Mandarine Equity Income - Prospectus French Mutual Fund (Fonds Commun de Placement Français) 2022/01/01
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Mandarine Equity Income Prospectus January 2022 French Mutual Fund (Fonds Commun de Placement Français) UCITS governed by French law covered by European Directive 2014/91/EU - UCITS V
Mandarine Equity Income - Prospectus I. GENERAL CHARACTERISTICS 4 I.1 TYPE OF UCITS 4 I.2 NAME 4 I.3 LEGAL FORM AND MEMBER STATE IN WHICH THE UCITS WAS ESTABLISHED 4 I.4 DATE OF CREATION AND INTENDED DURATION 4 I.5 OVERVIEW OF THE MANAGEMENT OFFER 4 I.6 INDICATION OF THE LOCATION WHERE THE MUTUAL FUND REGULATIONS, THE LATEST ANNUAL REPORT AND THE LATEST INTERIM REPORT ARE AVAILABLE 5 I.7 PUBLICATION OF SUSTAINABILITY INFORMATION 5 II. PARTICIPANTS 7 II.1 MANAGEMENT COMPANY 7 II.2 DEPOSITARY AND CUSTODIAN 7 II.3 STATUTORY AUDITOR 8 II.4 MARKETER 8 II.5 CENTRALISING AGENT 8 II.6 APPOINTED REPRESENTATIVES 8 III. OPERATING AND MANAGEMENT PROCEDURES 9 III.1. GENERAL CHARACTERISTICS 9 III.1.1 Features of the units or shares 9 III.1.2 Closing date 9 III.1.3 Information on the tax system 9 III.2. SPECIAL PROVISIONS 10 III.1.4 ISIN codes 10 III.1.5 Management objective 10 III.1.6 Benchmark index 10 III.1.7 Information to be communicated to UCI investors on the management style 11 III.1.8 Investment strategy 11 IV. COMMERCIAL INFORMATION 21 V. INVESTMENT RULES 21 VI. GLOBAL RISK 21 VII. ASSET VALUATION RULES 22 VII.1 ASSET VALUATION RULES 22 VII.2 ACCOUNTING METHOD 23 2 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus VIII. REMUNERATION 23 IX. REGULATIONS 24 SECTION 1 - ASSETS AND UNITS 24 Article 1 - Co-ownership units 24 Article 2 - Minimum assets 24 Article 3 - Issue and redemption of units 24 Article 4 - Calculation of the Net Asset Value of the unit 25 SECTION 2 - FUND OPERATION 25 Article 5 - The Management company 25 Article 5a - Operating rules 25 Article 6 - The Depositary 25 Article 7 - The Statutory auditor 25 Article 8 - Financial statements and management report 26 SECTION 3 - INCOME ALLOCATION PROCEDURES 26 Article 9 - Procedures for allocating income and amounts available for distribution 26 SECTION 4 - MERGERS - DEMERGERS - DISSOLUTION - LIQUIDATION 27 Article 10 - Mergers - Demergers 27 Article 11 - Dissolution - Extension 27 Article 12 - Liquidation 27 SECTION 5 - DISPUTES 27 Article 13 - Jurisdiction - Choice of domicile 27 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 3
Mandarine Equity Income - Prospectus I. GENERAL CHARACTERISTICS I.1 TYPE OF UCITS UCITS governed by French law covered by Directive 2014/91/EU - UCITS V I.2 NAME Mandarine Equity Income (hereinafter referred to as the “Fund”). I.3 LEGAL FORM AND MEMBER STATE IN WHICH THE UCITS WAS ESTABLISHED Mutual fund established on the territory of the French Republic. I.4 DATE OF CREATION AND INTENDED DURATION This Fund was created on 20 January 2005 for a period of 99 years. I.5 OVERVIEW OF THE MANAGEMENT OFFER Allocation Currenc Minimum Minimum Original of y Target initial subsequent ISIN code net asset Decimalisation distributable denomi investors subscription subscription value sums nation (1) Capitalisation/ All subscribers, in EUR 1/10000th M units FR0010147728 EUR EUR 100 1/10000 Distribution particular Suravenir 40,000,000 of a unit All subscribers, in EUR 1/10000th I units FR0010396374 Capitalisation EUR particular Institutional EUR 100 1/10000 1,000,000 of a unit investors EUR 1/10000th R units FR0010396382 Capitalisation EUR All subscribers EUR 100 1/10000 50 of a unit EUR 1/10000th F units FR0013300795 Capitalisation EUR All subscribers (2) EUR 100 1/10000 50 of a unit Capitalisation/ EUR 1/10000th F(d) units FR0013300803 EUR All subscribers (2) EUR 100 1/10000 Distribution 50 of a unit Capitalisation/ 1/10000th R(d) units FR0013300811 EUR All subscribers EUR 50 EUR 100 1/10000 Distribution of a unit All subscribers, in Capitalisation/ EUR 1/10000th I(d) units FR0013300829 EUR particular Institutional EUR 100 1/10000 Distribution 1,000,000 of a unit investors All subscribers, in EUR 1/10000th L units FR0013300837 Capitalisation EUR particular Institutional EUR 100 1/10000 40,000,000 of a unit investors Institutions governed by L(d) EUR 1/10000th FR0014001681 Distribution (3) EUR German and Austrian EUR 100 1/10000 units 40,000,000 of a unit law (4) (1) except the Management Company, which may only take out one unit. (2) For F and F(d) units: units reserved for all investors, and, solely as part of subscription or distribution within the European Union, who are: (a) Financial intermediaries who, owing to regulations applicable to their situation, are not authorised to receive or hold any non- monetary fees or benefits; or 4 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus (b) Subscribers subscribing to portfolio management services on behalf of third parties (management by mandate) and/or independently provided investment consulting within the meaning of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments within the European Union (the MiFID II Directive); (c) Distributors subscribing in the context of investment advice not considered to be independent within the meaning of Directive MIF2, on the basis of a contract with their customer and where such a distributor neither receives nor holds on to any commission or other non-monetary benefit under Directive MIF2. (3) Distribution frequency of L(d) units: quarterly (4) Legal persons subject to German legal and tax rules, especially those relating to the provisions of § 5 Investmentsteuergesesetz and also legal persons governed by Austrian law. I.6 INDICATION OF THE LOCATION WHERE THE MUTUAL FUND REGULATIONS, THE LATEST ANNUAL REPORT AND THE LATEST INTERIM REPORT ARE AVAILABLE The Fund's prospectus, the KIIDS of the various unit categories, the annual and interim reports and the breakdown of assets are sent, within eight (8) business days, free of charge upon written request to: MANDARINE GESTION, 40, Avenue George V- 75008 Paris E-mail: serviceclient@mandarine-gestion.com The prospectus, the KIIDS of the various Fund units, the annual and interim documents are available at www.mandarine- gestion.com. Dissemination of the portfolios The Management Company may be required to transmit all or part of the information concerning the composition of the portfolio of the UCITS to enable some of its investors, in particular institutional investors, to comply with their obligations derived notably from Directive 2009/138/EC ("Solvency II") in terms of transparency (SCR – Solvency Capital Requirement). The Management Company will ensure that each investor who is a recipient of this information has established the procedures for managing sensitive information prior to the transmission of the composition of the portfolio so that such information be used only for calculating prudential requirements. These procedures must also prevent the practices of market timing or late trading. I.7 PUBLICATION OF SUSTAINABILITY INFORMATION Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (known as the “Disclosure Regulation”) As a player in the financial markets, the management company of the UCI is subject to Regulation 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector (known as the “Disclosure Regulation” ). This Regulation lays down harmonised rules for financial market participants relating to transparency with regard to the integration of sustainability risks (Article 6 thereof), the taking into account of negative impacts in terms of sustainability, the promotion of environmental or social characteristics in the investment process (Article 8 thereof) or sustainable investment objectives (Article 9 thereof). Sustainable investment corresponds to an investment in an economic activity that contributes to an environmental objective, measured for example by means of key indicators in terms of efficient use of resources concerning the use of energy, renewable energies, raw materials, water and land, in terms of waste production and greenhouse gas emissions or in terms of effects on biodiversity and the circular economy, or an investment in an economic activity that contributes to a social objective, in particular an investment which contributes to the fight against inequalities or which promotes social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities, provided that these investments do not cause material prejudice to any of these objectives and that the companies in which the investments are made apply good governance practices – in particular with regard to sound management structures, employee relations, remuneration of competent staff and compliance with tax obligations. Sustainability risk is defined as an environmental, social or governance event or situation which, if it occurs, could have a material adverse effect – actual or potential – on the value of the investment. UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 5
Mandarine Equity Income - Prospectus It should be noted that this risk can therefore be understood as a specific category of financial risk (measured by its potential negative impact on the portfolio's return). Sustainability risk is primarily taken into account in the following way in the implementation of the portfolio management: - Like any other risk with a potential burden on the portfolio's return, sustainability risk is taken into account by management prior to acquiring a security and throughout the investment. To do so, management particularly relies on the expertise of Mandarine Gestion's team of ESG analysts. - A synthetic sustainability risk indicator (ISRD) has been developed and is used to measure the exposure of each portfolio to sustainability risk. Limits based on this indicator are applied to the Fund. If exceeded, adjustments to the portfolio may be required. - The risk and ESG analysis teams draw up and maintain exclusion lists to prohibit the purchase of securities that pose a particularly high sustainability risk. In particular, issuers that are the subject of serious controversy may be placed under surveillance or banned for investment. The Fund's exposure to sustainability risk is measured by a risk scale ranging from 1 to 5 (from negligible risk to severe risk), based on the level of the ISRD calculated for the Fund. At the date of publication hereof, the Management Company's analysis has determined that the Fund has exposure to level 3 sustainability risk, corresponding to a moderate level of risk. 6 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus II. PARTICIPANTS II.1 MANAGEMENT COMPANY The primary objective of the Depositary is to protect the interests of the unitholders/investors in the UCITS, which MANDARINE GESTION always prevail over commercial interests. Société Anonyme - 40, Avenue George V - 75008 PARIS Potential conflicts of interest may be identified, in particular if Portfolio management company approved by the Autorité des the Management Company also maintains commercial marchés financiers (AMF – Financial Markets Authority) on 28 relations with BNP Paribas Securities Services SCA in parallel February 2008 under no. GP 0800 0008. to its appointment as Depositary (which may be the case if BNP Paribas Securities Services calculates, by delegation of II.2 DEPOSITARY AND the Management Company, the NAV of the UCITS for which BNP Paribas Securities Services is the Depositary, or when a CUSTODIAN group relationship exists between the Management Company BNP PARIBAS SECURITIES SERVICES and the Depositary). Partnership limited by shares registered with the Registre du Commerce et des Sociétés (Trade and Companies Register) To manage these situations, the Depositary has implemented in Paris under No 552 108 011. and maintains a management policy for conflicts of interest Credit establishment approved by the Autorité de Contrôle with the following objectives: Prudentiel et de Résolution. - Identifying and analysing situations involving potential Registered office: 3, Rue d’Antin - 75002 PARIS conflicts of interest Postal address: Grands Moulins de Pantin - 9, Rue du - Recording, managing and monitoring situations involving Débarcadère - 93500 PANTIN potential conflicts of interest: ◦ based on permanent measures in place to manage conflicts BNP PARIBAS SECURITIES SERVICES, a partnership of interest, such as segregation of duties, separation of limited by shares (société en commandite par actions), hierarchical and functional lines, monitoring of internal registered in the Trade and Companies Register under insider lists, and dedicated IT environments; number 552 108 011, is an establishment approved by the ◦ by implementing on a case-by-case basis: Autorité de Contrôle Prudentiel et de Résolution (ACPR) and ✔ preventive and appropriate measures such as the creation subject to the supervision of the Autorité des Marchés of ad hoc watchlists, new Chinese walls, or verifying that Financiers (AMF), whose registered office is at 3 rue d'Antin, transactions are properly processed and/or informing 75002 Paris. affected customers ✔ or by refusing to manage activities that may give rise to As part of the Fund's liabilities management, the subscription, conflicts of interest. redemption and issuer account holding processing functions are carried out by the depositary in connection with Euroclear Description of any custodial functions delegated by the France, through which the units are registered. Depositary, list of delegates and sub-delegates and identifying conflicts of interest likely to arise from such Description of the responsibilities of the Depositary and delegation potential conflicts of interest The UCITS Depositary, BNP Paribas Securities Services SCA, is responsible for the custody of the assets (as defined Directive 2009/65/EC, as amended by Directive 2014/91/EU, in Article 22.5 of Directive 2009/65/EC, as amended by referred to as "UCITS 5", specifies the responsibilities of Directive 2014/91/EU). In order to provide services related to UCITS depositories. It entered into force on 18 March 2016. the safekeeping of assets in a large number of countries, The Depositary has three types of responsibilities: monitoring enabling the UCITS to achieve their investment objectives, the compliance of the decisions of the Management Company BNP Paribas Securities Services SCA has appointed sub- (as defined in Article 22.3 of the Directive), monitoring of cash custodians in countries where BNP Paribas Securities SCA flows of the UCITS (as defined in Article 22.4), and custody of services would have no local presence. These entities are the UCITS' assets (as defined in Article 22.5). All of these listed on the following website: responsibilities are set out in a written contract between the http://securities.bnpparibas.com/solutions/asset-fund- Management Company, MANDARINE GESTION, and the services/depositary-bank-and-trustee-serv.html Depositary, BNP PARIBAS SECURITIES SERVICES. The process of appointment and supervision of the sub- custodians is carried out in accordance with the highest quality standards, including the management of potential UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 7
Mandarine Equity Income - Prospectus conflicts of interest that may arise in connection with these appointments. II.5 CENTRALISING AGENT Centralising agent for subscription and redemption Up-to-date information on the above-mentioned points will be orders by delegation: sent to the investor upon request. BNP PARIBAS SECURITIES SERVICES The establishment responsible for maintaining the Issuer Partnership limited by shares registered with the Registre du account and the unit or share registers is BNP PARIBAS Commerce et des Sociétés (Trade and Companies Register) SECURITIES SERVICES, the contact details of which are in Paris under No 552 108 011. provided below. Credit establishment approved by the Autorité de Contrôle Prudentiel et de Résolution. Registered office: 3, Rue d’Antin - 75002 PARIS II.3 STATUTORY AUDITOR Postal address: Grands Moulins de Pantin - 9, Rue du Cabinet Mazars Débarcadère – 93500 PANTIN CEDEX Represented by Mr Gilles Dunand-Roux 61, rue Henri Regnault – 92075 La Défense Cedex II.6 APPOINTED II.4 MARKETER REPRESENTATIVES Administrative management and accounting: MANDARINE GESTION 40, Avenue George V - 75008 PARIS BNP PARIBAS SECURITIES SERVICES The Fund is registered with Euroclear France and its units Petits Moulins de Pantin - 9, Rue du Débarcadère - 93761 may be subscribed or redeemed through financial PANTIN CEDEX intermediaries who are not known to the management The delegation agreement covers the accounting company. management, including accounting updates, the net asset value calculation, the preparation and presentation of the file required for the audit carried out by the statutory auditor, and the keeping of accounting records. 8 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus III. OPERATING AND MANAGEMENT PROCEDURES III.1. GENERAL III.1.3 Information on the tax system The Fund itself is not subject to taxation. However, unitholders CHARACTERISTICS may incur taxation on any revenue distributed by the Fund, III.1.1 Features of the units or shares where paid, or when selling the securities. The tax regime applicable to the amounts distributed by the - ISIN codes: Fund or any realised or unrealised capital gains or losses of M units : FR0010147728 the Fund depend on the tax provisions applicable to the I units : FR0010396374 investor's particular situation and their tax residency. Thus, R units : FR0010396382 certain revenue distributed in France by the Fund to non- F units : FR0013300795 residents is liable to withholding tax in this state. F(d) units : FR0013300803 R(d) units : FR0013300811 Abroad (in the fund’s investment countries), capital gains I(d) units : FR0013300829 realised on the sale of foreign transferable securities and L units : FR0013300837 income from foreign sources earned by the fund as part of its L(d) units : FR0014001681 management may, where applicable, be subject to taxation - Type of rights attached to the unit category: each unitholder (usually in the form of a withholding tax). Taxation abroad has a right of co-ownership of the Fund assets in proportion may, in certain limited cases, be reduced or nullified in the to the number of units held. event of applicable tax agreements. - Entry in a register or specification of the methods for managing liabilities: liabilities are managed by BNP With regards to unitholders of the Fund: PARIBAS SECURITIES SERVICES. • Unitholders residing in France: Capital gains or losses - The Fund is registered with Euroclear France. realised by the Fund, revenue distributed by the Fund and capital gains or losses recorded by the unitholder are - Voting rights: no voting rights are attached to units, as subject to current tax legislation. decisions are taken by the Management Company. However, information on changes in the operation of the • Unitholders residing outside of France: Subject to tax Fund is provided to the unitholders either personally, agreements, the taxation provided for in Article 150-0 A of through the press or by any other means in accordance with the CGI is not applicable to capital gains earned on the the regulations. redemption or sale of units of the Fund by persons not fiscally resident in France under Article 4 B of the CGI or - Form of units: all units are in bearer form. The Fund will be whose registered office is located outside of France, on registered with Euroclear France. condition that such persons have not held, directly or - Decimalisation of ✔ YES ✗ NO indirectly, more than 25% of the units at any time during the the units: five years preceding the redemption or sale of their units (CGI Article 244a C). - Number of ✗ tenths ✗ hundredths ✗ thousan ✔ ten decimal places: dths thous Unitholders residing outside France shall be subject to the andth provisions of tax legislation in effect in their own country of s residence. III.1.2 Closing date Investors benefiting from the Fund as part of a life insurance The last trading day in December on the Paris stock contract shall be subject to taxation applicable to life exchange. insurance contracts. The financial year that started on 1 July 2017 will be a Tax system in Germany: shortened financial year that will close on 31 December 2017. The Fund is classed as an “Aktienfonds” under German tax law (§2 Abs. 6 InvStG); the investment in "Kapitalbeteiligungen" in accordance with §2 Abs. 8 InvStG UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 9
Mandarine Equity Income - Prospectus will continuously exceed 50% of net assets. investing in sustainable investments that are aligned with the criteria of the Taxonomy Regulation. NB: depending on your tax system, any capital gains and income associated with holding units in the Fund III.1.6 Benchmark index could be subject to taxation. We recommend that you The performances are compared to the performance of the consult your usual tax adviser for information on this STOXX® Europe 600 Net Return EUR. This index is the matter. global benchmark for the European markets. It is composed of 600 securities selected from the 16 euro area countries as ✗ Eligible for PEA ✗ DSK ✗ Madelin law ✗ PERP well as the UK, Denmark, Switzerland, Norway and Sweden. (equity savings contract Codes: ISIN: EU0009658210 Reuters: STOXXR; Bloomberg: plan) SXXR Index; the benchmark index is denominated in euros. The performance of the STOXX® Europe 600 EUR Net The Fund's units are capitalisation/distribution units, with the Return benchmark includes dividends from the equities that exception of I, R, L and F units, which are capitalisation units. make up the benchmark: www.stoxx.com. III.2. SPECIAL PROVISIONS Information pursuant to Q&A ESMA 34-43-362 "Actively Managed Fund" III.1.4 ISIN codes The Fund is actively managed. M units : FR0010147728 However, the Fund's objective is not to reproduce the I units : FR0010396374 performance of this index in any manner. The Fund's R units : FR0010396382 investments are made on the basis of criteria that could result F units : FR0013300795 in significant variations compared to the performance of this F(d) units : FR0013300803 index. Investments in companies are made on the basis of R(d) units : FR0013300811 weightings that are not based on the relative weighting of I(d) units : FR0013300829 each company in the Index. L units : FR0013300837 L(d) units : FR0014001681 Information concerning the benchmark indicator used by the Fund carried out in accordance with the provisions of EU Regulation 2016/1011. UCITS of UCITS or AIF (meeting the criteria of Article R.214- 13 of the Monetary and Financial Code): less than 10% of In accordance with Article 52 of Regulation (EU) 2016/1011 of assets. the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and III.1.5 Management objective financial contracts or to measure the performance of The objective of the Fund, managed in a discretionary investment funds and amending Directives 2008/45/EU and manner, is to outperform its benchmark index – the STOXX® 2014/17/EU and Regulation (EU) No 596/2014 (hereinafter Europe 600 Net Return EUR index (dividends reinvested) – referred to as the “Benchmark Regulation” or “BMR”), as the over the recommended five-year investment period. Management Company may refer to benchmark indices under the BMR regulation, it is considered a “User” of The Fund takes sustainability risks and ESG characteristics benchmark references: into account in its selection process. In this regard, the Fund • to ensure that the benchmark indices it uses within the promotes environmental or social characteristics within the European Union are supplied by administrators that are meaning of Article 8 of the SFDR Regulation. The Fund is legally authorised or registered with the European Union as subject to a sustainability risk as defined in the risk profile of benchmark index Administrators, including the the prospectus. Administrator (Article 29); or to ensure that those originating Although the Fund may invest in environmentally sustainable from third countries respect the principle of equivalence economic activities within the meaning of Regulation (EU) and the regulatory requirements (Article 30-33); 2020/852 of the European Parliament and of the Council of 18 • to establish a suitable monitoring procedure for benchmark June 2020 on the establishment of a framework to promote indices allowing it to substitute a new index in the event that sustainable investment and amending Regulation (EU) 2019/ one or more of the benchmark indices, including that of the 2088 ("Taxonomy Regulation"), it does not currently have a index provided by the Administrator, that it uses should be specific environmental objective and does not commit to substantially modified or cease to be published (Article 28). 10 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus volatility of the Index, Tracking Error, Sharp ratio, information On the date of the latest update to this Prospectus, which is ratio, etc.). the date appearing on the first page, the Administrator has obtained a registration under Article 32 and is therefore listed III.1.8 Investment strategy in the publication of administrators and publication of benchmarks maintained by ESMA (hereinafter referred to as the “Benchmark Register - List of EU benchmark III.1.8.1. Strategies used administrators and third country benchmarks”). The Fund's investment strategy consists in selecting In accordance with Article 28.2 of the BMR Regulation, the securities that offer returns equivalent to or higher than market Management Company has a monitoring procedure for the returns and securities with significant potential in terms of benchmark indices used describing the measures to dividend growth. implement in the case of substantial modifications made to an index or in the event that this index is no longer available. The selection of securities is initially carried out using quantitative criteria: securities are filtered from the universe of Information concerning the benchmark indicator used European equities using defined ratios such as yield (dividend by the Fund carried out in accordance with the divided by the share price), historical dividend growth, future provisions of EU Regulation 2019/2088, the “Disclosure dividend growth, pay-out (share of the profit distributed to Regulation” shareholders), financial leverage (net debt/EBITDA, net debt The attention of unitholders is drawn to the fact that the Index ratio), etc. This approach makes it possible to determine the does not take into account environmental, social or investment universe of the portfolio. governance issues. The index is not an “EU Paris-Aligned and Climate Transition-Benchmark”. Qualitative analysis is subsequently carried out for each company in the investment universe. Each security, without disregarding the sectoral and economic climate, is therefore III.1.7 Information to be subject to an in-depth analysis to enable the manager to communicated to UCI investors assess its valuation potential, the quality of management, the company’s competitive position, its capital position, the on the management style creation of social and societal value, etc. Within this universe, the manager will then select securities with high net returns In accordance with Commission Regulation (EU) No 583/2010 (net dividend per share/share price) and securities with a (“UCITS regulation”), as specified in particular by the answer strong dividend growth potential. to question 8 of section II of the ESMA Q&A relating thereto The analysis will also cover the company's distribution policy and the “Details of the information to be transmitted to and the durability of the dividend in relation to the company's investors of UCIs referring to a benchmark index” published financial structure and its cash generation. by the AMF (October 2019 version), it is specified that the The Fund management is discretionary and based on Fund's strategy is an active strategy, i.e. the management convictions. It allows for a high degree of autonomy in the objective is in no way to replicate the performance of any choice of investments and allows the portfolio to be focused index. on a limited number of securities. Sectoral and geographical distribution may change at any time on a discretionary basis, In addition, although the Fund is managed – for comparison owing to forecast earning prospects. purposes only – with reference to the CAC All Tradable NR index, it is not subject to any management constraint aimed at The Fund does not use the exemption ratios stated in Article significantly limiting the difference it can have with this index, R.214-22 of the Monetary and Financial Code. neither in terms of portfolio composition (investment universe, sector allocation), nor in terms of deviation of the Fund's III.1.8.2. Assets used: performance compared to the index (Tracking Error). In order to allow the Unitholders to assess how the Fund is III.1.8.2.1. Shares: actively managed in relation to its benchmark indicator, holders may refer to the information as contained in the The Fund may invest up to 100% of its assets in European monthly reports of the fund and the annual report and equities. indicators of ex-post measurement (volatility of the Fund, The Manager may invest up to 20% of its net assets in qualified small capitalisation issuers UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 11
Mandarine Equity Income - Prospectus AMF classification of UCITS or alternative investment funds: The manager may invest up to 10% of the assets: all AMF classifications as described in the AMF instructions - on international equity markets, excluding those in Europe; specifying the operating regulations of the UCITS and AIFs - in emerging issuers. The Fund may invest in trackers, listed index-linked funds and III.1.8.2.2. Debt securities and money market Exchange Traded Funds on an ad-hoc basis. instruments III.1.8.2.4. Derivatives The Fund may invest up to a maximum of 25% in debt securities and money market instruments. The Fund may invest in financial futures (traded on regulated and organised markets, in France and abroad and/or OTC). In As part of the cash management of the Fund, the Fund this context, the Fund may take positions to offset fluctuations Manager may use bonds, convertible bonds, debt securities, in the market. deposits and money market instruments. The distribution of private/public debt is not determined in The Fund transactions may therefore be: advance, as it will be based on the market opportunities. - to hedge equity risk in the portfolio; Similarly, the Fund Manager will determine the duration and - or exposing the portfolio to industrial sectors, shares, the sensitivity of bonds held in the portfolio based on the currencies or market indices through the use of instruments management objectives and market opportunities. Issuers of such as futures or options contracts. securities in the portfolio must have an “Investment Grade” rating from at least one recognised agency (e.g. at least BBB- To a lesser extent, transactions may be entered into on the from S&P, Moody's or Fitch), or their creditworthiness OTC markets as part of treasury management or currency estimated by the management company must correspond to transactions. this level (failing that, an equivalent short-term rating issued by one of the three aforementioned agencies). The Fund may use up to a limit of 100% of the assets on The Fund reserves the right to invest up to 25% in French derivative instruments. The portfolio's exposure is not money market instruments, as well as in securities issued on intended to exceed 100%; however, for significant foreign money markets denominated in euros, traded on subscriptions or redemptions or major market fluctuations, the regulated and non-regulated markets, in particular: Fund may be temporarily exposed beyond 100%. ◦ Euro Commercial Papers; All transactions are carried out within the global limit of the off ◦ Euro Medium Term Notes with a short maturity indexed on balance sheet commitment of one times the Fund's assets. short-term references; ◦ Certificates of deposit; III.1.8.2.5. Embedded derivatives (warrants, credit ◦ Commercial Paper; linked notes, EMTNs, subscription ◦ Treasury Bonds. warrants, etc.) III.1.8.2.3. UCITS, AIF, investment funds and Nature of instruments used: Essentially, warrants, trackers or Exchange Traded Funds subscription warrants, and all types of bonds to which a (ETF) conversion or subscription right is attached. In particular, the Fund may invest in securities with exposure to shares In order to manage the cash flow or gain access to markets or (convertible bonds, exchangeable bonds or equity notes). specific management styles (sectoral, geographical, etc.), the Fund may invest up to 10% of its net assets in UCITS/AIFs. Strategy for using embedded derivatives to achieve the The Fund may invest in UCITS managed by Mandarine management objective: Transactions involving embedded Gestion. derivatives are of the same nature as those for derivative Investments will be made within the regulatory limits in: instruments. The use of embedded derivatives is subject to • French or foreign UCITS (UCITS); their potential benefits in terms of cost/efficiency or liquidity. • alternative investment funds (AIF) meeting the criteria set The Fund may use up to a limit of 100% of the assets on out in Article R. 214-13 of the Monetary and Financial Code. embedded derivatives. III.1.8.2.6. Deposits 12 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus The Fund may make deposits with a maximum term of 12 in the opposite direction of interest rates. This risk arises from months with one or more credit institutions. The aim of these the fact that, in general, the price of debt securities and bonds deposits is to contribute to the cash holdings. Deposits falls when interest rates rise. denominated in euros or other currencies which adhere to the four conditions of the Monetary and Financial Code can Credit risk: account for up to 100% of assets. Credit risk is the risk that the issuer cannot meet its commitments. Credit risk is limited to debt securities and III.1.8.2.7. Cash loans money-market instruments, which may not make up more than a maximum of 25% of assets. Investors are reminded In the course of normal business, the Fund may occasionally that this risk may result in a decrease in the Fund's net asset find itself in debt and may make use of cash loans in this case, value. up to a limit of 10% of its assets. III.1.8.2.8. Temporary purchases and sales of Discretionary management risks: securities The discretionary management style applied by the Fund is based on the selection of securities and on the expectations Not applicable of the different markets. There is a risk that the Fund may not be invested in the best-performing securities at all times. As a result, the Fund's performance may be lower than the III.1.8.3. Risk profile investment objective. Furthermore, the net asset value of the Fund may decline. Performance largely depends on the Fund Your money will primarily be invested in the financial Manager's ability to anticipate market movements. instruments selected by the Management Company. These instruments will be subject to market trends. . The list of risk Political and exceptional risks: factors set out below is not exhaustive. These are any risks associated with a political or geopolitical situation, a decision or lack of decision by the political The investor is primarily exposed to the following risks: authorities or regional, national, transnational or supranational administrative authorities: nationalisation without sufficient Capital risk: compensation, embargoes, protectionist measures, Investors should be aware that the performance of the Fund secessionist movements, exclusion of certain markets, may not be in line with its objectives and, because the Fund is discriminatory taxation, resulting in lasting damage to public not capital protected or guaranteed, investors may not recover order and economic stability, etc. They also include the risks the full amount of their invested capital. of civil or foreign war (whether declared or not), mines and all means of warfare, whether or not related to the disintegration, Equity market risk: fission or fusion of nuclei of light atoms, piracy, capture, The Fund is exposed to one or more equity markets that could capture or detention by any government or authority, riots, experience substantial fluctuations. Equity risk corresponds popular movements, strikes, lockouts, acts of sabotage or to a decline on the equity markets. As the Fund is exposed to terrorism. equities, the net asset value may decline significantly. If the equity markets fall, the value of the portfolio may decline. When such intrinsically unpredictable events occur, there can be very significant financial consequences. Exchange-rate risk: This is the risk that fluctuations in foreign currencies could Sustainability risk: affect the value of securities held in the portfolio. The Fund An environmental, social or governance event or situation may hold, either directly or via UCITS or AIF, securities which, if it occurs, could have a material adverse effect – denominated in a currency other than the Fund's designated actual or potential – on the value of the investment. . The currency. Therefore, fluctuations in exchange rates could occurrence of such an event or situation may also lead to a result in a lower net asset value. The exchange risk may be modification of the mutual fund's investment strategy, hedged through derivatives. including the exclusion of the securities of certain issuers. More specifically, the negative effects of sustainability risks Interest-rate risk: can affect issuers through a series of mechanisms, including: Given its management orientation, the Fund may be exposed (1) lower income; (2) higher costs; (3) damage or depreciation to interest rate risk. Interest rate risk is represented by in the value of assets; (4) higher capital cost; and (5) fluctuations in the yield curve. The interest rate markets move regulatory fines or risks. Due to the nature of sustainability UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 13
Mandarine Equity Income - Prospectus risks and specific topics such as climate change, the To a lesser extent, they are also exposed to the following likelihood of sustainability risks impacting financial product risks: returns is likely to increase in the longer term. Emerging markets risk: Risks associated with consideration of sustainability The market practices and monitoring measures in the risk: emerging markets may deviate from the standards prevailing Currently, there is no universally recognised framework or list on the large international markets: information on certain of factors that must be considered for ensuring that securities may be incomplete and liquidity may be lower. The investments are sustainable, and the legal and regulatory performance of these securities may therefore be volatile. If framework governing sustainable finance is still under the securities of the emerging markets fall, the net asset value development. of the Fund may fall. The application of ESG criteria to the investment process as part of the inclusion of sustainability risks may exclude Counterparty risk: securities of certain issuers for non-financial reasons, which The Fund is exposed to the counterparty risk that results from may involve giving up certain market opportunities available to the use of financial futures. Contracts for these financial other funds that do not use ESG or sustainability criteria. The instruments may be concluded with one or more credit focus of the fund manager on issuers of securities which have institution(s) that is/are not able to honour their commitments sustainable features may affect the investment performance under these instruments. Investors are reminded that this risk of a Sustainable Fund and lead to a return which, at times, will may result in a decrease in the Fund's net asset value. be lower than that of similar funds that have no sustainable approach or which would apply non-financial criteria. The Risks linked to investments in small cap securities: sustainable or non-financial characteristics used in a fund's Given its management orientation, the Fund may be exposed investment policy may prevent it from buying certain securities to small cap securities, which may carry liquidity risk owing to which, in other circumstances, would offer advantages, and/ their specific characteristics. Due to the restricted nature of or from selling securities because of their sustainable the market, the performance of such securities is more characteristics despite the harm that could thereby result. In pronounced and may rise or fall sharply. This may result in an the short term, a focus on securities from issuers with increase in the volatility of the net asset value. sustainable characteristics could positively or negatively affect the performance of the Fund's investments compared to III.1.8.3.1. Target investors and typical investor similar funds without this focus. In the long term, this approach profile should have a favourable effect, but no guarantee is given in this regard. Target investors The ESG information available, whether it comes from third- party data providers or the issuers themselves, may be ▪ With regard to M units: incomplete, inaccurate, patchy, or unavailable, which can All subscribers, in particular Suravenir. have a negative impact on a portfolio that relies on this data to assess the appropriate inclusion or exclusion of a security. In ▪ With regard to I, I(d) and L units: addition, it is possible that a security or a stock could be All subscribers, in particular Institutional investors. incorrectly valued. The sustainable finance approach will have to evolve and ▪ With regard to L(d) units develop over time, both due to the refinement of investment Exclusively for legal persons subject to German legal and tax decision-making processes aimed at taking ESG factors and rules, especially those relating to the provisions of Section 5 risks into account, and due to legal and regulatory Investmentsteuergesesetz and also legal persons governed developments. by Austrian law. No statement has been made and no warranty has been given regarding the impartiality, accuracy, completeness or ▪ With regard to R, F, F(d) and R(d) units: coverage of the sustainable or extra-financial features. All subscribers. For F and F(d) units: units reserved for all investors and, solely as part of subscription or distribution However, it should be noted that, although sustainability risks within the European Union, those who are: are considered systematically, no single aspect (including (a) Financial intermediaries who, owing to regulations extra-financial ratings) could prevent the Fund Manager from applicable to their situation, are not authorised to receive or making an investment as investment decisions remain hold any non-monetary fees or benefits; or discretionary. (b) Subscribers subscribing to portfolio management services on behalf of third parties (management by mandate) and/or 14 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus independently provided investment consulting within the meaning of Directive 2014/65/EU of the European Parliament • The Fund's management company has the authority to and of the Council of 15 May 2014 on markets in financial impose restrictions (i) on the ownership of Units for a "US instruments within the European Union (the MiFID II Person" and thus proceed with the compulsory redemption of Directive); the Units held, or (ii) on the transfer of Units to a "US Person". (c) Distributors subscribing in the context of investment advice This authority also extends to any person (a) who appears, not considered to be independent within the meaning of directly or indirectly, to be in violation of the laws and Directive MIF2, on the basis of a contract with their customer regulations of any country or any government authority, or (b) and where such a distributor neither receives nor holds on to who could, in the Fund's management company's opinion, any commission or other non-monetary benefit under cause the Fund to suffer damage that it would not otherwise Directive MIF2. have endured or suffered. • Investor profile • The offer of Units has not been authorised or rejected by the The Fund is open to any investor seeking a dynamic return SEC, the specialised commission of a US State or any other who agrees to be exposed to significant equity risk. The US regulatory body, no more than the aforementioned appropriate amount to be invested in the Fund depends on authorities have delivered a verdict or sanctioned the merits of each investor's personal situation. To determine this, this offer, or the accuracy or adequate nature of the investors must take into account their personal assets, their documents relating to this offer. Any assertion to this effect is current and future needs, investment horizon, and also their against the law. All Unitholders must inform the Fund willingness to take risks or opt instead for a more cautious immediately in the event that they become a "US Person". Any investment. Investors are also strongly advised to diversify unitholder who becomes a U.S. Person will no longer be their investments in order to avoid exclusive exposure to the authorised to acquire new Units and they may be requested to risks of this Fund. give up their Units at any time to the benefit of persons who do not have Special warning "US Person" US SEC Regulation S (Part "U.S. Person" status. The Fund's management company 230 – 17 CFR 2330.903)/US Investors: reserves the right to proceed with the compulsory redemption These Fund units have not been registered under the US of any Unit held, directly or indirectly, by a "US Person", or if Securities Act of 1933. Consequently, they may not be offered the ownership of Units by any person whatsoever is against or sold, directly or indirectly, in the United States or on behalf the law or the interests of the Fund. of or to the benefit of a “US person” as defined by the US “Regulation S”. Furthermore, the units of this fund also cannot • Recommended investment period: over five years. be offered or sold, directly or indirectly, to "US persons" and/ or to any entities held by one or more "US persons" as defined III.1.8.4. Methods of determining and by the US "Foreign Account Tax Compliance Act (FATCA)" regulation. (The definitions of a “US Person” or an “effective allocating income beneficiary” are available at the following address: http:// The Fund's units are capitalisation/distribution units, with the www.sec.gov/about/laws/secrulesregs.htm and http:// exception of units with “(d)” in their name, which are www.irs.gov/Businesses/Corporations/Foreign-Account-Tax- distribution units. Compliance-Act-FATCA). The “M” unit is a capitalisation and/or distribution unit. The management company reserves the right to capitalise • Any resale or transfer of units to the United States of and/or distribute net income, in full or in part, or to it carry America or to a "US Person" can constitute a violation of US forward. Allocation of capital gains realised: The management law and requires prior written consent from the mutual fund's company reserves the right to opt for capitalisation and/or management company. Any persons wishing to acquire or distribution. Where applicable, net capital gains may, at the subscribe to the Units will have to certify in writing that they discretion of the management company, be wholly or partly are not "U.S. Persons". distributed annually or carried forward. III.1.8.5. Characteristics of units Currency Minimum Code Distribution of Minimum initial Initial net asset Decimalis denomin Target investors subsequent ISIN income subscription (1) value ation ation subscription All subscribers, M Capitalisation/ EUR 1/10000th FR0010147728 EUR and in particular EUR 100 1/10000 units Distribution 40,000,000 of a unit to Suravenir UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 15
Mandarine Equity Income - Prospectus Currency Minimum Code Distribution of Minimum initial Initial net asset Decimalis denomin Target investors subsequent ISIN income subscription (1) value ation ation subscription All subscribers I EUR 1/10000th FR0010396374 Capitalisation EUR in particular Institutional EUR 100 1/10000 I 1,000,000 of a unit investors R EUR 1/10000th FR0010396382 Capitalisation EUR All subscribers EUR 100 1/10000 units 50 of a unit EUR 1/10000th F units FR0013300795 Capitalisation EUR All subscribers (2) EUR 100 1/10000 50 of a unit F(d) Capitalisation/ EUR 1/10000th FR0013300803 EUR All subscribers (2) EUR 100 1/10000 units Distribution 50 of a unit R(d) Capitalisation/ EUR 1/10000th FR0013300811 EUR All subscribers EUR 100 1/10000 units Distribution 50 of a unit All subscribers I(d) Capitalisation/ EUR 1/10000th FR0013300829 EUR in particular Institutional EUR 100 1/10000 units Distribution 1,000,000 of a unit investors All subscribers EUR 1/10000th L units FR0013300837 Capitalisation EUR in particular Institutional EUR 100 1/10000 40,000,000 of a unit investors L(d) FR0014001681 Distribution (3) EUR Institutions governed by EUR 1/10000th EUR 100 units German and Austrian 40,000,000 of a unit 1/10000 law (4) (1) Excluding the management company, which may only take Subscription and redemption requests are processed on out one unit. every valuation day until 1:00 p.m. Paris time (cut-off time) via (2) For F and F(d) units: units reserved for all investors and, the centralising agent and are executed on the basis of the solely as part of subscription or distribution within the next net asset value, i.e. at an unknown price. Payments European Union, those who are: relating thereto are made on the second trading day following (a) Financial intermediaries who, owing to regulations the net asset value date. applicable to their situation, are not authorised to receive or hold any non-monetary fees or benefits; or It is possible to invest in whole and/or fractions of units; (b) Subscribers subscribing to portfolio management services redemptions are only made in quantities of units (ten on behalf of third parties (management by mandate) and/or thousandths). independently provided investment consulting within the Fund unit subscriptions and redemptions can be addressed meaning of Directive 2014/65/EU of the European Parliament to: and of the Council of 15 May 2014 on markets in financial instruments within the European Union (the MiFID II • The centralising agent by delegation: Directive); (c) Distributors subscribing in the context of investment advice BNP PARIBAS SECURITIES SERVICES not considered to be independent within the meaning of Registered office: 3 Rue d’Antin – 75002 PARIS. Directive MIF2, on the basis of a contract with their customer Postal address: Grands Moulins de Paris - 9, Rue du and where such a distributor neither receives nor holds on to Débarcadère – 93500 PANTIN Cedex. any commission or other non-monetary benefit under Subscriptions and redemptions are processed at 1 p.m., Paris Directive MIF2. time (cut-off time). (3) Distribution frequency of L(d) units: quarterly Date and frequency of calculation of the net asset value: daily, (4) Legal persons subject to German legal and tax rules, for all units. The net asset value is calculated every business especially those relating to the provisions of § 5 trading day of the French financial markets (Euronext Paris Investmentsteuergesesetz and also legal persons governed S.A. Official Calendar). by Austrian law. The net asset value of the Fund is available on request from: III.1.8.6. Subscription and redemption - MANDARINE GESTION – 40, Avenue George V – 75008 Paris; methods - or at the following e-mail address: serviceclient@mandarine-gestion.com. 16 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
Mandarine Equity Income - Prospectus Subscription and redemption transactions resulting from a The net asset value is also available on the website: order transmitted after the time mentioned in the prospectus www.mandarine-gestion.com. (late trading) are prohibited. Investors wishing to subscribe to units and unitholders wishing Pursuant to Article L. 214-8-7 of the Monetary and Financial to redeem units should contact their account holding Code, both the redemption by the Fund of its units and the institution regarding the cut-off time for processing their issue of new units may be suspended temporarily by the subscription or redemption request. The latter may be before Management Company if required by exceptional the processing cut-off time mentioned above. circumstances and if this is in the interests of the unitholders. Orders are executed in accordance with the table below: D (working day) D (working day) D: day on which in Paris in Paris the NAV is D+1 trading day D+2 trading day D+2 trading day (Valuation Day) (Valuation Day) established Processing before 1pm Centralisation Publication of the net Execution of the order Payment of Payment of for subscription 1pm for redemption asset value (dated on D at the latest subscriptions redemptions orders1 orders1 Valuation Day) 1 Excluding any specific delay agreed with your financial institution. III.1.8.7. Fees and commissions the redemption price. The fees paid to the Fund are used to offset the costs incurred by the Fund for investing or divesting The subscription and redemption fees are added to the assets. Unallocated fees are made available to the marketing subscription price paid by the investor or are deducted from networks. Fees charged to the investor levied on Base Rate/Scale All units subscriptions and redemptions Subscription fee not paid to the Fund 2% maximum Subscription fee paid to the Fund None Net asset value X number of units Redemption fee not paid to the Fund None Redemption fee paid to the Fund None Exemption from subscription fees for M units: Subscriptions made by Suravenir and all associated entities will be exempt from subscription fees. Operating and management fees: These fees cover all costs charged directly to the Fund, apart from transaction fees. Transaction fees include intermediation fees (brokerage, stock market tax, etc.) and any turnover fees (see table below “Fees charged to the Fund”). In addition to operating and management fees, there may also be: - outperformance fees. These are paid to the management company when the fund exceeds its objectives. They are therefore invoiced to the Fund; - turnover fees charged to the Fund. Rate/Scale Rate/ Rate/ Rate/ Rate/Scale Rate/ Fees invoiced to the Fund Base M units Scale Scale Scale F, F(d) units Scale UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022 17
Mandarine Equity Income - Prospectus I, I(d) R(d) L(d) R units units units units Maximum financial management fees 1.95% 0.60% 0.90% 2.20% 1.10% 0.75% 1 External administrative costs Net assets including all including all including all including all including all including all to the Management Company taxes taxes taxes taxes taxes taxes maximum Maximum indirect fees 2 (Commissions and management Net assets None* fees) Maximum turnover fees paid to the Transaction 3 0 to 0.18% incl. tax on the gross amount of the deal Management Company amount Maximum turnover fees paid to the Fixed fee per €0 to €115 incl. tax depositary/custodian (2) transaction 4 Outperformance fee (1) Net assets 15% of the outperformance over the STOXX® Europe 600 NR 1) N/A (*) UCITS of UCITS or AIF: less than 10% This period is fixed at five years. 1) From 1st January 2022, the outperformance fee will be Condition of positivity calculated as follows: A provision cannot be made and a fee can only be collected if the fund's performance is strictly positive over the year (NAV the outperformance fee corresponds to a variable charge and greater than the NAV at the start of the year). is contingent on the Fund achieving a positive performance over the financial year and outperforming its benchmark over the observation period. Crystallisation The crystallisation period, i.e. the frequency with which the Calculation method accrued performance fee, if any, must be paid to the The calculation of the amount of the performance fee is based management company, is twelve months. on a comparison between the performance of the Fund and that of a notional UCI that achieves the performance of its The initial crystallization period will end on the last day of the benchmark and has the same subscription and redemption financial year ending 31 December 2022. pattern as the actual Fund. Observation period The outperformance generated by the Fund on a given date is The initial observation period will start with a duration of 12 defined as the difference between the net assets of the Fund months starting at the beginning of 2022. and the assets of the notional fund on the same date. At the end of a crystallisation period, one of the following three Provisioning situations may occur: Each time the net asset value (NAV) is established, the performance fee is subject to a provision (of 15% of the - The Fund posts an underperformance over the observation outperformance above the STOXX® Europe 600 NR index) if period. In this case, no provision is taken, and the observation the Fund's performance exceeds that of the notional UCI over period is extended by one year, up to a maximum of five the observation period, or to a reversal of the provision limited years (reference period). to the existing allocation in case of underperformance. - The Fund posts an outperformance over the observation period but underperformed negatively over the year. In this Catching up on underperformance and reference period case, no provision is taken, but a new observation period of The reference period is the period during which the twelve months shall begin. performance is measured and compared to that of the - The Fund posts an outperformance over the observation benchmark index and at the end of which it is possible to reset period and a positive absolute performance over the year. In the compensation mechanism for the underperformance (or this case, the management company shall receive the negative performance) passed. provisioned fee (crystallisation) and a new observation period of twelve months shall begin. 18 UCITS governed by French law covered by Directive 2014/91/EU - UCITS V - January 2022
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