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Changes to specific SEB Fund 5 sub-funds and overall prospectus changes

As an investor, you are not required to act due to these changes, and the value of your investment in the sub-fund(s) will not be affected, but it is important for you to be aware of the changes. 

The purpose of these changes is to ensure clarity and transparency. 

Level of investment in contingent convertible bonds (CoCos) 

  • SEB Fund 5 – SEB Corporate Bond Fund EUR  

  • SEB Fund 5 – SEB Corporate Bond Fund SEK 

  • SEB Fund 5 – SEB Dynamic Bond Fund 

As set forth in the prospectus, the sub-funds (above) occasionally have exposure in bonds that are below investment grade, such as CoCos.  

It is noted that the sub-funds invest from time to time in CoCos. Investment levels in CoCos in these sub-funds were predominantly between 0-5%. However, due to market fluctuation, the exposure of CoCos may, on occasion, exceed 5%.  

The Management Company noted that no specific statements have been made in relation to the sub-funds’ CoCos investments. Therefore, it was decided by the Management Company to provide investors with more clarity in the sub-funds’ supplements. 

Along with the above clarification, to avoid any breach of investment restrictions and to maintain transparency for investors in this regard, a maximum exposure of 15% in CoCos is now added in the sub-funds’ supplements 

Notwithstanding the maximum level of 15%, going forward, the sub-funds’ investments in CoCos are intended to remain between 0-10%. 

The sub-funds will maintain low risk levels after the change. Note that “Coco bonds risk” has also been added in the sub-funds’ supplements to draw investors’ attention to this type of investment. 

Furthermore, the language in “Coco bonds risk” in the general part of the prospectus has also been updated. 

Change of investment horizon 

  • SEB Fund 5 – SEB Euro Bond Fund 

We intend to change the sub-fund’s investment horizon for investors from two (2) years to three (3) years. We have recently performed an evaluation of our funds based on risk classification, duration, and volatility. Given that the concerned sub-fund is classified as a fund with a long duration and high volatility, for the interest of investors, we consider that the investment horizon of three (3) years is more appropriate. 

Specification of investment manager 

  • SEB Fund 5 – SEB Euro Bond Fund 

  • SEB Fund 5 – SEB Euro Short Rate Fund 

Relevant information about SEB Investment Management AB, Finland branch is now provided in the prospectus. The introduction of this change is to be consistent with other sub-funds’ supplements in which the branch office is indicated if applicable. This is not a material change.  

Change of trading cycle 

  • SEB Fund 5 – SEB Euro Bond Fund  

To better reflect the underlying financial instruments’ settlement cycle that the sub-fund is investing in, we intend to change the settlement cycle at the level of the sub-fund from one (1) business day after a request is processed to two (2) business days after a request is processed. 

There is no change in the composition of the sub-fund’s portfolio. 

Overall changes in the prospectus 

Along with the changes in the sub-funds mentioned above, other non-material changes are also introduced in the prospectus. These are mainly to correct or supplement some factual statements. In particular, the removal of the 2% redemption charge for redemption within six months, the improvement of language in the section of “Coco bonds risk”, the deletion of the supplement of SEB Fund 5 – SEB Flexible Bond Fund SEK further to the completion of a merger, along with the update of Annex I at the end of the prospectus regarding the sub-funds' inclusion of investment disclosures within fossil fuels and nuclear energy-related activities, and other minor changes. 

How you as an investor are affected 

The changes will not have any foreseeable impact on your investment in the relevant sub-fund(s). The relevant sub-funds continue to follow the same investment objectives and strategies. Moreover, the sub-funds’ fees remain the same.  

The changes will take effect on 7 August 2023. If you would like to redeem your holding, free of charge, before the changes take effect, you should redeem them by 4 August 2023. Note that redemption can result in taxation. Kindly consult your financial advisor. 

Past performance does not guarantee future performance. The value of investment funds and other financial instruments may rise as well as fall and there is no guarantee you will recover your original investment. Key Information Documents and prospectuses are available at www.sebgroup.lu/funds.