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SYGNIA ITRIX (RF) PROPRIETARY LIMITED - Ballot Procedures In Respect Of The Amendment Of The Investment Policy Of The Sygnia SYG4IR ETF

Release Date: 29/04/2024 14:01
Code(s): SYG4IR     PDF:  
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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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