Merger of Evli Global Asset Allocation Fund

21.03.2018

Evli Fund Management Company Ltd has decided to merge the Evli Global Asset Allocation Fund (merging fund) with the Evli Global Multi Manager 30 Fund (acquiring fund). The Financial Supervisory Authority granted permission to conduct the merger on February 16, 2018.

The merger will take place on April 24, 2018, at which time the merging fund will be dissolved, and its assets and liabilities will be transferred to the acquiring fund. There will be no liquidation proceedings. No separate actions are required from unit holders to accept the merger and receive the fund units of the Evli Global Multi Manager 30 Fund offered as merger consideration. Trading with units of the Evli Global Asset Allocation Fund will cease no later than at 12.00 noon (Finnish time) on April 23, 2018.

Reasons for the merger

The mutual funds participating in the merger invest their assets globally by allocating them to equity and fixed-income through other mutual and ETF funds. The value of the merging fund’s assets has been on the decline for some time and the fund’s role as part of the asset management products and services offered by Evli Group has diminished.

When the Management Company manages two funds that invest in the same region and in similar instruments, it is justified to combine them into a single, larger fund. The acquiring mutual fund may continue to manage the assets transferred in the merger.

The historical risk rating of the acquiring fund was 4, but on August 31, 2017, as a consequence of the entry into effect of an amendment to the rules, the fund’s risk rating declined, and its current risk rating corresponds (risk rating 3) with that of the merging fund. The fixed management fee of the merging fund (1.25% p.a.) is higher than that of the acquiring fund (0.75% p.a.) but the fees charged by the other funds that the acquiring fund has invested in raise its ongoing charges slightly above those of the merging fund per a 12-month period.

Information on the funds involved in the merger on February 28, 2018

Fund Return 12 mo (%) Return 3 yrs (% p.a.) Return 5 yrs (% p.a.) Ongoing charges (% p.a.) Capital (EUR million) Risk category (1–7)
Evli Global Asset Allocation A/B 2.00 0.17 1.47 1.49

4.4

 

3

 

Evli Global Asset Allocation B SEK 1.22 -0.30 - 1.49
Evli Global Multi Manager 30 0.73 0.29 4.70 1.65 19.2 4* (3)**

* historical risk rating
** current risk rating

For more detailed information, please read the attached key investor information document of the Evli Nordic Fund.

Consequences of the merger

Unit holders of Evli Global Asset Allocation Fund

Under to the Act on Common Funds, a unit holder of the merging fund will become a unit holder of the acquiring fund on the merger date, unless the unit holder redeems his/her fund units or switches them to units of another fund managed by Evli Fund Management Company Ltd before execution of the merger.

The holdings of unit holders who accept the merger will be converted by the Management Company to holdings in the acquiring fund of corresponding cash value on the basis of the values of the fund units calculated on the merger date. Holders of accumulation units will receive euro-denominated units of the Evli Global Multi Manager 30 B unit series (acc. unit) as merger consideration irrespective of whether they own B, IB or B SEK units in the merging fund at the moment. Holders of distribution units will receive A series (dist. unit) units of Evli Global Multi Manager 30 Fund as merger consideration.

The unit holders’ rights in the acquiring fund will enter into force when the units received as merger consideration have been entered in the unit register maintained by the Management Company. Technical registration of the fund units received as merger consideration will be carried out by April 27, 2018, using the fund unit values confirmed for the merger date.

The Management Company can convert the assets of the merging fund into cash immediately before the merger date to ensure an uninterrupted merger. Any accrued income of the fund, such as sale price receivables for sold securities or accrued interest, will be taken into consideration as assets of the merging fund and will be transferred to the acquiring fund in the merger.

The Management Company will not charge redemption or switch fees from those unit holders who wish to redeem or switch their fund units before the execution of the merger. The deadline for placing redemption or switch orders is April 23, 2018, at 12.00 noon (Finnish time). Any orders received after this time will be executed after the completion of the merger. For redemption requests submitted by the deadline, redemption proceeds will be paid in cash to the unit holder’s bank account known to the Management Company by April 27, 2018.

Unit holders of Evli Global Multi Manager 30 Fund

The merger is not expected to have a significant impact on the unit holders of the fund and it does not affect their rights. The rules and composition of the investment portfolio of the acquiring fund will not change significantly but its assets will grow by the amount of the capital transferred in the merger. The assets of the merging fund will be transferred either as cash or as securities or a combination thereof and the acquiring fund will continue to manage them in accordance with its investment strategy.

Taxation

If a unit holder resident in Finland for purposes of taxation accepts the merger consideration offered in the form of fund units, there will be no tax consequences since this constitutes universal succession as referred to in Finnish tax legislation. However, redemption of fund units or switches to another mutual fund executed before the merger are subject to taxation in the same way as any other sale (or exchange) of property, i.e. normal tax treatment will be accorded to any such transfer of fund units. Correspondingly, any sale of the new units received as merger consideration will be taxed normally after the merger. However, the acquisition cost of the new units will be considered to be equal to the acquisition cost of the old units held in the merging fund.

EVLI FUND MANAGEMENT COMPANY LTD.

Additional information:
Investor Service, tel. +358 9 4766 9701, Monday to Friday from 9.30 am to 4.30 pm (Finnish time).