LETTER TO UNITHOLDERS OF THE MUTUAL FUND AMUNDI ETF MSCI JAPAN UCITS ETF
Paris, 23th, September 2016
SUBJECT: Change in the mutual fund (the “fund”) as specified below:
AMUNDI ETF MSCI JAPAN UCITS ETF
AMUNDI ETF MSCI JAPAN UCITS ETF – EUR
AMUNDI ETF MSCI JAPAN UCITS ETF – JPY
Dear Sir or Madam,
In your capacity as a unit holder of the fund, we inform you that AMUNDI ASSET MANAGEMENT (the “Management Company”) has decided to change the Investment Strategy and in particular the fund management methodology from 13 October 2016 (the “Effective Date”), to take into account the changing requirements of its clients.
The management method applied from 13 October 2016 is direct replication, which involves investing in financial securities making up the benchmark index (the “Index”) in proportions very similar to those of the Index.
Consequently, the fund will no longer be eligible for the Plan d’Epargne en Actions (French Stock Savings Plan - PEA) from 12 October 2016.
1. Description of the change in your fund
Change in the Investment Strategy concerning the management method
The management method applied from 13 October 2016 is index-tracking management using the direct replication method, under which the fund portfolio will be invested in financial securities making up the MSCI Japan benchmark index in proportions very similar to those of the index.
As a reminder, the investment strategy applied until 12/10/2016 involves achieving the performance of the MSCI Japan benchmark index using the indirect (or synthetic) replication method, which involves buying a diversified portfolio of shares and an over-the-counter forward swap on shares and indices, thereby replacing exposure to securities in the Portfolio with exposure to the MSCI Japan Index.
This modification will be associated with a change in the fund's name. From 13 October 2016, the fund will become “AMUNDI ETF MSCI JAPAN UCITS ETF DR”.
From 12 October 2016, the Units will no longer meet the eligibility criteria for the PEA.
This change in the fund’s Investment Strategy has various impacts:
From 13 October 2016 the fund’s assets will mainly comprise shares making up the MSCI Japan index and will therefore no longer permanently be made up of over 75% of shares in companies that have their head office in an EU member State. The fund’s assets will therefore no longer meet the eligibility criteria for the PEA;
If you are a private investor resident in France for tax purposes and hold units in this Fund in connection with your PEA;
You must sell your units before 12 October 2016. This sale will not affect the tax benefits linked to the PEA.
If you have not sold your units, your PEA will be closed after 12 October 2016, leading to the loss of all of the tax benefits attached to it.
Please contact your adviser now.
For all other types of investors: non-private investors, private investors not resident in France for tax purposes or resident in France for tax purposes but who hold units on an ordinary securities account:
You do not need to take any specific action and this change has no fiscal impact for you.
The modified Key Investor Information Documents and prospectus as well as a list of the AMUNDI ETF equity funds eligible for the PEA are available on request from AMUNDI ASSET MANAGEMENT and on amundietf.com.
This operation was approved by the French Market Regulator (AMF) on 7th, July 2016 and if you accept its terms, you are not required to take any specific action.
The main changes in your fund are set out below.
2. Effects of the modification of your fund
Change in the yield / risk profile:
The change in the investment strategy leads to a modification of the Risk Profile section of the prospectus. The description of counterparty risk and risk of using derivatives has been adapted to this new method of direct replication.
Increase of the yield/risk profile:
Increase in costs:
NO (However, to ensure that the actual costs of adjustment of the portfolio are borne by participants in the primary market, subscription and redemption fees will be charged by the fund.)
Please refer to the chart shown in the Appendix attached to this letter if you wish to find out more about the modifications made to the fund.
If your investment was made via a PEA, to avoid closing it and losing the tax benefits linked to your PEA, you must sell your units before the Effective Date.
In this respect, and in order to determine the best vehicle for your investment, please contact your usual financial adviser. He/she will help you to determine the most appropriate choices for the management of your portfolio
If these changes do not suit you, you may have your units redeemed before 12 October 2016. Purchases and sales on the secondary market do not incur any subscription or redemption fees, Nevertheless, placing a stock market order will trigger costs over which the Management Company has no influence.
AMUNDI ASSET MANAGEMENT
Amundi ETF, Indexing & Smart Beta
Please see the attached PDF for the full content:
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