Strategic Global Bond Fund - RMB class closure

Following the circulation of ESMA’s Opinion Paper to EU regulators, dated 30 January 2017 regarding the introduction of a consistent framework across the EU for the treatment of share classes, adopting a common set of principles, all of the share classes of the E.I. Sturdza Funds Plc umbrella were evaluated and E.I. Sturdza Strategic Management Limited (“EI Sturdza”) determined that the Strategic Global Bond Fund (the “Fund”) RMB Share class is not consistent with the ESMA guidance.

BACKGROUND

ESMA’s Opinion Paper states that all classes of a fund should share a ‘Common Investment Objective’ principle. Further, the paper notes that share class specific features (derivative overlays for example) that result in a change in the performance would not be considered as sharing a common investment objective.

EI Sturdza’s analysis regarding the Fund’s RMB Share Class was therefore undertaken in order to evaluate whether the currency overlay that is utilised was consistent with ESMA’s Opinion Paper, the conclusion of which was as follows:

• The RMB Share Class applies a currency overlay using currency forwards to provide exposure to the performance of the Chinese currency Renminbi/Yuan, relative to US Dollar.

• The currency derivative overlay has had a significant impact on the performance of the share class.

• The currency derivative overlay reduces correlation between share classes and significantly increases the risk profile of the RMB Share Class, such that it is materially different from the base currency class (USD Share Class) of the Fund and is not in line with the premise that both share classes share a common investment strategy or objective.

In light of the above, EI Sturdza has concluded that the RMB Share Class diverges from and is not consistent with the "common objective principle" set out in the ESMA Opinion Paper.

Accordingly the Board of Directors have elected to wind up the RMB Share Class by no later than the 31st December 2017.

NEXT STEPS

EI Sturdza will define a timeline for the closure and winding up of the RMB share class, with subsequent notices to be provided to investors. Further the Directors of the Fund have elected to cease accepting additional subscriptions to the RMB Share Class with immediate effect.

It is anticipated that the closure of the RMB Share Class will be captured within the next prospectus update, which is expected to be completed in Q4 2017 and as such formal notification to investors will be provided in due course. At this time, EI Sturdza expects that the following options will be put forward to investors who remain within the RMB Share Class as at the termination date:

• Shares in the RMB share class be redeemed and the proceeds reinvested in the base currency (USD) Share Class of the Fund at no additional cost – for the avoidance of doubt, with the exception of the RMB currency overlay all terms are consistent between the classes.

• Shares in the RMB Share Class be redeemed and the proceeds returned to investors.

• Shares in the RMB Share Class be redeemed and reinvested in an alternative Fund managed by EI Sturdza. A full list of EI Sturdza’s existing Fund range and the associated terms can be found on the Company’s  website (https://www.eisturdza.com/funds)

Please note that there is no intention to make any adjustments to the USD Share Class or to change the redemption terms or frequency associated with the Fund.

Additional communications will be provided by EI Sturdza in due course; however we remain at your disposal should you require any additional information at this time. For the avoidance of doubt, investors are free to redeem or switch investments as per the dealing cycle defined in the prospectus in advance of any further communication.

Further news

November 2017

Strategic China Panda Fund: Change in reporting Benchmark

E.I. Sturdza Strategic Management Limited (“EI Sturdza”) proposes to henceforth report performance of the Strategic China Panda Fund (the “Fund”) against the MSCI China NR USD index in addition to the MSCI China PR USD Index, in order to align the performance benchmark to the benchmark utilised in the calculation of the performance fees associated with the Fund. The following chart illustrates the returns of the Fund versus both of the indices for your reference:   For the...