sales prospectus - bayerninvest · sales prospectus swiss hedge - general information 5...

Sales Prospectus including Management Regulations

swiss hedgeDirective-compliant investment fund set up under Luxembourg law

Issue 01 January 2017

This is not an advertising prospectus Only to be used for individual investment advice

---------------------------------------English Translation - only the German version is legally binding

-----------------------------------------------The Translation is done very carefully but neither the Investment Manager nor the Management Company will be liable for the

correctness of the translated version of the prospectus

2 Sales prospectus SWISS HEDGE - General Information

SWISS HEDGE

Supplement to the Prospectus dated May 2015 for SWISS HEDGE

Additional information for United Kingdom investors only

This supplemental prospectus for investors from the United Kingdom forms part of the prospectus dated May 2015 (the

Prospectus) and should be read in the context of, and in conjunction with the Prospectus. This Supplement contains

specific information in relation to SWISS HEDGE (the Fund), was established as an open-ended investment fund without

legally independent status in the form of a collective investment fund (“fonds com¬mun de placement”, FCP) governed

by the law of Luxembourg and authorised by the Commission de Surveillance du Secteur Financier (the Financial

Regulator). The Fund has been authorised under Part I of the amended Luxembourg law of 17 December 2010 relating

to collective investment undertakings (loi relative aux organismes de placement collectif, the 2010 Law) and qualifies

as an Undertaking for Collective Investments in Transferable Securities (UCITS), and may therefore be offered for sale in

European Union Member States (subject to registration in countries other than the Grand Duchy of Luxembourg).

The Directors of the Fund, whose names appear in the Board of Directors section of the Prospectus, accept responsibility

for the information contained in the Prospectus and this Supplement.

FACILITIES AGENT SERVICES IN THE UK

KB Associates Consulting (UK) LLP has been appointed to act as facilities agent for the Fund in the United Kingdom (the

Facilities Agent). The Facilities Agent has agreed to provide facilities at its offices located at 42 Brook Street London, W1K

5DB, United Kingdom where:

a ) (a Shareholder may redeem his or her Shares and from which payments of the price on redemption may be

obtained;

b ) (a Shareholder may lodge a complaint concerning the operation of the Fund or sub-funds of the Fund (together

the Funds);

c ) (a Shareholder may obtain, during usual business hours on any business day, copies of the Funds’ most recent

Management Regulations, Prospectus, Key Investor Information Document, annual and semi-annual reports; and

d ) (information can be obtained in writing about the Funds’ most recently published Share prices.

Any person with questions relating to their ability to invest in the Funds should consult a financial adviser specialising in advising on participation in collective investment schemes. If you are in any doubt about the contents of this document, you should consult your professional adviser authorised pursuant to the FCA.

Words and expressions defined in the Prospectus shall, unless the context otherwise requires, have the same meaning when used in this Supplement.

Dated: January 2017

Sales prospectus SWISS HEDGE - General Information 3

BayernInvest Luxembourg S.A.

6B, rue Gabriel Lippmann

L-5365 Munsbach

www.bayerninvest.lu

Commercial Register

Luxembourg HR B 37803

Legal representatives:

Dr Volker van Rüth

Katja Lammert

Marjan Galun

(from 16/06/2016:)

Michael Löb

http://www.bayerninvest.lu


Subscriptions are only valid if made on the basis of this

current sales prospectus or the Key Investor Information

Document (hereinafter referred to as “KIID”) accompanied

by the annual report for the previous year and, if the

annual report dates back more than eight months, a more

recent semi-annual report. These reports are an integral

part of this sales prospectus.

In addition to this sales prospectus, a KIID will be issued

that contains important information on the SWISS HEDGE

Fund. This KIID and all other sales documents must be

made available at no charge to prospective investors prior

to subscription.

Prospectuses, KIIDs (Key Investor Information

Documents), annual and semi-annual reports, the Articles

of association of the Management Company and the

Management Regulations of the Fund may be obtained

at no charge at the registered office of the Management

Company, the Custodian or at the Paying Agents.

This prospectus does not constitute an offer for sale

in any jurisdiction in which such offer is unlawful, nor

does it constitute an offer for sale if it is presented by

any persons who are not authorised to do so, or by any

persons who are not legally authorised to make such offer.

Prospective investors should inform themselves as to the

legal requirements, exchange control regulations and tax

regulations applicable in the countries of their citizenship

or legal residence.

If any information contained in this prospectus or the

KIID is unclear, please consult your financial, legal or tax

advisor.

Special notes for US citizens (FATCA)

BayernInvest Luxembourg S.A. and the units of the Fund

are not and shall not be registered in accordance with

the United States Investment Company Act of 1940

(as amended). The units of the Fund are not and shall

not be registered in accordance with the United States

Securities Act of 1933 (as amended) or in accordance with

the securities laws of a federal state of the United States

of America (USA). Units of the Fund must not be offered

or sold either in the USA or its territories, or to a US person

or for the account thereof. Applicants may be required to

demonstrate that they are not US persons and that they

are not acquiring the units on behalf of US persons or

selling them on to US persons.

US persons are persons who are US citizens or residents

and/or are subject to taxes in the USA. The assignment of

units to such persons is likewise prohibited. US persons

may also be partnerships or corporations established in

accordance with the laws of the USA or a federal state,

territory, or possession of the USA.

If BayernInvest Luxembourg S.A. or the Transfer Agent

becomes aware that a unitholder is a US person or that

the units are held for the benefit of a US person, the

aforementioned companies are entitled to demand the

immediate return of these units at the prevailing and

latest available unit value.


Organisation

Management Company and Central Administration Agent



L-5365 Munsbach

Phone: (00352) 28 26 24 0

Fax: (00352) 28 26 24 99

www.bayerninvest.lu

Legal form: Société Anonyme

Established: 26 August 1991

Subscribed capital as at 31/12/2014:

EUR 153,387.56

Commercial register: Luxembourg HR B 37803

Board of Directors

Chairman

Dr Volker van Rüth

Management Board Spokesperson

BayernInvest Kapitalanlagegesellschaft mbH,

Munich

Members

Marjan Galun

Business Operations & Process Division Head

Management

BayernInvest Kapitalverwaltungsgesellschaft mbH,

Munich

Katja Lammert

Management Board

BayernInvest Kapitalverwaltungsgesellschaft mbH,

Munich

Michael Löb


BayernInvest Luxembourg S.A., Luxembourg

Management

Michael Löb


BayernInvest Luxembourg S.A., Luxembourg

Jörg Schwanitz

BayernInvest

Luxembourg S.A., Luxembourg

Custodian, Principal Paying Agent

M.M.Warburg & CO Luxembourg S.A.

2 pl. François-Joseph Dargent

L-1413 Luxembourg

Fund accounting

BayernInvest Kapitalverwaltungsgesellschaft mbH

Karlstraße 35

D-80333 Munich

Independent Auditors of the Fund and the Management Company

Until 31/03/2016:

KPMG Luxembourg

Société coopérative

39, Avenue John F. Kennedy

L-1855 Luxembourg

From 01/04/2016:

PricewaterhouseCoopers, Société coopérative

2, rue Gerhard Mercator

L-1014 Luxembourg

Investment Manager

Tell AG

(prior to 27/10/2016 operating under the name swiss

hedge capital ag)

Gerbergasse 5

CH-8001 Zurich

Initiator

Tell AG

(prior to 27/10/2016 operating under the name swiss

hedge capital ag)

Gerbergasse 5

CH-8001 Zurich

Information Agent in Germany

GerFIS - German Fund Information Service UG

Zum Eichhagen 4

D-21382 Brietlingen

Germany



Paying Agent in United Kingdom

KB Associates Consulting (UK) LLP

42 Brook Street

London, W1K 5DB

United Kingdom

Information concerning the distribution in Switzerland - to qualified investors only

See no. 29 / page 49

Legal advisor

GSK Stockmann + Kollegen

44, Avenue John F. Kennedy

L-1855 Luxembourg

Supervisory Authority

Commission de Surveillance du Secteur Financier (CSSF)

283, Route d’Arlon

L-1150 Luxembourg

(as at: January 2017)

The semi-annual and annual reports regularly provide updates about changes

to the information on this page.

Content 7

Table of Content

Additional information for United Kingdom investors only 2

FACILITIES AGENT SERVICES IN THE UK 2

1. Basic provisions 10

2. Management company 10

2.1 Firm, legal form and registered office 10

2.2 Board of Directors/Management/ Unitholders‘ Equity 10

2.3 Remuneration policy 10

3. Custodian 11

3.1 Duties of the Custodian 12

3.2 Cash flows 12

3.3 Safekeeping of financial instruments and assets 12

3.4 Sub-custodian services 13

3.5 Insolvency of the Custodian 16

3.6 Liability of the Custodian 16

4. Conflicts of interest 16

4.1 Measures for dealing with conflicts of interests 17

4.2 Additional information 18

5. Fund 18

5.1 Name, formation, term 18

5.2 Investment objective, investment principles and advisor/Fund Manager 19

6. Valuation (see also Art. 8 of the management regulations) 26

6.1 Assets listed on a stock exchange/traded on a regulated market 26

6.2 Unlisted assets/assets without a representative most recent sales price 26

6.3 Units of other UCITS or UCI 26

6.4 Liquid Assets 26

6.5 Unlisted bonds and borrowers‘ notes 26

6.6 Option rights and futures 26

6.7 Fair Value 27

7. Performance 28

8 Content

8. Risk advice 28

8.1 General 28

8.2 Potential range of investments 28

8.3 Market risk 29

8.4 Specific industry risks 29

8.5 Country or transfer risk 29

8.6 Settlement risk 29

8.7 Liquidity risk 29

8.8 Settlement default risk 29

8.9 Currency Risk 29

8.10 Custodial risk 30

8.11 Concentration risk 30

8.12 Inflation risk 30

8.13 Legal and tax risk 30

8.14 Changes in the investment policy 30

8.15 Amendment to the Management Regulations; liquidation or merger 30

8.16 Risk of suspension of redemption 30

8.17 Key personnel risk 30

8.18 Regulatory risk 30

8.19 Risks on domestic and foreign holidays 31

8.20 Risks associated with derivative transactions 31

8.21 Risk associated with the use of securities lending transactions and repurchase agreements 31

9. Increased Volatility 31

10. Units 31

11. Issue and redemption of units and order acceptance deadline 32

11.1 Net asset value 32

11.2 Issue of Units 32

11.3 Redemption and conversion of Units 32

11.4 Late trading and market timing 32

12. Publication of the issue and redemption prices and other communications to Unitholders 33

13. Administration and other costs 33

14. Specific provisions regarding the acquisition of investment Units 34

15. Unit classes 35

Content 9

16. Income Equalisation Procedure 35

17. Financial year 36

18. Liquidation and transfer of the Fund or sub-funds 36

18.1 Liquidation 36

18.2 Transfer 36

19. Tax notice 36

20. Note on the taxation of earnings on foreign investments for investors in the Federal Republic of Germany 37

20.1 Taxation on income 37

20.2 Interim income 37

20.3 Capital gains tax 37

20.4 Solidarity surcharge 38

20.5 Foreign withholding tax 38

20.6 Sales 38

20.7 Tax notice 38

21. Outsourcing 39

22. Annual reports/Semi-annual reports/Other sales documents 39

23. Auditor 39

24. Additional notices to investors in the Federal Republic of Germany 39

25. Payments to Unitholders/Dissemination of reports and other information 40

26. General Information for Unitholders 40

27. Other investment funds managed by the Company 40

28. Purchaser‘s right of revocation under Art. 305 KAGB (off-premises transactions) 40

29. Additional Information for Investors in the United Kingdom 41

30. Information concerning the distribution in Switzerland - to qualified investors only 42

30.1 Representative 42

30.2 Paying Agent 42

30.3 Location where the relevant documents may be obtained 42

30.4 Payment of retrocessions and rebates 42

30.5 Place of performance and jurisdiction 42

31. Overview of SWISS HEDGE 43

SWISS HEDGE - Twintrade 44

32. Management Regulations 52


General Part of the sales prospectus

1. Basic provisions

SWISS HEDGE (hereinafter referred to as “SWISS HEDGE”

or the “Fund”) is an investment fund with an umbrella

structure comprising one or more sub-funds. It was

established on 7 November 2011 in conformity with Part I

of the Law of 17 December 2010 on Undertakings for

Collective Investment in Transferable Securities, including

amendments and supplements thereto. It meets the

requirements of EC Council Directive 2009/65/EC in the

version as of 13 July 2009.

The Management Regulations of SWISS HEDGE in the

version as of 7 November 2011 entered into force on

7 November 2011 and were lodged on 7 November 2011

at the Registre de Commerce et des Sociétés (commercial

register). The registration notice was published in

Mémorial, on 12 November 2011.

The modified management regulations dated

28 November 2014 were registered on 29 November

2014 with the Registre de Commerce et des Sociétés.

The registration notice was published in Mémorial,

on 21 November 2014.

The modified management regulations dated

21 December 2014 were registered on 17 December

2014 with the Registre de Commerce et des Sociétés.

The registration notice was published in Mémorial,

on 29 December 2014.

The Management Regulations of SWISS HEDGE in the

version as of 23 November 2016 entered into force on

1 January 2017 and were lodged on 2 January 2017 at

the Registre de Commerce et des Sociétés (commercial

register). The registration notice was published in the

Recueil Électronique des Sociétés et Associations (RESA).

The fund is managed by BayernInvest Luxembourg S.A.

(“Management Company”), Luxembourg. The Custodian of

the assets of the Fund is M.M.Warburg & CO Luxembourg

S.A. (“Custodian”), Luxembourg.

2. Management company

2.1 Firm, legal form and registered office

Bayerninvest Luxembourg S.A. (the “Management

Company”) was set up on 26 August 1991 as a public

limited company of unlimited duration under Luxembourg

law with registered office in the City of Luxembourg. The

latest amendment to the articles of association of the

Management Company were registered on 19 December

2014 and has been published in Mémorial, the official

company and associations journal.

The purpose of the Company is the investment,

development, servicing, administration and management

of Undertakings for Collective Investment in Transferable

Securities (UCITS) pursuant to the amended Directive

85/611/EEC as of 20 December 1985 or its replacement,

Directive 2009/65/EC as of 13 July 2009 on the

coordination of laws and regulations relating to certain

UCITS and other Undertakings for Collective Investment

(UCI) pursuant to the law as of 17 December 2010 on

Undertakings for Collective Investment. The Company‘s

business is managed by the management board. It is

responsible in particular for the management of the fund‘s

assets and has the authority to act both in and out of court

in the name of the Company.

The Management Company is bound by the management

regulations in the administration of Fund assets.

2.2 Board of Directors/Management/ Unitholders‘ Equity

For more information on the management, the

composition of the Board of Directors and the equity

capital, please refer to the section “Organisation” at the

beginning of the sales prospectus.

2.3 Remuneration policy

As the Management Company, BayernInvest Luxembourg

S.A. is obligated to define remuneration principles as

per Art. 12 of the amended Law as of 12 July 2013 on

Alternative Investment Fund Managers and Art. 111 of the

amended Law as of 17 December 2010 on Undertakings

for Collective Investment in Transferable Securities. The

remuneration system requirements are determined in

greater detail as per Annex II to Directive 2011/61/EU

(AIFMD) and Article 14a(2) and Article 14b(1), (3) and


(4) of Directive 2009/65/EC (UCITS Directive). The ESMA

guidelines on remuneration shall also apply.

BayernInvest Luxembourg S.A. has adopted a remuneration policy that complies with the aforementioned requirements. It contains the following aspects in particular:

a ) Both the organisational structure and the services

offered by BayernInvest Luxembourg S.A. are

aligned in accordance with the principles of

sustainability, transparency and solidarity and aim

to ensure long-term company stability.

b ) Remuneration is compatible with and conducive to

constant and effective risk management and does

not encourage the assumption of risks that are

incompatible with the risk profiles, Management

Regulations and Articles of association as well as

the sales prospectuses/issuing documentation of

the managed AIF and UCITS.

c ) The remuneration policy is in line with the

business strategy, objectives, values and interests

of the Management Company and of the UCITS

under its management, as well as investors in any

such UCITS, and it includes measures for avoiding

conflicts of interest.

d ) Variable remuneration, including the retained

portion, is only paid out or earned if it is tenable

with regard to the overall financial position of the

Management Company and is justified due to the

performance of the relevant business unit, UCITS

and relevant person.

e ) With respect to employees not covered by

collective wage agreements, the fixed and variable

components of total remuneration are adequately

related to each other, where the portion of the

fixed element in the total remuneration is high

enough to provide full flexibility in relation to the

variable remuneration components, including

the option to dispense with payment of a variable

component.

f ) The remuneration system is reviewed on an annual

basis in terms of effectiveness, appropriateness

and conformity with the legal and regulatory

requirements and amended where required.

Further details on the Company’s current remuneration

policy are published online at http://www.bayerninvest.lu/

de/globale-navigation/disclaimer/index.html. This

includes a description of the methods for calculating

remuneration and benefits for certain groups of

employees, as well as details on those responsible for

allocating such amounts. The Company shall provide

this information in paper form, free of charge, upon

request.

3. Custodian

The Fund’s sole Custodian is M.M.Warburg & CO

Luxembourg S.A., with its registered office at 2, Place

François-Joseph Dargent, L-1413 Luxembourg. The

Custodian is a public limited company established

under Luxembourg law and conducts banking business.

Its equity as at 31 December 2015 amounted to

EUR 32.7 million (LUXGAAP). The rights and obligations

of the Custodian are governed by the Law as of

17 December 2010, the Custodian Contract, this Sales

Prospectus and these Management Regulations.

The appointment of the Custodian may be terminated

in writing by the Custodian or the Management

Company with a notice period of three months. Such

termination will, however, only take effect when

another bank that has been previously approved by the

relevant Luxembourg supervisory authority assumes

the responsibilities and functions of the Custodian

in accordance with the provisions of the General

Management Regulations.

In performing its tasks, the Custodian shall act honestly,

professionally, independently and in the interests of the

Fund and its investors.

The Custodian may not perform any functions with

respect to the Fund or the Fund’s Management Company

that may cause conflicts of interest between the Fund,

the Fund’s investors, the Management Company, the

Custodian’s representative and itself. This shall not apply

if the duties it performs as Custodian are functionally and

hierarchically segregated from the duties that could be in

a potential conflict with them and the potential conflicts

of interest are properly determined, managed, monitored

and disclosed to the Fund’s investors.

http://www.bayerninvest.lu/de/globale-navigation/disclaimer/index.html



All information regarding the identity of the Fund’s

Custodian, its duties, the conflicts of interest that may

arise, the description of all custodian functions delegated

by the Custodian and a list of sub-custodians, specifying

all conflicts of interest that may result from the delegation

of duties, shall be provided to investors on request free of

charge in the most up-to-date version.

3.1 Duties of the Custodian

The function of the Custodian is based on the amended

Law as of 17 December 2010, CSSF Circular 14/587,

the Custodian Contract, the Management Regulations

(Article 3) and the Prospectus. Transactions within the

fund portfolio are carried out through the Custodian.

The Custodian acts exclusively in the interest of

Unitholders.

The Custodian

a ) shall ensure that the sale, issue, redemption,

payout and cancellation of units of the Fund

are carried out in accordance with applicable

Luxembourg law and the Management

Regulations;

b ) shall ensure that the value of the units of the

Fund is calculated in accordance with applicable

Luxembourg law and the Management

Regulations;

c ) shall comply with instructions issued by the

Management Company unless they contravene

Luxembourg law or the Management Regulations;

d ) shall ensure, in the case of fund asset transactions,

that the countervalue is transferred to the Fund

within the usual period of time;

e ) shall ensure that income of the Fund is used in

accordance with applicable Luxembourg law and

the Management Regulations.

Foreign securities that are acquired or sold abroad or

that the Fund has the Custodian keep in this country or

abroad are normally subject to a foreign legal system.

The rights and obligations of the Custodian or Fund are

therefore determined by this legal system, which may also

permit the disclosure of the investor’s name. The investor

should be aware when buying units in the Fund that the

Custodian may have to issue such information to foreign

bodies if appropriate because it is obliged to do so by law

or regulation.

Bank deposits held with the Custodian, as well as those

held with other financial institutions if applicable, are not

protected by a deposit securing facility.

3.2 Cash flows

The Custodian shall ensure that the cash flows of the Fund

are monitored properly and, in particular, ensure that

all payments made by or in the name of investors upon

subscribing to units are received and that all monies of

the Fund are posted to cash accounts which:

a ) are opened in the name of the Fund, in the name

of the Management Company acting on behalf of

the Fund or in the name of the Custodian acting

on behalf of the Fund;

b ) are opened with an organisation stipulated in

Article 18(1)(a), (b) and (c) of Directive 2006/73/EC

of the European Commission and

c ) are managed in accordance with the principles

stipulated in Article 16 of Directive 2006/73/EC.

If the cash accounts are opened in the name of the

Custodian acting on behalf of the Fund, only monies of

the Fund shall be posted to such accounts.

3.3 Safekeeping of financial instruments and assets

The assets of the Fund are entrusted to the Custodian for

safekeeping as follows:

a ) For financial instruments that can be lodged for

safekeeping, the following applies:

i ) the Custodian shall hold all financial instruments

that are eligible to be posted to an account for

financial instruments with the Custodian and

all financial instruments that can be physically

transferred to the Custodian;


ii ) the Custodian shall ensure that financial

instruments that are eligible to be posted to

an account for financial instruments with the

Custodian are registered in the Custodian’s books

in segregated accounts, as per the principles

defined in Article 16 of Directive 2006/73/EC,

that have been opened in the name of the Fund

or the Management Company acting on behalf

of the Fund so that the financial instruments can

be identified clearly at any time as instruments

belonging to the Fund under the prevailing law;

b ) The following shall apply to other assets:

i ) the Custodian examines whether the Fund or

the Management Company acting on behalf

of the Fund has title to the relevant assets by

determining, based on information or documents

provided by the Fund or the Management

Company and to the extent available based

on external evidence, whether the Fund or the

Management Company acting on behalf of the

Fund is the owner;

ii ) the Custodian keeps records on the assets for

which it has ascertained that the Fund or the


fund has title and it keeps its records up-to-date.

The assets held in custody by the Custodian shall not

be reused for their own account by the Custodian or a

third party to which the custodian function has been

delegated. Re-use is considered to be any transaction of

the assets held in custody, including transfer, pledging,

sale and lending.

The assets held in custody by the Custodian may only be

re-used if

i ) the assets are re-used for the account of the Fund,

ii ) the Custodian is observing the instructions of the


Fund,

iii ) the re-use is for the benefit of the Fund as well as

in the interests of Unitholders and

iv ) the transaction is covered by high-quality liquid

collateral that the Fund has received in accordance

with an agreement on a transfer of title.

The market value of the collateral must at all times be at

least as high as the market value of the re-used assets plus

a supplement.

3.4 Sub-custodian services

The Custodian may outsource the safekeeping of assets

held for the account of the Fund to sub-custodians.

The sub-custodians may in turn outsource the custodian

duties delegated to them subject to relevant legal

conditions. The Custodian may not delegate the duties

described in sections 3.1 and 3.2 above to third parties.

The Management Company is dependent on the supply

of information by the Custodian and cannot verify the

accuracy and completeness in detail.

The Custodian shall ensure when delegating custodian

duties to third parties that they are subject to certain

requirements regarding effective supervisory regulation

and supervision.

3.4.1 Delegation of custodian duties

The following countries are covered by the sub-custodians

listed below:

AUSTRALIA

BRAZIL

CANADA

CHINA

HONG KONG

ICELAND

INDIA

INDONESIA

ISRAEL

JAPAN

MALAYSIA

MEXICO


NEW ZEALAND

NORWAY

PHILIPPINES

RUSSIA

SINGAPORE

SWITZERLAND

SOUTH AFRICA

SOUTH KOREA

THAILAND

TURKEY

UNITED STATES OF AMERICA


List of sub-custodians:

Name Address

Attrax S.A. 308, route d’Esch, L-1471 Luxembourg

Brown Brothers Harriman & Co Talstrasse 83, CH-8001 Zurich

Citibank (Luxembourg) S.A. 58, Boulevard Grande-Duchesse Charlotte, P.O. Box

1373, L-1330 Luxembourg

Clearstream Banking S.A. 42 Avenue J.F. Kennedy, L-1885 Luxembourg

Deutsche Bank Mumbai Kodak House 222, Dr. D.N. Road, FortMumbai – 400

001, India

HSBC Institutional Trust Services (Asia) Ltd. 17/F Tower 2&3 HSBC Centre, 1 Sham Mong Road,

Kowloon, Hong Kong

KBLUX 43, Boulevard Royal, L-2955 Luxembourg

M.M.Warburg & CO (AG & Co.) KGaA Ferdinandstraße 75, D-20095 Hamburg

Sal. Oppenheim jr. & Cie. Luxembourg S.A. Parc d’Activité Syrdall 2, L-5365 Munsbach

UniCredit Bank Austria AG Schottengasse 6-8, A-1010 Vienna, Austria

An up-to-date overview of the sub-custodians can

be found at http://www.bayerninvest.lu/de/globale-

navigation/disclaimer/index.html and http://www.

mmwarburg.lu/de/depotbank/weitere-informationen.

html or it can also be requested free of charge from the

Management Company or Custodian.

Most recent update: December 2016

The Management Company received the information

detailed in this section from the Custodian. The

Management Company has only verified the information

in terms of plausibility. It, however, depends on

information being delivered by the Custodian and cannot

verify the accuracy and completeness in detail.



http://www.mmwarburg.lu/de/depotbank/weitere-informationen.html




3.5 Insolvency of the Custodian

In the event of the insolvency of the Custodian and/or a

third party based in Europe to which the custody of the

fund assets was delegated, the fund assets held in custody

shall not be distributed to the creditors of this Custodian

and/or this third party or used for their benefit.

3.6 Liability of the Custodian

The Custodian shall be liable to the Fund and the

Unitholders for the loss of any financial instruments held

in custody of the Custodian or of a third party to whom

custody thereof has been delegated.

In the event that a financial instrument held in custody

is lost, the Custodian shall immediately return a

financial instrument of the same type to the Fund or the

Management Company acting on behalf of the Fund or

reimburse it with an equivalent amount. As per the Law

as of 17 December 2010 and the relevant regulations,

the Custodian shall not be liable if it is able to prove that

the loss is ascribable to external events which could not

reasonably have been controlled by the Custodian and

the consequences of which could not have been avoided

in spite of reasonable efforts.

The Custodian shall also be liable to the Fund and the

investors of the Fund for all other losses they incur due

to the negligent or wilful non-performance of the legal

obligations of the Custodian.

Subject to the legal exceptions, the liability of the

Custodian remains unaffected by any delegation

according to the “Sub-custodian” section above.

Unitholders may assert a claim in relation to the

Custodian’s liability, be it directly or indirectly, through the

Management Company, provided that this does not result

in the duplication of damage claims or lead to unequal

treatment of Unitholders.

4. Conflicts of interest

Potential conflicts of interest could arise when the

Custodian delegates particular custodial duties or

sub-custodianship to another outsourcing company.

If this other outsourcing company is an entity affiliated

with the Management Company or Custodian (e.g. group

parent), potential conflicts of interest could arise from

the interaction between this outsourcing company

and the Management Company or Custodian (e.g. the

Management Company or Custodian could favour

a company affiliated with itself over equivalent bidders

when a contract for custodial duties is awarded or when

a sub-custodian is selected).

4.6.1 Potential situation of conflicts of interest between the Custodian and sub-custodians

There is a group affiliation between the Custodian

M.M.WARBURG & CO LUXEMBOURG S.A. and

M.M.WARBURG & CO (AG & Co.) KGaA as a possible

sub-custodian, which is realised in such a way that

the Custodian is a subsidiary of M.M.WARBURG & CO

(AG & Co.) KGaA. M.M.Warburg & CO (AG & Co.) KGaA

also provides members of the Supervisory Board to the

Custodian. The delegation of custodian functions to

affiliated companies may give rise to potential conflicts of

interests.

As part of this group affiliation, the Custodian and

M.M.WARBURG & CO (AG & Co.) KGaA as a possible

sub-custodian apply guidelines and procedures to ensure

that they

a ) recognise all conflicts of interests resulting from

this affiliation;

b ) carry out all suitable measures to avoid such

conflicts of interests.

The appointment of third parties as sub-custodians may

also give rise to potential conflicts of interests. Where third

parties are appointed as sub-custodians, the Custodian

shall ensure that it and the appointed third parties have

taken all necessary measures regarding compliance

with requirements for organisation and avoidance of

conflicts of interests as they are specified in the laws and

regulations of Luxembourg and shall monitor compliance

with these requirements.


At the time this Prospectus was drafted, aside from the

aforementioned group affiliation, an issue which is being

resolved using the described measures in the interests of

investors, no relevant further conflicts of interests with

sub-custodians were known. Should such conflicts of

interests arise, they shall be resolved in accordance with

the existing guidelines and procedures and disclosed to

investors as part of the next Prospectus update.

4.6.2 Potential conflicts of interests situations between the Custodian and the Management Company

No relevant affiliation or group affiliation exists between

the Fund or the Management Company and the

Custodian as per Article 1 of the level 2 Regulation on

Directive 2014/91/EU (UCITS V).

The function of the Custodian or sub-custodians that

have been commissioned to carry out the custodian

functions can also be assumed by an associated company

of the Management Company. Insofar as they are

affiliated, the Management Company and the Custodian

have appropriate structures in place in order to avoid

potential conflicts of interests which could arise from the

affiliation. If conflicts of interests cannot be prevented, the

Management Company and the Custodian shall identify,

manage, monitor and disclose such conflicts of interests,

insofar as any exist.

The following conflicts of interests may arise from this

delegation:

– The sub-custodian M.M.Warburg & CO (AG & Co.)

is a company affiliated with the Custodian. The

approach to conflicts of interests is dealt with on

its website www.mmwarburg.lu.

4.1 Measures for dealing with conflicts of interests

The Management Company and Custodian have

implemented appropriate and effective measures (e.g.

policies and organisational measures) to completely avoid

potential conflicts of interests, or in cases where this is

not possible, to rule out the potential impairment of the

investors’ interests. Compliance with these measures is

monitored by an independent compliance function.

4.1.1 Identification of conflicts of interests

The Management Company and the Custodian must

thoroughly check each Fund structure and each

contractual relationship for potential conflicts of interests.

In the following cases, the companies must assume that

there is a high probability that a conflict of interests exists:

– The Management Company, Custodian or an

associated person must do their best to generate

gains or avoid losses at the cost of the Fund


associated person has an interest in the outcome

of a service/activity/transaction carried out in

respect of a fund or another customer for their

benefit if this service does not stand up to a

comparison among third parties or is carried

out for their benefit where this service/activity/

transaction is not in the interest of the Fund.


associated person is persuaded for financial or

other reasons to treat the interests of a customer

or customer group preferentially to the interests

of a fund


associated person carries out the same activities

for a fund as for one or more customers that are

not funds


associated person carries out the same or different

activities related to the Fund at the same time or

consecutively


associated person receives from another entity

http://www.mmwarburg.lu


than the Fund an advantage related to portfolio

management activities in the form of money,

goods or services, such as the commissions and

fees that are normally paid for these services.


associated person occupy both a position on

the Supervisory Board/Board of Directors of the

Management Company and of one of the SICAVs

it manages. If the Compliance Officer determines

that one of these criteria is fulfilled, the conflict

of interests is recorded in the conflict of interests

register and will undergo a conflict management

process.

4.1.2 Avoidance of conflicts of interests

The Management Company and Custodian shall strive

to structure themselves and their organisation in such

a way that conflicts of interests do not arise from the

outset. For this purpose, the companies have each

appointed an independent compliance officer. It is

incumbent upon this officer to monitor the adequacy,

effectiveness and appropriateness of measures and

procedures implemented to deal with and, in particular,

to avoid conflicts of interests, to check them regularly,

at least once a year, and to develop them. In particular,

the Management Company has integrated the following

measures into its organisational procedures:

– Separation of functions/responsibilities

– Four-eyes principle

– Ensuring best execution

– Gift policy

– Regulations on the topic of market abuse,

proprietary trading and personal employee

transactions

– Due diligence tests of service providers and fund

initiators

– A remuneration policy in compliance with the

relevant guidelines

– Voting rights policy

– Careful selection and regular training of

employees

4.1.3 Dealing with conflicts of interests

The primary objective is to avoid conflicts of interests. If

conflicts of interests cannot be avoided in specific cases,

BayernInvest Luxembourg S.A. and the Custodian shall

maintain a conflict register. Here the Compliance Officer

shall document existing conflicts of interests and the

measures taken. The conflict register shall be maintained

on a regular basis and as required under the responsibility

of the Compliance Officer.

Conflicts of interests that could be resolved shall

be marked as resolved in the conflict register and

documented. Unresolved conflicts of interests shall be

marked as existing conflicts of interests and disclosed to

investors as part of the next Prospectus update.

4.2 Additional information

On request, the Management Company shall provide

investors with up-to-date information on the Custodian

and its obligations, the sub-custodians and possible

conflicts of interests in connection with the Custodian’s

activities or the sub-custodians’ activities.

A description of the methods used by the Management

Company to deal with conflicts of interests can be found

on the BayernInvest Luxembourg S.A website at http://

www.bayerninvest.lu/de/globale-navigation/disclaimer/

index.html.

The Custodian’s conflict of interests policy can be

found on their website at http://www.mmwarburg.

lu/export/download/mmwarburg_luxemburg/

Grundsaetze_fuer_die_Ausfuehrung_von_Auftraegen_

in_Finanzinstrumenten.pdf.

5. Fund

5.1 Name, formation, term

The fund has been set up for an indeterminate duration.

The individual sub-funds may be created for a stipulated

length of time and thus deviate from the duration of

the fund. If a sub-fund has been created for a stipulated




http://www.mmwarburg.lu/export/download/mmwarburg_luxemburg/Grundsaetze_fuer_die_Ausfuehrung_von_Auftraegen_in_Finanzinstrumenten.pdf





duration then further information on this can be found

in the respective fund description in the Prospectus

under “Overview of SWISS HEDGE”. Investors share in the

securities of the individual funds and are co-owners to the

exact percentage of their share.

5.2 Investment objective, investment principles and advisor/Fund Manager

5.2.1 Investment objective/Investment principles

The investment objectives of the individual Sub-funds are

presented in the section “Overview of SWISS HEDGE”. Assets

permissible pursuant to the Law of 17 December 2010

on Undertakings for Collective Investment and Article 4

of the Management Regulations may be acquired for the

sub-funds.

5.2.2 Fund Manager (Investment Manager)

The name of the Fund Manager and/or Investment

Advisor of each sub-fund is detailed in the sub-fund

description (see Overview of SWISS HEDGE), if a Fund

Manager or Investment Advisor has been appointed

for the sub-fund. Fund Managers/Investment Advisors

to a sub-fund may delegate their duties, under the

responsibility and control of the Management Company,

partially or completely to one or more other companies

under the condition that any such company is at least

majority owned by companies in the same group of

companies as the Fund Manager/Investment Advisor.

The Investment Advisors are authorised to make

recommendations on the acquisition or sale of

investments within the framework of the provisions of

Article 2 of the Management Regulations.

The Fund Manager/Investment Advisor can enter

into contracts with Brokers/Counterparties in which

the Brokers/Counterparties pay for services provided

to the Fund Manager/Investment Advisor by third

parties (so-called “soft commission arrangements”).

Under these agreements, payment for such services

is made from turnover commissions received by the

Brokers/Counterparties for trades executed for the

sub-fund. Acting In accordance with the principle that

the best interest of the sub-fund is to be assured, the

Fund Manager/Investment Advisor can have Brokers/

Counterparties with whom such arrangements have been

entered into execute trades in return for services received.

Receiving these services (for example, information on

potential investments) expands the opportunities of the

Fund Manager/Investment Advisor and permits access to

the assessments and information of third parties.

These agreements are only entered into under the

following conditions: 1) the Fund Manager/Investment

Advisor acts in the interest of the Unitholders when

entering into such agreements; 2) the services received

by the Fund Manager/Investment Advisor are in direct

connection with his duties; 3) the agreements are only

entered into with legal entities and not with natural

persons; 4) the Fund Manager/Investment Advisor shall

inform the Management Company of these agreements

when reporting services received.

5.2.3 Techniques and instruments

The Fund‘s assets are invested in compliance with the

conditions of the Luxembourg Law on Undertakings

for Collective Investment in transferable securities of

17 December 2010 and the Directive of the European

Parliament and the Council of 13 July 2009 (2009/65/EC).

5.2.4 Investment in sub-funds of the same UCI

A sub-fund may subscribe, acquire and/or hold securities

issued by, or to be issued by, one or more sub-funds of the

same UCI if:

• the target fund is itself not invested in the sub-fund

that is invested in such target sub-funds; and

• the sub-funds that are to be acquired may not,

pursuant to their articles of association, invest more

than 10% of their assets in Units of other UCIs of the

same sub-funds; and

• any voting rights associated with the securities in

question are suspended during such time that they

are held by the corresponding sub-fund, irrespective

of whether they are appropriately recorded in the

annual accounts and the period reports; and


• as long as these securities are held by the UCI, their

value is in no case accounted for when calculating the

net assets of the UCI with regard to determining the

minimum amount for net assets as required by this

law; and

• there is no doubling of management fees, sales

charges or redemption fees at the level of the

sub-fund of the UCI that has invested in the target

sub-fund and paid to that target fund.

5.2.5 Techniques for efficient portfolio management

In accordance with CSSF Circular 13/559, techniques for

efficient portfolio management may be used for the Fund.

This also includes any form of derivative transactions,

securities loans and repurchase agreements.

These techniques and instruments must be used for

the purposes of efficient portfolio management; in

accordance with CSSF Circular 08/356 and ESMA guideline

2012/832, this assumes that the following criteria are met:

a ) They are economically suitable in the sense that their

implementation is profitable;

b ) they are used to achieve one or more of the following

objectives:

– reduction of risks

– reduction of costs

– creation of capital or additional income for the

UCITS with a degree of risk that is compatible with

its risk profile and the rules of risk diversification

applicable to it;

c ) The risks associated with the techniques and

instruments are taken into account in an appropriate

manner as part of the UCITS’s risk management

process.

Under no circumstances may the use of these transactions

by the sub-fund in question result in a change in the

investment policy set out in the Management Regulations

and this Prospectus or result in an assumption of

additional risk higher than the risk profile described in this

Prospectus (see “Overview of SWISS Hedge”).

5.2.5.1 Derivatives

For the purposes of efficient portfolio management, the

Company may hedge each of the sub-funds by trading in

derivatives as part of its investment strategy (this may be

detailed in the investment policy of each sub-fund (see

“Overview of SWISS HEDGE”)). Consequently, the risk of

losses for that sub-fund may increase temporarily. Trading

in derivatives takes place within the investment limits and

serves to allow the efficient management of the Fund’s

assets and the maturity and risk management of the

investments.

In its business, the Company may, under no

circumstances, deviate from the investment principles

outlined in this Prospectus.

The Management Company shall ensure that the entire

derivatives risk for any sub-fund does not exceed the

value of that sub-fund.

When calculating the market risk potential for each

sub-fund from using derivatives, the Management

Company shall classify each sub-fund by reference to CSSF

circular 11/512, depending on the type and scope of the

derivative used. Detailed information on this is included in

the Prospectus of each sub-fund.

5.2.5.2 Futures

Futures are contracts binding on both partners whereby

a fixed volume of a fixed underlying security is purchased

or sold at a pre-determined price at a certain point in

time, the final settlement date, or within a fixed period.

5.2.5.3 Options

An option consists of a third party having the right, for

a premium (the option premium), during a certain time

period or at the end of a certain period, to delivery or

disposal of a security, at a pre-determined price (base

price) or to demand the delivery or removal of the assets


or the payment of the difference or also to purchase the

relevant option rights.

5.2.5.4 Swaps

These are exchange contracts whereby the underlying

cash flows or risks are swapped between the contracting

parties.

On the basis of the investment principles, the

management company may deal in interest rate, foreign

exchange, equity, interest rate/forex and credit default

swaps on behalf of the sub-fund.

• interest rate transactions,

• foreign exchange transactions,

• equity transactions,

• interest rate/currency swaps,

• credit default swaps

on behalf of the sub-fund.

5.2.5.4.1 Swaptions

Swaptions are options on swaps. A swaption is the right,

but not the obligation to assume the swap defined in the

agreement at a certain time or after a certain period.

5.2.5.5 Credit default swaps

Credit default swaps are credit derivatives that enable

a potential volume of credit defaults to be passed on to

another party. As consideration for assuming the credit

default risk, the seller of the risks pays a premium to the

contract partner.

5.2.5.6 Securitised financial instruments

The Company may acquire the above-mentioned

financial instruments when they have been securitised.

This business may also be only partially securitised (e.g.

warrant bonds). The chance and risk forecasts for such

securitised financial instruments apply proportionately,

except that the loss risk for securitised financial

instruments is limited to the NAV of the security.

5.2.5.7 OTC derivative trading

The Company may undertake trading in derivatives

that are admitted to a securities exchange or to another

organised market, and also in so-called over the counter

(OTC) business.

5.2.5.8 Collateral management for transactions with OTC derivatives and techniques for efficient portfolio management

The Fund may receive collateral for transactions with

OTC derivatives and reverse repurchase agreements to

reduce counterparty risk. As part of its securities lending

transactions, collateral must be provided with a value

corresponding to at least 90% of the total value of the

securities loaned for the duration of the agreement

(taking into account interest, dividends, any other

potential rights and agreed discounts or minimum

transfer amounts).

The Fund may accept all collateral that meets the

regulations of the CSSF Circulars 08/356, 11/512 and

13/559 to back up liabilities.

1 . This collateral must have been received before or at

the time of transferring the loaned securities in the

case of securities lending. If the securities are loaned

via mediatory authorities, the transfer of the securities

may take place before receipt of the collateral

provided that the respective mediatory authority

guarantees the proper conclusion of the transaction.

Said mediatory authority may provide collateral in

place of the borrower.

2 . In principle, collateral for securities lending

transactions, reverse repurchase agreements and

transactions with OTC derivatives (excluding forward

currency contracts) should be provided in one of the

following forms:

a ) liquid assets such as cash, short-term bank deposits,

money market instruments as per the definition

in Directive 2007/16/EC of 19 March 2007, letters

of credit and guarantees payable on first demand

issued by first-class banks not affiliated with the

counterparty, or bonds issued by an OECD member


state or its local authorities or by supranational

institutions and authorities at a municipal, regional

or international level;

b ) units in a UCI investing in money market

instruments which calculates a net asset value

daily and has a rating of AAA or a comparable

rating,

c ) units in a UCITS which mainly invests in bonds/

shares listed in the next two points,

d ) bonds that are issued or guaranteed by first-class

issuers with adequate liquidity, or

e ) shares permitted or traded on a regulated market

of a member state of the European Union or

on a stock exchange of an OECD member state

provided that these shares are listed on a major

index.

3 . Accepted cash securities should only:

• be invested as demand deposits at entities

in accordance with Article 50 Letter f of Directive

2009/65/EC;

• be invested in high-quality government bonds;

• be invested in money market funds with a short

maturity structure in accordance with the definition

in the CESR’s Guidelines on a common definition of

European money market funds.

Reinvested cash securities should be diversified in

accordance with the diversification requirements

for non-cash securities. Non-cash securities and

reinvested cash securities received by the relevant

fund should be taken into account as an aggregate

in the fulfilment of diversification requirements

concerning the securities received by the relevant

fund.

4 . Securities not issued as cash or UCI/UCITS units must

be issued by a legal entity not affiliated with the

counterparty.

5 . If the security is provided in the form of cash and as

a result there is a credit risk for the Company with

regard to the manager of this security, this risk is

subject to the 20% limit stated in Article 43 paragraph

1 of the Law of 17 December 2010. The custody of

this kind of cash security also must not be carried

out by the counterparty unless it is legally protected

from the consequences of a payment default by the

counterparty.

6 . The custody of non-cash securities must not be carried

out by the counterparty unless they are separated

from the counterparty’s own assets in a suitable

manner.

7 . If a security fulfils a number of criteria such as the

standards for liquidity, rating, creditworthiness of the

issuer, correlation and diversification, it may be offset

against the counterparty’s gross exposure. If a security

is offset, its value can be reduced by a percentage

(a “discount”) depending on the price volatility of the

security, which should absorb short-term fluctuations

in the value of the exposure and the security

The criterion of adequate diversification with regard to

issuer concentration is deemed satisfied if, in effective

portfolio management or transactions in OTC derivatives,

the sub-fund of a counterparty has a collateral basket

where the maximum total value of the open positions

to a particular issuer does not exceed 20% of the net

asset value. If a sub-fund has various counterparties,

the different collateral baskets should be aggregated to

calculate the 20% limit for the total value of the open

positions to a particular issuer.

8 . The discounts applied to securities are either

geared at:

a ) The counterparty’s creditworthiness,

b ) The securities’ liquidity,

c ) Their price volatility,

d ) The creditworthiness of the issuer and/or


e ) The country or market in/on which the security is

traded.

9 . Assets that are highly volatile in terms of price

should only be accepted as securities if appropriate

conservative valuation haircuts are applied.

Depending on the type of securities received, e.g. the

creditworthiness of the counterparty, the due date,

the currency and the price volatility of the assets, the

valuation haircuts listed in the table below may be

made:

Type of security Valuation

haircut

Cash in the Fund’s currency 0%

Cash in a currency other than the

Fund’s currency, limited to EUR,

CHF, USD

up to 10%

Bonds and/or other debt

instrument or debt securities with

fixed or variable interest rates

up to 10%

Other assets that meet the

requirements for securities

may also be accepted on an

exceptional basis

up to 30%

It is possible that transactions in OTC derivatives may be

accepted for the Fund without securities being requested

from the counterparty, e.g. for currency futures with the

Custodian and for amounts below the threshold or the

minimum transfer amount.

10 . The discounts applied are reviewed for their suitability

at regular intervals – at least annually – and adjusted

accordingly if necessary.

11 . The Company (or its representative) carries out a

valuation of the securities received every day. If the

value of the securities already granted are deemed

insufficient in light of the amount to be covered, the

counterparty must provide additional collateral at

very short notice. If appropriate, the exchange or

market risks associated with the securities accepted

as collateral are taken into account by means of safety

margins.

12 . The Company will ensure that it can assert its rights

regarding securities if an event occurs which makes

the exercise of these rights necessary; i.e. the security

must be available at all times either directly or via

the mediatory authority of a first-class financial

institution or a wholly-owned subsidiary company of

this institute in a format that enables the Company to

appropriate or liquidate the securities provided if the

counterparty does not fulfil its obligation to return the

loaned securities.

13 . For the duration of the agreement, the security cannot

be sold, provided as collateral or pledged elsewhere

unless the Company has other funds to cover risks.

14 . A sub-fund that receives securities for at least 30% of

its assets shall examine the associated risk by means

of regular stress tests under normal and exceptional

conditions, the effects of changes in the market value

and the liquidity of the securities.

5.2.5.9 Loans on securities

If the Fund’s investment guidelines in the following

Special Section do not contain any significant restrictions,

the Fund may conduct securities lending transactions.

The respective restrictions can be found in the most

recent version of CSSF circular 08/356 and in guideline

ESMA/2012/832.

The Fund may only conduct securities lending

transactions in compliance with the following provisions:

(i) The Fund may only lend securities using a

standardised system operated by a recognised clearing

house or a securities lending programme operated by

a top-rated financial institution, insofar as this financial

institution specialises in such transactions and is subject

to supervisory regulations that, in the opinion of the CSSF,

are comparable with the provisions of Community law.


(ii) The borrower must be subject to supervisory

regulations that the CSSF consider to be comparable with

the provisions of Community law.

(iii) The counterparty risk arising from one or

several securities lending transaction(s) with a single

counterparty (which, for clarification, can be reduced by

the use of collateral) may not exceed 10% of the assets of

the respective sub-fund if the counterparty is a financial

institution falling under Article 41(1)(f ) of the Law of 2010

or 5% of the sub-fund’s assets in all other cases.

These transactions may be entered into for one or more of

the following purposes:

(i) Risk reduction,

(ii) Cost reduction and

(iii) To achieve an increase in capital or earnings at a risk

level that corresponds to the risk profile of the fund and

the applicable provisions on risk spreading.

These transactions may be carried out on the basis of

100% of the Fund, provided

(i) that the transaction volume is always kept at an

appropriate level or the redemption of the loaned

securities can be demanded in such a way that the fund

can fulfil its redemption obligations at any time, and

(ii) that these transactions do not jeopardise the

management of fund assets in accordance with the

investment policy of the respective sub-fund. The

risks of these transactions are managed as part of the

Management Company’s risk management process.

Securities lending transactions can also be carried out

synthetically (“synthetic securities lending”). Synthetic

securities lending takes place when a security in the

relevant sub-fund is sold to a counterparty at the current

market price. The sale is carried out subject to the

condition that the sub-fund simultaneously receives an

unleveraged securitised option from the counterparty,

entitling the sub-fund at a later point in time to demand

the provision of securities of the same type, quality and

quantity as the sold securities. The price for the option

(“option price”) corresponds to the current market price

from the sale of the securities, minus

a ) the securities lending fee,

b ) the returns (e.g. dividends, interest payments,

corporate actions) from the securities that can be

reclaimed when exercising the option, and

c ) the exercise price associated with the option. The

option will be exercised at the exercise price during its

term.

If the security on which the synthetic securities lending is

based is sold during the option’s term for the purpose of

implementing the investment strategy, this may also be

done by selling the option at the then prevailing market

price minus the exercise price.

Securities lending transactions may also be conducted

with regard to individual unit classes in consideration of

their respective special features and/or investor profiles,

where all revenue claims and collateral forming part of

such securities lending transactions arise at the level of

the relevant unit classes.

The Fund will, in its semi-annual and annual reports,

disclose the value as at the relevant reporting date of the

securities surrendered or received by way of a loan.

In terms of loans on securities, the Fund may act as lender

or borrower on the condition that such transactions are in

accordance with the following rules.

a) Lender

As a principle, when acting as lender the Fund must

receive a guarantee at least equal to the value of the

securities loaned out. The guarantee must be in the form

of liquid assets and/or securities issued by a member

country of the OECD or its regional authorities or by

an international institution or institutions of a federal,

regional or worldwide dimension. The guarantees remain

in escrow in favour of the Fund until termination of the

contract. Such a guarantee is not required when the


securities loan is cleared through Euroclear, Clearstream

or another recognised clearing house that guarantees

lenders the return of their securities or provides other

forms of guarantee.

If the Fund is lender, such loans shall not exceed 50%

of the value of the sub-fund securities portfolio. This

restriction does not apply where the Fund has at all times

the right to cancel the agreement and enforce return of

the securities. A loan of securities may not exceed 30 days.

b) Borrower

Securities that are, as an exception, accepted by way

of loan cannot be accessed during the time they are in

the Fund’s possession, unless the Fund has sufficient

guarantee to be able to repay the loan securities at the

end of the contract. If the Fund is the recipient of the loan,

loan securities received may not exceed 10% of the total

value of the securities portfolio of a sub-fund and such

transactions may only be entered into for short periods.

The Fund may act as recipient of a loan in securities

transactions under the following terms and conditions:

1) During a period of time in which securities have been

sent off to be registered, 2) where securities have been

surrendered by way of a loan and have not returned in

due time, and 3) in order to avoid the non-performance of

a securities transaction where the Custodian is unable to

meet its delivery obligations.

5.2.5.10 Repurchase agreements

Unless otherwise specified in the following Special

Section (see “Overview of SWISS HEDGE”), the Fund may

a ) enter into repurchase agreements consisting of the

purchase and sale of securities and including a right

or obligation on the part of the seller to repurchase

the securities sold from the buyer at a price and under

conditions contractually agreed upon by both parties,

and it may

b ) enter into reverse repurchase agreements consisting

of futures that, when they fall due, oblige the buyer

(counterparty) to repurchase the securities sold and

oblige the Fund to return the securities received as

part of the transaction (together, the “repurchase

agreements”).

The Fund may act as either buyer or seller for individual

repurchase agreements or a series of consecutive

repurchase agreements. However, participation in these

transactions is subject to the following conditions:

a ) The Fund may only purchase or sell securities as part

of a repurchase agreement if the counterparty for the

transaction is subject to regulatory provisions that

the CSSF considers comparable to the provisions of

EU law.

b ) The counterparty risk from one or more repurchase

agreements with respect to a single counterparty

(which, in the interests of clarity, can be reduced

through the use of collateral), where this is a financial

institution under Article 41 paragraph 1 letter f ) of the

Law of 2010, must be no more than 10% of the Fund’s

assets, or, in all other cases, no more than 5% of the

Fund’s assets.

c ) During the term of a repurchase agreement in which

the Fund acts as buyer, the Fund may not sell the

securities forming the subject of the agreement until

the counterparty has exercised its right to repurchase

these securities or the deadline for repurchase has

expired, unless the Fund has access to other covering

funds.

d ) The securities acquired by the Fund as part of a

repurchase agreement must be consistent with the

Fund’s investment policy and investment restrictions,

and be restricted to:

– short-term bank certificates or money market

instruments in accordance with the definition in

Directive 2007/16/EC dated 19 March 2007,

– bonds from non-governmental issuers that

provide adequate liquidity, or


– assets referred to above in the second, third and

fourth sections under a) Securities lending.

e ) The Management Company will disclose the total

amount of its open repurchase agreements on the

reporting dates of its annual and semi-annual reports.

Repurchase agreements may also be conducted with

regard to individual unit classes in consideration of their

respective special features and/or investor profiles, where

all revenue claims and collateral forming part of such

repurchase agreements arise at the level of the relevant

unit classes.

5.2.5.11 Borrowing

Short-terms loans worth up to 10% percent of the value of

each sub-fund may be taken out for the collective account

of the investors provided the terms of credit are fair and

the Custodian agrees to the loan.

6. Valuation (see also Art. 8 of the management regulations)

6.1 Assets listed on a stock exchange/traded on a regulated market

Securities and money-market instruments with (residual)

maturities of more than one year and other assets

permitted under the law and in accordance with these

Management Regulations that are listed on an official

exchange or traded on another regulated market which

operates regularly and is recognised and open to the

public, are valued on the basis of the last known sales

price. If the same security is traded on different markets,

the last known sales price on the main market will be

used.

6.2 Unlisted assets/assets without a representative most recent sales price

Non-listed securities and other legal assets and securities,

which are allowed by these Management Regulations,

that are listed or are traded on a recognised market,

but for which the latest sales price is not representative,

shall be valued at market value as determined by the

Management Company in good faith, applying generally

recognised valuation principles which can be examined

by an independent auditor.

6.3 Units of other UCITS or UCI

Units of other UCITS or UCIs are calculated using their

most recent net asset value.

6.4 Liquid Assets

Liquid assets shall be valued at their par value plus

accrued interest.

The valuation of money-market instruments and other

asset investments with a remaining maturity of less than

one year may be adjusted to the redemption price of

corresponding money-market instruments and other

asset investments on the basis of the price paid at

acquisition less the costs associated with acquisition,

while assuming a constant return on investment. The

Management Company shall ensure that if these asset

investments are sold, the sales price will not be less than

the yield rate.

In the event of significant changes in the market, the

valuation basis will be adjusted to reflect current market

yields.

If an exchange rate is necessary for determining the net

asset value of a sub-fund, the last known exchange rate

will be used.

6.5 Unlisted bonds and borrowers‘ notes

The prices used for the valuation of bonds not authorised

for trade on a stock exchange or included on an

organised market (e.g. unlisted bonds, commercial

papers and investment certificates) and for the valuation

of borrowers‘ notes are those agreed to for comparable

borrowers‘ notes and prices agreed to for borrowers‘

notes, and, if applicable, the market prices of bonds of

comparable issuers with corresponding terms and interest

rates. If necessary, a deduction is made to account for the

lower level of saleability.

6.6 Option rights and futures

Option rights accruing to a sub-fund and debt arising

from options bestowed by a third party that are admitted


for trading on an exchange or on another organised

market are valued at their latest quoted price.

This also applies to receivables and payables arising out

of futures purchased or sold on account of a sub-fund.

Any valuation gain or loss observed on a trading day is

aggregated with any margin falling due to the sub-fund.

6.7 Fair Value

If the assets of the sub-fund cannot be valued on the

basis of their “market value” because no market price is

available, valuation will be made on the basis of the “fair

value”.

This is oriented to the principles of the “Position paper of

the IDW (German Institute of Chartered Accountants) on

accounting and valuation issues related to the subprime

crisis of 10 December 2007”.

The presence of an active market is particularly relevant in

connection with the classification of financial instruments

and the determination of fair value.

An active market requires that:

• the items traded within the market are homogeneous;

• willing buyers and sellers can normally be found at

any time; and

• prices are available to the public.

A financial instrument is considered to be listed on an

active market if quoted prices are readily and regularly

available from an exchange, a dealer or broker, an

industry group, a price-service agency, such as Reuters

or Bloomberg, and these prices represent actual and

regularly occurring market transactions on an arm‘s-

length basis.

An active market is assumed for all price quotations on

a regulated market. If, however, the volume of trade on

organised markets is exceptionally low, each specific

case must be reviewed as to whether the securities listed

on the organised market should be considered as being

listed on an active market.

A market is no longer active when there is no longer

detectable market liquidity due to the complete and long-

term withdrawal of buyers and/or sellers from the market.

In the absence of an active market, the valuation of assets

is undertaken at fair value. The fair value of financial

instruments is the amount for which an asset could be

exchanged, or a liability settled, between knowledgeable,

willing parties in an arm’s length transaction. For the

determination of fair value, prices that have arisen due to

forced transactions, involuntary liquidation or distressed

sales are not taken into account.

The following hierarchy is used to determine fair value:

on an active market

1 . price on trade date

2 . price shortly before the trade date, which is adjusted

if the economic fundamentals have changed

significantly since the pricing date.

If the economic fundamentals have changed significantly

since then, the last available price is adjusted on the basis

of appropriate procedures (e.g. performance of an index,

rating of securitised loans).

Derivation of fair value using valuation techniques when

there is no active market

1 . Use of the most recent arm’s length transactions

between knowledgeable and willing parties for the

same financial instrument

2 . Comparison to the current fair value of another,

substantially identical financial instrument

3 . Use of valuation models (e.g. discounting expected

cash flows, option pricing models or any other

valuation models commonly used by market

participants for the valuation of that instrument).


The objective is to determine the transaction price that

would result from an arm‘s length transaction on the

valuation date. Market conditions at the valuation date

are used as the basis for this. The fair value calculated

using the valuation process should appropriately reflect

how the market would value the financial instruments

at the valuation date. The data used in the valuation

method must appropriately reflect all the inherent market

expectations and calculations of risk-return factors of the

financial instruments.

Generally, a distinction can be drawn between analytical

models and simulation models. All models are based

on the discounted cash flow method, i.e. the cash flows

resulting from the financial instrument are projected and

discounted with a maturity- and risk-equivalent interest

rate.

In addition to the amount of the cash flows and the

observable market situation, statements about the timing

of possible defaults must also be observed in determining

the interest rate. The illiquidity of the market must also be

considered as an additional input factor.

7. Performance

The performance of the sub-fund can be found in the specific information on the sub-fund in the KIID. If a sub-fund has been newly launched, no past performance can be indicated.

The performance of individual sub-funds can also be found in the published half yearly/annual management reports and on the company's website www.bayerninvest.lu.

No forecast can be made as to the future performance of the sub-fund based on its past performance.

8. Risk advice

8.1 General

The assets in which the Management Company invests

for the account of the investment fund contain risks as

well as opportunities for growth. Losses may be incurred

if the market value of the assets decreases in relation to

the purchase price. If an investor disposes of units in a

sub-fund at a time when the quoted price of the sub-fund

securities is less than at the time of investment then the

investor will not recover the full value of moneys invested.

Even though all sub-funds seek to achieve constant value

growth, this cannot be guaranteed. However, investor risk

is limited to the amount invested. Investors will not be

required to make any payments beyond the sum invested.

NO GUARANTEE CAN BE GIVEN THAT THE OBJECTIVES OF THE RESPECTIVE SUB-FUND WILL BE ACHIEVED.

8.2 Potential range of investments

In observance of the investment principles and limits set

forth in the law of 17 December 2010 on Undertakings for

Collective Investment in Transferable Securities and the

terms and conditions, which provide a broad framework

for the SWISS HEDGE and its sub-funds, the actual

investment policy may be oriented towards acquiring

assets primarily, for example, from only a few sectors,

markets or regions/countries. This focus on a few specific

investment sectors may be associated with particular

opportunities, but they are countered by corresponding

risks (e.g. narrow markets, broad range of opportunities

within certain economic cycles).

Risks associated with the investment policy of individual

sub-funds are described under Overview of SWISS HEDGE.



8.3 Market risk

The price or market performance of financial products

depends to a great extent on the performance of the

capital markets, which is in turn affected by the overall

economic situation worldwide and the general economic

and political framework in individual countries. Illogical

factors such as moods, opinions and rumours may have

an impact on the general price trend, especially on a stock

market.

8.4 Specific industry risks

Investing a high proportion in securities of one sector can

mean the risks specific to that sector are over-represented

in the sub-fund.

In particular, investments in industries that are

strongly dependent on research and development

(e.g. biotechnology, pharmaceuticals, e.g.) or that

are comparatively new may be subject to significant

price fluctuations when developments with industry-

wide implications cause premature investor reactions.

The success of these industries is frequently based on

speculations about and expectations concerning future

products. However, if these products do not meet these

expectations or if they suffer other setbacks, there may be

unexpected losses throughout the entire industry.

However, there may be dependencies in other industries

that lead to unfavourable developments such as delivery

bottlenecks, shortages of raw materials, tightening of

legal requirements, etc., that subject the industry to

significant fluctuations.

8.5 Country or transfer risk

Country risk refers to the risk that a foreign debtor, despite

solvency, cannot make payments on time or cannot make

them at all, due to lack of the ability or willingness to

transfer payments on the part of his country of residence.

So, for example, payments to which the sub-fund has

a right may remain unsettled or may be received in

a currency that is no longer convertible due to currency

restrictions.

8.6 Settlement risk

Investments in unlisted securities are particularly subject

to the risk that settlement through a transfer system may

not be executed according to expectations because of a

delayed payment or deliver of a payment or delivery that

is not in compliance with the agreement.

8.7 Liquidity risk

The sub-fund may also acquire securities that are not

admitted to an official exchange or listed on an organised

market. The acquisition of such assets is associated with

the risk that there could be problems in reselling the

assets to third parties.

In particular, market segments just being established

may experience bottlenecks in tradability sooner than

in highly developed markets. It may be difficult and

timeconsuming to establish valuations and sell individual

investments. A loss may have to be taken on sales.

8.8 Settlement default risk

The sub-fund may suffer losses due to the default of an

issuer or counterparty.

Issuer risk describes the effect of the particular

developments concerning the respective issuer, which,

in addition to the general trends on the capital markets,

have an effect on the price of a security. Even when

securities are carefully selected, the possibility cannot

be excluded that losses may result from a decline in the

assets of issuers.

Counterparty risk comprises the risk that a counterparty

to a reciprocal contract partially or completely defaults on

its liabilities. This applies to all agreements concluded on

behalf of a sub-fund.

8.9 Currency Risk

When the assets of a sub-fund are invested in a currency

other than the currency of the corresponding sub-fund,

the sub-fund receives income, repayments and proceeds

from such investments in the corresponding currency.


If the value of that currency falls against the fund currency

then the value of the sub-fund is reduced.

8.10 Custodial risk

When assets are held in custody, there is a risk of loss

resulting from the insolvency, violation of due diligence

or improper conduct on the part of the custodian or a

sub- custodian. In this case, there is the possibility that

the Fund may, in whole or in part and to its detriment, be

deprived of access to the investments held in custody.

8.11 Concentration risk

Further risks can arise from a concentration of the

investments in particular assets or markets. The sub-

fund is then particularly vulnerable to the performance

of those securities or markets. This is associated with a

concentration of the settlement default risk.

8.12 Inflation risk

Inflation contains the risk that the assets will drop in value.

8.13 Legal and tax risk

The legal and tax treatment of funds may change in a

manner that cannot be predicted or influenced. A change

in incorrectly established tax bases for the sub-fund for

previous financial years can bring about fundamentally

negative tax adjustments for the investor, and the

investor must bear the tax burden of those prior years'

adjustments, even though it may be that the investor

had no investment in the fund at the time in question.

Similarly, the consequence may also arise for the

investor that a correction that has tax advantages for the

current and for previous financial years in which he was

invested in the sub-fund may not benefit him because

he redeemed or sold his Units before the correction in

question was implemented.

In addition, a correction of tax information may result

in income that is subject to taxation or tax advantages

being actually assessed for tax purposes in a different

tax assessment period from the period that is really

appropriate this could have a negative impact on the

individual investor.

8.14 Changes in the investment policy

The sub-fund’s risk exposure may substantially change if

the investment policy is changed within the sub-fund’s

authorised investment scope.

8.15 Amendment to the Management Regulations; liquidation or merger

In the Management Regulations, the Management

Company reserves the right to amend the Management

Regulations (see also Number 2: “General Provisions”).

In addition, the Company may, in accordance with the

Management Regulations, completely liquidate a sub-

fund or merge it with another sub-fund. For the investor,

this entails the risk that the holding period planned by the

investor will not be realised.

8.16 Risk of suspension of redemption

Investors may request that the Management Company

redeem their Units on any valuation date, but not at

month-end. The Management Company may, however,

temporarily suspend redemption of Units for a limited

period in exceptional circumstances and then redeem the

Units at a later date at the applicable price at that time.

This price may be lower than the price before suspension

of redemption.

8.17 Key personnel risk

The success of a sub-fund over a particular period may

be thanks to the abilities of its trading staff and thus to

the appropriateness of decisions taken by management.

Personnel making up the Fund management can change.

New decision-makers may not necessarily trade with the

same success.

8.18 Regulatory risk

The sub-fund may also make investments abroad.

This is accompanied by the risk of potential adverse

international political developments, changes in policy

of the respective government, changes in regulatory

environment, changes in tax base and other legal

developments. In particular, restrictions may be placed

on assets that may be acquired for the sub-fund, which


may therefore adversely affect the performance of the

sub-fund.

8.19 Risks on domestic and foreign holidays

Due to local holidays in certain regions/countries there

may be discrepancies between the trading days on the

stock exchanges of these countries/regions and the

valuation days of the sub-fund. Therefore, on a day that is

not a valuation day, the sub-fund may not be able to react

to market developments in the countries/regions on the

same day or may not be able to trade on the local market

on a valuation day that is not a trading day in those

countries. This can give rise to liquidity problems in the

disposal of units.

8.20 Risks associated with derivative transactions

Buying and selling options and entering into futures

contracts or swaps carry the following risks:

1 . Changes in the price of the underlying securities

may decrease the value of an option right or the

futures contract until it becomes financially worthless.

Changes in the value of an asset being used as an

underlying security for a swap may result in significant

losses to the sub-fund.

2 . Any necessary counter-transaction (closing-out) will

incur costs.

3 . As a result of the leveraging effect of options, they

may have a greater influence on Fund assets than the

direct purchase of the underlying securities would.

4 . The purchase of options entails the risk that some

options will not be exercised because the prices of

the underlying securities do not develop as they are

expected to, so that the option premium paid by the

sub-fund is forfeited. When options are sold, there is

the risk that a sub-fund will be obliged to purchase

assets at a price higher than the market price, or to

deliver assets at a price lower than the current market

price. This will result in the sub-fund suffering a loss

in the amount of the price difference less the option

premium received.

5 . Futures contracts also contain the risk that a sub-

fund will suffer losses as a result of an unexpected

development of the market price at maturity.

8.21 Risk associated with the use of securities lending transactions and repurchase agreements

If the counterparty to a securities lending transaction or

repurchase agreement drops out, the Fund may suffer

a loss in that the return from the sale of the collateral

held by the Fund in connection with the securities

lending transaction or repurchase agreement may be

lower than the ceded securities. Moreover, the Fund

may, through bankruptcy or a similar procedure against

the counterparty of the securities lending transaction

or repurchase agreement or any other form of non-

compliance with the return of the securities, suffer losses,

e.g. loss of interest, loss of the relevant security, or costs

from late payment and enforcement with regard to the

securities lending transaction or repurchase agreement.

It can be assumed that the use of acquisition with a

repurchase option or a reverse repurchase agreement

and securities lending agreement will have no significant

impact on the sub-fund’s performance. Such use may,

however, have a significant effect, whether positive or

negative, on the net asset value of the sub-fund.

9. Increased Volatility

The onset of volatility in a sub-fund, i.e. particularly severe

variations in the Unit price over a short period, is due

for the most part to general market phenomena which

cannot be assessed in advance. However, the risk of a

high level of volatility increases when the investment

instruments have a focus.

For more details, see the heading “Overview of SWISS

HEDGE”.

10. Units

The rights of investors on creation of a sub-fund are

exclusively securitised in global certificates. These global

certificates are held in custody by a securities depository

bank. No claim can be made by the investor for the


delivery of individual Unit certificates. The acquisition

of Units is only possible in conjunction with depository

custody. The Units are bearer Units and certify the claims

of the bearer vis-à-vis the Company.

The various Unit classes are arranged in accordance with

Article 7 of the Regulations. The Management Company

shall issue one or more of these classes per sub-fund. The

unit classes issued for each sub-fund are detailed in the

Prospectus under the heading “Overview of SWISS HEDGE”.

11. Issue and redemption of units and order acceptance deadline

11.1 Net asset value

The net asset value per unit for each unit class of

each sub-fund is calculated in the base currency on

the valuation day and is published on the website

www.bayerninvest.lu on each valuation day. The base

currency of each sub-fund is stated in the corresponding

description of the sub-fund. Article 8 of the Management

Regulations provides more information on the net asset

value.

11.2 Issue of Units

Units are issued pursuant to Articles 5 and 6 of the

Management Regulations. Units of each sub-fund can

be acquired on a valuation day from the Management

Company, from the Custodian and from any Paying Agent

listed in the Prospectus.

The issue price is the NAV per unit in each sub-fund as

published on the corresponding valuation day (trading

day) after the purchase agreement is received by the

Management Company.

There is no general restriction regarding the number of

Units issued per sub-fund. The Units may be acquired

from the Management Company. They are issued by the

Custodian at the issue price. The issue price of each Unit

certificate class may be increased by the amount of any

stamp duties or other charges to which the Management

Company is subject, as well as by a sales commission

plus a sales charge paid to the distributors, as set by

the Management Company. The Company reserves the

right to temporarily or permanently suspend the issue

of Units.

11.3 Redemption and conversion of Units

Unitholders can submit requests for redemption and

conversion of their Units on any valuation date.

The Units may be redeemed or converted through the

Management Company, the Custodian or any Paying

Agent. The redemption or conversion will be executed in

accordance with the provisions set forth in Articles 10 and

11 of the Regulations.

When a substantial number of redemptions are requested,

the Management Company can, with the approval

of the Custodian, delay payment of the redemption

price until such time as the corresponding assets have

been disposed of (see Article 8 of the Management

Regulations).

The redemption price may be higher or lower than the

issue price paid (purchase price) depending on the NAV

performance of the sub-fund in question.

The redemption price of each Unit certificate class may

be increased by the amount of any stamp duties or other

charges to which the Management Company is subject,

as well as by a redemption fee. The Company reserves

the right to temporarily or permanently suspend the

redemption of Units.

The Management Company does not intend to charge

any conversion fee.

When an investor switches Units from a sub-fund to

another with a higher issue premium, however, then

the Management Company will charge the positive

difference.

The Management Company may, in exceptional

circumstances, temporarily suspend the calculation of a

sub-fund’s NAV and consequently the issue, redemption

or conversion of Units in the sub-fund or in all the sub-

funds (see Article 9 of the management regulations).

11.4 Late trading and market timing

On the date the request for subscription, redemption

or conversion is received, the subscription, redemption



or conversion of Units is executed at unknown issue

and redemption prices. The subscription, redemption

or conversion application must be received by the

Management Company before 2 p.m. (Luxembourg time)

of the corresponding valuation date.

Subscription, redemption or conversion applications that

the Company receives after 2 p.m. Luxembourg time on

a valuation day are treated as if the Company had not

received them until the following valuation day.

The Management Company shall implement appropriate

measures to counteract the misuse of market timing and,

if market timing is suspected, take the necessary steps to

prevent this practice.

12. Publication of the issue and redemption prices and other communications to Unitholders

The relevant issue and redemption price shall generally

be published on the Management Company’s website

(http://www.bayerninvest.lu/de/fondsdaten/fondspreise/

index.html) and may also be published in a daily

newspaper or other online medium.

Other information for Unitholders, if required under the

Management Regulations, is published in the Recueil

Électronique des Sociétés et Associations (RESA) of

the Grand Duchy of Luxembourg. They may also be

published in a Luxembourg newspaper and in other

newspapers selected by the Management Company,

specifically in those countries in which Fund Units are

offered.

The net asset value per Unit of each sub-fund and the

issue and redemption prices may be obtained from the

head office of the Management Company, the Custodian

and at any Paying Agent.

At those same locations, the current sales prospectus with

the Management Regulations, the KIID and the annual

and semi-annual reports may also be obtained.

13. Administration and other costs

The Management Company charges a maximum annual

administration fee of 2.5%. Any Fund Manager fees

and any Investment Advisor fees incurred including

performance-related fees relating to the management of

a sub-fund‘s assets may be charged separately to the sub-

fund. Details of the management fees, any Fund Manager

fees and any Investment Advisor fees incurred, including

performance related fees and how these are calculated,

are set out in the overview of each sub-fund.

The Custodian charges an annual custodian fee

(“custodian fee”) of a maximum of 0.7%, payable every

month, calculated based on the last net asset value of any

sub-fund at the end of any month. These custody fees do

not include any third party custody or management fees

charged by other correspondent banks and/or clearing

houses (e.g. Clearstream or Euroclear) for the custody of

fund assets.

Apart from the above remuneration, the following

expenses are charged to the respective sub-fund:

1 . The usual broker’s and banker’s fees accruing to each

sub-fund‘s business;

2 . The printing costs for unitholder certificates, the

costs of preparing and/or official scrutiny of the

management regulations and all other documents

related to the fund, including authorisation

applications, Prospectuses, KIIDs and any applications

for amendment made to authorities in various

countries in their respective language and relating to

the offering for sale of fund Units;

3 . The costs of printing and mailing annual and interim

reports and other notifications to Unitholders in the

relevant language as well as the costs of publishing

the issue and redemption prices, and the publication

of profit sharing information and all other notifications

made to Unitholders;

4 . The costs of accounting, registration and transfer,

measurement of sub-fund performance, risk

http://www.bayerninvest.lu/de/fondsdaten/fondspreise/index.html

http://www.bayerninvest.lu/de/fondsdaten/fondspreise/index.html


management and the daily calculation of NAV and

publication of this;

5 . Auditors’ fees;

6 . The costs of EMIR related reportings;

7 . The costs of any transactions for stabilising prices;

8 . Any VAT incurred;

9 . The cost of sales promotion;

10 . The costs of consultations with lawyers and

other similar administration costs incurred by the

Management Company or the Custodian when acting

in the interests of Unitholders;

11 . The costs for announcing the tax base and

certification that tax details have been determined in

accordance with the regulations of German tax law.

12 . The costs of exchange listing(s) and/or registration of

Units for sale to the public in various countries;

13 . An annual duty (“taxe d’abonnement”) is levied by the

Grand Duchy of Luxembourg on total NAV.

14 . The Management Company has the right to charge

a sales commission on certain Unit classes, up to a

maximum of 0.5% p.a. on the percentage of the NAV

of that Unit class within the sub-fund as set out in the

Prospectus. The calculation method used is described

in the overview of each of the sub-funds.

If any of the above-mentioned fund issues cannot be

allocated to a particular sub-fund, then the issue will be

allocated to all the sub-funds in proportion to their NAV.

If the fund makes the above-mentioned issue for a distinct

sub-fund or in connection with a distinct sub-fund, then

the issue will be allocated to that sub-fund.

All periodically recurring costs are borne directly by the

fund; other expenses can be written off over 5 years.

The expenses (except transaction fees) falling to the

account of the sub-funds are p ublished in the fund’ s

annual report and shown as a ratio to the published fund

volume (“ Total expense ratio”– TER).

In the course of business the Management Company may

incur costs for valuable services (such as broker research,

financial analyses, market and quotation information

systems), which are used for the taking of investment

decisions in the interests of investors.

14. Specific provisions regarding the acquisition of investment Units

In addition to the fee for the management of the sub-

funds, a management fee is also charged for the target

fund Units held in the sub-funds. Sub-funds are not

invested in underlying funds charging management fees

of more than 5% p.a.

All types of fees, costs, taxes, commissions and other

expenses that can be charged to the respective target

funds in accordance with their terms and conditions are

to be borne indirectly or directly by the investors in the

sub-fund. These include in particular transaction costs,

normal custodial fees, costs of printing, distribution and

notification of the annual and semi-annual reports and

liquidation reports for investors, costs of publication

of the issue and redemption prices and distributions,

audit costs of the target funds, any taxes, costs of the

notification of tax bases and costs for the assertion and

enforcement of legal rights.

Conversely, each sub-fund assumes in full the trail

commission paid by the underlying fund company to the

Management Company.

If a sub-fund acquires Units in another UCITS and/or

UCI that is managed directly or indirectly by another

Management Company with which the Management

Company is linked through common management or


control or through a substantial direct or indirect holding,

then no issue fees, sales commission or redemption

commission will be levied for the subscription or

redemption of Units in the other UCITS and/or UCI. If

a sub-fund invests in one of these types of UCITS, fees

(management fees, investment advisor/fund manager

fees and custodian bank fees) charged to the sub-fund

insofar as these are for the same entity, will be discounted

for that proportion. Investments in other funds may result

in duplicate charges, which will be reported in the audited

financial report. Target funds are purchased under usual

bank terms and conditions, so that there is only ever a

small risk of duplicate charges. In addition, any discounts

received are credited to the sub-fund’s assets.

The issue and redemption fees paid by the sub-fund for

acquiring or redeeming Units in another investment fund

are published in the annual and semi-annual reports. In

addition, details are published of any expenses charged

by a Management Company or other company associated

with the Company to a sub-fund as management fees for

the Units held by the sub-fund.

15. Unit classes

The various Unit classes are arranged in accordance with

Article 7 of the Regulations. The Management Company

will assign each sub-fund one or more of these Unit

classes. The unit classes issued for each sub-fund are

detailed in the Prospectus under the heading “Overview

of SWISS HEDGE”.

The following Unit classes may be assigned by the

Management Company.

Unit class:

A: Distribution with sales commission

D: Distribution without sales commission

T: Reinvestment with sales commission

O: Reinvestment without sales commission

InstA: Restricted to institutional investors (inst) –

Distribution with sales commission

InstD: Restricted to institutional investors

(inst) – Distribution without sales

commission

InstT: Restricted to institutional investors

(inst) – Reinvestment with sales

commission

InstO: Restricted to institutional investors

(inst) – Reinvestment without sales

commission

If a country in which Units are distributed charges

stamp duties or other fees, the issue price will be raised

accordingly.

The Management Company may reject purchase orders at

its discretion and suspend or limit the issue of Units (see

Management Regulations, Article 5).

16. Income Equalisation Procedure

The Management Company applies a so-called income

netting procedure to the sub-fund. This means that the

proportional income accruing during the financial year

that the acquirer of the fund Units must pay as part of

the issue price and that the seller of the Unit certificates

receives as payment as part of the redemption price is

continuously netted. The expenses incurred are taken into

account in calculating the income equalisation.

The income equalisation procedure serves to adjust for

fluctuations in the relationship between income and

other assets caused by net fund inflows or outflows due to

the sale or redemption of Units. Otherwise, every net fund

inflow would reduce the returns on the net asset value of

the sub-funds and viceversa.

The result of the income netting process is that the

distribution per unit is not affected by unforeseen

developments in the sub-fund or in the turnover of


holdings. In doing so, it is accepted that investors who, for

example, purchase Units shortly before the distribution

date, receive back the portion of the issue price accruing to

income in the form of a distribution, although the capital

paid in did not contribute to the generation of the income.

17. Financial year

The financial year of the Fund and of each sub-fund ends

on 31 December of each year.

The first financial year begins with the launch of the first

sub-fund and ends on 31 December 2012.

The first report will be the unaudited semi-annual report

covering the period from the launch of the first sub-fund

to 30 June 2012.

The audited annual report is prepared as at 31 December

of each year. The first audited annual report will be

prepared as at 31 December 2012.

The unaudited semi-annual report is prepared as at 30

June of each year. The first unaudited semi-annual report

will be prepared as at 30 June 2012.

18. Liquidation and transfer of the Fund or sub-funds

18.1 Liquidation

The fund or individual sub-funds may be wound up at any

time by mutual agreement of the Management Company

and the Custodian. Moreover, the Fund shall be liquidated

upon activation of the provisions of Article 22 of the law

of 17 December 2010 on Undertakings for Collective

Investment in Securities.

As soon as a decision is taken to wind up the fund or a

sub-fund, no more Units in the fund or that sub-fund

will be issued or redeemed (unless all investors can

be treated on an equal basis). This will be announced

to the Unitholders as provided for in Article 16 of the

Management Regulations. The Management Company

will dispose of the assets of any such sub-fund in the

interest of the Unitholders and the Custodian will

pay out the net liquidation proceeds, less liquidation

expenses and fees, to the Unitholders of the sub-fund

in proportion to their respective holdings, as instructed

by the Management Company. After liquidation has

been completed, amounts that were generated by the

liquidation of the Fund or its sub-funds and not claimed

by the rightful Unitholders are deposited by the Custodian

with the “Caisse de Consignation” in Luxembourg for the

benefit of the rightful Unitholders. The proceeds shall be

forfeited if they are not claimed within 30 years of deposit.

18.2 Transfer

Sub-funds may be merged under the conditions described

in the Management Regulations by merging one

sub-fund into another or by merging them into another

Undertaking for Collective Investment (“UCI”). A merger

of sub-funds or merger into another UCITS will be carried

out upon decision of the Management Company.

19. Tax notice

In Luxembourg, the assets of the sub-funds are subject

to a tax (Taxe d’abonnement) that is currently 0.05% p.a.

of the respective net fund assets. If a sub-fund controls

an institutional Unit class, the taxe d’abonnement for

this Unit class currently amounts to 0.01% p.a. Taxe

d’abonnement is currently charged quarterly against

the net asset value of the sub-fund on the last day of the

quarter.

Unitholders who are not resident or located in

Luxembourg and who have not been granted a residency

permit for Luxembourg are currently subject neither to

the Luxembourg investment income tax, income tax,

withholding tax, gift or inheritance tax nor any other

Luxembourg tax on the Units of the Fund or sub-fund

they hold. Income from investment in the Fund may be

subject to taxes in other countries in which Fund assets

are invested. Neither the Management Company nor

the Custodian will obtain receipts for such taxes for any

Unitholders.

In accordance with the provisions of the Directive on

taxation of interest payments (the “Directive”), which

entered into force on 1 July 2005, the possibility cannot

be excluded that in certain cases withholding tax may

be deducted if a Paying Agent effects distributions and


redemptions of Units in a sub-fund and the recipient of

the amounts paid out is an individual who is resident

in another EU Member State. The withholding tax rate

on these distributions and redemptions is 35%, unless

the individual expressly requests that he be subject

to the information exchange system of the Directive.

The Unitholder may have any withholding tax offset

against his income tax obligations in his own country of

residence.

Interested investors should obtain information and, if

appropriate, consult an advisor concerning the laws

and regulations applying to the subscription, purchase,

holding and sale of shares at their place of residence.

20. Note on the taxation of earnings on foreign investments for investors in the Federal Republic of Germany

20.1 Taxation on income

For private investors resident in Germany, distributed

income and/or income that is to be considered distributed

from the sub-fund is subject to income tax (withholding

tax). Private investors must disclose income separately

in “Interest and other income”. For corporate investors,

these gains represent taxable operating income. However,

dividends from German and foreign companies as well as

distributed capital gains from securities transactions with

shares, realised applying the Investment Tax Act, are tax-

free for corporations. Only half the amount of this income

is taxed for partnerships and other companies. All other

distributed capital gains are fully taxable.

20.2 Interim income

As a result, investment funds and/or investment

companies are required to calculate interim income

each valuation day and to publish it together with the

redemption price. Fees for accrued interest, interest

claims, income and interim income from other foreign and

domestic investment assets received by the investor for

the sale, redemption or assignment of share certificates

are considered to be interim income. Private investors

resident in Germany are required to pay tax on interim

income realised upon redemption. The interim income

paid by the investor in the issue price on the acquisition of

shares can be deducted as negative income from interim

income received or other income such as distributions

on investment shares in the respective calendar year.

The tax obligation on interim income and distributed or

accumulated interest income thus applies only to the

actual time the investor owns the shares.

20.3 Capital gains tax

If an investor holds Units in a securities account with

one of the Custodians located in the Federal Republic of

Germany, in its role as Paying Agent, the credit institution

maintaining custody withholds 30% of the distributed

income that is subject to capital gains tax (principally

interest income and other earnings). However, no tax is

withheld on accumulations.

When shares are sold, Paying Agents in the Federal

Republic of Germany withhold 30% of the interim income

contained in the redemption price - where applicable

reduced by interim income paid - and on the accumulated

gains.

The German Paying Agent will not withhold capital

gains tax if the investor submits either an application

for a tax allowance in a timely manner (for the portion

of earnings subject to capital gains tax a maximum of

EUR 801 for individuals or EUR 1,602 for married couples

filing jointly) or a tax exemption certificate or for investors

domiciled abroad, proof of non-resident status. If the

share certificates are held as operating assets, tax must be

withheld.

If the investor does not hold shares in custody in a

securities account with a domestic credit institution

(non-securities account), but does not present the

income certificates to the domestic credit institution

for paying out or the share certificates for sale or

redemption, the capital gains tax withholding is

increased from 30% to 35%.

If distributed or accumulated investment income is

withheld from an investor, the investor receives a tax


certificate for the capital gains tax withheld from the

institution maintaining custody. The domestic investor

then has the opportunity to offset this amount of the

certified income tax withheld against his individual

income tax liability on submission of his income tax or

corporate tax return.

20.4 Solidarity surcharge

Since 1 January 1995, in the Federal Republic of Germany,

a solidarity surcharge of currently 5.5% has been levied

on the capital gains tax due. Like capital gains tax, the

solidarity surcharge can also be offset against income tax

liabilities. If no capital gains tax is due, for example, if an

application for tax allowance or a tax emption certificate is

presented, no solidarity surcharge will be withheld.

20.5 Foreign withholding tax

Withholding tax is sometimes withheld on foreign income

in the country of origin. The following applies to the tax

handling of the investor’s withholding taxes:

If the Fund already exercises its authority to withhold

foreign taxes when calculating taxable income as

advertising costs (option), the deduction or withholding

by the investor is no longer possible.

If, however, the Fund has not already offset the foreign

withholding tax when calculating income as advertising

costs, provided that it is not applied to tax- free income,

this foreign withholding tax is deductible upon request

when calculating total income or can be offset against the

portion of German income or corporate tax of the investor

that is due on the corresponding foreign income.

20.6 Sales

Private investors must pay tax on gains from the sale

of their Unit certificates. Taxes on investment income

and capital gains from foreign investment funds are

not automatically withheld. The following special

characteristics apply to the taxation of gains on sales of

foreign investment Unit certificates held as operating

assets: Only one-half of the gains resulting from sales of

domestic or foreign shares (gain on proportional holdings

of shares) are taxable (private companies and other

companies) or basically tax- free (corporations). Gains on

sales from any real estate income and gains exempted

from income under double taxation agreements (gain

on proportional holdings of real estate) are tax free. The

same applies to losses and sales and for depreciation of

the partial value of fund shares. Gains on shares and gains

on real estate are calculated and published for the Fund

as a percentage. The gains on proportional holdings of

shares and real estate must be calculated individually

by professional investors on the basis of the published

percentages.

20.7 Tax notice

The above tax principles (so-called transparent taxation)

only apply if all the tax bases as defined in Article 5

paragraph 1 InvStG are published (so-called obligation to

publish tax information). This also applies if the sub-fund

has acquired units in other investment funds (target funds

as defined in Article 10 InvStG), provided that they fulfil

their obligations to publish tax information.

The Management Company publishes all tax bases to

which it has access.

However, the required publication cannot be guaranteed

if a sub-fund has acquired target funds that do not fulfil

their obligations to publish tax information. In this case,

the distributions and the interim income of the respective

target fund and 70% of the increase in value of the last

calendar year of the respective target fund (however, no

less than 6% of the redemption price) are recognised as

taxable income at the level of the respective subfund.

Note:

Fiscal remarks are based on the legal situation established

at present. However, we are unable to guarantee that

evaluation for tax will not change the fiscal as a result of

legislation, jurisdiction or financial authority directives.

This notice is not intended to replace a tax consultation.


21. Outsourcing

The Management Company has transferred the following

duties to other companies as per the relevant provisions:

The function of Transfer Agent has been outsourced to


Services in connection with fund accounting

shall be performed by BayernInvest

Kapitalverwaltungsgesellschaft mbH.

Risk and performance measurement for

each sub-fund is carried out by BayernInvest

Kapitalverwaltungsgesellschaft mbH, Munich.

22. Annual reports/Semi-annual reports/Other sales documents

The annual and semi-annual reports and the current KIID

and the full sales prospectus with the current version of

the Management Regulations are available free of charge

from the Management Company and on the website

www.bayerninvest.lu.

23. Auditor

PricewaterhouseCoopers Luxembourg Société coopérative, 2, rue Gerhard Mercator, L-1014 Luxembourg, has been commissioned with the auditing of the Fund, the sub-funds and the annual report.

24. Additional notices to investors in the Federal Republic of Germany

The issue and redemption prices are available in the

Federal Republic of Germany in the full prospectus and

from paying and information agents indicated in the KIID

in the Federal Republic of Germany.

At those same locations, Unitholders may also obtain,

at no charge, the Sales Prospectus, the KIIDs, the

Management Regulations and the annual and

semi-annual reports for the acquisition of Units in

electronic or paper form and may inspect the Custodian

Contract, the transfer agent agreement, the fund

accounting agreement, the fund manager agreements,

the investment advisor agreements and the Articles of

association of the Management Company.

Issue and redemption prices and other required

communications to Unitholders are also published in

accordance with the current applicable provisions of

German law in the Börsen-Zeitung.

After publication in one of these information media stated

in this Sales Prospectus, investors shall in certain cases

also receive information without delay via their Custodian

on a medium on which information can be visibly

reproduced without modification and stored for a period

appropriate for the purposes of the information, such as

in paper form or electronic form (“durable medium”), as

per Section 167 of the German Capital Investment Code

(KAGB) in conjunction with Section 298 II of the KAGB.

This information includes the essential content of the

proposed amendments, their background, the rights of

investors in connection with the amendment, as well

as an indication of where and how further information

can be obtained. The information provided on a durable

medium includes the following situations:

1 . the suspension of the redemption of units or shares of

an investment fund;

2 . the termination of the management of an investment

fund or its liquidation;

3 . changes to the investment terms and conditions

that are not compatible with the current investment

principles, affect essential investor rights or relate to

the fees and reimbursements that can be drawn from

the investment fund, including the background to the

changes and the rights of investors in a clear manner

in addition to where and how further information can

be obtained on these matters;

4 . the merger of investment funds in the form of merger

information to be provided as per Article 43 of

Directive 2009/65/EC and

5 . the conversion of an investment fund into a feeder

fund or a change relating to a master fund in the form

of information to be provided as per Article 64 of

Directive 2009/65/EC.



Proceeds from redemptions, distributions to Units and

other payments will be made to Unitholders in the Federal

Republic of Germany at the offices of the Paying Agents in

the Federal Republic of Germany.

25. Payments to Unitholders/Dissemination of reports and other information

The engagement of the Custodian ensures that investors

will receive the distributions due to them and that Units

can be redeemed. The information mentioned in this sales

prospectus can be obtained from the sources listed under

number 1 “Basic information” in this sales prospectus.

26. General Information for Unitholders

The Management Company draws investors’ attention

to the fact that investments in UCITS are often executed

through an intermediary which makes investments it its

own name but on behalf of the investor. In this context,

investors may not necessarily be able to assert all investor

rights directly against the UCITS. Investors are advised to

update themselves as to their rights.

27. Other investment funds managed by the Company

Directive-compliant investment funds:

BayernInvest, Luxembourg investment fund with an

umbrella structure with the following sub-funds:

• BayernInvest Short Term Fund

• BayernInvest Total Return Corporate Bond Fund

• BayernInvest Global Flex Income

• BayernInvest Active Global Balanced

• BayernInvest Osteuropa Fund

DKB, Luxembourg investment fund with an umbrella

structure with the following sub-funds:

• DKB Europa Fund

• DKB Nordamerika Fund

• DKB Asien Fund

• DKB Pharma Fund

• DKB TeleTech Fund

• DKB Zukunftsfonds

GREIFF, Luxembourg investment fund with an umbrella


• GREIFF – Pro Art ERV

BILKU 1, Luxembourg investment fund with an umbrella


• BILKU 1 EPOS Fund

• BILKU 1 OPAL Fund

HUK-Vermögensfonds, Luxembourg investment fund with

an umbrella structure with the following sub-funds:

• HUK-Vermögensfonds Basis

• HUK-Vermögensfonds Balance

• HUK-Vermögensfonds Dynamik

Timberland, SICAV, Luxembourg investment fund with an

umbrella structure with the following sub-funds:

• Timberland, SICAV - Timberland Top - Dividende

International

Most recent update: December 2016

28. Purchaser‘s right of revocation under Art. 305 KAGB (off-premises transactions)

If the purchase of investment Units is made on the basis

of oral negotiations outside of the permanent business

premises of the party making or brokering the sale, then

the purchaser may revoke his declaration of the sale in

writing to the foreign management company within a

period of two weeks (Right of Revocation); this is also true

when the party selling or brokering the sale of the Units

does not have any permanent business premises. For

distance selling as defined by Section 312b of the German

Civil Code (Bürgerliches Gesetzbuch, BGB), revocation

will be precluded in the case of the purchase of financial

services, the price of which on the financial markets is

subject to fluctuations (Section 312g(II)(8) BGB).

The timely dispatch of the revocation notice is sufficient

for the purpose of observing the time limit. The revocation

must be notified in writing directly to


the Legal, Tax and Compliance Department,



L-5365 Munsbach

including information on the person making the declaration

and his address; no reason for the revocation is required.

The deadline for revocation does not commence until

a copy of the concluded contract has been delivered to

the purchaser or a contract note has been sent to him

or her, including instructions regarding the right of the

revocation similar to the above.

If the beginning of the period is in dispute, the burden of

proof lies with the seller.

The right of revocation does not apply if the seller can

prove that either the investor acquired the Units as part

of his commercial operations, or that he called on the

investor to conduct negotiations leading to the sale of the

Units as a result of a previous order (Article 55, Para. 1 of

the German Industrial Code [Gewerbeordnung]).

If the revocation is exercised after the investor has made

payment, the foreign investment company is obliged

to repay the investor‘s costs – incrementally as the

purchased Units are transferred back to the investment

company, if necessary – in addition to an amount

corresponding to the value of the purchased Units the day

after the revocation was received.

The right of revocation cannot be waived.

29. Additional Information for Investors in the United Kingdom

These additional notes are directed at investors from the

United Kingdom only.

These additional notes are part of the Prospectus and

should be read in conjunction with it. These additional

notes contain special information on Swiss Hedge.

Swiss Hedge is launched as an unincorporated “fonds

commun de placement” with an indefinite term and is

subject to Luxembourg legislation and the Luxembourg

financial market supervisory authority, the Commission

de Surveillance du Secteur Financier (CSSF). The Fund

was launched pursuant to Part I of the Luxembourg Law

dated 17 December 2010 on Undertakings for Collective

Investment in Transferable Securities (Law of 2010), and is

considered to be a Directive-compliant investment fund

(UCITS). On this basis, the Fund may, following a successful

distribution notice, be offered for sale to the public in the

member states of the European Union except the Grand

Duchy of Luxembourg.

The competent Board of Directors for this Fund (see

“Organisation” in this Prospectus) is responsible for the

correctness of the information in this Prospectus and in

these notes.

Facilities Agent Services in the UK

KB Associates has been appointed to perform the duties

of Facilities Agent for Swiss Hedge, and the Facilities

Agent has accepted these duties.

KB Associates, with registered office at 42 Brook Street,

London, W1K 5DB, United Kingdom, has agreed to

perform the duties of Facilities Agents at its business

premises.

From the same premises, unitholders may:

(a) return their units and obtain the prevailing redemption

price;

(b) submit complaints with regard to the activities of the

Fund or sub-funds;

(c) during normal business hours on any banking day,

view or obtain up-to-date copies of the Management

Regulations, the Prospectus, the Key Investor Information

Documents and the annual and semi-annual reports; and

(d) obtain written information on the currently published

unit certificate prices.

All investors should, with regard to their opportunities for investing in Swiss Hedge, first consult a tax advisor or financial advisor specialising in advice relating to investment funds. In the event of uncertainty regarding the content of this Prospectus, you should consult a professional advisor authorised by the FCA.

The terms and expressions used in this Prospectus

are used in the same context as in these notes unless

otherwise permitted by context.


30. Information concerning the distribution in Switzerland - to qualified investors only

30.1 Representative

The representative in Switzerland is Valex Capital AG,

Schützenstrasse 18, CH-8808 Pfäffikon SZ

30.2 Paying Agent

The paying agent in Switzerland is Neue Helvetische Bank

AG, Seefeldstrasse 215, 8008 Zürich

30.3 Location where the relevant documents may be obtained

The prospectus, the key investors information document

(KIIDs) and the management regulations as well as the

annual and semi-annual reports may be obtained free of

charge from the representative.

30.4 Payment of retrocessions and rebates

29.4.1 The Management Company and its agents

may pay retrocessions as remuneration for distribution

activity in respect of fund units in or from Switzerland. The

remuneration may be deemed payment for the following

services in particular:

– Screening and analysis of fund universe and

selection of appropriate funds

– Ongoing information of investors

Retrocessions are not deemed to be rebates even if they

are ultimately passed on, in full or in part, to the investors.

The recipients of the retrocessions must ensure

transparent disclosure and inform investors, unsolicited

and free of charge, about the amount of remuneration

they may receive for distribution.

On request, the recipients of retrocessions must disclose

the amounts they actually receive for distrib-uting the

collective investment schemes of the investors concerned.

29.4.1 In the case of distribution activity in or from

Switzerland, the Management Company and its agents

may, upon request, pay rebates directly to investors. The

purpose of rebates is to reduce the fees or costs incurred

by the investors in question. Rebates are permitted

provided that

– they are paid from fees received by the

Management Company and therefore do not

represent an additional charge on the fund assets;

– they are granted on the basis of objective criteria;

– all investors who meet these objective criteria and

demand rebates are also granted these within the

same timeframe and to the same extent.

The objective criteria for the granting of rebates by the

Management Company are as follows:

– the volume subscribed by the investor or the

total volume he or she holds in the collective

investment scheme or, where applicable, in the

product range of the promoter;

– the amount of fees generated by the investor;

– the investment behavior shown by the investor

(e.g. expected investment period);

– the investor’s willingness to provide support in the

launch phase of a collective investment scheme.

At the request of the investor, the Management Company

must disclose the amounts of such rebates free of charge.

30.5 Place of performance and jurisdiction

In respect of the units distributed in or from Switzerland,

the place of performance and jurisdiction is the registered

office of the Representative.


31. Overview of SWISS HEDGE


SWISS HEDGE - Twintrade

The assets in the sub-fund are invested on the principle

of risk diversification, based on the investment policy

principles described below and in accordance with

the investment restrictions defined in Article 4 of the

Management Regulations.

Investment Policy

The investment policy objective is to generate long-

term positive and uncorrelated returns by investing in

a stock portfolio with a focus on investing in European

companies. Instead of direct investments, investments

may be made in derivative financial instruments, on which

equities are directly or indirectly based.

Investment Strategy

Bank deposits, money-market instruments, equities,

interest-bearing securities, convertible loans, convertible

and warrant bonds, participation certificates, which

must be at least investment- grade, i.e. BBB (Standard &

Poor‘s), Baa (Moody‘s) or comparable, option warrants on

securities and securities in the form of index certificates

may be acquired for the sub-fund assets. Assets are

invested primarily in securities issued by

• Top-rated financial institutions or companies,

• States in the European Economic Area,

• State organisations of OECD Member States,

or

• Supra-national public organisations in which at least

one EEA state is a member.

SWISS HEDGE Twintrade may invest up to 10% of its assets

in Units of other UCITS or UCI.

Borrowing for short-term redemptions and liquidity

bottlenecks is permitted up to 10% of net sub-fund assets.

For hedging purposes and as part of the investment

strategy, the sub-fund may use derivatives as well as other

techniques and instruments. The overall risk incurred

through derivatives may not exceed the net asset value of

the sub-fund.

Techniques for a more efficient portfolio management

In accordance with the investment limits specified in

Article 4 of the Management Regulations, the investment

policy of the sub-fund is, using certain techniques and

instruments for a more efficient portfolio management,

primarily implemented through the use of suitable

derivatives, for example using performance swaps

negotiated with a counterparty under standard market

conditions. In the context of a performance swap of

this type, the sub-fund and the respective counterparty

agree, from an economic perspective, on the partial

or complete exchange of any profits or losses in the

portfolio underlying the performance swap. Favourable

performance of the portfolio underlying the performance

swap has a positive impact on the sub-fund‘s

performance. If, on the other hand, the portfolio performs

poorly, losses from the performance swap have a negative

or value-reducing impact on the sub-fund‘s assets.

The issuer limit in this regard applies in each case to both

the sub-fund assets and the portfolio underlying the

swap.

The portfolio underlying the performance swap chiefly

pursues investment strategies based on generating

income that is independent of the market, using absolute-

return strategies.

The investment of the Fund‘s assets in the performance

swap is made primarily in equities of European

companies. Investments in other countries may also be

added.

In the swap portfolio, a suitable combination of long and

short positions, or a suitable hedging of long positions,

is used to try to achieve an absolute return, while

ensuring that the overall risk associated with derivatives

does not exceed the total net value of the portfolio by

a factor of 2.

Sales prospectus SWISS HEDGE – Twintrade 45

Leverage of up to 2 will be used for investment purposes

for the portfolio underlying the performance swap.

Risk Profile

The performance of the sub-fund is considerably

influenced by the performance of the performance swaps

that are used. Through broad diversification and active

management of the portfolio underlying the performance

swaps, the sub-fund seeks to generate income that is

independent of trends, using absolute-return strategies.

Equities Risk

Acquiring equities may incur particular market and

company risks. The value of equities does not always

reflect the actual value of the company. As a result, there

may be large and rapid fluctuations in these securities

if market circumstances and assessments by market

participants change with regard to the value of these

investments. In addition, the rights resulting from equities

are always satisfied subordinate to the claims of all the

issuer‘s creditors. Consequently, equities are in general

subject to larger fluctuations in value than fixed-income

securities, for example.

Given that the acquisition of mid- and small caps from

all market segments can increase the potential for the

generation of income, there is a possibility that the

sub-fund will also from time to time include an increased

number of smaller and medium-sized companies. In

particular, equities from predominantly smaller, less

mature companies are as a rule subject to higher

fluctuations than the market in general. This is because

the securities are generally traded in smaller quantities

and these companies are exposed to greater business risk.

Where the sub-fund primarily comprises shares, this

may, in light of the danger of greater and more frequent

fluctuations in share values, give rise to correspondingly

large and small changes in the value of the sub-fund.

The risk associated with equity investments may also

impact indirectly on the Fund due to derivatives based on

equities.

Risks related to derivative transactions, buying and

selling options as well as entering into forward contracts

or swaps can be associated with the following risks:

Price changes in the underlying security may reduce the

value of the swap, option right or forward contract such

that it becomes worthless. sub-fund assets may also suffer

losses due to changes in the value of the asset on which

a swap is based. The equities risk may have an indirect

effect due to the equities on which the swap is based.

From time to time, payment obligations towards the

swap partner may result in a significant increase of the

sub-fund's risk of loss.

Any necessary back-to-back transactions (closing of

position) incur costs.

The leverage effect of options may alter the value of the

Fund’s assets more strongly than would be the case with

the direct purchase of assets.

The purchase of options carries the risk that the option

may not be exercised because the prices of the underlying

assets do not perform as expected, with the result that the

option premium paid by the Fund‘s assets is lost. When

options are sold, there is the risk that the sub-fund will

be obliged to purchase assets at a price higher than the

current market price, or to deliver assets at a price lower

than the current market price. This will result in the assets

of the sub-funds suffering a loss in the amount of the

price difference less the option premium received.

There is also the risk, in the case of forward contracts, that

the fund assets may suffer a loss on maturity due to an

unexpected performance of the market price.

The costs resulting from currency futures transactions

and from the acquisition of the corresponding rights to

options and option certificates and any possible losses

may reduce the performance of the sub-fund.

Interest rate fluctuation risk

With investments in fixed-income securities there is

always the possibility that market interest rates prevailing

at the time a security is issued may subsequently change.

46 Sales prospectus SWISS HEDGE – Twintrade

If market interest rates rise in comparison with the rates

that were current at the time of issue then, as a rule,

the price of the fixed-income security will fall. If market

interest rates should fall, then generally the price of

fixed-income securities will rise. This price adjustment

means that yields from fixed-income securities at any

point in time are roughly equal to current market interest

rates. These price fluctuations vary according to the

maturity dates of each fixed-income security. Short-dated

fixed-income securities hold less price risk than longer-

dated securities. However, short-dated fixed-income

securities generally offer lower yields than longer-dated

fixed-income securities. Money-market instruments

with residual maturities of less than 12 months tend

to represent a lower price risk due to their short-term

maturity.

Currency Risk

In cases where a sub-fund holds investments in currencies

other than that in which the sub-fund is denominated,

the sub-fund will receive the income, repayments and

proceeds from these investments in that currency. When

the value of this currency falls compared to the value of

the currency of the sub-fund, the value of the assets of the

sub-fund is reduced.

Key personnel risk

The success of a sub-fund, the investment results of which

are extremely positive over a specific period, is due to

the intuition of the Fund’s individual traders, i.e. the right

decisions taken by the Fund managers. Personnel making

up the Fund management can change. New decision-

makers may not necessarily trade with the same success.

Market risk

The price or market performance of financial products

depends to a great extent on the performance of the

capital markets, which is in turn affected by the overall

economic situation worldwide and the general economic

and political framework in individual countries. Illogical

factors such as moods, opinions and rumours may have

an impact on the general price trend, especially on a stock

market.

Increased Volatility

The sub-fund may be subject to significantly higher

fluctuations than pure bond funds due to the equities risk

with an indirect effect arising from the use of performance

swaps.

Leverage

The investment strategy can be associated with leverage

and is subject to the risks connected with it. Significant

adverse exchange rate movements will generally give rise

to the possibility that the sub-fund will suffer considerable

losses.

The Management Company calculates the extent of

the Fund’s leverage using the sum of the notionals of

derivative financial instruments. With this approach, the

values to be assessed arising from contrary positions are

not balanced but added, meaning that the derivative

financial instruments with a positive value used for

hedging purposes must be taken into account in the

addition. The extent of the expected leverage shown

below is expressed as the ratio between the sum of the

nominal values and the net Fund assets and is based on

historical values and expected trends. It is expected that

the amount of leverage will generally be between 1 on

average and 2 maximum in terms of the net Fund assets.

A leverage of 0 in this context means that the Fund does

not contain any derivative financial instruments or other

securities to be assessed.

It should be taken into account that derivative financial

instruments may be used for various purposes and the

calculation of the expected amount of leverage does

not differentiate between these different purposes.

The amount of the expected leverage shown therefore

does not reflect the Fund’s degree of risk. New market

conditions may change both the weighting of the

individual derivative financial instruments and the

characteristics of the risk factors for each derivative

financial instrument may change over time.


Investors must in this respect anticipate that in exceptional

cases, the expected leverage effect may differ from the

range shown above.

(See also Chapter 7 “Risk Disclaimer”)

Investors should be aware that no assurances can be

made with regard to achieving the investment objectives,

and there may be a risk of suffering total loss or receiving

a lower amount back than originally invested.

Profile of a typical investor

Any investment in the SWISS HEDGE Twintrade sub-

fund is only suitable for experienced investors who are

in a position to assess the risks and the value of the

investment, and who wish to participate indirectly in the

performance of companies listed on European equity

markets. Investors must be prepared and in a position to

accept large fluctuations in the value of the Units and,

possibly, a substantial loss of capital, up to complete loss.

Investors should have a long-term investment horizon.


Key figures

Launch date: 04 January 2012

First quotation: 04 January 2012

Value date for subscriptions and

redemption of Units:

The following trading day + 3 Luxembourg banking days

Unit class: D-EUR

Currency: Euro

Initial issue price: EUR 100.00

Minimum subscription: EUR 10,000

Use of income: Distribution

Sales charge: max. 5% (contained in the precentage of the net inventory value per share)

Redemption commission: N/A

Management fee 2.15% p.a.

Minimum fee of EUR 24,000 (based on sub-fund assets)

(calculated in % based on an average value calculated at each month end derived from the Fund’s net asset values determined on the valuation dates and payable at the end of each month)

The management fee includes the investment manager fee.

Taxe d’abonnement: 0.05% p.a.

Securities identification number: A1JNWM

ISIN: LU0700553844

Unit class: D-USD

Currency: USD

Initial issue price: USD 100.00

Minimum subscription: USD 10,000




Management fee 2.15% p.a.





Securities identification number: A1JNWN

ISIN: LU0700553927

Unit class: D-CHF

Currency: CHF

Initial issue price: CHF 100.00

Minimum subscription: CHF 10,000





Management fee: 2.15% p.a.





Securities identification number: A1JNWP

ISIN: LU0700554149

Unit class: A-EUR

Currency: Euro

Initial issue price: EUR 100.00



Redemption commission: none

Management fee: Maximum 2.50% p.a.





Securities identification number: A1JNWQ

ISIN: LU0700554495

Unit class: A-USD

Currency: USD

Initial issue price: USD 100.00




Management fee: maximum 2.50% p.a.





Securities identification number: A1JNWR

ISIN: LU0700554651

Unit class: A-CHF

Currency: CHF


Initial issue price: CHF 100.00




Management fee: Maximum 2.50% p.a.





Securities identification number: A1JNWS

ISIN: LU0700554735

All Unit classes:

Fund Manager:

Custodian fee: 0.06% p.a. (minimum fee EUR 15,000 p.a.)

(calculated in % based on average net sub-fund assets at each month end

and payable in euro at the end of each month)

Performance fee: In addition to the investment manager fee, each quarter the Investment

Manager also receives a performance fee of up to 20% of the amount of

the positive performance of the Units in circulation. The high watermark

principle will apply. The performance fee is calculated each valuation day

and accrued in the assets of the sub-fund. It is paid from the assets of the

sub-fund to the management company. The performance fee accrued at

each quarter is payable in arrears at the end of each quarter.

Swap counterparty for Performance

Swaps:

Merrill Lynch International

2 King Edward Street, London, EC1A 1HQ

Portfolio Manager for Performance

Swaps:

Tell AG

(prior to 27/10/2016 operating under the name swiss hedge capital ag)

Gerbergasse 5

CH-8001 Zurich

sub-fund currency: Euro

Valuation day: Every day that is an all-day banking day in Luxembourg and Frankfurt.

Subscriptions and redemptions: Every day that is an all-day banking day in Luxembourg, London and Frankfurt.

Total risk: The relative value at risk (99%, 20T) for the sub-fund is a maximum of 200%

of the value at risk of the benchmark portfolio.

Benchmark portfolio: Stoxx Europe 50 Index

Leverage: The maximum leverage amounts to 2

The average leverage amounts to 1


Calculation method: Notional Sum

Units: Bearer Units with no par value

Certificates: Global certificates

Term: Unlimited

Authorised for sale in: Luxembourg, Germany, Great Britain, Switzerland (to qualified investors

only)

*Institutional investors must be disclosed by name to the Management Company on subscribing to the Fund


32. Management Regulations

The Management Regulations of the SWISS HEDGE

investment fund (fonds commun de placement), as well

as all future amendments pursuant to Article 15 in this

connection, govern the legal relationships among:

I. The Management Company BayernInvest Luxembourg

S.A., a limited liability company with its registered office in

Luxembourg, 6B, rue Gabriel Lippmann, L-5365 Munsbach

II. The Custodian, M.M.Warburg & CO Luxembourg S.A.,

a limited liability company with its registered office in

Luxembourg, 2, Place François-Joseph Dargent, L-1413

(the “Custodian”), and

III. The subscribers and holders of SWISS HEDGE Units

(the “Unitholders”), who acknowledge the Management

Regulations through their purchase of the Units.

The contractual rights and obligations of the

Management Company, the Custodian and the

Unitholders with respect to the Fund are governed by the

Management Regulations set out below.

Article 1. The Fund

The Fund is a legally dependent special fund which

is founded as “fonds commun de placement” (FCP)

in accordance with the law of the Grand Duchy of

Luxembourg. It may consist of several sub-funds (the sub-

funds, hereinafter also collectively referred to as the Fund

Assets). The Board of Directors may, with the consent

of the Custodian, decide upon the launch of new sub-

funds or the dissolution of any individual sub-fund. Each

sub-fund, which constitutes an integral part of the Fund,

is deemed to be an independent Unit in the form of an

investment fund, over whose securities and other legally

valid assets the Unitholders acquire co-ownership.

The rights and obligations of the unitholders of a

sub-fund are completely separate from those of the

unitholders of the other sub-funds. This also applies in

relation to third parties to whom a sub-fund is responsible

only for the liabilities of that individual sub-fund. All sub-

funds are managed by the Management Company in the

interests of the Unitholders.

Unitholders hold the sub-fund’s assets in proportion to

the number of units they hold. By subscribing to units,

the Unitholder accepts the Management Regulations, the

Special Regulations of the relevant fund assets and all

approved and announced changes.

The assets of all of the sub-funds are kept in custody by

the Custodian and are kept separate from those of the

Management Company.

Article 2. The Management Company

The Fund is managed in the name of the Management

Company and for the joint account of the Unitholders

and in accordance with Part I of the law of 17 December

2010 on Undertakings for Collective Investment. The

Management Company has its registered office in

Luxembourg.

As per Luxembourg law, the Management Company

is obliged to act in the interests of the Unitholders in

respect of the management of the Fund. In particular, it

is entitled to purchase, sell, underwrite, exchange and

own securities, and to exercise all rights arising directly or

indirectly in connection with the fund assets.

The Board of Management of the Management Company

determines the investment policy of each of the sub-

funds, taking account of the restrictions.

The Board of Management of the Management Company

may by its own responsibility appoint, for one or more of

the sub-funds, an Investment Advisor or an investment

committee, which is composed of members of the Board

of Management and/or other persons and advises the

Board of Management and the Fund Managers, if any, in

respect of the general investment policy. Any Investment

Advisor fees incurred may be charged to the relevant

sub-funds. The Board of Directors may also delegate the

implementation of the investment policy and the general

management of the Fund Assets to employees of the

Management Company.

The Management Company has implemented a

Risk Management Procedure in relation to the fund

management, which calculates and observes the relevant

Sales prospectus SWISS HEDGE – Management Regulations 53

risk positions of any asset in relation to the overall risk

profile of the sub-fund at any time, as well as a procedure

for the precise and independent valuation of OTC

derivatives. The Management Company reports to CSSF

about the observance of the requirements of circular

11/512 dated 30 May 2011, in recurrent periods.

Article 3. The Custodian

The Management Company appoints a Custodian for the

Fund in the Special Regulations.

The Custodian is entrusted with the safekeeping of the

Fund assets. The Custodian’s rights and duties are laid

down in Luxembourg Law, the Management Regulations

and the Custodian Contract.

All the securities and other assets of the Fund are kept in

safe custody by the Custodian in blocked accounts and

securities accounts, which may be accessed in accordance

with the provisions of the Management Regulations

and the laws applicable in Luxembourg. The Custodian

may entrust third parties, in particular other banks and

collective securities depositaries, with the safe custody of

securities and other assets, under its own responsibility

and with the agreement of the Management Company.

The Custodian will have a claim for remuneration to

which it is entitled pursuant to the fee rate detailed in

the relevant sub-fund prospectus; it may withdraw the

amount of such remuneration from the separate blocked

account of a sub-fund only with the consent of the

Management Company.

The Custodian will only pay such remuneration to the

Management Company out of the separate blocked

accounts of a sub-fund as is provided for in the sub-fund

prospectus and the Management Regulations.

If permissible by law, the Custodian is entitled and obliged

to act in its own name to:

6 . Enforce claims of the Unitholders against the

Management Company or a former Custodian;

7 . Appeal against the enforcement of judgements by

third parties and prevent the enforcement of claims

against one of the sub-funds for which the latter is not

liable.

The Management Company and the Custodian must, in

carrying out their functions, act independently of each

other and solely in the interests of the Unitholders.

Either the Management Company or the Custodian may

terminate the Custodian’s appointment in writing by

mutual agreement or with three months’ notice at any

time. The Management Company may, however, only

dismiss the Custodian when a new Custodian will be

able to assume the functions and duties of a Custodian

pursuant to the Management Regulations within two

months of the date of the dismissal and once the CSSF

has granted its approval. Subsequent to its dismissal, the

Custodian must continue to carry out its functions as

per the legal and regulatory requirements for as long as

necessary in order to transfer the entire fund assets to the

new Custodian.

If the Custodian terminates its own appointment, the

Management Company will be obliged to appoint a new

Custodian to assume the functions and duties of the

Custodian pursuant to these Management Regulations.

In this case, the Custodian will continue to carry out its

functions as per the legal and regulatory requirements

until the fund assets have been transferred to the new

Custodian.

Article 4. Investment objective, investment policy and restrictions

The targets and specific constraints stipulated by the

investment policy of each sub-fund are described in the

Prospectus.

The assets of each sub-fund are invested in accordance

with the principle of risk spreading. In accordance with

the detailed description contained in the Prospectus, the

investment policy of the individual sub-funds comprises

investments in fixed and variable interest-bearing

securities, including convertible and warrant-linked

bonds, in warrants on securities, in shares and securities

akin to shares and in other permissible assets. The

investment policies of the individual sub-funds may vary,

in particular in terms of their subject, the region in which

investments are to be made, the securities which are to

be acquired, the currency in which those securities are

denominated, and the term of those securities.

54 Sales prospectus SWISS HEDGE – Management Regulations

The Management Company may, taking account of the

following investment constraints, make use of derivatives

or other techniques and instruments. A sub-fund may not

under any circumstances diverge from the investment

targets specified in its investment policy in respect of

any transactions in connection with derivatives or other

techniques and instruments.

The Management Company and the auditor will monitor

the transparency and traceability of the valuation

methods and the application thereof. If discrepancies

become apparent during monitoring, the Management

Company will arrange for their correction.

The total amount of liabilities arising out of credit default

swaps and other techniques and instruments may not

exceed the net asset value of a sub-fund. The calculation

of risks takes account of the market price of the base

values, the counterparty risk, future foreseeable market

developments and the liquidation time limits of the

positions. The use of derivative financial instruments may

double the total risk of the sub-fund maximum. The total

risk of the UCITS is thereby limited to a maximum of 200%.

The total amount of liabilities arising out of credit default

swaps (CDSs) may not exceed 20% of the net assets of

a sub-fund, where they are not undertaken for hedging

purposes. The valuation of CDSs is carried out on a regular

basis in accordance with traceable and transparent

methods.

The use of credit derivatives must be exclusively in the

interests of the individual sub-fund and the Unitholders,

and must also be in line with the investment policy and

the risk profile of the sub-fund.

Loans on securities

The fund may act as lender or borrower on condition that

such transactions are in accordance with the following

rules.

The fund may only grant or contract for loans within a

standardised system organised by a recognised clearing

organisation or by a first class financial institution

specialising in such transactions.

The fund shall, in its annual report, state the value of the

security loans granted or contracted for at the balance

sheet date of the report.

Lender

As a principle, when acting as lender the Fund must

receive a guarantee at least equal to the value of the

securities loaned out. The guarantee must be in the form

of liquid assets and/or securities issued by a member

country of the OECD or its regional authorities or by

an international institution or institutions of a federal,

regional or worldwide dimension. The guarantees remain

in escrow in favour of the Fund until termination of the

contract. Such a guarantee is not required when the

securities loan is cleared through Euroclear, Clearstream

or another recognised clearing house that guarantees

lenders the return of their securities or provides other

forms of guarantee.

If the Fund is lender, such loans shall not exceed 50%

of the value of the sub-fund securities portfolio. This

restriction does not apply where the Fund has at all times

the right to cancel the agreement and enforce return of

the securities. A loan of securities may not exceed 30 days.

Borrower

Securities that are, as an exception, accepted by way

of loan cannot be accessed during the time they are in

the Fund’s possession, unless the Fund has sufficient

guarantee to be able to repay the loan securities at the

end of the contract. If the Fund is the recipient of the loan,

loan securities received may not exceed 10% of the total

value of the securities portfolio of a sub-fund and such

transactions may only be entered into for short periods.

The Fund may act as recipient of a loan in securities

transactions under the following terms and conditions:

1 . during a period of time in which securities have been

sent off to be registered,


2 . where securities have been surrendered by way of

a loan and have not returned in due time, and

3 . in order to avoid the non-performance of a securities

transaction where the Custodian is unable to meet its

delivery obligations.

Investment restrictions/limits

4.1

1 . The investments of each sub-fund may only comprise

the following assets:

a ) Securities and money market instruments which

are listed or traded on a regulated market; or

b ) Securities and money market instruments which

are traded on another market which is recognised,

regulated and open to the public and operates in a

proper manner, in a member state of the European

Union; or

c ) Securities and money market instruments that are

officially listed on a stock exchange in a country

that is not a part of the European Union or traded

on another regulated market in a country that is

not a part of the European Union which operates

regularly and is recognised and open to the public,

provided that the choice of this stock exchange or

market is provided for in the UCITS’ Management

Regulations.

d ) In the case of securities or money market

instruments from initial public offerings, the terms

of issue must contain the following obligations:

– that issue conditions contain the obligation

that requires that the permission is applied for

official listing on a securities exchange or on

another regulated market that is recognised,

open to the public and that operates in a proper

manner, and, insofar as the selection of this

exchange or this market is provided for in the

attachment to this administrative regulation

and the permission is obtained before the

period of one year following the issuance

expires at the latest.

e ) Shares in UCITS admitted pursuant to Directive

2009/65/EC and/or other UCIs within the meaning

of the first and second points of Article 1(2) of

Directive 2009/65/EC with their registered office in

a member state of the European Union or a non-EU

state, provided that:

– these UCIs are authorised pursuant to statutory

provisions which are comparable to those of

Community law and which subject the UCIs to

regulation by a supervisory authority.

– the shareholders of these UCIs are subject to a

level of protection which is equivalent to that

which is in place in respect of a UCITS, and the

provisions in respect of the custodianship of

the fund assets, the assumption of loans, the

granting of loans and short sales of securities

and money market instruments are equivalent

to the requirements of Directive 85/611 EEC in

this regard;

– the business activities of the other UCIs are

the subject of semi-annual and annual reports,

which enable investors to form an opinion

of their assets and liabilities, income and

transactions within the reporting period;

– the UCITS or the UCI whose shares are to

be acquired may, pursuant to its formation

documents, invest a maximum of 10% in total

of its assets in shares of another UCITS or UCI;

f ) Deposits at credit institutions that are repayable

on demand or within 12 months, provided that

the credit institution in question has its registered

office in a member state of the European Union or,

where the registered office of the credit institution

is located in a non-EU state (an OECD or FATF

member state), the credit institution is subject

to regulatory provisions which are equivalent to

those of Community law.


g ) Derivative financial instruments (“derivatives”),

including comparable cash-settled instruments

traded on the markets identified under items a),

b) and c), and/or derivative financial instruments

not traded on a stock exchange (“OTC derivatives”),

provided that:

– These instruments and techniques have as

their basis the securities, exchange rates or

currencies, interest rates or financial indices

in which the sub-fund is permitted to invest,

pursuant to the provisions of its investment

policy; OTC transactions are concluded

exclusively with major counterparties which

specialise in such transactions and are subject

to regulation by supervisory authorities; the

OTC transactions are subjected to regular,

reliable and verifiable valuations and may at

any time be sold, liquidated or offset by way of

a countertrade at their commensurate current

market value.

h ) Money market instruments which are not traded

on a regulated market and which are defined in

Article 1 of the law as of 17 December 2010, that

pertains to structures for joint investments, insofar

as the issuance or the issuer of these instruments

is also subject to the investment and investor

protection and provided that these instruments

have been:

– issued or guaranteed by a central, regional or

local authority or the central bank of a member

state, the European Central Bank, the European

Union or the European Investment Bank or by

a third country or, if the country is a federation,

a member country or an international public

sector institution to which at least one member

state belongs, or

– issued by a corporation whose securities are

traded on one of the markets referred to in a),

b) or c) above, or

– issued or guaranteed by an institution that,

pursuant to the criteria laid down in EU law,

is subject to official supervision or else an

institution that underlies and complies with

supervision that is as least as stringent as EU

law, or

– issued by another issuer which belongs to

a category authorised by the Luxembourg

supervisory authority (CSSF) and provided

investor protection measures exist for

investments in these instruments equivalent

to the first three paragraphs above and

provided the issuer is either a company with

share capital of at least ten million euros (EUR

10,000,000) and that compiles and publishes its

annual financial statements in accordance with

the Fourth Directive 78/660/EEC or is a legal

entity which is part of a group of companies

consisting of one or more listed companies

and where that company is responsible for

financing that group, or a legal entity financing

the securitisation of liabilities by means of a

line of credit granted by a bank.

However, a UCITS or sub-fund may not:

f ) invest more than 10% of its assets in securities and

money market instruments other than those listed in

paragraph 1;

g ) acquire precious metals or certificates in respect of

precious metals.

Each sub-fund may additionally hold liquid assets.

4.2

1 . Furthermore, each sub-fund is permitted to avail

itself of such techniques and instruments which

have securities and money market instruments as

their basis, provided that these techniques and

instruments are used to promote the efficient

management of the sub-fund in question and are

in compliance with the conditions and limitations

imposed by the Luxembourg supervisory authority.


The aforementioned conditions and limitations must

be in line with the provisions of the law where the

transactions relate to the use of derivatives.

The sub-fund may not under any circumstances

diverge, in the context of such transactions, from the

investment targets specified in its investment policy.

2 . Each sub-fund ensures that the total risk associated

with derivatives does not exceed the total net asset

value of the sub-fund. The total risk of the UCITS may

double at most, meaning that the total risk is limited

to 200%.

The calculation of the risk takes account of the

market price of the underlying securities, the risk of

default by a counterparty, future market fluctuations

and liquidation time limits. This also applies to the

following paragraphs.

Each sub-fund may invest in derivatives as part of

its investment strategy and within the boundaries

specified in point 4.3, provided that the total risk

associated with the underlying securities does not

exceed the investment limits specified under point 4.3.

Where a sub-fund invests in index-based derivatives, it

is not bound by the investment limits specified under

point 4.3.

Where a derivative is embedded in securities or a

money market instrument, this must also be taken into

account in respect of the provisions contained in this

section.

4.3

1 . Each sub-fund may invest a maximum of 10% of its net

assets in securities or money market instruments of a

single issuer. Each sub-fund may invest a maximum of

20% of its net assets with a single institution. The risk

of default by a counterparty in the case of transactions

with OTC derivatives effected by the sub-fund may not

exceed 10% of its net assets, where the counterparty is

a credit institution in terms of point 4.1(1) (f ). In other

cases, the limit constitutes a maximum of 5% of the

net assets.

2 . The total value of the securities and money market

instruments of issuers in which the sub-fund in each

case invests more than 5% of its net assets may

not exceed 40% of the value of its net assets. This

limitation does not apply in respect of deposits and

transactions involving OTC derivatives concluded with

financial institutions which are subject to regulation

by a supervisory authority. Notwithstanding the

individual upper limits contained in paragraph 1,

each sub-fund may invest a maximum of 20% of

its net assets with a single institution by way of a

combination of:

– Securities or money market instruments issued by

that institution,

– Deposits with that institution, and/or

– OTC derivatives traded with that institution.

3 . The upper limit specified in the first sentence of

the first paragraph of section 1 will amount to a

maximum of 35%, where the securities or money

market instruments in question have been issued or

guaranteed by a member state of the European Union

or one of its regional entities, by a non-EU state or by

international institutions of a public nature of which at

least one member state is a member.

4 . The upper limit specified in paragraph 1, sentence

1 will amount to a maximum of 25% in respect of

certain bonds, where these have been issued by a

credit institution with its registered office in a member

state of the European Union and which is subject to

regulation by a special supervisory authority pursuant

to statutory provisions for the protection of holders of

such bonds. In particular, the income from the issue of

such bonds must, pursuant to the statutory provisions,

be invested in assets which, during the entire term of

the bonds, adequately cover the resultant liabilities

and are preferentially earmarked for the repayment

of the capital, which will become necessary upon a

default by the issuer, and the payment of interest.


Where a sub-fund invests more than 5% of its net

assets in bonds, in terms of the preceding sub-

paragraph, which have been issued by a single issuer,

the total value of these investments may not exceed

80% of the value of the net assets of the sub-fund.

5 . The securities and money market instruments

specified in paragraphs 3 and 4 are not taken into

account in respect of the application of the investment

limits of 40% provided for in paragraph 2.

The limits specified in paragraphs 1, 2, 3 and 4 may not

be aggregated. That is, investments made pursuant

to paragraphs 1, 2, 3 and 4 in securities and money

market instruments of a single issuer, in deposits

with that issuer or in derivatives of that issuer, may

not exceed 35% of the net assets of the sub-fund

concerned.

Companies which belong to the same corporate

group, in terms of the preparation of their

consolidated financial statements in terms of Directive

83/349/EEC or pursuant to recognised international

accounting principles, are to be viewed as a single

issuer as regards the calculation of the investment

limits provided for in this section.

Each sub-fund may cumulatively invest up to 20%

of its net assets in securities and money market

instruments of a single corporate group.

4.4

1 . Notwithstanding the investment limits specified in

point 4.7, the upper limits for investments in shares

and/or debt instruments from a single issuer specified

under point 4.3 amount to a maximum of 20%, where

the intention of the investment policy of a sub-fund

is to replicate a specific share or debt instrument

index, described in greater detail in the appendix to

this Prospectus and recognised by the Luxembourg

supervisory authority (CSSF). This is conditional upon:

– The composition of the index being sufficiently

diversified,

– The index representing an adequate reference

point for the market on which it is based, and

– The index being published appropriately.

2 . The limit specified in paragraph 1 amounts to

35%, provided that this is justified on the basis of

extraordinary market conditions, in particular on

regulated markets where certain securities or money

market instruments dominate. An investment to this

upper limit may only be made in respect of a single

issuer.

4.5

1 . Notwithstanding the rules specified under point 4.3,

the Luxembourg supervisory authority (CSSF) may, in

accordance with the principle of risk spreading, permit

a sub-fund to invest up to 100% of its net assets in

securities and money market instruments from various

issues floated or guaranteed by a member state of

the European Union or one of its regional entities,

or by a non-EU state (an OECD member state), or by

international institutions of a public nature of which

at least one member state of the European Union is a

member.

2 . The Luxembourg supervisory authority (CSSF) will

grant the aforementioned approval only where it is

of the opinion that the Unitholders of the sub-fund

concerned enjoy the same protection as Unitholders

of sub-funds which comply with the limitations

outlined in points 4.3 and 4.4.

3 . The securities held by the sub-fund in question must

have been issued in the context of at least six different

issues, whereby the securities from a single issue may

not exceed 30% of the net assets of the sub-fund

concerned.

4 . If the approval referred to in paragraph 1 is granted,

the sub-funds concerned must explicitly list in an

annex to this Prospectus the states, regional entities or

international institutions of a public nature issuing or

guaranteeing securities in which the sub-funds intend

to invest more than 35% of their net assets.


5 . Furthermore, the sub-funds in question must,

where such approval is granted by the Luxembourg

supervisory authority (CSSF), explicitly refer to this

approval in the Prospectus, in the KIID and in any

other advertising materials in respect of the sub-funds

in question, and in doing so list the states, regional

entities or international institutions of a public nature

in whose securities the sub-funds in question intend

to invest or have invested more than 35% of their net

assets.

4.6

1 . The sub-fund may acquire units in other UCITS and/

or other UCIs as defined in Point 4.1(1) (e) provided it

does not invest more than 20% of its net assets in one

and the same UCITS or other UCI.

In the context of the application of the investment

limit, each sub-fund in the umbrella fund within the

meaning of Article 181 of the Law dated 17 December

2010 concerning Undertakings for Collective

Investment is to be viewed as an independent issuer,

provided that the principle of the several liability of

each sub-fund in respect of third parties applies.

Investments made as a UCITS in shares of other UCIs

may not exceed 30% of the net assets of the sub-fund

in question.

Where a sub-fund acquires shares of another UCITS

and/or another UCI, the investment values of the

UCITS or other UCI concerned will not be taken into

account in respect of the upper limits specified under

point 4.3.

If the sub-fund acquires Units in another UCITS

that is managed directly or indirectly by another

Management Company with which the Management

Company is linked through common management

or control or through a substantial direct or indirect

holding, then no issue fees, sales commission or

redemption commission will be levied for the

subscription or redemption of Units in the other UCITS.

If a sub-fund invests a significant portion of its assets

in other UCITS and/or other UCIs, its prospectus must

contain details on the maximum management fees to

be borne by the relevant UCITS itself and by the other

UCITS and/or other UCIs in which it intends to invest.

The UCITS shall state in its annual report the maximum

proportion of management fees to be borne by the

UCITS and the UCITS or other UCIs in which it invests.

4.7

1 . The Management Company may not acquire shares

with attached voting rights, which would enable

it to exercise an appreciable influence over the

management of an issuer, on behalf of any of the

sub-funds managed by it which fall within the scope

of application of Part I of the Law dated 17 December

2010 concerning Undertakings for Collective

Investment.

2 . Furthermore, no sub-fund may acquire more than:

– 10% of the non-voting shares of a single issuer,

– 10% of the bonds of a single issuer,

– 25% of the shares of a single UCITS and/or UCI, or

– 10% of the money market instruments of any

single issuing body.

It is not necessary to comply with the limitations

provided for in the preceding second, third and fourth

points in the context of an acquisition where the gross

amount of the bonds or money market instruments,

or the net amount of the issued shares, cannot be

calculated at the time of the acquisition.


3 . Paragraphs 1 and 2 do not apply in respect of:

a ) Securities and money market instruments issued

or guaranteed by a member state of the European

Union or one of its regional entities;

b ) Securities and money market instruments issued

by a non-EU member state;

c ) Securities and money market instruments issued

by international institutions of a public nature of

which one or more member states of the European

Union are members; or

d ) Shares held by a UCITS in the capital of a company

in a non-EU member state which primarily invests

its assets in securities of issuers domiciled in

that non-EU member state, and where such a

shareholding constitutes, due to the statutory

provisions of the non-EU member state, the only

possibility for the UCITS to invest in securities of

issuers domiciled in that non-EU member state.

However, this exception will only apply where the

Company domiciled in the non-EU member state

does not, in implementing its investment policy,

exceed the limitations specified in points 4.3,

4.6 and 4.7(1) and (2). Where it does exceed the

limitations specified in points 4.3 and 4.6, the rules

specified in point 4.8 will apply correspondingly.

4.8

1 . The sub-funds will not be required to comply with the

investment limitations provided for in this section in

respect of the exercise of subscription rights linked to

securities or money market instruments which form

part of the relevant sub-fund assets.

2 . Notwithstanding their obligation to comply with the

principle of risk spreading, newly-admitted UCITS may

diverge from the provisions specified in points 4.3, 4.4,

4.5 and 4.6 for a period of six months from the date of

their admission.

3 . If the limitations referred to under paragraph 1 are

exceeded, unintentionally or as a result of the exercise

of subscription rights, the sub-fund in question

must as a matter of priority endeavour to rectify this

situation by means of the sale of assets, taking account

of the interests of the Unitholders.

4 . In the event that an issuer forms a legal entity with

several sub-funds, in respect of which a sub-fund will

be liable with its assets exclusively against the claims

of the Unitholders of that sub-fund and also against

creditors whose claims have accrued as a result of the

formation, maturity or liquidation of the sub-fund,

each sub-fund is to be viewed as an independent

issuer for the purposes of the application of the rules

in respect of the spreading of risk in accordance with

points 4.3, 4.4 and 4.6.

4.9

1 . Each sub-fund may acquire foreign currencies by

means of a back-to-back loan.

2 . Each sub-fund may assume loans of up to 10% of

its net assets, provided that the loans are of short

duration.

3 . The Fund Assets may only be pledged as collateral,

transferred, assigned or otherwise encumbered to

the extent that this is required by a stock exchange,

in another market or in connection with contracted

transactions as a result of binding obligations.

No loans may be granted, and no surety obligations

on behalf of third parties may be entered into, at the

expense of the Fund Assets. This shall not prevent

such sub-funds from acquiring securities not yet paid

in full, money market instruments or other financial

instruments referred to in Point 4.1(1) (e), (g) and (h).

4.10

Short sales of securities, money market instruments or

other financial instruments specified under point 4.1(1)

(e), (g) and (h) may not be effected by management


companies or custodians acting for the account of the

Fund or its sub-funds.

4.11

The Management Company may, with the agreement of

the Custodian, impose additional investment restrictions

to correspond with the conditions in those countries in

which Units are distributed or are to be distributed.

4.12

A sub-fund may subscribe, acquire and/or hold securities

to be issued by or issued by one or more sub-funds of the

same UCI if:

• the target fund is itself not invested in the sub-fund

that is invested in such target sub-funds; and

• the sub-funds that are to be acquired may not,

pursuant to their articles of association, invest more

than 10% of their assets in Units of other UCIs of the

same sub-funds; and

• any voting rights associated with the securities in

question are suspended during such time that they are

held by the corresponding sub-fund, irrespective of

whether they are appropriately recorded in the annual

accounts and the period reports; and

• as long as these securities are held by the UCI, their

value is in no case accounted for when calculating the

net assets of the UCI with regard to determining the

minimum amount for net assets as required by this

law; and

• there is no doubling of management fees, sales

charges or redemption fees at the level of the

sub-fund of the UCI that has invested in the target

sub-fund and paid to that target fund.

Article 5. Issue of Units

The Management Company issues Units of each individual

sub-fund at the issue price specified in the Prospectus and

under the conditions specified therein. Unitholders are

co-owners of only that sub-fund in which they hold Units.

The Management Company observes the laws and

requirements of the countries in which Units are offered.

The Management Company may also impose further

requirements for the issue of Units outside Luxembourg,

which are documented in the Prospectuses for the

countries in question. The Management Company may

at any time and at its own discretion discontinue or

restrict the issue of Units, for a specified period of time or

indefinitely, in respect of private individuals or corporate

bodies in certain countries or regions. The Management

Company may preclude certain individuals or corporate

bodies from acquiring Units, where such measures

are necessary in the interests of the protection of the

Unitholders and the Fund.

The subscription application must be received by the

Management Company, the transfer authority, the sales or

paying agents before 2:00 p.m. Luxembourg time on the

valuation date. This is settled based on the net asset value

of the next valuation date. For subscription applications

received after 2:00 p.m. Luxembourg time on the relevant

valuation day, the corresponding units will be issued on

the basis of their net asset value on the valuation day

following the next valuation day.

In addition, the Management Company may reject

subscription applications at its own discretion, and

redeem Units belonging to Unitholders who have been

precluded from acquiring and owning Units at any time.

Payments received for subscription applications which

are not processed immediately shall be repaid by the

Custodian as soon as possible without interest.

Payments for the subscription of Units must be made to

the Custodian within 3 Luxembourg business days of the

relevant valuation day (trading day).

Any deviations from this regulation are listed in the

description of the respective sub-fund.

Article 6. Issue Price

The issue price is the net asset value per Unit of each

of the sub-funds as published on the next subsequent


valuation day, as defined in the Prospectus in respect of

each sub-fund, on which the subscription or redemption

application is received by the Management Company, the

Transfer Agent, the Sales Agent or Paying Agent.

The issue price of each Unit class may be increased by

the amount of stamp duty or other charges incurred

by the Management Company, or by the amount of

a sales commission, plus an issue premium paid to

the distribution agencies, which is determined by the

Management Company.

The issue price will be rounded to the nearest two decimal

places.

Article 7. Units in a Sub-Fund

Subject to local legislation in the countries in which

the Units are being offered, the Units will be issued as

registered Units or as bearer Units.

The Management Company may issue fractions of Units of

up to four decimal places for registered Units or for bearer

Units confirmed by global certificates.

After receipt of the issue price in the account of the Fund

at the Custodian, the Units will be immediately transferred

on behalf of the Management Company by the Custodian

through a credit to a securities account of the investor.

This also applies to Unit confirmations when the Units are

entered in the Unit register.

As a principle, all the units in a sub-fund have equal rights.

The Management Company may offer several categories

of Units for every sub-fund with the features and rights

laid down by the Management Company in each case, as

described in the Prospectus for each sub-fund. The Unit

classes may be differentiated by the dividend distribution

policy (distribution or reinvestment), the investor profile

(institutional investor or non-institutional investor),

the fee policy (e.g. issue premium, sales commission,

management fee) or other features and rights laid

down by the Management Company and shown in the

Prospectus.

A maximum issue fee of 5% will be charged on the Unit

classes with issue premium; a maximum sales commission

of 0.5% will be charged on the Unit classes with sales

commission (see Article 12). The maximum issue fees and

maximum sales commissions are listed in the description

of the respective sub-fund.

Article 8. Net Asset Value

The net asset value per Unit of any sub-fund will be

determined under the supervision of the Custodian by

the Management Company or a company instructed by

the latter in Luxembourg on the valuation day, as laid

down for every sub-fund in the Prospectus, by dividing

the net asset value of the corresponding sub-fund (assets

minus liabilities) by the number of Units of this sub-fund

in circulation. The net asset value for every sub-fund is

expressed in the currency of the relevant sub-fund.

Unless otherwise specified in the relevant Sub-Fund

description, is considered the valuation of each full-day

bank business day in Luxembourg and Frankfurt am Main.

The value of the assets of every sub-fund is determined as

follows:

1 . Securities and money market instruments with a

(residual) term of more than one year, and other

securities that are admissible at law or under the

management regulations, are valued at their latest

quoted price when they are listed on an official

exchange or are traded in another regulated market

that is recognised, open to the public and operates

regularly. When a single security is traded on several

markets, then the latest quoted price from the

security’s main market shall be used.

2 . Non-listed securities and other legal assets and

securities, which are allowed by these Management

Regulations, that are listed or are traded on a

recognised market, but for which the latest sales

price is not representative, shall be valued at market

value as determined by the Management Company in

good faith, applying generally recognised valuation


principles which can be examined by an independent

auditor.

3 . Units of other UCITS or UCIs are calculated using their

most recent net asset value.

4 . Liquid assets are calculated at their nominal value plus

interest accrued.

5 . When valuing debenture bonds that are not admitted

to an official market or are not listed in an organised

market (e.g. unlisted loans, commercial papers and

loan certificates) and the valuation of promissory

notes, the agreed price for similar debenture bonds

and promissory notes is used and, where applicable,

the quoted price for debt issued by a similar issuer for

the same term and same interest rate less any discount

necessary to take account of the lower marketability.

6 . Option rights accruing to a sub-fund and debt arising

from options bestowed by a third party that are

admitted for trading on an exchange or on another

organised market are valued at their latest quoted

price. This also applies to receivables and payables

arising out of futures purchased or sold on account of

a sub-fund. Any valuation gain or loss observed on a

trading day is aggregated with any margin falling due

to the sub-fund.

The valuation of money market paper and other securities

with a residual term of less than a year can be based on

the original cost less expenses paid at purchase and by

comparison with equivalent money market paper or

other securities with a constant return. The Management

Company ensures that on disposal the sale price attained

is not below the yield-implied price.

Consequently, the valuation basis is adjusted to take

account of significant changes in market circumstances.

Whenever a foreign exchange rate is needed for

establishing the NAV of a sub-fund, then the last known

average rate is used.

In addition, appropriate measures will be taken to

calculate the fees charged and the reinvested income for

each sub-fund.

Should unusual circumstances arise, which make the

valuation impossible or inappropriate in accordance with

the above-mentioned criteria, the Management Company

is authorised to temporarily pursue other valuation rules

determined in good faith, which are generally recognised

and verifiable by independent auditors, in order to achieve

an appropriate valuation of the fund assets.

For the purpose of drawing up annual and semi-annual

reports, the entire fund assets are expressed in EUR;

this value corresponds to the balance of all assets and

liabilities of every sub-fund within the fund.

The net asset value of every individual sub-fund is

converted into Euro for this valuation.

Insofar as several Unit categories are established for a

sub-fund in accordance with Article 7 of the management

regulations, the following special features occur for the

Unit valuation:

a ) The Unit valuation takes place separately for each Unit

class under the criteria listed in paragraph 1 of this

Article.

b ) The inflow of funds on the basis of the issue of Units

increases the percentage proportion of the relevant

Unit class in the overall value of the net fund assets

of the relevant sub-fund. The outflow of funds owing

to the redemption of Units reduces the percentage

proportion of the relevant Unit class in the total value

of the net fund assets of the relevant sub-fund.

c ) In the event of a distribution, the Unit value – of

distribution Units is reduced by the amount of the –

distribution. This means that at the same time the

percentage proportion of the Units with a distribution

is reduced in the value of the net fund assets of

the relevant sub-fund by the total amount of the


distribution, whilst the percentage proportion of

the accumulation Units – which are not entitled to a

distribution– increases in the net fund assets of the

relevant sub-fund.

d ) The expense of the sales commission, which is

charged to the Units with sales commission, reduces

the percentage proportion of the Units with sales

commission in the entire value of the net fund assets

of the relevant sub-fund, whilst the percentage

proportion of the Units with issue premium increases

in the net fund assets of the relevant sub-fund.

If there are widespread requests for redemption,

which cannot be satisfied from the liquid funds and

permitted borrowing of the relevant sub-fund, then the

Management Company may, with the prior consent of

the Custodian, determine the net asset value of the Units

of a sub-fund on the basis of the rates on the valuation

day on which it disposes of the necessary assets for

the corresponding sub-fund, acting without delay and

protecting the interests of the relevant Unitholders. It

can only then redeem the Units at the corresponding net

asset value; this then also applies to the applications for

subscription for the corresponding sub-fund which are

submitted at the same time.

Article 9. Periodic suspension of the valuation of the net asset value and the issue, redemption and conversion of the Units of one or all sub-funds

The Management Company may periodically suspend

the valuation of the net asset value of any sub-fund and

consequently the issue, redemption and conversion of the

Units of one or all sub-funds if:

• a stock exchange or a regulated market on which a

substantial part of the securities of a sub-fund are

quoted or traded is closed (apart from on normal

weekends or public holidays) or if the trade on such

a stock exchange or on such market is restricted or

suspended;

• political, economic, military, monetary emergencies,

which lie outside the control, responsibility or

influence of the Management Company, make acts of

disposal of the relevant sub-fund assets impossible;

• an interruption to communications or any other

reason makes it impossible to determine the value of a

substantial part of a sub-fund;

• transactions for the relevant sub-fund become

impossible to carry out owing to restrictions on

foreign exchange operations or other transfers of

assets or if evidence can be provided objectively that

purchases or sales of a substantial part of the assets of

a sub-fund are not able to be carried out at rates in line

with the market.

Article 10. Redemption

Unitholders may submit applications for the redemption

of their Units at any time under the conditions laid down

in the Prospectus and at the redemption price indicated

therein.

The redemption price of any sub-fund is the net asset

value per Unit, as determined on the day of receipt of

the redemption application and in the event of Unit

certificates, receipt of the corresponding certificates

in accordance with the conditions laid down in the

Prospectus, or alternatively as published on the

following day.

The redemption application must be received by the

Management Company, the transfer authority, the sales or

paying agents before 2:00 p.m. Luxembourg time on the

valuation date. This is settled based on the net asset value

of the next valuation date. For redemption applications





Depending on the development of the net asset value, the

redemption price may be higher or lower than the issue

price paid.

The redemption price of each Unit certificate class may

be reduced by taxes or other charges incurred by the

Management Company, as well as by any fee charged by


the sales office and a redemption fee, which is determined

by the Management Company. The redemption price is

rounded to two decimal places.

The Management Company must ensure that the

sub-fund assets possess sufficient liquid funds after

receipt of redemption applications to be able to redeem

Units under normal circumstances within 3 Luxembourg

business days after the corresponding valuation day

(trading day).

The Custodian is obliged to pay the redemption

price within 3 Luxembourg business days after the

corresponding valuation day (trading day), except

for where specific statutory provisions apply, such as

foreign exchange restrictions, or where a circumstance

outside the control of the Custodian arises which makes

it impossible to transfer the redemption price into the

country from which the application for the redemption

was made. In addition, the Management Company may

postpone the payment of the redemption price with

the consent of the Custodian in the event of extensive

redemption applications until the corresponding assets

have been disposed of (see Article 8).

Any deviations from this regulation are listed in the

description of the respective sub-fund.

Article 11. Conversion of Units

The conversion of Units from one Unit class of a sub-fund

into Units in a different Unit class of the same sub-fund

or the same or a different Unit class of another sub-fund

may take place on every valuation day in Luxembourg

by submitting a conversion request to the Management

Company, on condition that the requirements for the

investment in the new Unit class are satisfied. The

conversion takes place on the date the request is received

at the net asset value per Unit of the Unit class of the

sub-fund concerned on the same day or the subsequent

valuation day under the conditions laid down in the

Prospectus, published on the subsequent day and by

applying the most recent foreign exchange rate at the

time of the conversion.

The Conversion request must be received by the

Management Company, the transfer authority, the sales

or paying agents before 2:00 p.m. Luxembourg time on

the valuation date. This is settled based on the net asset

value of the next valuation date. For Conversion requests





If an investor converts his Units from one Unit class in

a sub-fund into another Unit class of a sub-fund with

a higher issue premium, then the positive difference

between these issue fees is taken into account.

Article 12. Expenditure of the fund

The following costs are borne directly by the fund.

Provisions are made on each valuation day for significant

predictable Fund expenses.

1 . The Management Company charges a maximum

annual administration fee of 2.5%. Any Fund Manager

fees and any Investment Advisor fees incurred

including performance-related fees relating to the

management of a sub-fund‘s assets may be charged

separately to the sub-fund. The management fee, any

Fund Manager fees and any Investment Advisor fees

as well as their method of calculation are listed in the

overview of the relevant sub-fund.

2 . The Custodian charges an annual custodian fee

(“custodian fee”) of a maximum of 0.7%, payable

every month, calculated based on the last net asset

value of any sub-fund at the end of any month. These

custody fees do not include any third party custody

or management fees charged by other correspondent

banks and/or clearing houses (e.g. Clearstream or

Euroclear) for the custody of fund assets.

3 . The usual broker’s and banker’s fees accruing to each

sub-fund‘s business;


4 . The printing costs for Unitholder certificates, the

costs of preparing and/or official scrutiny of the

management regulations and all other documents

related to the fund, including authorisation

applications, Prospectuses, KIIDs and any applications

for amendment made to authorities in various

countries in their respective language and relating to

the offering for sale of fund Units;

5 . The costs of printing and mailing annual and interim

reports and other notifications to Unitholders in the

relevant language as well as the costs of publishing

the issue and redemption prices, and the publication

of profit sharing information and all other notifications

made to Unitholders;

6 . The costs of accounting, registration and transfer,

measurement of sub-fund performance, risk

management and the daily calculation of NAV and

publication of this;

7 . Auditors’ fees;

8 . The costs of EMIR related reportings

9 . The costs of any transactions for stabilising prices;

10 . Any VAT incurred;

11 . The cost of sales promotion;

12 . Costs for advertising the tax base and certification that

tax details have been determined in accordance with

the regulations of German tax law;

13 . The costs of consultations with lawyers and

other similar administration costs incurred by the

Management Company or the Custodian when acting

in the interests of Unitholders;

14 . Expenses of any market listing(s) and/or registration of

Units for sale to the public in various countries;

15 . An annual duty (“taxe d’abonnement”) is levied by the

Grand Duchy of Luxembourg on total NAV.

16 . the Management Company has the right to charge

a sales commission on certain Unit classes, up to a

maximum of 0.5% p.a. on the percentage of the NAV

of that Unit class within the sub-fund as set out in the

Prospectus. The calculation method is detailed in the

Prospectus for each sub-fund.

If any of the above-mentioned fund issues cannot be

allocated to a particular sub-fund, then the issue will be

allocated to all the sub-funds in proportion to their NAV.

If the fund makes the above-mentioned issue for a distinct

sub-fund or in connection with a distinct sub-fund, then

the issue will be allocated to that sub-fund.

All periodically recurring costs are borne directly by the

fund; other expenses can be written off over 5 years.

Article 13. Financial year, audit

The financial year of the fund ends on 31 December of

each year.

The annual accounts of the Management Company and

the statement of accounts of the fund are audited by

an authorised, independent auditor instructed by the

Management Company.

Article 14. Dividends

A dividend will be paid only on Units in a Unit class in

which dividends are paid. Income accruing to reinvesting

Unit classes is not paid out and will be re-invested.

The Management Company will pay out distributions

every year for the distribution Unit classes from the

ordinary net income and the net capital gains that flow

into these Unit classes within the relevant sub-fund.

Furthermore, the Management Company may carry out

any other disbursement in order to ensure a sufficient

amount for the dividend.

A dividend will not be paid if, as a result of so doing, the

net assets of the fund would fall below the minimum of

EUR 1,250,000.00 prescribed by Luxembourg legislation.


Dividends which have not been claimed five years after

the date they were paid out will be retained by the

relevant Unit class in the relevant sub-fund from which

they originate.

Article 15. Amendment of the management regulations

The Management Company may amend the management

regulations in full or in part at any time if this is in the

interest of the Unitholders and occurs with the agreement

of the Custodian and the Luxembourg supervisory

authorities.

Amendments to the management regulations are

recorded at the Commercial Register of the District Court

in Luxembourg and a note of this record is published in

Mémorial, the official journal.

The amendments enter into force on the day the

management regulations, which have been amended in

full or in part, are signed.

Article 16. Publications

The net asset value and the issue and redemption price of

every sub-fund can be requested from the Management

Company, the Custodian and every Paying Agent.

The audited annual report, which is published within 4

months of the end of the financial year, and all the semi-

annual reports, which are published within 2 months

of the end of the reporting period, are accessible to

Unitholders at the registered office of the Management

Company, the Custodian and the paying and distribution

agents.

The announcement of the liquidation of the Fund shall

be published in the RESA, Recueil Électronique des

Sociétés et Associations. The announcement of the Fund’s

liquidation shall also be published in a Luxembourg daily

newspaper and as per the legal and regulatory provisions

of the countries in which Units are offered or sold.

Announcements of the merger of sub-funds, the transfer

of a sub-fund to another UCITS under Luxembourg or

foreign law and the liquidation of a sub-fund shall be

published as per the legal and regulatory provisions of the

countries in which Units are offered or sold. Notifications

to Unitholders, including notifications on the waiver of

the valuation of the net asset value and the issue and

redemption price of a sub-fund, shall be published as per

the legal and regulatory provisions of the countries in

which Units are offered or sold.

Article 17. Duration and liquidation of the fund, winding-up of a sub-fund

The fund has been set up for an indeterminate duration.

The individual sub-funds may be created for a stipulated

length of time and thus deviate from the duration of

the fund. If a sub-fund has been created for a stipulated

duration then further information on this can be found in

the respective fund description in the Prospectus under

“Overview of SWISS HEDGE”.

Liquidation

The fund or individual sub-funds may be wound up at any

time by mutual agreement of the Management Company

and the Custodian. Moreover, the Fund shall be liquidated

upon activation of the provisions of Article 22 of the law

of 17 December 2010 on Undertakings for Collective

Investment in Securities.

As soon as a decision is taken to wind up the fund or a

sub-fund, no more Units in the fund or that sub-fund

will be issued or redeemed (unless all investors can be

treated on an equal basis). The Unitholders are informed

of this in accordance with Article 16 of these management

regulations. The Management Company sells off the

assets in each fund in the interest of the Unitholders

in the respective sub-fund and the Custodian pays out

the net liquidation proceeds on instructions from the

Management Company after deduction of liquidation

costs and expenses to the Unitholders of each sub-fund in

proportion to their holdings.

After liquidation has been completed, amounts that were

generated by the liquidation of the Fund or its sub-funds

and not claimed by the rightful Unitholders are deposited

by the Custodian with the “Caisse de Consignation” in

Luxembourg for the benefit of the rightful Unitholders.

The proceeds shall be forfeited if they are not claimed

within 30 years of deposit.


Sub-funds may be merged, under the following terms and

conditions, in that one sub-fund is brought into another

of the fund’s sub-funds or they can be transferred into

another Undertaking for Collective Investment ("UCI").

Mergers (amalgamations of sub-funds)

A merger, i.e. a transaction in which:

a ) one or more UCITS or sub-funds thereof, the

“transferring UCITS”, in the process of winding up

without settlement, transfers all assets and liabilities to

another existing UCITS or a sub-fund of such a UCITS,

the “acquiring UCITS”, and their unitholders in return

receive units of the acquiring UCITS and, if applicable,

a cash payment amounting to a maximum of 10% of

the net asset value of these units;

b ) two or more UCITS or sub-funds thereof, the

“transferring UCITS”, in the process of winding up

without settlement, transfer all assets and liabilities to

a UCITS formed by them or a sub-fund of such a UCITS,

the “acquiring UCITS”, and their unitholders in return

receive units of the acquiring UCITS and, if applicable,

a cash payment amounting to a maximum of 10% of

the net asset value of these units;

c ) one or more UCITS or sub-funds thereof, the

“transferring UCITS”, which continue to exist until the

liabilities are repaid, transfer their net assets to another

sub-fund of the same UCITS, to a UCITS formed by

them, or to another existing UCITS or a sub-fund of

such a UCITS, the “acquiring UCITS”;

or

a cross-border merger, i.e. a merger of UCITS

a ) of which at least two are established in different

member states or

b ) established in the same member state with a newly

formed UCITS established in another member state;

or

a domestic merger, i.e. a merger of UCITS established in

the same member state, if at least one of the UCITS in

question has been notified in accordance with Article 93

of Directive 2009/65/EC.

Mergers take place under the conditions of Chapter

8 of the Law of 17 December 2010 on Undertakings

for Collective Investment and upon a resolution by

the Management Company to decide on the date and

effectiveness of a merger with another UCITS.

The Management Company can decide to merge sub-

funds if the management of one or all the merging sub-

funds can no longer be carried on in an efficient manner

or in the event of a change in the economic or political

situation.

In the event of a merger of sub-funds, the Management

Company will notify Unitholders of the sub-fund(s) to be

merged of the intention to merge them by a notification

in accordance with the provisions of Article 16 of these

management regulations at least one month before the

merger decision enters into force; these Unitholders then

have the right to return all or some of their Units at the net

asset value without further costs.

Article 18. Statute of limitations

Claims by the Unitholders against the Management

Company or the Custodian shall expire 5 years after the

date of the event which has given rise to the claim.

Article 19. Law to be applied, place of jurisdiction and contractual language

The District Court of Luxembourg is responsible for

any disputes between Unitholders, the Management

Company and the Custodian. Luxembourg law shall apply.

However, the Management Company and the Custodian

submit themselves and the Fund to the jurisdiction of

the countries in which Units are offered and sold if claims

are made by Unitholders who are resident in the relevant

country and if such claims refer to matters relating to the

subscription and redemption of Units by these investors.


The German version of these management regulations

is legally binding. The Management Company and the

Custodian do, however, permit translations, which they

have approved, in the languages of any countries in

which Units are offered and sold. If there is any doubt, the

German version is legally binding.

Article 20. Inception

The Management regulations are valid from

1 January 2017.

Luxembourg, December 2016





L-5365 Munsbach, Luxembourg

Telephone (00352) 28 26 24 0

Fax (00352) 28 26 24 99

[email protected]

www.bayerninvest.lu

mailto:[email protected]
