All investors in HIIT were recently sent a Circular, which provides details of the wind-up, the options available to them and what action they need to take.
This page includes some questions and answers which you may find useful.
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1. GENERAL QUESTIONS2. M&G FUND OPTIONS3. JPM ELECT4. OVERSEAS INVESTORS
1. GENERAL QUESTIONS
Q1: What are the options at wind-up?
- The M&G UK Income Distribution Fund (which is an open-ended fund, also known as an OEIC), which has similar investment objectives to those of HIIT, is invested in many of the same assets as HIIT, and is run by the same manager as HIIT, Richard Hughes. The M&G UK Income Distribution Fund will be the automatic option for HIIT shareholders who do not choose one of the other alternative options. Find out more
- M&G Strategic Corporate Bond Fund (OEIC) run by Richard Woolnough. Find out more
- M&G Dividend Fund (OEIC), run by Phil Cliff. Find out more
- Taking cash
- Moving your investment into another closed-ended investment trust, JPMorgan Elect plc (JPM Elect)*
*This option is subject to JPM Elect shareholders approving a proposal to issue new shares in connection with HIIT’s wind-up scheme.
Q2: What do I need to do now?
Please refer to the Circular for the action you need to take.
Q3: Should I move to another closed-ended investment trust or to an Open-Ended Investment Company?
See the comparison table which explains the differences between an open-ended fund, (also known as an Open-Ended Investment Company or OEIC) and a closed-ended investment trust. M&G cannot provide investment advice, so you should speak to a financial adviser about what type of investment will suit you.
Q4: Can I move into another closed-ended investment trust?
The Board of HIIT has chosen JPM Elect as an alternative option for investors in HIIT who wish to remain invested in a closed-ended investment trust. You have been sent a circular with full details of your options and details on how to tell us which option you want. If you want to move your investment into a different closed-ended investment trust (other than JPM Elect) then you can select any of the options at wind-up (including cash) and subsequently move to the investment trust of your choice.
Or you can at any point sell your shares in HIIT and reinvest the cash in another investment trust.
Q5: What should I do if I want to take cash?
The Circular provides information on all the different options available to you, including what to do if you want to receive cash for your shares or units.
You are of course free to sell your HIIT investment in advance of wind-up if you prefer. If you choose to sell before the wind-up date, the value you receive will depend on the price obtained in the market on that day.
Q6: Can I choose any of the options?
Full details of the options available to you can be found in the Circular.
Q7: What happens if I do nothing?
As explained in the Circular, if you do not tell us which option you prefer, your investment will be automatically moved into the M&G UK Income Distribution Fund. For more information on this fund, visit the fund page.
Q8: Are there any tax implications?
Details of the tax implications of the wind-up are provided in the Circular in respect of the scheme. The exact implications of all options will depend on your individual circumstances. We cannot provide advice on your individual tax situation and recommend you seek your own tax advice.
Q9: Are there any costs associated with any of this?
As you would expect, there are some costs to winding up HIIT. The first £350,000 will be charged to HIIT, (this being an amount provided for by the HIIT Board to cover the costs of a simple wind-up without any investment options). This amounts to an average of approximately 0.14p per Package Unit. (Package Units consist of one zero dividend preference share, one income share and one capital share) Providing investment options will result in significant additional costs being incurred over £350,000; these will be met by M&G and JPMorgan Funds Limited.
M&G will not be charging investors for any costs related to the transfer of investments into M&G funds. JPM Elect may charge further costs to investors moving into the trust, which are set out in the Circular sent to you recently.
Q10: Can I split my investment between an M&G fund and JPM Elect?
This will depend on your circumstances. If you hold your shares or units in HIIT:
- directly; or
- through an ISA manager or other account through which you can hold both M&G funds and JPM Elect.
Q11: Is there any difference if I sell my HIIT shares or units now as opposed to waiting for wind-up?
If you sell (or transfer in cash) now, you will receive the market price for your HIIT shares or units. The market price is what other investors are willing to pay for your shares on that day, and shares could trade at a premium (above) or a discount (below) to the value of the assets owned by the trust, less dealing costs. It is likely that the market price will be different to the Net Asset Value for the shares or units, which may or may not be to your advantage.
If you choose to hold your shares or units until wind-up and then receive cash for them, you will get the Terminal Asset Value (‘TAV’) of your HIIT investment. The Terminal Asset Value is the per share value of the assets held within the fund on the day it is wound up.
Q12 What is happening to the assets in HIIT when it is wound up?
If you would like to know more about how HIIT is being managed as it approaches wind-up, and what will happen to the assets it holds, please watch this short video made by the HIIT fund manager, Richard Hughes.
Q13: Why is M&G not offering another investment trust company at wind-up?
HIIT is the last investment trust managed by M&G. It was launched in 1997 with a fixed life of 20 years, scheduled to wind-up on 17 March 2017. During its life, it has been used as a consolidation vehicle for several UK investment trusts and two Guernsey investment companies when they came to the ends of their respective fixed lives. Although we are not offering another closed-ended investment trust, we manage an open-ended fund with a very similar strategy and the same fund manager, the M&G UK Income Distribution Fund. Further details of this fund, as well as the other M&G funds being offered, can be found here.
Q14: Is JPMorgan taking over M&G?
No. The Board of HIIT have selected JPM Elect, a closed-ended investment trust alongside the three M&G open-ended funds as options at wind-up for shareholders.
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2. M&G FUND OPTIONS
Q1: What are the M&G fund options?
M&G is offering three different open-ended funds at wind-up:
- The M&G UK Income Distribution Fund, which has similar investment objectives to those of HIIT through investment in a combination of UK equities and bonds. It is invested in many of the same assets as HIIT, and is run by the same manager as HIIT, Richard Hughes. The M&G UK Income Distribution Fund will be the automatic option for HIIT shareholders who do not choose another option. The fund manager of the M&G UK Income Distribution Fund and HIIT, Richard Hughes, has made a short video to explain their similarities and differences.
- M&G Strategic Corporate Bond Fund
- M&G Dividend Fund
Q2: How do I choose to move my investment to the M&G funds?
Instructions can be found in the Circular, which was sent to you recently.
Q3: What if I want other M&G funds at wind-up?
First choose one of the three M&G funds being offered at the wind-up of HIIT. Following wind-up, you may immediately switch into any other M&G funds.
Q4: What will be the terms for investment in the M&G funds?
There will be no entry or exit charge on the M&G funds, however all M&G funds have ongoing charges associated with them. The Circular and Key Information for Investors Documents (KIIDs) sent to you recently contain full details of the share class offered for each fund and charges applied to them. KIIDs can be viewed at www.mandg.co.uk/kiids.
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3. JPM ELECT
Q1: Why did the Board of HIIT select JPMorgan Elect plc (JPM Elect) as the new closed-ended investment trust option?
Once HIIT is wound up, M&G will no longer run any closed-ended investment trusts. The HIIT Board, conscious that some shareholders may want to remain invested in a closed-ended trust, reviewed other closed-ended options and chose JPM Elect to be a closed-ended option to supplement the three M&G fund options which are also being offered to HIIT shareholders*. JPM Elect provides investors access to a number of different investment strategies, including one focussed on UK equity income, through a multi-share class structure. The Board of HIIT believes this will appeal to HIIT shareholders and unitholders who wish to remain in a closed-ended investment vehicle.
*This option is subject to JPM Elect shareholders approving a proposal to issue new shares in connection with HIIT's wind-up scheme.
Q2: Where can I find details of JPM Elect?
You can find information about JPM Elect on the company's website www.jpmelect.co.uk.
Q3: How do I choose to move my investment to JPM Elect at wind-up?
Full details on how to choose the JPM Elect option can be found in the Circular.
Please note that the JPM Elect option is subject to JPM Elect shareholders approving a proposal to issue new shares in connection with HIIT's wind-up scheme.
Q4: When are the shareholders of JPM Elect voting on the proposals?
JPM Elect's shareholders will vote on the proposals on 3 March 2017.
Q5: What if JPM Elect plc shareholders vote 'no' to the proposals?
There will be no investment trust offering to roll into. Details of what happens in that eventuality are provided in the Circular for the scheme.
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4. OVERSEAS INVESTORS
Q1: I invest in HIIT but live outside of the UK.
Full details of your options and how to tell us which option you want have been sent to you. Options for overseas holders may be affected by laws of the relevant country.
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