Common use of Swinging Single Pricing Clause in Contracts

Swinging Single Pricing. For any Sub-Fund, the Management Company may determine to apply a swinging single pricing mechanism for dealing with performance dilution issues that arise when a fund experiences large inflows or outflows to ensure that long-term Unitholders are not materially disadvantaged by the negative impact from redemptions and subscriptions. The swinging single pricing mechanism utilizes a single Net Asset Value per Unit for subscriptions and redemptions, which is adjusted upwards or downwards for net inflows or outflows, respectively, to cover the transaction costs, commissions, taxes, spreads and other costs incurred by a Sub-Fund due to cash flows. As a result, the aforementioned costs will be borne by subscribing and redeeming investors. The adjustment factor (the “Swing Factor”) is typically applied when the net in- or outflows exceed a certain threshold (the “Swing Threshold”). Under the swinging single pricing policy, the swinging single pricing committee (the “SSP Committee”) decides upon the application of single swinging pricing to the Sub-Funds, the effective Swing Threshold and sets the Swing Factors based on an assessment of the above listed costs incurred in the relevant markets. The SSP Committee meets at least semi-annually, and ad-hoc as deemed necessary (such as in the case of substantial changes in financial market conditions or in the case of material changes to the Sub-Funds’ investment policy). The SSP Committee takes into account and may rely upon advice by investment and risk management experts within or outside LGT Group. Annex A specifies whether or not a single swinging policy is applied for a given Sub-Fund and sets out the maximum Swing Factor and the Swing Threshold, where applicable.