Last checked at 3 Dec 2010 07:30
STOCK EXCHANGE ANNOUNCEMENT
For Immediate Release 3 December 2010
PowerShares Global Funds Ireland plc (the "Company")
PowerShares EQQQ Fund (ISIN IE0032077012)
PowerShares FTSE RAFI US 1000 Fund (ISIN IE00B23D8S39)
PowerShares FTSE RAFI Developed 1000 Fund (ISIN IE00B23D8W74)
PowerShares FTSE RAFI Europe Fund (ISIN IE00B23D8X81)
PowerShares FTSE RAFI Developed Europe Mid-Small Fund (ISIN IE00B23D8Y98)
PowerShares Global Listed Private Equity Fund (ISIN IE00B23D8Z06)
PowerShares Palisades Global Water Fund (ISIN IE00B23D9026)
PowerShares Global Clean Energy Fund (ISIN IE00B23D9133)
PowerShares Dynamic US Market Fund (ISIN IE00B23D9240)
PowerShares FTSE RAFI Asia Pacific Ex-Japan Fund (ISIN IE00B23D9463)
PowerShares FTSE RAFI Emerging Markets Fund (ISIN IE00B23D9570)
PowerShares FTSE RAFI All-World 3000 Fund (ISIN IE00B23LNQ02)
PowerShares FTSE RAFI UK 100 Fund (ISIN IE00B23LNN70)
PowerShares FTSE RAFI Switzerland Fund (ISIN IE00B23LNR19)
PowerShares FTSE RAFI Italy 30 Fund (ISIN IE00B23LNP94)
PowerShares Global Agriculture NASDAQ OMX Fund (ISIN IE00B3BQ0418)
PowerShares FTSE RAFI Hong Kong China Fund (ISIN IE00B3BPCG45)
PowerShares Middle East North Africa NASDAQ OMX Fund (ISIN IE00B3BPCJ75)
PowerShares EuroMTS Cash 3 Months Fund (ISIN IE00B3BPCH51)
(each a "fund" together the "Funds")
Re: Updates to the Company
The Directors of PowerShares Global Funds Ireland Public Limited Company wish to announce certain changes affecting the Company and the Funds which are due to take effect on 20 December 2010 (the "Effective Date").
1. Amendments to the PowerShares Middle East North Africa NADSAQ OMX Fund,
PowerShares FTSE RAFI Emerging Markets Fund and PowerShares FTSE RAFI
All-World 3000 Fund only (together the "Swap Funds")
Currently, the Investment Manager achieves the objective of each Swap Fund by tracking the relevant benchmark index through the acquisition of the constituent securities of the relevant benchmark index through sampling techniques or through specific replication of the index weights as defined by the respective index benchmark. The Directors intend that, with effect from 5 January 2011 (the "Swap Implementation Date"), each of the Swap Funds will avail of the capacity to use financial derivative instruments ("FDI") and will now replicate the total return of the benchmark index solely through the use of FDI, namely over-the-counter swap agreements rather than direct acquisition of securities. In the period from the Effective Date to the Swap Implementation Date, the Swap Funds will continue to track the relevant benchmark index through the direct acquisition of securities.
These changes are being implemented to lower fund expenses and improve tracking performance results. These changes will eliminate frictional expenses associated with the maintenance of the portfolio and the custody fees incurred by the Swap Funds for the safekeeping of the securities. In addition, since the FDI guarantees the total return of the relevant benchmark index, there will be an improvement in the Swap Funds' ability to track the performance of the relevant benchmark index. It is anticipated that the impact of transaction costs associated with the implementation of the above changes on the Net Asset Value per Share of each Swaps Fund will be approximately:
Swap Fund BPs Cost PowerShares Middle East North Africa NASDAQ 0.36% OMX Fund PowerShares FTSE RAFI Emerging Markets Fund 0.24% PowerShares FTSE RAFI All-World 3000 Fund 0.08%
With effect from the Effective Date, the maximum fee charged by the Manager per annum for each of the Swap Funds will be reduced as set out below.
Swap Fund Current Fee Proposed Fee (% per annum) (% per annum) PowerShares Middle East North Africa 0.95 0.75 NASDAQ OMX Fund PowerShares FTSE RAFI Emerging Markets 0.85 0.65 Fund PowerShares FTSE RAFI All-World 3000 0.55 0.50 Fund
The Prospectus already provides the flexibility to allow the Company to use FDI. However, the Prospectus is being updated to reflect the focus on the use of FDI.
As a result of this move to replication of the relevant benchmark index, the Swap Funds may have a substantial portion of their Net Asset Value in cash. The Directors intend to employ a cash management policy whereby cash may be pooled for the Swap Funds, in order to seek to maximise the value of their holdings.
As the Swap Funds will be partaking in indirect replication of the relevant benchmark indices through the use of FDI, cash subscriptions and cash redemptions will generally only be accepted for the Swap Funds. Subscriptions and redemptions in specie will no longer be accepted, except where otherwise agreed with Invesco Capital Management Ireland Limited, the Manager.
Language has been included in the Prospectus to permit the use of common investment pools and additional risk factors have been inserted regarding the use of over-the-counter swap agreements, counterparty risks and collateral risks.
2. Amendments applicable to the PowerShares FTSE RAFI UK 100 Fund, PowerShares Palisades Global Water Fund, PowerShares FTSE RAFI Emerging Markets Fund, PowerShares Global Agriculture NASDAQ OMX Fund and PowerShares Middle East North Africa NASDAQ OMX Fund only (together the "Regulation 49A Funds")
As you are aware, the investment objective of each of the Regulation 49A Funds is to provide investment results which, before expenses, correspond to the price and yield performance of the relevant benchmark index in the base currency of that Regulation 49A Fund. In order to achieve this, the Regulation 49A Funds will, in so far as it is practicable, invest in a portfolio of equity securities which replicates the relevant benchmark index constituents.
Given the profile and weightings of the relevant benchmark index constituents, in order for the Regulation 49A Funds to be in a position to achieve its investment objective, it is necessary that the each of the Regulation 49A Funds has the ability to invest up to 20% of its Net Asset Value in transferable securities or money market instruments issued by the same body, with this limit capable of being raised to 35% in respect of a single issuer where justified by exceptional market conditions. The Directors intend that, with effect from the Effective Date, each of the Regulation 49A Fund's Supplements will be updated to disclose this investment flexibility regarding concentration limits.
Shareholders should note that this amendment to the Regulation 49A Funds' Supplements will not require any change in the current day to day management or investment style of the Regulation 49A Funds, rather, the Regulation 49A Funds' investment policies will simply be amended in these Supplements in order to clearly disclose the above investment concentration limit for particular index constituents.
3. Amendments applicable to the PowerShares FTSE RAFI UK 100 Fund only
The Directors intend, with effect from the Effective Date, to change the Valuation Point for the PowerShares FTSE RAFI UK 100 Fund from 5.30 p.m. Irish time to 4.30 p.m. GMT time.
4. Amendments applicable to the PowerShares EQQQ Fund only
The Directors intend, with effect form the Effective Date, to change the Dealing Deadline in respect of the PowerShares EQQQ Fund from 4.00 p.m. New York time to 4.00 p.m. Irish time.
5. General Amendments to the Prospectus and Supplements, applicable to all Funds
a. Common Investment Pools
Language has been included in the Prospectus to permit the use of common investment pools where the investment policies of certain Funds result in those Funds having a substantial holding in cash assets. The Investment Manager has discretion to pool some or all of the assets of such Funds for the purpose of achieving common investment policies on the management of that cash. It is anticipated that these common investment pools will assist in achieving economies of scale in the management and administration of the assets.
b. General Updates to the Prospectus
The Directors intend, with effect from the Effective Date, to make the following changes to the Company's Prospectus:
i. As a result of the implementation of the Central Bank Reform Act 2010, all
references to the Irish Financial Services Regulatory Authority and/or
Financial Regulator will be amended to the Central Bank of Ireland and/or
Central Bank.
ii. The list of directorships will be updated to reflect recent change to the
Board of Directors, whereby Mr Harold Bruce Bond resigned as a Director.
iii. The Investment Manager's name changed from that of "PowerShares Capital
Management LLC" to "Invesco PowerShares Capital Management LLC." The
Prospectus will be updated in this regard.
iv. The taxation section of the Prospectus and all Schedules to the Prospectus
will be updated in line with recent legislative developments and the re-publication of the Central Bank's Guidance Notes and UCITS Notices. In addition, the Anti-Money Laundering and Counter Terrorism Financing section will be updated in light of the recently adopted Criminal Justice (Money & Terrorism Financing) Act 2010.
(c) General Updates to the Supplements
The Directors intend that, with effect from the Effective Date, the Supplements of the Funds will be amended as set out below:
i. The minimum cash subscription of each of the Funds will be amended to one
Creation Unit of the relevant Fund.
ii. The latest available Net Asset Value per Share for each of the Funds will
be published on www.invescopowershares.net.
iii. All references to the Irish Financial Services Regulatory Authority and/or
Financial Regulator and the new Investment Manager's name will be updated,
as set out above. Enquiries:William Fry Michelle McGrath +353 1 639 5000 Invesco Asset Management Ltd Tim Mitchell 020 7065 3555
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