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Janus Capital Funds (IRSH)

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Thursday 11 August, 2016

Janus Capital Funds

Janus Absolute Return Income Fund - EGM Circular

RNS Number : 9873G
Janus Capital Funds PLC
11 August 2016
 

 

This document is important and requires your immediate attention.  If you are in any doubt as to the action you should take you should seek advice from your investment consultant or other professional adviser.

 

If you have sold or transferred any of your shares in the Janus Absolute Return Income Fund, a sub-fund of Janus Capital Funds plc (the "Company"), please pass this document at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee as soon as possible.

 

Unless otherwise defined herein, all other capitalised terms used herein shall bear the same meaning as capitalised terms used in the prospectus of the Company dated 1 April 2016 (the "Prospectus").  A copy of the Prospectus is available upon request during normal business hours from the Administrator.

 

In accordance with the current policy of the Central Bank of Ireland (the "Central Bank"), this document has not been reviewed by the Central Bank.

 

11 August 2016

 

Dear Shareholder,

 

RE:      Proposed amendment to the investment policy of the Janus Absolute Return Income Fund (the "Fund")

 

We are writing to you as a Shareholder in the Janus Absolute Return Income Fund, a sub-fund of the Company. The purpose of this letter is to inform Shareholders of a proposal to amend the investment policy of the Fund as follows, subject to the Shareholder approval at the extraordinary general meeting of the Fund to be held on 6 September 2016:

 

Amendment to the investment policy of the Fund:

 

The Fund is currently permitted to employ investment techniques and instruments, such as trading in futures, options, swaps, warrants and forward currency exchange contracts to manage its duration, for efficient portfolio management (i.e. reduction of risk, reduction of costs, generation of additional capital or income for the fund) or for investment purposes as described in the "Types and Description of Financial Derivative Instruments" section of the Prospectus, subject to the conditions and within the limits from time to time laid down by the Central Bank to gain or hedge exposure to the investments contemplated in its investment policies. The Fund currently measures its market risk using the commitment approach.

 

It is proposed to increase the permitted use of derivatives so that going forward the Fund may make significant use of financial derivative instruments and use the VaR methodology (instead of the commitment approach) to measure market risk going forward.  It is expected that under normal market conditions, the Fund's leverage, as calculated using the sum of the notionals of the derivatives held by the Fund (the "Notionals Approach"), will be less than 300% of the Fund's Net Asset Value, and is expected to typically range from 150% to 200% of the Fund's Net Asset Value.  Under exceptional circumstances, it is expected that the Fund may be leveraged up to 400% (using the Notionals Approach) of the Fund's Net Asset Value.  The proposed revised investment policies are set out in Appendix A to this letter.

 

The change in the Fund's investment policy more accurately reflects the Fund's intention to make a significant use of financial derivative instruments and, consequently, use the VaR methodology (instead of the commitment approach) to measure market risk going forward.

 

Extraordinary General Meeting ("EGM"):

 

An EGM of the Shareholders of the Fund will take place at 3 p.m. (Irish time) on 6 September 2016 at Arthur Cox, Earlsfort Centre, Earlsfort Terrace, Dublin 2, Ireland.  At the EGM, Shareholders of the Fund will be asked to consider an item of ordinary business, the purpose of which is to pass a resolution approving the proposed amendments to the investment policy of the Fund as set forth in this letter.  The quorum for the meeting is two Shareholders present (in person or by proxy).

 

If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall be adjourned for one week at the same time and place or to such other day, time and place as the Board of Directors may determine. 

 

The amendment to the Fund's investment policy requires the approval of Shareholders of the Fund by way of an ordinary resolution.  This means that over 50% of the Shareholders of the Fund present and voting in person or by proxy must vote in favour of the resolution. A copy of the resolution can be found in the attached notice of EGM.

 

The results of the EGM vote will be available on or about 7 September 2016 on Janus Capital International's website at www.janusinternational.com and at www.ise.ie.  

 

Casting your Vote/Proxy Form:

 

To take part in this vote please return your completed original and signed Form of Proxy to the address specified on the proxy form (i.e. Janus Capital Funds plc, c/o Janus Capital International Limited (Legal Department) 26th Floor, Citypoint, 1 Ropemaker Street, London, EC2Y 9HT) so that it is received by 11 a.m. (Irish time) on 2 September 2016.  Alternatively you may attend the meeting and vote in person. Completion and return of a form of proxy will not preclude a Shareholder from attending and voting in person at the EGM.

 

Effective Date of the changes if approved:

 

The Company will confirm the effective date of the change by way of an announcement which will be available on Janus Capital International Limited's website at www.janusinternational.com and at www.ise.ie.  Subject to Shareholder approval, the changes will take effect on or about 22 September 2016 (the "Effective Date") pursuant to a new prospectus to be noted by the Central Bank.

 

 

 

Redemption of Shares

 

Subject to Shareholders passing the resolution approving the proposed amendment to the investment policy of the Fund at the EGM, Shareholders who do not wish to remain invested in the Fund will have the opportunity to redeem some or all of their shares during a period of at least 2 weeks after the EGM, which will be confirmed in due course at Janus Capital International's website at www.janusinternational.com and at www.ise.ie.  During such period, redeeming Shareholders will not be subject to contingent deferred sales charge, if applicable, provided they submit their redemption request following the usual redemption procedures as set out in the Prospectus.

 

Recommendation:

 

The Board of Directors recommend that you vote in favour of the ordinary resolution and consider the change to the investment policy to be in the best interests of the Shareholders of the Fund, as a whole.  

 

Please note that a draft prospectus containing, inter alia, the proposed amendment to the investment policy of the Fund will be reviewed by the Central Bank, the home regulator. Should the Central Bank require further material amendments to the proposed amendments to the investment policy of the Fund as set out in the draft prospectus, such amendments shall be brought to the attention of Shareholders of the Fund as soon as is reasonably practicable and, in any event, at the meeting of Shareholders of the Fund before consideration of the resolution. 

 

If you have any questions please do not hesitate to contact your distributor or usual Janus representative.

 

Yours sincerely,

 

 

 

___________________

For and on behalf of

Janus Capital Funds plc

 

Enclosures                    Notice of Meeting;

                                    Form of Proxy

 


Appendix A - Revised Investment Policies

 

The Fund's investment objective is to seek positive, consistent returns above those that would be earned on cash-equivalent investments. The Fund seeks to provide long-term positive returns through various market environments (i.e. the typical cyclical expansion/contraction/recession periods of the Business Cycle and the ensuing increasing and decreasing of interest rate levels due to market forces or central bank intervention). Under normal circumstances, it pursues this objective by investing Primarily in Debt Securities rated investment grade, below investment grade or unrated Debt Securities of similar quality to below investment grade as determined by the Investment Adviser located anywhere in the world (including Developing Markets), or financial derivative instruments.  Typical sectors in which the Fund could invest would include, but are not limited to, Government Securities, corporate credit, commercial mortgage-backed securities, asset-backed securities, emerging market securities and high yield securities, currencies and cash.  The mortgage-backed and asset-backed securities in which the Fund may invest will not contain embedded derivatives and/or leverage.  The Fund has no pre-established maturity or quality standards, and its average maturity and quality may vary substantially and it may have negative duration.

 

The Fund may employ investment techniques and instruments (trading in futures, options, swaps, swaptions, credit default swaps (both single name and indices) and forward currency exchange contracts to manage its duration) for efficient portfolio management (i.e. reduction of risk, reduction of costs, generation of additional capital or income for the fund) or for investment purposes as described in the "Types and Description of Financial Derivative Instruments" section herein, subject to the conditions and within the limits from time to time laid down by the Central Bank to gain or hedge exposure to the investments contemplated in these investment policies. The financial derivative instruments will be used where direct purchase would not be possible or would be less efficient and may be used to hedge, increase or decrease currency exposures, increase or decrease fixed income exposure to specific countries, increase or decrease exposure to interest rates or a specific currency or country, get exposure to a country's or currency's yield curve (which shows the bond yield for different maturities), manage exposure to interest rate, sovereign and credit risk, hedge instruments with inflation sensitivity, gain exposure to a country specific real interest rates.

 

The Fund will make significant use of financial derivative instruments.  The market risk of the Fund will be measured using the VaR methodology.  The absolute VaR of the Fund will not exceed 14.1% of the Fund's Net Asset Value.  It is expected that under normal market conditions, the Fund's leverage, as calculated using the sum of the notionals of the derivatives held by the Fund (the "Notionals Approach"), will be less than 300% of the Fund's Net Asset Value, and is expected to typically range from 150% to 200% of the Fund's Net Asset Value.  Under exceptional circumstances, it is expected that the Fund may be leveraged up to 400% (using the Notionals Approach) of the Fund's Net Asset Value.  Exceptional circumstances may include periods characterised by (i) lack of liquidity, particularly in securities listed, traded or dealt on a Regulated Market, causing the Sub-Investment Adviser to seek exposure in derivatives markets; (ii) volatility where the Sub-Investment Adviser seek to hedge or be opportunistic while respecting the investment policies and restrictions applicable to the Fund; or (iii) imperfect correlations and unanticipated market conditions.  If the Fund uses a high amount of leverage, especially the higher amount permitted in exceptional circumstances, it may have greater losses that would have occurred absent the high leverage. The leverage figure is calculated using the Notional Approach as is required by the UCITS Regulations. The notional value of the investments varies significantly from their market value which is why the leverage limits are high. These leverage limits do not take into account any netting and hedging arrangements that the Fund may have in place at any time even though these netting and hedging arrangements are used for risk reduction purposes.

 

Due to its exposure to Developing Markets and below-investment grade securities, an investment in the Fund should not constitute a substantial proportion of an investment portfolio and may not be appropriate for all investors.

 

 

 

 

This announcement has been issued through the Companies Announcement Service of

the Irish Stock Exchange.

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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