Notification of changes to the underlying fund of R12 DWS Invest Global Agribusiness
19 May 2020
We have been notified by DWS Invest SICAV (the “Company”) of the following changes to the Sales Prospectus of the underlying funds of the above named funds in relation to the swing pricing mechanism. This change has come into effect from 15 May 2020 (the “Effective Date”).
The Company have confirmed the below:
“As of the Effective Date, a sub-fund may apply the Swing Pricing mechanism. Therefore, the general section of the Sales Prospectus has been updated with the following detailed description on the Swing Pricing mechanism:
Swing Pricing is a mechanism to protect shareholders from the impact of transaction costs resulting from subscription and redemption activity. Substantial subscriptions and redemptions within a sub-fund may lead to a reduction of the sub-fund’s assets, due to the fact, that the NAV potentially does not entirely reflect all trading and other costs that occur, if the portfolio manager has to buy or sell securities in order to manage large in- or outflows of the sub-fund. In addition to these costs, substantial order volumes could lead to market prices, which are considerably lower, respectively higher, than the market prices under normal circumstances. Partial Swing Pricing may be adopted to compensate for trading and other costs in case that the aforementioned in- or outflows have a material impact to the sub-fund.
The Management Company will predefine thresholds for the application of the Swing Pricing Mechanism, based – amongst others – on the current market conditions, given market liquidity and estimated dilution costs. In accordance with these thresholds, the adjustment itself will be initiated automatically. If net inflows/net outflows exceed the Swing Threshold, the NAV will be adjusted upward when there are large net inflows into the sub-fund and downward when there are large net outflows; it will be applied to all subscriptions and redemptions on this trading day equally.
The Management Company established a Swing Pricing Committee which determines the Swing Factors individually for each of the respective sub-funds. Such Swing Factors measure the size of the NAV adjustment. The Swing Pricing Committee considers especially the following factors:
a) The bid-ask spread (Fixed Cost Component);
b) Market impact (Price Impact of transactions);
c) Additional costs arising through trading activities for assets.
The Swing Factors, operational decisions about Swing Pricing, including the Swing Threshold, the extent of the adjustment and the scope of sub-funds affected are subject to a periodical review.
The Swing Pricing adjustment will not exceed 2% of the original NAV. The adjustment to the NAV is available on request from the Management Company. In a market environment with extreme illiquidity, the Management Company can increase the Swing Pricing adjustment above 2% of the original NAV.
Since the mechanism is only executed when significant in- and outflows occur and as it is not based on regular volumes, it is assumed that the NAV adjustment will only be executed occasionally. Where a performance fee applies to the respective sub-fund, the calculation will be based on the unswung NAV. The mechanism may be applied across all sub-funds.”
The Company have also confirmed the below:
The paragraph regarding the sub-fund’s assets invested in equites that are admitted to official trading on a stock exchange or admitted to, or included in another organized market and which are not investment fund units has been amended in accordance with the amendments to the German Investment Tax Act (InvStG).
Should you have any questions regarding these changes, please contact International Funds & Investments.