Last checked at 7 Jan 2022 09:00
Xtrackers (IE) plcInvestment Company with Variable CapitalRegistered Office: 78 Sir John Rogerson's Quay, Dublin 2, IrelandRegistration number: 393802
Circular to the Shareholders andNotice of Extraordinary General Meeting of
Xtrackers iBoxx USD Corporate Bond Yield Plus UCITS ETF
ISIN: IE00BF8J5974
(the Fund)
_________________________________________________________________________________
This document is important and requires your immediate attention. If you are in doubt as to the action you should take you should seek advice from your stockbroker, bank manager, solicitor, accountant or other independent financial advisor. The directors of Xtrackers (IE) plc (the Company) accept responsibility for the information contained in this document as being accurate as at the date of publication. If you have sold or transferred all of your shares in the Fund please pass this document 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 or inconsistent with the context in this document, capitalised terms used herein have the same meanings as are ascribed to them in the current prospectus of the Company and supplement in respect of the Fund.
_________________________________________________________________________________
7 January 2022
Xtrackers (IE) plc (the “Company”)Xtrackers iBoxx USD Corporate Bond Yield Plus UCITS ETFISIN: IE00BF8J5974 (the “Fund”)
We are writing to inform you as a Shareholder that the directors of the Company (the “Directors”) have resolved to convene an Extraordinary General Meeting of the Shareholders of the Fund on 4 February 2022 at 9.00 a.m. (Dublin time) at 25/28 North Wall Quay, Dublin 1, Ireland (the “Meeting” or the “EGM”). Defined terms used which are not otherwise defined herein shall have the same meaning as in the Company’s prospectus (the “Prospectus”) and the supplement in respect of the Fund (the “Supplement”).
The purpose of the Meeting
The purpose of the Meeting is to enable Shareholders to consider a proposed change to the investment objective of the Fund and certain other changes as detailed below.
The current investment objective of the Fund is to track the performance of the Markit iBoxx USD Corporates 1-20 Yield Plus Index (the “Current Reference Index”). The Current Reference Index is administered by IHS Markit Benchmark Administration Limited (the “Current Index Administrator”) and is designed to reflect the performance of the higher-yielding US Dollar denominated corporate bond market with a credit rating between BB- and AAA.
It is proposed that the Current Reference Index will be replaced with the Bloomberg MSCI USD Corporate Sustainable and SRI 0-5 Years Index (the “New Reference Index”). The New Reference Index is designed to reflect the performance of the investment grade, USD-denominated, short-duration corporate bond market, excluding bonds which do not fulfil specific environmental, social, and governance (“ESG”) criteria. The New Reference Index is administered by Bloomberg Index Services Limited (the “New Index Administrator”).
Additional relevant differences between the Current Reference Index and the New Reference Index include, but are not limited to, the following:
- ESG Criteria: The Current Reference Index does not apply ESG screens. The New Reference Index uses company ratings and research provided by MSCI ESG Research LLC and excludes companies which do not fulfil specific ESG criteria:
Securities that are unrated by MSCI ESG Research LLC;Bonds issued by issuers rated BB or below by MSCI ESG Research LLC;Issuers with a “red” MSCI ESG Controversies score (less than 1);Issuers that are classified by MSCI in their MSCI ESG Business Involvement Screening Research (BISR) as breaching certain revenue thresholds in controversial activities, including, but not limited to: alcohol, tobacco, gambling, adult entertainment, genetically modified organisms, nuclear power, civilian firearms, military weapons, and energy production from thermal coal, nuclear power or natural gas sources. BISR aims to enable institutional investors to manage ESG standards and restrictions;Issuers with any involvement in controversial weapons, nuclear weapons, or with any fossil fuel reserves.The New Reference Index promotes ESG characteristics, therefore the Fund will qualify as a product subject to Article 8 of SFDR following the proposed change.
- Weighting and Capping Criteria: Both the Current Reference Index and the New Reference Index are market-value weighted indices, weighting eligible bonds according to the relative market value of each issuance. The Current Reference Index applies a capping of 2% for the weight of each issuer in the index while the New Reference Index includes a sector capping component to limit the cumulative weighting of bonds classified in the financial sector to 50% of the total index weight, as well as a 2% issuer cap.
- Eligibility Criteria: The Current Reference Index includes US Dollar denominated bonds issued by both US and non-US domiciled corporates with a credit rating of between BB- and AAA, an average expected life threshold of twenty years, and which meet certain yield differential requirements (compared to a US Treasury bond with a comparable maturity). The New Reference Index includes bonds meeting certain ESG criteria, with an investment grade credit rating, and which have a time to maturity of between one month and up to (but not including) five years. Further details on the index methodology of the New Reference Index can be found on https://www.bloomberg.com/professional/product/indices/bloomberg-fixed-income-indices.
If the ordinary resolution is approved by the Shareholders of the Fund, the name of the Fund will be changed to Xtrackers ESG USD Corporate Bond Short Duration UCITS ETF, the Management Company Fee and All-in Fee of the 1D share class (ISIN: IE00BF8J5974) will be amended as set out in Table 1 below.
Table 1:
Share Class | Current Management Company Fee | Current All-in Fee | New Management Company Fee | New All-in Fee |
1D | up to 0.15% per annum | up to 0.25% per annum | up to 0.06% per annum | up to 0.16% per annum |
A summary of all proposed changes is available in Appendix 1 to this letter.
For the avoidance of doubt, the Platform Fee will remain unchanged.
If the ordinary resolution is approved by the Shareholders of the Fund, the Securities Lending language of the Supplement will be amended to provide that the Fund is no longer eligible to enter into Securities Lending Transactions.
In addition the investment policy of the Fund will be amended to reflect that (i) the Fund’s portfolio will mainly comprise of investment grade, USD-denominated, fixed-rate corporate bonds, that comprises all or a representation of the securities comprised in the New Reference Index or unrelated transferable securities or other eligible assets; and (ii) that any unrelated transferable securities held by the Fund will typically be similar to the securities comprised in the New Reference Index, with full disclosure on the composition of the Fund’s portfolio available on a daily basis at www.Xtrackers.com.
For the avoidance of doubt, the risk profile of the Fund remains unchanged.
Shareholder Approval
Changes to the investment objective of the Fund as described above cannot be made without the approval of an ordinary resolution of the Shareholders of the Fund.
For this purpose, the Meeting is being convened and will take place at 25/28 North Wall Quay, Dublin 1, Ireland on 4 February 2022, at the times set out in the attached notice. Formal notice of the Meeting and Proxy form are attached hereto (as Appendix 2).
The quorum for the Meeting is one Shareholder present (in person or by proxy) entitled to vote upon the business to be transacted. If a quorum is not present within half an hour of the time appointed for the Meeting, or if during the Meeting a quorum ceases to be present, the Meeting will stand adjourned until 9.00 a.m. (Dublin time) on 11 February 2022 without any further notice to Shareholders. The quorum at the adjourned meeting shall be those Shareholders present at the adjourned meeting in person or by proxy and one person entitled to be counted in a quorum present at any adjourned meeting shall be quorum. The resolution will be proposed at the adjourned meeting in the same manner as described above.
The notice sets out the text of the resolution to be proposed at the Meeting. The resolution will be proposed as an ordinary resolution, meaning more than 50% of the total number of votes cast is required for the resolution to be passed by the Meeting. If the resolutions are passed by the requisite majority, they will be binding on all Shareholders in the Fund irrespective of how (or whether) they voted and the proposed changes would be expected to take effect and reflected in a revised Supplement on or around 23 February 2022. The Supplements will be published on www.Xtrackers.com.
Entitlement to attend and vote
Please note that you are only entitled to attend and vote at the Meeting (or any adjournment thereof) if you are a registered shareholder. As the sub-funds in the Company use the International Central Securities Depositary ("ICSD") model of settlement and Citivic Nominees Limited is the sole registered shareholder of shares in the Fund under the ICSD settlement model (the “Registered Shareholder”), investors in the Fund should submit their voting instructions through the relevant ICSD or the relevant participant in an ICSD (such as a local central securities depositary, broker or nominee). If any investor has invested in the Fund through a broker/dealer/other intermediary, the investor should contact this entity to provide voting instructions.
The Company specifies that only those members registered in the Register of Members of the Company at 9.00 a.m. on 4 February 2022 or, if the Meeting is adjourned, at 9.00 a.m. on the day that is two days prior to the adjourned meeting (the "Record Date"), shall be entitled to attend, speak, ask questions and vote at the Meeting, or if relevant, any adjournment thereof and may only vote in respect of the number of shares registered in their name at that time. Changes to the Register of Members after the record date shall be disregarded in determining the right of any person to attend and/or vote at the Meeting or any adjournment thereof.
Appointment of proxies
A form of proxy is enclosed with this notice for use by the Registered Shareholder only. As mentioned above, investors in the Fund who are not the Registered Shareholder should submit their voting instructions through the relevant ICSD or the relevant participant in an ICSD (such as a local central securities depositary, broker or nominee), instead of using the form of proxy attached hereto.
To be effective, the form of proxy duly completed and executed, together with a copy of the power of attorney or other authority under which it is executed must be deposited by the Registered Shareholder at the offices of the office of the Company Secretary, Goodbody Secretarial Limited, IFSC, North Wall Quay, Dublin 1, Ireland, so as to be received no later than 24 hours before the time appointed for the Meeting or any adjournment thereof or (in the case of a poll taken otherwise than at or on the same day as the Meeting or adjourned Meeting) at least 24 hours before the taking of the poll at which it is to be used. Any alteration to the form of proxy must be initialled by the person who signs it.
Enquiries
Copies of the existing and the proposed Supplement are available for inspection during normal business hours from the date of this circular up to and including the time of, and during, the Meeting (and any adjourned meeting) at the office of the Company's Legal Advisor, A&L Goodbody LLP, IFSC, North Wall Quay, Dublin 1, Ireland.
If you have any queries, or if any of the above is not clear, please write to us at the above address.
Further information in relation to the Meeting may be obtained from the offices of foreign representatives or by sending an email to Xtrackers@dws.com.
Conclusion
The Directors are of the opinion that the proposed change to the investment objective of the Fund described above is in the best interests of the Shareholders in the Fund and accordingly recommend that you vote in favour of the resolution set out in the attached Notice.
The Directors accept responsibility for the information contained in this circular.
Neither the contents of the Company’s website nor the contents of any other website accessible from hyperlinks on the Company’s website is incorporated into, or forms part of, this announcement.
We thank you for your continuing support of the Company.
Yours faithfully,
______________________________
DirectorFor and on behalf ofXtrackers (IE) plc
APPENDIX 1
Summary of proposed changes
Current Fund Name | New Fund Name | Current Reference Index | New Reference Index | Current Index Administrator | New Index Administrator |
Xtrackers iBoxx USD Corporate Bond Yield Plus UCITS ETF | Xtrackers ESG USD Corporate Bond Short Duration UCITS ETF | Markit iBoxx USD Corporates 1-20 Yield Plus Index | Bloomberg MSCI USD Corporate Sustainable and SRI 0-5 Years Index | IHS Markit Benchmark Administration Limited | Bloomberg Index Services Limited |
Share Class | Current Management Company Fee | Current All-in Fee | Platform Fee | New Management Company Fee | New All-in Fee |
1D | up to 0.15% per annum | up to 0.25% per annum | Up to 0.10% per annum (no change) | up to 0.06% per annum | Up to 0.16% per annum |
Registered in Dublin as an open-ended variable capital umbrella investment company with limited liability and as an umbrella fund with segregated liability between sub-funds. Registration Number 393802. Registered Office as above. Directors: Tom Murray (Irish), Michael Whelan (Irish), Gerry Grimes (Irish), Alex McKenna (British), Julien Boulliat (French), Philippe Ah-Sun (British)
APPENDIX 2
NOTICE OF EXTRAORDINARY GENERAL MEETINGofXtrackers iBoxx USD Corporate Bond Yield Plus UCITS ETFISINs: IE00BF8J5974(the “Fund”)
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Fund will be held at
9.00 a.m. on 4 February 2022 at 25/28 North Wall Quay, Dublin 1, Ireland to consider and if thought fit, to pass the following resolution:
By Ordinary Resolution:
That the change to the investment objective of the Fund as set out in the Circular to the Shareholders of the Fund dated 7 January 2022 be and is hereby approved.And to transact any other business which may properly be brought before the meeting.
By Order of the Board
________________________
For and on behalf ofGoodbody Secretarial LimitedSecretary7 January 2022
TRAVEL RESTRICTIONS UNDER COVID 19 AND PROPOSED ACTION TO BE TAKEN
Please note that there are currently significant travel restrictions in place due to COVID 19. Depending on what travel restrictions (if any) may be in place by the date of the EGM, physical attendance at the EGM may not be possible. Please refer to below link issued by the Irish Health Service Executive in respect of such travel restrictions: https://www2.hse.ie/conditions/coronavirus/coronavirus.html#travel. The Company will publish any relevant updates regarding the EGM on www.Xtrackers.com.
The Registered Shareholder entitled to attend and vote may, using the form set out in Section 184 of the Companies Act 2014, appoint a proxy to attend, speak and vote on his behalf. Should you wish to vote at the EGM, we would strongly recommend that you complete the proxy form enclosed with this Notice and return a completed and signed proxy form by email to gslfunds@algoodbody.com. Please also refer to the "Notes to the Proxy Form" on page 9 of this Notice.
FORM OF PROXY(for use by the Registered Shareholder only)XTRACKERS (IE) PLC(the Company)
Xtrackers iBoxx USD Corporate Bond Yield Plus UCITS ETFISINs: IE00BF8J5974(the “Fund”)
I/We ____________________________________________________________________________ being a Shareholder of the above named Fund, hereby appoint the Chairman of the meeting or failing him or her, Sarah O'Donovan or failing her, another representative of Goodbody Secretarial Limited or A&L Goodbody or ______________________________________________________________ to vote for me/us* on my/our* behalf at an Extraordinary General Meeting of the Fund to be held at 9.00 a.m. on 4 February 2022 and at any adjournment thereof.
*Please delete as appropriate
Signature: _______________________ Date: _______________________
Please indicate with an ‘X’ in the space below how you wish your vote to be cast. Unless otherwise instructed, the proxy will vote or abstain from voting as he thinks fit.
Ordinary Resolution | FOR | AGAINST | ABSTAIN |
1. That the change to the investment objective of the Fund as set out in the Circular to the Shareholders of the Fund dated 7 January 2022 be and is hereby approved. |
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Notes:
This form of proxy is enclosed with this notice for use by the Registered Shareholder only. As mentioned above, investors in the Fund who are not the Registered Shareholder should submit their voting instructions through the relevant ICSD or the relevant participant in an ICSD (such as a local central securities depositary, broker or nominee), instead of using the form of proxy attached hereto.To be valid, this proxy form (and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof) must be received or deposited at the offices of the Company Secretary, Goodbody Secretarial Limited, IFSC, North Wall Quay, Dublin 1, Ireland (facsimile + 353 1 1649 2649 or by email to gslfunds@algoodbody.com) for the attention of Sarah O'Donovan not less than 24 hours before the time of the Extraordinary General Meeting.Please insert your name(s) and address in BOLD TYPE and sign and date the form.If any amendments are made they should be initialled.If you wish to appoint as your proxy some person other than the Chairman of the Extraordinary General Meeting insert in block capitals the full name of the person of your choice. A proxy need not be a Shareholder of the Company.The proxy will exercise his/her discretion as to how he/she votes or whether he/she abstains from voting on the resolution if no instruction is given in respect of each resolution, and on any business or resolution considered at the Extraordinary General Meeting other than the resolutions referred to in the Notice of the Extraordinary General Meeting.If the appointer is a corporation, this proxy form must be executed under the seal or under the hand of an officer of same, or an attorney duly authorised on its behalf. In the case of joint Shareholders, any one Shareholder may sign, but the names of all the joint holders should be stated. In the event of more than one joint holder tendering votes, the vote of the shareholder whose name first appears in the register of members will be accepted to the exclusion of all others.The completion and return of the proxy form will not preclude Shareholders from attending and voting at the said Extraordinary General Meeting should they decide to do so.If you are holding shares of the Company through the relevant ICSD or the relevant participant in an ICSD (such as a local central securities depositary, broker or nominee), the proxy form including an indication as to how the proxy should vote, must be returned to the relevant ICSD or the relevant participant in an ICSD in good time in advance of the time for holding the Extraordinary General Meeting so it may complete and deposit the proxy form at the registered office of the Company in accordance with the above procedure.Registered in Dublin as an open-ended variable capital umbrella investment company with limited liability and as an umbrella fund with segregated liability between sub-funds. Registration Number 393802. Registered Office as above. Directors: Tom Murray (Irish), Michael Whelan (Irish), Gerry Grimes (Irish), Alex McKenna (British), Julien Boulliat (French), Philippe Ah-Sun (British)
Registered in Dublin as an open-ended variable capital umbrella investment company with limited liability and as an umbrella fund with segregated liability between sub-funds.
Registration Number 393802. Registered Office as above.
Directors: Tom Murray (Irish), Michael Whelan (Irish), Gerry Grimes (Irish), Alex McKenna (British), Julien Boulliat (French), Philippe Ah-Sun (British)
Registered in Dublin as an open-ended variable capital umbrella investment company with limited liability and as an umbrella fund with segregated liability between sub-funds. Registration Number 393802. Registered Office as above. Directors: Tom Murray (Irish), Michael Whelan (Irish), Gerry Grimes (Irish), Alex McKenna (British), Julien Boulliat (French), Philippe Ah-Sun (British)
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