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Funds Impacted By ABIL

Funds Impacted By ABIL

Atlantic

Atlantic Enhanced Income PSG Fund

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Atlantic Enhanced Income PSG Fund, the current illiquid ABIL exposure is 7.0881%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 7.0881% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Atlantic Real Income PSG Fund

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Atlantic Real Income PSG Fund, the current illiquid ABIL exposure is 5.8809%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 5.8809% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Cadiz

Cadiz Absolute Yield Fund

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Cadiz Absolute Yield Fund, the current illiquid ABIL exposure is 6.95%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 6.95% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Cadiz Inflation Plus Fund

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Cadiz Inflation Plus Fund, the current illiquid ABIL exposure is 2.12%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 2.12% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Cadiz Money Market Fund

Financial Services Board instruction to re-price money market unit trust funds with African Bank exposure

As a result of the South African Reserve Bank's announcement regarding African Bank Investments Limited (ABIL), the Financial Services Board (FSB) has instructed all Managers of money market unit trust funds to re-price their ABIL exposure down by 10% which will impact your investment in this fund.

The Cadiz Money Market Fund had exposure to ABIL resulting in a requirement to reduce the value of this ABIL exposure.

The FSB announcement has had the following impact on the fund and in turn your investment effective Monday, 11 August 2014:

  • A reduction in the income accrued (and therefore the daily yield) in the fund for Monday, 11 August 2014 to 0 (zero)
  • Since the income accrued in the fund for Monday, 11 August 2014 was insufficient to offset the reduction in value resulting from the re-pricing, the remaining reduction in value was provided for by reducing the proportionate number of participatory interests (units). In the case of the Cadiz Money Market Fund a reduction of approximately 0.12728% was applied.
  • The Net Asset Value (NAV) unit price of the fund remained at R1
  • You will notice the impact of this event, dated as 11 August 2014 on your next statement with the transaction description 'ABL adjustment'

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure

Further to the abovementioned write down, the Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host ABIL's debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Cadiz Money Market Fund, the current illiquid ABIL exposure is 1.25%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fundwas created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created retention fund, which will only hold the illiquid ABIL assets. The percentage of your investment in the original fund that has been allocated to the Retention Funds is 1.25% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

  • A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the retention fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Investec

Investec Money Market Fund (Class R)

Financial Services Board instruction to re-price money market unit trust funds with African Bank exposure

As a result of the South African Reserve Bank's announcement regarding African Bank Investments Limited (ABIL), the Financial Services Board (FSB) has instructed all Managers of money market unit trust funds to re-price their ABIL exposure down by 10% which will impact your investment in this fund.

This Investec Money Market Fund (Class R) had exposure to ABIL resulting in a requirement to reduce the value of this ABIL exposure.

The FSB announcement has had the following impact on the fund and in turn your investment:

  • The daily yield of the Investec Money Market Fund (Class R) for Monday, 11 August 2014 was reduced to -0.07947%.
  • The Net Asset Value (NAV) unit price of the fund remained at R1

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Momentum

Momentum Bond Fund (Class A)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Momentum Bond Fund Class A, the current illiquid ABIL exposure is 1.96%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Thursday, 21 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 1.96% as indicated above.

You will notice the impact of this event, dated as 21 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Momentum Inflation Linked Bond Fund (A)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Momentum Inflation Linked Bond Fund (A), the current illiquid ABIL exposure is 1.43%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

Your current investment in this affected fund was split into two investments on Tuesday, 26 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 1.43% as indicated above.

You will notice the impact of this event, dated as 26 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Momentum Maximum Income Fund (Class A)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Momentum Maximum Income Fund A, the current illiquid ABIL exposure is 2.93%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Wednesday, 20 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 2.93% as indicated above.

You will notice the impact of this event, dated as 20 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Momentum Money Market Fund (Class A)

Financial Services Board instruction to re-price money market unit trust funds with African Bank exposure

As a result of the South African Reserve Bank's announcement regarding African Bank Investments Limited (ABIL), the Financial Services Board (FSB) has instructed all Managers of money market unit trust funds to re-price their ABIL exposure down by 10% which will impact your investment in this fund.

This Momentum Money Market Fund (Class A) had exposure to African Bank Limited resulting in a requirement to reduce the value of this ABIL exposure.

The FSB announcement has had the following impact on the fund and in turn your investment:

  • A reduction in the income accrued (and therefore the daily yield) in the fund for Monday, 11 August 2014 to 0 (zero)
  • Since the income accrued in the fund for Monday, 11 August 2014 was insufficient to offset the reduction in value resulting from the re-pricing, the remaining reduction in value was provided for by reducing the proportionate number of participatory interests (units). In the case of the Momentum Money Market Fund (Class A) a reduction of approximately 0.058% was applied.
  • The Net Asset Value (NAV) unit price of the fund remained at R1
  • You will notice the impact of this event, dated as 11 August 2014 on your next statement with the transaction description 'ABL adjustment'

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the Momentum Money Market Fund A, the current illiquid ABIL exposure is 0.92%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Friday, 22 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 0.92% as indicated above.

You will notice the impact of this event, dated as 22 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

Old Mutual

Old Mutual Money Market Fund (Class A)

Financial Services Board instruction to re-price money market unit trust funds with African Bank exposure

As a result of the South African Reserve Bank's announcement regarding African Bank Investments Limited (ABIL), the Financial Services Board (FSB) has instructed all Managers of money market unit trust funds to re-price their ABIL exposure down by 10% which will impact your investment in this fund.

This Old Mutual Money Market Fund (Class A) had exposure to ABIL resulting in a requirement to reduce the value of this ABIL exposure.

The FSB announcement has had the following impact on the fund and in turn your investment:

  • The daily yield of the Old Mutual Money Market Fund (Class A) for Monday, 11 August 2014 was reduced to -0.04768%.
  • The Net Asset Value (NAV) unit price of the fund remained at R1

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

STANLIB

STANLIB Aggressive Income Fund

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the STANLIB Aggressive Income Fund, the current illiquid ABIL exposure is 5.52%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 5.52% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

STANLIB Bond Fund (Class A)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the STANLIB Bond Fund (A), the current illiquid ABIL exposure is 0.90%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 0.90% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

STANLIB Bond Fund (Class R)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the STANLIB Bond Fund (R), the current illiquid ABIL exposure is 0.90%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 0.90% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

STANLIB Flexible Income Fund (A)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the STANLIB Flexible Income Fund (A), the current illiquid ABIL exposure is 7.85%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 7.85% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

STANLIB Income Fund (Class B6)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the STANLIB Income Fund (B6), the current illiquid ABIL exposure is 5.47%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 5.47% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

STANLIB Income Fund (Class R)

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure.

The Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host African Bank Investments Limited's (ABIL) debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the STANLIB Income Fund (R), the current illiquid ABIL exposure is 5.47%

This fund has created a Retention Fund which means:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed.

What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created Retention Fund, which will only hold the illiquid ABIL assets.

The percentage of your investment in the original fund that has been allocated to the Retention Funds is 5.47% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the Retention Fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

STANLIB Money Market Fund (Class R)

Financial Services Board instruction to re-price money market unit trust funds with African Bank exposure.

As a result of the South African Reserve Bank's announcement regarding African Bank Investments Limited (ABIL), the Financial Services Board (FSB) has instructed all Managers of money market unit trust funds to re-price their ABIL exposure down by 10% which will impact your investment in this fund.

The Stanlib Money Market Fund (Class R) had exposure to ABIL resulting in a requirement to reduce the value of this ABIL exposure.

This fund has created a Retention Fund which means:

  • A reduction in the income accrued (and therefore the daily yield) in the fund for Monday, 11 August 2014 to 0 (zero)
  • Since the income accrued in the fund for Monday, 11 August 2014 was insufficient to offset the reduction in value resulting from the re-pricing, the remaining reduction in value was provided for by reducing the proportionate number of participatory interests (units). In the case of the Stanlib Money Market Fund (Class R) a reduction of approximately 0.16% was applied.
  • The Net Asset Value (NAV) unit price of the fund remained at R1
  • You will notice the impact of this event, dated as 8 August 2014 on your next statement with the transaction description 'ABL adjustment'

Registrar of Collective Investment Schemes (CIS) empowers CIS Managers to segregate ABIL exposure

Further to the abovementioned write down, the Registrar of Collective Investment Schemes (CIS) has decided to allow CIS managers to create new funds, known as 'Retention Funds', to host ABIL's debt instruments. The move seeks to assist managers to segregate the less liquid ABIL assets within their portfolios from the remaining assets and in so doing limit new investors into the fund from exposure to the ABIL debt.

In the case of the STANLIB Money Market Fund (Class R), the current illiquid ABIL exposure is 1.58%

Should a CIS fund elect to create retention fund for ABIL debt:

  • The ABIL assets will be transferred from the main fund to the secondary Retention Funds.
  • Unit holders at the date of creation of the retention fund will be allocated their proportional units in this fund.
  • Each affected unit holder will therefore have units in two funds, the sum of which will be equal to their investment in the originating fund before the retention fund was created.
  • Any new investment in the original fund after the retention fund was set up will not be exposed to the ABIL debt.
  • As and when the ABIL debt matures and is settled by the curator of ABIL, unit holders in the Retention Funds will be paid out their proportionate share, according to their unit holding.
  • What does the creation of Retention Funds mean to investors?

Your current investment in this affected fund was split into two investments on Monday, 18 August 2014, the sum of which is equal in value to your existing investment. The two investments are:

  • A liquid investment in the original fund, which will continue to operate as previously, except that it will have no exposure to illiquid ABIL assets
  • An illiquid investment in a newly created retention fund, which will only hold the illiquid ABIL assets. The percentage of your investment in the original fund that has been allocated to the Retention Funds is 1.58% as indicated above.

You will notice the impact of this event, dated as 18 August 2014 on your next statement with the transaction description 'ABIL Retention Fund transfer'

A practical example to explain the above impact

Assuming an investor has 1 000 units at 200 cents per unit in an affected fund (R2 000) and that the fund had an exposure of 5% to illiquid African Bank Limited assets on the implementation date. After implementation of the Retention Fund, and assuming no change in the unit price, the investor will have:

  • 950 units at 200 cents per unit in the original fund valued at R1 900 which now contains no illiquid ABIL assets
  • 50 units at 200 cents per unit in the Retention Fund valued at R100 which only holds illiquid ABIL assets.

In certain instances the cents per unit price for the units created in the Retention Fund may not be the same as the original fund; however the value will always equal R100. The total investment above therefore remains R2 000.

It is important to note that the split of the assets into the two funds does not result in a loss in value for investors.

What is the impact regarding ongoing investment instructions

Ongoing transactions such as recurring investments, withdrawals or annuity payments will not be affected as they will be channelled through the original fund which has been segregated from ABIL exposure.

When will investors be able to disinvest from the Retention Fund?

Currently no redemptions will be possible from the retention fund. The fund will be priced daily but will only be able to pay redemptions once the Curator pays out amounts relating to capital and interest of any matured illiquid African Bank Limited asset or liquidity returns to the market. As and when the ABIL debt matures and is settled by the Curator of ABIL, the manager of the fund will communicate how this proportionate share will be distributed. The Curator has not provided any guidance regarding when this may occur as yet.

We will continue to monitor the situation, as part of our commitment to you as our client and will communicate any material changes to your investment.

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