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Ballot Procedures in Respect of the Amendment of the Investment Policy of the Sygnia Itrix New China Sectors ETF
Sygnia Itrix (RF) (Proprietary) Limited
Sygnia Itrix New China Sectors ETF
JSE Code: SYGCN
ISIN: ZAE000309159
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 NEW CHINA SECTORS 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:
Amendment of the investment policy, the index or benchmark, and the name of the Sygnia
Itrix New China Sectors ETF (SYGCN) to convert the fund into a feeder exchange traded fund
(ETF).
Motivation for the proposed changes:
The Portfolio Manager has explored various options available to ensure that investors are
treated fairly. After careful consideration, the portfolio manager has decided it would be in the
best interests of the investors to convert the structure of the fund into a Feeder Fund.
As there is no fund tracking the S&P New China Sectors Index to feed into that the portfolio
manager considers both economically viable and sufficiently liquid to be beneficial for
investors, a new index has also been selected.
The MSCI China index is a broad representation of the Chinese market with a significant
number of global investors gaining exposure, providing liquidity and having available funds to
feed into.
The change will benefit investors directly due to the ease of administration and management
as well as lower overall costs of management due to the lower audit, safekeeping fees and
trading fees. Clients can expect to note a lower tracking error and trading costs due to the
increased efficiencies.
Impact on Investors:
We believe that the impact of the proposed changes will benefit investors directly due to the
ease of administration and management as well as lower overall costs of management due to
the lower audit, safekeeping fees and trading fees. Clients can expect to note a lower tracking
error and trading costs due to the increased efficiencies.
Important information to note:
1. The JSE code and ISIN of the fund will remain the same.
2. The management fee will change.
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: SYGCN SYGCN
ISIN: ZAE000309159 ZAE000309159
Fund name: Sygnia Itrix New China Sectors ETF Sygnia Itrix MSCI China Feeder ETF
Long name: Sygnia Itrix New China Sectors Sygnia Itrix MSCI China Feeder ETF
Abbreviated SYGNEWCN SYGCHINA
name:
Portfolio S&P New China Sectors Index MSCI China Index
benchmark:
Underlying S&P New China Sectors Index iShares MSCI China UCITS ETF
Investment The objective of the Sygnia Itrix New The objective of the Sygnia Itrix MSCI
policy: China Sectors ETF is to provide an China Feeder ETF is to provide an
investment vehicle that gives easy investment vehicle for investors
access to investors who want to wishing to track the movement of the
achieve long term capital appreciation MSCI China Index by investing in the
in tracking the performance of the S&P iShares MSCI China UCITS ETF
New China Sectors Index ("benchmark ("underlying fund") securities.
index"). The investment objective of the iShares
The benchmark index measures the MSCI China UCITS ETF is to deliver
performance of China- and Hong Kong- the net total return performance of the
domiciled companies in consumption MSCI China Index, less the fees and
and service-oriented industries. All expenses of the fund. In order to
Chinese share classes including A- achieve this investment objective, the
investment policy of the iShares MSCI
shares and offshore listings are eligible China UCITS ETF is to invest in a
for inclusion. The initial universe has portfolio of equity securities that as far
been created from companies as possible and practicable consists of
domiciled in China or Hong Kong that the component securities of the MSCI
operate in the targeted sectors. By China Index. The MSCI China
investing in China's new economic measures the performance of
sectors, the fund will have exposure to approximately 85% of the Chinese
the main sectors which are consumer- stock market via large and mid-cap
facing services and products, including Chinese stock.
consumer discretionary, consumer
staples, communication services, In the event that the underlying fund is
information technology, healthcare and discontinued and/or modified and is no
insurance and these sectors will be longer deemed suitable for purposes
reviewed on a six-monthly basis. The as outlined in this supplement, then the
initial universe has been created from existing underlying fund will be
companies domiciled in China or Hong replaced with an underlying fund that is
Kong that operate in the targeted suitably similar to the iShares MSCI
sectors. Sectors primarily linked to the China UCITS ETF (subject to
old economy such as manufacturing, necessary regulatory approvals and
and commodities are excluded. due processes).
The portfolio will be managed to most
effectively give effect to the objectives
and investment policy by including
apart from assets in liquid form the use
of listed and unlisted financial
In order to achieve this objective, the instruments (derivatives) for the
Sygnia Itrix New China Sectors ETF exclusive purpose of efficient portfolio
shall track the benchmark index as management. The portfolio is passively
closely as practically and feasibly managed and aims to produce the
possible by buying securities that same level of income as that produced
substantially make up the Index at by the Index.
similar weighting as they are included
in the Index. Whenever the Index gets
rebalanced, the Portfolio will be
rebalanced to align its holdings to that The Trustee shall ensure that the
of the benchmark and to the extent that Manager complies with the investment
it's performance will not deviate from its policy set out in this supplemental
deed.
benchmark. The portfolio will be For the purpose of this portfolio, the
passively managed and provides Manager shall reserve the right to close
investors with access to the Chinese the portfolio to new investors on a date
consumption and service-oriented determined by the Manager. This will
industries. The Sygnia Itrix New China be done in order to be able to manage
Sectors ETF will be the only ETF listed the portfolio in accordance with its
on the JSE that tracks the S&P New mandate. The Manager may, once a
China Sectors Index (SPNCSUP) or portfolio has been closed, open that
provides exposure to the "new China" portfolio again to new investors on a
economy as at launch date. date determined by the Manager.
No securities will be bought for the sole
purposes of making a speculative profit
by selling them at a higher price later,
unless this is for the purpose of tracking
the Index.
The portfolio will be managed to most
effectively give effect to the objectives
and investment policy by including
apart from assets in liquid form the use
of listed and unlisted financial
instruments (derivatives) for the
exclusive purpose of efficient portfolio
management. The portfolio is passively
managed and aims to produce the
same level of income as that produced
by the Index. As a further objective, the
securities held by the portfolio may be
managed to generate income for the
benefit of investors.
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 or offshore with 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 in accordance with the
provisions of the Collective Investment
Schemes Control Act and applicable
legislation, as amended from time to
time, in order to achieve the portfolio's
investment objective. 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.
The Trustee shall ensure that the
Manager complies with the investment
policy set out in this supplemental
deed.
For the purpose of this portfolio, the
Manager shall reserve the right to close
the portfolio to new investors on a date
determined by the Manager. This will
be done in order to be able to manage
the portfolio in accordance with its
mandate. The Manager may, once a
portfolio has been closed, open that
portfolio again to new investors on a
date determined by the Manager
Charges: Management Fees 0.50% excl VAT Management Fees 0.173913% excl
VAT
Distribution: June, December June, December
Rebalancing: March, June, September and February, May, August and November
December
ASISA Global Equity General Global Equity General
classification
JSE Sector Exchange Traded Fund Exchanged Traded Fund
Benchmark S&P New China Sectors Index MSCI China Index
Balloting Procedures for the investors in the SYGCN 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 SYGCN portfolio structure will be
converted to a feeder ETF. Refer to the list above for a detailed description of the investment
policy of the Feeder ETF.
The investment policy change will be achieved by means of a name change that will settle
through STRATE. In other words, there will be no conversion ratio applicable. 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 SYGCN 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 SYGCN investors:
1. Investors are requested to notify their JSE Brokers/CSDPs by no later than
Thursday, 14 November 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, Forviz Mazars, at ballotsygnia@mazars.co.za on or before
Thursday, 14 November 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 JSE and FSCA,
the proposed amendments will come into effect from commencement of business on
Wednesday, 11 December 2024. Copies of the Sygnia Itrix MSCI China Feeder 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: www.sygnia.co.za
Expected timeline for the implementation of the proposed change in the investment
policy:
Salient dates 2024
Record date for the ballot voting procedures Friday, 27 September
Declaration SENS Announcement of the investment policy Thursday, 03 October
and name change ballot procedures
Last day for investors/brokers/CSDPs to respond to the Thursday, 14 November
auditors (by 5pm)
Deadline for Auditors to submit their findings report to Sygnia Thursday, 21 November
Itrix
FSCA issues approval letter Monday, 02 December
SENS announcement confirming the results of the ballot by Tuesday, 03 December
11:00
Last day to trade in the old name as an ETF Tuesday, 10 December
Ex-date (trading commences as an AMETF) Wednesday, 11 December
Record date Friday, 13 December
Settlement date Tuesday, 17 December
Note: Any changes to the expected dates above will be announced on SENS.
Index disclaimer:
The index currently tracked by SYGCN is a product of S&P and has been licensed for use by
Sygnia Itrix. The new index proposed is a product of MSCI and has been licence for use by
Sygnia Itrix. The funds or securities referred to herein are not sponsored, endorsed or
promoted by S&P or MSCI, and neither S&P nor MSCI bears liability with respect to any such
funds or securities or any index on which such funds or securities are based.
The complete terms and conditions of your ETF investment are contained in the fund's Offering
Circular and Pre-Listing Statement and the relevant Supplement.
Should you require any further information, please do not hesitate to contact our Client Contact
Centre on 0860 794 642.
3 October 2024
Manager
Sygnia Itrix (RF) (Proprietary) Limited
Trustee
The Standard Bank of South Africa Limited
JSE Sponsor
Vunani Sponsors
Date: 03-10-2024 11:35:00
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