Notification of changes to the underlying funds of various Aberdeen funds

04 August 2020

J96 Aberdeen Standard SICAV I Technology Equity

P33 Aberdeen Standard SICAV I All China Equity

P54 Aberdeen Standard SICAV I Indian Equity

P65 Aberdeen Standard SICAV I Asia Pacific Equity

R11 Aberdeen Standard SICAV I Emerging Markets Smaller Companies

We have been notified by Aberdeen Standard Investments (the “Company”) of the following inclusion of additional disclosures on the use of swing pricing mechanism of the underlying funds of the mirror funds named above, and of the following change of name and investment policy of the underlying fund of mirror funds. These changes will take effect from 1 September 2020 (the “Effective Date”).

Inclusion of additional disclosures on the use of the Swing Pricing Mechanism of the underlying funds of the mirror funds

Please see the extract below and overleaf, which has been taken from the shareholder circular of the underlying funds of the mirror funds:

“To comply with the CSSF FAQ dated 30 July 2019 confirming the minimum level of information to be disclosed in relation to the use of swing pricing, the current swing pricing disclosures in the prospectus of the Company will be updated as described below. The maximum Swing Factor (as defined below) is not expected to be higher than 3% of the Net Asset Value of the Fund."

“The Board of Directors current policy is to impose a swing pricing adjustment to the Net Asset Value of each Class of Shares in a given Fund in the following circumstances:

- if the net redemptions on a particular Dealing Day, exceed 5% of the Net Asset Value of the Fund or any lower thresholds (i.e. from 0% up to 5%) (the “Swing Threshold”) applicable to specific Funds as determined by the Board of Directors, the Net Asset Value for issues and redemptions will be adjusted downwards by the applicable swing factor (the “Swing Factor”);

- if net subscriptions on a particular Dealing Day, exceed 5% of the Net Asset Value of the Fund or any lower Swing Threshold applicable to specific Funds as determined by the Board of Directors, the Net Asset Value for issues and redemptions will be adjusted upwards by the applicable Swing Factor.

- If charged the swing pricing adjustment will be paid into the relevant Fund and become part of the assets of the relevant Fund.

As a result of a swing pricing adjustment, the Share price for subscription or redemption of Shares will be higher or lower than the Share price for subscription or redemption of Shares which would otherwise have been applied in the absence of a swing pricing adjustment. The costs associated with dealing in Shares as a result of Shareholder subscriptions and redemptions may adversely impact the value of a Fund’s assets. In order to (i) prevent this adverse effect, called "dilution", on existing or remaining Shareholders and therefore protect their interests, (ii) more equitably allocate the costs associated with investor trading activity to those investors transacting on the relevant trade date; (iii) reduce the impact on the Funds’ performance of transactions costs and (iv) deter frequent trading activity, the Funds may apply swing pricing as part of their valuation policy.

The decision to swing the Net Asset Value is based on the overall net-flows in a Fund, and is not applied per share class. It does therefore not address the specific circumstances of each individual investor transaction.

As dilution is related to the inflows and outflows of money from the Fund it is not possible to accurately predict whether dilution will occur at any future point in time. Consequently it is also not possible to accurately predict how frequently Aberdeen Standard SICAV I will need to make such dilution adjustments.

The Management Company retain the right to suspend the application of the swing pricing mechanism on a specific Dealing Day when they consider that its application is not the most appropriate approach when taking into consideration the circumstances surrounding particular investor trading activity.

The swing pricing allows for the Net Asset Value to be adjusted upwards or downwards by a Swing Factor which is not expected to be higher than 3% of the Net Asset Value of the Fund if, on any Dealing Day, the net subscriptions or net redemptions in a Fund exceed a Swing Threshold, as set by the Board of Directors from time to time upon proposal by the Management Company and determined on the basis of elements as disclosed in the Standard Life Aberdeen Group’s swing pricing policy (e.g. the size of the relevant Fund, the type and liquidity of positions in which the Fund invests, etc.). The maximum Swing Factors noted are expected and the actual Swing Factor will reflect the costs noted below which may adversely impact the value of a Fund’s assets. The Management Company may decide to increase the maximum Swing Factor beyond the maximum percentages stated above, where such increase is justified by exceptional market conditions such as volatile markets and taking into account the best interest of Shareholders.

The Swing Factor is determined on the basis of expected costs associated with the Fund’s portfolio trading activity. Such costs can include, but are not limited to bid/offer spreads, broker fees, transaction charges, tax and duty charges, entry or exit fees, share class specific costs and, registration costs where appropriate, in line with the Standard Life Aberdeen Group’s swing pricing policy.

The Management Company has implemented a swing pricing policy, which has been approved by the Board of Directors as well as specific operational procedures governing the day-to-day application of the swing pricing. The above applies to all Funds.”

Change of name and investment policy of the underlying fund of Aberdeen Standard SICAV I Technology Equity

Please see the table below for more details regarding the name change of the underlying fund of Aberdeen Standard SICAV I Technology Equity:

	Before the Effective Date	With effect from the Effective Date
Mirror fund Name	Aberdeen Standard SICAV I Technology Equity	Aberdeen Standard SICAV I Global Innovation Equity
Fund Code	J96	J96
Underlying Fund Name	Aberdeen Standard SICAV I Technology Equity Fund	Aberdeen Standard SICAV I Global Innovation Equity Fund

Please find the below extract regarding the change in investment policy of the underlying fund of Aberdeen Standard SICAV I Technology Equity, which has been taken from the shareholder circular of the underlying fund of Aberdeen Standard SICAV I Technology Equity:

“Currently, the Fund’s investment objective is long term total return to be achieved by investing at least two-thirds of the Fund’s assets in equities and equity-related securities of companies involved in high technology industries; and/or, of companies which have the preponderance of their business activities in high technology industries; and/or, of holding companies that have the preponderance of their assets in companies involved in high technology industries.

Following a strategic review of the Fund’s investment policy, from the Effective Date the Fund will be repositioned to a thematic approach. The opportunity set for innovation is wider than just technology and IT sectors. As a result of the changes, the Investment Managers expect the Fund to have access to a broader investment opportunity set with the potential to achieve better long term financial results and diversification for Shareholders when compared to the existing investment policy.

From the Effective Date, the Fund’s investment objective will be long term total return to be achieved by investing at least two-thirds of the Fund’s assets in equities and equity-related securities of companies of all sizes whose business models are focused on and/or benefit from all forms of innovation.

To identify such companies throughout the world whose business models are focused on and/or benefit from all forms of innovation, the Fund undertakes a qualitative analysis to invest in companies which exhibit one or more of the following features:

1. the company is subject to the impact of innovation. The Fund considers the impact of innovation by breaking it into five pillars: How we live, How we make, How we save and spend, How we work and How we play, which are key pillars of human activity.

2. the company is using innovation to improve their businesses, disrupt existing businesses and enable innovation to occur.

3. innovation in its different forms is currently and/or in the future will be one of the key drivers behind a company’s growth.

While the Fund aims to have exposure to a broad range of companies across sectors, it is likely the Fund will have material exposure to established businesses in the information technology, healthcare and consumer discretionary sectors.

The investment process will change from Long Term Quality to a Thematic approach as described in the Investment Philosophy and Process section of the prospectus.

In the same view, the Fund will also be renamed to Global Innovation Equity Fund to reflect the repositioning.

As from the Effective Date the Investment Managers will reposition the portfolio of the Fund in line with the new investment policy and strategy described above. Whereas it is expected that 90% of the portfolio will be repositioned within a week following the Effective Date, the repositioning of a limited number of assets of the Fund may take approximately up to 16 calendar days. The transaction costs for the repositioning process are estimated at 4bps of the net asset value of the Fund which corresponds to approximately USD 125,000 with USD 313 million of net assets under management as at 30 June 2020. Such transaction costs will be borne by the Fund.

Following the change of investment objective, the Fund may be subject to the following key risks:

Concentration risk -The Fund’s investments may be concentrated in specialist market sectors which include companies whose business models are focused on and/or benefit from all forms of innovation, including but not limited to information technology, healthcare and consumer discretionary sectors. The value of the Fund may be more volatile than that of a fund having a more diverse portfolio of investments.

Risk relating companies in innovation sectors - While the Fund aims to have exposure to a broad range of companies across sectors, it is likely that the Fund will have material exposure to established businesses in the information technology, healthcare and consumer discretionary sectors, which might result in the performance of the Fund being more volatile against the broad MSCI AC World Index over the short and medium term.

The Fund’s focus on innovation means that the companies in the Fund’s portfolio are more likely to be growth focused. Where a company’s efforts in innovation is not successful or well-received by consumers, the company may not achieve the expected growth, and the value of the Fund may be adversely affected as a result. The Fund may also invest in companies which are heavily dependent on patent and intellectual property rights and/or licences, the loss or impairment of which may adversely affect profitability of these companies.

Risk of investing in smaller companies - Smaller companies are subject to the risk of greater vulnerability to the release of unfavourable market news and information and the risk of being adversely affected by poor economic or market conditions. The stock of smaller companies may have lower liquidity and their prices are more volatile to adverse economic developments than those of larger companies in general.

Further, from the Effective Date the benchmark of the Fund will change from MSCI AC World Information Technology Index (USD) to MSCI AC World Index (USD).”

Should you have any questions regarding these changes, please contact International Funds & Investments.