REG - Invesco Markets II - EGM Circular

Bank Of New York MellonAnnouncement

02/03/2022 12:45

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RNS Number : 3822D  Invesco Markets II PLC  02 March 2022

 

 

 Invesco Markets II plc

 Ground Floor, 2 Cumberland Place, Fenian

 Street, Dublin 2, Ireland

 Telephone/Switchboard +44 (0)20 3370 1100 etf.invesco.com

 

 

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This circular (the "Circular") is sent to you as a Shareholder of Invesco Euro
Corporate Bond
UCITS ETF Dist (ISIN: IE00BF51K249), a share class of Invesco Euro Corporate Bond UCITS ETF (the "Fund"), a
sub-fund of Invesco Markets II plc (the "Company"). It is important and
requires your
immediate attention. If you are in any doubt as to the action you should take, seek advice from your stockbroker, bank manager, solicitor, accountant or independent financial adviser. The Circular and the
changes it proposes have not been received by the Central Bank of Ireland (the
"Central Bank") and it is possible that changes may be necessary
to meet the requirements of the Central Bank.

If you have sold or transferred your shares in the Fund, please pass this
circular to the purchaser
or transferee or to the stockbroker or other agent through whom the sale or transfer was effected, for transmission to the
purchaser or transferee as soon as possible.

Unless otherwise defined herein, all capitalised terms used herein shall bear
the same meaning as capitalised terms used in the latest prospectus of the
Company (the "Prospectus"). A copy of the Prospectus and the supplement
relating to the Fund (the "Supplement") is available on request during normal
business hours from the Company or from the local representative of the
Company in any jurisdiction in which the Fund is registered for public distribution, including from the German information
agent Macard, Stein & Co AG, Ballindamm 36, 20095 Hamburg,
Germany and in Switzerland at BNP Paribas Securities Services, Paris,
succursale de Zurich, Selnaustrasse 16, 8002 Zurich which is the
Swiss representative and paying agent.

The Directors accept responsibility for the information contained in this
document. To the best of the knowledge and belief of the Directors (who have
taken all reasonable care to ensure that
such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect
the import of such information.

RE:       Invesco Euro Corporate Bond UCITS ETF

Notification of Extraordinary General Meeting to change the investment objective of the Fund

2 March 2022 Dear Shareholder

1.    Introduction

The Company is authorised by the Central Bank pursuant to the European Communities (Undertakings for Collective
Investment in Transferable Securities) Regulations 2011, as amended (the "UCITS

 

 

Regulations"). The Company is established an umbrella fund with segregated
liability between sub- funds and the Fund is a sub-fund of the Company.

The purpose of this letter is to notify you of an extraordinary general
meeting ("EGM") to consider and vote on the proposed material
amendments to the Fund (the "Material Changes").

2.    Material Changes

 

a.    Change of Reference Index

The Board has determined to replace the current Reference Index tracked by the
Fund, as
indicated in the table below. The change to the Reference Index is proposed as part of the Manager's continuous review
of its existing product range and due to increased demand for ESG compliant
investments in the Fund whilst still providing broad exposure to the
investment grade corporate bond
market. A description of the proposed new Reference Index can be
found in Appendix I hereto.

 

 Current Reference Index              New Reference Index
 Bloomberg Euro Corporate Bond Index  Bloomberg MSCI Euro Liquid Corporate ESG

                                      Weighted Bond Index

 

b.    Change of fund name

As a result of the change of the Reference Index, the Fund will also undergo a
change of name as outlined below.

 

 Current Fund Name                      New Fund Name
 Invesco Euro Corporate Bond UCITS ETF  Invesco EUR IG Corporate Bond ESG UCITS ETF

 

c.     Change to the investment objective

As a result of the change of the Reference Index, the investment objective of the Fund will also change, as outlined below.

 

 Current Investment Objective                                               New Investment Objective
 The investment objective of the Fund is to achieve the performance of the  The investment objective of the Fund is to achieve the total return
 Bloomberg Euro Corporate Bond Index (the "Reference Index") less fees,     performance of the Bloomberg MSCI Euro Liquid Corporate ESG Weighted Bond
 expenses and transaction costs.                                            Index (the "Reference Index")

                                                                            less fees, expenses and transaction costs.

 

Shareholders should note that:

·
Following the change of the Reference Index, the Fund will be categorised as an Article 8 Fund for the purposes of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27
November 2019 on sustainability-related disclosures in the financial sector.

 

·
The maximum Management Fee for all unhedged share classes of the Fund will be reduced to 0.10%
per annum. For the avoidance of doubt, the actual Management Fee is not reducing.

 

·
The maximum Management Fee for all hedged share classes of the Fund will be reduced to 0.12%
per annum. For the avoidance of doubt, the actual Management Fee is not reducing.

 

·
The Fund does not intend to carry out any securities lending and therefore the expected proportion of
the Fund's assets that may be subject to securities lending is 0%.

 

·
The Fund retains all its other characteristics, in particular its risk and return profile (which remains unchanged at 3 on the scale presented in the KIID).

 

·
Shareholders will not bear any additional legal or administrative costs as a result of the Material Changes.

The Fund may incur transaction costs associated with the Material Changes. The
transaction costs, based on the Fund's current portfolio, are expected to be minimal and will be borne by the
Fund.

The total expense ratio will not change as a result of the Material Changes.
The anticipated tracking error and risk profile
of the Fund are expected to remain the same.

·
Subject to Shareholder approval being obtained, the Material Changes will take effect on or around 19 April
2022 (the "Effective Date").

Recommendation:

The Directors believe that the resolution to be proposed at the EGM is in the
best interests of Shareholders and, accordingly, the Directors recommend that
Shareholders vote in favour of the resolution.

3.    NOTICE OF EGM TO CONSIDER AND VOTE ON MATERIAL CHANGES

In order to obtain Shareholder approval for the Material Changes, the Board
has decided to
convene an EGM at which a resolution to approve the Material Changes will be proposed. You will find attached to this letter a notice of EGM ("Notice of EGM") which will be held at 10.00 a.m. (Irish time) on 8 April 2022. Please note that you are only entitled to attend and vote at the meeting (or any adjournment thereof)
if you are a registered shareholder. As the Fund uses the International
Central
Securities Depositary (ICSD) model of settlement and The Bank of New York Depository (Nominees) Limited is the
sole registered shareholder of shares in the Fund, investors in the Fund
should submit their voting instructions through the relevant ICSD or the
relevant participant in an ICSD (such as a
local central securities depositary, broker or nominee). If
any investor has invested in the Fund through

a broker/dealer/other intermediary, the investor should contact this entity to provide voting instructions.

 

Proxy Form

The form of proxy accompanying this Notice of EGM should be completed and returned in accordance with
the instructions thereon, so as to be received no later than 48 hours before
the time fixed for the holding of the EGM.

Re-convening the EGM

Should it be necessary to re-convene the EGM, Shareholders should not that the Board has determined that the re-convened meeting would take place on 15 April 2022 at 10.00 a.m. (Irish time).

Publication of Results

The results of the EGM will be announced through the regulatory news service on the Euronext Dublin website
and will be published in the appropriate manner in each of the other
jurisdictions in which the Fund is listed on a stock exchange.

Redemption of Shares

Shareholders who do not wish to remain in the Fund following the
implementation of the Material Changes (if the resolution is passed) will
have the opportunity to redeem their shares on any Dealing Day
prior to the Effective Date in the manner
prescribed in the Prospectus.

Should you have any questions relating to these matters, you should either
contact the Company at the above address or
alternatively you should contact your investment consultant.

Yours faithfully

 

 

 

Director

For and on behalf of

Invesco Markets II plc

 

Appendix I

 

New Reference Index Description

This section is a summary of the principal features of the New Reference Index
and is not a complete description of the New Reference Index.

The Reference Index is designed to reflect the performance of EUR-denominated
investment
grade, fixed-rate, taxable debt securities issued by corporate issuers adjusted based upon certain environmental,
social and governance ("ESG") metrics, which seek to increase overall exposure
to those issuers demonstrating a robust ESG profile.
The Reference Index includes publicly issued securities by
industrial, utility
and financial institution issuers in global and regional markets.

To be eligible for inclusion in the Reference Index, eligible securities'
principal and interest must be denominated in EUR. The securities which
comprise the Reference Index must be rated investment grade (Baa3/BBB-/BBB-
or higher) using the middle rating of Moody's, S&P and Fitch. When a
rating from only two agencies is available, the lower is used. When only one agency rates a bond, that rating is
used. In cases where explicit bond level ratings may not be available, other
sources may be used to classify securities by credit quality.

To be eligible for inclusion in the Reference Index, bonds must have €500 million minimum par amount outstanding.
Bonds must have fixed-rate coupon issues and at least one year to final
maturity regardless of optionality. Callable bonds are eligible for
inclusion; callable bonds that convert fixed
to floating rate, including fixed-to-float perpetual, are included during their fixed-rate term only and will exit
the index one year prior to conversion to floating-rate. Fixed-rate perpetual
bonds are
not included. Only fully taxable issues are eligible for inclusion. Senior and subordinated issues are eligible for inclusion.

Securities are excluded that according to the Index Provider's exclusionary criteria: 1) have faced very severe
controversies pertaining to ESG issues (including UN Global Compact
violations) over the last three years; or 2) are involved, as per the
Bloomberg MSCI screens, in any of the following
business activities: conventional weapons, nuclear weapons, oil sands, thermal coal, tobacco and firearms; or

3) are issued by emerging market issuers.

Each of the eligible component securities is then assigned an ESG score using
MSCI ESG metrics. This ESG Score is then applied to re-weight the eligible
securities from their natural weights as a result of the notional
size of the bond, to construct the weighting of the Reference Index.

MSCI ESG metrics is a tool designed to produce a broad set of standardised ESG
data and
simple flagged metrics that are comparable across a broad universe of companies and used to assess the ESG profile of a company. ESG metrics cover risk exposure, controversies, performances and practices and take the following areas into account: climate change, natural capital, pollution and waste, environmental
opportunities, human capital, product liability, stakeholder opposition and
corporate behaviour.

Security types excluded from the Reference Index include: treasuries,
government-related
bonds, securitised and covered bonds, contingent capital securities (including traditional CoCos and contingent write-down securities, with explicit capital ratio or solvency/balance sheet-based triggers),

 

 

bonds with equity type features (e.g. warrants, convertibles, preferreds), inflation-linked bonds, floating-rate issues, private placements, retail bonds
and structured notes.

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