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Ballot Procedures In Respect Of The Amendment Of The Investment Policy Of The Sygnia SYG4IR ETF
Sygnia Itrix (RF) (Proprietary) Limited
Sygnia Itrix 4th Industrial Revolution Global Equity ETF
JSE Code: SYG4IR
ISIN: ZAE000252433
Portfolios in the Sygnia Itrix Collective Investment Scheme registered as such in terms of the
Collective Investment Schemes Control Act, 45 of 2002, managed by Sygnia Itrix (RF)
Proprietary Limited (Sygnia Itrix).
BALLOT PROCEDURES IN RESPECT OF THE AMENDMENT OF THE INVESTMENT
POLICY OF THE SYGNIA ITRIX 4TH INDUSTRIAL REVOLUTION GLOBAL EQUITY ETF
THIS LETTER IS IMPORTANT AND REQUIRES YOUR ATTENTION
Sygnia Itrix (RF) (Pty) Ltd, a Manager appointed in terms of the Collective Investment
Schemes Control Act, No. 45 of 2022 (the Act), hereby effects ballot voting procedures in
terms of Section 59 of the Deed and Section 98 of the Act to obtain approval for:
• An amendment of the investment policy of the Sygnia Itrix 4th Industrial Revolution
Global Equity ETF (SYG4IR) changing the fund from a passively managed exchange
traded fund (ETF) to an actively managed ETF.
Motivation for the proposed change:
The motivation for changing the Sygnia Itrix 4th Industrial Revolution Global Equity ETF to an
actively managed ETF is to allow the fund to be repositioned to benefit from changing
economic environments. The current Kensho New Economies Index is based on a complex
rule based weighting algorithm that results in small and unprofitable companies being over-
represented in the index and these companies tend to cyclically underperform in times of high
interest rates. Changing the fund to an actively managed ETF means Sygnia would have more
flexibility to vary the weights to companies across economic cycles. The fund retains its focus
on global companies optimally positioned to benefit from new technologies and innovations
that have the potential to transform the global economy across a broad range of sectors.
Impact on Investors:
We believe that the impact of the proposed changes will be to the benefit of investors as the
portfolio manager will have more flexibility in selecting investments in new technologies and
innovations, as well as the weighting of these investments in the portfolio. As the current index
construction has resulted in small and unprofitable companies being overrepresented in the
index, by allowing active management, the portfolio manager will be able to have discretion in
removing these from the portfolio when optimal to do so. The manager, through a number of
mechanisms including portfolio construction and efficient portfolio management, will aim to
improve the return / risk ratio relative to the benchmark.
Important information to note:
1. The JSE code and ISIN of the fund will remain the same; and
2. The management fee will remain the same.
Please refer to the below summary indicating the changes before and after the investment
policy change.
List of similarities and differences before and after the proposed changes:
Before After
JSE Code: SYG4IR SYG4IR
ISIN: ZAE000252433 ZAE000252433
Fund name: Sygnia Itrix 4th Industrial Revolution Sygnia Itrix 4th Industrial Revolution
Global Equity ETF Global Equity Actively Managed
ETF
Long name: SYG4IRGE S4IR ACTIVELYMANAGED ETF
Abbreviated SYG4IRGE S4IRAMETF
name:
Portfolio S&P Kensho New Economies Solactive GBS United States 500
benchmark: Composite Index Index
Investment The objective of this portfolio is to provide simple The portfolio will be an actively managed exchange
policy: access to investors who wish to gain investment traded fund. The Sygnia Itrix 4th Industrial
exposure to new technologies by tracking the Revolution Global Equity Actively Managed ETF is
movements of the Kensho New Economies a Global-Equity-General portfolio which seeks to
Composite ? Index through investing in the deliver long term capital growth by investing in
physical index securities. The Kensho New financially sound equity securities, preference
Economies Composite ? Index comprehensively shares which generate capital growth, property
captures the 21st Century Sectors that are shares and property related assets in liquid form
listed internationally. The portfolio may invest in
propelling the 4th Industrial Revolution and participatory interests and other forms of
fostering new industries that will transform every participation in portfolios of collective investment
facet of our lives. schemes, registered in South Africa and other
The investment policy of the portfolio shall be to similar schemes operated in territories with a
track the Index by buying securities that regulatory environment which is to the satisfaction
substantially make up the Index at similar of the manager and trustee of a sufficient standard
weighting as they are included in the Index. to provide investor protection at least equivalent to
Whenever the Index gets rebalanced by the index that in South Africa and which is consistent with the
provider, the Portfolio will purchase the constituent portfolio's primary objective.
securities that substantially make up the Index and
will sell the constituent securities which were The portfolio may also invest in listed and unlisted
excluded from the Index and buy or sell the financial instruments, including derivatives, in
securities that remain in the Index, in order to accordance with the provisions of the Collective
ensure that the returns of the portfolio follows that Investment Schemes Control Act and applicable
of the index. A tracking error minimizing algorithm legislation, as amended from time to time, in order
is used to determine the least number of to achieve the portfolio's investment objective. The
transactions required to keep the portfolio's Manager may also include unlisted forward
returns aligned as closely as practically and currency, interest rate, index and exchange rate
feasibly possible to the Index's return while at the swap transactions for efficient portfolio
same time keeping the trading costs in the portfolio management. In selecting securities for the
to a minimum. portfolio, where possible, the manager shall seek
to sustain long-term capital growth.
No securities will be bought for the sole purposes
of making a speculative profit by selling them at a The portfolio will focus on selecting global
higher price later on unless this is for the purpose companies which have exposure to new
of tracking the Index. All purchase and sales of technologies and innovations which have the
securities are done solely to ensure the Portfolio potential to transform the global economy across a
holds securities that substantially make up the broad range of sectors. The underlying portfolio
Index and minimizes the tracking error to the will be actively managed in terms of sector and
Index. geographical allocation. The securities selection
will be determined by reference to published
The portfolio is passively managed, and aims to indices associated with each sector, taking into
produce the same level of income as that account risk. The manager shall have the
produced by the Index. As a further objective, the maximum flexibility to vary allocation between the
securities held by the portfolio shall be managed various geographical markets and sector classes
to generate income for the benefit of investors. to reflect changing economic and market
conditions. The portfolio's benchmark, for
The composition of the Portfolio will be compared performance measurement purposes, will be the
to the composition of the Index on a daily basis, Solactive GBS United States 500 Index.
taking into account any investment contributions or
withdrawals to and from the Portfolio, the receipt The effective exposure of the portfolio invested
of any dividends for reinvestment, the effect of any outside of the Republic of South Africa will always
corporate actions and its impact on the be above 80%.
composition of the Portfolio relative to that of the
Index. The portfolio also represents Sygnia's best
investment view on the optimal combination of
The portfolio shall also be entitled to employ such securities required to achieve superior long-term
other investment techniques and instruments as returns at a reasonable level of risk at any time.
will most effectively give effect to the object and The portfolio exploits the benefits of diversification
investment policy of the portfolio, including the use and will change its exposure to different securities
of depository receipts as well as listed and unlisted and sectors on an active basis, based on prevailing
financial instruments, including derivatives, in market conditions.
accordance with the provisions of the Act and
applicable legislation as amended from time to The portfolio aims to achieve its investment
time. The Manager may also include unlisted objectives whilst recognising that there will be
forward currency, interest rate, index and significant short-term volatility and aims to protect
exchange rate swap transactions for efficient capital over the medium to long term.
portfolio management.
Investors can obtain participatory interests in the
Portfolio by acquiring participatory interests on the
secondary market or subscribing for participatory
interests in the portfolio. In order to achieve this
objective the manager may, subject to the Act and
this Supplemental Deed No 16 read together with
the Main Deed, create and issue or redeem and
cancel an unlimited number of participatory
interests in the portfolio.
The portfolio will not be managed according to
traditional methods of active management, which
involve the buying and selling of securities based
on economic, financial and market analysis and
investing judgment. Instead the investment
objective and style will be replication of the Index
returns. As a result the financial or other condition
of any company or entity included from time to time
in the Index will not result in the elimination of its
securities from the portfolio unless the securities of
such company or entity are removed from the
Index itself.
The portfolio will hold securities purely for the
economic rights and benefits attaching thereto,
and accordingly if a takeover bid is made for
shares of a company included in the Index, the
portfolio will not tender shares in respect thereof.
Securities held by the portfolio which are subject
to a takeover bid will only be surrendered if such
surrender is mandatory (and then only to the
extent of such mandatory surrender) in terms of
the applicable law or under the rules of a
regulatory authority or body having jurisdiction. If a
takeover bid results in a company no longer
qualifying for inclusion in the Index, any shares of
the company held by the portfolio after the
takeover bid will be disposed of by the portfolio,
and the proceeds will be applied in effecting the
appropriate adjustments to the portfolio.
To the extent necessary for the purposes of
achieving its investment policies, the portfolio may
hold assets in liquid form.
It is recorded that the portfolio's ability to replicate
the price and yield performance of the Index will
be affected by the costs and expenses incurred by
the portfolio.
To the extent that assets in the portfolio are
exposed to exchange rate risk, the Manager may
include listed and unlisted financial instruments for
the exclusive purpose of hedging exchange rate
risk subject to the conditions and limits stipulated
by the Act. The manager shall have the maximum
flexibility to vary allocation between the various
geographical markets and sector classes to reflect
changing economic and market conditions.
The portfolio may invest in participatory interests
and other forms of participation in portfolios of
collective investment schemes, whether listed on
an exchange or not, registered in South Africa and
other similar schemes operated in territories with a
regulatory environment which is to the satisfaction
of the manager and trustee of a sufficient standard
to provide investor protection at least equivalent to
that in South Africa and which is consistent with
the portfolio's primary objective.
Any material change to the investment policy of
the portfolio shall constitute an amendment of the
Deed, and shall be subject to the provisions of
clause 65 of the Deed, in which even investors
shall be given reasonable notice to enable them to
redeem their participatory interest prior to
implementation of the change.
Charges: Management Fees 0.50% excl VAT Management Fees 0.50% excl VAT
Distribution: June, December June, December
Rebalancing: March, June, September and Not applicable
December
ASISA Global Equity General Global Equity General
classification
JSE Sector Exchange Traded Fund Exchange Traded Fund
JSE Sub- Exchange Traded Fund Actively Managed Exchange Traded
sector Fund
Balloting Procedures for the investors in the SYG4IR portfolio
The ballot will be valid if investors holding no less than 25% in value of the total number
of participatory interests have responded in writing and a majority of the investors who
have responded have voted in favour of the investment policy change. In the event that
a quorum is not achieved, a second ballot will be conducted resulting in a change in
the proposed salient dates.
How does the proposed changes impact your investment?
Please refer to the list of similarities and differences above summarising the changes.
If the ballot is successful and approved by the FSCA, the SYG4IR portfolio will be changed
from a passively managed ETF to an actively managed ETF. Refer to the list above for a
detailed description of the investment policy of the actively managed ETF. The investment
policy change will be achieved by means of a Name Change capital event that will settle
through STRATE. In other words, there will be no conversion ratio applicable as investors will
hold the same number of shares in the actively managed ETF as they held in the ETF.
Therefore, a rounding methodology and/or fractions will not apply.
There shall be no tax impact or change in investment value for investors as a result of the
investment policy change.
The investment policy change does not release the trustees, custodian or manager from any
responsibility to the investors.
Your rights as an investor:
All investors in the SYG4IR portfolio are given an opportunity to vote in favour of, or against,
the proposed investment policy change in terms of clause 98 of the Act.
An independent auditor will verify the outcome of the ballot.
Should you not be comfortable with the proposal in so far as they relate to the portfolio in
which you hold participatory interests, you may elect to redeem your participatory interests at
any time and withdraw your money at the prevailing price in the market, as defined in the Main
Deed, subject to that it is a discretionary investment. By electing to redeem or sell your
participatory interests, it will constitute a CGT event for which you will be liable to pay
CGT at your next income tax assessment.
If you choose not to withdraw your investment, the proposed changes as set out in this
announcement (to the extent that they are approved by investors) will automatically apply to
your investment.
Action required by SYG4IR investors:
1. Investors are requested to notify their JSE Brokers/CSDPs by no later than Monday,
27 May 2024, as to whether they approve the proposed investment policy change
as set out in this announcement or not;
2. Alternatively, please complete the enclosed Ballot Form and return it to our
registered auditors, Mazars, at ballotsygnia@mazars.co.za on or before Monday, 27
May 2024.
3. If you have disposed of your participatory interests in the portfolio, no action is
required.
Approval and commencements:
Subject to the ballot voting procedure being successful and approval by the FSCA, the
proposed amalgamation will come into effect from commencement of business on
Wednesday, 19 June 2024. Copies of the Sygnia Itrix 4th Industrial Revolution Global Equity
ETF Pricing Supplement, in English, may be obtained during normal business hours from the
office of Sygnia Itrix (RF) (Proprietary) Limited located at 7th Floor, The Foundry, Cardiff Street,
Greenpoint, 8001 and is available on the website: https://www.sygnia.co.za/our-funds.
Expected timeline for the implementation of the proposed change in the investment
policy:
Salient dates 2024
Record date for the ballot voting procedures Friday, 26 April
Declaration SENS Announcement of the investment policy and Monday, 29 April
name change
Last day for investors/brokers/CSDPs to respond to the auditors Monday, 27 May
(by 5pm)
Deadline for Auditors to submit their findings report to Sygnia Itrix Monday, 3 June
FSCA issues approval letter Tuesday, 11 June
SENS announcement confirming the results of the ballot by 11:00 Tuesday, 11 June
Last day to trade in the old name as an ETF Tuesday, 18 June
Ex-date (trading commences as an AMETF) Wednesday, 19 June
Record date Friday, 21 June
Settlement date Monday, 24 June
Note:
SYG4IR will not carry over its trading and reference data history from the ETF to the
AMETF.
Any changes to the expected dates above will be announced on SENS.
Index disclaimer:
The indices currently tracked by SYG4IR are products of S&P Dow Jones Indices LLC or its
affiliates ("SPDJI") and has been licensed for use by Sygnia Itrix. Standard & Poor's® and
S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow
Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and
these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes
by Sygnia Itrix. The Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones,
S&P, their respective affiliates and none of such parties make any representation regarding
the advisability of investing in such product(s) nor do they have any liability for any errors,
omissions, or interruptions of the Index.
Should you require any further information, please do not hesitate to contact our Client Contact
Centre on 0860 794 642.
29 April 2024
Manager
Sygnia Itrix (RF) (Proprietary) Limited
Trustee
The Standard Bank of South Africa Limited
JSE Sponsor
Vunani Sponsors
Date: 29-04-2024 02:01:00
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