Carnegie Fund of Funds International
Carnegie Fund of Funds International is changing the fund structure from an FCP (Fonds Commun de Placement) to a SICAV (Société d'Investissement à Capital Variable). Consequently, the fund will no longer be set up in the form of a contract and will instead be incorporated as a separate legal entity, which means that the fund will be arranged under more rigid regulations.
The name of the fund will be changed to Utländska Aktier and merged with the foreign equity-related investments component of Carnegie Build. At present, both of these portfolios are managed according to the same investment guidelines and by the same manager and thus contain the same holdings. For unitholders in Fund of Funds International, this means that there will be no changes to their holdings,management process, investment philosophy, objective or risk.
Carnegie Shield and Carnegie Build
Carnegie Shield and Carnegie Build will be divided up into four new funds, one for each asset class: Svenska Aktier, Utländska Aktier, Räntebärande Investeringar and Alternativa Investeringar. In practice, this means that Carnegie Shield will be split into two parts, while Carnegie Build will spin off all foreign equities to be merged into Utländska Aktier and thereafter change its name to Svenska Aktier. The objective is to separate asset classes with different risk levels, expected return and correlation with other asset classes. Through these separations, we will be able to create even more effective management on your behalf, where the level of risk is more closely aligned with your management targets and risk appetite. It will also make it possible for you to exclude one or more asset classes, if for example, you prefer a separate management of that asset class(es). In short, we are increasing the flexibility for your investments!
Carnegie Shield's holdings in hedge funds will be transferred to the new Alternativa Investeringar fund. This new fund will be traded monthly because that allows for a much wider investment universe to be accessed by the fund. We will include strategies that are not traded daily in order to gain access to the higher expected returns and lower correlations these holdings may offer.
Consequently, if you want to subscribe for shares in Alternativa Investeringar you must notify Carnegie 10 banking days before the end of the month for your order to be executed on the first day of the following month. Otherwise, your order will not be executed until the first day of the month thereafter. If you wish to redeem shares, we need your order at least 12 banking days before the end of the month. In the case of redemtion of shares , cash is normally obtained 20 banking days after the month end when the redemption is executed, but can be paid earlier based on the fund's ability to do so.
For shareholders with a discretionary management mandate, we may complement the investment in Alternativa Investeringar with an investment in a daily-traded instrument, fund or ETF. We do this to enhance our ability to manage rebalancing or tactical allocation in management. In addition to the holding in Alternativa Investeringar, your account statement will therefore also include another instrument in the same asset class (Hedge Funds/Alternative Investment Funds).
The management of Svenska Aktier will be based on Carnegie’s award-winning equity research team’s work, as it taps into its unrivalled research capacity in the local market to invest in the portfolio of Swedish stocks which from time to time is judged to have the best appreciation potential in the market. The portfolio will follow the changes in Carnegie Securities’ price objective for individual stocks and will hold around 20-40 positions at any time. While the management of the portfolio will be based on Carnegie’s fundamental research, there will be a touch of momentum character to it, since an upward change in the price objective statistically has a positive effect on the share price.
The forthcoming changes to our funds Carnegie Shield, Carnegie Build and Carnegie Fund of Funds International constitute an exchange that will be regarded as a transfer of assets under tax law. A capital gain or capital loss may arise that you must declare on your tax return for the year after the change. However, there is some uncertainty as to the legal situation with regard to the tax consequences related to the restructuring of investment funds. We have applied to the Swedish Revenue Law Commission (Skatterättsnämnden) for a preliminary ruling on the matter. We expect a response in autumn 2017.
However, we encourage you to review your vehicle for your investments from a tax perspective. Owning financial instruments within the framework of an Investment Savings Account (ISA, in Swedish ISK) or an insurance policy may in many cases be advantageous to keeping the instruments in a customary custody account. In order to move from one tax structure to the other, the financial instruments must first be sold and then repurchased. Any resulting profit or loss must be reported on your tax return. Talk to your financial adviser, who can provide guidance and help you determine which structure is the best fit for you.
Last day of trading
We will accept subscription and redemption orders for Carnegie Shield and Carnegie Build until 15:00 CET on 20 September. The settlement date will be 25 September.
We will accept subscription and redemption orders for Carnegie Fund of Funds International until 15:00 CET on 21 September. The settlement date will be 25 September.
Trading in the new funds Svenska Aktier, Utländska Aktier, Räntebärande Investeringar and Alternativa Investeringar will open 27 September and orders placed before 15:00 CET will gain exposure as per 29 September inclusive, all with the exception of Alternativa Investeringar which is traded monthly in accordance whith the terms set out above. The settlement date will be 3 October.
Going from two to four funds is done by splitting Shield in two and Build in two, such that after the conversion you will have exactly the same underlying holdings and at the same value you would have had if the former funds still existed. The percentages transferred to the respective new funds will be determined by a valuation of the funds’ holdings after market close on 26 September. Roughly 80% of Carnegie Shield will be transferred to Räntebärande Investeringar and the remaining 20% to Alternativa Investeringar. The equivalent approximate ratio for Carnegie Build is 75% to Utländska Aktier and the remaining 25% to Svenska Aktier.
Carnegie Fund of Funds International will be changing its fund structure and name to Utländska Investeringar.
The new NAV per share (the fund’s market value per share) for Räntebärande Investeringar and Alternativa Investeringar will be set to 100 as per 26 September and the number of shares you own will be adjusted accordingly. The NAV per share for Utländska Aktier will be the same as the NAV per share for Carnegie Fund of Funds International as per 26 September for two share classes and 100 for the remaining share classes. Corresponding share classes in Svenska Aktier will inherit Build share classes' NAV per share, that is, the final NAVs for Build will be retained as the starting point for the corresponding share classes in Svenska Aktier. The remaining share classes of Svenska Aktier will be set to 100 as per 26 September.
You will see the effect of the conversion in Carnegie Online on 29 September, including the first market movements of the new funds since 27 September.
Changed base currency
At present, the base currency of Carnegie Fund of Funds International is the US dollar. Accordingly, all subscribed capital is converted to USD before units are purchased. When this fund is converted to Utländska Aktier, the base currency will be changed to SEK. As a result, Swedish investors will not have their subscriptions exchanged from SEK to USD in connection with transactions and thus will not incur exchange fees.
The base currency of all four new funds will be SEK.