Various changes to JPMorgan funds (Asia)
We have been notified by JPMorgan Funds (Asia) Limited (the “Company”) of various changes in relation to four JPMorgan funds (the “affected funds”). These changes will take effect from 25 July 2022 (the “Effective Date”).
Notification of changes to the underlying funds of:
| ISIN | Fund Name | Fund features in these products |
|---|---|---|
| HK0000055746 | JPMorgan Pacific Securities Acc USD | Preference, Hong Kong Preference |
| HK0000055670 | JPMorgan Japan (Yen) Acc JPY | Preference, Hong Kong Preference |
| MU0129U0005 | JPMorgan India Acc USD | Preference, Hong Kong Preference |
| HK0000055647 | JPMorgan Asian Smaller Companies Acc USD | Preference, Hong Kong Preference |
SUMMARY OF THE CHANGES
The following is an extract from the Company's Shareholder Circular of the underlying funds in regard to the changes:
“The respective trust deeds of all the Funds empower the JPMorgan Funds (Asia) Limited, as the manager of the Funds (the “Manager”), to adjust the net asset value per unit of the Funds to reflect the fiscal charges which, as the Manager estimates, would be incurred by the Funds in order to buy or sell the underlying securities to meet subscription or redemption requests (the “Adjustment Mechanism”). The purpose of the Adjustment Mechanism is to protect interests of all investors of the Funds under specific circumstances (including but not limited to high volatility and/or lack of liquidity in the underlying market) where dealings of units in the Funds might result in potential impact on the interests of existing investors (hereinafter referred to as “dilution effects”).”
Circumstances under which the Adjustment Mechanism may be applied
From the Effective Date, the offering documents of the affected funds will be amended to provide that the underlying Manager may make swing pricing adjustments when the net capital flow of an underlying fund of an affected fund exceeds the threshold pre-determined by the underlying Manager from time to time and if the underlying Manager considers it is in the interests of all unitholders to do so.
Increase in the maximum rate of adjustment
From the Effective Date, the offering documents will be amended to provide that, under normal market conditions, the adjustment rate will not exceed 2% of the net asset value per unit of the underlying funds of affected funds or classes; however it may be significantly higher during extreme market conditions such as periods of high volatility, reduced asset liquidity and market stress. In any event, unless with the approval of the underlying fund Trustee and the Securities and Futures Commission (if required), swing pricing adjustment rate exceeding 2% will only be applied on a temporary basis and will not exceed 5%.
Renaming of the Adjustment Mechanism
The Adjustment Mechanism will be renamed as “swing pricing” (currently referred to as “fiscal charge” in the current underlying funds’ offering documents).
Please refer to the notification opposite for further details.