Swing pricing changes to the underlying fund of P40 Value Partners High-Dividend Stocks

22 March 2021

We have been notified by Value Partners Hong Kong Limited, the Manager of the Trust (the “Manager”) of the following upcoming changes to the swing pricing policy of the underlying fund of P40 Value Partners High-Dividend Stocks. These changes will take effect from 30 April 2021 (the “Effective Date”).

Please see the below extract for more details, which has been taken from the shareholder circular of the underlying fund of P40 Value Partners High-Dividend Stocks:

“With effect from the Effective Date, with a view to protecting the interests of Unitholders the Manager may introduce anti-dilution pricing adjustment mechanism under certain circumstances.

In order to reduce the effect of “dilution” on the Trust, the Manager may (if in its opinion in good faith it is in the best interest of Unitholders to do so), adjust the Net Asset Value of a Unit of any Class. Dilution occurs when the actual cost of purchasing or selling the underlying assets of the Trust, deviates from the carrying value of these assets in the Trust’s valuation due to dealing and other costs, taxes and duties, market movements and any spread between the buying and selling prices of the underlying assets. Dilution may have an adverse effect on the value of the Trust and therefore impact the Unitholders. By adjusting the Net Asset Value per Unit, this effect can be reduced or mitigated and Unitholders can be protected from the impact of dilution.

Under normal market conditions, the Manager expects that the anti-dilution pricing adjustment will not exceed 3% of the Net Asset Value per Unit on the relevant Valuation Day. Under extreme market conditions (such as market crash or global financial crisis), the Manager may increase such amount to protect interests of the Unitholders.

In determining the Issue Price and Redemption Price of a Unit of any Class on each relevant Valuation Day, the Net Asset Value per Unit shall be increased by the aforesaid adjustment where the net subscription on the relevant Valuation Day exceeds certain pre-determined threshold(s), or decreased by the aforesaid adjustment where the net redemption on the relevant Valuation Day exceeds certain pre-determined threshold(s). Such pre-determined threshold(s) will be determined and reviewed on a periodic basis by the Manager.

The Manager will consult the Trustee prior to any adjustment and such adjustment would only be made where the Trustee has no objection to it. Any such additional amount will be retained by the Trust and will form part of the assets of the Trust.

As a result of the above change, the Trust to which the anti-dilution pricing adjustment applies is subject to pricing adjustments risk. Subscriptions or redemptions may dilute the Trust’s assets due to dealing and other costs associated with the trading of underlying securities. In order to counter this impact, adjustment of prices (including swing pricing) may be adopted to protect the interests of the Unitholders. Consequently, investors may subscribe (redeem) at a higher subscription price (lower redemption price). Investors should note that the occurrence of events which may trigger adjustment of prices is not predictable. It is not possible to accurately predict how frequent such adjustments of prices will need to be made. Adjustments may be greater than or less than the actual charges incurred. Investors should also be aware that adjustment of prices may not always, or fully, prevent the dilution of the Trust’s assets.”

 

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