Termination of ETFS S&P/ASX 100 ETF

Oct 11, 2018

ETFS Management (AUS) Limited ACN 150 433 828 (ETFS), as responsible entity for the ETFS S&P/ASX 100 ETF (ZOZI), has resolved to terminate the Fund (Termination), effective after the close of trading on 31 October 2018 (Last Trading Day). As a result of the Termination, Units in the Fund will be suspended from quotation on the AQUA market of the Australian Securities Exchange (ASX) and removed from trading status after the close of trading on the Last Trading Day and wound up in accordance with Part 5C.9 of the Corporations Act and the Fund's constitution.

Background

ETFS has undertaken a review of the Fund and determined that it would be in the best interests of Holders to terminate the Fund. ETFS made this determination for several reasons, including that:

  1. the Fund has not reached sufficient size to be cost effective for investors relative to other Australian equity ETFs. Management Costs are 0.24% per annum, as detailed in the Product Disclosure Statement (PDS), which are higher than those on offer by comparable Australian equity ETFs with more assets under management. Current asset value is approximately $10 million, and it is not expected that the size of the Fund will increase in the near future, and

  2. due to limited secondary market trading in the Fund average bid-offer spreads are higher than for comparable Australian equity ETFs.

ETFS has decided to provide Holders with 15 trading days’ notice of its intention to terminate the Fund. This communication outlines the steps that will be taken to affect the Termination of the Fund and seeks to inform you as to what action you may take.

Important dates

Set out below are a summary of the key dates relating to the Termination.

Dispatch of this letter

11 October 2018

Last day for dealings in the Units in the Fund and last day for redemption of Units in the Fund by Authorised Participants (the Last Trading Day)

31 October 2018

The date at which termination will commence (Termination Commencement Date)

31 October 2018

Ex-date for distribution of income for the period 1 October 2018 to 1 November 2018

1 November 2018

The date at which an investor needs to be recorded as the beneficial owner of Units in the Fund in the Clearing House Electronic Subregister System (CHESS) (the Termination Record Date).

2 November 2018

Final distribution to be paid to investors holding Units on the Termination Record Date (the Termination Payment Date).

7 November 2018

The dates above are subject to change. Any change will be announced to the market via the ASX.

How will the termination of the Fund affect your Units?

As a Holder of Units, you have several choices as to the action you can take in response to this communication. In any event your Units will not be able to be traded on the ASX after the Last Trading Day. You should consult your financial adviser to ensure that you understand the implications, including the costs and risks, of your choice.

As a Holder of Units, you may either;

  1. sell your Units on the ASX in the ordinary way via your broker prior to the close of trading on the Last Trading Day. ETFS expects that the market makers will continue to make a market for Units until 31 October 2018,

  2. redeem your Units with the Issuer in the ordinary way, if you are an Authorised Participant, prior to the close of trading on the Last Trading Day, or

  3. hold your Units until the Termination of the Fund and receive a pro-rata share of the proceeds of winding up.

If you choose to sell your Units on the ASX, you will incur brokerage costs and any spread costs as you normally would when transacting on the ASX. Similarly, if you are an Authorised Participant and choose to redeem your Units with the Issuer, you will incur the costs associated with a redemption as set out in section 6.4 of the PDS for the Fund. Holders deciding to sell their Units are able to have regard to the prevailing price of the underlying securities and their Units at the relevant time. Performance information for both the Fund and the benchmark Index, as well as the full portfolio holdings of the Fund are published daily on www.etfsecurities.com.au.

Where you hold your Units until Termination, you will receive a distribution of income for the period from 29 September 2018 to 1 November 2018, together with an amount in Australian dollars equal to the net asset value per Unit of the Fund on the day the assets of the Fund are sold (which is expected to be the Last Trading Day), multiplied by the number of Units you hold. ETFS will bear all transaction costs associated with the liquidation of the assets of the Fund. Holders should be aware that the price of the underlying securities may change and the net asset value per Unit of the Fund may change between the date of this communication and the completion of Termination.

For further information in relation to the Fund or how to sell or redeem your Units, please refer to the PDS. A copy of the PDS is available here.