Terms and conditions improved and simplified in more funds
At Danske Invest we constantly strive to make investing in our funds simpler and more attractive. We have therefore altered the terms and conditions for three of our funds.
Danske Invest Eastern Europe Absolute
Investors in Danske Invest Eastern Europe Absolute pay an annual performance fee that depends on the fund’s return.
To date, investors have paid a performance fee if the fund has generated a higher return than the ‘hurdle rate’-interest rate chosen for the fund (see link below). As this interest rate is currently negative across many markets, that means investors could potentially have to pay a performance fee on a negative return. We have therefore altered the fund’s terms and conditions so investors only have to pay a performance fee if return is positive. In addition, performance fees will be based on the day-to-day interest rate going forward.
Furthermore, the fund’s expected gearing is being changed from 160-170% to 90-200% with a maximum gearing ratio of 200-250%. Expected gross equity exposure is 200-300%, while the total long equity exposure is 100-150%. This will, in our opinion, improve the return potential of the fund without affecting the fund’s risk level.
The changes to the fund apply from 1 August 2018. We have also made a series of other changes in the fund that are described in more detail in the fund prospectus. You can see a summary of the changes here.
Danske Invest Europe Long-Short Dynamic
Investors in Danske Invest Europe Long-Short Dynamic and Europe Long-Short Dynamic Plus pay an annual performance fee that depends on the returns of the funds.
To date, investors have paid a performance fee if the funds have generated a higher return than the ‘hurdle rate’-interest rate chosen for the funds (see link below). As this interest rate is currently negative across many markets, that means investors could potentially have to pay a performance fee on a negative return. We have therefore altered the fund’s terms and conditions so investors only have to pay a performance fee if return is positive. In addition, performance fees will be based on the day-to-day interest rate going forward.
The changes to the funds apply from 1 August 2018. We have also made a series of other changes in the funds that are described in more detail in the fund’s prospectuses. You can see a summary of the changes here.
Danske Invest Allocation Stable Income and Danske Invest Allocation Dynamic
Investors in our Danske Invest Allocation Stable Income and Danske Invest Allocation Dynamic funds pay an annual performance fee depending on the fund’s return.
To date, investors in both funds paid a performance fee of 20% of the fund’s excess return relative to the 3-month interest rate. Going forward, the calculation of the performance fee in each fund will be relative to the day-to-day rate. Interest rates are currently negative, which could potentially mean investors having to pay a performance fee despite a negative return on the funds. Hence, we have changed the terms and conditions so investors only pay performance fees if return is positive. The changes regarding performance fees come into effect from 1 August 2018.
The structure of the ongoing charge in the two funds has also been altered. Until now, these have been variable and split into several items, but now they are gathered in one fixed charge, so you always know what you have to pay. The new fixed price is based on the latest variable price, so there will be no immediate change in costs for investors. The changes apply from 1 June 2018.
Allocation Equity Opportunities
The structure of the ongoing charge in the Danske Invest Allocation Equity Opportunities fund has been altered. Until now, the charges have been variable and split into several items, but now they are gathered in one charge, which is fixed. This way, investors know what they have to pay. The new fixed price is based on the latest variable price, so there will be no immediate change in costs for investors. The change applies from 1 June 2018.
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We have made a number of other changes to the funds and they are described in more detail in the funds’ prospectuses. You can see a summary of the changes here. Note that the investment strategies and the risks associated with the funds are the same as before.
