Fund merger - JPM US Dynamic Fund
JPMorgan have announced they will merge the JPM US Dynamic Fund into the JPM US Dynamic 130/30 Fund on 31 May 2013.
The merged fund will be re-named the JPMorgan US Equity Plus Fund.
Products affected by the fund merger are: Kudos and PIMS
Reason for and advantage of the merger
Following significant outflows from the JPMorgan US Dynamic Fund, the Board has approved the merger with the purpose of offering shareholders of the fund the opportunity of investing in an alternative fund that has experienced superior performance historically* and that has the prospect of stronger growth in assets in the future.
*Please note past performance is not a guide to future performance.
Comparison of the features of the merging and receiving funds
Due to the assets of the receiving fund being invested either directly or through the use of financial derivatives there are additional risks to which the receiving fund is exposed.
- The value of financial derivative instruments can be volatile. This is because a small movement in the value of the underlying asset can cause a large movement in the value of the financial derivative instrument and therefore, investment in such instruments may result in losses in excess of the amount invested by the receiving fund.
- The possible loss from taking a short position on a security may be unlimited as there is no restriction on the price to which a security may rise. The short selling of investments may be subject to changes in regulations, which could adversely impact returns to investors.
- There is no guarantee that the use of long and short position will succeed in enhancing investments returns.
Investment objective of the JPMorgan US Dynamic Fund (merging fund):
To maximise long-term capital growth by investing primarily in an aggressively managed portfolio of US Companies.
Annual Management Charge is 1.50%
Investment objective of the JPMorgan US Dynamic 130/30 Fund (receiving fund)
To provide long-term capital growth through exposure to US companies by direct investments in securities of such companies and through the use of financial derivative instruments. The portfolio will be managed aggressively.
Annual Management Charge is 1.50%. The fund is subject to a 10% performance fee.
Letters have been issued to affected policyholders advising of the fund merger. The fund managers notification and sample letter can be viewed opposite.