SCHRODER STRATEGIC PORTFOLIO

Transcription

1 1 SCHRODER STRATEGIC PORTFOLIO MANAGER TRUSTEE Schroder Investment Management (Singapore) Ltd Bermuda Trust (Singapore) Limited 65 Chulia Street # Raffles Place, #13-01/05 OCBC Centre Ocean Towers Singapore Singapore DIRECTORS OF MANAGER AUDITORS David Gibson PricewaterhouseCoopers Jan A Kingzett 8 Cross Street #17-00 John Dominic Burns PWC Building Wah Geok Sum Singapore Leong Wah Kheong Ong Lay Beng Thai Chee Ken Tham Ee Mern Lilian SOLICITORS TO THE MANAGER SOLICITORS TO THE TRUSTEE Shook Lin & Bok Allen & Gledhill 1 Robinson Road # Robinson Road #18-01 AIA Tower City House Singapore Singapore

2 2 Schroder Investment Management (Singapore) Ltd (the Manager ) accepts full responsibility for the accuracy of the information contained in this Prospectus of the Schroder Strategic Portfolio (the Fund ) and confirms, having made all reasonable enquiries, that to the best of its knowledge and belief, there are no facts the omission of which would make any statement herein misleading. Unless otherwise stated or context otherwise requires, all undefined terms in this Prospectus have the same meanings as ascribed to them in the deed of trust (as amended) relating to the Fund (the Deed ). Investors should refer to the relevant provisions of the Deed and obtain professional advice in the event of any doubt or ambiguity relating thereto. Copies of the deed of trust and its supplemental deeds are available for inspection at the Manager s office at all times during usual business hours (subject to such reasonable restrictions as the Manager may impose). This Prospectus does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation and may only be used in connection with the offering of units in the Fund ( Units ) as contemplated herein. All capitalised terms and expressions used in this Prospectus shall, unless the context otherwise requires, have the same meanings ascribed to them in the Deed. Investors should seek professional advice to ascertain (a) the possible tax consequences, (b) the legal requirements; and (c) any foreign exchange transactions or exchange control requirements which they may encounter under the laws of the countries of their citizenship, residence, domicile and which may be relevant to the subscription, holding or disposal of Units in the Schroder S$ Dual Advantage 100 Fund, Schroder S$ Dual Advantage 85 Fund and Schroder US$ Dual Advantage Fund (the Sub-Funds ). Investors should carefully consider the risks of investing in the Sub-Funds which are set out in Part IX of this Prospectus. Investors should note that the Units offered by the Fund are not listed on any stock exchange. Investors may purchase, sell, switch, convert or redeem their Units through the Manager or any agent or distributor appointed by the Manager subject to the ultimate discretion of the Manager in respect of the purchase, sale, switching, conversion or redemption of an investor s Units in accordance with the provisions in the Deed. All enquiries in relation to the Fund or the Sub-Funds should be directed to the Manager, Schroder Investment Management (Singapore) Ltd, or any agent or distributor appointed by the Manager.

3 3 SCHRODER STRATEGIC PORTFOLIO TABLE OF CONTENTS I. BASIC INFORMATION 4 II. THE MANAGER 5 III. THE TRUSTEE 5 IV. OTHER PARTIES 5 V. STRUCTURE OF THE SUB-FUNDS 5 VI. INVESTMENT OBJECTIVES, FOCUSES AND APPROACHES 6 VII. SCHEME INCLUDED UNDER THE CPFIS 13 VIII. FEES & CHARGES 14 IX. RISKS 14 X. SUBSCRIPTION OF UNITS 18 XI. REALISATION OF UNITS 20 XII. PRICES OF UNITS 24 XIII. SUSPENSION OF DEALINGS 24 XIV. PERFORMANCE OF THE SUB-FUNDS 25 XV. SOFT DOLLAR COMMISSIONS/ARRANGEMENTS 25 XVI. CONFLICTS OF INTEREST 26 XVII. REPORTS 26 XVIII. QUERIES AND COMPLAINTS 26 XIX. OTHER MATERIAL INFORMATION 26

4 4 SCHRODER STRATEGIC PORTFOLIO The collective investment schemes offered in this Prospectus are authorised schemes under the Securities and Futures Act (Chapter 289). A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the Authority ). The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act (Chapter 289), or any other legal or regulatory requirements have been complied with. The Authority has not, in any way, considered the investment merits of the collective investment schemes. I. BASIC INFORMATION Name of Fund 1. This Prospectus is in relation to the umbrella fund known as the Schroder Strategic Portfolio (the Fund ). The Fund has nine sub-funds established as at the date of registration of this Prospectus and is presently offering three sub-funds, namely, the Schroder S$ Dual Advantage 100 Fund, the Schroder S$ Dual Advantage 85 Fund and the Schroder US$ Dual Advantage Fund (collectively the Sub-Funds and each a Sub-Fund ). Date of registration and expiry date of Prospectus 2. This Prospectus is registered on 10 March 2003 and will expire on 9 March Deed of Trust and Supplemental Deeds 3. The Fund is constituted as a unit trust by way of a deed of trust dated 26 February 2002 (the Principal Deed ) as amended by the following supplemental deeds and amendment deed:- (a) the First Supplemental Deed dated 14 May 2002; (b) the Second Supplemental Deed dated 5 September 2002; and (c) the First Amendment Deed dated 7 March The terms and conditions of the Principal Deed as amended by the supplemental deeds and the amendment deed (collectively referred to as the Deed ) shall be binding on each unitholder (each a Holder and collectively the Holders ) and persons claiming through such Holder as if such Holder had been a party to the Deed. 5. Copies of the Principal Deed, the supplemental deeds and the amendment deed are available for inspection at the office of the manager of the Fund, Schroder Investment Management (Singapore) Ltd (the Manager ), at 65 Chulia Street, #46-00, OCBC Centre, Singapore at all times during usual business hours (subject to such reasonable restrictions as the Manager may impose) and shall be supplied by the Manager to any person on application at a charge of S$25 per copy of the document (or such other amount as the trustee of the Fund and the Manager may from time to time agree in writing), such charge being payable to the Manager.

5 5 Semi-annual reports and audited financial statements 6. A copy of the latest semi-annual reports and the audited financial statements of the Fund may be obtained from the Manager at 65 Chulia Street, #46-00, OCBC Centre, Singapore II. THE MANAGER 7. The Manager of the Fund is Schroder Investment Management (Singapore) Ltd whose registered office is at 65 Chulia Street, #46-00, OCBC Centre, Singapore The investment sub-manager of each of the Sub-Funds is Schroder Investment Management Limited (the Sub-Manager ). 9. The Manager has been managing collective investment schemes and discretionary funds in Singapore for more than 20 years. The Sub-Manager is domiciled in the United Kingdom and has been managing collective investment schemes and discretionary funds in the United Kingdom for more than 70 years. Both the Manager and the Sub-Manager are wholly-owned subsidiaries of Schroders plc. 10. Schroders plc has been listed on the London Stock Exchange since The history of the Schroders group however dates back 200 years when Schroders was founded as a merchant bank in III. THE TRUSTEE 11. The trustee of the Fund is Bermuda Trust (Singapore) Limited (the Trustee ) whose registered office is at 20 Raffles Place, #13-01/05, Ocean Towers, Singapore IV. OTHER PARTIES 12. The registrar of the Fund is the Manager, and the register of Holders (the Register ) is kept at the office of the Manager at 65 Chulia Street, #46-00 OCBC Centre, Singapore Alternatively, the Register may be inspected at the registered office of Barbinder & Co Pte Ltd, the administrative agent of the Manager at 8 Cross Street #07-00 PWC Building Singapore The Register shall be conclusive evidence as to the persons respectively entitled to the units of the Fund (collectively the Units and each a Unit ) entered therein and no notice of any trust, expressed, implied or constructive shall be entered on the Register in respect of any Unit. In the event of discrepancies, the entries in the Register shall prevail unless the Holder proves, to the satisfaction of the Manager and the Trustee, that the Register is incorrect. 13. The auditor of the Fund is PricewaterhouseCoopers whose registered office is at 8 Cross Street, #17-00, PWC Building, Singapore V. STRUCTURE OF THE SUB-FUNDS 14. Each of the Sub-Funds offered is an open-ended capital protected non-specialised unit trust established under the umbrella structure of the Fund.

6 6 VI. INVESTMENT OBJECTIVES, FOCUSES AND APPROACHES Schroder S$ Dual Advantage 100 Fund 15. The investment objective of the Schroder S$ Dual Advantage 100 Fund is to provide investors with the opportunity to participate in the relative performance of a portfolio of stock pairs that represent major equity sectors while providing 100% capital protection at the Sub-Fund s maturity date approximately at the end of five years from the close of the Initial Offer Period (the 100 Maturity Date *). In addition, the Sub-Fund also aims to provide investors with:- (i) (ii) a fixed payout of between 1% to 5% of the Initial Offer Price per Unit which will be approximately at the end of the first year after the close of the Initial Offer Period (the 100 Fixed Payout *); and additional annual payouts of 1.5% of the Initial Offer Price per Unit (the 100 Additional Payouts ) on a Dealing Day approximately at the end of years 2, 3 or 4 if the Net Asset Value per Unit of the Sub-Fund reaches or exceeds the trigger value of S$1.03 (the 100 Trigger Value ) on the relevant Dealing Day as determined by the Manager in consultation with the option writers and subject to prevailing market conditions on a best efforts basis. *Investors will be notified of (a) the exact 100 Maturity Date, (b) the exact 100 Fixed Payout percentage and (c) the exact 100 Fixed Payout date at the commencement of the Initial Offer Period. 16. The 100 Fixed Payout and the 100 Additional Payouts (if any) (collectively the 100 Payouts ) of the Schroder S$ Dual Advantage 100 Fund are provided by the call option(s) described below and are not guaranteed and will be made by way of cash distributions from the Sub-Fund. Any such distribution will be paid out to Holders within 30 days from the due date or such other period as may be agreed between the Manager and the Trustee or made in such other manner as may be agreed between the Manager and the Trustee. 17. To achieve the investment objective of 100% capital protection, the Schroder S$ Dual Advantage 100 Fund will invest in bonds issued by corporations, governments, government agencies, or supranationals with at least A rating by Standard & Poor s or equivalent (including sub-categories or gradations therein) and/or placed in deposits with financial institutions rated at least B by Moody s or equivalent, provided that not more than one-third of the net asset value of the Sub-Fund will be invested or placed with the same entity. The Schroder S$ Dual Advantage 100 Fund may also invest more than one-third and up to 100% of the net asset value of the Sub-Fund in debt securities issued or guaranteed by a government, government agency or supra-national with at least AA rating by Standard & Poor s or equivalent (including sub-categories or gradations therein). The Schroder S$ Dual Advantage 100 Fund may also enter into one or more interest rate swap transactions with counterparties rated at least A by Standard & Poor s or equivalent (including sub-categories or gradations therein), including cross currency swaps. The maturity value of the debt securities and/or deposits, combined with the interest rate swaps (if utilised) is expected to be sufficient for the Schroder S$ Dual Advantage 100 Fund to return 100% of the initial capital invested for Units held until the 100 Maturity Date. To provide participation in the performance of a portfolio comprising a basket of winning stocks ( 100 Winning Basket ) and a basket of losing stocks ( 100 Losing Basket ) and also to provide the 100 Fixed Payout and the 100 Additional Payouts, the Sub-Fund will invest in call option(s).

7 7 18. Each year, Schroders global research analysts will select stock pairs, each pair from within the same global sector. Each stock pair will comprise a winning stock, i.e. a stock which Schroders analysts believe is likely to outperform the sector, and a losing stock, i.e. a stock which Schroders analysts believe is likely to underperform the same sector, based on a 1-year investment view. There will be at least 5 stock pairs and at most 10 stock pairs, diversified across at least 5 sectors. The winning stocks will constitute the 100 Winning Basket and the losing stocks will constitute the 100 Losing Basket. Investors will be notified of the initial stocks comprising the 100 Winning Basket and the 100 Losing Basket after the close of the Initial Offer Period. To maximise the return potential of the Sub-Fund, the call option(s) will incorporate an active mechanism which will allow the Manager to select new stock pairs at the start of each year or at such other period as the Manager may determine depending on market circumstances. To allow for reselection of stocks each year the 100 Winning Basket and 100 Losing Basket will each contain a variable cash component. Each time the stocks are selected the cash component will be adjusted up or down, according to a pre-defined formula, to compensate for the change in volatility. 19. Calculation of Final Redemption at 100 Maturity Date On the 100 Maturity Date, Holders are expected to receive the higher of: 100% of their initial capital, or 100% + (P x G x F) (Total 100 Additional Payouts + Growth Adjustment) x F of their initial capital, where: P is the actual participation rate, which is estimated to be between 60% to 260% (exact rate to be determined and notified to Holders when the investments are made after the close of the Initial Offer Period and will depend on prevailing market conditions); G is the average of the annual growth of the 100 Winning Basket minus the annual growth of the 100 Losing Basket, That is, G = (G1 + G2 + G3 + G4 + G5) / 5 where: G1, G2, G3, G4 and G5 are the percentage returns of the 100 Winning Basket minus the percentage returns of the 100 Losing Basket in years 1, 2, 3, 4 and 5 respectively, with each of G1, G2, G3, G4 and G5 subject to a maximum of 20%, where for n = 1, 2, 3, 4 or 5 W n L Gn = lower of 20% and ( n W n-1 L n-1 ) where W n is the level of the 100 Winning Basket at the end of the nth year (or on the 100 Maturity Date if n=5);

8 8 W n-1 is the level of the 100 Winning Basket at the end of the n-1th year (or one day after the date of purchase of the call option(s) if n-1 is zero); L n is the level of the 100 Losing Basket at the end of the nth year (or on the 100 Maturity Date if n=5); and L n-1 is the level of the 100 Losing Basket at the end of the n-1th year (or one day after the date of purchase of the call option(s) if n-1 is zero). F is the relative change in the Singapore Dollar/United States Dollar exchange rate from inception to the 100 Maturity Date of the Sub-Fund. Growth Adjustment is the fair market value adjustment that is required in the event of the 100 Additional Payouts being made, should they occur, as determined by the Manager at the time of the payment of the 100 Additional Payouts in consultation with the option writer(s), subject to prevailing market conditions and on a best efforts basis. 20. While every effort will be taken to obtain the best participation rate, investors should be aware that market conditions may change significantly and that, in particular, any shift in 5-year Singapore dollars interest rates will have an impact on the participation rate. It is estimated that a decline in 5-year Singapore dollars interest rates of 0.10% would reduce the participation rate by approximately 25% (and vice versa). If the Manager feels that it is in the interest of investors to hedge against movements in interest rates or other market conditions prior to the end of the Initial Offer Period, the Manager may (subject to the approval of the Trustee) do so. 21. The investment approach of the Manager is to purchase the assets required to meet the investment objectives after the close of the Initial Offer Period. Thereafter, the Manager intends to hold the said assets until the 100 Maturity Date. Under normal circumstances, there should be no subsequent dealings in the said assets by the Manager unless required in meeting early redemption requests or to provide for the 100 Payouts (where relevant). Schroder S$ Dual Advantage 85 Fund 22. The investment objective of the Schroder S$ Dual Advantage 85 Fund is to provide investors with the opportunity to participate in the relative performance of a portfolio of stock pairs that represent major equity sectors while providing 85% capital protection at the Sub-Fund s maturity date approximately at the end of five years from the close of the Initial Offer Period (the 85 Maturity Date *). In addition, the Sub-Fund also aims to provide investors with fixed annual payouts of between 2% to 5% of the Initial Offer Price per Unit which will be approximately at the end of years 1, 2, 3 and 4 after the close of the Initial Offer Period (the 85 Fixed Payouts *). *Investors will be notified of (a) the exact 85 Maturity Date, (b) the exact 85 Fixed Payouts percentages and (c) the exact 85 Fixed Payouts dates at the commencement of the Initial Offer Period. 23. The 85 Fixed Payouts of the Schroder S$ Dual Advantage 85 Fund are provided by the call option(s) described below and are not guaranteed and will be made by way of cash distributions from the Sub-Fund. The distributions will be paid out to Holders within 30 days from the due date or such other period as may be agreed between the Manager and the Trustee or made in such other manner as may be agreed between the Manager and the Trustee.

9 9 24. To achieve the investment objective of 85% capital protection, the Schroder S$ Dual Advantage 85 Fund will invest in bonds issued by corporations, governments, government agencies, or supranationals with at least A rating by Standard & Poor s or equivalent (including sub-categories or gradations therein) and/or placed in deposits with financial institutions rated at least B by Moody s or equivalent, provided that not more than one-third of the net asset value of the Sub-Fund will be invested or placed with the same entity. The Schroder S$ Dual Advantage 85 Fund may also invest more than one-third and up to 100% of the net asset value of the Sub-Fund in debt securities issued or guaranteed by a government, government agency or supra-national with at least AA rating by Standard & Poor s or equivalent (including sub-categories or gradations therein). The Schroder S$ Dual Advantage 85 Fund may also enter into one or more interest rate swap transactions with counterparties rated at least A by Standard & Poor s or equivalent (including sub-categories or gradations therein), including cross currency swaps. The maturity value of the debt securities and/or deposits, combined with the interest rate swaps (if utilised) is expected to be sufficient for the Schroder S$ Dual Advantage 85 Fund to return 85% of the initial capital invested for Units held until the 85 Maturity Date. To provide participation in the performance of a portfolio comprising a basket of winning stocks ( 85 Winning Basket ) and a basket of losing stocks ( 85 Losing Basket ) and also to provide the 85 Fixed Payouts, the Sub-Fund will invest in call option(s). 25. Each year, Schroders global research analysts will select stock pairs, each pair from within the same global sector. Each stock pair will comprise a winning stock, i.e. a stock which Schroders analysts believe is likely to outperform the sector, and a losing stock, i.e. a stock which Schroders analysts believe is likely to underperform the same sector, based on a 1-year investment view. There will be at least 5 stock pairs and at most 10 stock pairs, diversified across at least 5 sectors. The winning stocks will constitute the 85 Winning Basket and the losing stocks will constitute the 85 Losing Basket. Investors will be notified of the initial stocks comprising the 85 Winning Basket and the 85 Losing Basket after the close of the Initial Offer Period. To maximise the return potential of the Sub-Fund, the call option(s) will incorporate an active mechanism which will allow the Manager to select new stock pairs at the start of each year or at such other period as the Manager may determine depending on market circumstances. To allow for reselection of stocks each year the 85 Winning Basket and 85 Losing Basket will each contain a variable cash component. Each time the stocks are selected the cash component will be adjusted up or down, according to a pre-defined formula, to compensate for the change in volatility. 26. Calculation of Final Redemption at 85 Maturity Date On the 85 Maturity Date, Holders are expected to receive the higher of: 85% of their initial capital, or 85% + (P x G x F) of their initial capital, where: P is the actual participation rate, which is estimated to be between 250% to 450% (exact rate to be determined and notified to Holders when the investments are made after the close of the Initial Offer Period and will depend on prevailing market conditions);

10 10 G is the average of the annual growth of the 85 Winning Basket minus the annual growth of the 85 Losing Basket, That is, G = (G1 + G2 + G3 + G4 + G5) / 5 where: G1, G2, G3, G4 and G5 are the percentage returns of the 85 Winning Basket minus the percentage returns of the 85 Losing Basket in years 1, 2, 3, 4 and 5 respectively, with each of G1, G2, G3, G4 and G5 subject to a maximum of 20%, ( ) where for n = 1, 2, 3, 4 or 5 W n L n Gn = lower of 20% and W n-1 L n-1 where W n is the level of the 85 Winning Basket at the end of the nth year (or on the 85 Maturity Date if n=5); W n-1 is the level of the 85 Winning Basket at the end of the n-1th year (or one day after the date of purchase of the call option(s) if n-1 is zero); L n is the level of the 85 Losing Basket at the end of the nth year (or on the 85 Maturity Date if n=5); and L n-1 is the level of the 85 Losing Basket at the end of the n-1th year (or one day after the date of purchase of the call option(s) if n-1 is zero). F is the relative change in the Singapore Dollar/United States Dollar exchange rate from inception to the 85 Maturity Date of the Sub-Fund. 27. While every effort will be taken to obtain the best participation rate, investors should be aware that market conditions may change significantly and that, in particular, any shift in 5-year Singapore dollars interest rates will have an impact on the participation rate. It is estimated that a decline in 5-year Singapore dollars interest rates of 0.10% would reduce the participation rate by approximately 20% (and vice versa). If the Manager feels that it is in the interest of investors to hedge against movements in interest rates or other market conditions prior to the end of the Initial Offer Period, the Manager may (subject to the approval of the Trustee) do so. 28. The investment approach of the Manager is to purchase the assets required to meet the investment objectives after the close of the Initial Offer Period. Thereafter, the Manager intends to hold the said assets until the 85 Maturity Date. Under normal circumstances, there should be no subsequent dealings in the said assets by the Manager unless required in meeting early redemption requests or to provide for the 85 Fixed Payouts. Schroder US$ Dual Advantage Fund 29. The investment objective of the Schroder US$ Dual Advantage Fund is to provide investors with the opportunity to participate in the relative performance of a portfolio of stock pairs that represent major

11 11 equity sectors while providing 100% capital protection at the Sub-Fund s maturity date approximately at the end of three and three-quarter years from the close of the Initial Offer Period (the US$ Maturity Date *). In addition, the Sub-Fund also aims to provide investors with four fixed payouts of between 1% to 3% of the Initial Offer Price per Unit which will be approximately at the end of years 1, 2 and 3 after the close of the Initial Offer Period and on the US$ Maturity Date (the US$ Fixed Payouts *). *Investors will be notified of (a) the exact US$ Maturity Date, (b) the exact US$ Fixed Payouts percentages and (c) the exact US$ Fixed Payouts dates at the commencement of the Initial Offer Period. 30. The US$ Fixed Payouts of the Schroder US$ Dual Advantage Fund are provided by the call option(s) described below and are not guaranteed and will be made by way of cash distributions from the Sub-Fund. The distributions will be paid out to Holders within 30 days from the due date or such other period as may be agreed between the Manager and the Trustee or made in such other manner as may be agreed between the Manager and the Trustee. 31. To achieve the investment objective of 100% capital protection, the Schroder US$ Dual Advantage Fund will invest in bonds issued by corporations, governments, government agencies, or supranationals with at least A rating by Standard & Poor s or equivalent (including sub-categories or gradations therein) and/or placed in deposits with financial institutions rated at least B by Moody s or equivalent, provided that not more than one-third of the net asset value of the Sub-Fund will be invested or placed with the same entity. The Schroder US$ Dual Advantage Fund may also invest more than one-third or up to 100% of the net asset value of the Sub-Fund in debt securities issued or guaranteed by a government, government agency or supra-national with at least AA rating by Standard & Poor s or equivalent (including sub-categories or gradations therein). The Schroder US$ Dual Advantage Fund may also enter into one or more interest rate swap transactions with counterparties rated at least A by Standard & Poor s or equivalent (including sub-categories or gradations therein), including cross currency swaps. The maturity value of the debt securities and/or deposits, combined with the interest rate swaps (if utilised) is expected to be sufficient for the Schroder US$ Dual Advantage Fund to return 100% of the initial capital invested for Units held until the US$ Maturity Date. To provide participation in the performance of a portfolio comprising a basket of winning stocks ( US$ Winning Basket ) and a basket of losing stocks ( US$ Losing Basket ) and also to provide the US$ Fixed Payouts, the Sub-Fund will invest in call option(s). 32. Each year, Schroders global research analysts will select stock pairs, each pair from within the same global sector. Each stock pair will comprise a winning stock, i.e. a stock which Schroders analysts believe is likely to outperform the sector, and a losing stock, i.e. a stock which Schroders analysts believe is likely to underperform the same sector, based on a 1-year investment view. There will be at least 5 stock pairs and at most 10 stock pairs, diversified across at least 5 sectors. The winning stocks will constitute the 100 Winning Basket and the losing stocks will constitute the US$ Losing Basket. Investors will be notified of the initial stocks comprising the US$ Winning Basket and the US$ Losing Basket after the close of the Initial Offer Period. To maximise the return potential of the Sub-Fund, the call option(s) will incorporate an active mechanism which will allow the Manager to select new stock pairs at the start of each year or at such other period

12 12 as the Manager may determine depending on market circumstances. To allow for reselection of stocks each year the US$ Winning Basket and US$ Losing Basket will each contain a variable cash component. Each time the stocks are selected the cash component will be adjusted up or down, according to a pre-defined formula, to compensate for the change in volatility. 33. Calculation of Final Redemption at US$ Maturity Date On the US$ Maturity Date, Holders are expected to receive the higher of: 100% of their initial capital, or 100% + (P x G) of their initial capital, where: P is the actual participation rate, which is estimated to be between 30% to 100% (exact rate to be determined and notified to Holders when the investments are made after the close of the Initial Offer Period and will depend on prevailing market conditions); G is the average of the annual growth of the US$ Winning Basket minus the annual growth of the US$ Losing Basket, That is, G = (G1 + G2 + G3 + G4) / 3.75 where: G1, G2, G3 and G4 are the percentage returns of the US$ Winning Basket minus the percentage returns of the US$ Losing Basket in years 1, 2, 3 and 4 respectively, with each of G1, G2, G3 subject to a maximum of 20% and G4 subject to a maximum of 15%. Investors should note that the final period will be less than a full year. Where for n = 1, 2 or 3 Gn = lower of 20% and where W ( n L n ) W L n-1 n-1 W n is the level of the US$ Winning Basket at the end of the nth year; W n-1 is the level of the US$ Winning Basket at the end of the n-1th year (or one day after the date of purchase of the call option(s) if n-1 is zero); L n is the level of the US$ Losing Basket at the end of the nth year; and L n-1 is the level of the US$ Losing Basket at the end of the n-1th year (or one day after the date of purchase of the call option(s) if n-1 is zero). and for n = 4

13 13 G4 = lower of 15% and where W ( 4 L 4 ) W L 3 3 W n is the level of the US$ Winning Basket on the US$ Maturity Date; W n-1 is the level of the US$ Winning Basket at the end of the 3rd year; L n is the level of the US$ Losing Basket on the US$ Maturity Date; and L n-1 is the level of the US$ Losing Basket at the end of the 3rd year. 34. While every effort will be taken to obtain the best participation rate, investors should be aware that market conditions may change significantly and that, in particular, any shift in 3.75-year US dollars interest rates will have an impact on the participation rate. It is estimated that a decline in 3.75-year US dollars interest rates of 0.10% would reduce the participation rate by approximately 13% (and vice versa). If the Manager feels that it is in the interests of investors to hedge against movements in interest rates or other market conditions prior to the end of the Initial Offer Period, the Manager may (subject to the approval of the Trustee) do so. 35. The investment approach of the Manager is to purchase the assets required to meet the investment objectives after the close of the Initial Offer Period. Thereafter, the Manager intends to hold the said assets until the US$ Maturity Date. Under normal circumstances, there should be no subsequent dealings in the said assets by the Manager unless required in meeting early redemption requests or to provide for the US$ Fixed Payouts. VII. SCHEME INCLUDED UNDER THE CPFIS 36. The Schroder S$ Dual Advantage 85 Fund is included under the CPF Investment Scheme Ordinary Account. The CPF Board has classified it under the risk classification of Low to Medium Risk-Narrowly Focused (Sector). The performance of the Schroder S$ Dual Advantage 85 Fund will be measured (after the deduction of applicable fees) against the 12-month Singapore dollar fixed deposit rate. The CPF Board currently pays a legislated minimum annual interest rate of 2.5% on the Ordinary Account and a guaranteed minimum annual interest rate of 4% on the Special Account. CPF interest rate is based on the 12-month fixed deposit and month-end savings rates of the major local banks and it is revised quarterly.

14 14 VIII. FEES & CHARGES Fees payable by a Holder Schroder S$ Schroder S$ Schroder US$ Dual Advantage 100 Dual Advantage 85 Dual Advantage Fund Fund Fund Preliminary Charge Nil Nil Nil Realisation Charge Nil Nil Nil Fees deducted from the assets of each Sub-Fund Schroder S$ Schroder S$ Schroder US$ Dual Advantage 100 Dual Advantage 85 Dual Advantage Fund Fund Fund Management Fee* 1.00% per annum of 1.00% per annum of 1.1% per annum of the capital raised the capital raised the capital raised during the Initial during the Initial during the Initial Offer Period Offer Period Offer Period Trustee Fee* 0.05% per annum of 0.05% per annum of 0.05% per annum of the capital raised the capital raised the capital raised during the Initial during the Initial during the Initial Offer Period Offer Period Offer Period * The Management Fee, Trustee Fee and other charges permitted under the Deed for the entire duration of each Sub-Fund are payable upfront to the Manager and the Trustee respectively after the close of the relevant Initial Offer Period of the Sub-Funds. Investors will have to bear the total Management Fee and total Trustee Fee incurred for the whole duration of each Sub-Fund even if Units are redeemed before the relevant Sub-Fund s maturity date. In the event that the Manager is unable to perform its duties under the Deed prior to the relevant Sub-Fund s maturity date, the Manager shall refund a pro-rated amount of the Management Fee payable for the relevant Sub-Fund which represents 0.15% per annum of the capital raised during the Initial Offer Period of that Sub-Fund attributable to the remaining term of that Sub-Fund. In the event that the Trustee is unable to perform its duties under the Deed prior to the relevant Sub-Fund s maturity date, the Trustee shall refund a pro-rated amount of the Trustee Fee attributable to the remaining term of that Sub-Fund. 37. The fees of the Sub-Manager of the Sub-Funds are paid by the Manager and not out of the assets of the respective Sub-Funds. IX. RISKS General Risks 38. (a) Investment in a collective investment scheme will be subject to different degrees of market, derivatives, interest rate, credit, equity, foreign securities, currency and industry risks depending on the collective investment scheme invested into.

15 15 (b) (c) (d) (e) Investors should note that investment in a collective investment scheme is designed to produce returns over the specified term and is not suitable for short-term speculation. Investors should not expect to obtain short-term gains from such investment. Investors should be aware that the price of units in a collective investment scheme, and the income from them, may fall or rise. Investors may not get back their original investment. Investors should note that expected returns from average annual growth are less than from simple growth over the full investment term. Investment in a collective investment scheme is designed to produce returns over the specified term and is not suitable for short-term speculation. Investors should not expect to obtain short-term gains from such investment. The value of investments by the Sub-Funds may go up and down due to changing economic, political or market conditions, or due to an issuer s individual situation. Specific Risks 39. (i) Derivatives Risk The Sub-Funds use of futures and swaps involves increased risk. The Sub-Funds ability to use such instruments successfully depends on the Manager s or the Sub-Manager s ability to accurately predict movements in stock prices, interest rates, currency exchange rates or other economic factors and the availability of liquid markets. If the Manager s or the Sub-Manager s predictions are wrong, or if the derivatives do not work as anticipated, the Sub-Funds could suffer greater losses than if the Sub-Funds had not used the derivatives. If a Sub-Fund invests in over-the-counter (OTC) derivatives, there is increased risk that a counterparty may fail to honour its contract. Financial derivatives will only be used for hedging and efficient portfolio management purposes and will not be used to gear the overall portfolio. These instruments are highly volatile instruments and their market values may be subject to wide fluctuations. The Manager and the Sub-Manager is of the view that they have the necessary expertise to control and manage the use of derivatives. Investments in derivatives are monitored and controlled by the Manager and the Sub-Manager with monthly mark to market valuations, careful research prior to investment and compliance monitoring to ensure careful compliance with the investment restrictions set out in the Deed with regard to derivatives. (ii) Interest Rate Risk Deposits in financial institutions and investments in bonds, debentures, loan stocks, convertibles and other debt securities may decline in value if interest rates change. In general, the prices of debt securities rise when interest rates fall, and fall when interest rates rise. (iii) Credit Risk The Sub-Funds are subject to the risk that some issuers of debt securities and other investments made by the Sub-Funds may not make payments on such obligations. Or, an issuer may suffer adverse changes in its financial condition that could lower the credit quality of a security, leading to greater volatility in the price of the security and in the value of the Sub-Funds. A change in the quality rating of a security can also affect the security s liquidity and make it more difficult to sell.

16 16 In particular, investors in the Sub-Funds should note that the protection of the initial capital depends principally on the non-default of the issuers of the bonds which the Sub-Funds invest in and/or the financial institutions in which deposits are placed in. In the event of default by any issuer of the bonds invested by the Sub-Funds, the Holders of the Sub-Funds will only be able to realise their Units at the prevailing net asset value per Unit of the Sub-Funds which may be lower than the initial capital invested. Investors should note that the minimum credit rating for bond issuers and interest rate swap counterparties will be A by Standard & Poor s or equivalent (including sub-categories or gradations therein). An obligation rated A is defined as being somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories. (iv) Equity Risk The Sub-Funds may invest in stocks and other equity securities and their derivatives which are subject to market risks that historically has resulted in greater price volatility than experienced by bonds and other fixed price securities. (v) Foreign Securities A Sub-Fund that invest in securities throughout the world are subject to numerous risks resulting from market and currency fluctuations, future adverse political and economic developments, the possible imposition of restrictions on the repatriation of currency or other governmental laws or restrictions, reduced availability of public information concerning issuers and the lack of uniform accounting, auditing and financial reporting standards or of other regulatory practices and requirements comparable to those applicable to companies in the investor s domicile. In addition, securities of companies or governments of some countries may be illiquid and their prices volatile and, with respect to certain countries, the possibility exists of expropriation, nationalisation, exchange control restrictions, confiscatory taxation and limitations on the use or removal of funds or other assets, including withholding of dividends. Some of these Sub-Funds securities may be subject to government taxes that could reduce the yield on such securities, and fluctuation in foreign currency exchange rates may affect the value of securities and the appreciation or depreciation of investments. Certain types of investments may result in currency conversion expenses and higher custodial expenses. (vi) Currency Risks The assets and liabilities of a Sub-Fund may be denominated in currencies different to the Base Currency or offering currency and such a Sub-Fund may be affected favourably or unfavourably by exchange control regulations or changes in the exchange rates between such Base Currency or offering currency and other currencies. If the currency in which a security is denominated appreciates against the base currency or offering currency, the value of the security would increase. Conversely, a decline in the exchange rate of the currency would adversely affect the value of the security. The Base Currency for the Schroder S$ Dual Advantage 100 Fund and the Schroder S$ Dual Advantage 85 Fund is Singapore dollars, while the Base Currency for the Schroder US$ Dual Advantage Fund is U.S. dollars. The Manager may manage the currency risk by hedging through forward currency contracts, currency futures, currency swap agreements or currency options.

17 17 The final redemption of the Sub-Funds will include the maturity value of the respective bonds and/ or deposits at the maturity dates of the Sub-Funds. In relation to the Schroder S$ Dual Advantage 100 Fund and the Schroder S$ Dual Advantage 85 Fund, as the bonds and/or deposits will be denominated in Singapore dollars, investors will not be subject to currency risk on the majority of their Singapore dollars investment. However, the additional returns from the call options of the Schroder S$ Dual Advantage 100 Fund and the Schroder S$ Dual Advantage 85 Fund, if any, will be exposed to currency risk. (vii) Industry Risks The value of the Units in the Sub-Funds will be susceptible to factors affecting the respective industries that they cover and may be subject to greater risks and market volatility than an investment in a broader range of securities covering various economic sectors. (viii) Lack of Diversification As an exception to the 10% single party limit under Appendix 1 of the Code on Collective Investment Schemes issued by the Authority, each Sub-Fund may invest up to one-third of its total net asset value in debt securities issued by corporations, governments, government agencies, or supranationals with at least A rating by Standard & Poor s or equivalent (including sub-categories or gradations therein) and/or placed in deposits with financial institutions rated B by Moody s or equivalent, provided that not more than one-third of the net asset value of the Sub-Fund will be invested or placed with the same entity. Each Sub-Fund may also invest its entire deposited property in debt securities issued by either a government, government agency or supranational that has a minimum long-term rating of AA by Standard and Poor s or equivalent (including sub-categories or gradations therein) or in any single party if the debt security invested in has the benefit of a guarantee from either a government, government agency or supranational that has a minimum long-term rating of AA by Standard and Poor s or equivalent (including sub-categories or gradations therein). Therefore, the Sub-Funds would be subject to a higher level of risk than a portfolio diversifying its holdings across different issuers. (ix) Nature of the Sub-Funds The Sub-Funds are capital protected funds and not guaranteed funds. The capital of Units held until the respective maturity dates of the Sub-Funds are protected by (i) investment in debt securities issued by corporations, governments, government agencies, or supranationals with at least A rating by Standard & Poor s or equivalent (including sub-categories or gradations therein) and/or placed in deposits with financial institutions rated at least B by Moody s or equivalent and/or interest rate swaps with counterparties with at least A rating by Standard & Poor s or equivalent (including sub-categories or gradations therein), provided that not more than one-third of the net asset value of the Sub-Fund will be invested or placed with the same entity or (ii) more that one-third and up to 100% investment in debt securities issued or guaranteed by a supranational where the rating is at least AA by Standard and Poor s or equivalent (including sub-categories or gradations therein).

18 18 X. SUBSCRIPTION OF UNITS Subscription Procedure 40. Units in the Sub-Funds can be purchased from the Manager or its distributors using cash, SRS monies or CPF monies (where relevant). To apply, investors must complete the application form accompanying this Prospectus and send the application form together with the application monies (if applicable) to the Manager or its distributors. An investor paying with CPF monies shall instruct his CPF agent bank or the CPF Board (as the case may be) to withdraw from his CPF account monies in respect of the Units applied for. An investor paying with SRS monies shall instruct his SRS operator bank to withdraw from his SRS account monies in respect of the Units applied for. 41. Minimum initial subscription amount and minimum subsequent subscription amount Schroder S$ Schroder S$ Schroder US$ Dual Advantage 100 Dual Advantage 85 Dual Advantage Fund Fund Fund Minimum initial subscription amount S$5,000 S$5,000 US$5,000 Minimum subsequent S$500 only during the S$500 only during the US$500 only during subscription amount Initial Offer Period Initial Offer Period the Initial Offer Period 42. Initial Offer Price and Initial Offer Period Schroder S$ Schroder S$ Schroder US$ Dual Advantage 100 Dual Advantage 85 Dual Advantage Fund Fund Fund Initial Offer Price S$1.00 S$1.00 US$1.00 Initial Offer Period Within 6 months from Within 6 months from Within 6 months from the date of registration the date of registration the date of registration of this Prospectus or of this Prospectus or of this Prospectus or such other period as such other period as such other period as may be determined may be determined may be determined by the Manager by the Manager by the Manager Although Units in the Sub-Funds are currently available for subscription only during the Initial Offer Period, the Manager may accept new subscriptions on any Dealing Day at the prevailing net asset value unless the Manager is of the view that such subscriptions cannot be efficiently invested for market reasons or more generally, if the Manager is of the view that it is not in the best economic interests of the Holders as a whole to do so. In the event of arrangements being made by the Manager for the issue of Units for delivery in any country outside Singapore the price at which such Units may be issued may at the discretion of the

19 19 Manager include as an addition to the Initial Offer Price a further amount sufficient to cover any expenses, fees, duties or taxation whether national, municipal or otherwise leviable in that country in respect of such issue or the remittance of money to Singapore. 43. Numerical example The following example shows how the number of Units allotted to an investor of the Sub-Funds is derived. Based on an investment of $10,000, the number of Units allotted will be calculated as follows: For Schroder S$ Dual Advantage 100 Fund and Schroder S$ Dual Advantage 85 Fund, S$10,000 S$1.00 = 10,000 Units Your Initial Offer No. of investment Price* Units * Includes Preliminary Charge which is at present 0% For Schroder US$ Dual Advantage Fund, US$10,000 US$1.00 = 10,000 Units Your Initial Offer No. of investment Price* Units * Includes Preliminary Charge which is at present 0% 44. An investor who invests in the Sub-Funds during the Initial Offer Period shall be sent a confirmation of his purchase within 10 Business Days from the date of receipt and acceptance of his application and the application monies by the Manager. Minimum fund size 45. The commencement of the Sub-Funds after the Initial Offer Period is subject to the Sub-Funds receiving a minimum aggregate of S$50 million of subscription monies or such other amount the Manager deems sufficient to operate the Sub-Fund upon the close of the Initial Offer Period. 46. The Manager reserves the right not to issue Units in any of the Sub-Funds and to return the application monies received (without interest) to investors no later than 14 Business Days after the close of the Initial Offer Period in the event that a Sub-Fund does not achieve the minimum fund size determined by the Manager, or if the Manager is of the opinion that it is not in the interest of investors or not commercially economical to proceed with the Sub-Fund, and in such event that Sub-Fund shall be deemed not to have commenced.

20 20 XI. REALISATION OF UNITS 47. Realisation procedure A Holder may at any time during the life of any of the Sub-Funds make a request in writing (a Realisation Request ) for the realisation of all or any Units held by him, subject to the suspension of realisation as set out in Part XIII below. Holders who hold their Units until the respective maturity dates of the Sub-Funds shall be deemed to have submitted their Realisation Requests for all their Units on the relevant maturity dates to the Manager or its distributors, i.e. such Holders need not submit any Realisation Requests. 48. Minimum Holding The minimum holding of Units for each of the Sub-Funds is 1000 Units ( Minimum Holding ). A Holder shall not be entitled to realise part of his holding of Units without the approval of the Manager and the Trustee if, as a result of such realisation of Units, his holding would be reduced to less than the Minimum Holding. Unless the Manager in any particular case, or generally otherwise agrees, a Holder shall not be entitled to realise Units other than in amounts above 100 Units. 49. Dealing Deadline Units are priced on a forward basis. This means that the realisation price for Units of each of the Sub- Funds realised is determined after the Dealing Deadline. Dealing Deadline means, in relation to any Dealing Day, 4 p.m. Singapore time, 2 Business Days before the Dealing Day or such other time on such Dealing Day as the Manager and the Trustee may agree. The Dealing Day in connection with the realisation of Units of the Sub-Funds is once a month on the first Friday of the month, or if this is not a Business Day the following Business Day (or such other day or days at such intervals as the Manager shall otherwise determine provided that reasonable notice of such determination shall be given by the Manager to all the Holders at such time and in such manner as the Trustee may approve). Where a realisation request has been received by the Manager or its duly authorised agents on or before the Dealing Deadline, the holder will be paid a price based on the net asset value of the Sub- Funds at the close of the Dealing Day. Where a Realisation Request has been received by the Manager after the Dealing Deadline, the holder will be paid a price based on the net asset value of the Sub- Funds at the close of the next Dealing Day. Business Day means any day (other than a Saturday or Sunday or a public holiday) on which banks in Singapore, the United States and the United Kingdom are open for business or any other day as the Manager and the Trustee may agree in writing. 50. Realisation proceeds For Holders realising their Units prior to the maturity dates of the Sub-Funds, Units will be realised at the net asset value per Unit of the Sub-Funds at the time of realisation which may be higher or lower