PRODUCT HIGHLIGHTS SHEET
PRODUCT HIGHLIGHTS SHEET Prepared on 18 January 2016
This Product Highlights Sheet is an important document.
• It highlights the key terms and risks of this investment product and complements the Singapore Prospectus
1(“Prospectus”).
• It is important to read the Prospectus before deciding whether to purchase shares in the product. If you do not have a copy, please contact us to ask for one.
• You should not invest in the product if you do not understand or are not comfortable with the accompanying risks.
• If you wish to purchase this product, you will need to make an application in the manner set out in the Prospectus.
JPMORGAN INVESTMENT FUNDS – GLOBAL INCOME FUND
Product Type Investment Company Launch Date 11 December 2008 Management
Company JPMorgan Asset Management
(Europe) S.à r.l. Custodian J.P. Morgan Bank Luxembourg S.A.
Investment Manager JPMorgan Asset Management (UK) Limited and J.P. Morgan Investment Management Inc.
Dealing Frequency Daily, on every Singapore Dealing Day
2Capital Guaranteed No Expense Ratio for financial year ending 31 December 2014
3A (div) – SGD: 1.45%
A (div) – SGD (Hedged): 1.45%
(annualised)
A (mth) – SGD (Hedged): 1.45%
(annualised)
A (div) – EUR: 1.45%
A (mth) – EUR: N/A
A (mth) – GBP (Hedged): N/A A (div) – USD (Hedged): 1.45%
A (mth) – USD (Hedged): 1.45%
A (acc) – USD (Hedged): 1.45%
A (irc) – AUD (Hedged): 1.45%
(annualised)
PRODUCT SUITABILITY WHO IS THE PRODUCT SUITABLE FOR?
• The Sub-Fund is only suitable for investors who:
– are looking for a source of income through exposure to a range of asset classes;
and
– have a three to five year investment horizon.
• The principal of the Sub-Fund may be at risk.
• Investors should consult their financial advisors on the suitability of the Sub-Fund for them if in doubt.
Further Information Refer to relevant Appendix (GLOBAL INCOME FUND) of the Prospectus for further information on product suitability.
KEY PRODUCT FEATURES WHAT ARE YOU INVESTING IN?
• You are investing in a sub-fund of the Fund, an open-ended investment company in and organised as a société anonyme under the laws of the Grand Duchy of Luxembourg and qualifying as a SICAV and a UCITS.
• The Sub-Fund aims to provide regular income by investing primarily in a portfolio of income generating securities, globally, and through the use of financial derivative instruments.
Refer to paragraphs 1 (THE FUND) and 2 (THE SUB-FUNDS) and relevant Appendix (GLOBAL INCOME FUND) of the Prospectus for further information on features of the product.
Investment Strategy
• The Sub-Fund will primarily invest in debt securities, equity securities and REITs.
Issuers of these securities may be located in any country, including emerging markets.
• The Sub-Fund may also invest in other assets including, but not limited to, convertible securities and forward currency exchange contracts.
• The Sub-Fund may invest in below investment grade and unrated debt securities.
Refer to relevant Appendix (GLOBAL INCOME FUND) of the Prospectus for further information on the investment strategy of the Sub-Fund)
1
The Prospectus is available for collection from the Singapore Representative at 168 Robinson Road, 17th Floor, Capital Tower, Singapore 068912 or any appointed Singapore distributor.
2
Please refer to paragraph 9 (DEALING) of the Prospectus for more information on the dealing frequency.
3
As the A (mth) – EUR and A (mth) – GBP (Hedged) Share Classes were not established
as at the date of registration of the Prospectus, the Expense Ratios relating to these Share
Classes are not available.
PRODUCT HIGHLIGHTS SHEET
• The Sub-Fund may invest in financial derivative instruments to achieve its investment objective. Such instruments may also be used for the purposes of hedging. These instruments may include, but are not limited to, futures, options, contracts for difference, forward contracts on financial instruments and options on such contracts, credit linked instruments, mortgage TBAs and swap contracts by private agreement and other fixed income, currency and credit derivatives.
• Periodic dividends, to be made available at the sole discretion of the Management Company, are intended to be paid in respect of the share classes, A (div) – SGD, A (div) – SGD (Hedged), A (mth) – SGD (Hedged), A (div) – EUR, A (div) – USD (Hedged), A (mth) – USD (Hedged) and A (irc) – AUD (Hedged), of the Sub-Fund.
Parties Involved WHO ARE YOU INVESTING WITH?
• The Management Company is JPMorgan Asset Management (Europe) S.àr.l..
• The Investment Managers are JPMorgan Asset Management (UK) Limited and J.P. Morgan Investment Management Inc..
• The Custodian is J.P. Morgan Bank Luxembourg S.A..
Refer to paragraphs 3 (MANAGEMENT AND ADMINISTRATION) and 4 (OTHER PARTIES) of the Prospectus for further information on the role and responsibilities of these entities)
KEY RISKS WHAT ARE THE KEY RISKS OF THIS INVESTMENT?
• The value of your investment may fall as well as rise and you may get back less than you originally invested.
• Returns to investors will vary from year to year, depending on dividend income and capital returns generated by the underlying financial assets. Capital returns may be negative in some years and dividends are not guaranteed.
• Past performance is not a guide to future performance and the Sub-Fund should be regarded as medium to long-term investment.
• The Sub-Fund may have a higher volatility to its net asset value due to its investment policy when compared to sub-funds investing in global markets, with broader investment policies and/or are a less volatile asset class.
• Investors should note that for the A (div) – SGD, A (div) – SGD (Hedged), A (mth) – SGD (Hedged), A (div) – EUR, A (div) – USD (Hedged), A (mth) – USD (Hedged) and A (irc) – AUD (Hedged), dividends may in certain circumstances be paid out of the share class capital. Dividends paid out of capital would result in erosion of the capital invested.
Refer to paragraph 8 (RISK FACTORS) and relevant Appendix (GLOBAL INCOME FUND – Risk Profile) of the Prospectus for further information on risks of the product.
Market and Credit Risks YOU ARE EXPOSED TO MARKET RISKS
• The value of equity securities may go down as well as up in response to the performance of individual companies and general market conditions.
• The Sub-Fund may invest in China A-Shares through the Shanghai-Hong Kong Stock Connect program which is subject to regulatory change, quota limitations and also operational constraints which may result in increased counterparty risk.
• The value of debt securities may change significantly depending on economic and interest rate conditions as well as the credit worthiness of the issuer.
• In addition, emerging markets may be subject to increased political, regulatory and economic instability, less developed custody and settlement practices, poor transparency and greater financial risks. Emerging market currencies may be subject to volatile price movements. Emerging market and below investment grade debt securities may also be subject to higher volatility and lower liquidity than non emerging market and investment grade debt securities respectively.
• Contingent Convertible Securities are likely to be adversely impacted should specific trigger events occur (as specified in the contract terms of the issuing company). This may be as a result of the security converting to equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
• Investments in REITs may be subject to increased liquidity risk and price volatility due to changes in economic conditions and interest rates.
YOU ARE EXPOSED TO BOND DEFAULT AND INTEREST RATE RISKS
• Issuers of debt securities may fail to meet payment obligations or the credit rating of debt securities may be downgraded. These risks are typically increased for emerging market and below investment grade debt securities.
• The credit worthiness of unrated debt securities is not measured by reference to an independent credit rating agency.
• The securities in which this Sub-Fund invests carry a risk of default or downgrade.
• The Sub-Fund will hence subject investors to potential bond default risks and
interest rate risks.
PRODUCT HIGHLIGHTS SHEET
YOU ARE EXPOSED TO CURRENCY RISKS
• Movements in currency exchange rates can adversely affect the return of your investment. The currency hedging that may be used to minimise the effect of currency fluctuations may not always be successful.
• Where a purchase involves a foreign exchange transaction, it may be subject to the fluctuations of currency values.
• The Sub-Fund may invest in assets denominated in any currency. Non EUR currency exposure may be hedged or may be managed with reference to the Sub- Fund’s benchmark.
Notwithstanding the hedged share classes, the Sub-Fund may invest in assets denominated in any currency and currency exposure may not be hedged for the shares on offer in Singapore. In addition, the net asset value of the USD, EUR or AUD denominated Share Classes are not denominated in SGD. Accordingly, foreign currency exchange rate movements are likely to influence your returns, and you may be exposed to exchange rate risks. In respect of the hedged share classes, the Sub-Fund may invest in assets denominated in any currency and currency exposure may be hedged. The currency hedging process may not give a precise hedge nor is there guarantee that the hedging will be totally successful.
Liquidity Risks YOU ARE EXPOSED TO LIQUIDITY RISKS
• The Sub-Fund is not listed and you can redeem only on a Singapore Dealing Day
4.
• If the total requests for redemptions and switches out of the Sub-Fund on any Luxembourg Dealing Day exceeds 10% of the total value of Shares in issue of that Sub-Fund, the Management Company reserves the right to defer any redemption or switching requests in excess of 10% until the next Luxembourg Dealing Day. On the next Luxembourg Dealing Day, or Luxembourg Dealing Days until completion of the original requests, deferred requests will be dealt with in priority to later requests.
Product Specific Risks YOU ARE EXPOSED TO DERIVATIVE RISKS
• The value of financial derivative instruments can be volatile. This is because a small movement in the value of the underlying asset can cause a large movement in the value of the financial derivative instrument and therefore, investment in such instruments may result in losses in excess of the amount invested by the Sub-Fund.
• The Sub-Fund may, within its prescribed limits, invest in financial derivative instruments for hedging purposes and to achieve its investment objective. In an extreme scenario, investments made through derivative transactions may cause the investor to lose his entire principal amount invested.
• The global exposure of the Sub-Fund is measured by the relative VaR methodology.
The applied reference portfolio is the Sub-Fund’s benchmark.
• The Sub-Fund’s expected level of leverage is 150% of the Net Asset Value of the Sub-Fund, although it is possible that leverage might significantly exceed this level from time to time. In this context leverage is calculated as the sum of the notional exposure of the financial derivative instruments used.
• Participation in certain financial derivative instruments involves risks of a type, level or nature to which the Sub-Fund would not ordinarily be subject to, including risks relating to exchange traded and OTC derivative transactions such as suspension of trading, absence of regulation, counterparty default and liquidity risks.
FEES AND CHARGES WHAT ARE THE FEES AND CHARGES OF THIS INVESTMENT?
Payable directly by you
Initial Charge Class A: Up to 5%.
Redemption Charge Class A: Nil (Maximum: 0.5%).
Switching Fee Class A: Up to 1%.
Payable by the Sub-Fund from invested proceeds Annual
Management and Advisory Fee
Class A: 1.25% per annum, payable monthly in arrears.
Distribution Fee Class A: Nil.
Operating and Administrative Expenses
Class A: 0.20% per annum (Maximum).
Refer to paragraph 7 (FEES, CHARGES AND EXPENSES) and relevant Appendix (GLOBAL INCOME FUND) of the Prospectus for further information on fees and charges.
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