEMIL\ _2.doc 5

6 Risk monitoring and management financial derivative instruments The Manager is required by laws and regulations to employ a risk management process in respect of the Schemes that allows it to monitor accurately, and manage, the global exposure from financial derivative instruments ( global exposure ) which each Scheme faces as a result of its investment strategy. There are 2 generally accepted approaches: (A) (B) The first approach is the commitment approach. The commitment approach is a methodology that aggregates the underlying market or notional values of financial derivative instruments to determine the degree of global exposure of a Scheme to financial derivative instruments. Pursuant to applicable laws and regulations, the global exposure for a Scheme under the commitment approach must not exceed 100% of the relevant Scheme s net asset value. This is the approach currently adopted by all Schemes for this purpose. The alternative approach to monitor and manage risk arising out of the use of financial derivative instruments is Value at Risk ( VaR ). The VaR methodology measures the potential loss to a Scheme at a particular confidence (probability) level over a specific time period and under normal market conditions. There are two variants of the VaR measure generally used to monitor and manage the global exposure of a fund, namely: (i) Relative VaR and (ii) Absolute VaR. Relative VaR is where the VaR of a Scheme is divided by the VaR of an appropriate benchmark or reference portfolio, allowing the global exposure of a Scheme to be compared to, and limited by reference to, the global exposure of the appropriate benchmark or reference portfolio. Applicable regulations specify that the VaR of the Scheme under the Relative VaR calculation must not exceed twice the VaR of its benchmark. In contrast, Absolute VaR is commonly used as the relevant VaR measure for absolute return style Schemes, or where a benchmark or reference portfolio is not otherwise appropriate for risk measurement purposes. For the avoidance of doubt, none of the Schemes currently adopt VaR, given that none of the Schemes use financial derivative instruments extensively for investment purposes. However, should this change in respect of any particular Scheme(s), the Manager will provide more information on the above and the relevant document and disclosures will be updated accordingly, as necessary. Exposure to China B Shares Insofar as any SFC authorized Scheme is permitted to invest (directly or indirectly) in China B Shares (as more particularly described in the Prospectus), such Scheme s aggregate exposure to China B Shares is not expected to exceed 10% of its net asset value and if the aforesaid percentage is increased the Hong Kong Offering Document will be updated accordingly. Currently the following Schemes may invest (directly or indirectly) in China B Shares: St. James s Place Asia Pacific Unit Trust St. James s Place Balanced Managed Unit Trust St. James s Place Global Emerging Markets Unit Trust St. James s Place Global Equity Income Unit Trust St. James s Place Global Unit Trust St. James s Place International Equity Unit Trust St. James s Place Managed Growth Unit Trust St. James s Place Strategic Managed Unit Trust For the avoidance of doubt, the Schemes will not invest (directly or indirectly) in China A Shares. MAIN\WOEMIL\ _2.doc 6

7 Based on tax advice on Chinese tax law received by the Manager, under current Chinese tax laws, regulations and implementation rules, if a Scheme will invest directly in China B Shares, then dividends derived during the holding of B Shares will be subject to Chinese withholding income tax ( WHT ), currently at a rate of 10%. WHT on dividends will be withheld by B Share issuers upon distribution of dividends. Under the current Chinese tax laws, there lacks specific guidance on the corporate income tax treatment of capital gains derived on the disposal of China B Shares held directly by a Scheme. Technically, such capital gains should be subject to 10% PRC WHT based on the general principle of for asset transfer provided by the current domestic corporate income tax law and regulation, subject to relief by the applicable double tax treaty/arrangement (if applicable). In addition, the net gains (gains net of losses) from the trading of China B Shares by the Scheme should be subject to Chinese Business Tax ( BT ) at a rate of 5%. However, in practice, the Chinese tax authorities have not enforced the collection of WHT and BT on the gains from the trading of B Shares in absence of specific guidance and withholding mechanism. No Chinese WHT or BT liability will be incurred directly by a Scheme as a result of the Scheme s indirect exposure to China B Shares. No tax provision has been made by the Scheme in respect of Chinese WHT and BT liability on capital gains resulting from direct / indirect exposure to China B shares but the Scheme reserves the right to make provisions should Chinese tax law, regulation or practice change. Investors should note that a Scheme may indirectly bear Chinese taxes levied on or borne by such schemes and instruments invested in by a Scheme as a result of its indirect exposure to China B shares. Promotional and Advertising Expenses For so long as the relevant Scheme(s) are authorised pursuant to Section 104(1) of the SFO, expenses arising out of any advertising or promotional activities in connection with the relevant Scheme(s) shall not be paid from the Scheme s assets in accordance with paragraph 6.18(b) of the SFC s Code on Unit Trusts and Mutual Funds (the Code ). Cash Rebates and Soft Dollar Commissions No cash rebates will be retained by the Manager, the Investment Advisers or any of their connected persons. Transactions carried out on behalf of the relevant Scheme(s) with the Manager, the Investment Advisers or any of their connected persons will be conducted on an arm's length basis and would only be executed where the brokerage rates are not in excess of customary institutional full service brokerage rates. Termination/Merger of a Scheme The Prospectus and the trust deed of the relevant Scheme does not require that prior notice be given to affected Unitholders of any termination or merger of the relevant Scheme. However, pursuant to applicable United Kingdom laws and regulations, termination of a Scheme requires approval (subject to one month s prior notice) from the FCA before notifying affected Unitholders on the commencement of a termination (FCA Rules, COLL 7). A merger of a Scheme requires that a general meeting of Unitholders is convened with at least 14 days notice and the passing of a Unitholder s resolution in favour of such proposed merger (FCA Rules, COLL 4). For so long as any Scheme(s) are authorised in Hong Kong pursuant to Section 104(1) of the SFO, affected Unitholders will be given 3 months' notice, or such shorter period as the SFC may determine, in the event of such termination or merger of such Scheme. Additional Information MAIN\WOEMIL\ _2.doc 7

8 FOREIGN ACCOUNT TAX COMPLIANCE ACT U.S. tax legislation, the Foreign Account Tax Compliance Act (FATCA), imposes rules with respect to certain payments to non-u.s. persons, such as the Schemes, including interest and dividends from securities of U.S. issuers and gross proceeds from the sale of such securities. All such payments may be subject to a 30% withholding tax unless the recipient of the payment satisfies certain requirements intended to enable the Internal Revenue Service in the United States of America (IRS) to identify Specified U.S. Persons with interests in such payments. The U.S. and the UK have signed a model 1 intergovernmental agreement (IGA) for the implementation of FATCA. Under the IGA, the Schemes will generally be relieved from FATCA withholding tax on payments they receive, as well as the obligation to withhold tax on payments made to Unitholders, provided that HM Revenue & Customs and the Schemes comply with the terms of the IGA and the related UK law. Under the terms of FATCA and the IGA, although the Schemes have not been registered directly with the IRS, the Manager is a reporting financial institution and may need to disclose the name, address, taxpayer identification number and investment information relating to certain Unitholders who fall within the definition of Specified U.S. Person in FATCA, as well as certain other information relating to such interest to HM Revenue & Customs, who will in turn exchange this information with the IRS. The Manager will endeavour to satisfy the requirements imposed under FATCA and the IGA to avoid the Schemes suffering the above withholding tax. In the event that the Manager or HM Revenue & Customs is not able to comply with the requirements imposed by FATCA, the IGA or related UK law, and a Scheme suffers U.S. withholding tax on its investments as a result of such non-compliance, the net asset value of the Scheme may be adversely affected and the Scheme may suffer significant loss as a result. The extent to which the Schemes are able to report to HM Revenue & Customs will depend on each affected Unitholder in a Scheme providing the Manager with any information that the Manager determines is necessary to satisfy such obligations. By subscribing for Units in the Schemes, each affected Unitholder is agreeing to provide such information upon request from the Manager or the Registrar. Unitholders are encouraged to consult with their own tax advisors regarding the possible implications of FATCA on them and the Schemes. FATCA risk The Manager will endeavour to satisfy the requirements imposed under FATCA to avoid the Schemes suffering any withholding tax. In the event that the a Manager or HM Revenue & Customs is not able to comply with the requirements imposed by FATCA, and a Scheme suffers U.S. withholding tax on its investments as a result of such non-compliance, the net asset value of the Scheme may be adversely affected and the Scheme may suffer significant loss as a result. Stock Lending / Repurchase / Reverse Repurchase Transactions Notwithstanding any disclosure in the Prospectus to the contrary, the Manager currently does not intend to enter into any stock lending or repurchase / reverse repurchase or similar overthe-counter ( OTC ) transactions in respect of any of the SFC authorized Schemes listed above. Prior SFC approval will be sought and at least one month prior notice will be given to Unitholders should there be a change in such intention. Charging of Fees and Expenses to Capital Whilst the Prospectus provides that certain Schemes may charge either (i) all fees and MAIN\WOEMIL\ _2.doc 8

9 expenses; (ii) the annual management charge; or (iii) the Investment Adviser s fee out of the relevant Scheme s capital, this policy will not affect Hong Kong investors as only Accumulation Units are being offered in Hong Kong. Establishment costs For the avoidance of doubt, any establishment costs of the SFC authorised Schemes listed above will not be charged to the Scheme. Enhanced disclosure / clarification in relation to certain existing disclosures of the Schemes in the Prospectus In the Prospectus: 1. Under the heading 6 The Investment Advisers of the Prospectus, each of the sections referring to the relevant Investment Adviser of each Scheme has the following statement as the last sentence: The Manager may terminate the agreement with immediate effect in the interests of Unitholders. For the avoidance of doubt, in such cases, for any Scheme(s) that is authorized by the SFC in Hong Kong, the Manager will ensure that any delegation of discretionary investment management functions will only be made to an entity that is acceptable to the SFC. 2. All references to investment in the Scheme(s) via regular savings plans for individual savings accounts (and related disclosures) are not applicable to Hong Kong investors as these are not available in Hong Kong. Likewise, all references to redemption of Units for reinvestment within an ISA wrapper (and related disclosures) are not applicable to Hong Kong investors as these are not available in Hong Kong. Certain Schemes investment objectives and policy state that such Scheme(s) may invest in investment grade securities. Unitholders should note however that securities which were investment grade at the time of acquisition may be downgraded and that there is no specific requirement to sell such securities if they fall below investment grade unless otherwise stated in the investment policy of the relevant Scheme(s). The risk of securities, which are investment grade at the time of acquisition, being downgraded will vary over time. The Manager will assess each situation on its merits but does not expect that a majority of any such securities held by a relevant Scheme(s) would be downgraded in this manner, except in extreme market conditions. Under normal market conditions, the Manager does not expect such downgrading to occur frequently as, in general, the Manager will endeavor to avoid the purchase of securities that may follow a downward migration path. 3. Notwithstanding anything therein to the contrary, the Manager has confirmed that none of the aforementioned Schemes may invest more than 10% of its net asset value in noninvestment grade sovereign securities. 4. Investors should note that the term Investment Association referred to in the Prospectus, in particular, under the Investment Objectives and Policy section of St. James Place Balanced Managed Unit Trust, St. James Place Managed Growth Unit Trust and St. James Place Strategic Managed Unit Trust refers to the UK industry body which represents UK investment managers. 5. Investors should note that the term index linked securities in the objectives and policy section of St. James Place Strategic Managed Unit Trust refers to financial instruments for which the amounts of the coupon payments (interest) and/or the principal outstanding are linked to a general price index, a specific price index or an exchange rate index (per MAIN\WOEMIL\ _2.doc 9

10 OECD definition). Investors should note the related risk factors in this regard (e.g. interest rate risk, downgrading risk). Enhanced disclosure in relation to exposure to debt securities issued by or guaranteed by a single country whose credit rating is below investment grade Not more than 10% of the net asset value of the Schemes, may be invested in securities issued by or guaranteed by a single country (including its government, a public or local authority of that country) whose credit rating is below investment grade, which is being equivalent to below BBB- from the rating agency Standard & Poor s. In the event the securities are downgraded to below investment grade, the Schemes may continue to hold such securities but will dispose of them within a reasonable time to ensure that it complies with the above investment restriction. Enhanced disclosure in relation to the delegation arrangement of the St. James s Place Strategic Managed Unit Trust In respect of the St. James s Place Strategic Managed Unit Trust, investors should note that the investment adviser, namely Threadneedle Asset Management Limited ( Threadneedle ), as described in the Prospectus, has (as between Threadneedle and the sub-delegate, internally) sub-delegated discretionary investment management functions in respect of this Scheme to Columbia Management Investment Advisers, LLC ( Columbia ) (up to 15% of the Scheme s net asset value). Columbia is authorized to provide investment supervisory services by virtue of its regulation by the Securities and Exchange Commission of the U.S.A. Columbia has its registered office and head office at 225 Franklin Street, Boston, MA 02110, U.S.A. Additional Information re strategy of St. James Place Index Linked Gilts Unit Trust 1. Investors should note that the Scheme is an index fund. 2. Investors would also note that the Scheme may also invest in other, non-uk, highly rated government backed index linked securities, and is also permitted to invest in other types of transferable securities (collectively Other Securities ), units and/or shares in collective investment schemes, money market instruments, cash and near cash, and deposits (collectively Liquid Investments ). However, there is no current intention for the Scheme to invest in Other Securities. The Scheme is permitted to invest in derivatives and forward transactions (collectively Derivatives ) for the purposes of efficient portfolio management and hedging. In this respect, and notwithstanding anything in the Prospectus, it is expected that the Scheme will only have limited exposure to Liquid Investments and/or Derivatives. 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 for the purpose of efficient portfolio management (as permitted by applicable investment restrictions, being economically appropriate and cost effective use of such instruments to reduce risk, reduce cost or generate additional capital or income for the Scheme which is consistent with the Scheme s risk profile), 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. MAIN\WOEMIL\ _2.doc 10

11 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 semi-annual 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. 3. Accordingly, Hong Kong investors should note the following additional information in respect of the Scheme: (a) The Index MAIN\WOEMIL\ _2.doc 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 ) 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 Indexlinked 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 note that the Manager does not take responsibility for the contents of such website and they have not been reviewed by the SFC. 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 Investors should note that in the event that either of the 2 thresholds set out under Chapter 8.6(e)(ii) of the SFC s Code on Unit Trusts and Mutual Funds ( UT Code ) (i.e. (a) the Index s single constituent security weighing 40% of the Scheme s net asset value; or (2) the Index s top five constituent securities weighing 75% of the Scheme s net asset value) are likely to be exceeded, to ensure the Scheme s compliance with relevant regulatory requirements under the UT Code, the Manager would cease accepting further investment into the Scheme from Hong Kong investors and may (if necessary) seek its withdrawal of 11

12 MAIN\WOEMIL\ _2.doc authorisation from the SFC, at which point affected investors would have the option of redeeming from the Scheme without penalty or switching to another of the Manager s SFC authorised funds free of charge. Accordingly, the Manager will monitor adherence to these limits on an ongoing basis and will notify the SFC in advance should it become likely that either of these limits will be breached. 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 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. Investors should however note that such website has not been reviewed by the SFC. Should you require any further information, please contact your St. James s Place Partner. (b) Description of Index Methodology applicable to the Index and access The Index seeks to replicate the market for UK index linked gilts issued by the UK Government with remaining maturities of up to 15 years. The Index is rebalanced at the start of each month (i.e. equivalently at the close of business on the last business day of the preceding month), so that it has an equal weighting of each of its Component Indices. This is the monthly rebalancing. The weighting to the individual securities within each of these buckets is determined by their issuance. Such monthly rebalancing is necessary because the weighting to each bucket will fluctuate throughout the month depending on the performance of the underlying UK index linked gilts, and as such will be rebalanced back to an equal weighting at the start of each month. Therefore, the equal weighting of the Index to the Component Indices in the Index may not be maintained throughout the relevant month. For details of the methodology used for calculating the Index and the Component Indices, Hong Kong investors should refer to the FTSE Russell website ( Investors should note that this website has not been reviewed by the SFC. 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. 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. 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. The aforesaid index methodology is subject to change from time to time and investors may refer to the abovementioned website for up-to-date information thereof. 12

13 The monthly fact-sheets containing information on the top 10 holdings of both the Index and the Component Indices are available from Investors should however note that this website has not been reviewed by the SFC. 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% % (c) Specific risks applicable to the Scheme MAIN\WOEMIL\ _2.doc Investors should refer to the section below headed Additional Risk Factors for applicable Scheme specific risks. (d) Replacement of the Index Subject to any applicable requirement in the Scheme s constitutive documents, the Manager reserves the right with the prior approval of the SFC and provided that in its opinion the interests of the Unitholders would not be adversely affected, to replace the Index with another index. The circumstances under which any such replacement might occur include but are not limited to the following events: the index provider no longer calculating the Index or being able to provide the required information for the Scheme to comply with its regulatory requirements, the Manager deciding that the index provider is no longer best placed to undertake the calculation of the Index, or the Index no longer being suitable for the Scheme e.g. if there were insufficient securities for the Index to replicate. St. James s Place Index Linked Gilts Unit Trust is not in any way sponsored, endorsed, sold or promoted by FTSE International Limited ( FTSE ) or the London Stock Exchange Group companies ( LSEG ) (together the Licensor Parties ) and none of the Licensor Parties make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of 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 ) (upon which The St. James s Place Index Linked Gilts Unit Trust is based), (ii) the figure at which the Index is said to stand at any particular time on any particular day or 13

14 otherwise, or (iii) the suitability of the Index for the purpose to which it is being put in connection with St. James s Place Index Linked Gilts Unit Trust. None of the Licensor Parties have provided or will provide any financial or investment advice or recommendation in relation to the Index to St. James s Place Unit Trust Group or to its clients. The Index is calculated by FTSE or its agent. None of the Licensor Parties shall be (a) liable (whether in negligence or otherwise) to any person for any error in the Index or (b) under any obligation to advise any person of any error therein. All rights in the Index vest in FTSE. FTSE is a trade mark of LSEG and is used by FTSE under licence. Additional Information re objective and strategy of the relevant Schemes listed below Investors should note the following additional information in respect of the investment objective and strategy of the Scheme: Scheme St. James s Place Allshare Income Unit Trust St. James s Place Asia Pacific Unit Trust Additional Information re objective and strategy 1. The Scheme will be invested in a combination of primarily (which means at least 70% of its net asset value) UK, but also global, equities. 2. The strategy may result in the Scheme investing 30% or more of its net asset value in equities of small-capitalisation and mid-capitalisation companies. 3. The Scheme is also permitted to invest less than 30% of its net asset value in other asset classes permitted for Undertaking for the Collective Investment of Transferable Securities ( UCITS ) including other types of transferable securities (e.g. convertible bonds), units and/or shares in collective investment schemes, money market instruments, deposits, and use derivatives (e.g. futures, options) and forward transactions for the purposes of investment (e.g. efficient portfolio management) and hedging. Derivatives however will not be used extensively for investment purposes. 1. The Scheme aims to achieve this objective by predominantly (i.e. at least 75% of the Scheme s net asset value) investing into the equities of companies exposed to the Asia Pacific (such as Hong Kong, India, Australia and Taiwan). This includes companies based outside of the region who derive an economic benefit from countries in the Asia Pacific. The Scheme is intended to be invested with only limited exposure to equities issued by companies in Japan. The Scheme may not invest 30% or more of its net asset value in equities issued by companies in a single country. 2. The Scheme is also permitted to invest up to a total of 25% of its net asset value in other types of transferable securities (e.g. depositary receipts), units and/or shares in collective investment schemes, money market instruments, deposits, and use derivatives (e.g. futures, options) for investment purposes (although it is anticipated this will be limited and/or infrequent use) and for the purposes of efficient portfolio management (including investment and hedging). However, for so long as the Scheme remains authorised by the SFC, the Manager hereby confirms that the Scheme will not use derivatives for purposes other than efficient portfolio management and/or for hedging to protect the Scheme s assets and commitments. Derivatives will not be used extensively for investment purposes. 14 MAIN\WOEMIL\ _2.doc

15 St. James s Place Balanced Managed Unit Trust St. James s Place Corporate Bond Unit Trust 1. The Scheme will achieve this objective by generally (which means at least 60% of its net asset value) investing in quoted securities on a worldwide basis. The Scheme will invest, at the Manager s discretion, in UK and overseas equities (between 40% to 85% of the Scheme s net asset value), UK and overseas fixed interest and index linked securities (including sovereign debts) (up to 40% of the Scheme s net asset value), units and/or shares in other collective investment schemes ( in normal circumstances exposure expected to be less than 30% of the Scheme s net asset value), cash and near cash (up to 40% of the Scheme s net asset value). The Scheme will invest in line with the Investment Association s Mixed Investment 40-85% Shares Sector, which currently means that (i) at least 50% of net asset value must be in US Dollar, Sterling or Euro, of which 25% must be Sterling and (ii) it will invest between 40% and 85% of its net asset value in equities. 2. The Scheme is also permitted to invest, on an ancillary basis (i.e. less than 30% of its net asset value), in other types of transferable securities (e.g. depositary receipts), money market instruments, deposits, and use derivatives (e.g. futures, options) and forward transactions for the purposes of investment (e.g. efficient portfolio management) and hedging. Derivatives however will not be used extensively for investment purposes. 3. The Scheme will not invest more than 10% of its net asset value in below investment grade or unrated debt securities. 1. In normal market conditions the portfolio is expected to be predominantly (i.e. which means at least 80% of its net asset value) invested in high yield bonds (i.e. high yield bonds issued by corporations). However, the Manager will reduce this proportion as necessary (e.g. by investing in Investment Grade Corporate Bonds, namely corporate bonds with credit rating of no lower than a BBB minus from the ratings agency Standard & Poor s or equivalent) to preserve the capital value of the Scheme if required by market conditions (e.g. where there are insufficient investable corporate high yield bonds which meet the investment objective of the Scheme). 2. Investors should note that in the case of government bonds, emerging market bonds and asset back securities, in normal market conditions the portfolio s maximum exposure to the relevant security can be up to 10% of the Scheme s net asset value. In the case of defaulted and/or distressed bonds, in normal market conditions the portfolio s maximum exposure to the relevant security can be up to 20% of the Scheme s net asset value. Notwithstanding the above, the overall exposure to these securities, in aggregate, will not exceed 20% of the Scheme s net asset value. The Scheme s maximum exposure to unrated debt securities is 10% of the Scheme s net asset value. The Scheme may fully invest in debt securities rated below investment grade, which is being equivalent to below BBBfrom the rating agency Standard & Poor s. 3. The Scheme is also permitted to invest, on an ancillary basis, in other asset classes permitted for Undertaking for the Collective Investment of Transferable Securities ( UCITS ) 15 MAIN\WOEMIL\ _2.doc

16 including other transferable securities (e.g. preferred stock), money market instruments, cash and near cash, units in collective investment schemes, deposits and use derivatives (e.g. futures, options, credit default swaps) and forward transactions for the purposes of investment (e.g. efficient portfolio management) and hedging. Derivatives however will not be used extensively for investment purposes. St. James s Place Equity Income Unit Trust St. James s Place Global Emerging Markets Unit Trust St. James s Place Global Equity Income Unit Trust 1. It is intended that the Scheme will invest at least 70% of its net asset value in equities in UK and European Community companies. There are no specific restrictions on the investment of the Scheme including as to economic sector or geographical area, except that all securities markets in which the Scheme may invest or deal must be established in a member State of the European Economic Area and as provided in the Regulations. 2. The Scheme is also permitted to invest less than 30% of its net asset value in other types of transferable securities (e.g. corporate bonds), units and/or shares in collective investment schemes, money market instruments, deposits, and use derivatives (e.g. futures, options) and forward transactions for the purposes of investment (e.g. efficient portfolio management) and hedging. Derivatives however will not be used extensively for investment purposes. 1. The Scheme aims to achieve this objective by principally (which means at least 80% of its net asset value) investing worldwide in equities in emerging economies such as Brazil, India and South Africa including those of companies listed on developed market exchanges whose activities predominantly take place in emerging market countries. 2. The Scheme is also permitted to invest up to 20% of its net asset value in other types of transferable securities (e.g. preferred stock), units and/or shares in collective investment schemes, money market instruments, cash and near cash, deposits, and use derivatives (e.g. futures, options) and forward transactions for the purposes of investment (e.g. efficient portfolio management) and hedging. Derivatives however will not be used extensively for investment purposes. 1. The investment objective of the Scheme is to provide income, together with the potential for long-term capital appreciation, through investing primarily (which means at least 70% of net asset value) in global listed equities (including those listed in North America and Europe). 2. The Scheme invests in company shares in a wide range of countries. The Scheme is also permitted to invest less than 30% of its net asset value in other types of transferable securities (e.g. preferred stock), units and/or shares in collective investment schemes, money market instruments, cash and near cash, deposits, and use derivatives (e.g. futures, options) and forward transactions for the purposes of investment (e.g. efficient portfolio management) and hedging. Derivatives however will not be used extensively for investment purposes. 16 MAIN\WOEMIL\ _2.doc