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Ballot Procedures In Respect Of The Amendment Of The Investment Policy Of The 1nvest Swix 40 ETF
STANLIB Collective Investments (RF) (Pty) Limited
1nvest Swix 40 ETF
JSE code: ETFSWX
ISIN: ZAE000279220
Portfolios in the STANLIB ETF Collective Investment Scheme are registered as such in terms of
the Collective Investment Schemes Control Act, 45 of 2002, managed by STANLIB Collective
Investments (RF) (Pty) Limited ("STANLIB").
BALLOT PROCEDURES IN RESPECT OF THE AMENDMENT OF THE INVESTMENT POLICY
OF THE 1NVEST SWIX 40 ETF
THIS LETTER IS IMPORTANT AND REQUIRES YOUR ATTENTION
STANLIB Collective Investments (RF) (Pty) Limited, a Manager appointed in terms of the
Collective Investment Schemes Control Act, No. 45 of 2002 ("the Act"), hereby effects ballot voting
procedures in terms of Clause 59 of the Deed in order to obtain approval for:
I. Amendment of the investment policy of the 1nvest Swix 40 ETF to track a new index,
the FTSE/JSE Capped SWIX All Share Index.
PLEASE NOTE: ONLY INVESTORS OF THE 1NVEST SWIX 40 ETF ARE REQUIRED TO VOTE
ON THIS AMENDMENT.
BACKGROUND
1. Introduction
STANLIB Collective Investments (RF) (Pty) Ltd ("STANLIB") has accepted strategic
proposals to effect certain investment policy amendments of the Scheme's portfolio
(ETFSWIX) for the benefit of investors.
1nvest Fund managers (Pty) Ltd ("1nvest") is an Index Product Provider within the Standard
Bank Group. 1nvest implements all strategies using fixed methodologies (index tracking)
determined by the index provider and therefore, without utilising discretion in terms of
weightings of the securities held in the fund as these are determined by the index provider's
set of rules.
In September 2022, the FTSE/JSE tabled a proposal (FTSE/JSE Index Harmonisation
Market Proposal) which sought to consolidate the methodology behind its index
construction to ensure that the indices are aligned with evolving market requirements and
continue to be relevant in the future. This project seeks to simplify current benchmark
complexity by collapse the vanilla and SWIX indices into a unified set of benchmark indices,
simplifying current benchmark complexities and overlaps, and centralising liquidity. The
project will be implemented in two phases, with the first phase effective from the March
2024 quarterly index rebalancing.
The initial phase involved aligning the free floats of the vanilla indices with those of the
SWIX indices. Consequently, the FTSE/JSE Top 40 index is now aligned with the
methodology of the FTSE/JSE SWIX 40 index, meaning the 1nvest Top 40 ETF and the
1nvest SWIX 40 ETF have identical underlying holdings and exposure. To address this
duplication, we propose changing the benchmark of the 1nvest SWIX 40 ETF from the
FTSE/JSE Capped SWIX 40 Index to the FTSE/JSE Capped SWIX All Share Index,
thereby providing investors with broader market equity exposure.
In order to effect the investment policy amendment, investors in the 1nvest SWIX 40 ETF
are required to vote on the proposed investment policy changes and this letter provides you
with detailed information and facts to enable you to make an informed decision.
2. A summary of our existing offering and impact of proposed changes
The 1nvest Swix 40 ETF was initially launched in 2010, "the investment policy of the
portfolio shall be to replicate the FTSE/JSE SWIX Top 40 Index as closely as possible by,
apart from holding assets in a liquid form -
- Buying only securities included in the Index, in the weightings in which they
have been Included in the Index; and
- Selling only securities which are excluded from the Index from time to time as
a result of corporate actions or quarterly Index reviews, so as to ensure that at
all times the portfolio holds securities included in the Index in the same
weightings as they are included in the Index; or
- Trading in derivative instruments, as permissible in terms of the Act, to
replicate the Index"
The sole purpose of buying and selling securities in the portfolio is to ensure Index tracking
and not a profit motive. Therefore, the manager does not buy or sell securities based on
economic, financial, investment judgement or any market analysis. The objective of the
portfolio is solely full Index replication.
Impact of proposed changes
Proposed investment policy amendment
A summary of the proposed amendment in investment policy can be found in Annexure I.
Annexure I provides detailed information on the potential impact the proposed amendments
in investment policy may have on the terms of your current investment, as well as details of
the investment policies of the portfolio under the STANLIB ETF Collective Investment
Scheme.
Portfolio management
1nvest will remain responsible for the investment management of the above-mentioned
portfolio.
3. The impact of outcomes of the ballot procedures
Ballot outcome: Consent for the amendment of the investment policy of the 1nvest Swix 40
ETF
The proposed amendment to the investment policy of the 1nvest Swix 40 ETF is expected
to become effective should the affected investors of ballot procedures provide consent for
the proposed changes
How will the proposed investment policy amendment affect your investment?
Value of investment
There will be no effect on the value of your investment as a result of the proposed investment policy
amendment. For example, if you have R1000 worth of participatory interests in your current portfolio
prior to the proposed change, you will hold R1000 worth of participatory interests after the proposed
change.
A. Taxation implications
Capital Gains Tax (CGT) implications
There will be no capital gains implications as a result of the proposed investment policy
amendment. However, should you elect to sell or switch any or all of your participatory
interests, it will be viewed as a normal transaction and Capital Gains Tax may apply in that
instance.
Dividend Withholding Tax (DWT) implications
There will be no Dividend Withholding Tax implications as a result of the investment policy
amendments.
B. Charges
No additional fees, charges, taxes or brokerage will be borne by either investors or the portfolio
as a result of the proposed investment policy amendment. STANLIB will carry all costs relating
to the proposed amendment.
C. Distributions and special distribution
The distribution frequency will remain unchanged save as for any amendments detailed in
Annexure I.
D. Changes in policies and conditions of investment
All the differences in respect of the proposed investment policy amendment of the 1nvest SWIX
40 ETF are outlined in Annexure – I.
Your rights as an investor and the ballot process
In terms of Section 98 of the Collective Investment Schemes Control Act 45 of 2002 ("the Act"),
STANLIB may only amend the deed of the Scheme with respect to a portfolio, if the consent of
investors holding a majority in value in the respective portfolio has been obtained as prescribed in
terms of Clause 59 of the deed of the Scheme.
- Investors holding no less than 25% in value of the total number of participatory interests then
issued in the respective portfolio, must respond in writing.
- Each proposed investment policy amendment must be given consent by investors holding a
majority in value of the participatory interests held by the investors who have responded.
- If investors holding less than 25% in value of the total number of participatory interests then
issued have responded, a second ballot will be conducted. In the event of a second ballot,
investors holding a majority in value of the participatory interests held by the investors who
have responded must consent to the amendment.
The Trustees of the Scheme, ABSA Bank Limited, have considered and consented to the
proposed investment policy amendment.
Should you not agree with any of the proposed investment policy amendment, you may elect at any
time to switch your holdings to another portfolio, or to dispose of your holdings and withdraw your
funds at the net asset value (NAV) price, as defined in the deed. Should you elect to sell, switch
any or all your participatory interests, it will be viewed as a normal transaction and Capital
Gains Tax may apply in that instance.
If you choose not to withdraw your funds prior to 02 December 2024, the relevant
investment policy amendment as set out in this letter will automatically apply to your
investment, should it be consented to in terms of the ballot process.
4. Action required from investors
4.1. Please vote by completing the enclosed ballot form (refer to Annexure – II) and
return it to the auditors in the enclosed self-addressed envelope or scan and e-mail
the form directly to the auditors at za_ballots@pwc.com by 31 October 2024.
4.2. Please do not include any other instructions regarding your holdings with your ballot
form – e.g. requests for repurchases, switching instructions, etc. will not be possible
to implement with this ballot because ballot forms are addressed directly to the
auditors who will not act on any transaction requests that may be included. (Please
refer to our website: www.stanlib.com for applicable forms for transactions.)
4.3. If you have disposed of your investment before 11 September 2024, no action is
required to vote
5. Approval and Commencements
Provisional approval for amendments was granted by the JSE on 23 July 2024.
Subject to the ballot voting procedure being successful and approval by the Financial
Sector Conduct Authority ("the Authority") of Collective Investment Schemes, the
investment policy amendment will be with effective from commencement of business on [02
December 2024]. Copies of the 1nvest Swix 40 ETF Pricing Supplement, in English, may
be obtained during normal business hours from the office of the local manager, STANLIB
Collective Investments (RF) Proprietary Limited, located at 17 Melrose Boulevard, Melrose
Arch, 2196 and is available on the website: www.1nvest.co.za
Timelines for the implementation of the amendments on 1nvest Swix 40 ETF ballot:
Activity Date
1. Declaration and finalisation Data SENS announcement of approval
09 September 2024
of the amendments
2. Cut-off date for investors on record to be balloted 11 September 2024
3. Date on ballot letter and the date on which the SENS is
18 September 2024
announced to investors.
4. Closing date of the Ballot (last date on which ballot letters may be
31 October 2024
returned to the Auditors).
5. Time required for Auditors to count the ballots and issue required 31 October 2024 to
audit certificate. 14 November 2024
6. Time required for FSCA to review ballot results and required audit
14 November 2024 to
certificate before giving their final approval for the investment
29 November 2024
policy.
7. Effective date: 02 December 2024
Conclusion
STANLIB appreciates your effort and time to consider the proposed investment policy amendment
as set out in Annexure – I.
Should you require further information regarding the ballot process or its implication, please send
email to:
JSE Sponsor: The Standard Bank South Africa Limited
Trustee: ABSA Bank Limited
18 September 2024
Annexure - I
Existing Investment Policy Proposed Investment Policy Changes and
impact
1nvest SWIX 40 ETF 1nvest SWIX 40 ETF
The investment policy of the portfolio shall be to replicate the The investment policy of the portfolio shall be to replicate the Investment objective will
FTSE/JSE Capped Shareholder Weighted 40 Index as closely as FTSE/JSE Capped SWIX All Share Index as closely as possible by, remain the same however
possible by, apart from holding assets in a liquid form: apart from holding assets in a liquid form: the fund will now replicate
the FTSE/JSE Capped
Buying only securities included in the Index, in the weightings in which Buying only securities included in the Index, in the weightings in which SWIX All Share Index
they have been Included in the Index; and they have been Included in the Index; and
Selling only securities which are excluded from the Index from time to Selling only securities which are excluded from the Index from time to
time as a result of corporate actions or quarterly Index reviews, so as time as a result of corporate actions or quarterly Index reviews, so as
to ensure that at all times the portfolio holds securities included in the to ensure that at all times the portfolio holds securities included in the
Index in the same weightings as they are included in the Index; or Index in the same weightings as they are included in the Index; or
Trading in derivative instruments, as permissible in terms of the Act, to Trading in derivative instruments, as permissible in terms of the Act, to
replicate the Index. replicate the Index.
The sole purpose of buying and selling securities in the portfolio is to The sole purpose of buying and selling securities in the portfolio is to
ensure Index tracking and not a profit motive. The manager will ensure Index tracking and not a profit motive. The manager will
therefore not buy or sell securities based on economic, financial, therefore not buy or sell securities based on economic, financial,
investment judgement or any market analysis. The objective of the investment judgement or any market analysis. The objective of the
portfolio is solely full Index replication. portfolio is solely full Index replication.
The composition of the portfolio will be adjusted quarterly or at any The composition of the portfolio will be adjusted quarterly or at any
other time that the Index provider, FTSE/JSE affect changes to the other time that the Index provider, FTSE/JSE affect changes to the
Index. Index.
The portfolio shall hold securities purely for the economic rights and The portfolio shall hold securities purely for the economic rights and
benefits attaching thereto and, accordingly, if there is a takeover bid or benefits attaching thereto and, accordingly, if there is a takeover bid or
other corporate actions occurs in relation to any entity the securities of other corporate actions occurs in relation to any entity the securities of
which are included in the portfolio, the portfolio shall not surrender any which are included in the portfolio, the portfolio shall not surrender any
securities held by the portfolio which may be subject to such takeover securities held by the portfolio which may be subject to such takeover
bid or other corporate action, unless such surrender is mandatory in bid or other corporate action, unless such surrender is mandatory in
terms of any applicable law or under the rules of a regulatory authority terms of any applicable law or under the rules of a regulatory authority
or body having jurisdiction over the portfolio and/or the applicable or body having jurisdiction over the portfolio and/or the applicable
securities. However, if any takeover or corporate action results in an securities. However, if any takeover or corporate action results in an
entity previously included in the Index no longer qualifying for inclusion entity previously included in the Index no longer qualifying for inclusion
in the Index, any securities in such entity held by the portfolio, shall be in the Index, any securities in such entity held by the portfolio, shall be
disposed of by the portfolio and the proceeds derived from such disposed of by the portfolio and the proceeds derived from such
disposal shall be applied in effecting the appropriate adjustments to the disposal shall be applied in effecting the appropriate adjustments to the
portfolio so as to ensure same tracks the Index. portfolio so as to ensure same tracks the Index.
The portfolio's ability to replicate the price and income performance will The portfolio's ability to replicate the price and income performance will
be affected by the cost and expenses incurred by the portfolio. be affected by the cost and expenses incurred by the portfolio.
Any material change in the investment policy of the portfolio constitutes Any material change in the investment policy of the portfolio constitutes
an amendment of the deed and shall be subject to the provisions of an amendment of the deed and shall be subject to the provisions of
clause 59 of the deed, in which event investors shall be given clause 59 of the deed, in which event investors shall be given
reasonable notice to enable them to redeem their participatory interest reasonable notice to enable them to redeem their participatory interest
prior to implementation of the change. prior to implementation of the change.
Portfolio Benchmark: Portfolio Benchmark: FTSE/JSE Capped SWIX 40
FTSE/JSE Capped Shareholder Weighted 40 Index The current benchmark will change to the FTSE/JSE Capped SWIX All Index to FTSE/JSE Capped
Share Index SWIX All Share Index
Classes of participatory interests and fees:
There will be no change in classes of participatory interests and fees.
Distribution:
Portfolio distributes on a quarterly basis. There will be no change in the frequency of distributions.
Valuation times:
The portfolio is valued at 17h00. There will no change to valuation times.
Trading closing time:
There will be no change in the trading closing time.
Trustee:
The trustee will remain Absa Bank Limited.
ASISA Classification:
The current ASISA classification is South African - Equity - Large Cap. There will be no change in the ASISA classification.
Annexure - II
STANLIB Collective Investments (RF) (Pty) Ltd
Ballot Form (for Direct Investors)
Instructions for completing the form
• The ballot is to be completed by current investors in the 1nvest SWIX 40 ETF with respect to the proposed benchmark change in
the investment policy to provide investors with broader market equity exposure.
• Please read and complete all fields on this ballot form as instructed and return it to the auditors in the enclosed self-addressed
envelope or scan and email directly to the auditors at za_ballots@pwc.com.
• Failure to complete all required sections will render the vote invalid.
Investor Name: _________________________________________________________
(Please print full names and surname)
Entity Number: _________________________________________________________
Please vote as detailed below
I, the undersigned,
1. Accept Reject the proposed benchmark change in the investment policy of the 1nvest SWIX 40 ETF
under the STANLIB ETF Collective Investment Scheme, to provide investors with broader
market equity exposure.
in accordance with the ballot process as provided for in terms of Sections 98 of the Collective Investment Schemes Control Act No 45 of 2002, the
details of which are set out in the letter from STANLIB dated 18 September 2024.
Signed at _____________________ on the ______ day of _______________ 2024
Signature_______________________________
Date: 18-09-2024 09:00:00
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