Notification of a merger of the underlying fund of R52 Schroder Middle East

10 Jan 2022

R52 Schroder Middle East

We have received notification from Schroder Investment Management (Europe) S.A. (the “Company”) of its decision to merge the Schroder International Selection Fund – Middle East (“the Merging Fund”) which is the underlying fund of the above named mirror fund, into the Schroder International Selection Fund – Frontier Markets Equity (the “Receiving Fund”) with effect from 21 February 2022 (the “Merger Date”). 

Background to the merger

The Merging Fund and the Receiving Fund have a similar investment approach and risk profile, with the Receiving Fund having a much greater sum under management, of approximately USD 403 million as of 30 September 2021, compared to approximately USD 57 million under management in the Merging Fund as at the same date. Given the relevant size of the two funds, the Company believe that a merger into the Receiving Fund will offer investors of the Merging Fund an alternative fund with greater fund size, which can offer the potential for additional economies of scale following the merger.  

Between 15 January 2022 and 21 February 2022 (the “Rebalancing Period”), the Merging Fund will dispose of any assets that are not in line with the Receiving Fund’s investment portfolio (i.e. non-common holdings); which is estimated to be approximately 50% of the net asset value of the Merging Fund, and proceeds from the disposal of these non-common holdings will be transferred into the Receiving Fund in cash on 21 February 2022.

Therefore, during the Rebalancing Period, the portfolio of the Merging Fund may not be able to comply with the investment objective and policy of the Merging Fund as disclosed in the underlying fund Prospectus. 

What happens next?

Subscriptions from existing investors will only be accepted into the Merging Fund by the Company until 31 January 2022, and switch instructions cannot be placed during the Rebalancing Period.  In line with this, we will stop accepting any new investment instruction, or request to increase regular premium payments, to the Merging Mirror Fund from the date of this letter onwards.

The Receiving Fund is the underlying fund to the FPIL mirror fund L38 Schroder Frontier Markets Equity (the “Receiving Mirror Fund”). We have therefore taken the decision to switch holdings and redirect future regular premiums from the Merging Mirror Fund into the Receiving Mirror Fund.  Unless we receive alternative instructions, regular premiums will be redirected from 31 January 2022 and current holdings will be switched on 21 February 2022. 

Please refer to the Appendix opposite for comparative details of the Merging Mirror Fund and the Receiving Mirror Fund.

These changes will happen automatically within your policy or contract and you do not need to take any action if you agree with the choice of Default Fund that we have selected. 

However, you can choose to switch your current holdings in the Merging Mirror Fund and/or redirect your premiums or contributions, into a different fund in the FPIL range from the Receiving Mirror Fund if you wish to do so.  You can do this at any time, but if you wish to override the transfer or redirection to the Receiving Mirror Fund that we have selected, you must provide us with alternative instructions by the following cut off dates:

• Redirection of future regular premiums: 3pm UK time on 28 January 2022
• Switch current holdings: 3pm UK time on 11 February 2022

No FPIL charges will arise from these transactions.

Whilst appropriate due diligence has been carried out on the Receiving Mirror Fund we do not accept any liability for the future performance of this, or any other FPIL fund.  We recommend that you seek the advice of your usual financial adviser before making any investment decisions. 

Should you have any questions regarding these changes, please contact the Investment Marketing Team.