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Ballot Voting Procedure - Proposed Amalgamation of the Satrix ILBI ETF with the Satrix ILBI ETF
Satrix Managers (RF) Pty Ltd
Satrix ILBI ETF
Share code: STXIFL
ISIN: ZAE000318291
A portfolio in the Satrix Collective Investment Scheme in Securities
2, registered as such in terms of the Collective Investment Schemes
Control Act, 45 of 2002
Ballot Voting Procedure - Proposed Amalgamation of the Satrix
ILBI ETF (JSE Code – STXIFL) with the Satrix ILBI ETF (JSE
Code – STXILB)
This letter is important and requires your immediate attention.
The purpose of this letter is to inform you of the proposed
amalgamation of the Satrix ILBI ETF (JSE Code -STXIFL)(source fund)
with the Satrix ILBI ETF (JSE Code -STXILB) (target fund), and to
provide you with sufficient information to vote on this proposal –
including your rights as an investor and the impact this will have on
your investment.
In terms of Section 99 of the Collective Investment Schemes Control
Act, 45 of 2002 ("the Act"), the proposed amalgamation will proceed
if the majority of investors vote in favour of the amalgamation by
way of the enclosed ballot. Absence of a response will be regarded as
a vote in favour of the amalgamation.
The amalgamation ballot is conducted at the request of Satrix Managers
(RF) (Pty) Ltd ("Satrix"), FSP 15658, the investment manager of the
Satrix Collective investment Scheme and the Satrix Collective
Investment Scheme in Securities 2.
Reason for the proposed amalgamation
The source funds' mandate and risk profile are the same to that of
the target fund and investors will benefit from the lower fee in the
target fund.
The Satrix ILBI ETF ("Satrix IFL"), the source fund, tracks the total
return version of the Barclays/Absa South African Government
Inflation-Linked Bond Index ("BEMZOS"). The index consists of bonds
issued by the South African Government which are linked to the South
African Consumer Price Index and calculated on a daily basis by
Barclays. The index rebalances monthly.
The Satrix ILBI ETF ("Satrix ILBI"), the target fund, currently tracks
the FTSE/JSE Inflation-Linked Government Index ("IGOV"). The IGOV is
a sub-index of the CILI Index that comprises Bonds that are issued by
the Republic of South Africa. The index rebalances monthly.
Both the ETFs currently hold the same instruments at similar
weightings. The modified duration and yield to maturity for both ETFs
are also similar and therefore Satrix would like to amalgamate the
Satrix ILBI ETF (JSE Code - STXIFL) with the Satrix ILBI ETF (JSE Code
- STXILB).
Details of the similarities, differences, and the impact on you as an
investor are detailed in the table below:
Satrix ILBI ETF (STXIFL) Satrix ILBI ETF (STXILB) Changes and impact
Investment Objective Investment Objective
No change to investment
4.1. The investment policy of the Portfolio shall be The investment policy of the portfolio shall be to
objective
to: track the FTSE/JSE Government Inflation-Linked
4.1.1. track the Index as closely as possible by, to Index ("IGOV") (hereinafter referred to as "the
the fullest extent possible: Index") as closely as possible, by:
4.1.1.1. buying only securities in the Index in
the weightings in which they are included in the 3.1.1 Buying only constituent securities in the
Index; and same weightings in which they are included in the
4.1.1.2. selling only securities which are excluded FTSE/JSE Government Inflation-Linked Index
from the Index from time to time as a result of the ("IGOV") and selling only securities which are
monthly Index reviews or corporate actions, so as excluded from the Index from time to time as a
to ensure that at all times the Portfolio holds result of periodic Index reviews or corporate
securities in the Index in the same weightings in actions or which are required to be sold to ensure
which they are included in the Index; and that the Portfolio holds securities in the same
weighting as they are included in the Index.
4.1.2. as a further objective, to manage the
securities held by the Portfolio to generate income 3.2. The Portfolio shall not buy or sell securities for
for the benefit of investors. the purpose of making a profit nor for any purpose
other than tracking the Index.
4.2. The Portfolio shall not buy or sell securities
for the purpose of making a profit nor for any 3.3. It is anticipated that assets in liquid form will
purpose other than tracking the Index. not form a substantial part of the Portfolio's
assets, however any liquid assets that the Portfolio
4.3. The Portfolio will be passively managed in holds may be invested in short term investments
that the manager will not buy and sell securities such as banker's acceptances and certificates of
based on economic, financial and/or market deposit.
analysis but rather, will buy and sell securities
solely for the purpose of ensuring that the 3.4. Investors can obtain participatory interests in
Portfolio tracks the Index. As such the investment the Portfolio on the secondary market or by
subscribing for new participatory interest in the
objective and style of the Portfolio will be full
Portfolio on the primary market. In order to
replication of the Index.
achieve this objective the Manager may, subject to
the Act and the Deed, create and issue an
4.4. Investors may obtain participatory interests in unlimited number of participatory interests in the
Portfolio.
the Portfolio on the secondary market or by
subscribing for new participatory interests in the
3.5. The Portfolio will not be managed according
Portfolio on the primary market. In order to to traditional methods of active management,
achieve this objective the manager may, subject to which involve the buying and selling of securities
the Act and the Deed, create and issue an based on the economic, financial and market
unlimited number of participatory interests in the analysis and investing judgement. Instead the
Portfolio. investment objective and style will be full
replication of the Index. As a result the financial or
4.5. The manager shall further be entitled, in its other condition of any company or entity included
discretion and only on a temporary basis, to from time to time in the Index will not result in the
employ such other investment techniques and elimination of its securities from the Portfolio
instruments as will most effectively give effect to
Satrix ILBI ETF (STXIFL) Satrix ILBI ETF (STXILB) Changes and impact
the object or the investment policies of the unless the securities of such company or entity are
Portfolio, subject to the provisions of the Deed removed from the Index itself.
and the Act from time to time.
3.6. The Portfolio will acquire and hold a portfolio
4.6. The composition of the Portfolio will be of securities that substantially represents all of the
adjusted periodically to conform to changes in the component securities of the Index in substantially
composition and weightings of the securities in the same weighting as in the Index. However the
the Index so as to ensure that the composition and Portfolio shall also be entitled, in its discretion and
weighting of the Portfolio are a reflection of the only on a temporary basis, to employ such other
composition and weighting of the securities investment techniques and instruments as will
contained in the Index. most effectively give effect to the object or the
investment policies of the Portfolio.
4.7. Assets in liquid form will form a minor part of
the Portfolio's assets. 3.7. The composition of the Portfolio will be
adjusted periodically to confirm to changes in the
4.8. The Portfolio's ability to replicate the price composition and weighting of the securities in the
and yield performance of the Index will be Index so as to ensure that the composition and
affected by the costs and expenses incurred by the weighting of the Portfolio are a reflection of the
Portfolio. composition and weighting of the securities
contained in the Index.
4.9. Since the manager will not be distributing to
investors any income (including coupons) in the 3.8. The Portfolio will hold securities purely for the
Portfolio, the manager will disclose in the Portfolio economic rights and benefits attaching thereto,
Supplements that such income will be reinvested and accordingly if a takeover bid is made for shares
in the Portfolio. of a company included in the Index, the Portfolio
will not tender shares in respect thereof. Securities
4.10. Any material change in the investment policy held by the Portfolio which are subject to a
of the Portfolio shall constitute an amendment of takeover bid will only be surrendered if such
the Deed, and shall be subject to the provisions of surrender is mandatory (and then only to the
clause 59 of the Deed, in which event investors extent of such mandatory surrender) in terms of
shall be given reasonable notice to enable them to applicable law or under the rules of a regulatory
redeem their participatory interest prior to authority or body having jurisdiction. If a takeover
implementation of the bid results in a company no longer qualifying for
change. the inclusion in the Index, any shares of the
company held by the Portfolio after the takeover
4.11. The manager shall in managing the assets of bid will be disposed of by the Portfolio, and the
the Portfolio ensure that it is aligned with the proceeds will be applied in effecting the
limits as prescribed by Regulation 28 of the appropriate adjustments to the Portfolio.
Pension Funds Act, 24 of 1956, to the extend
allowed by the Act. 3.9. The Portfolio's ability to replicate the price
performance of the Index will be affected by the
costs and expenses incurred by the Portfolio.
Portfolio Benchmark Portfolio Benchmark Change due to amalgamation
Barclays/Absa South African Government FTSE/JSE Government Inflation-Linked Index
Inflation-Linked Bond Index ("IGOV") (Price Return)
Distribution Methodology Distribution Methodology
Reinvesting quarterly Distributing Monthly Change due to amalgamation
Satrix ILBI ETF (STXIFL) Satrix ILBI ETF (STXILB) Changes and impact
Total Expense Ratio Total Expense Ratio
35 bps 25 bps Change due to amalgamation
Charges, performance, and pricing
• Investors will not be liable for the payment of any additional
fees, charges, taxes, or brokerage as a result of the
amalgamation.
• Future performance and share pricing will be determined by the
new amalgamated fund, i.e., the Satrix ILBI ETF.
How the amalgamation impacts your investment
Replacement participatory interests
When the source fund, Satrix ILBI ETF is absorbed into and amalgamated
with the target fund, the Satrix ILBI ETF, investors will be issued
with replacement participatory interests (shares) in the new
amalgamated fund. The replacement shares will be equal in
market/monetary value to the shares held prior to the amalgamation,
although the number of shares held may change. The Satrix ILBI ETF
(source fund) will cease to exist.
This is in accordance with Section 99 (3) (a) of the Act, which
stipulates that on the effective date, every investor:
"shall… hold in the new scheme or portfolio, such participatory
interests with an aggregate money value that is not less than the
lower of the net asset value or market value, as may be fair and
reasonable in the circumstances of the participatory interests which
such investor, immediately before the date on which the proposed
transaction becomes effective, held in an original scheme or
portfolio."
BALLOT TIMELINE
Weekday Date Action
Monday 20 November 2023 Receive investor holdings per STRATE
Register (as of 17 Nov)
Monday 20 November 2023 Release of announcement on JSE SENS
Thursday 04 January 2024 Final date of response to ballot letter
(30 business days after distribution)
Wednesday 31 January 2024 Effective date of amalgamation of
portfolios
Details of the special distribution and amalgamation salient dates
will be announced after FSCA approval.
Special distribution
The Financial Sector Conduct Authority ("FSCA") requires that all
accrued income in funds to be transferred be distributed prior to the
transfer taking place. In line with this requirement, both the source
and target funds will distribute a special income declaration.
Action required
1. Please read this circular on the proposed change to the fund, your
rights as an investor and the impact this will have on your
investment.
2. Please complete the enclosed ballot form and email it directly to
our external auditors, KPMG, at satrixballotSTXIFL@kpmg.co.za on
or before 04 January 2024. If you do not participate in the ballot
in time, you will be deemed to have voted in favour of the change.
3. Please do not include any other instructions regarding your
holdings with your ballot form, e.g., requests for purchases,
switching instructions, etc. Your ballot form will go directly to
our auditors and, should such instructions be sent to the auditors,
we cannot guarantee that any instruction after the commencement of
the ballot process will be effected.
4. If you are no longer invested in this fund, no action is required.
Effective date of change
The effective date of the proposed amalgamation of the funds will be
31 January 2024, provided that the necessary consent is obtained from
investors and the Financial Sector Conduct Authority ("FSCA").
Your rights as an investor
The rights of investors are firmly entrenched in the Act. In terms
of Section 99 of CISCA, as read with Clause 59 of the Deed of the
Satrix Collective Investment Scheme in Securities 2, the Registrar of
Collective Investment Schemes requires that:
• All investors in the affected portfolios will be informed in
writing on the details of the proposed amalgamations of the
portfolios.
• All investors are given an opportunity to vote in favour of, or
against, the proposed amalgamations.
• An independent auditor will verify the outcome of the ballot.
• All investors will be notified in writing of any proposed
material changes to the collective investment schemes and
portfolios in which they hold units, and
• All investors will be given the opportunity to vote on the
proposed changes.
Please note that, in terms of the Act, the Registrar will not consent
to the changes to the fund unless satisfied that the changes will not
be detrimental to the interests of any investor.
If investors do not respond before the cut-off date, they will be
deemed to have voted in favour of the change.
If the ballot is successful and you do not want your investment to be
included in the amalgamation, you may elect to sell your securities
at any time before the amalgamation effective date and withdraw your
funds at the prevailing market price of the ETF. Please note that this
this transaction may trigger a CGT event and that you may be liable
for CGT at your next income tax assessment as well as brokerage cost.
If you choose not to sell your funds prior to the effective date of
the amalgamation, the amalgamation proposals, as set out in this
letter (if approved by investors), will automatically apply to your
investment.
Should you require further information on the proposed change you can
also email us on info@satrix.co.za.
20 November 2023
JSE Sponsor
Vunani Sponsors
Date: 21-11-2023 07:15:00
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