Notification of merger of L36 JPMorgan Indonesia
20 Aug 2024
Notification of merger of L36 JPMorgan Indonesia (the “Affected Mirror Fund”) into R08 JPMorgan ASEAN (the “Receiving Mirror Fund”)
We have received notification from JPMorgan Funds (Asia) Limited (“JPMorgan”) that the JPMorgan Indonesia Fund (the “Merging Underlying Fund”), which is the underlying fund of the Affected Mirror Fund, will merge (the “Underlying Fund Merger”) into JPMorgan ASEAN Fund (the “Receiving Underlying Fund”), with effect from 20 September 2024 (the “Effective Date”).
Background
JPMorgan has advised that, as the net asset value of the Merging Underlying Fund has fallen below its small fund size threshold of 70 million USD for a sustained period, it is considered to have limited growth potential.
JPMorgan believes the Underlying Fund Merger is in the best interest of unit holders, as it will create a larger pool of assets, providing potential economies of scale and enhanced efficiency due to the lower ongoing charge figure of the Receiving Underlying Fund. In addition, JPMorgan notes that the Receiving Underlying Fund invests in countries comprising the Association of South East Asian Nations, offering a better diversification than the Merging Underlying Fund, which is a single country emerging markets fund.
The Mirror Fund Merger
In line with the Underlying Fund Merger, the Affected Mirror Fund has been closed to new investment. Existing premiums can continue to be paid into the Affected Mirror Fund until 3pm UK time on 11 September 2024 (the “Deadline”), however cannot be increased from their current level.
We will switch policyholders' unit holdings, and where applicable, redirect future regular premiums, from the Affected Mirror Fund into the Receiving Mirror Fund, the underlying fund of which is the Receiving Underlying Fund of the Underlying Fund Merger.
For the notional units held in the Affected Mirror Fund, policyholders will receive an equal amount by value of notional units in the Receiving Mirror Fund (“the Mirror Fund Merger”).
The exchange ratio of the Mirror Fund Merger will be the result of the ratio between the notional unit price of the Affected Mirror Fund and the notional unit price of the Receiving Mirror Fund as of the Mirror Fund Merger Effective Date. The price of the Affected Mirror Fund and the Receiving Mirror Fund will be calculated by FPIL by reference to the net asset value of the underlying funds.
Whilst the overall value of notional units held will remain the same, policyholders may receive a different number of notional units in the Receiving Mirror Fund than they previously held in the Affected Mirror Fund.
Please refer to the Appendix in the Sample Client Communication opposite for more details of the merger and comparative information between the Affected Mirror Fund and the Receiving Mirror Fund.
If we have not received any alternative instruction from policyholders by the Deadline, we will redirect future regular premiums (where applicable) to the Receiving Mirror Fund from 12 September 2024; existing units in the Affected Mirror Fund will be exchanged for units in the Receiving Mirror Fund on the Effective Date.
Dealing of Receiving Mirror Fund units allocated to policies as a result of the Mirror Fund Merger will be permitted from 23 September 2024.
Policyholder options
Policyholders can choose to switch their current holdings in the Affected Mirror Fund, and/or redirect premiums or contributions, into a different fund in the FPIL range. Policyholders can do this at any time, but in order to override the switch of holdings to the Receiving Mirror Fund that we have selected, we require alternative instructions by the Deadline.
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 mirror fund. No FPIL charges will arise from these transactions.
We have contacted impacted policyholders and their financial advisers to notify them of the changes; primarily by e-shot, with letters sent by post where we do not hold a valid email, and to those who prefer to receive letters by post.
These changes will happen automatically within affected policies and policyholders do not need to take any action if they agree with the stated changes.
Should you have any questions regarding these changes, please contact the Investment Marketing team.
