NAFA SAVINGS PLANS. Supplementary Offering Document

Risk Disclaimer: All Investments in mutual fund are subject to market risks. The NAV of units may go up or down based on the market conditions. The in...
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Risk Disclaimer: All Investments in mutual fund are subject to market risks. The NAV of units may go up or down based on the market conditions. The investors are advised in their own interest to carefully read the contents of the Offering Document(s), in particular the Investment Policies mentioned in clause 2.1.1, Risk Factors mentioned in clause 2.4 and Warnings in Clause 11 before making any investment decision.

NAFA SAVINGS PLANS Supplementary Offering Document Managed by

A Joint Venture of National Bank of Pakistan Alexandra Fund Management Pte. Ltd. (A member of Fullerton Fund Management Group, Singapore)

NAFA SAVINGS PLANS Supplementary Offering Document

Underlying Funds: NAFA Savings Plus Fund ("NSPF") and / or NAFA Asset Allocation Fund ("NAAF") 1.

Introduction NAFA Savings Plans ("Plans") as listed below are offered by NBP Fullerton Asset Management Limited ("NAFA") (formerly National Fullerton Asset Management Limited) with underlying funds, namely NAFA Savings Plus Fund ("NSPF") and / or NAFA Asset Allocation Fund ("NAAF"). The features and characteristics of each Plan are enunciated below. The Plans are available to new investors as well as to the existing investors. All transactions under the Plans are governed by the Trust Deed dated December 9, 2009 of NSPF and Trust Deed dated June 29, 2010 of NAAF, as well as the Offering Documents of NSPF and NAAF along with this Supplementary Offering Document of the Plans. Investments in the Plans shall be investments in the units of the underlying Fund i.e. NSPF and/or NAAF, which apart from the provisions of the respective Trust Deeds and Offering Documents as mentioned above, will also be governed by the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 ("NBFC Rules") and Non-Banking Finance Companies and Notified Entities Regulations, 2008 ("NBFC Regulations") as amended or substituted from time to time.

2.

Benefits The Plans will invest in the underlying NAFA Funds. The key benefits of these Plans are:

2.1 Reduction in investment risk by investing either in a low-risk Fund i.e. NSPF or investing initially in the low-risk Fund i.e. NSPF and gradual shifting from the low-risk Fund to the high-risk Fund i.e. NAAF. The rationale behind this strategy is reduction of risk and earning a reasonable rate of return for the investors by gradually shifting from a low-risk fund to a high-risk fund. 2.2 The terms and features of the Plans are subject to change as communicated by NAFA (as the Management Company) from time to time with the consent of the Trustee and the approval of the Securities and Exchange Commission of Pakistan (SECP). However, all such changes will be applicable only to investors who invest after such revision(s), and will not be applicable retrospectively. The existing investors however may agree in writing to accept such revisions. 3.

Plan Types

Investors can choose among the following Savings Plans: (1) NAFA Mahana Amdani Plan The underlying Fund will be NAFA Savings Plus Fund (NSPF). Since there is only one underlying Fund there will not be any switching to another Fund. The investor will be receiving a monthly income linked to the monthly profitability of the Fund (see Clause 8.2.16 for detailed procedure). (2) NAFA Bachat Plan The underlying Fund will be NAFA Savings Plus Fund (NSPF). Since there is only one underlying Fund there will not be any switching to another Fund. The investor will receive distribution in the form of bonus units. As a result the investment value will grow over time. (3) NAFA Sarmaya Izafa Plan The underlying Funds will be NAFA Savings Plus Fund (NSPF) and NAFA Asset Allocation Fund (NAAF). Investment will initially be made in NSPF, and subsequently 2% of net investment value of the Plan will be switched from NSPF to NAAF at the end of every complete calendar month, excluding any investment plus any profit earned on that investment that has not completed one complete calendar month The entire investment shall be switched from the low-risk fund to the high-risk fund within an approximate span of 4 to 4.5 years. The switching over of net investment from NSPF to NAAF will be mandatory. NAFA will redeem the units of NSPF equivalent to 2% of the net investment value of the Plan and invest this amount in NAAF by issuing units of NAAF at the offer price prevailing on the date of the switch over. (4) NAFA Sarmaya Izafa Plus Plan The underlying funds will be NAFA Savings Plus Fund (NSPF) and NAFA Asset Allocation Fund (NAAF). Investment will initially be made in NSPF, and subsequently 4% of net investment value of the Plan will be switched from NSPF to NAAF at the end of every complete calendar month, excluding any investment plus any profit earned on that investment that has not completed one complete calendar month. The entire investment shall be switched from the low-risk fund to the high-risk fund within an approximate span of 2 to 2.5 years. The switching over of net investment from NSPF to NAAF will be mandatory. NAFA will redeem the units of NSPF equivalent to 4% of the net investment value of the Plan and invest this amount in NAAF by issuing units of NAAF at the offer price prevailing on the date of the switch over. 4.

Investment Style Investment in NAFA Savings Plans can be made in one of the following ways: Lump Sum: This will be a lump-sum investment in a Plan by the Investor. This may or may not be followed with additional investment in the Plan. Regular Savings: Regular (monthly, quarterly, semi-annually or annually) pre-defined fixed investment in a Plan by an individual Investor. This is a regular savings scheme where an Investor invests over a number of years (“Term”) in a Plan with a targeted

future date (“Maturity Date”). The Investment Term will be 5 to 25 years, and the frequency of the investment will be Monthly, Quarterly, Semi-annually or Annually. The minimum investment amount is Rs 5,000 per month, Rs 15,000 per quarter, Rs 30,000 semi-annually or Rs 60,000 annually. However, for NAFA Mahaana Amdani Plan the minimum initial investment is Rs. 100,000. An Investor may increase or decrease his/her investment subject to this minimum threshold. 5.

Management Fee and Loads The management fee and loads of underlying Funds will apply, which are as follows: Fund Name NAFA Savings Plus Fund (NSPF) NAFA Asset Allocation Fund (NAAF)

Management Fee (p.a.) 1.25% 2%

Load 0% 2%

NAFA, at its discretion may reduce the management fee and / or the loads.

Please note that in case of NAFA Sarmaya Izafa Plan and NAFA Sarmaya Izafa Plus Plan at the time of monthly switching from NSPF to NAAF a front-end load of 2% shall be applicable on the amount that is being switched from NSPF to NAAF.

6.

Summary of the Plans: NAFA SAVINGS PLANS NAFA Mahaana Amdani Plan Objective To provide investors with monthly income while seeking possible preservation of capital Risk Profile Low Suggested Investment Time Short Horizon Or Long Underlying NAFA Funds NAFA Savings Plus Fund (NSPF)

Systematic Switching to Manage Risk

Management Fee and Loads Withdrawal / Redemption Back End Load Minimum Initial Investment Lump Sum (one time) Regular Savings

NAFA Sarmaya Izafa Plan To provide investors with longterm capital growth, while seeking possible preservation of capital Low Moderate Short Medium (Less than 3 Years) (Over 3 Years) NAFA Savings NAFA Savings Plus Fund (NSPF) Plus Fund (NSPF) and NAFA Asset Allocation Fund (NAAF) Investment will Investment will Investment will only be made in only be made in initially be made in NSPF. The investor NSPF. The NSPF, and will receive a investment value subsequently 2% of monthly income. will grow over net investment time. value of the Plan will be switched from NSPF to NAAF at the end of every complete calendar month Same as that of Same as that of Same as that of underlying funds underlying funds underlying funds Generally within 2 Generally within 2 Generally within 2 business days* business days* business days* NIL NIL NIL

Rs 100,000

NAFA Bachat Plan To provide investors with growth while seeking possible preservation of capital

Rs 100,000

Rs 100,000

NAFA Sarmaya Izafa Plus Plan To provide investors with longterm high capital growth, while seeking possible preservation of capital Moderate-High Long (Over 5 years) NAFA Savings Plus Fund (NSPF) and NAFA Asset Allocation Fund (NAAF) Investment will initially be made in NSPF, and subsequently 4% of net investment value of the Plan will be switched from NSPF to NAAF at the end of every complete calendar month Same as that of underlying funds Generally within 2 business days* NIL

Rs 100,000

**Rs 5,000 per Rs 5,000 per month Rs 5,000 per month Rs 5,000 per month month Distribution Bonus Bonus Bonus Bonus Plan Type Open-end Open-end Open-end Open-end * However, Constitutive Documents allow upto 6 working days. ** Initial minimum investment is Rs. 100,000

7.

Administrative Information

7.1 Introduction All transactions under this arrangement are governed by the respective Trust Deeds of the pertinent NAFA Funds as amended from time to time vide Supplemental Trust Deed(s). Unless specifically altered by this document, all the terms and conditions of the Trust Deeds and the Offering Documents of the underlying NAFA Funds shall apply to the respective Units of the Funds in which investment is made under these Plans.

Units of the underlying NAFA Funds shall be issued against the amount received from the Unit Holder in accordance with the terms of the Offering Documents of these funds. The Management Company may alter the minimum application amount from time to time for any Plan under intimation to Trustee and announce it on its website. This shall however not apply to the existing investors in the plans. 7.2 Features and Administrative Arrangements 7.2.1

An investor may invest in the NAFA Saving Plans by filling out the prescribed Form and submitting it along with the investment amount (drawn in favor of CDC-Trustee - NAFA Funds). Payment through credit cards, debit cards, auto debit instructions, IVR (Interactive Voice Response), online using the internet from our website, SMS, ATM facility or in such form (other than through cash or any bearer instruments) is subject to finalization of arrangement by the Management Company (subject to mutually agreeing with the Trustee and approval of SECP).

7.2.2

Unit Holder opting for Regular Savings shall send in the monthly, quarterly, semiannually or annually contributions, by submitting the prescribed form along with 12 (in case of monthly payments) or 4 (in case of quarterly payments) post-dated cheques. The Management Company may also introduce arrangements whereby a Unit Holder may pay regular contributions through standing instructions to a bank. In the event that the Unit Holder does not make his regular payment(s) for any reason, the account will remain active and the amounts outstanding in the Plan will continue to remain in the Plan. No penalty shall be imposed in case of delay or missing out of regular contributions.

7.2.3

On receipt of investment amount at the time of opening an account or subsequently for purchase of Units under the Plans, the Units shall be issued at the respective NAVs applicable for the underlying funds as per their constitutive documents, on the day the funds and the Application Forms are lodged. The pricing of units is subject to change from time to time as directed by the SECP.

7.2.4

The Transfer Agent (‘NAFA’) shall send an Account Statement and activity in the account on the frequency that the investor desires such as monthly or quarterly. Such Statements shall be sent by ordinary mail to the Unit Holder’s address recorded in the Register of Unit Holders. Certificates representing Units purchased under this plan shall not be issued and the Account Statement issued in this respect will be the final confirmation in respect of the Units purchased under the Plans.

7.2.5

Plans will not announce plan-related distributions. However, the Investor will be entitled to distributions, if any, by the underlying Funds. In all plans, the distribution from the underlying funds will be in the form of Bonus units. Bonus Units declared on the respective Units held in the NAFA Savings Plans shall remain invested in the respective Funds to which such dividends relate. However, investors in NAFA Mahana Amdani Plan will receive income by way of transfer to their designated bank accounts or through Cheque / Pay Order / Demand Draft issued by the underlying Fund.

7.2.6

The switching from one underlying Fund to another shall be at the prevailing NAV on the relevant Date, as per the constitutive documents of the pertinent Funds.

7.2.7

The investor may at any time instruct to discontinue further switching in the high risk fund. This can be done by giving written instruction to NAFA at least three working days prior to the end of the month

7.2.8

The Unit Holder may submit a redemption request for redeeming partial or all Units purchased under these Plans. The redemption proceeds shall be payable in accordance with the constitutive documents of the underlying Funds.

7.2.9

In case of partial redemption, the Units shall be redeemed in the same proportion as they are held in the underlying Funds at the time of redemption.

7.2.10 The Investor may also change the NAFA Savings Plans after subscription. The Investor may at any point of time with written request transfer from one Savings Plan to another, for which the investor shall submit the prescribed “Form-B” attached hereto. 7.2.11 In the event of winding up of the underlying fund(s), the respective Savings Plan(s) shall be discontinued and the Units standing to the credit of the Unit Holder shall be dealt with the same manner as the rest of the Units in the underlying Fund(s). 7.2.12 The Management Company may at its discretion, and with the approval of SECP and the Trustee and with notification to the Unit Holders introduce changes in the Plans, from time to time. 7.2.13 In the event any changes are introduced in the Plan after an existing Unit Holder has made an initial investment in the Plan, the existing Unit Holder shall not be under any obligation to comply with the changes. However, if the Unit Holder is willing to comply with the changes, he/she shall be welcome to opt for the changed terms and shall be required to sign “Form-C” attached hereto, accepting the new terms. Any subsequent investments shall be in accordance with any changes so made. 7.2.14 The Mahana Amdani Plan Unit holder authorizes the Management Company to decide the quantum of part redemption of his / her unit holding at the end of every month based on the performance (NAV growth) of the Plan during the month. If the value of the investment increases (due to growth in NAV) during the month, the Management Company will calculate the number of units to be redeemed in such a manner that the total redemption value of such units is equal to the increase in the value of investment during the month. If the value of investment falls (due to fall in NAV) during the month, the Management Company will not redeem any units at the end of that month. The amount so redeemed shall be transferred to the designated account within six working days of the redemption. 8.

Risk Disclosures

8.1 The Offering Documents of the underlying funds provide in detail the risks associated for investors, investing in these plans. A brief summary of such risks is as follows: Interest Rate Risk: The values of all investments are sensitive to the interest rates and the forward looking yield curve prevailing in the economy. Credit Risk: Credit risk is comprised of default; credit spread & downgrade risks which reflect the credibility of investment in meeting its obligations. Government Regulation Risk: Changes in government regulations affect various sectors with subsequent effects on the investment value in such sectors. Equity Risk: This risk is only applicable if the investment is made in the NAFA Sarmaya Izafa Plan or NAFA Sarmaya Izafa Plus Plan. Share prices are generally volatile and may go up or down because of their dependence on market sentiments, speculative activity, supply and demand for the shares and liquidity in the market. Other Risks: Liquidity Risk, Mismanagement of the investee company, break down of law and order, war, terrorist activities, natural disasters, etc. Disclaimer: The Units of the Trust are not bank deposits and are neither issued by, insured by, obligations of, nor otherwise supported by the SECP, any Government agency, the Trustee (except to the extent specifically stated in this document and the Trust Deed) or any of the shareholders of the Management Company or any of the Core Investors or any other bank or financial institution. 8.2 Investors in the Plan are not offered any guaranteed capital or returns. 9.

Taxation No capital gain tax is applicable on redemption, if investment in mutual fund is held for more than a year. If investment is redeemed within one year, the capital gain tax will be applicable in the following manner: Period Rate of Capital Gain Tax Where holding period is less than six months 10% Where holding period is more than six months but less 7.5% than twelve months Applicable tax laws provide tax credit to the individual investors, if investment is held for a period of at least one year. On investment of Rs.300,000/-, tax credit up to Rs.75,000 subject to taxable income exceeding Rs.1.3 million for non-salaried class and up to Rs.60,000 subject to taxable income exceeding Rs.8.65 million for salaried class. Disclaimer: The information set forth above is included for general information purposes only. Each investor is advised to consult a tax advisor regarding the specific tax consequences to him/her of investing in the Fund.

10. All Other Matters The Offering Documents relating to the underlying Fund(s), of which these plans are an administrative arrangement, shall apply to all such matters, relating to the investment in Units issued under the respective Funds. 11. “Unit Holder” / “Investor” means an investor/ Unit Holder in the underlying funds. Other capitalized terms used in this Supplementary Offering Document shall have the same meanings as ascribed thereto in the Offering Document of the pertinent Fund. 12. The Unit holders are advised to read the Constitutive Documents and Offering Documents of the underlying funds before investing in the Plans.