Important Changes to JN Mutual Funds

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December 2017
 

Important Changes to JN Mutual Funds

 

Dear Valued Client,

We wish to advise you of important and material changes to the operation of JN Mutual Funds that will be effective January 1, 2018. Specifically, the Net Asset Value (NAV) of the Local Money Market and Global Money Market Funds (“Money Market Funds “) will no longer be fixed, and quarterly distributions will no longer be paid. Instead, the NAV of the Money Market Funds will vary, taking account of accrued income and the underlying market values of assets held in the Money Market Funds.

What does this mean?

  • The Net Asset Value will increase as long as the overall value of the invested assets in the Funds increases. The Net Asset Value will remain the same if the overall value of the invested assets does not change. The Net Asset Value will decrease if for any reason the overall value of the invested assets declines.
  • You will no longer be restricted to receiving your returns at the end of each quarter. Instead, you may continue to encash units as often as you wish – subject to the restrictions illustrated in the Offering Document.
  • In order to receive income from your investments, you may choose to encash an appropriate portion of your units at anytime.

 

Comparison of Fixed and Floating NAV for Investors in the Local Money Market Fund

Current
(Fixed NAV)
New Arrangement
(Floating NAV)
Unit Value at the beginning of quarter (J$) 10.00 10.00
Value of Assets at beginning of quarter (J$) 1,000,000.00 1,000,000.00
Accrued Income during the quarter (J$) 10,000.00 10,000.00
Value of Assets at end of quarter (J$) 1,000,000.00 1,010,000.00
Unit Value at end of quarter (J$) 10.00 10.10
Distribution to Investors at end of quarter (J$) 10,000.00 0.00

 

The table above is for illustrative purposes only and indicates that an investor in the Local Money Market Fund purchased 100,000 units on January 1, 2018. If the overall value of the assets in the fund remained constant , the investor would still have $1M at March 31, 2018, and also would have received a distribution of $10,000. Under the new arrangement where the Net Asset Value will vary, the investor would have had 100,000 units valued at $1,010,000 but would have received no automatic distribution. However, the investor – if he so wished – would have been able to encash 990.09901 units and receive $10,000.00. The remaining units would have been worth $1,000,000.00. Consequently, in the stated example, the financial position of the investor would be exactly the same regardless of whether the NAV is fixed or varied. A similar example – but adjusted for the NAV quoted in US dollars – would apply to the Global Money Market Fund.

What should you do?

You are not required to take any act ion, however, if you wish further information or clarification , we invite you to review the updated Offering Document at www.jnfunds.com or contact one of our financial advisors at your convenience.

Sincerely,

Allan Lewis
Managing Director

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