|The OMW Threadneedle UK Absolute Alpha fund invests solely in the Threadneedle UK Absolute Alpha fund, a sub fund of Threadneedle Specialist Investment Funds ICVC, a UK authorised Open Ended Investment Company, managed by Threadneedle Investment Services Limited.
The underlying fund seeks to achieve an absolute return, irrespective of market conditions, over the long term and a positive return over a 12 month period. There is a risk to capital, and there is no guarantee that such a return will be achieved within 12 months, or any other timescale. The underlying Fund will principally invest in: equity securities, or equity related derivatives, of corporate issuers headquartered in the United Kingdom (or corporate issuers who exercise a predominant part of their activity in the United Kingdom) fixed interest securities, cash, or money market instruments.
In addition to the underlying annual management charge of 1.50% of the underlying fund’s value, the fund manager of the underlying fund charges a performance-related fee of 20% of the amount by which the underlying fund’s performance exceeds that of the GBP 3 month LIBOR rate (“the Benchmark”) or 0% (whichever is the greater). The fee is calculated daily and deducted once a year at the end December. For full details of the performance-related fee, see the fund manager’s simplified prospectus at www.threadneedle.com.
The table below illustrates the performance-related fee for three different examples of fund performance. Note that these are examples only and not forecasts or guarantees.
Performance after AMC Performance related fee @ 20%* Standard Annual Management Charge (AMC) Total Annualised fund charge
2.00% 0.32% 1.50% 1.82%
5.00% 0.92% 1.50% 2.42%
8.00% 1.52% 1.50% 3.02%
* These figures assume a GBP 3 month LIBOR rate of 0.37688% throughout.
The above figures do not include the effect of any expenses which are charged to the fund or OMW product charges which are reflected in the pricing of OMW funds.
The underlying fund may be denominated in or hold assets in a currency other than Sterling. The performance of the fund may therefore rise and fall as a result of exchange rate fluctuations.
The underlying fund invests in bonds or money market instruments (including deposits with banks or other financial institutions). The yield and/or value of the fund will fluctuate as interest rates change. There is a possibility of default, reducing capital values.
The underlying fund, or some of its underlying assets, may hold derivatives, or borrow to invest ('gearing'), and the nature of these investments can lead to a higher volatility in the price of the fund. In addition, the fund may have some exposure to credit risk if a provider of derivatives fails to honour their obligation.
Some of the investments in the underlying fund can be difficult to sell at times, which could affect the price of units.
The underlying fund aims to deliver positive returns in any market conditions, but returns are not guaranteed. Funds in this sector must clearly state the timeframe over which they aim to meet their stated objective which must not be longer than three years.
It should be noted that the performance of the OMW fund will not match that of the underlying investment due to OMW fund charges, appropriate taxation adjustment and the OMW investment process.