Your Questions Answered How do I Investments in Nedgroup International Investor Series (NIIS) are denominated in US Dollars (USD, GBP and EUR Invest? in the case of the Money Market Funds). Once you have decided on the size of your investment, complete an application form indicating the selection of fund(s). The relevant statutory forms and a completed application form should be sent, together with “know your client” documentation, to your Private Banker or financial advisor. The minimum investment is US$4 000 or currency equivalent. Subsequent applications by existing shareholders must be for a minimum of US$1 600 or currency equivalent. What statutory forms In terms of the South African Reserve Bank and exchange control allowances: am I required to - BOP Report (outward payment flow - application for overseas transfer of funds) to be completed. complete? - MP1423 - South African Reserve Bank exchange application and declaration to be completed. - SARS tax clearance certificate - includes a declaration of good standing regarding applicant’s tax affairs and is valid for a period not exceeding twelve months. In terms of Isle of Man (IOM) Government “Anti-Money Laundering” requirements: Original or duly certified copies of the following documentation: - Proof of identification - current valid full passport, National Identity Document or full driving license bearing your signature - Verification of name and physical address - letter of reference, utility bill or bank statement not more than 6 months old (documentation reflecting P O Box address is not acceptable). - In the case of a joint account, proof of identity must be obtained for all applicants. - Where an account is submitted with a Power of Attorney, proof of identity must be obtained for both the Power of Attorney and all applicants. Other documentation: Special or General Power of Attorney (where applicable) which must cover world-wide assets. Please note that funds cannot be invested without the complete “Anti-Money Laundering” documentation. In the event of a delay caused by incomplete submission of the required documentation, as highlighted above, your funds will remain in the client bank account and will not earn any interest. You will also be required to provide documentation to evidence the source of your investment. Can a minor invest? No, we are only able to register individuals over the age of 18 years. Can a third party be Yes, if you would like a third party to have authority to operate your account without becoming a joint holder signatory to my then a separate signing mandate must be completed or a Power of Attorney should be appointed. account? Am I able to hold a joint Yes, we are able to accept a maximum of four holders. However it is important to note that the definition of account? a “joint account” held in the IOM in terms of treatment of tax and distribution of funds upon death differs to that of a joint account held in South Africa (SA). How does the Joint accounts with Nedgroup Investments (IOM) Limited are held as joint tenancy and a joint holder cannot treatment of a joint therefore dispose of his/her share of the joint account by testamentary disposition. Upon the death of one account differ between holder the account passes to the surviving joint holder/s, and this may be in conflict with the deceased’s Will. IOM and SA? A NIIS application form must be signed by all applicants and where more than one applicant signs, then such signatories will be deemed to be joint holders. In the event of the death of any signatory, probate is not necessary as the transfer of assets happens automatically by survivorship. Why would one The holding of offshore assets in joint accounts may have advantages in certain circumstances. For example, consider a joint in the United Kingdom, IOM and Channel Islands, the use of a joint account can ensure that, on the death of account holding? one of the holders, the assets are transferred to the survivor with the minimum of formality. Furthermore, it is presumed that anyone placing money into a joint account is advancing one half to the other holder. This may have tax implications for South Africans. So, use a joint account only when necessary and beneficial and be sure to avoid the pitfalls. How is payment Payment may be effected by means of two methods: effected? i) Cheque made payable to “Nedgroup International Investor Series Plc” and mailed or hand delivered to your Private Banker or financial advisor. ii) Telegraphic Transfer (TT) made payable to “Nedgroup International Investor Series Plc” and mailed or hand delivered to your Private Banker or financial advisor. When is the currency The currency conversion is made immediately upon receipt of your funds, unless otherwise instructed by you. conversion completed? If the funds are received before 12 noon they are converted to the Fund base currency on the same day. Funds reaching us after 12 noon will only be processed on the following business day. When will shares be Shares will be purchased on the dealing day immediately after receipt of your cleared funds. Fractional shares purchased? will be issued to four decimal points and any excess amounts occasioned by rounding off will be retained for the benefit of the fund(s). What is the dealing The shares in the fund are valued and dealt daily on any day which is a business day in the Isle of Man for the day? issue or redemption of shares within Nedgroup International Investor Series. Investments are processed before 12 noon. Any investments received after that time will be processed the following day. Do my funds earn No, your funds do not earn interest pending the purchasing of shares. All funds are paid into the Manager’s interest pending Client Account in the IOM pending allocation of shares. The interest earned on the Client Account is retained investment? by the manager. The money is then transferred from the Client Account, for example pending investment or received from settlements, earn interest which is for the benefit of the fund and ultimately all investors in the funds. Why am I buying shares The Nedgroup International Investor Series is an Open Ended Investment Company (OEIC), - a fund structure and not units? which combines elements of an Investment Trust and a Unit Trust and as such offers shares, rather than units. The shares are single priced and do not have a bid-offer spread. Initial charges are therefore applied to the investment before the purchase of shares. What documentation A contract note giving full details of the investment will be despatched to your postal address provided duly do I receive confirming completed AML documentation has been received. Individual share certificates will not be issued as the contract my investment? note acts as proof of your holding. Confirmation of ownership of shares can be obtained from the fund’s register of shareholders held in the IOM, contact details for which can be obtained from our website www.nedgroupinvestments.com What reports will I - Annual report and audited financial statements (30 September). receive? - Annual statements (as at 28 February) - On-line valuations will be available to access at your convenience subject to registering on-line. How do I access daily The share price of each portfolio within Nedgroup International Investor Series will be available on request from shares prices? your financial advisor. Alternatively, contact the International Client Service Centre toll free on 0800 999 160 Prices will also be listed in the London Financial Times (FT) in the section titled “Financial Times Managed Funds Service” and on the FT Internet web site at FT.com. Prices are also updated daily on our website www.nedgroupinvestments.com What is the dividend The funds in the Nedgroup International Investor Series are accumulation funds and all income received and policy? interest earned will be accumulated in order to enhance the capital value of the underlying funds. No dividends will be paid. Are there any tax Investment income earned by South African residents are taxed on a world-wide basis. With this in mind, our implications? suite of offshore funds (NIIS) has been constituted as “roll-up” or accumulation funds. The result of this is that income accrues to the fund’s value and is not distributed. This avoids the incidence of tax on income arising in the funds under existing legislation. We will not be providing you with IT3’s. However, we recommend that you retain your statements and attach these to your tax return as proof that no income was received from your international investment. What about switching? Portfolios may be switched between the available funds within the NIIS suite at any time for a nominal charge of US$50 per transaction. Where a lower initial charge was paid on the original application, the difference in initial charges may also be payable. There is no minimum investment period, but the investment should be thought of as medium to long-term. and encashment? However, all or part of the investment may be encashed at any time subject to the minimum redemption amounts and minimum holdings. Application and redemption of shares are based on a single dealing price reflecting the net asset value per share. How do I redeem Complete and sign a Transaction Advice Form, quoting your account number, for the realisation of your investment shares? or part thereof. All redemption requests received after 12 noon will be held until the next dealing day following receipt of the request. Payment of redemption proceeds will be made in the base currency of the investment unless otherwise requested, within 5 business days of the relevant dealing day. Payment will be made by TT to a bank account nominated by you. In respect of direct payments, all bank charges will be for expense of the shareholder. A contract note giving full details of the sale will be despatched confirming your redemption. Am I able to transact Yes, Nedgroup Investments (IOM) Limited offers a facility designed to make life easier for you to transact on your by fax, e-mail or account via fax, telephone or e-mail, while maintaining confidentiality. This is achieved through the issuing of an telephone? individual identification code which should be quoted each time you require information regarding your account and when issuing financial instructions. You will be required to complete a form specifying a password and designating bank accounts to which redemption proceeds can be paid. However, this facility cannot be used to change account holder details, amend signing powers or send funds to any destination other than the accounts nominated on the form. What happens upon In the case of a joint account holder where a signatory dies, the funds pass automatically to the survivor/s and the death of an account probate is not necessary. holder? For sole account holders, the individual’s estate is distributed to the individuals who are entitled to it. The deceased individual may, by way of his/her Will, appoint an executor. If he/she has not, or if the executor cannot or will not act, the High Court may appoint an admnistrator to deal with the estate. The executor appointed by the Will may be confirmed in his/her position by the High Court: the document by which the Court does so is called ‘Probate’ of the Will. The document by which the court appoints an administrator is called ‘letters of administration’. Each document is called ‘grant of representation’ and a grant is proof that the person named in it is entitled to receive the money and distribute it to the persons to whom it belong. When Nedgroup Investments (IOM) Limited receives notification that a shareholder has died, we require various supporting documentation in order to implement the probate instructions. A South African Will is valid in the IOM, however, it will need to be re-sealed by the master of the Supreme Court for use outside of South Africa. All documentation must be received in English, alternatively, if written in a foreign language we require an English translation certified by a Commissioner of Oaths. When is manx probate In the case of a sole shareholder, Manx Probate is needed where the estate exceeds £100 000. Please note that needed? the Company does reserve the right to insist on receiving Manx Probate for amounts less than this value depending on circumstances. Fees are available on request. When an estate has been wound up and the heirs wish to retain their investment in the NIIS product, no further approval is required on the monies as the original investment was approved by the Reserve Bank. The heirs will however, be required to complete an application form and provide proof of identification and address. What implication does This merely means that the Isle of Man, itself does not levy taxation on income or capital gains arising in the the tax status of the IOM if these are earned by investors who are not resident in the IOM. The IOM also does not levy any estate IOM have for me as an duty on such investments. investor? Whether or not an international investor is subject to tax on an IOM-based investment depends entirely on the legislation in the investor’s home country. South Africans who invest in IOM are subject to South African tax on the investment income arising from those investments, excluding dividend income. You may also be subject to capital gains tax on redemption, switching or transfer of ownership of your investment. South African estate duty will apply to the offshore assets of a South African investor if they were acquired with assets originating from South Africa. In other cases there may be certain exceptions. Whenever you make an offshore investment you should be aware of the vehicle in which you are investing as in many cases the investment vehicles only appear to be unit trusts as we know them and there may be unforeseen tax consequences. Who are the parties - The Manager and Investment Advisor of the fund is Nedgroup Investments (IOM) Limited. Its principal activity involved in managing is the management of the fund and advising on it. Its role is to ensure that the assets of the fund are managed the Nedgroup in accordance with the mandates and to advise as to the investment and re-investment of the assets of the International Investor fund in accordance with the investment mandate. Series and what are - The Custodian is Fairbairn Private Bank (IOM) Limited. Its role is the provision of a range of domestic and their roles? international banking and custodian services. What is the multi- The multi-manager approach effectively allows us to select leading international fund managers from a universe manager approach and of more than 20 000 international funds. It combines different investment styles and strategies of various fund what are the benefits managers in order to achieve a diversified portfolio that provides you with a superior risk-adjusted return over to me? the medium to long-term. Benefits: - Access to the world’s major investment houses. - Access to funds with high minimum investment levels, which would ordinarily not be accessible to the individual investor. - Daily monitoring of each fund to ensure ongoing performance of the underlying fund managers. - Ongoing quantitative and qualitative analysis of existing and potential fund managers. Do I incur double No. As a result of the size of the investments that we are able to place with different fund managers we are charges when investing able to rebate the initial charges down to a minimum (e.g. 0-0.25%). With regard to annual management fees, in a NIIS fund? while these are effectively levied within our portfolio as well as in the underlying funds, when investing in a fund, we examine its performance net of fees and aim to ensure that this figure is well above the benchmark. Furthermore, we receive a reduced annual management fee from some of our underlying fund managers, and as our asset size grows these economies of scale are passed on to investors as further reductions are negotiated. The performance objectives for our fund is set on the basis of returns after annual management fees. Why are all portfolios The US Dollar is internationally recognised as the currency in which fund managers not only price their portfolios, denominated in US but also conduct their investment transactions. In keeping with this philosophy we too have opted to price our dollars and not Sterling funds in US Dollars. or Euro? It should be recognised that holding a US Dollar-referenced fund does not necessarily equate to dollar exposure, neither does it imply that when investing in any one of our funds, one’s exposure is limited 100% to the US Dollar. The effective currency exposure is determined by our underlying fund managers’ asset allocation (asset class and currency) and not by the reference currency. In addition, our underlying fund managers will also actively manage the currency exposure within portfolios. Why global asset We at Nedgroup Investments (IOM) Ltd believe that the optimal structure for an international portfolio is allocation and not one that provides you with a spread of global investments, both in terms of investments and currencies. This region specific funds? structure optimises not only the returns but also the downside risk. The selected asset allocation model has taken into account the positive effect that constructive diversification provides in managing risk and providing long-term capital growth. Our quantitative research shows that investing in even the most favourable economic and market environments does not come without facing risk of losing a portion of capital invested at any given time. This “downside” risk tends to increase where an investment is restricted to one geographic region. Will Nedgroup Nedgroup Investments will not automatically move your investment between the sub funds of the NIIS range. Investments Should your risk profile, or tolerance for exposure to asset classes change then you may instruct us to switch automatically switch to another portfolio of your choice. my investment between equities, bonds and cash? Nedgroup Investments (IOM) Limited (Reg no 57917C) is licensed to conduct investment business by the Isle of Man Government Financial Supervision Commission.