Threadneedle (Lux) Singapore Prospectus - Fundsupermart.com

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Threadneedle (Lux) Singapore Prospectus - Fundsupermart.com

Threadneedle (Lux) – Singapore ProspectusThreadneedle (Lux) – Emerging Market Corporate BondsThreadneedle (Lux) – Emerging Market DebtThreadneedle (Lux) – Enhanced CommoditiesThreadneedle (Lux) – Global Asset AllocationThreadneedle (Lux) – Global Emerging Market Short-Term BondsThreadneedle (Lux) – Global TechnologyThreadneedle (Lux) – Pan European EquitiesThreadneedle (Lux) – Pan European Smaller CompaniesThreadneedle (Lux) – Target Return (US$)Threadneedle (Lux) – US$ High Income Bondssub-funds ofThreadneedle (Lux)Established in LuxembourgSingapore ProspectusThis Singapore Prospectus incorporates and is not valid without the attached base prospectus dated November 2011 of the Threadneedle (Lux) (the“Base Prospectus”). Unless the context otherwise requires, terms defined in the Base Prospectus shall have the same meaning when used in thisSingapore Prospectus except where specifically provided for by this Singapore Prospectus.The SICAV is an investment company with variable capital (société d’investissement à capital variable) incorporated in Luxembourg and is constitutedoutside of Singapore. The SICAV has appointed State Street Bank And Trust Company, Singapore Branch (whose details appear in the Directory ofthis Singapore Prospectus) as its Singapore representative and agent for service of process in Singapore.1


Threadneedle (Lux) – Singapore ProspectusTable of ContentsDirectory 3Important information 41. The SICAV 52. The Portfolios 53. Management and Administration 54. Other Parties 55. Investment Objective, Focus and Approach 66. Investor Profile 67. Fees and Charges 68. Risk Factors 69. Subscription for Shares 710. Regular Savings Plan (RSP) 811. Redemption of Shares 812. Switching 913. Obtaining Price Information in Singapore 914. Suspension of Dealings 915. Performance of the Portfolios 916. Soft Dollar Commissions/Arrangements 917. Conflicts of Interests 918. Reports 919. Other Material Information 1020. Queries and Complaints 10Schedule 1 – List of Portfolios and Share Classavailability in Singapore 11Schedule 2 – Sub-Advisors 12Schedule 3 – Fees and Charges 13Schedule 4 – Minimum Initial Subscription Amounts 17Schedule 5 – Performance of thePortfolios and their Benchmarks 182


Threadneedle (Lux) – Singapore ProspectusDirectoryRegistered Office69, Route d’EschL-1470 LuxembourgGrand Duchy of LuxembourgManagement CompanyThreadneedle Management Luxembourg S.A.74, MühlenwegL-2155 LuxembourgGrand Duchy of LuxembourgCustodianRBC Dexia Investor Services Bank S.A.14, Porte de FranceL-4360 Esch sur AlzetteGrand Duchy of LuxembourgSingapore RepresentativeState Street Bank And Trust Company, Singapore Branch168 Robinson Road#33-01 Capital TowerSingapore 068912(Company Registration No.: T01FC6134G)Solicitors to the SICAV as to Singapore LawAllen & Gledhill LLPOne Marina Boulevard #28-00Singapore 018989MORE CONTACT DETAILS ARE SET OUT IN THE DIRECTORYOF THE BASE PROSPECTUS.AuditorsPricewaterhouseCoopers, S.à r.l.400, Route d’Esch, B.P.1443L-1014 LuxembourgGrand Duchy of Luxembourg3


Threadneedle (Lux) – Singapore ProspectusInformation on other service providers to the SICAV is set outin the Base Prospectus under the section headed “SERVICEPROVIDERS”.5. INVESTMENT OBJECTIVE, FOCUS AND APPROACH5.1 Information on the investment objective and policy of aPortfolio is set out in the Base Prospectus in the sectionrelating to that Portfolio under the “INVESTMENT OBJECTIVESAND POLICIES” section. Please also refer to Schedule 2 forinformation on the investment approach of each Sub-Advisor.5.2 In addition, each Portfolio may employ the investment practicesdescribed under “OTHER INVESTMENT PRACTICES” in theBase Prospectus and in Appendix A of the Base Prospectusheaded “INVESTMENT RESTRICTIONS” and in Appendix Bof the Base Prospectus headed “INVESTMENT TECHNIQUESAND INSTRUMENTS” (which includes a description of thesecurities lending transactions and repurchase agreementtransactions which the SICAV may engage in).6. INVESTOR PROFILE6.1 The typical investor profile of a Portfolio is set out in the BaseProspectus in the section relating to that Portfolio under the“INVESTMENT OBJECTIVES AND POLICIES” section.6.2 Investors should consult their financial advisers if in doubtwhether a Portfolio is suitable for them.7. FEES AND CHARGES7.1 The fees and charges payable by a Singapore investor investingin a Portfolio as well as the fees and charges payable out ofthe assets of the Portfolio are set out in Schedule 3 to thisSingapore Prospectus.7.2 Further information on such fees and charges is set out in theBase Prospectus under the sections headed “PURCHASEOF SHARES”, “REDEMPTION OF SHARES”, “EXCHANGEPRIVILEGE” and “FEES AND EXPENSES”.8. RISK FACTORS8.1 GeneralInvestors should consider and satisfy themselves as to therisks of investing in a Portfolio. There can be no assurance thata Portfolio will achieve its investment objectives. Investorsshould be aware that the price of Shares in a Portfolio, andthe income from them, may fall or rise and an investor maynot get back his original investment in the Portfolio, especiallyif investments are not held for the long term. The Portfoliosmay exhibit significant price volatility.8.2 Specific risks8.2.1 Exchange rate risksMany of the Portfolios are invested in securitiesdenominated in a number of different currencies otherthan the Base Currency in which the Portfolios aredenominated (or the currency of denomination of theparticular Share Class) and, therefore, changes in foreigncurrency exchange rates will affect the value of securitiesin such Portfolios.Investment decisions will be made from the perspectiveof the Base Currency of the Portfolio. Unless otherwiseprovided in the section for a Portfolio under the“INVESTMENT OBJECTIVES AND POLICIES” sectionof the Base Prospectus, there is currently no intention toactively hedge any non-Base Currency exposure for suchPortfolio.Share Classes may also be available in differentcurrencies than the Base Currency of the Portfolio. Unlikenon-hedged Share Classes, hedged Share Classes willaim to hedge the currency risk of investing in a Portfoliowhose Base Currency is different to the currency ofthe Share Class by using currency derivatives. Furtherinformation is set out in the Base Prospectus in thesection headed “RISK FACTORS” under the sub-heading“Hedged Shares Classes”.Singapore investors should note that the Portfoliosare not denominated in Singapore Dollars and theirShare Classes may not be denominated in SingaporeDollars. Singapore investors whose reference currencyis Singapore Dollars should therefore note that theymay be exposed to additional exchange rate risks in thisconnection.8.2.2 General market risksInvestments of a Portfolio may go up or down due tochanging economic, political or market conditions thatimpact the share price of companies that the Portfolioinvests in.8.2.3 Inflation risksBond Portfolios offer limited capital growth potentialand an income that is not linked to inflation. Inflation cantherefore affect the value of capital and income of thebond Portfolios over time.8.2.4 Interest rate risksChanges in interest rates are likely to affect the values offixed income securities held by the Portfolios. In general,as interest rates rise, the price of a fixed rate bond willfall, and vice versa. Duration is a measure of the extent towhich this is the case, with a longer duration suggestinghigher sensitivity to interest rate moves.8.2.5 Liquidity risksA Portfolio may invest in assets that are not alwaysreadily saleable without suffering a discount to fair value.The Portfolio may have to lower the selling price, sellother investments or forego another more appealinginvestment opportunity as a result.6


Threadneedle (Lux) – Singapore Prospectus8.2.6 Valuation risksSome Portfolios may invest in assets that are not readilyrealisable or may be hard to value. The value of theseassets is a matter of the relevant valuation agent’s policyand the true value may not be recognised until the assetis sold.8.2.7 Derivatives risksThe use of derivatives may result in losses in excess ofthe amount invested. Investors should note that certainPortfolios may use financial derivative instrumentsfor investment purposes. Information on whether aPortfolio may do so and whether the use of such financialderivative instruments may increase the risk profile ofa Portfolio is provided in the section for that Portfoliounder the “INVESTMENT OBJECTIVES AND POLICIES”section of the Base Prospectus. Investors should beaware that the use of financial derivative instrumentsfor investment purposes carries a greater degree ofrisk than investments that do not make use of financialderivative instruments. Further information on the useby Portfolios of financial derivative instruments (includinghow exposure to such financial derivative instrumentsis measured) is set out in the Base Prospectus in thesection headed “RISK FACTORS” under the sub-heading“USE OF DERIVATIVES AND OTHER INVESTMENTTECHNIQUES”.The Management Company will ensure that the riskmanagement and compliance procedures are adequateand have been or will be implemented and that it has thenecessary expertise to manage the risk relating to theuse of financial derivatives.8.2.8 Liquidity risks associated with redemptions of SharesThe Portfolios are not listed in Singapore and there isno secondary market for the Portfolios in Singapore.Therefore, Singapore investors can only redeem theirShares by submitting redemption requests as describedin this Singapore Prospectus. In addition, in certaincircumstances, an investor’s right to redeem his Sharesmay be suspended or his redemption may be deferred fora period.8.2.9 OthersInformation on other risks which potential investorsshould consider before investing in a Portfolio is setout in the Base Prospectus under the section headed“RISK FACTORS” and, where applicable, in the sectionrelating to the relevant Portfolio under “INVESTMENTOBJECTIVES AND POLICIES” section of the BaseProspectus. Investors considering an investment in anabsolute return portfolio should also note additional riskfactors for an absolute return portfolio set out in theBase Prospectus in the section headed “INVESTMENTOBJECTIVES AND POLICIES” under the sub-heading“THE ABSOLUTE RETURN PORTFOLIOS”.The above shall be read in conjunction with the BaseProspectus in the section headed “RISK FACTORS” andshould not be considered to be an exhaustive list of therisks which potential investors should consider beforeinvesting into any Portfolio. Potential investors should beaware that an investment in any Portfolio may be exposedto other risks of an exceptional nature from time to time.9. SUBSCRIPTION FOR SHARES9.1 Subscription ProcedureShares may be purchased by Singapore investors throughSingapore distributors appointed by the Management Companyfor the Portfolios (“Singapore Distributors”).An application for Shares should be made on the applicationform prescribed by the Singapore Distributor through whomthe investor is purchasing Shares. The properly completedapplication form, together with any relevant supportingdocuments and the payment for the Shares as may be advisedby the Singapore Distributor, must be sent to the SingaporeDistributor.Details on the terms and conditions of subscriptions are set outin the Base Prospectus under the section headed “PURCHASEOF SHARES”.Singapore investors should also contact the relevant SingaporeDistributor to check whether any additional terms andconditions are imposed by such Singapore Distributor.9.2 Minimum Initial Subscription Amount and MinimumSubsequent SubscriptionThe minimum initial subscription amount for a Portfolio isset out in Schedule 4 to this Singapore Prospectus. Thereis currently no minimum subsequent subscription amountimposed by the Management Company.Singapore Distributors may impose a different minimuminitial subscription amount or impose a minimum subsequentsubscription amount on their clients and Singapore investorsshould check with the relevant Singapore Distributor whetherany such requirements are imposed.9.3 Dealing Deadline and Pricing BasisShares shall be issued on a forward pricing basis i.e. the issueprice is calculated at the next valuation point after the sale isagreed. Accordingly, the issue price of Shares shall not beascertainable at the time of application. The issue price ofShares is based on the Net Asset Value of the relevant ShareClass which will vary from day to day.Further details are set out in the Base Prospectus under thesection headed “PURCHASE OF SHARES”.7


Threadneedle (Lux) – Singapore ProspectusAsset Value of the relevant Share Class which will vary fromday to day.Further details are set out in the Base Prospectus under thesection headed “REDEMPTION OF SHARES”.The Net Asset Value per Share of each Class of each Portfoliois calculated as of each Valuation Date. Information on thecalculation of the Net Asset Value is set out in the BaseProspectus under the section headed “NET ASSET VALUEDETERMINATION”.If an investor in Singapore sells his Shares before the Cut OffTime (as set out in paragraph 9.3 above) on a Valuation Day, hewill receive the price calculated on that Valuation Day. If he sellshis Shares after the Cut-Off Time on a Valuation Day, he willreceive the price calculated on the next Valuation Day.As investors in Singapore must place orders for redemptionthrough the Singapore Distributor through whom they originallypurchased their Shares, orders may only be placed duringthe opening hours for that Singapore Distributor. Singaporeinvestors should therefore confirm the applicable deadline bywhich the redemption order must be received and dealingprocedures with the relevant Singapore Distributor.11.4 Numerical examples of calculation of redemption proceedsThe following is an illustration of the redemption proceedspayable based on a redemption order for 1,000 Shares anda notional redemption price of $1.10 per Share. The notionalredemption price is for illustrative purposes only, and the actualredemption price will fluctuate according to the Net AssetValue of the relevant Share Class:1,000SharesRedemptionrequestx $1.10 = $1,100 – $0 = $1,100RedemptionPriceGrossRedemptionProceeds*There is currently no redemption charge payable.11.5 Payment of Redemption ProceedsRedemptionCharge*Information on the payment of redemption proceeds isset out in the Base Prospectus under the section headed“REDEMPTION OF SHARES”.NetRedemptionProceedsWhere shareholders have invested via a Singapore Distributor,redemption proceeds will normally be paid to the SingaporeDistributor. Singapore shareholders will receive the proceeds ofredemption from their Singapore Distributor as agreed betweenthe Singapore shareholder and the Singapore Distributor.Singapore shareholders should contact their SingaporeDistributor for further details (including the period withinwhich the redemption proceeds will be paid out to them bythe Singapore Distributor) as the payment policy amongst theSingapore Distributors may vary. The cost of any settlement bytelegraphic transfer may be passed on to the shareholder.11.6 Compulsory RedemptionsInformation on circumstances under which Shares may becompulsorily redeemed is set out in the Base Prospectus underthe section headed “RESTRICTIONS ON OWNERSHIP”.12. SWITCHINGInformation on switching is set out in the Base Prospectusunder the section headed “EXCHANGE PRIVILEGE”.Singapore investors may effect switches of their Shares bycompleting the switching form prescribed by the SingaporeDistributor through whom they originally purchased theirShares and sending the properly completed switching form,together with such documents as may be required by theSingapore Distributor, to the Singapore Distributor.Singapore investors should note in addition that, as acondition of their switches, the new fund or share classsubscribed into as a result of the switch must be availableto Singapore investors for subscription.13. OBTAINING PRICE INFORMATION IN SINGAPOREThe issue prices and redemption prices of the Shares of eachPortfolio are normally published in Singapore on the websitewww.threadneedle.sg within one Singapore business dayimmediately succeeding each Valuation Day.14. SUSPENSION OF DEALINGSCircumstances under which the issue or redemption of Sharesmay be suspended are set out in the Base Prospectus underthe section headed “SUSPENSION OF ISSUE, REDEMPTIONAND EXCHANGE OF SHARES AND CALCULATION OF NETASSET VALUE”.15. PERFORMANCE OF THE PORTFOLIOSThe performance of each Portfolio and its benchmark is set outin Schedule 5 of this Singapore Prospectus.16. SOFT DOLLAR COMMISSIONS / ARRANGEMENTSInformation on soft dollar commissions / arrangements whichmay be entered into by the Management Company and eachSub-Advisor in respect of the Portfolios is set out in the BaseProspectus under the section headed “FEES AND EXPENSES”under the heading “Soft commission arrangements”.17. CONFLICTS OF INTERESTSInformation on conflicts of interest which may arise in relationto the Portfolios is set out in the Base Prospectus underthe sections headed “CONFLICTS OF INTEREST” and“PORTFOLIO TRANSACTIONS”.9


Threadneedle (Lux) – Singapore Prospectus18. REPORTSThe financial year end for the SICAV is 31 March.The annual report containing the audited financial accounts willbe made available to Shareholders at least 15 days before theannual general meeting which is held on the last Friday in Julyin each year or if such day is a legal holiday, the next followingBusiness Day. Unaudited semi-annual reports containing thesemi-annual accounts will be made available to Shareholderswithin two months after the period ending on 30 September.Copies of the latest semi-annual accounts or annual accounts,and semi-annual report or annual report may be obtained uponrequest from the Singapore Representative and are available onthe website www.threadneedle.sg.19. OTHER MATERIAL INFORMATION19.1 Distribution PolicyInformation on the dividend policy of the SICAV in respectof the Share Classes of the Portfolios is set out in the BaseProspectus under the section headed “DIVIDEND POLICY”.19.2 Obtaining Supplementary Information on RiskManagementInvestors may obtain supplementary information relating tothe risk management methods employed by each Portfolio,including the quantitative limits that are applied and any recentdevelopments in the risk and yield characteristics of the maincategories of investments from the Singapore Representative(whose contact details are set out in the Directory of thisSingapore Prospectus) upon request at its office, during normalSingapore business hours.19.3 Tax ConsiderationsInvestors should be aware that they may be required to payincome tax, withholding tax, capital gains tax, wealth tax,stamp taxes or other kind of tax on distributions or deemeddistributions of the Portfolios, capital gains within the Portfolios,whether or not realised, income received or accrued or deemedreceived within the Portfolios. Investors who are in doubt oftheir tax position should consult their own independent taxadvisors.19.4 Merger or Liquidation of a Portfolio, Share Class and theSICAVA Portfolio or Share Class of the SICAV may be liquidatedin certain circumstances. Details are set out in the BaseProspectus under the section headed “MERGER ORLIQUIDATION” and “THE SICAV”.19.5 Base ProspectusOther material information relating to the Portfolios is set out inthe Base Prospectus which must be read in conjunction withthis Singapore Prospectus.20. QUERIES AND COMPLAINTSSingapore investors may contact the Singapore Representativeat +65 6826 7100 during normal Singapore business hoursor SingaporeRepresentative@statestreet.com, to seek anyclarification about the Portfolios.10


Threadneedle (Lux) – Singapore ProspectusSCHEDULE 1 –List of Portfolios and Share Class availability in SingaporePortfolios Base Currency of Portfolio Share ClassesThe Bond PortfoliosThreadneedle (Lux) – Emerging Market Corporate Bonds USD AU, AUP, ASH, IU, ISHThreadneedle (Lux) – Emerging Market Debt USD AU, AUP, ASH, IU, ISHThreadneedle (Lux) – Global Emerging Market Short-Term Bonds USD AU, AUP, ASH, IU, ISHThreadneedle (Lux) – US$ High Income Bonds USD AU, AUP, ASH, IU, ISHThe Asset Allocation PortfolioThreadneedle (Lux) – Global Asset Allocation USD AU, AUP, ASH, IU, ISHThe Equity PortfoliosThreadneedle (Lux) – Pan European Equities EUR AE, ASH, IE, ISHThreadneedle (Lux) – Pan European Smaller Companies EUR AE, ASH, IE, ISHThreadneedle (Lux) – Global Technology USD AU, ASH, IU, ISHThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) USD AU, ASH, IU, ISHThe Specialist PortfolioThreadneedle (Lux) – Enhanced Commodities USD AU, ASH, IU, ISHThe SICAV retains the right to only offer selected Share Classes of a Portfolio for purchase by investors in Singapore and not all the Share Classesof that Portfolio as listed above. Investors may therefore wish to check with Singapore distributors on the Share Classes of a Portfolio which areavailable for purchase by investors in Singapore.11


Threadneedle (Lux) – Singapore ProspectusSCHEDULE 2 –Sub-AdvisorsPortfolios Sub-Advisor Track record Country of domicileAll Portfolios except for Threadneedle Threadneedle Asset The Sub-Advisor has been managing United Kingdom(Lux) – Global Technology andThreadneedle (Lux) – US$ HighIncome BondsManagement Limited collective investment schemes and/ordiscretionary funds for approximately17 years since 1994.Threadneedle (Lux) – Global Technologyand Threadneedle (Lux) – US$ HighIncome BondsColumbia ManagementInvestment Advisers, LLCThe Sub-Advisor has been managingcollective investment schemes and/ordiscretionary funds for approximately39 years since 1972.United States of AmericaThreadneedle Asset Management Limited (“TAML”)TAML are active fund managers seeking to outperform consistently.TAML are research-led, combining both macroeconomic andthematic opportunities with a thorough fundamental and valuationanalysis at the stock level to identify the best investmentopportunities for their portfolios. TAML’s investment process isstructured to marry both insights and to balance opportunities andrisk controls.Columbia Management Investment Advisers, LLC(“Columbia”)With respect to Threadneedle (Lux) – Global Technology, Columbiaemploys a consistent, disciplined investment approach that seeksto identify highly profitable, fast-growing companies that arebeneficiaries and leaders of technological change. Columbia alsorelies heavily on first-hand research, visiting hundreds of companieseach year.With respect to Threadneedle (Lux) – US$ High Income Bonds,the investment process seeks to identify opportunities based oncredit fundamentals, capitalisation and valuation. Credit analysisis comprehensive, emphasising independent and forward-lookingviews.12


Threadneedle (Lux) – Singapore ProspectusSCHEDULE 3 –Fees and Charges(A) Fees and Charges for Class A SharesI. Fees and charges payable by a Singapore investor investing in a PortfolioFor Threadneedle (Lux) – Emerging Markets Corporate Bonds, Threadneedle (Lux) – Emerging Market Debt, Threadneedle (Lux) – GlobalEmerging Market Short-Term Bonds and Threadneedle (Lux) – US$ High Income Bonds:Maximum Initial ChargeRedemption ChargeMaximum Switching Fee2.0% of the amount investedCurrently nil0.75% of the net asset value of the acquired sharesFor Threadneedle (Lux) – Target Return (US$):Maximum Initial ChargeRedemption ChargeMaximum Switching Fee3.0% of the amount investedCurrently nil0.75% of the net asset value of the acquired sharesFor Threadneedle (Lux) – Enhanced Commodities, Threadneedle (Lux) – Global Asset Allocation, Threadneedle (Lux) – Global Technology,Threadneedle (Lux) – Pan European Equities and Threadneedle (Lux) – Pan European Smaller Companies:Maximum Initial ChargeRedemption ChargeMaximum Switching Fee5.0% of the amount investedCurrently nil0.75% of the net asset value of the acquired sharesInitial charges set out above are maximums, which a Singapore Distributor is allowed to waive in whole or in part, depending on the sizeof the subscription or upon local market considerations. Any redemption charge may also be waived by the Directors or the SingaporeDistributor in whole or in part, depending upon local market considerations.The SICAV may also impose a penalty of 2.00% of the net asset value of Shares redeemed or switched where the SICAV reasonablybelieves that an investor has engaged in market timing activity. Further information is set out in the Base Prospectus under the sectionheaded “MARKET TIMING AND LATE TRADING”.Additional fees may be payable by investors to the Singapore Distributors depending on the specific nature of services provided by suchSingapore Distributors. Investors should check with the Singapore Distributors to confirm the applicable fees and charges (including anyadditional taxes or commissions, where applicable) incurred in Singapore on the issuance, redemption or switching of Shares.II.Fees and charges payable out of the assets of a Portfolio until 31 March 2012 (included)Until 31 March 2012 (included), the fees charged out of the assets of the relevant Portfolio will be as follows:AssetManagementShareholderServicingCustodian,Domiciliary andPerformanceFeeFeeFeeAdministrativeFeeThe Bond PortfoliosThreadneedle (Lux) – Emerging Market Corporate Bonds 1.00% 0.50% Up to 0.20% Not applicableThreadneedle (Lux) – Emerging Market Debt 1.00% 0.50% Up to 0.20% Not applicableThreadneedle (Lux) – Global Emerging Market Short-Term Bonds 1.15% 0.25% Up to 0.20% Not applicableThreadneedle (Lux) – US$ High Income Bonds 1.25% 0.50% Up to 0.20% Not applicableThe Asset Allocations PortfolioThreadneedle (Lux) – Global Asset Allocation 1.25% 0.50% Up to 0.20% Not applicableThe Equity PortfoliosThreadneedle (Lux) – Pan European Equities 1.25% 0.50% Up to 0.20% Not applicableThreadneedle (Lux) – Pan European Smaller Companies 1.40% 0.50% Up to 0.20% See below 1Threadneedle (Lux) – Global Technology 1.25% 0.50% Up to 0.20% Not applicableThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) 1.00% 0.25% Up to 20% Not applicableThe Specialist PortfolioThreadneedle (Lux) – Enhanced Commodities 1.25% 0.50% Up to 0.20% Not applicable1Performance fee for Threadneedle (Lux) – Pan European Smaller Companies Portfolio will no longer be charged with effect from 1 January 2012.13


Threadneedle (Lux) – Singapore ProspectusIn addition, the SICAV pays out of the assets of each Portfolio certain other expenses payable by the SICAV including a fee of up to0.09% p.a. payable to the Management Company.Further information is set out in the Base Prospectus under the section headed “FEES AND EXPENSES” under the sub-heading“PORTFOLIO OPERATING EXPENSES UNTIL 31 MARCH 2012 (INCLUDED)”.III. Fees and charges payable out of the assets of a Portfolio from 1 April 2012From 1 April 2012, the fees charged out of the assets of the relevant Portfolio will be as follows:AssetOperating Performance FeeManagement Fee 1 Expenses 2The Bond PortfoliosThreadneedle (Lux) – Emerging Market Corporate Bonds 1.50% 0.30% Not applicableThreadneedle (Lux) – Emerging Market Debt 1.50% 0.30% Not applicableThreadneedle (Lux) – Global Emerging Market Short-Term Bonds 1.40% 0.30% Not applicableThreadneedle (Lux) – US$ High Income Bonds 1.25% 0.30% Not applicableThe Asset Allocation PortfolioThreadneedle (Lux) – Global Asset Allocation 1.50% 0.35% Not applicableThe Equity PortfoliosThreadneedle (Lux) – Pan European Equities 1.50% 0.35% Not applicableThreadneedle (Lux) – Pan European Smaller Companies 1.50% 0.35% Not applicableThreadneedle (Lux) – Global Technology 1.75% 0.35% Not applicableThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) 1.25% 0.30% Not applicableThe Specialist PortfolioThreadneedle (Lux) – Enhanced Commodities 1.75% 0.35% Not applicable1Includes Shareholder Servicing Fee2Includes Custodian, Domiciliary and Administrative Fee.Further information is set out in the Base Prospectus under the section headed “FEES AND EXPENSES” under the sub-heading“PORTFOLIO OPERATING EXPENSES FROM 1 APRIL 2012”.IV. Performance FeesPan European Smaller Companies (payable to 31 December 2011 only)Performance FeeA performance fee of 10% will be payable at the end of each fiscal year calculated each day on the difference between the performanceof the HSBC European Smaller Companies Index and the performance of the relevant Share Class.Further information is set out in the Base Prospectus under the section headed “FEES AND EXPENSES” under the sub-heading“PERFORMANCE FEE”.(B) Fees and Charges for Class I SharesI. Fees and charges payable by a Singapore investor investing in a PortfolioFor Threadneedle (Lux) – Emerging Markets Corporate Bonds, Threadneedle (Lux) – Emerging Market Debt, Threadneedle (Lux) – GlobalEmerging Market Short-Term Bonds and Threadneedle (Lux) – US$ High Income Bonds:Maximum Initial ChargeRedemption ChargeMaximum Switching FeeCurrently nilCurrently nil0.75% of the net asset value of the acquired sharesFor Threadneedle (Lux) – Target Return (US$):Maximum Initial ChargeRedemption ChargeMaximum Switching FeeCurrently nilCurrently nil0.75% of the net asset value of the acquired shares14


Threadneedle (Lux) – Singapore ProspectusFor Threadneedle (Lux) – Enhanced Commodities, Threadneedle (Lux) – Global Asset Allocation, Threadneedle (Lux) – Global Technology,Threadneedle (Lux) – Pan European Equities and Threadneedle (Lux) – Pan European Smaller Companies:Maximum Initial ChargeRedemption ChargeMaximum Switching FeeCurrently nilCurrently nil0.75% of the net asset value of the acquired sharesInitial charges set out above are maximums, which a Singapore Distributor is allowed to waive in whole or in part, depending on the sizeof the subscription or upon local market considerations. Any redemption charge may also be waived by the Directors or the SingaporeDistributor in whole or in part, depending upon local market considerations.The SICAV may also impose a penalty of 2.00% of the net asset value of Shares redeemed or switched where the SICAV reasonablybelieves that an investor has engaged in market timing activity. Further information is set out in the Base Prospectus under the sectionheaded “MARKET TIMING AND LATE TRADING”.Additional fees may be payable by investors to the Singapore Distributors depending on the specific nature of services provided by suchSingapore Distributors. Investors should check with the Singapore Distributors to confirm the applicable fees and charges (including anyadditional taxes or commissions, where applicable) incurred in Singapore on the issuance, redemption or switching of Shares.II.Fees and charges payable out of the assets of a Portfolio until 31 March 2012 (included)Until 31 March 2012 (included), the fees charged out of the assets of the relevant Portfolio will be as follows:AssetCustodian, Performance FeeManagementFeeDomiciliary andAdministrative FeeThe Bond PortfoliosThreadneedle (Lux) – Emerging Market Corporate Bonds 0.80% Up to 0.20% Not applicableThreadneedle (Lux) – Emerging Market Debt 0.80% Up to 0.20% Not applicableThreadneedle (Lux) – Global Emerging Market Short-Term Bonds 0.80% Up to 0.20% Not applicableThreadneedle (Lux) – US$ High Income Bonds 0.80% Up to 0.20% Not applicableThe Asset Allocations PortfolioThreadneedle (Lux) – Global Asset Allocation 0.85% Up to 0.20% Not applicableThe Equity PortfoliosThreadneedle (Lux) – Pan European Equities 0.85% Up to 0.20% Not applicableThreadneedle (Lux) – Pan European Smaller Companies 1.00% Up to 0.20% See below 1Threadneedle (Lux) – Global Technology 1.00% Up to 0.20% Not applicableThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) 0.65% Up to 0.20% Not applicableThe Specialist PortfolioThreadneedle (Lux) – Enhanced Commodities 1.00% Up to 0.20% Not applicable1Performance fee for Threadneedle (Lux) – Pan European Smaller Companies Portfolio will no longer be charged with effect from 1 January 2012.In addition, the SICAV pays out of the assets of each Portfolio certain other expenses payable by the SICAV including a fee of up to 0.09%p.a. payable to the Management Company.Further information is set out in the Base Prospectus under the section headed “FEES AND EXPENSES” under the sub-heading“PORTFOLIO OPERATING EXPENSES UNTIL 31 MARCH 2012 (INCLUDED)”.15


Threadneedle (Lux) – Singapore ProspectusIII. Fees and charges payable out of the assets of a Portfolio from 1 April 2012From 1 April 2012, the fees charged out of the assets of the relevant Portfolio will be as follows:AssetOperating Performance FeeManagementFee 1Expenses 2The Bond PortfoliosThreadneedle (Lux) – Emerging Market Corporate Bonds 0.80% 0.20% Not applicableThreadneedle (Lux) – Emerging Market Debt 0.80% 0.20% Not applicableThreadneedle (Lux) – Global Emerging Market Short-Term Bonds 0.80% 0.20% Not applicableThreadneedle (Lux) – US$ High Income Bonds 0.65% 0.20% Not applicableThe Asset Allocation PortfolioThreadneedle (Lux) – Global Asset Allocation 0.75% 0.25% Not applicableThe Equity PortfoliosThreadneedle (Lux) – Pan European Equities 0.80% 0.25% Not applicableThreadneedle (Lux) – Pan European Smaller Companies 0.85% 0.25% Not applicableThreadneedle (Lux) – Global Technology 1.00% 0.25% Not applicableThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) 0.65% 0.20% Not applicableThe Specialist PortfolioThreadneedle (Lux) – Enhanced Commodities 1.00% 0.25% Not applicable1Includes Shareholder Servicing Fee2Includes Custodian, Domiciliary and Administrative Fee.Further information is set out in the Base Prospectus under the section headed “FEES AND EXPENSES” under the sub-heading“PORTFOLIO OPERATING EXPENSES FROM 1 APRIL 2012”.IV. Performance FeesPan European Smaller Companies (payable to 31 December 2011 only)Performance FeeA performance fee of 10% will be payable at the end of each fiscal year calculated each day on the difference between the performanceof the HSBC European Smaller Companies Index and the performance of the relevant Share Class.Further information is set out in the Base Prospectus under the section headed “FEES AND EXPENSES” under the sub-heading“PERFORMANCE FEE”.16


Threadneedle (Lux) – Singapore ProspectusSCHEDULE 4 –Minimum Initial Subscription AmountsClasses AU and AUP US$ 2,500Class AE EUR 2,500Class ASH SGD 2,500Class IU US$ 100,000Class IE EUR 100,000Class ISH SGD 100,00017


Threadneedle (Lux) – Singapore ProspectusPortfolio / Benchmark One Year Three Years Five Years Ten Years Since inception(Average annual compounded return)Class ASHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass IE(Inception date:-4.72% 14.97% N.A. N.A. 5.49%30 June 2008)Benchmark: -4.72% 8.80% N.A. N.A. -5.31%Class ISHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusThreadneedle (Lux) – Pan European Smaller Companies (Inception date: 22 June 2007)Benchmark: HSBC Smaller Pan European (EUR) Index (prior to 8 September 2009 MSCI Europe Small Cap Gross)**The benchmark was changed due to an amendment to the investment objective and policy of the Portfolio.Class AE(Inception date:-8.83% 21.77% N.A. N.A. -3.27%31 January 2007)Benchmark: -11.35% 16.17% N.A. N.A. -6.94%Class ASHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass IEPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass ISHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusThreadneedle (Lux) – Global Technology (Inception date: 31 May 1997)Benchmark: MSCI World IT IndexClass AU(Inception date:-5.89% 19.70% 1.75% 3.00% 4.05%28 February 1998)Benchmark: 5.36% 20.10% 1.78% 1.44% 2.47%Class ASHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass IUPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass ISHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) (Inception date: 31 August 2009)Benchmark: US$ 3 month LIBORClass AU(Inception date:-3.59% N.A. N.A. N.A. -2.43%31 August 2009)Benchmark: 0.32% N.A. N.A. N.A. 0.32%Class ASHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass IUPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass ISHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore Prospectus20


Threadneedle (Lux) – Singapore ProspectusPortfolio / Benchmark One Year Three Years Five Years Ten Years Since inception(Average annual compounded return)The Specialist PortfoliosThreadneedle (Lux) – Enhanced Commodities (Inception date: 29 June 2010)Benchmark: Dow Jones-UBS Commodity IndexClass AU(Inception date:1.57% N.A. N.A. N.A. 13.41%30 June 2010)Benchmark: -0.32% N.A. N.A. N.A. 11.31%Class ASHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusClass IU(Inception date:7.79% N.A. N.A. N.A. 18.54%30 June 2010)Benchmark: -0.32% N.A. N.A. N.A. 11.31%Class ISHPerformance information for this Share Class is not available as this Share Class has not been launched as at thedate of this Singapore ProspectusSource: Morningstar. For Portfolios that were suspended during the period, the performance shown has been calculated using Morningstar databy adding the returns prior to the suspension period to the returns after the Portfolios resumed trading.Notes:1. Performance returns of all Portfolios other than the Threadneedle (Lux) – Pan European Equities and Threadneedle (Lux) – Pan EuropeanSmaller Companies are calculated in USD on a single pricing basis (taking into account any applicable subscription charge) and on theassumption that all dividends and distributions made by the relevant Portfolio are reinvested, taking into account all charges which wouldhave been payable upon such reinvestment.Performance returns of the Threadneedle (Lux) – Pan European Equities and Threadneedle (Lux) – Pan European Smaller Companies arecalculated in Euro on a single pricing basis (taking into account any applicable subscription charge) and on the assumption that all dividendsand distributions made by the relevant Portfolio are reinvested, taking into account all charges which would have been payable upon suchreinvestment.2. Performance returns of the respective benchmarks of all Portfolios other than the Threadneedle (Lux) – Pan European Equities andThreadneedle (Lux) – Pan European Smaller Companies are calculated on a bid-to-bid basis. Where the benchmark of a Portfolio is calculatedin a currency other than USD, the performance returns of the benchmark have been converted to USD based on prevailing exchange rates atthe relevant time.Performance returns of the respective benchmarks of the Threadneedle (Lux) – Pan European Equities and Threadneedle (Lux) – PanEuropean Smaller Companies are calculated on a bid-to-bid basis. Where the benchmark of a Portfolio is calculated in a currency other thanEuro, the performance returns of the benchmark have been converted to Euro based on prevailing exchange rates at the relevant time.Past performance of the Portfolios and their benchmarks is not necessarily indicative of the future performance of the Portfolios.21


Threadneedle (Lux) – Singapore Prospectus(B) Expense and turnover ratiosThe expense ratios of the Portfolios and the turnover ratios of the Portfolios, based on the SICAV’s latest audited accounts for the financial yearended 31 March 2011, are set out below:Portfolios Share Class Expense Ratios Note 1 TurnoverRatios Note 2The Bond PortfoliosThreadneedle (Lux) – Emerging Market Corporate Bonds AU Not available as this Share Class has not yet 169.31%been launchedAUP 2.04%ASH Not available as this Share Class has not yetbeen launchedIUNot available as this Share Class has not yetbeen launchedISHNot available as this Share Class has not yetbeen launchedThreadneedle (Lux) – Emerging Market Debt AU 2.05% 91.74%AUP 2.05%ASH Not available as this Share Class has not yetbeen launchedIUNot available as this Share Class has not yetbeen launchedISHNot available as this Share Class has not yetbeen launchedThreadneedle (Lux) – Global Emerging MarketAU 1.94% 172.81%Short-Term BondsAUP 1.96%ASH Not available as this Share Class has not yetbeen launchedIUNot available as this Share Class has not yetbeen launchedISHNot available as this Share Class has not yetbeen launchedThreadneedle (Lux) – US$ High Income Bonds AU 2.30% 95.48%AUP 2.29%ASH Not available as this Share Class has not yetbeen launchedIUNot available as this Share Class has not yetbeen launchedISHNot available as this Share Class has not yetbeen launchedThe Asset Allocation PortfolioThreadneedle (Lux) – Global Asset Allocation AU 2.30% 296.15%AUP 2.31%ASH Not available as this Share Class has not yetbeen launchedIU 1.37%ISHNot available as this Share Class has not yetbeen launched22


Threadneedle (Lux) – Singapore ProspectusPortfolios Share Class Expense Ratios Note 1 TurnoverRatios Note 2The Equity PortfoliosThreadneedle (Lux) – Pan European Equities AE 2.30% 141.89%ASH Not available as this Share Class has not yetbeen launchedIE 1.35%ISHNot available as this Share Class has not yetbeen launchedThreadneedle (Lux) – Pan European Smaller Companies AE 2.50% 80.70%ASH Not available as this Share Class has not yetbeen launchedIENot available as this Share Class has not yetbeen launchedISHNot available as this Share Class has not yetbeen launchedThreadneedle (Lux) – Global Technology AU 2.28% 167.79%ASH Not available as this Share Class has not yetbeen launchedIUNot available as this Share Class has not yetbeen launchedISHNot available as this Share Class has not yetbeen launchedThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) AU 1.81% 68.22%ASH Not available as this Share Class has not yetbeen launchedIUNot available as this Share Class has not yetbeen launchedISHNot available as this Share Class has not yetbeen launchedThe Specialist PortfolioThreadneedle (Lux) – Enhanced Commodities AU 2.33% 224.84%ASH Not available as this Share Class has not yetbeen launchedIU 1.52%ISHNot available as this Share Class has not yetbeen launchedNotes:1. The expense ratios are calculated in accordance with the guidelines on the disclosure of expense ratios issued by the InvestmentManagement Association of Singapore (IMAS). The following expenses (where applicable) are excluded from the calculation of the expenseratios:(i)(ii)brokerage and other transaction costs associated with the purchase and sales of investments;foreign exchange gains and losses of the relevant Portfolio, whether realised or unrealised;(iii) front-end loads, back-end loads and other costs arising on the purchase or sale of a foreign unit trust or mutual fund;(iv) tax deducted at source or arising on income received, including withholding tax;(v)dividends and other distributions paid to Shareholders; and(vi) interest expense.2. The turnover ratios are calculated based on the lesser of purchases or sales over the same period used for calculating the expense ratioexpressed as a percentage of daily average net asset value.23


Threadneedle (Lux)ProspectusNovember 2011ThreadneedleProspectus


Threadneedle (Lux) ProspectusThreadneedle (Lux)SICAVA Luxembourg UndertakingFor Collective InvestmentIn Transferable SecuritiesUnder Part I of the Law of 17 December 2010ProspectusNovember 2011The Prospectus is only valid in conjunction with the Loose Leaf to the Prospectus dated November 2011.3


Threadneedle (Lux) ProspectusTable of ContentsImportant Information 6Introduction 7Investment Objectives and Policies 9Other Investment Practices 21Risk Factors 21The SICAV 29The Management Company 30Investment Advisory Arrangements 30Conflicts of Interest 31Portfolio Transactions 31APPENDIX A Investment Restrictions 46APPENDIX B Investment Techniques and Instruments 53APPENDIX C Portfolio Charges 57APPENDIX D Portfolio Charges 60APPENDIX E Portfolio Charges 63APPENDIX F Portfolio Charges 65APPENDIX G Portfolio Charges 66GLOSSARY 69All capitals terms used in this Prospectus are defined in theglossary.Net Asset Value Determination 32Net Asset Value Publication 33Fees and Expenses 33Distribution Arrangements 36Luxembourg Anti-Money Laundering Regulations 37Purchase of Shares 37Redemption of Shares 38Restrictions on subscriptions and conversions intocertain Portfolios 39Merger or Liquidation 40Exchange Privilege 41Market Timing & Late Trading 41Suspension of Issue, Redemption and Exchange ofShares and Calculation of Net Asset Value 42Dividend Policy 42Tax Considerations 42Restrictions on Ownership 43Meetings and Reports 43Service Providers 44Data Protection 44Documents Available for Inspection 454


Threadneedle (Lux) ProspectusDirectoryDirectorsCrispin Henderson (Chairman)Simon DaviesMarie-Jeanne Chèvremont-LorenziniDominik KremerTony PoonRegistered Office69, Route d’EschL-1470 LuxembourgGrand Duchy of LuxembourgManagement CompanyThreadneedle Management Luxembourg S.A.74, MühlenwegL-2155 LuxembourgGrand Duchy of LuxembourgDirectors of the Management CompanyCrispin Henderson (Chairman)Simon DaviesMarie-Jeanne Chèvremont-LorenziniDominik KremerTony PoonCustodian, Domiciliary, Administrative andPaying AgentRBC Dexia Investor Services Bank S.A.14, Porte de FranceL-4360 Esch sur AlzetteGrand Duchy of LuxembourgAuditorsPricewaterhouseCoopers S.à r.l.400, Route d’Esch, B.P. 1443L-1014 LuxembourgGrand Duchy of LuxembourgRegistrar and Transfer Agent 1International Financial Data Services (Luxembourg) S.A.47, Avenue John F. KennedyL-1855 LuxembourgGrand Duchy of LuxembourgHong Kong RepresentativeHSBC Institutional Trust Services (Asia) Limited17/F Tower 2 & 3, HSBC Centre1 Sham Mong RoadKowloonHong KongAuditors of the Management CompanyErnst & Young S.A.7, Rue Gabriel Lippmann – Parc d’activité SyrdallL-5365 MunsbachGrand Duchy of LuxembourgLuxembourg Legal AdvisersLinklaters LLP35, Avenue John F. Kennedy, B.P. 1107L-1011 LuxembourgGrand Duchy of Luxembourg1With effect from 31 October 2011 (included). Up to 31 October 2011, The Bank of New York Mellon (Luxembourg) S.A. with its registered office at Vertigo Building – Polaris, 2-4,Rue Eugène Ruppert, L-2453 Luxembourg, Grand Duchy of Luxembourg acted as the Registrar and Transfer Agent.5


Threadneedle (Lux) ProspectusImportant InformationNo person may rely on any information other than thatcontained in this Prospectus or in the documents specifiedherein as being available for public inspection.If you are in any doubt about the contents of this Prospectus, youshould consult an independent financial adviser. Shares areoffered on the basis of the information contained in thisProspectus and the documents referred to herein. No dealer,sales representative or any other person is authorised to give anyinformation or to make any representations concerningThreadneedle (Lux), (the “SICAV”) other than as contained in thisProspectus, and any purchase made by any person on the basisof statements or representations not contained in or inconsistentwith the information and representations contained in thisProspectus shall be solely at the risk of the purchaser.The Directors, whose names appear under the heading “TheSICAV”, are the persons responsible for the information containedin this Prospectus. To the best knowledge and belief of theDirectors (who have taken all reasonable care to ensure that suchis the case), the information contained in this Prospectus is inaccordance with the facts and does not omit anything likely toaffect the importance of such information. The Directors acceptresponsibility accordingly.Statements made in this Prospectus are based on the laws andpractice currently in force in the Grand Duchy of Luxembourg,and are subject to changes in those laws.The price of the SICAV’s Shares and any income earned onthe Shares may go down as well as up. Future earnings andinvestment performance can be affected by many factors notnecessarily within the control of the SICAV or its Directors orofficers. For example, changes in exchange rates betweencurrencies, changes in effective interest rates, or changes inmarket conditions due to a wide range of political oreconomic factors, as well as the performance of individualcompanies, may cause the value of an investment tofluctuate. No guarantees as to future performance of, orfuture return from, the SICAV can be given by the SICAVitself, or by any Director or officer of the SICAV, by theManagement Company, or any of its affiliates, or by any oftheir directors or officers, or by any authorised dealers.The Key Investor Information (the “Key Investor Information”)contains the essential characteristics of the SICAV, and shall beprovided to investors before their proposed subscription ofShares. Subscription of the Shares implies acceptance of termsof the Key Investor Information. A version of the Key InvestorInformation is available on the website www.threadneedle.com. 2Persons interested in purchasing Shares should informthemselves as to: (a) the legal requirements within their owncountries for the purchase of Shares; (b) any foreign exchangerestrictions which may be applicable; and (c) the income andother tax consequences of a purchase, exchange and/orredemption of Shares. In addition, certain distributors, selecteddealers and financial intermediaries may not offer all of theSICAV’s portfolios (the “Portfolios”) or Classes described in thisProspectus. For more information, consult your distributor,selected dealer or financial intermediary.The Portfolios have not been registered under the U.S.Investment Company Act of 1940. In addition, the Shares of eachPortfolio have not been registered under the Securities Act andmay not be and will not be offered for sale or sold in the UnitedStates, its territories or possessions or to a United States Person.The Articles contain certain restrictions on the sale and transfer ofShares of each Portfolio to such persons. See the sections “TheSICAV” and “Restrictions on Ownership” of this document.No dealer, sales representative or any other person has beenauthorised to give any information or to make anyrepresentations, other than those contained in this Prospectus, orin any documents referred to herein as being available forinspection by the public, in connection with the offer madehereby, and, if given or made, such information or representationsmust not be relied upon as having been authorised by the SICAVor the Management Company. Applications for Shares of anyPortfolio are subject to acceptance by the SICAV.This Prospectus does not constitute, and may not be used for thepurposes of, an offer or invitation to subscribe for any Shares byany person in any jurisdiction (i) in which such offer or invitation isnot authorised; (ii) in which the person making such offer orinvitation is not qualified to do so; or (iii) to any person to whom itis unlawful to make such offer or invitation.Subscriptions are accepted only on the basis of the currentProspectus and/or Key Investor Information accompanied by themost recent annual report and any subsequent semi-annualreport of the SICAV, when issued. Such reports form an integralpart of this Prospectus. The Prospectus, the Key InvestorInformation, the annual and semi-annual reports may betranslated into other languages. In the case of any ambiguity, theEnglish language version shall control to the extent permitted byapplicable law.Prospective purchasers of Shares should inform themselves as tothe legal requirements, exchange control regulations andapplicable taxes in the countries of their respective citizenship,residence or domicile.2Until otherwise determined by the Directors, the Simplified Prospectus will stillbe used. Key Investor Information will only be used as from such date except insuch jurisdictions where the use of the Simplified Prospectus may be required.6


Threadneedle (Lux) ProspectusIntroductionThreadneedle (Lux) is an investment company with variablecapital (“société d’investissement à capital variable“) formedunder the laws of the Grand Duchy of Luxembourg and qualifiesin Luxembourg as a UCITS.The SICAV offers investors the opportunity to invest in separatePortfolios. Each Portfolio has a different investment objective andis a separate portfolio of assets represented by separate Shares.Each Portfolio may have one or more Classes of Shares related toit. The SICAV as a whole, including all of the existing Portfoliosand all future Portfolios, is one legal entity. However, with regardto third parties and, in particular, with regard to the SICAV’screditors and as between Shareholders, each Portfolio shall beexclusively responsible for all liabilities attributable to it.Threadneedle Management Luxembourg S.A. has been appointedas the Management Company to the SICAV.The Portfolios of the SICAV are as follows:The Bond PortfoliosThreadneedle (Lux) – Global Bonds (Euro) (hereafter “GlobalBonds (Euro)”) 3Threadneedle (Lux) – Global Aggregate Bond (hereafter “GlobalAggregate Bond”)Threadneedle (Lux) – Euro Active Bonds (hereafter “Euro ActiveBonds”)Threadneedle (Lux) – Emerging Market Corporate Bonds(hereafter “Emerging Market Corporate Bonds”)Threadneedle (Lux) – Emerging Market Debt (hereafter“Emerging Market Debt”)Threadneedle (Lux) – Global Emerging Market Short-Term Bonds(hereafter “Global Emerging Market Short-Term Bonds”)Threadneedle (Lux) – US$ High Income Bonds (hereafter “US$High Income Bonds”)Threadneedle (Lux) – Global High Yield and Emerging Market(Euro) (hereafter “Global High Yield and Emerging Market(Euro)”) 4Threadneedle (Lux) – European High Yield Bond (hereafter“European High Yield Bond”) 5The Equity PortfoliosThreadneedle (Lux) – Global Focus (hereafter “Global Focus”)Threadneedle (Lux) – Global Emerging Market Equities (hereafter“Global Emerging Market Equities”)Threadneedle (Lux) – American (hereafter “American”) 6Threadneedle (Lux) – American Select (hereafter “AmericanSelect”)Threadneedle (Lux) – US Contrarian Core Equities (hereafter “USContrarian Core Equities”)Threadneedle (Lux) – Pan European Equities (hereafter “PanEuropean Equities”)Threadneedle (Lux) – Pan European Smaller Companies (hereafter“Pan European Smaller Companies”)Threadneedle (Lux) – European Quantitative Equities (hereafter“European Quantitative Equities”)Threadneedle (Lux) – Asia (hereafter “Asia”)Threadneedle (Lux) – Greater China Equities (hereafter “GreaterChina Equities”)Threadneedle (Lux) – Global Energy Equities (hereafter “GlobalEnergy Equities”)Threadneedle (Lux) – Global Technology (hereafter “GlobalTechnology”)Threadneedle (Lux) – Global Equities – Walter Scott & Partners(hereafter “Global Equities – Walter Scott & Partners”)Threadneedle (Lux) – Mondrian Investment Partners – FocusedEmerging Markets Equity (hereafter “Mondrian InvestmentPartners – Focused Emerging Markets Equity”)Threadneedle (Lux) – UK Equities (hereafter “UK Equities”) 7Threadneedle (Lux) – Latin America (hereafter “Latin America”) 8Threadneedle (Lux) – US Smaller Companies (hereafter “USSmaller Companies”) 9Threadneedle (Lux) – Global Equity Dividend (hereafter “GlobalEquity Dividend”) 10(together, the “Equity Portfolios”)(together, the “Bond Portfolios”)The Asset Allocation PortfolioThreadneedle (Lux) – Global Asset Allocation (hereafter “GlobalAsset Allocation”) (the “Asset Allocation Portfolio”)3On 12 January 2012, this Portfolio will be merged with the Threadneedle (Lux) –Global Aggregate Bond Portfolio.4On 12 January 2012, this Portfolio will be merged with the Threadneedle (Lux) –Emerging Market Corporate Bonds Portfolio.5This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.6Until 30 November 2011 (included), the name of the Portfolio will remain asfollows: Threadneedle (Lux) – US Equities.7This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.8This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.9This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.10This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.7


Threadneedle (Lux) ProspectusThe Absolute Return PortfoliosThreadneedle (Lux) – Target Return (US$) (hereafter “TargetReturn (US$)”)Threadneedle (Lux) – American Absolute Alpha (hereafter“American Absolute Alpha”)Threadneedle (Lux) – Absolute Emerging Market Macro (hereafter“Absolute Emerging Market Macro”)Threadneedle (Lux) – Multi Asset Absolute Alpha (hereafter “MultiAsset Absolute Alpha”) 11Threadneedle (Lux) – European Smaller Companies AbsoluteAlpha (hereafter “European Smaller Companies Absolute Alpha”)Threadneedle (Lux) – Global Opportunities Bond (hereafter“Global Opportunities Bond”)Threadneedle (Lux) – European Absolute Alpha (hereafter“European Absolute Alpha”) 12(together, the “Absolute Return Portfolios”)The Specialist PortfolioThreadneedle (Lux) – Enhanced Commodities (hereafter“Enhanced Commodities”) (the “Specialist Portfolio”)Multiple Share Classes are available in respect of each Portfolio asdescribed in the loose leaf to the Prospectus.The Shares presently issued are offered for sale, wherelegally permitted, and all subscriptions are accepted on thebasis of the current Prospectus and either the last availableannual report of the SICAV containing its audited accounts,or the most recent semi-annual report which are available atthe registered office of the SICAV.11This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.12This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.8


Threadneedle (Lux) ProspectusInvestment Objectives and PoliciesInvestment Objectives and PoliciesSet forth below are the investment objectives and policies ofeach Portfolio. The SICAV is authorised, by amendment to theProspectus, to offer Shares in additional Portfolios if and whenthe Directors, the Management Company determine that there issufficient interest in any such additional Portfolio to warrant anoffering of its Shares. There can be no assurance that anyPortfolio will achieve its investment objective. Unless specificallystated otherwise, the Net Asset Value of the Portfolios shall beexpressed in U.S. Dollars and investment decisions will be madefrom a U.S. Dollar perspective, unless otherwise indicated.Certain Classes of the Portfolios may be expressed in currenciesother than the Base Currency as noted in the loose leaf to theProspectus.In addition to the following investment objectives and policies,each Portfolio may employ the investment practices describedunder “Other Investment Practices” and in Appendix A“Investment Restrictions” and in Appendix B “InvestmentTechniques and Instruments”.The attention of the investors is drawn to the fact that investing inthe following Portfolios may involve specific risks described under“Risk Factors” below. Investors should consider such risks beforeinvesting in any of the Portfolios especially risks linked toinvestment in financial derivative instruments when appropriate.The Bond Portfolios:Global Bonds (Euro) 13The Global Bonds (Euro) Portfolio seeks to achieve total returnfrom both income and capital appreciation by investing principallyin a managed portfolio of fixed income securities.The Portfolio will also use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement. These derivatives may include, but are not limitedto, foreign currency exchange contracts, futures on TransferableSecurities, interest rate swaps, and credit default swaps.The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek returns from both income and moderate capitalappreciation;are looking to diversify their investments through exposure toglobal bonds;will accept high volatility and a high level of risk;have a long-term investment horizon.13On 12 January 2012, this Portfolio will be merged with the Threadneedle (Lux) –Global Aggregate Bond Portfolio.Global Aggregate BondThe Global Aggregate Bond Portfolio seeks to achieve total returnfrom income and capital appreciation by investing principallyeither directly, or indirectly through derivatives, in a managedportfolio of both government and non-government fixed incomeand floating rate securities that are Investment Grade at the timeof purchase, and when determined appropriate cash and MoneyMarket Instruments.The Portfolio may use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement. These derivatives may include, but are not limitedto, foreign currency exchange contracts, futures and options onTransferable Securities, interest rate swaps and credit defaultswaps.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek returns from both income and moderate capitalappreciation;are looking to diversify their investments through exposure toglobal bonds;will accept moderate to high volatility and have a moderate tohigh risk tolerance;have a medium to long-term investment horizon.Euro Active BondsThe Euro Active Bonds Portfolio seeks to achieve total return fromincome and capital appreciation by investing principally in shortto-medium term European sovereign bonds and corporate bonds,primarily issued by companies domiciled in the Euro Area or withsignificant operations in the Euro Area.The Portfolio may also use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement. These derivatives may include, but are not limitedto, futures on transferable securities and interest rate swaps. ThePortfolio seeks to minimise interest rate risk if the investmentenvironment warrants such action. Conversely, interest rate riskof the Portfolio may be increased in the countervailing scenario.The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek potential total return through income and capitalappreciation;seek to diversify their investments through exposure toEuropean debt;seek active management of interest rate risk;will accept moderate volatility and moderate level of risk;have a medium-term investment horizon.9


Threadneedle (Lux) ProspectusEmerging Market Corporate BondsThe Emerging Market Corporate Bonds Portfolio seeks to achievetotal return from income and capital appreciation by investingprincipally in U.S. Dollar-denominated or U.S. Dollar hedgedInvestment Grade and Below Investment Grade debt and otherobligations issued or guaranteed by institutions and corporationshaving their head office in, or conducting a significant part of theirbusiness in, Emerging Market Countries.The Portfolio may secondarily invest in other debt securities,including bonds issued by sovereign borrowers from EmergingMarket Countries, bonds issued by sovereign and corporateborrowers from OECD, deposits, cash and near cash.The average duration of the Portfolio will not exceed five years.Emerging market investments are more volatile and present higherrisk than investments in more established markets. Investorsshould consider this extra risk when evaluating the potentialbenefits of investing in this Portfolio.The Portfolio may also use financial derivative instruments forinvestment purposes, hedging and efficient portfolio management.These derivatives may include, but are not limited to, foreigncurrency exchange contracts, interest rate swaps, interest ratefutures and credit default swaps.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek returns from both income and capital appreciation;seek to diversify their investments through exposure to emergingmarket corporate debt;will accept high volatility and high level of risk;have a medium to long-term investment horizon.Emerging Market DebtThe Emerging Market Debt Portfolio seeks to achieve total returnfrom income and capital appreciation by investing principally insovereign bonds and corporate bonds issued by borrowers fromEmerging Market Countries.The Portfolio may further invest in other fixed income securities,including bonds issued by countries making up the G-7, deposits,cash and near cash.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek potential total return through income and capitalappreciation;seek diversification within their investments through exposure toemerging market debt;can tolerate the high volatility associated with emerging marketdebt;are willing to take on high level of risk;have a long-term investment horizon.Global Emerging Market Short-Term BondsThe Global Emerging Market Short-Term Bonds Portfolio seeks toachieve total return from income and capital appreciation byinvesting principally in a globally diversified range of Transferabledebt Securities. Such securities will be issued or guaranteed byemerging market sovereignties or supranational entities, orfinancial institutions or corporations headquartered in EmergingMarket Countries. The Portfolio may also invest secondarily in debtsecurities issued or guaranteed by G-7 sovereignties orsupranational entities and in credit linked notes.The Portfolio may invest in securities denominated in variouscurrencies and will generally hedge non-U.S. Dollar exposures.However, the maximum amount of non-U.S. Dollar exposureremaining unhedged will not exceed 35% of the net assets of thePortfolio. At the same time, the maximum amount of non-U.S.Dollar exposure remaining unhedged in any one currency will notexceed 10% of the net assets of the Portfolio. The Portfolio willhave an average duration of five years or less.The Portfolio may also use financial derivative instruments forinvestment purposes, hedging and efficient portfolio management.These derivatives may include, but are not limited to, foreigncurrency exchange contracts, interest rate swaps, interest ratefutures and credit default swaps.Emerging market investments are more volatile and present higherrisk than investments in more established markets. Investorsshould consider this extra risk when evaluating the potentialbenefits of investing in this Portfolio.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek potential total return through income and capitalappreciation;seek diversification within their investments through exposure toemerging market short-term debt;can tolerate the high volatility associated with emerging marketdebt;are willing to take on a high level of risk;have a long-term investment horizon.US$ High Income BondsThe US$ High Income Bonds Portfolio seeks to achieve total returnfrom capital appreciation and income by investing principally inincome-producing U.S. Dollar denominated debt securities with anemphasis on the High Yield market. The Portfolio will invest undernormal circumstances at least two thirds of its net assets in adiversified portfolio of debt securities that are rated BelowInvestment Grade. The Portfolio will not generally purchase debtsecurities rated below “C” by S&P or by Moody’s or that have an10


Threadneedle (Lux) Prospectusequivalent rating by another NRSRO, or are unrated and believedto be of similar quality. All ratings apply at the time theinvestment is made. If the rating of a security changessubsequent to purchase, the security may continue to be held atthe Sub-Advisor’s discretion.The Portfolio may invest secondarily in other securities and mayemploy other investment strategies that are not principalinvestment strategies. The Portfolio’s policies permit investmentin other Transferable Securities, including non income-producingsecurities and common stocks. The Portfolio may invest up to25% of its net assets in non-U.S. securities and up to 10% of itsnet assets in non-U.S. Dollar denominated securities.The Portfolio may also use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement. These derivatives may include, but are not limitedto, interest rate futures, interest rate options, interest rate swaps,total/excess return swaps and credit default swaps.It is intended that income produced by the Portfolio’s investmentswill be reinvested within the Portfolio.Investment in debt securities rated Below Investment Gradeentails special risks and may not be appropriate for all investors.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek potential total return through higher income and capitalappreciation;seek diversification in their investments through exposure tothe U.S. Dollar denominated high-yield market;can tolerate the high price volatility and lower liquidityassociated with lower-rated debt securities;are willing to take on a high level of risk;have a long-term investment horizon.Global High Yield and Emerging Market (Euro) 14The Global High Yield and Emerging Market (Euro) Portfolio seeksto achieve income and capital appreciation by investing principallyin a broadly diversified range of High Yield and Emerging MarketCountries’ Transferable debt Securities such as bonds,debentures, and notes of government and private issuers, orwarrants on the same. The Portfolio will invest globally. For theavoidance of doubt, the Portfolio is permitted to invest in HighYield securities from non-Emerging Markets as well as sovereignbonds from Emerging Market Countries that are consideredInvestment Grade.income securities and Money Market Instruments), cash and nearcash, deposits, and forward currency exchange contracts.The Portfolio may invest in securities denominated in variouscurrencies and will generally hedge non-Euro exposures.However, the maximum amount of non-Euro exposure remainingun-hedged will not exceed 33% of the net assets of the Portfolio.The Net Asset Value of this Portfolio shall be expressed in theEuro and investment decisions will be made from a Europerspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek potential total return through higher income and capitalappreciation;seek global diversification in their investments throughexposure to high yield and emerging market debt issuers;can tolerate the high price volatility and lower liquidityassociated with lower-rated debt securities;are willing to take on a high level of risk;have a long-term investment horizon.European High Yield Bond 15The European High Yield Bond Portfolio seeks to achieve totalreturn, predominantly by way of income by investing principally inEuro or GBP denominated Below Investment Grade debt issuedor guaranteed by institutions or corporations that are domiciled in,or have significant activities in Europe. The Portfolio may furtherinvest in other securities (including other fixed income securities,equities and Money Market Instruments). Where securities arenon-Euro denominated, it is intended they will generally behedged into Euro.The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor ProfileThis Portfolio is suitable for investors who:seek potential total return through higher income and capitalappreciation;seek diversification within their investments through exposureto the European high yield market;can tolerate the high price volatility and lower liquidityassociated with lower-rated debt securities;have a medium to long-term investment horizon.In addition to investments in High Yield and Emerging MarketCountries Transferable debt Securities denominated in Euro, thePortfolio may invest in other securities (including other fixed14On 12 January 2012, this Portfolio will be merged with the Threadneedle (Lux) –Emerging Market Corporate Bonds Portfolio.15This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.11


Threadneedle (Lux) ProspectusThe Asset Allocation Portfolio:Global Asset Allocation 16As from 1 January 2012, the investment objective and policy andtypical investor’s profile of the Threadneedle (Lux) – Global AssetAllocation Portfolio will be amended and read as follows:The Global Asset Allocation Portfolio seeks to achieve a return fromincome and capital appreciation.The Portfolio will invest globally primarily in the equity and fixedincome securities of both government and corporate issuers, eitherdirectly, or indirectly through financial derivative instruments and/orcollective investment schemes, as well as in forward currencyexchange contracts and, when determined appropriate on adefensive basis, in cash and Money Market Instruments. ThePortfolio may also gain indirect exposure to commodities through,but not limited to, investment in collective investment schemes,securitised notes and/or financial derivative instruments where suchderivatives’ underlying instruments are indices. The Portfolio will notinvest in physical commodities or property.The Portfolio may use financial derivative instruments and forwardtransactions for both efficient portfolio management and investmentpurposes. The use of derivatives for investment purposes mayincrease the risk profile of the Portfolio.The Portfolio retains the flexibility to vary its exposure betweenasset classes where it deems necessary in order to achieve theinvestment objective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation in a globally asset-allocated portfolio;seek to add diversification to their investments through exposureto global equities, fixed income, cash, currencies andcommodities;have a medium to high level of risk tolerance;have a medium- to long-term investment time horizon.The Equity Portfolios:Global FocusThe Global Focus Portfolio seeks to achieve capital appreciation by16Until 31 December 2011 (included), the investment objective and policy and thetypical investor’s profile remains as follows:“The Global Asset Allocation Portfolio seeks to achieve a return from income andcapital appreciation through a globally balanced investment portfolio consistingof equity and debt securities.The Global Asset Allocation Portfolio will operate as a separate Portfolio and willfollow the objective of the Global Focus Portfolio for its equity portion and theGlobal Aggregate Bond Portfolio for its bond portion (including the use ofderivatives as disclosed for such latter Portfolio).Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation in a globally asset-allocated balanced portfolio;seek to add diversification to their investments through exposure to globalequities and debt;have a medium to high level of risk tolerance;desire to invest with a medium- to long-term investment time horizon.”investing principally in a concentrated portfolio of equity securitiesof corporate issuers listed, domiciled or conducting a significantpart of their business in developed and emerging marketcountries. Secondarily, the Portfolio may invest in securitiesconvertible into equity securities and/or warrants.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation through a globally-focused equity fund;seek investment diversification through exposure to globalequities;have a high level of risk tolerance commensurate with aninvestment in equity securities;can tolerate high volatility in the value of their investment;have a long-term investment horizon.Global Emerging Market EquitiesThe Global Emerging Market Equities Portfolio seeks to achievelong-term capital appreciation by investing principally in the equitysecurities of Emerging Markets companies. These are defined ascompanies domiciled in and/or whose significant activities are inEmerging Market Countries. The Portfolio may further invest inother securities (including fixed income securities, other equitiesand Money Market Instruments).Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation through a global emerging marketfocusedequity fund;seek investment diversification through exposure to EmergingMarket Countries equities;have a high level of risk tolerance commensurate with aninvestment in developing countries;can tolerate frequent periods of high volatility and risk;have a long-term investment horizon.US Equities 17As from 1 December 2011, the name, the investment objectiveand policy and typical investor’s profile of the Threadneedle (Lux) –US Equities Portfolio will be amended and read as follows:17Until 30 November 2011 (included), the name, investment objective and policy andthe typical investor’s profile remains as follows:“US Equities“The US Equities Portfolio seeks to achieve capital appreciation by investingprincipally in a diversified portfolio of equity securities of corporate issuersheadquartered in the United States or exercising a predominant part of theiractivity in this country. Secondarily, the Portfolio may invest in securitiesconvertible into equity securities and/or warrants. The securities will generally beof companies with capitalisations that are similar to those of companiesrepresented in the S&P 500 Index.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment diversification through exposure to the U.S. equity market. Theinvestor should be aware that geographic concentration may add more volatilitythan a more geographically diversified portfolio;can tolerate potentially high volatility in the value of their investment;have a high level of risk tolerance commensurate with an investment in equitysecurities;have a long-term investment horizon.”12


Threadneedle (Lux) ProspectusAmericanThe American Portfolio seeks to achieve capital appreciation byinvesting principally in the equity securities of medium to largecompanies domiciled in North America or with significant NorthAmerican operations. The Portfolio may further invest in othersecurities (including fixed income securities, other equities andMoney Market Instruments).Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment diversification through exposure to the NorthAmerican equity market. The investor should be aware thatgeographic concentration may add more volatility than a moregeographically diversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.American SelectThe American Select Portfolio seeks to achieve capitalappreciation by investing principally in the equity securities ofcompanies domiciled in North America or which have significantNorth American operations. These may include large, medium andsmaller companies. There will be no particular specialisation. Theselect investment approach means that the Portfolio has theflexibility to take significant stock and sector positions which maylead to increased levels of volatility.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the North America equity market.The investor should be aware that geographic concentrationmay add more volatility than a more broadly diversifiedportfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.US Contrarian Core EquitiesThe US Contrarian Core Equities Portfolio seeks to achieve longtermcapital appreciation by investing principally in the equitysecurities of large cap companies (generally over US$ 2 billion inmarket capitalisation, as at time of purchase) listed, domiciled, orconducting a significant part of their business in the UnitedStates. The Sub-Advisor will take a contrarian approach and willspecifically target stocks that it believes are undervalued by themarket.The Portfolio may use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement. These derivatives may include but are not limited toequity swaps, options, futures and foreign currency exchangecontracts.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the US equity market. Theinvestor should be aware that geographic concentration mayadd more volatility than a more broadly diversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment time horizon.Pan European EquitiesThe Pan European Equities Portfolio seeks to achieve capitalappreciation by investing principally in the equity of largecompanies domiciled in Europe or with significant Europeanactivities. The Portfolio may further invest in the equity securitiesof European Smaller Companies and other securities (includingfixed income securities, other equities and Money MarketInstruments).The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the European equity market. Theinvestor should be aware that geographic concentration mayadd more volatility than a more broadly diversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.Pan European Smaller CompaniesThe Pan European Smaller Companies Portfolio seeks to achievecapital appreciation by investing principally in the equity securitiesof European Smaller Companies. The Portfolio may further investin other securities (including fixed income securities, otherequities and Money Market Instruments).The Net Asset Value of this Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.13


Threadneedle (Lux) ProspectusTypical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the European equity market. Theinvestors should be aware that geographic concentration mayadd more volatility than a more broadly diversified portfolio;seek investment exposure to small size European companies.The investor should be aware that there are certain risksassociated with investing in smaller companies that mayinclude greater market price volatility and greater vulnerabilityto fluctuations in the economic cycle;can tolerate potentially large fluctuations in share price;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.European Quantitative EquitiesThe European Quantitative Equities Portfolio seeks to achievecapital appreciation by investing principally in a diversifiedportfolio of equity securities of corporate issuers headquarteredin Europe or exercising a predominant part of their activity inEurope. These securities will be mainly of companies withmedium and large capitalisation. Investments will generally bemade in major European markets.The Portfolio may invest secondarily in securities convertible intoequity securities and/or warrants of those companies. ThePortfolio may also invest up to 20% of its net assets in securitiesof companies in emerging European markets.The Portfolio may use financial derivative instruments for principalinvestment, hedging and efficient portfolio management. Thesederivatives may include but are not limited to equity swaps,options, futures and foreign currency exchange contracts.The Portfolio will be managed utilizing quantitative stock selectiontechniques to implement a disciplined decision-making process.Such techniques may include the use of computer modeling toscreen companies for various fundamental financialcharacteristics, to perform sector and/or portfolio leveloptimisation, to apply various risk controls and to back-test theresults of these processes.The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the European equity market usingquantitative stock selection techniques. The investor should beaware that geographic concentration may add more volatilitythan a more broadly diversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.AsiaThe Asia Portfolio seeks to achieve capital appreciation byinvesting principally in the equity securities of companiesdomiciled in Asia (with the exclusion of Japan) or with significantAsian (excluding Japan) operations. The Portfolio may furtherinvest in other securities (including fixed income securities, otherequities and Money Market Instruments).Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the Asia Pacific (excluding Japan)equity market. The investor should be aware that geographicconcentration may add more volatility than a more broadlydiversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities of a single region;have a long-term investment horizon.Greater China EquitiesThe Greater China Equities Portfolio seeks to achieve capitalappreciation by investing principally in a diversified portfolio ofequity securities of corporate issuers headquartered or exercisinga predominant part of their activity in the People’s Republic ofChina (“China”), Hong Kong or Taiwan.Secondarily, the Portfolio may invest in securities convertible intoequity securities and/or warrants.While China is a very large country, it is still an Emerging MarketCountry. Emerging market investments are more volatile andpresent higher risk than investments in more establishedmarkets. Investors should consider this extra risk when evaluatingthe potential benefits of investing in this Portfolio.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek portfolio exposure to China, Hong Kong and Taiwan equitymarkets. The investor should be aware that geographicconcentration may add more volatility than a more broadlydiversified portfolio;can tolerate potentially high volatility in value of theirinvestment;14


Threadneedle (Lux) Prospectushave a high level of risk tolerance commensurate with aninvestment in equity securities of a single region;have a long-term investment horizon.Global Energy EquitiesThe Global Energy Equities Portfolio seeks to achieve capitalappreciation by investing principally in a globally diversifiedportfolio of equity securities of corporate issuers exercising apredominant part of their activity in the development, research,production or distribution of energy related products andservices. Investments will generally be made in major worldmarkets, except that the Portfolio may invest up to 15% of its netassets at the time of purchase in securities of companies inEmerging Market Countries. As a sector portfolio, this Portfoliowill provide less diversification, and may lead to higher volatility,than other broadly invested portfolios.Secondarily, the Portfolio may invest in securities convertible intoequity securities and/or warrants.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment diversification through exposure to the energysector. The investor should be aware that sector concentrationmay add more volatility than a more broadly diversifiedportfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities of a single sector;have a long-term investment horizon.Global TechnologyThe Global Technology Portfolio seeks to achieve long term capitalappreciation by making global investments principally inTransferable Securities of companies with business operations intechnology and technology-related industries. Technology-relatedcompanies are those companies that use technology extensivelyto improve their business processes and applications.The Portfolio may invest in Transferable Securities of issuers ofany size and domiciled in any country. The Portfolio will normallyinvest its assets in any equity securities, including commonstock, securities convertible or exchangeable into common stock,rights and warrants to purchase common stock and depositaryreceipts representing an ownership interest in these equitysecurities. The Portfolio may invest up to 25% of its assets inpreferred stock and Investment Grade debt securities.Typical Investor ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek portfolio diversification through exposure to thetechnology sector. The investor should be aware that sectorconcentration may add more volatility than a more broadlydiversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.Global Equities – Walter Scott & PartnersThe Global Equities – Walter Scott & Partners Portfolio seeks toachieve a relatively high real return by investing principally in aglobally diversified portfolio of equity securities (includingsecurities convertible into equity securities and/ or warrants) ofcorporate issuers. These securities will typically be of companiesthat have the potential for achieving above average rates of return.The Portfolio will be invested with a long term focus and thereforeportfolio turnover is expected to be low. The Portfolio will mainlyinvest in developed markets but may secondarily invest in thesecurities of companies in Emerging Market Countries.The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation through a globally-focused equity fund;seek portfolio diversification through exposure to geographicregions across the world;have a high level of risk tolerance commensurate with aninvestment in equity securities;can tolerate potentially large fluctuations in share price;have a long-term investment horizon.Mondrian Investment Partners – Focused EmergingMarkets EquityThe Mondrian Investment Partners – Focused Emerging MarketsEquity Portfolio will invest in a focused list of equity securities ofcorporate issuers. This Portfolio will be managed against theMSCI Emerging Markets Index. In choosing the focused list, theSub-Advisor will take into consideration overall market exposureto any given country which will typically be limited to one-third ofthe net assets of the Portfolio. The Portfolio will invest primarily incorporate issuers that will be headquartered in Emerging MarketCountries. The Portfolio will typically hold 35 – 45 corporateissuers with a market capitalisation of approximately more thanUS$3.5 billion at the time of initial purchase. However, it shouldbe noted that the Portfolio may hold more or less issuers thanindicated and that the market capitalisation of the issuers in thePortfolio may also vary from the level indicated here.Up to 20% may be invested in situations where the Sub-Advisorcan only attain the emerging market exposure desired throughequity securities traded or headquartered elsewhere.15


Threadneedle (Lux) ProspectusA disciplined dividend discount model will be utilised, consistentlyacross all markets and securities.and corporate Latin American debt, other equities and MoneyMarket Instruments).Emerging market investments are more volatile and presenthigher risk than investments in more established markets.Investors should consider this extra risk when evaluating thepotential benefits of investing in this Portfolio.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation through a focused large cap globalemerging market equity portfolio;seek portfolio diversification through exposure to developinggeographic regions across the world;have a high level of risk tolerance commensurate with aninvestment in developing countries;can tolerate potentially frequent periods of high volatility andrisk;have a long-term investment horizon.UK Equities 18The UK Equities Portfolio seeks to achieve capital appreciation byinvesting principally in the equity securities of companiesdomiciled in the United Kingdom or which have significant UnitedKingdom operations. The Portfolio may further invest in othersecurities (including fixed income securities, other equities andMoney Market Instruments).Typical Investor ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the equity market of LatinAmerica. The investor should be aware that geographicconcentration may add more volatility than a more broadlydiversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.US Smaller Companies 20The US Smaller Companies Portfolio seeks to achieve capitalappreciation by investing principally in the equities of companiesthat are domiciled in the United States or have significant UnitedStates operations and have a market capitalisation of less thanUS$ 5 billion. Secondarily, the Portfolio may further invest in othersecurities (including fixed income securities, other equities andMoney Market Instruments).Typical Investor ProfileThis Portfolio is suitable for investors who:The Net Asset Value of the Portfolio shall be expressed in GBPand investment decisions will be made from a GBP perspective.Typical Investor ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek investment exposure to the equity market of the UnitedKingdom. The investor should be aware that geographicconcentration may add more volatility than a moregeographically diversified portfolio;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.Latin America 19The Latin America Portfolio seeks to achieve capital appreciationby investing principally in the equity securities of companiesdomiciled in Latin America or which have significant LatinAmerican operations. The Portfolio may further invest in othersecurities (including fixed income securities such as sovereign18This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.19This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.seek capital appreciation;seek investment exposure to the equity market of the UnitedStates. The investor should be aware that geographicconcentration may add more volatility than a more broadlydiversified portfolio;seek investment exposure to small size U.S. companies. Theinvestor should be aware that there are certain risks associatedwith investing in smaller companies that may include greatermarket price volatility and greater vulnerability to fluctuations inthe economic cycle;can tolerate potentially large fluctuations in share price;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.Global Equity Dividend 21The Global Equity Dividend Portfolio seeks to achieve a high andgrowing income combined with prospects for capital appreciationby investing principally in a globally diversified range of equitysecurities of corporate issuers listed, domiciled or conducting asignificant part of their business in developed countries andEmerging Market Countries.20This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.21This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.16


Threadneedle (Lux) ProspectusSecondarily, the Portfolio may further invest in derivatives,forward transactions and other securities (including fixed interestsecurities and Money Market Instruments), deposits and cash.The Portfolio may use financial derivative instruments and forwardtransactions for both efficient portfolio management and forinvestment purposes. These derivatives may include but are notlimited to equity swaps, options, futures and foreign currencyexchange contracts.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek income and capital appreciation through a globally-focusedequity fund;seek investment diversification through exposure to globalequities;can tolerate potentially high volatility in the value of theirinvestment;have a high level of risk tolerance commensurate with aninvestment in equity securities;have a long-term investment horizon.The Absolute Return Portfolios:Risk factors for Absolute Return Portfolios (to be read inconjunction with the “Risk Factors” section of thisProspectus):Absolute Return:Portfolios seeking an Absolute Return will use investmenttechniques that are capable of making profits in markets wheresecurity prices are increasing or decreasing. As such, they have apotential to deliver a positive return independent of the marketdirection. However, it is important to note this does not meanthese Portfolios will produce a positive return at all times, andindeed may be subject to periods of negative return. Theseinvestment techniques will also introduce additional risks whencompared to more traditional directional Portfolios.Use of derivatives and forward transactions:The Portfolios use derivatives and forward transactions for bothefficient portfolio management and investment purposesincluding short selling and leverage. The use of derivatives andforward transactions may significantly increase or decrease therisk profile of the Portfolio.Short Sales and Leverage:The Portfolio’s exposure involves short sales of securities andleverage via financial derivative instruments which increases therisk of the Portfolio. The investment strategy includes thesynthetic short sales of securities, which creates an exposureequivalent to selling securities not physically owned by thePortfolios at the time. The Portfolios will profit if the value ofthese securities fall, however, if the value of these securitiesincrease, it will have a negative impact on the Portfolios. The useof derivatives may also create leverage in the Portfolios. Leveragehas the effect of increasing the magnitude of any profitscompared to if there were no leverage. However, it will alsoincrease the level of any loss.For the avoidance of doubt, the Absolute Return Portfolios do notoffer any form of guarantee with respect to performance, and noform of capital protection will apply.For further information on risks associated to the use ofderivatives, please note section “Use of Derivatives and otherInvestment Techniques” in the “Risk Factors” section.Target Return (US$)The Target Return (US$) Portfolio seeks to achieve a total positivereturn in excess of the 3-month LIBOR of the Base Currency,regardless of market conditions.The Portfolio will gain exposure to global bond and currencymarkets. The portfolio will principally invest in derivatives, cashand near cash, fixed income securities, index linked securities,Money Market Instruments and deposits.At times the Portfolio may be concentrated in any one or acombination of such assets. The Portfolio may take long and shortpositions through derivatives in such issues. Securities which aredenominated in a currency other than US$ may or may not behedged to the US$ at the discretion of the ManagementCompany or the relevant Sub-Advisor.The Portfolio will use derivatives and forward transactions forboth efficient portfolio management and investment purposesincluding synthetic short selling and leverage. The use ofderivatives may increase or decrease the risk profile of thePortfolio.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek a potential total return in excess of cash;seek returns from both income and capital appreciation;have a moderate to high risk tolerance;have a medium term investment time horizon.American Absolute AlphaThe American Absolute Alpha Portfolio seeks to achieve anabsolute return. The Portfolio will principally invest in equitysecurities and equity related derivative contracts of corporateissuers headquartered in North America or exercising apredominant part of their activity in North America, and whendetermined appropriate, cash and Money Market Instruments.Secondarily, the Portfolio may invest in securities and derivativesrelated to corporate issuers headquartered outside NorthAmerica.17


Threadneedle (Lux) ProspectusThe Portfolio will take long positions in publicly traded equitysecurities. Short positions (and possibly long positions) will betaken by the use of financial derivative instruments to include, butnot limited to, equity swaps, total/excess return swaps, andfutures and options related to individual equity securities, relatedto exchange traded funds and/or related to equity indices inaccordance with section A(7)(b) in Appendix A “InvestmentRestrictions”. Hedging may also be achieved through the purchaseof exchange traded funds.The Portfolio will use financial derivative instruments and forwardtransactions for both efficient portfolio management andinvestment purposes. The use of derivatives may increase ordecrease the risk profile of the Portfolio.Multi Asset Absolute Alpha 22The Multi Asset Absolute Alpha Portfolio seeks to achieve anabsolute return.The Portfolio will invest globally in equity, fixed income andcurrency markets, either directly, or indirectly through collectiveinvestment schemes and/or financial derivative instruments, andwhen determined appropriate cash and Money MarketInstruments. The Portfolio will also gain indirect exposure tocommodities, property or other assets through, but not limited to,investment in collective investment schemes, securitised notesand/or financial derivative instruments where such derivative’sunderlying instruments are indices. The Portfolio will not invest inphysical commodities or property.Typical Investor’s ProfileThis Portfolio is suitable for investors who:The Portfolio is expected to invest more than 10% and up to100% of its assets in other UCITS or UCIs.seek capital appreciation;seek returns driven principally by long and short investmentdecisions;have a high risk tolerance;have a long term investment time horizon.Absolute Emerging Market MacroThe Absolute Emerging Market Macro Portfolio seeks to achievean absolute return.The Portfolio will principally invest either directly in debt andcurrencies of Emerging Market Countries including but notlimited to, domestic, sovereign and quasi-sovereign debt, issuedin local or foreign currencies, or indirectly in such debt andcurrencies through derivatives such as, including but not limitedto, credit default swaps, interest rate swaps and currency futures,options and forwards, and when determined appropriate, cashand Money Market Instruments.Secondarily, the Portfolio may further invest in debt securities andcurrencies of non-Emerging Market Countries.The Portfolio will use financial derivative instruments and forwardtransactions for both efficient portfolio management andinvestment purposes. The use of derivatives may increase ordecrease the risk profile of the Portfolio.The Portfolio will use financial derivative instruments and forwardtransactions for both efficient portfolio management andinvestment purposes, including synthetic short selling andleverage. The use of derivatives may increase or decrease the riskprofile of the Portfolio.The Portfolio retains the flexibility to vary its exposure betweenasset classes where it deems necessary in order to achieve theinvestment objective.Typical Investor ProfileThis Portfolio is suitable for investors who:seek capital appreciation;have a high risk tolerance;have a long term investment time horizon.European Smaller Companies Absolute AlphaThe European Smaller Companies Absolute Alpha Portfolio seeksto achieve an absolute return. The Portfolio will principally invest inequity securities, convertible debt securities and equity relatedderivative instruments of European Smaller Companies, andwhen determined appropriate cash and Money MarketInstruments. Secondarily, the Portfolio may invest in securitiesand derivatives related to companies headquartered outsideEurope.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek a potential total return in excess of cash;seek returns from both income and capital appreciation;have a high risk tolerance;have a long term investment time horizon.The Portfolio will take both long and short positions. Shortpositions (and possibly long positions) will be taken by the use offinancial derivative instruments to include, but not limited to,equity swaps, total/excess return swaps, and futures and optionsrelated to individual equity securities, related to exchange tradedfunds and/or related to indices. Hedging may also be achievedthrough the purchase of exchange traded funds.22This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time, confirmation of thelaunch will be made available at the registered office of the SICAV.18


Threadneedle (Lux) ProspectusThe Portfolio will use financial derivative instruments and forwardtransactions for both efficient portfolio management andinvestment purposes. The use of derivatives may increase ordecrease the risk profile of the Portfolio.The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek returns driven principally by long and short investmentdecisions;have a high risk tolerance;have a long term investment time horizon.Global Opportunities BondThe Global Opportunities Bond Portfolio seeks to achieve anabsolute return. The Portfolio will principally invest either directly,or indirectly through derivatives, in both government and nongovernmentfixed income and floating rate securities. Theseinclude, but are not limited to: developed and emerging marketgovernment bonds; Investment Grade, non-Investment Grade andunrated corporate bonds; asset backed Transferable Securities;and when determined appropriate cash and Money Marketinstruments. At times the Portfolio may be concentrated in anyone or a combination of these types of assets. The Portfolio maytake long positions, and short positions through derivatives, insuch assets.The Portfolio will use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement. These derivatives may include, but are not limitedto, foreign currency exchange contracts, futures and options onTransferable Securities, interest rate swaps and credit defaultswaps. The use of derivatives may increase or decrease the riskprofile of the Portfolio.European companies headquartered or exercising a predominantpart of their activity in Europe, and when determined appropriate,cash and Money Market Instruments. Secondarily, the Portfoliomay invest in securities and derivatives related to companiesheadquartered outside Europe.The Portfolio will take both long and short positions (thePortfolio’s positions are generally expected to be directionallylong, but at times may be market neutral or net short). Shortpositions (and possibly long positions) will be taken by the use offinancial derivative instruments to include, but not limited to,equity swaps, total/excess return swaps, and futures and optionsrelated to individual equity securities, related to exchange tradedfunds and/or related to indices. Hedging may also be achievedthrough the purchase of exchange traded funds.The Portfolio will use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement. The use of derivatives for investment purposesmay increase the risk profile of the Portfolio.The Net Asset Value of the Portfolio shall be expressed in Euroand investment decisions will be made from a Euro perspective.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek return driven principally by long and short investmentdecisions;have a high risk tolerance; andhave a long-term investment time horizon.The Specialist Portfolio:Enhanced CommoditiesThe Enhanced Commodities Portfolio seeks to achieve capitalappreciation which is directly and indirectly linked to commoditymarkets.Typical Investor’s ProfileThis Portfolio is suitable for investors who:seek potential return in excess of cash;seek returns from both income and capital appreciation;have a moderate to high risk tolerance;have a medium to long term investment time horizon.European Absolute Alpha 23The European Absolute Alpha Portfolio seeks to achieve anabsolute return.The Portfolio will principally invest in equity securities, convertibledebt securities and equity related derivative instruments of23This Portfolio is not available for subscription at the date of this Prospectus. Itmay be launched at the Directors’ discretion, at which time confirmation of thelaunch will be made available at the registered office of the SICAV.The Portfolio will invest in financial derivative instruments whoseunderlying instruments are commodity indices or sub-indicescomposed of futures contracts on physical commodities.Investments into single commodity indices will be in accordancewith section A(7)(b) in Appendix A “Investment Restrictions”. ThePortfolio may also gain high exposure to an index that issufficiently diverse on the basis set out in section A(7)(a) inAppendix A “Investment Restrictions”.The Portfolio may also invest in exchange traded funds and/orexchange traded commodities/securitised notes, certificates,Investment Grade government securities, Money MarketInstruments, cash, equities and/or other debt securities.The Portfolio will use financial derivative instruments forinvestment purposes, hedging and efficient portfoliomanagement.19


Threadneedle (Lux) ProspectusTypical Investor’s ProfileThis Portfolio is suitable for investors who:seek capital appreciation;seek portfolio diversification within their investment throughexposure to commodities;have a high risk tolerance;can tolerate potentially high volatility in value of theirinvestment;have a long term investment time horizon.Investors should note the “Risk factors” section of thisProspectus in terms of risks applicable to investing in theEnhanced Commodities Portfolio and in particular “Use ofDerivatives and other investment Techniques”, “CounterpartyRisk”, “Financial derivatives on indices or sub-indices”,“Total/Excess Return Swaps”, “Commodity Indexes” and“Exchange traded notes”. Investors should consider this extra riskwhen evaluating the potential benefits of investing in thisPortfolio.The Portfolio uses derivatives to gain exposure to commodityindices or sub-indices composed of futures contracts on physicalcommodities. The use of such derivatives for investmentpurposes may increase the risk profile of the Portfolio.20


Threadneedle (Lux) ProspectusOther Investment PracticesThe Global Asset Allocation Portfolio, the Equity Portfolios andcertain Bond Portfolios may invest in warrants to purchasecommon stock. Investment in warrants entails special risks,notably those described under “Investment in warrants” in the“Risk Factors” section below.Each Portfolio may hold ancillary liquid assets as appropriate toprovide for redemptions or to meet other liquidity needs. Theseassets may consist of commercial paper and other Money MarketInstruments with a remaining maturity not in excess of 12months and of time deposits, and demand deposit accounts. Inaddition, each such Portfolio may invest up to 10% of its netassets in Money Market Instruments that are regularly traded andhave a remaining maturity in excess of 12 months.Unless otherwise specified within the Portfolio’s investmentobjective and policy, each Portfolio may invest up to 10% of itsnet assets in units of other UCIs or UCITS. See Section C(a)(12)of Appendix A below. Investors are thus subject to the risk ofduplication of fees and commissions except that if a Portfolioinvests in other UCIs or UCITS sponsored by Ameriprise Financial,Inc. or one of its affiliates or by a company with which AmeripriseFinancial, Inc. is bound within the framework of a community ofmanagement or of control or by a direct or indirect shareholdingof more than 10% of the share capital or of the votes, thePortfolio will not be charged any subscription and redemptionfees with respect to such investment and any of the AssetManagement Fee with respect to such assets. The maximummanagement fees of other UCIs or UCITS in which a Portfoliomay invest shall not exceed 2.5% of such Portfolio’s assets.When market or financial conditions warrant, and in accordancewith the Investment Restrictions in Appendix A, each Portfoliomay invest, as a temporary defensive measure, up to 100% of itsnet assets in transferable debt obligations issued or guaranteed inaccordance with Investment Restriction C(a)(6) by a memberstate of the OECD or issued by public international bodies ofwhich one or more Member States are members. In addition, fortemporary purposes, each Portfolio may borrow from banks orother lending institutions in amounts up to 10% of its net assets.Such borrowing may be used for liquidity purposes (e.g., to covercash shortfall caused by mismatched settlement dates onpurchase and sale transactions, finance repurchases or pay feesreverting to a service provider) and/or for investment purposes.The assets of such Portfolio may be charged as security for anysuch borrowings in accordance with the principle of segregationof assets and liabilities provided by Article 181 of the 2010 Law.To determine the rating of an instrument with a split rating, thelower rating shall prevail.The portfolios that invest in US Bonds may purchase restrictedsecurities that are offered and sold only to “qualified institutionalbuyers” under Rule 144A of the US Securities Act of 1933.Each Portfolio’s ability to purchase or sell portfolio securities maybe affected by laws or regulations relating to the convertibility andrepatriation of assets. Because the Shares of each Portfolio maybe redeemed on each Valuation Date in the currency which hasbeen elected at the time of subscription, the ManagementCompany and the relevant Sub-Advisor intend to manage eachPortfolio so that they will be able to obtain the liquidity necessaryto meet anticipated redemptions. There can be no guarantee thatthis result will be achieved.In order to reduce operating and administrative costs whileallowing investment risk to be spread more widely, the Directorsmay decide that all or part of the assets of the SICAV will be comanagedwith the assets belonging to other collectiveinvestment undertakings or that all or part of the assets of thePortfolios and/or Classes of Shares will be co-managed amongthemselves. For additional information see Appendix B, section IV“Co-Management”.Except as otherwise noted below, each Portfolio may usefinancial derivative instruments (including options, forwards,futures, contracts for difference and/or swaps (including creditdefault swaps, credit default swaps on loans, interest rate swapsand total/excess return swaps) on Transferable Securities and/orany financial instruments and currencies) to hedge against marketand currency risks, as well as for efficient portfolio management,as described under “Investment Restrictions” in Appendix A and“Investment Techniques and Instruments” in Appendix B. CertainPortfolios may further use financial derivative instruments as aprincipal investment objective, as more fully described in theinvestment policy of each relevant Portfolio, when appropriate. Insuch case, the underlying of the financial derivative instrumentsmust consist in instruments in which the Portfolio may investaccording to its investment policy. Shareholders should be awarethat the use of derivative instruments for purposes other thanhedging carries a certain degree of risk.If a Portfolio invests in OTC derivatives, such Portfolio may holdmaterial quantities of cash, time deposit and/or Money MarketInstruments with a remaining maturity not in excess of 12months. These additional cash levels will not be held in directpursuit of achieving the investment objectives of the relevantPortfolio, but may be required as a consequence of the use of theOTC derivatives for risk management purposes, notably in orderto cover for exposure to such derivatives or mitigate the risk ofthe leverage entailed by the use of the derivatives.Risk FactorsGeneralInvestment in any Portfolio entails a degree of risk. While thereare some risks that may be common to a number or all of thePortfolios, there may also be specific risk considerations whichapply to particular Portfolios in which case such risks will bespecified in the investment policy section for that Portfolio. It isimportant to keep in mind one of the main principles of investing:21


Threadneedle (Lux) Prospectusthe higher the risk of losing money, the higher the potentialreward. The reverse, also, is generally true: the lower the risk, thelower the potential reward. Investment in the Shares may not besuitable for all investors and should not be considered a completeinvestment program.The Net Asset Value of Shares can go down as well as up, andShareholders may lose money by investing in a Portfolio.Shareholders should generally view an investment in a Portfolioas being a medium to long-term investment. The value of aninvestment in a Portfolio changes with the values of thatPortfolio’s investments. Many factors can affect those values.Each separate security in which a Portfolio may invest and theinvestment techniques which a Portfolio may employ are subjectto various risks. The following describes some of the general riskfactors that should be considered before investing in a particularPortfolio. The following list is neither specific nor exhaustive and afinancial adviser or other appropriate professional should beconsulted for additional advice.Exchange RatesMany of the Portfolios are invested in securities denominated in anumber of different currencies other than the Base Currency inwhich the Portfolios are denominated (or the currency ofdenomination of the particular Share Class) and, therefore,changes in foreign currency exchange rates will affect the value ofsecurities in such Portfolios.Interest RatesThe values of fixed income securities held by the Portfoliosgenerally will vary inversely with changes in interest rates andsuch variation may affect Share prices accordingly.High YieldCertain Portfolios may invest in High Yield. Investing in High Yieldinvolves special risks in addition to the risks associated withinvestments in higher-rated fixed income securities. Whileoffering a greater potential opportunity for capital appreciation andhigher yields, High Yield typically entail greater potential pricevolatility and may be less liquid than higher rated securities. HighYield may be regarded as predominantly speculative with respectto the issuer’s continuing ability to meet principal and interestpayments. They may also be more susceptible to real orperceived adverse economic and competitive industry conditionsthan higher rated securities.Risk Factors Relating to Small and Mid-CapCompaniesSome of the Portfolios invest in the securities of small and middlecapitalised companies. There are certain risks associated withinvesting in securities of these types of companies, includinggreater market price volatility, less publicly available information,and greater vulnerability to fluctuations in the economic cycle.Because small and middle capitalised companies normally havefewer shares outstanding than larger companies, it may be moredifficult to buy or sell significant amounts of such shares withoutaffecting prevailing market prices.Shares in the same Portfolio with differentcharacteristicsSome of the Portfolios may have multiple Shares Classes whichwill expose the investor to different levels of risk. Although eachShare Class so far as possible will be treated as bearing theliabilities, expenses, costs and charges attributable to it, if itsassets are not sufficient, the assets, liabilities, expenses, costsand charges may be reallocated between the Share Classes ofthe Portfolios in a manner which is fair to the Shareholders of thePortfolio generally. A Shareholder is not liable to make any furtherpayment to the Portfolio after they have paid the purchase priceof the Shares.Hedged Shares ClassesNon-hedged Shares may be available in different currencies thanthe Base Currency of the Portfolio, and therefore will beconverted to the Base Currency of the Portfolio at the point ofinvestment. This investment will then be converted back to thecurrency of the Shares at the point at which an investorwithdraws their money from the Portfolio. The investor willtherefore receive the return of the underlying investments in thePortfolio, as well as the currency movement between the BaseCurrency of the Portfolio and the currency of the Shares. HedgedShares on the other hand will aim to hedge the currency risk ofinvesting in portfolios whose base currency is different to theshare class currency. This will be achieved by using currencyderivatives (Please see the Risk warning on the Use ofDerivatives and other Investment Techniques).Emerging MarketsInvestments in emerging markets may be more volatile thaninvestments in more developed markets. Some of these marketsmay have relatively unstable governments, economies based ononly a few industries, and securities markets that trade only alimited number of securities. Many emerging markets do nothave well developed regulatory systems and disclosure standardsmay be less stringent than those of developed markets.The risk of expropriation, confiscatory taxation, nationalisationand social, political and economic instability are greater inemerging markets than in developed markets. In addition towithholding taxes on investment income, some emergingmarkets may impose different capital gains taxes on foreigninvestors.A number of attractive emerging markets restrict, to varyingdegrees, foreign investment in securities. Further, some attractiveequity securities may not be available to one or more of thePortfolios because foreign shareholders hold the maximumamount permissible under current law. Repatriation of investmentincome, capital and the proceeds of sales by foreign investorsmay require governmental registration and/or approval in someemerging markets and may be subject to currency exchangecontrol restrictions. Such restrictions may increase the risks ofinvesting in certain of the emerging markets. Unless otherwise22


Threadneedle (Lux) Prospectusspecified within the Portfolio’s investment objective and policy, aPortfolio will only invest in markets where these restrictions areconsidered acceptable by the Directors.Generally accepted accounting, auditing and financial reportingpractices in emerging markets may be significantly different fromthose in developed markets. Compared to mature markets, someemerging markets may have a low level of regulation,enforcement of regulations and monitoring of investors’ activities,including trading on material non-public information.The securities markets of emerging countries have substantiallyless trading volume, resulting in a lack of liquidity and high pricevolatility. There may be a high concentration of marketcapitalisation and trading volume in a small number of issuersrepresenting a limited number of industries as well as a highconcentration of investors and financial intermediaries. Thesefactors may adversely affect the timing and pricing of a Portfolio’sacquisition or disposal of securities.Practices in relation to settlement of securities transactions inemerging markets involve higher risks than those in developedcountries because brokers and counterparties in such countriesmay be less well capitalised and custody and registration ofassets in some countries may be unreliable. Delays in settlementcould result in investment opportunities being missed if aPortfolio is unable to acquire or dispose of a security.There may be less publicly available information about certainfinancial instruments than some investors would find customaryand entities in some countries may not be subject to accounting,auditing and financial reporting standards and requirementscomparable to those to which certain investors may beaccustomed. Certain financial markets, while generally growing involume, have for the most part, substantially less volume thanmore developed markets, and securities of many companies areless liquid and their prices more volatile than securities ofcomparable companies in more sizeable markets. There are alsovarying levels of government supervision and regulation ofexchanges, financial institutions and issuers in various countries.In addition, the manner in which foreign investors may invest insecurities in certain countries, as well as limitations on suchinvestments, may affect the investment operations of certain ofthe Portfolios.Emerging Market Country debt will be subject to high risk andwill not be required to meet a minimum rating standard and maynot be rated for creditworthiness by any internationallyrecognised credit rating organisation. The issuer or governmentalauthority that controls the repayment of an emerging country’sdebt may not be able or willing to repay the principal and/orinterest when due in accordance with the terms of such debt. Asa result of the foregoing, a government obligor may default on itsobligations. If such an event occurs, the SICAV may have limitedlegal recourse against the issuer and/or guarantor.Use of Derivatives and other Investment TechniquesThe Portfolios may employ techniques and instruments relating toTransferable Securities and other financial liquid assets for eitherefficient portfolio management i.e. to increase or decrease theirexposure to changing security prices, interest rates, currencyexchange rates, commodity prices or other factors that affectsecurity values and hedging purposes, and/or to attempt toreduce certain risks of its investments and to attempt to enhancereturn. These techniques may include but are not limited to theuse of options, forward currency exchange contracts, futurescontracts, contracts for difference and swaps (including creditdefault swaps, credit default swaps on loans, interest rate swapsand total/excess return swaps) and other investment techniquesdescribed in Appendix B “Investment Techniques andInstruments”.Participation in the options or futures markets and in currencyexchange or contracts for difference or swap transactions involvesinvestment risks and transactions costs to which the Portfolioswould not be subject in the absence of the use of thesestrategies. The use of derivatives and other techniques carrieshigh risk and leverage risk in particular. Leverage has the effect ofincreasing the magnitude of any profits compared to if there wereno leverage; however, it also increases the level of any loss. Thisis the risk arising from the use of relatively small financialresources to obtain a large number of market positions. In afalling market, leverage can increase the losses on the derivativepositions concerned. In a falling market, the sale of options andother currency derivatives or other assets may mean that theirentire purchase price or premiums are lost.The use of such techniques and instruments for the Portfolios is,however, subject to special limits (see Appendix A).The SICAV may use these techniques to adjust the risk and returncharacteristics of a Portfolio’s investments. If the ManagementCompany or the relevant Sub-Advisor judges market conditionsincorrectly or employs a strategy that does not correlate well witha Portfolio’s investments, these techniques could result in a loss,regardless of whether the intent was to reduce risk or increasereturn. These techniques may increase the volatility of a Portfolioand may involve a small investment of cash relative to themagnitude of the risk assumed. In addition, these techniquescould result in a loss if the counterparty of the transaction doesnot perform as promised. Portfolios engaging in contracts fordifference or swap transactions are also exposed to a potentialcounterparty risk. In the case of insolvency or default of the swapcounterparty, the Portfolio involved could suffer a loss.There can be no assurance that the Management Company orthe relevant Sub-Advisor will be able to successfully hedge thePortfolios or that the Portfolios will achieve their investmentobjectives.23


Threadneedle (Lux) ProspectusCertain Portfolios of the SICAV may also invest in financialderivative instruments as a principal investment objective, asmore fully described in the investment policy of the relevantPortfolios, which may entail additional risks for Shareholders. Ifleverage is used, the global exposure of the SICAV shall notexceed a maximum percentage of 200% of its net asset value ona permanent basis.The SICAV may use Value at Risk (“VaR”) and/or, as the case maybe, commitments methodologies depending on the Portfoliosconcerned, in order to calculate the global exposure of eachrelevant Portfolio and to ensure that such global exposure relatingto financial derivative instruments does not exceed the total netasset value of such Portfolio.Attention of Shareholders is drawn to the potential additionalleverage which may result from the use of a VaR methodology tocalculate the global exposure relating to financial derivativeinstruments for the relevant Portfolio.The Management Company employs a risk management processin accordance with CSSF Circular 11/512 and article 13 of CSSFRegulation 10-4, which it communicates to the CSSF regularlyand in accordance with the detailed rules defined by the latter.This reporting also lists the types of derivative instruments, theunderlying risks, the quantitative limits and the methods whichare chosen in order to estimate the risks associated withtransactions in derivative instruments. Under no circumstancesshall these operations cause the SICAV to diverge from itsinvestment objectives as laid down in its constitutionaldocuments.Global exposure is determined using the Commitment Approachfor all Portfolios with the exception of those listed in the tablebelow, where it is determined using either the Absolute orRelative VaR Approach (all as defined in CSSF Circular 11/512). Forthe Portfolios using the Absolute VaR or Relative VaR Approachleverage is also determined in accordance with CSSF Circular11/512. The leverage factor is calculated using the methodologydefined in CESR/10-788 for calculating the Global Exposure usingthe Commitment Approach. Typical levels of leverage are shownin the table, but actual levels may be higher than the rangesshown. Where leverage is high, additional measures are used tomonitor the Portfolio’s risk profile.Absolute VaR PortfoliosPortfolioExpected level of leverage:Target Return (US$) 0-500%A range of 0-500% of expectedleverage would include up to100% exposure in physicalassets, and up to an additional400% exposure from derivativesAmerican Absolute Alpha 0-200%A range of 0-200% of expectedleverage would include up to100% exposure in physicalassets, and up to an additional100% exposure from derivativesAbsolute EmergingMarket Macro 0-400%A range of 0-400% of expectedleverage would include up to100% exposure in physicalassets, and up to an additional300% exposure from derivativesMulti Asset Absolute Alpha 0-400%A range of 0-400% of expectedleverage would include up to100% exposure in physicalassets, and up to an additional300% exposure from derivativesEuropean Smaller CompaniesAbsolute Alpha 0-200%A range of 0-200% of expectedleverage would include up to100% exposure in physicalassets, and up to an additional100% exposure from derivativesGlobal Opportunities Bond 0-500%A range of 0-500% of expectedleverage would include up to100% exposure in physicalassets, and up to an additional400% exposure from derivativesEuropean Absolute Alpha 0-200%A range of 0-200% of expectedleverage would include up to100% exposure in physicalassets, and up to an additional100% exposure from derivatives24


Threadneedle (Lux) ProspectusRelative VaR PortfoliosPortfolio Expected Reference PortfolioLevel ofLeverageGlobal Bonds (Euro) 24 0-400%* Tracks the performance ofliquid local currencydenominated fixed rategovernment debt globallywith a maturity of at least13 months remaining untilmaturityGlobal Aggregate Bond 0-400%* Tracks the performance ofglobal investment gradefixed rate debt markets,including governmentbonds, mortgage-backedbonds and corporate bondsEuro Active Bonds 0-400%* Tracks the performance oflarge capitalisation Eurodenominated investmentgrade debt*A range of 0-400% of expected leverage would include up to100% exposure in physical assets, and up to an additional 300%exposure from derivativesCredit RiskInvestors in a Portfolio should be aware that such an investmentmay involve credit risk. Bonds or other debt securities involvecredit risk to the issuer which may be evidenced by the issuer’scredit rating. Securities which are subordinated and/or have alower credit rating are generally considered to have a highercredit risk and a greater possibility of default than more highlyrated securities. In the event that any issuer of bonds or otherdebt securities experiences financial or economic difficulties, thismay affect the value of the relevant securities (which may bezero) and any amounts paid on such securities (which may bezero). This may in turn affect the Net Asset Value per Share.Investors in any Portfolio investing in OTC derivatives should beaware that the assets covering the obligations of such Portfoliounder such OTC derivatives, where applicable, will generallyinclude bonds or other debt instruments that involve credit riskthat may be retained by such Portfolio.Counterparty RiskThis risk relates to the quality of the counterparty with whom theManagement Company or the relevant Sub-Advisor doesbusiness, in particular for the settlement/delivery of financialinstruments or the conclusion of financial forward contracts.The risk reflects the counterparty’s ability to honour itscommitments (payment, delivery, repayment, etc.).24On 12 January 2012, this Portfolio will be merged with the Threadneedle (Lux) –Global Aggregate Bond Portfolio.Options and futures on currencies and other assetsThe sale of calls on currencies and other assets commits therelevant Portfolio to supply the underlying asset to the callpurchaser if he or she exercises the option to buy. This gives riseto the risk that, if the option is exercised, the Portfolio couldeither fail to benefit from any significant rise in the value of theunderlying asset or be forced to purchase that asset on the openmarket at a higher price in order to supply it to the counterpartyto the contract. In the case of the sale of puts on currencies orother assets, the risk is that the relevant Portfolio will be forced tobuy those currencies or other assets at the strike price, eventhough their market prices may be significantly lower at theexercise date. The value of fund assets could be more adverselyaffected by option leverage than by the direct purchase ofcurrencies or other assets.Similar risks accompany financial futures in which the parties tothe contract agree to deliver an agreed asset or currency at anagreed time at an agreed price. Leverage and its associated risksexist here too because only one part of the contract (the“margin”) must be delivered immediately. Sharp pricefluctuations in either direction on the margin can produce majorgains or losses. In private transactions, the duty to make marginpayments need not necessarily apply.Financial derivatives on indices or sub-indicesSome Portfolios may invest in financial derivative instruments onindices or sub-indices. When investing in such instruments, thereis no assurance that the underlying index or sub-index willcontinue to be calculated and published or that it will not beamended significantly. Any change to the underlying index or subindexmay adversely affect the value of the relevant instrument.The past performance of an index or sub-index is not necessarilya guide to its future performance.When a Portfolio invests in a financial derivative instrument on anindex or a sub-index, the relevant Sub-Advisor will not activelymanage the underlying components of such financial derivativeinstrument. The selection of the underlying components will bemade in accordance with the relevant index composition rulesand eligibility criteria and not by reference to any performancecriteria or performance outlook.Investors should be aware that investments in financial derivativeinstruments on indices or sub-indices involve assessing the riskof an investment linked to the relevant index or sub-index and,where applicable, the techniques used to link the investment tothe underlying index or sub-index.The value of the underlying indices or sub-indices and the value ofthe techniques used to link the investment to them may vary overtime and may increase or decrease by reference to a variety offactors which may include, amongst others, corporate actions,macro economic factors and speculation.25


Threadneedle (Lux) ProspectusInvestment in warrantsWarrants confer on the investor the right to subscribe a fixednumber of ordinary shares in the relevant company at a predeterminedprice for a fixed period.The cost of this right will be substantially less than the cost of theshare itself. Consequently, the price movements in the share willbe multiplied in the price movements of the warrant. Thismultiplier is the leverage or gearing factor. The higher the leveragethe more attractive the warrant. By comparing, for a selection ofwarrants, the premium paid for this right and the leverage, theirrelative worth can be assessed. The levels of the premium andgearing can increase or decrease with investor sentiment.Warrants are therefore more volatile and speculative thanordinary shares. Investors should be warned that prices ofwarrants are extremely volatile and that furthermore, it may notalways be possible to dispose of them.The gearing effect of investments in warrants and the volatility ofwarrant prices make the risks attached to investment in warrantshigher than is the case with investments in equities.Mortgage-backed securitiesThe Portfolios may invest in mortgage derivatives, includingmortgage-backed securities. Mortgage pass-through securities aresecurities representing interests in “pools” of mortgages in whichpayments of both interest and principal on the securities are mademonthly, in effect “passing through” monthly payments made bythe individual borrowers on the residential mortgage loans whichunderlie the securities. Early or late repayment of principal basedon an expected repayment schedule on mortgage pass-throughsecurities held by such Portfolios (due to early or late repaymentsof principal on the underlying mortgage loans) may result in a lowerrate of return when the Portfolios reinvest such principal. Inaddition, as with callable fixed-income securities generally, if thePortfolios purchased the securities at a premium, sustained earlierthan expected repayment would reduce the value of the securityrelative to the premium paid. When interest rates rise or declinethe value of a mortgage-related security generally will decline, orincrease but not as much as other fixed-income, fixed-maturitysecurities which have no prepayment or call features.Payment of principal and interest on some mortgage passthroughsecurities (but not the market value of the securitiesthemselves) may be guaranteed by the U.S. Government, or byagencies or instrumentalities of the U.S. Government (whichguarantees are supported only by the discretionary authority ofthe U.S. Government to purchase the agency’s obligations).Certain mortgage pass-through securities created by nongovernmentalissuers may be supported by various forms ofinsurance or guarantees, while other such securities may bebacked only by the underlying mortgage collateral.The Portfolios may also invest in Investment Grade collateralisedmortgage obligations (“CMOs”), which are structured productsbacked by underlying pools of mortgage pass-through securities.Similar to a bond, interest and prepaid principal on a CMO arepaid, in most cases, monthly. CMOs may be collateralised bywhole residential or commercial mortgage loans but are moretypically collateralised by portfolios of residential mortgage passthroughsecurities guaranteed by the U.S. Government or itsagencies or instrumentalities. CMOs are structured into multipleClasses, with each Class having a different expected average lifeand/or stated maturity. Monthly payments of principal, includingprepayments, are allocated to different Classes in accordancewith the terms of the instruments, and changes in prepaymentrates or assumptions may significantly affect the expectedaverage life and value of a particular Class.The Portfolios may invest in principal-only or interest-only strippedmortgage-backed securities. Stripped mortgage-backed securitieshave greater volatility than other types of mortgage-relatedsecurities. Stripped mortgage-backed securities which arepurchased at a substantial premium or discount generally areextremely sensitive not only to changes in prevailing interestrates but also to the rate of principal payments (includingprepayments) on the related underlying mortgage assets, and asustained higher or lower than expected rate of principalpayments may have a material adverse effect on such securities’yield to duration. In addition, stripped mortgage securities may beless liquid than other securities which do not include such astructure and are more volatile if interest rates moveunfavourably.The Management Company expects that government,government-related or private entities may create othermortgage-related securities in addition to those described above.As new types of mortgage-related securities are developed andoffered to investors, the Management Company will considermaking investments in such securities, provided they are dealt inon a Regulated Market.Asset-backed Transferable SecuritiesThe Portfolios may also invest in asset-backed TransferableSecurities. Asset-backed Transferable Securities represent aparticipation in, or are secured by and payable from, a stream ofpayments generated by particular assets, most often a pool ofassets similar to one another, such as motor vehicle receivablesor credit card receivables, home equity loans, manufacturedhousing loans or bank loan obligations.Structured productsThe Portfolios may invest in structured products. These includeinterests in entities organised solely for the purpose ofrestructuring the investment characteristics of certain otherinvestments. These investments are purchased by the entities,which then issue Transferable Securities (the structured products)backed by, or representing interests in, the underlyinginvestments. The cash flow from the underlying investments maybe apportioned among the newly issued structured products to26


Threadneedle (Lux) Prospectuscreate Transferable Securities with different investmentcharacteristics such as varying maturities, payment priorities orinterest rate provisions, and the extent of the payments madewith respect to structured investments depends on the amountof the cash flow from the underlying investments.Structured products are subject to the risks associated with theunderlying market or security, and may be subject to greatervolatility than direct investments in the underlying market orsecurity. Structured products may entail the risk of loss ofprincipal and/or interest payments as a result of movements inthe underlying market or security.Each Portfolio may also invest in credit linked securitiesreferenced to underlying securities, instruments, baskets ofsecurities or indices. These securities are subject to bothcounterparty risk and the risks inherent in the underlyinginvestment. The counterparty risk lies with each party with whomthe Management Company or the Sub-Advisors contract onbehalf of the SICAV for the purpose of making investments (thecounterparty). The underlying investment risk lies with thesovereign or corporate entity against which payments madeunder the product are referenced.Credit default swapsSome Portfolios may also enter into credit default swaptransactions which can be subject to higher risk than directinvestment in debt securities. The market for credit default swapsmay from time to time be less liquid than debt securities markets.The “buyer” (of protection) in a credit default swap transaction isobliged to pay the “seller” a periodic stream of payments over theterm of the contract provided that no event of default on anunderlying reference obligation has occurred. If an event of defaultoccurs, the seller must pay the buyer the full notional value, or “parvalue”, of the reference obligation in exchange for the referenceobligation. The Portfolios, if sellers, will lose their investment andrecover nothing. However, if an event of default occurs, thePortfolios (if buyers) will receive the full notional value of thereference obligation that may have little or no value. As sellers, thePortfolios receive a fixed rate of income throughout the term of thecontract, which is typically between six months and three years,provided that there is no event of default.The above mentioned Portfolios may also purchase credit defaultswap contracts in order to hedge against the risk of default ofdebt securities they hold in their portfolios. This would alsoinvolve the risk that the swap may expire worthless and wouldonly generate income in the event of an actual default by anissuer of the underlying obligation as opposed to a creditdowngrade or other indication of financial instability. This wouldalso involve credit risk: the risk that the seller may fail to satisfyits payment obligations to the Portfolios in the event of a default.To mitigate the counterparty risk resulting from credit defaultswaps transactions, the Portfolios will only enter into creditdefault swaps with highly rated financial institutions specialised inthis type of transaction.Interest rate swapsSome Portfolios may enter into an interest rate swap, in whichone party exchanges a stream of interest for another party’sstream. This type of swap is a contractual agreement entered intobetween two counterparties under which each agrees to makeperiodic payment to the other for an agreed period of time basedupon a notional amount of principal. Under the commonest formof interest rate swap, a series of payments calculated by applyinga fixed rate of interest to a notional principal amount is exchangedfor a stream of payments similarly calculated but using a floatingrate of interest.Total/Excess return swapsSome Portfolios may enter into a total return swap and/or excessreturn swap in which one party receives interest payments on areference asset plus any capital gains and losses over thepayment period, while the other receives a specified fixed and/orfloating cash flow unrelated to the performance of the referenceasset.Equity swapsSome Portfolios may enter into an equity swap which is a swapwhere a set of future cash flows are exchanged between twocounterparties. One of these cash flow streams will typically bebased on a reference interest rate. The other will be based on theperformance of a share of stock or stock market index.Currency FluctuationsAll globally invested Portfolios will be exposed to currencies otherthan the Base Currency, which may increase the volatility of theNet Asset Value of the Portfolios. In addition, those Portfoliosexposed to emerging markets currencies may experience evengreater volatility.Some currencies may experience significant declines againstsome other currencies and devaluation of any such currenciesmay occur subsequent to the investment in these currencies by aPortfolio. The value of the assets of the Portfolio, as measured inone currency, may consequently be affected unfavourably by suchdevaluations. In addition, the Portfolios may engage in certaincurrency transactions, where available, in an attempt to hedgethe Portfolio’s currency risks. Such transactions may entailadditional costs.While the factors described above may result in a generally higherrisk with respect to emerging markets, the Portfolios will attemptto manage this risk through diversification of investments withinthe Portfolio.Commodity indexesSome Portfolios may invest in commodity indexes comprised offutures contracts on physical commodities in certain sectors.Unlike equities, which typically entitle the holder to a continuingstake in a corporation, commodity futures contracts normallyspecify a certain date for delivery of the underlying physical27


Threadneedle (Lux) Prospectuscommodity. As the futures contracts that the index comprisesapproach expiration, they are replaced by contracts that have alater expiration. For example, a contract purchased and held inAugust may have an October expiration. As time passes, thecontract expiring in October is replaced by a contract for deliveryin November. This process is referred to as “rolling”. ThosePortfolios which invest in rolling indexes could be positively ornegatively impacted depending on whether the underlying marketis in “backwardation”, or “contango”. If the market for thesecontracts is in “backwardation”, where the prices are lower in thedistant delivery months than in the nearer delivery months, thesale of the October contract would take place at a price that ishigher than the price of the November contract, thereby creatinga “roll yield”. Conversely, contango markets are those in which theprices of contracts are higher in the distant delivery months thanin the nearer delivery months. The absence of backwardation inthe commodity markets could result in negative “roll yields”,which could adversely affect the value of the index and,accordingly, adversely affect the market value of the Portfolio.Portfolios investing in commodity indexes will be affected by theunderlying commodity markets and the underlying commoditiesmay perform very differently to the traditional securities marketssuch as equities and bonds. Commodity prices may changeunpredictably, affecting the index and the level of the index andthe value of the Portfolio in unforeseeable ways. Trading in futurescontracts associated with the index commodities is speculativeand can be extremely volatile.Some Portfolios may invest in single commodity indexes, e.g.solely in the livestock sector. Single commodity indexes may beparticularly susceptible to fluctuation and may fluctuate rapidlybased on numerous factors, including: changes in supply anddemand relationships; weather; trade; fiscal, monetary andexchange control programs; domestic and foreign political andeconomic events and policies; disease; technologicaldevelopments and changes in interest rates. These factors mayaffect the level of the index and the value of the relevant Portfolioin varying ways, and different factors may cause the value of theindex commodities, and the volatilities of their prices, to move ininconsistent directions at inconsistent rates. This could adverselyaffect the value of the Portfolio.The commodities underlying the index components may beproduced in a limited number of countries and may be controlledby a small number of producers, political, economic and supplyrelated events in such countries could have a disproportionateimpact on the prices of such commodities and the value of theindex.Exchange traded notesSome Portfolios may invest in exchange traded securitised notes(“Notes”) linked to the performance of a reference asset issuedby certain counterparties (the “Note Provider”). Changes in thecredit ratings of the Note Provider may affect the market value ofthe reference asset. Credit ratings are an assessment of the NoteProvider’s ability to pay its obligations, including those on theNotes. Consequently, actual or anticipated changes in the NoteProvider’s credit ratings may affect the market value of the Notes.However, because the return on the Notes is dependent uponcertain factors in addition to the Note Provider’s ability to pay itsobligations on the Notes, an improvement in the credit ratings ofthe Note Provider will not reduce the other investment risksrelated to the Notes.Investment in other UCIs (including Exchange TradedFunds)Some Portfolios may invest in other UCIs. Investment decisionsof such underlying UCIs are made at the level of such UCIs. Therecan be no assurance that the selection of the managers of theunderlying UCIs will result in an effective diversification ofinvestment styles and that positions taken by the underlying UCIswill always be consistent. The underlying UCIs may not be subjectto the supervision of the CSSF and may be less regulated;custody and audit rules may notably differ. The valuations of theassets of the underlying UCIs may not be verified by anindependent third party on a regular or timely basis.Both the Portfolio and the underlying UCIs will have costs andimpose fees and commissions, which will cause a higher level offees than if the investors invested directly in the underlying UCIs.However, when a Portfolio invests in units/shares of other UCITSand/or other UCI which are managed, either directly or bydelegation, by the Management Company or any appointed Sub-Advisor or by any other company with which the ManagementCompany or any appointed Sub-Advisor is linked by commonmanagement or control, or by a substantial direct or indirectholding, the Management Company or any appointed Sub-Advisoror other company may not charge subscription or redemptionfees on account of the Portfolio’s investment in the units of suchother UCITS and/or UCIs. The maximum management fees ofother UCIs or UCITS in which a Portfolio may invest shall notexceed the percentage indicated in the “Other InvestmentPractices” section.Some underlying UCIs may invest in assets that are not readilyrealisable or may be hard to value. The value of these assets is amatter of the relevant valuation agent’s policy and the true valuemay not be recognised until the asset is sold. This may be anongoing risk for UCIs investing in property, but could also includeother asset classes in extreme market conditions. There may beoccasions where UCIs restrict redemptions and as such thePortfolios may not be able to liquidate a position in such UCIs. Ina falling market this may result in losses to the Portfolios.Custody RiskWithout prejudice to the obligations of the Custodian underLuxembourg law and to any related legal actions that may be28


Threadneedle (Lux) Prospectusavailable in this respect, the SICAV may be exposed to risk inrelation to the custody of its assets particularly but not exclusivelycash, where – depending on factors such as the legal regime inthe country of custody or local market practice or other factors –assets may not be fully protected.Tony POON, Head of Client Service and Business ManagerNorth Asia of the Threadneedle Group;Marie-Jeanne CHEVREMONT-LORENZINI, IndependentDirector.In the unlikely event of this happening, the SICAV’s assets maybe lost or access to SICAV assets may be barred temporarily orpermanently. Legal proceedings to retrieve such assets and/or fordamages may or may not be successful and may be timeconsuming. Therefore these factors may lead to disruptions of theoperations of the SICAV, ultimately assets of the SICAV may belost, and consequently the Net Asset Value may be reduced.The SICAVThe SICAV is an investment company organised as a “sociétéd’investissement à capital variable” in the Grand Duchy ofLuxembourg under the Companies Law and qualifies as a UCITSunder the 2010 Law.The SICAV was incorporated on 10 February 1995 for an unlimitedperiod and may be liquidated by decision of its Shareholders in anextraordinary general meeting. The Articles were published in theMemorial on 31 March 1995 and were last amended effective on1 July 2011. The SICAV was formerly known as American ExpressFunds and subsequently as World Express Funds I. The SICAV’sprincipal and registered office is at 69, Route d’Esch, L-1470Luxembourg.The SICAV is registered under the number R.C.S. LuxembourgB 50 216 at the Register of Commerce and Companies at theDistrict Court of Luxembourg where the Articles are available forinspection and where copies thereof may be obtained uponrequest.The corporate capital of the SICAV shall be at all times equal tothe total net assets of all of the Portfolios of the SICAV. Theminimum share capital of the SICAV shall be the equivalent inU.S. Dollars of 1,250,000 Euro.The Directors are responsible for the overall administration,control and management of the SICAV and each of its Portfolios.The Directors are listed below together with their principaloccupations:Crispin HENDERSON (Chairman), Chief Executive Officer ofThreadneedle Asset Management Limited and ThreadneedleAsset Management Holdings Limited;Simon DAVIES, Chairman of Threadneedle AssetManagement Holdings Limited;Dominik KREMER, Head of European Distribution of theThreadneedle GroupThe Auditors are PricewaterhouseCoopers, S.à r.l., 400, Routed’Esch, B.P. 1443, L-1014 Luxembourg.The SICAV may, with the consent of the Shareholders expressedin the manner provided for by articles 67 and 172 of theCompanies Law be liquidated and the liquidator authorised totransfer all assets and liabilities of the SICAV to a LuxembourgUCITS or to a UCITS of another EU member state, in exchangefor the issue to Shareholders in the SICAV of shares or units ofsuch UCITS proportionate to their shareholdings in the SICAV. Anyliquidation of the SICAV will be carried out in accordance withLuxembourg law and each Shareholder shall be entitled to a prorata share of the liquidation proceeds corresponding to hisshareholding in each Class of Shares of each Portfolio. Moniesavailable for distribution to Shareholders in the course of theliquidation that are not claimed by Shareholders will, at the closeof liquidation, be deposited at the Caisse de Consignation inLuxembourg pursuant to article 146 of the 2010 Law.If the capital of the SICAV falls below two-thirds of the minimumcapital of the equivalent in U.S. Dollars of 1,250,000 Euro, theDirectors must submit the question of the dissolution of theSICAV to a general meeting of Shareholders convened to be heldwithin 40 days and for which no quorum shall be prescribed, anda decision to dissolve the SICAV may be taken by a simplemajority of the affirmative votes of the Shareholders present orrepresented.If the capital of the SICAV falls below one quarter of the minimumcapital stated above, the Directors must submit the question ofthe dissolution of the SICAV to a general meeting of Shareholdersconvened to be held within 40 days and for which no quorumshall be prescribed, and a decision to dissolve the SICAV may betaken by the Shareholders owning one quarter of the Sharesrepresented at the meeting.The Shares of each Portfolio have no par value. Each Share isentitled to one vote at all general meetings of Shareholdersirrespective of its Net Asset Value, subject to the limitationsimposed by the Articles of Incorporation and by applicableLuxembourg laws and regulations. The SICAV will not recognisethe vote of any United States Person. See “Restrictions onOwnership”.The Shares of each Portfolio when issued will have no preferentialor pre-emptive rights. There are and will be no outstandingoptions or special rights relating to any Shares. The Shares arefreely transferable, subject to the restrictions set forth belowunder “Restrictions on Ownership”.29


Threadneedle (Lux) ProspectusShares of each Portfolio are presently issued in non-certificatedregistered form, including fractional entitlements, except where aShareholder specifically also asks for a physical Share certificateto be issued, in which case such Shareholder shall bear theassociated costs.Separate Portfolio or Class meetings may be held on certainmatters materially affecting the interests of the relevantShareholders, at which only the Shares of the relevant Portfolioand/or Class will vote.The Management CompanyThe SICAV has designated Threadneedle ManagementLuxembourg S.A. to serve as its designated managementcompany in accordance with the 2010 Law, pursuant to aManagement Company Services Agreement dated as of October31, 2005. Under this Agreement, the Management Companyprovides investment management, administrative and marketingservices to the SICAV, subject to the overall supervision andcontrol of the Directors.Threadneedle Management Luxembourg S.A. formerly known asAmerican Express Bank Asset Management Company(Luxembourg) S.A. and subsequently Standard CharteredInvestments (Luxembourg) S.A was organised on August 24,2005 as a public limited company (société anonyme) for anunlimited period of time under the laws of the Grand Duchy ofLuxembourg. Its articles of incorporation were published in theMemorial on 22 September 2005 and were last amended on28 September 2010. It is registered under the number R.C.S.Luxembourg B 110242 at the Register of Commerce andCompanies at the District Court of Luxembourg. Its share capitalamounts to Euro 800,000 fully paid-up. ThreadneedleManagement Luxembourg S.A. is indirectly owned by and is anindirect subsidiary of Ameriprise Financial, Inc. It is registered onthe official list of Luxembourg management companies governedby Chapter 15 of the 2010 Law.The Management Company is in charge of the day-to-dayoperations of the SICAV. The board of directors of theManagement Company is composed of:Marie-Jeanne CHEVREMONT-LORENZINI, IndependentDirector.The conducting persons of the Management Company are:Philip Best, Chief Risk Officer of Threadneedle AssetManagement Limited;Carmel McGovern, General Manager of ThreadneedleManagement Luxembourg S.A.In fulfilling its responsibilities set forth by the 2010 Law and theManagement Company Services Agreement, it is permitted todelegate all or a part of its functions and duties to third parties,provided that it retains responsibility and oversight over suchdelegates. The appointment of third parties is subject to theapproval of the SICAV and the Regulatory Authority. TheManagement Company’s liability shall not be affected by the factthat it has delegated its functions and duties to third parties.The Management Company has delegated the followingfunctions to third parties: investment management, transferagency and administration and marketing and distribution. See“Investment Advisory Arrangements”, “DistributionArrangements” and “Service Providers” below.The Management Company shall at all times act in the bestinterests of the SICAV and its Shareholders and according to theprovisions set forth by the 2010 Law, the Prospectus and theArticles.The Management Company Services Agreement provides for aterm of unlimited duration and may be terminated by either partyupon three months’ prior written notice.Investment Advisory ArrangementsSubject to the overall responsibility of the Directors, theManagement Company will provide or procure for each Portfolioinvestment advisory and discretionary investment managementservices, pursuant to the provisions of the ManagementCompany Services Agreement.Crispin HENDERSON (Chairman), Chief Executive Officer ofThreadneedle Asset Management Limited and ThreadneedleAsset Management Holdings Limited;Simon DAVIES, Chairman of Threadneedle AssetManagement Holdings Limited;Dominik KREMER, Head of European Distribution of theThreadneedle Group;Tony POON, Head of Client Service and Business ManagerNorth Asia of the Threadneedle Group;In order to implement the investment policies of each Portfolio,the Management Company has delegated the management ofthe assets of each Portfolio to the Sub-Advisors listed belowpursuant to a Sub-Advisory agreement with each Sub-Advisor.The Sub-Advisors provide the Management Company withmanagement or advisory services in relation to Portfolio assetsand also provide investment research and credit analysisconcerning prospective and existing Portfolio investments. EachSub-Advisor has day-to-day investment responsibility in respect ofthe relevant Portfolios. The Management Company is responsiblefor paying the fees of such Sub-Advisors as set forth in thesection “Fees and Expenses”.25On 12 January 2012, this Portfolio will be merged with the Threadneedle (Lux) –Emerging Market Corporate Bonds Portfolio.30


Threadneedle (Lux) ProspectusColumbia Management Investment Advisers, LLC, 100 FederalStreet Boston, MA 02110, United States, acts as Sub-Advisor toGlobal Technology, US$ High Income Bonds, Global EnergyEquities and US Contrarian Core Equities.Threadneedle Asset Management Limited, 60 St. Mary Axe,London, EC3A 8JQ, United Kingdom, acts as Sub-Advisor toGlobal Aggregate Bond, Global Opportunities Bond, GlobalEmerging Market Short-Term Bonds, Global Asset Allocation,Global High Yield and Emerging Market (Euro) 25 , Global Focus,Target Return (US$), Emerging Market Debt, Emerging MarketCorporate Bonds, Pan European Smaller Companies, PanEuropean Equities, Asia, Global Bonds (Euro) 26 , AmericanSelect, Euro Active Bonds, Global Emerging Market Equities,Greater China Equities, American Absolute Alpha, AbsoluteEmerging Market Macro, Multi Asset Absolute Alpha, EuropeanSmaller Companies Absolute Alpha, Enhanced Commodities,European High Yield Bond, UK Equities, Latin America, USSmaller Companies, Global Equity Dividend, European AbsoluteAlpha and American 27 .Mondrian Investment Partners Limited, 5th Floor, 10 GreshamStreet, London EC2V 7JD, United Kingdom, acts as Sub-Advisorto Mondrian Investment Partners – Focused Emerging MarketsEquity.Walter Scott & Partners Limited, 1, Charlotte Square, EdinburghEH2 4DR, Scotland acts as Sub-Advisor to US Equities 28 andGlobal Equities – Walter Scott & Partners.MC Gestioni S.G.R. S.p.A., Via della Chiusa n. 15, 20123 Milan,Italy, acts as Sub-Advisor to European Quantitative Equities.While the Management Company is at all times subject to thedirection of the Directors, the Management Company ServicesAgreement and relevant Sub-Advisory agreement provide that theManagement Company or the Sub-Advisor appointed by it isresponsible for the management of the relevant Portfolios.Therefore, the responsibility for making decisions to buy, sell orhold a particular security rests with the Management Company orthe Sub-Advisors appointed by it, subject to the control,supervision, direction and instruction of the Directors.Conflicts of InterestThere are potential sources of conflicts of interest between theSICAV and/or the Management Company and the Shareholdersand the Threadneedle Group and any persons appointed as Sub-Advisor (each an “Interested Party”). These include the following:(i)an Interested Party may purchase and sell for its own account26On 12 January 2012, this Portfolio will be merged with the Threadneedle (Lux) –Global Aggregate Bond Portfolio.27Until 30 November 2011 (included), this Portfolio will remain named“Threadneedle (Lux) – US Equities” and sub-advised by Walter Scott & PartnersLimited.28On 1 December 2011, this Portfolio will be renamed “Threadneedle (Lux) –American” and will be sub-advised by Threadneedle Asset Management Limited.(ii)securities in which the SICAV may also invest. In addition, theManagement Company in its normal course may purchaseand sell assets for the SICAV from and to an Interested Partyon an arm’s length basis and may give investment advice inrespect of, or manage third-party funds that are invested in,the same securities in which the SICAV will invest;an Interested Party may lend money to the companies orcountries in which the SICAV invests. Credit decisions that anInterested Party makes in respect of such companies orcountries could have an impact on the market value of thesecurities in which the SICAV invests. Furthermore, anInterested Party’s position as a lender may be senior to thesecurities in which the SICAV invests;(iii) an Interested Party may also engage in other activitiesinvolving or affecting the securities in which the SICAVinvests. In particular, an Interested Party may be involved inorigination of transactions concerning such securities,underwriting such securities and acting as broker-dealer inrespect of such securities. In addition, an Interested Partymay perform other services for portfolio companies andreceive fees, commissions and other remuneration therefore;(iv) in conjunction with its various activities, an Interested Partymay come into possession of confidential information thatcould, if known to the public, affect the market value of thesecurities in which the SICAV will invest. An Interested Partymay not disclose such information to the SICAV or use suchinformation for the benefit of the SICAV.In effecting foreign exchange or in making any purchase or sale ofany securities or other assets for the SICAV, an Interested Partymay act as a counterparty, principal agent or broker in thetransaction and may be separately compensated in that capacity.Portfolio TransactionsSubject to policies established by the Directors, the ManagementCompany is primarily responsible for the execution of eachPortfolio’s transactions and the allocation of such transactions.The SICAV has no obligation to deal with any broker or group ofbrokers in respect of the execution of transactions in Portfoliosecurities. The SICAV contemplates, however, that a substantialamount of its portfolio transactions will be conducted through theManagement Company or its delegates. Transactions may also beeffected through brokers and dealers that are affiliated with Sub-Advisors. Such transactions may be subject to a commission ordealer mark-up, which may not be the lowest commission orspread available.Brokers who provide supplemental investment research to theManagement Company may receive orders for transactions bythe SICAV. Information so received will be in addition to and not inlieu of the services required to be performed by the ManagementCompany under the Management Company Services Agreement,31


Threadneedle (Lux) Prospectusand the expenses of the Management Company will notnecessarily be reduced as a result of the receipt of suchsupplemental information.Securities held by a Portfolio also may be held by anotherPortfolio or by other funds or investment advisory clients forwhich the Management Company or Sub-Advisors or theiraffiliates act as an advisor. Because of different objectives orother factors, a particular security may be bought for one or moresuch clients when one or more clients are selling the samesecurity. If the Management Company or Sub-Advisor isconsidering the purchase or sale of a security for a Portfolio or foranother company for which it acts as management company orsub-advisor, transactions in such securities will be made, insofaras feasible, in a manner deemed by the Management Companyor Sub-Advisor to be equitable to both the Portfolio and theSICAV. There may be occasions, however, when such purchasesor sales of securities have an adverse effect on the Portfolio or onother clients of the Management Company or Sub-Advisor.Net Asset Value DeterminationThe Net Asset Value per Share of each Class of each Portfolio iscalculated as of each Valuation Date.(iii) if such prices are not representative of their value, suchsecurities are stated at market value or otherwise at the fairvalue at which it is expected they may be resold, asdetermined in good faith by or under the direction of theDirectors;(iv) Money Market Instruments (or other instruments in line withmarket convention in the jurisdiction in which the instrumentis held) with a remaining maturity of 90 days or less will bevalued by the amortised cost method, which approximatesmarket value. Under this valuation method, the relevantPortfolio’s investments are valued at their acquisition cost orthe last market value prior to the 90 day period commencing(where an instrument at purchase date originally had morethan 90 days to maturity) and adjusted for amortisation ofpremium or accretion of discount rather than at market value;(v) units or shares of open-ended UCI will be valued at their lastdetermined and available net asset value or, if such price isnot representative of the fair market value of such assets,then the price shall be determined by the SICAV on a fair andequitable basis. Units or shares of a closed-ended UCI will bevalued at their last available stock market value;The Net Asset Value per Share is determined by or at thedirection of the SICAV and made available at the registered officeof the SICAV. The Net Asset Value per Share is stated in thecurrency in which the relevant Class of such Portfolio’s Shares isdenominated as well as in certain other currencies as may bedetermined from time to time by the Directors.The assets of the SICAV will be valued as follows:(i) the value of any cash on hand or on deposit, bills and demandnotes and accounts receivable, prepaid expenses, cashdividends and interest declared or accrued as aforesaid andnot yet received shall be deemed to be the full amountthereof, unless in any case the same is unlikely to be paid orreceived in full, in which case the value thereof shall bearrived at after making such discount as the SICAV mayconsider appropriate in such case to reflect the true valuethereof;(vi) the liquidating value of futures, forward or options contractsnot traded on a stock exchange of an Other State or onRegulated Markets, or on Other Regulated Markets shallmean their net liquidating value determined, pursuant to thepolicies established by the Directors, on a basis consistentlyapplied for each different variety of contracts. The value offutures, forward or options contracts traded on a stockexchange of an Other State or on Regulated Markets, or onother Regulated Markets shall be based upon the lastavailable settlement or closing prices as applicable to thesecontracts on a stock exchange or on regulated markets, or onother regulated markets on which the particular futures,forward or options contracts are traded on behalf of theSICAV; provided that if a future, forward or options contractcould not be liquidated on the day with respect to whichassets are being determined, the basis for determining theliquidating value of such contract shall be such value as theDirectors may deem fair and reasonable;(ii)the value of Transferable Securities, Money MarketInstruments and any financial assets listed or dealt in on astock exchange of an Other State or on a Regulated Market,or on any Other Regulated Market of a Member State or of anOther State, are generally valued at the last available knownprice in the relevant market prior to the time of valuation, orany other price deemed appropriate by the Directors. Fixedincome securities not traded on such markets are generallyvalued at the last available price or yield equivalents obtainedfrom one or more dealers or pricing services approved by theDirectors, or any other price deemed appropriate by theDirectors;(vii) interest rate swaps will be valued on the basis of their marketvalue established by reference to the applicable interest ratecurve;(viii)credit default swaps and total/excess return swaps will bevalued at fair value under procedures approved by theDirectors. As these swaps are not exchange-traded, but areprivate contracts into which the SICAV and a swapcounterparty enter as principals, the data inputs for valuationmodels are usually established by reference to activemarkets. However it is possible that such market data will notbe available for credit default swaps and total/excess return32


Threadneedle (Lux) Prospectusswaps near the Valuation Date. Where such markets inputsare not available, quoted market data for similar instruments(e.g. a different underlying instrument for the same or asimilar reference entity) will be used provided that appropriateadjustments be made to reflect any differences between thecredit default swaps and total/excess return swaps beingvalued and the similar financial instrument for which a price isavailable. Market input data and prices may be sourced fromexchanges, a broker, an external pricing agency or acounterparty.If no such market input data are available, credit defaultswaps and total/excess return swaps will be valued at theirfair value pursuant to a valuation method adopted by theDirectors which shall be a valuation method widely acceptedas good market practice (i.e. used by active participants onsetting prices in the market place or which has demonstratedto provide reliable estimate of market prices) provided thatadjustments that the Directors may deem fair and reasonablebe made. The SICAV’s auditor will review the appropriatenessof the valuation methodology used in valuing credit defaultswaps and total/excess return swaps. In any way the SICAVwill always value credit default swaps and total/excess returnswaps on an arm’s-length basis;In addition, if on any Valuation Date the aggregate transactions inShares of a Portfolio result in a net increase or decrease ofShares which exceeds a threshold set by the Directors from timeto time for that Portfolio, the investments will be valued on anoffer or bid price basis, as appropriate. The investments will bevalued on an offer price basis if there is a net increase in NetAssets of the Portfolio (net subscription) above the threshold. Onthe other hand, the investments will be valued on a bid pricebasis if there is a net decrease in Net Assets of the Portfolio (netredemption) above the threshold. Furthermore the valuations maytake into account applicable dealing costs and/or fiscal charges, toreflect more fairly the value of the investments in thecircumstances.The Net Asset Value per Class of each Portfolio is determined bydividing the value of the total assets of the Portfolio properlyallocable to such Class of Shares, less the liabilities of suchPortfolio properly allocable to such Class of Shares by the totalnumber of Shares of such Class outstanding on the ValuationDate.If the Net Asset Value per Share is certified by an authorisedofficer or representative of the SICAV, any such certification shallbe conclusive except in the case of manifest error.(ix) All other swaps will be valued at fair value as determined ingood faith pursuant to procedures established by theDirectors;(x) all other securities, instruments and other assets will bevalued at fair market value, as determined in good faithpursuant to procedures established by the Directors;(xi) assets denominated in a currency other than that in which therelevant Net Asset Value will be expressed, will be convertedat the relevant foreign currency spot rate on the relevantValuation Date. In that context account shall be taken ofhedging instruments used to cover foreign exchange risks.The SICAV constitutes one single collective investment schemewith separate Portfolios. Each Portfolio, however, is deemed aseparate entity vis-à-vis third parties and creditors and isexclusively liable for its own debts and obligations.Notwithstanding the above, pursuant to general guidelines andpolicies adopted by the Directors from time to time, if theDirectors consider that another method of valuation would moreaccurately reflect the value at which it is expected that thesecurities or other investments may be resold, the method usedto value such securities or other investments, whether on eachValuation Date, or on any particular Valuation Date, may beadjusted by or under the direction of the Directors, in their soleand absolute discretion.Interest receivable on debt securities held by a Portfolio isaccrued daily and dividends receivable are accrued as of therelevant ex-dividend dates.Net Asset Value PublicationThe Net Asset Value per Class of each Portfolio and the offeringand redemption prices shall be available at the registered office ofthe SICAV. The SICAV may arrange for the publication of thisinformation in leading financial newspapers or as otherwiserequired by applicable law. The SICAV cannot accept anyresponsibility for any error or delay in publication or for nonpublicationof a Net Asset Value.Fees and ExpensesPortfolio Operating ExpensesPortfolio Operating Expenses until 31 March 2012 (included)Each Portfolio pays the portfolio charges described underAppendices C, D, E, F and G below (except with respect toperformance fees and to Classes BU, WS, M and MGH for whichcharges are described directly in the body of this Prospectuswhich are accrued daily and paid monthly). In addition, until31 March 2012 (included), each Portfolio pays all other expensesincurred in the operation of the SICAV, including, among otherthings, taxes, expenses for legal and auditing services, costs ofprinting proxies, stock certificates, Shareholders’ reports andnotices, Prospectuses and Key Investor Information and otherpromotional expenses, fees and charges of the Custodian and itscorrespondents, and of the Domiciliary Agent, AdministrativeAgent, Registrar and Transfer Agent and of any paying agent,33


Threadneedle (Lux) Prospectusexpenses of the issue and redemption of Shares, registrationfees and expenses in various jurisdictions, listing fees, fees ofunaffiliated directors of the SICAV, expenses of the Directors andofficers of the SICAV and the Sub-Advisors relating to attendanceat meetings of the Directors and of the Shareholders of theSICAV, translation costs, accounting and pricing costs (includingthe calculation of Net Asset Value per Share), insurance, litigationand other extraordinary or non-recurring expenses, and all otherexpenses properly payable by the SICAV. Such other expenseswill be allocated to each Portfolio having regard to the asset sizeof each Portfolio outstanding.Certain Classes of Shares of each Portfolio may also be subject toa shareholder servicing fee accrued daily and payable monthly atthe annual rates indicated in Appendices C, D, E and F (exceptwith respect to Classes BU, WS, M and MGH for which chargesare described directly in the body of this Prospectus). Suchshareholder servicing fees and related expenses of shareholderservicing of each Portfolio will also be allocated to such Portfolio.expenses of the issue and redemption of Shares, registrationfees and expenses in various jurisdictions, listing fees, fees ofunaffiliated directors of the SICAV, expenses of the Directors andofficers of the SICAV and the Sub-Advisors relating to attendanceat meetings of the Directors and of the Shareholders of theSICAV, translation costs, accounting and pricing costs (includingthe calculation of Net Asset Value per Share), insurance, litigationand other extraordinary or non recurring expenses, and all otherexpenses properly payable by the SICAV. The Operating Expensesalso include the service fee payable to the ManagementCompany. In the case of Classes WS, M and MGH only, subcustodycharges are paid by the relevant Classes as incurred andare not included in the Operating Expenses.The Management Company will bear the excess of any OperatingExpenses above the annual rate. Conversely the ManagementCompany will be entitled to retain any amount by which theannual rate of Operating Expenses exceeds the actual expensesincurred by the SICAV.The Custodian, Domiciliary and Administrative Agent is entitled toreceive a fee up to 0.20% per annum calculated quarterly as apercentage of the average Net Asset Value of each Share Classwithin each Portfolio.The custody, domiciliary and administration fees are accrued dailyand paid monthly.The Management Company is entitled to receive for its servicesto the SICAV a fee up to 0.09% per annum of the net assets ofeach Portfolio computed on each Valuation Date and payablemonthly in arrears (the “service fee”), with the exception ofClasses WS, M and MGH where such service fee is up to 0.06%and of Classes XU, XE, XUH, XEH, XG, XGH, XFH and XSH wherethere is no such service fee.For the avoidance of doubt, the Portfolio expenses in thepreceding paragraph will only apply up to 31 March 2012(included), whereafter the following fees apply:Portfolio Operating Expenses from 1 April 2012From 1 April 2012, all other expenses incurred in the operation ofthe SICAV and defined below (hereafter the “OperatingExpenses”) are fixed at the rates shown in Appendices C, D, E, Fand G to this Prospectus except for Classes WS, M and MGH, forwhich the Operating Expenses are 0.20% and Class BU, forwhich the Operating Expenses are 0.35%.The Operating Expenses include, among other things, taxes,expenses for legal and auditing services, costs of printing proxies,stock certificates, Shareholders’ reports and notices,Prospectuses and Key Investor Information and other promotionalexpenses, fees and charges of the Custodian and itscorrespondents, and of the Domiciliary Agent, AdministrativeAgent, Registrar and Transfer Agent and of any paying agent,Furthermore, the Management Company is entitled to receive anAsset Management Fee as more fully described in Appendices C,D, E, F and G herein (except with respect to Classes BU, WS, Mand MGH for which charges are described directly in the body ofthis Prospectus) which are accrued daily and paid monthly. Also,in relation to certain Portfolios, the Management Company isentitled to receive a performance fee as more fully described inthe section below entitled “Performance fee”. For the avoidanceof doubt, Operating Expenses do not include either AssetManagement Fees or performance fees which are separate anddistinct.For the avoidance of doubt, from 1 April 2012, no shareholderservicing fees will be payable.The Management Company will be responsible for payingongoing sub-advisory fees to the Sub-Advisors out of the AssetManagement Fee. The actual Asset Management Fee chargedduring any semi-annual period to each Class within each Portfoliowill be disclosed in the annual or semi-annual reports coveringsuch period. Investors may also obtain a schedule of the AssetManagement Fee currently in effect upon request at theregistered offices of the SICAV, the Management Company or thesub-distributors.Institutional Share Classes – Portfolio Charges – Class IU,Class IE, Class IEH, Class IUH, Class IG, Class IGH, Class IGP,Class IFH, Class ISH, Class XU, Class XE, Class XUH, ClassXEH, Class XG, Class XGH, Class XFH, Class XSH, Class WS,Class M and Class MGH.There will be no initial sales charges applicable to any of theInstitutional Share Classes except for Share Classes M and MGH.An Asset Management Fee for Classes IU, IE, IEH, IUH, IG, IGH,IGP, IFH, and ISH will be charged as disclosed in Appendix G34


Threadneedle (Lux) Prospectusbelow, for Share Class WS in which an Asset Management Fee ofup to 1.00% of the average monthly net assets of the relevantShare Class per annum will be charged, for Share Classes M andMGH in which an Asset Management Fee of up to 0.95% of theaverage monthly net assets of the relevant Share Class perannum will be charged. A portion of the Asset Management Feebeing paid with respect to Share Class WS will be used tocompensate Walter Scott & Partners Limited for referrals to thatShare Class. There will be no initial sales charges or AssetManagement Fee for Classes XU, XE, XUH, XEH, XG, XGH, XFH,and XSH as these Share Classes are only available to EligibleInvestors.BU Share Class – Portfolio ChargesThe SICAV offers Class BU Shares within the Global TechnologyPortfolio. Class BU Shares are only available for subsequentinvestments and not for new subscriptions. Class BU Shares bearno initial sales charge and are subject to a distribution fee of1.00% per annum and up to 31 March 2012 (included) ashareholder servicing fee 29 of 0.75% per annum.For Share Class BU an Asset Management Fee of 1.25% of theaverage monthly net assets of the relevant Share Class perannum will be charged up to 31 March 2012 (included). After1 April 2012 Class BU Shares are subject to an AssetManagement Fee of 2.00% of the average monthly net assets ofthe relevant Share Class per annum.There is a declining Contingent Deferred Sales Charge, “CDSC”on Class BU shares redeemed within 4 years of purchase asfollows:Years since PurchaseCDSCLess than 1 year 4%1 year or more but less than 2 years 3%2 years or more but less than 3 years 2%3 years or more but less than 4 years 1%4 years or more 0%The amount of the CDSC is equal to the lesser of the current NetAsset Value and the original purchase price of the Class BUShares being redeemed, multiplied by the applicable percentagerate referenced above. The Class BU Shares will continue to agewithout regard to any exchanges. Accordingly, upon redemptionof Shares acquired in an exchange for Class BU Shares of anotherPortfolio, the amount of any CDSC will be applied as if the Sharesredeemed were held since the date of initial purchase.In order to minimise any CDSC that is payable, the SICAVassumes for each Shareholder that Class BU Shares not subjectto any charge are redeemed first, followed by Class BU Sharesheld the longest during the four year period.29From 1 April 2012, the shareholder servicing fee will be included in the AssetManagement Fee.Soft commission arrangementsThe Management Company and each relevant Sub-Advisor mayenter into soft commission arrangements with broker-dealersunder which certain business services are obtained from suchbroker-dealers directly or from third parties and are paid for by thebroker-dealers out of the commissions they receive ontransactions for the SICAV. Consistent with obtaining bestexecution, brokerage commissions on portfolio transactions forthe SICAV may be specifically allocated by the ManagementCompany or each relevant Sub-Advisor to broker-dealers inconsideration of any research services rendered as well as forservices rendered in the execution of orders by such brokerdealers.Soft commission arrangements are subject to the followingconditions: (i) the Management Company or the Sub-Advisor willact at all times in the best interest of the SICAV and of itsShareholders when entering into soft commission arrangements;(ii) the services provided will be in direct relationship to theactivities of the Management Company or Sub-Advisor; (iii)brokerage commissions on portfolio transactions for the SICAVwill be allocated by the Management Company or the Sub-Advisor to broker-dealers that are entities and not to individuals;(iv) the amount of soft commissions paid to the broker-dealersdoes not entail any increase in brokerage commissions and is nota determining factor in the selection of the broker-dealers; (v) theManagement Company or the Sub-Advisor will provide reports tothe Directors with respect to soft commission arrangementsincluding the nature of the services it receives; (vi) neither theManagement Company, the Sub-Advisor nor any of theirconnected persons may retain cash or other rebates from brokerdealers;(vii) the goods or services received are of demonstrablebenefit to the Shareholders; and (viii) periodic disclosure will bemade in the SICAV’s annual report in the form of statementdescribing the Management Company’s soft commissionpractices, including a description of the goods and servicesreceived.Performance feeThe Management Company shall receive a performance fee asset forth below with respect to all Share Classes of the followingPortfolios except the X Share Classes (in which case it receivesits fees under a separate written arrangement): Pan EuropeanSmaller Companies, American Absolute Alpha, AbsoluteEmerging Market Macro, Multi Asset Absolute Alpha, EuropeanSmaller Companies Absolute Alpha and European Absolute AlphaPortfolios, and shall receive a performance fee with respect to allShare Classes except the D and X Share Classes within theGlobal Opportunities Bond. Daily provisions shall be set up for theaccrual of the payment of the performance fee and the balanceshall be paid to the Management Company at the end of thefiscal year of the SICAV. The amount of this performance feedepends on the performance of the Net Asset Value of therelevant Share Class within the relevant Portfolio compared to theperformance of the benchmark (described below) (the35


Threadneedle (Lux) Prospectus“Benchmark”). Provisions shall only be set up when theBenchmark and NAV High Water Mark (defined below) areexceeded. However, for the purpose of calculating theperformance fee, the Benchmark will also be subject to its ownhigh water mark (“Benchmark High Water Mark” as definedbelow). Where the Net Asset Value of a relevant Share Classexceeds its NAV High Water Mark and the Benchmark is below itsBenchmark High Water Mark then in such case, only theperformance of the relevant Share Class above the NAV HighWater Mark will be taken into account in the calculation of theperformance fee.below, the amount of the accrued performance fee will be paid tothe Management Company within the first quarter of thesubsequent fiscal year. The performance fee shall only be paid tothe Management Company if the Net Asset Value of the relevantShare Class exceeds the NAV High Water Mark.If the amount of the accrued performance fee is negative, suchnegative amount will be carried forward and the ManagementCompany shall not receive the payment of a performance feeuntil the amount of the accrued performance fee is positive at thesubsequent fiscal year’s end.The performance fee shall be calculated on the differencebetween the performance of the Benchmark and theperformance of the Share Class concerned. For the AmericanAbsolute Alpha, Absolute Emerging Market Macro, EuropeanSmaller Companies Absolute Alpha and European Absolute AlphaPortfolios:In the event all of the assets of a Portfolio or a Share Class areliquidated and the Portfolio or Share Class becomes dormant, anyoutstanding performance fee accrual shall be realised and payableto the Management Company. Thereafter, when newShareholders have invested in such Portfolio or Class, the feeaccruals will be reset.(i)(ii)in the event the performance of the relevant Share Classexceeds the performance of the Benchmark on a particularday, a 20% performance fee shall be accrued in respect ofthat day;if the performance of the relevant Share Class decreasesbelow the Benchmark, the accrued performance fee willadjust for a 20% reduction for that particular day.For the Multi Asset Absolute Alpha and Pan European SmallerCompanies 30 Portfolios:(i)(ii)in the event the performance of the relevant Share Classexceeds the performance of the Benchmark on a particularday, a 10% performance fee shall be accrued in respect ofthat day;if the performance of the relevant Share Class decreasesbelow the Benchmark, the accrued performance fee willadjust for a 10% reduction for that particular day.For the Global Opportunities Bond Portfolio:(i)(ii)in the event the performance of the relevant Share Classexceeds the performance of the Benchmark on a particularday, a 15% performance fee shall be accrued in respect ofthat day;if the performance of the relevant Share Class decreasesbelow the Benchmark, the accrued performance fee willadjust for a 15% reduction for that particular day.If the amount of the accrued performance fee is positive at theend of the fiscal year and the Net Asset Value as of the last day ofsuch fiscal year has exceeded the NAV High Water Mark defined30With effect from 1 January 2012, Pan European Smaller Companies will nolonger pay a performance fee.PortfoliosBenchmark for performancefee purposesGlobal Opportunities Bond 1 month USD Deposit Rate +4.5%(gross of fees)Pan European Smaller Companies 31 HSBC Smaller EuropeanCompanies IndexAmerican Absolute Alpha3 month Libor (US$)Absolute Emerging Market Macro 3 month Libor (US$)Multi Asset Absolute Alpha 3 month Libor (Euro)European Smaller Companies 3 month Libor (Euro)Absolute AlphaEuropean Absolute Alpha3 month Libor (Euro)NAV High Water Mark: in respect of each Share Class, thegreater of (i) the Net Asset Value (prior to the deduction of anyperformance fee) of a Share of such Share Class as of the lastValuation Date of the relevant fiscal year in which any accruedperformance fee becomes due and payable; and (ii) the Net AssetValue of a Share of such Share Class as of the last Valuation Dateof the most recent fiscal year end of the SICAV in which aperformance fee was payable except for the first period in whichany accrued performance fee becomes due and payable in whichcase the Net Asset Value to be taken into account is (i) the NetAsset Value of a Share of such Share Class of the last ValuationDate immediately preceding that period or (ii) the initial offeringprice of a Share of the new Share Class.Benchmark High Water Mark: the highest level of theBenchmark since the inception of a performance fee accrual ofthe relevant Share Class.Distribution ArrangementsThe Management Company has also been appointed to providedistribution and marketing services pursuant to the ManagementCompany Services Agreement. The Management Company may31With effect from 1 January 2012, the Pan European Smaller Companies Portfoliowill no longer pay a performance fee.36


Threadneedle (Lux) Prospectusenter into contractual arrangements with financial institutions forthe distribution of Shares outside the United States. Shares alsomay be purchased directly from the SICAV on the same pricingand charge basis as if obtained through the ManagementCompany. The Shares have not been registered under theSecurities Act, as amended, and may not be sold in the UnitedStates or to United States Persons.The Management Company may re-allow discounts to subdistributorswith whom it has agreements and are entitled to thebalance over such discounts. The Management Company and thesub-distributors may further re-allow the total or some part of theagreed discount to other parties, such as certain recognisedfinancial intermediaries. The Management Company may, but isnot obligated to, pay out of its assets for certain distribution andother expenses related to any Class of Shares.Luxembourg laws and circulars regarding the prevention ofmoney laundering and in particular with Luxembourg law datedNovember 12, 2004 against money laundering and terrorismfinancing, as amended. To that end, the SICAV, the ManagementCompany, sub-distributors and the Registrar and Transfer Agentmay request information necessary to establish the identity of apotential investor and the origin of subscription proceeds. Failureto provide documentation may result in a delay or rejection by theSICAV of any subscription or exchange or a delay in payout ofredemption of Shares by such investor.Purchase of SharesInvestors will be required to complete an initial subscriptionapplication or other documentation satisfactory to theManagement Company, sub-distributor and/or the Registrar andTransfer Agent in order to purchase Shares.The Management Company will provide a nominee service andmay appoint additional nominees, (each a “Nominee”) toinvestors purchasing Shares of any Portfolio. Investors in aPortfolio may elect to make use of such nominee servicepursuant to which the Nominee will hold the Shares of suchPortfolio in its name for and on behalf of the investors who shallbe entitled to at any time claim direct title to the Shares and who,in order to empower the Nominee to vote the Shares at anygeneral meeting of Shareholders, shall provide the Nominee withspecific or general voting instructions to that effect.Applications for the subscription of Shares must be received byeither the Registrar and Transfer Agent or the ManagementCompany, or if investing through a sub-distributor at the office ofthe sub-distributor prior to 3.00 p.m. (Luxembourg time) on therelevant Valuation Date, subject to such orders being received bythe Registrar and Transfer Agent from the distributor within areasonable period of time thereafter. Any orders received afterthis time or not transmitted to the Registrar and Transfer Agent bythe distributor within a reasonable period of time thereafter willbe dealt with on the next Valuation Date.Only registered Shareholders may submit redemption ordersdirectly to the SICAV. Investors whose Shares are maintained inthe name of a Nominee must submit an order through theNominee since the Nominee is recognised by the ManagementCompany as the owner of record of the Shares. Beneficialowners of Shares held by a Nominee may at all times request theSICAV to register such Shares into their own name, subject toprior notification to the Nominee and documentation of theidentity of such owners to be provided to the Registrar andTransfer Agent.The SICAV draws the investors’ attention to the fact that anyinvestor will only be able to fully exercise his investor rightsdirectly against the SICAV, notably the right to participate ingeneral shareholders’ meetings, if the investor is registeredhimself and in his own name in the shareholders’ register of theSICAV. In cases where an investor invests in the SICAV throughan intermediary investing into the SICAV in his own name but onbehalf of the investor, it may not always be possible for theinvestor to exercise certain shareholder rights directly against theSICAV. Investors are advised to take advice on their rights.Luxembourg Anti-Money LaunderingRegulationsIn an effort to deter money laundering, the SICAV, theManagement Company, sub-distributors and the Registrar andTransfer Agent must comply with all applicable international andDifferent subscription procedures and earlier time limits mayapply if applications for Shares are made through a subdistributor.In such instance, the sub-distributors will inform theapplicant of the relevant procedure together with any time limitby which the application must be received. No sub-distributor ispermitted to withhold subscription orders to benefit itself or itscustomers by a price change.In the event the SICAV has suspended the Net Asset Valuedetermination, the valuation on the first Valuation Date (on whichthe SICAV resumes the Net Asset Value determination) occurringafter receipt of the order will be utilised.Any order may be rejected by the Management Company, thesub-distributor, the Registrar and Transfer Agent or the SICAV. TheSICAV reserves the right to suspend the sale to the public ofShares of any Portfolio in response to conditions in the securitiesmarkets or otherwise.During the continuous offerings of the Shares of the respectivePortfolios, the Subscription Price of Classes of Shares of eachPortfolio is the Net Asset Value per Share of such Class plus anyapplicable sales charges imposed at the time of purchase. Salescharges can be found in Appendices C, D, E, F and G (except withrespect to Classes BU, WS, M and MGH for which charges aredescribed directly in the body of this Prospectus).37


Threadneedle (Lux) ProspectusSubject to the terms of this Prospectus, Shares are availablefor purchase on each Valuation Date, which is normally eachBusiness Day.for information concerning the Classes of Shares of each Portfoliocurrently available for purchase or write to the SICAV’s Registrarand Transfer Agent.Prior to subscription to Classes XU, XE, XUH, XEH, XG, XGH, XFHand XSH Shares, the prospective Shareholder must have receivedconfirmation that they fall within the definition of EligibleInvestors.In each Class, Shares may be made available in the currency inwhich the Class is denominated and in such other freelyconvertible currencies upon a decision of the Directors.In particular, the Subscription Price shall be payable in MultiplePayment Currencies which currently include U.S. Dollar and Euro.Multiple Payment Currencies will be available for the followingShare Classes: Class AU, Class AE, Class DU, Class DE, Class W,Class IU, Class IE, Class XU, Class XE, Class BU, Class M andClass SU. Where permitted, the Redemption Price shall bepayable in the same currency elected for subscription. In Classesoffering the Multiple Payment Currency option, the foreigncurrency exchange cost of conversion to the Portfolio’s BaseCurrency, if any, will be paid by the Portfolio. While the foreigncurrency exchange is being performed, the SICAV may beexposed to a short-term risk of foreign exchange fluctuation.Certain Classes of Shares of each Portfolio may also be subject toa shareholder servicing fee 32 accrued and payable monthly at theannual rates indicated in Appendices C, D, E, and F (except withrespect to Classes BU, M and MGH for which charges aredescribed directly in the body of this Prospectus). The ShareClasses IU, IE, IEH, IUH, IG, IGH, IGP, IFH, ISH, XU, XE, XUH,XEH, XGH and XSH are not subject to a shareholder servicing fee.Share Classes M and MGH within the Mondrian InvestmentPartners – Focused Emerging Markets Equity Portfolio may besubject to a transaction charge of up to 0.75% of the Net AssetValue subject to the fair and equal treatment of the Shareholders.The charge is to cover certain investment expenses of therelevant Portfolio such as brokerage commissions and transactionrelated costs, including stamp duty, dealer spreads and, at times,market impact. The aim of such charge is to protect any existingShareholders of the relevant Portfolio from carrying said costsand charges upon a subscription. The amount of the charge socollected shall be retained in the relevant Portfolio.The SICAV retains the right to offer only one Class of Shares ofeach Portfolio for purchase by investors in any particularjurisdiction in order to conform to local law, or any other reason.The SICAV also reserves the right to adopt standards applicableto classes of investors or transactions that permit or require thepurchase of a particular Class of Shares of a Portfolio. Investorsshould consult their distributor or sub-distributor representatives32From 1 April 2012, the shareholder servicing fee will be included in the AssetManagement Fee.If in any country in which a Class of Shares of a Portfolio isoffered with an initial sales charge, local law or practice requiresor permits a lower initial sales charge than set forth in AppendixC, D, E, F or G (or directly in the body of this Prospectus withrespect to Classes BU, WS, M and MGH) for any individualpurchase order, the Management Company may sell Shares, andmay authorise sub-distributors to sell Shares, within such countrywith a lower sales charge. The SICAV also retains the right toauthorise the Management Company or sub-distributor to sellShares of each affected Class of a Portfolio with a higher initialsales charge, but not in excess of 5.0% of the Net Asset Valueper Share.The applicable Subscription Price of each Class of Sharesordinarily will be payable within three Business Days after therelevant Valuation Date, with the exception of Multi AssetAbsolute Alpha which will be payable within four Business Daysafter the relevant Valuation Date. If the payment period in therelevant currency ends on a day which is not a bank business dayin New York and Luxembourg in respect of U.S. Dollar,Luxembourg and Brussels in respect of the Euro, Luxembourgand London in respect of GBP, of Luxembourg and Geneva inrespect of CHF, or Luxembourg and Singapore in respect of SGD,then payment must be made on the next following bank businessday in the relevant place. The Subscription Price of each Class ofShares of each Portfolio shall be available in Luxembourg at theregistered office of the SICAV unless alternative arrangementsare made by the Management Company or sub-distributors.The SICAV may elect, at its discretion, to accept in certain casessubscriptions in kind by contribution of Transferable portfolioSecurities and other eligible assets and any associated transfercosts may be charged to the Shareholder, provided that these aresuitable assets in respect of the relevant Portfolio’s investmentobjective and that their market value on the relevant ValuationDate will be verified by a special report of Luxembourgindependent auditors at the expense of the contributingShareholder(s).Share confirmations will be sent to investors within one monthafter Shares are issued, by the Registrar and Transfer Agent, tothe investor’s address or elsewhere at his request and expense,unless alternative arrangements are made by the ManagementCompany or sub-distributor.Redemption of SharesThe Articles provide that it will, subject to the limitationsdescribed therein, redeem Shares of any Class of a Portfoliotendered to it by Shareholders. Subject to the terms of thisdocument, Shares may be redeemed on each Valuation Date inLuxembourg. Requests for redemption must be made in writing38


Threadneedle (Lux) Prospectusto the Registrar and Transfer Agent at its registered office and areirrevocable, except during any period of suspension or deferral ofredemption as described below.In case of suspension or deferral of the Net Asset Valuedetermination or postponement of redemption requests, Sharesof such Portfolio presented for redemption as from the date ofsuch suspension or postponement will be redeemed upon theSICAV resuming redemption at the first then determined NetAsset Value.Share Classes M and MGH within the Mondrian InvestmentPartners – Focused Emerging Markets Equity Portfolio may besubject to a transaction charge of up to 0.75% of the Net AssetValue subject to the fair and equal treatment of the Shareholders.The charge is to cover certain disinvestment expenses of therelevant Portfolio such as brokerage commissions and transactionrelated costs, including dealer spreads and, at times, marketimpact. The aim of such charge is to protect any existingShareholders of the relevant Portfolio from carrying said costsand charges upon a redemption. The amount of the fee socollected shall be retained in the relevant Portfolio.Redemption requests must be received by either the Registrarand Transfer Agent, the Management Company, or if investingthrough a sub-distributor at the office of the sub-distributor by3.00 p.m. (Luxembourg time) on any Valuation Date in order toreceive the prevailing Net Asset Value for that day, subject to suchrequests being received by the Registrar and Transfer Agent fromthe distributor within a reasonable period of time thereafter. Anyrequest received after that time or not transmitted to theRegistrar and Transfer Agent by the distributor within a reasonableperiod of time thereafter will be treated as received on the nextsucceeding Valuation Date.Payments will ordinarily be made within seven Business Days inthe case of the Mondrian Investment Partners – FocusedEmerging Markets Equity Portfolio and four Business Days in thecase of the Multi Asset Absolute Alpha and, in respect of theother Portfolios, within three Business Days after the relevantValuation Date in U.S. Dollar, Euro, GBP, CHF or SGD (dependingon which currency was elected at the time of subscription). If thedate for payment is not a bank business day in the country of therelevant payment currency (e.g., New York for U.S. Dollar,Brussels for Euro, London for GBP, Geneva for CHF, or Singaporefor SGD) and in Luxembourg, the payment will be made on thenext day that is a bank business day in such countries. Upon therequest of an investor, payment of redemption proceeds may alsobe made to the relevant sub-distributor who will remit therelevant funds, if so requested by the investor, in local currencyas may be freely purchased with U.S. Dollar, GBP, CHF, Euro orSGD as the case may be (depending on which currency waselected at the time of subscription). Payment will not beprocessed until the Subscription Price on the purchase of Shareshas been paid.The value of Shares of each Portfolio at the time of redemptionmay be more or less than the Subscription Price, depending onthe market value of the relevant Portfolio’s investments at suchtime.The SICAV’s obligation to redeem Shares of each Portfolio issubject to suspension or deferral as set forth below under“Suspension of Issue, Redemption and Exchange of Shares andCalculation of Net Asset Value”.The SICAV shall not be bound to redeem or exchange on anyValuation Date more than 10% of a Portfolio’s Shares or Class ofShares outstanding on such Valuation Date. Accordingly, anyredemption or exchange request in excess of such limits may bedeferred for a period that the Directors consider to be in the bestinterest of the SICAV but normally not exceeding 30 ValuationDates after the date of receipt of the redemption or exchangerequests. In case of deferral of redemptions or conversions, therelevant Shares will be redeemed or exchanged at the Net AssetValue per Share as of the Valuation Date following such period.Any deferred redemption or exchange shall be treated in priorityto any redemption or exchange requests received for subsequentValuation Dates.The SICAV may, in certain cases, subject to the fair and equaltreatment of the remaining Shareholders of any Class of Sharesand by agreement with redeeming Shareholders, effect paymentfor redeemed Shares of Portfolios by an in specie transfer, ofsecurities and other assets of the relevant Portfolio. The natureand type of assets to be transferred in such case shall bedetermined on a fair and reasonable basis and without prejudicingthe interests of the other Shareholders of the relevant class orclasses of Shares. In the event that a redemption of Shares iseffected by way of an in specie transfer any associated transfercosts may be charged to the redeeming Shareholder, providedthat the market value of such securities will be verified by aspecial report of Luxembourg independent auditors, at theexpense of the redeeming Shareholder(s).If as result of a redemption or exchange request, the value of theaccount held by any Shareholder in a Portfolio would fall belowthe equivalent of US$ 1,000 or 100 Shares, the ManagementCompany may decide to redeem (or exchange) the entireshareholding of such Shareholder in a Portfolio.Restrictions on subscriptions andconversions into certain PortfoliosA Portfolio may be closed to new subscriptions or conversions in(but not to redemptions or conversions out) if, in the opinion ofthe Management Company, this is necessary to protect theinterests of existing Shareholders. One such circumstance wouldbe where the Portfolio has reached a size such that the capacityof the market and/or the capacity of the Management Companyor the relevant Sub-Advisor has been reached, and where topermit further inflows would be detrimental to the performance39


Threadneedle (Lux) Prospectusof the Portfolio. Any Portfolio which, in the opinion of theManagement Company, is materially capacity constrained may beclosed to new subscriptions or conversions without notice toShareholders. Once closed to new subscriptions or conversionsin, a Portfolio will not be re-opened until, in the opinion of theManagement Company, the circumstances which requiredclosure no longer prevail and significant capacity is availablewithin the Portfolio for new investment.Where closures to new subscriptions or conversions occur, thewebsite www.threadneedle.com/lux will be amended to indicatethe change in status of the applicable Portfolio or Share Class.Investors should confirm with the Management Company for thecurrent status of Portfolios or Share Classes.Merger or LiquidationA. The Portfolios/Classes of SharesThe Directors may decide to liquidate a Portfolio created for anunlimited period of time or a Class of Shares if the net assets ofsuch Portfolio or Class of Shares fall below an amount determinedby the Directors to be a minimum level to enable such Portfolio orClass to be operated in an economically efficient manner, if achange in the economic or political situation relating to thePortfolio or Class concerned would justify such liquidation or, if forother reasons the Directors believe it is required for the interestsof the Shareholders. If a Portfolio is feeder of another UCITS or ofone of its sub-funds, the merger, split or liquidation of suchmaster UCITS or such relevant master sub-fund of the UCITStriggers liquidation of the feeder Portfolio, unless the investmentpolicy of such Portfolio is amended in compliance with Part I ofthe 2010 Law. The decision of the liquidation will be published(either in a newspaper in Luxembourg and in newspapers issuedin countries where the Shares are sold (insofar as required byapplicable regulations), or sent to the Shareholders at theiraddresses indicated in the register of Shareholders orcommunicated via other means as deemed appropriate by theDirectors) prior to the effective date of the liquidation and thepublication will indicate the reasons for, and the procedures of,the liquidation. Unless the Directors otherwise decide in theinterests of or to keep equal treatment between theShareholders, the Shareholders of the Portfolio or Class of Sharesconcerned may continue to request to redeem or to exchangetheir Shares without redemption fees. Assets which cannot bedistributed to their beneficiaries upon the completion of theliquidation of the Portfolio or Class of Shares concerned will bedeposited with the Custodian for a period of six months after thecompletion of the liquidation. After such time, the assets will bedeposited with the Caisse de Consignation on behalf of theirbeneficiaries. The liquidation of a Portfolio shall in principle beclosed within nine months from the decision to liquidate. In theevent where such liquidation could not be closed within suchtimeframe, an authorisation to extend the period must be soughtfrom the CSSF. Any funds to which Shareholders are entitledupon the liquidation of the Portfolio and which are not claimed bythose entitled thereto prior to the close of the liquidation processshall be deposited for the persons entitled thereto at the Caissede Consignation in Luxembourg and shall be forfeited after thirtyyears.Under the same circumstances as provided in the precedingparagraph, the Directors may decide to liquidate one Portfolio bycontribution into another Portfolio. Such decision will be publishedin the same manner as described in the preceding paragraph and,in addition, the publication will contain information in relation tothe new Portfolio. Such publication will be made one month (orsuch longer period as required by compulsory law) before thedate on which the amalgamation becomes effective in order toenable Shareholders to request redemption of their Shares,without redemption fees, before the operation involvingcontribution into another Portfolio becomes effective.The Directors may also, under the same circumstances asprovided above, decide to liquidate one Portfolio by contributioninto another Luxembourg UCITS governed by the 2010 Law or toanother UCITS in another EU member state. Such decision will bepublished in the same manner as described above and, inaddition, the publication will contain information in relation to theother UCITS. Such publication will be made one month (or suchlonger period as required by compulsory law) before the date onwhich the merger becomes effective in order to enableShareholders to request redemption of their Shares, free ofcharge, before the operation involving contribution into anotherUCITS becomes effective.In the event that the Directors believe it is required for theinterests of the Shareholders of the relevant Portfolio or that achange in the economic or political situation relating to thePortfolio concerned has occurred which would justify it, thereorganisation of one Portfolio, by means of a division into two ormore Portfolios, may be decided by the Directors. Such decisionwill be published in the same manner as described above and, inaddition, the publication will contain information in relation to thetwo or more new Portfolios. Such publication will be made onemonth (or such longer period as required by compulsory law)before the date on which the reorganisation becomes effective inorder to enable the Shareholders to request redemption of theirShares, free of charge before the operation involving division intotwo or more Portfolios becomes effective.Any of the aforesaid decisions of liquidation, amalgamation,merger or reorganisation may for any reason also be decided by aseparate meeting of the Shareholders of relevant Classes in thePortfolio concerned where no quorum is required and thedecision is taken at the simple majority of the Shares voting atthe meeting.Should future Portfolios be created for a limited maturity, theprocedure for liquidation, amalgamation, merger or reorganisationwill be described in the sales documents of the SICAV.40


Threadneedle (Lux) ProspectusB. The SICAVThe SICAV may at any time be dissolved by a resolution of thegeneral meeting of Shareholders. Liquidation will be carried outby one or more liquidators appointed by the general meeting ofShareholders and the net liquidation proceeds of the SICAVdistributed to Shareholders in proportion to their respectiveholdings at the close of liquidation.Where exchanges among Shares of the same Class arepermitted, if there is a difference in the initial sales chargeimposed between the two Portfolios between which theexchange will be effected, the difference may be assessed to theShares involved in the exchange. All exchanges will be processedin the payment currency selected at the time of subscription ofthe initial Shares.Assets or proceeds which cannot be distributed followingliquidation of the SICAV will be deposited with the Caisse deConsignation.Whenever the Share capital of the SICAV falls below two thirds ofthe minimum capital required by Luxembourg law, the question ofthe dissolution of the SICAV shall be referred to the generalmeeting by the Directors. The general meeting, for which noquorum shall be required, shall decide by simple majority of theShares present and represented at the meeting. The question ofthe dissolution of the SICAV shall further be referred to thegeneral meeting whenever the Share capital falls below onefourth of the minimum capital indicated above. In such an event,the general meeting shall be held without any quorumrequirements and the dissolution may be decided byShareholders holding one fourth of the Shares present andrepresented at the meeting. This general meeting must beconvened within 40 days from the date of ascertaining that thenet assets of the SICAV have fallen below the relevant minimum.Exchange PrivilegeSubject to the terms of this document, on any Valuation DateShareholders of a Portfolio will be entitled to exchange theirShares for: (i) Shares of the same Class of another Portfolio or (ii)Shares of a different Class of the same or of another Portfolioprovided that (i) both Classes have the same fee structure; (ii) therequested Class is available in the jurisdiction in which theShareholder is subscribing; and (iii) in the case of XU, XE, XUH,XEH, XG, XGH, XFH and XSH, the Shareholder is an EligibleInvestor.Furthermore, in order to be compliant with the requirements ofthe Directive 2004/39/EC of the European Parliament and of theCouncil of 21 April 2004 on markets in financial instruments,Shareholders that qualify as Institutional Investors of ShareClasses DU, AU, DE, AE, AEC, AUC, AUP, AEP, AUH, DEH, DUH,AEH, AGH, AGP, DG, AFH, and ASH will be entitled to exchangetheir Shares for Shares Classes IU, IE, IUH, IEH, IGH, IGP, IFH andISH within the same Portfolio provided that the requested Classis available in the jurisdiction in which the Shareholder issubscribing.The Management Company and sub-distributors of the SICAVmay impose an exchange fee of up to 0.75% of the Net AssetValue of the Shares on each exchange of those Shares acquiredthrough them. The exchange fee, if any, will be deducted at thetime of such exchange and paid to the relevant distributors.Shareholders have also the right to exchange Shares into certainother UCIs with similar Share Classes sponsored by the sponsorof the SICAV and/or the Management Company denominated inthe same currency on the basis of relative net asset value pershare, and subject to the minimum investment requirements ofthat UCI. Such exchanges are effected by means of redemptionof the existing Shares and purchase of the new shares. No salescharge will be imposed at the time of the exchange. However, anexchange fee may be levied at the discretion of the Directors butin compliance with the principle of fair and equal treatmentbetween Shareholders in the same circumstances. Beforeexchanging, Shareholders should request a current prospectuswhich describes charges and expenses and other matters ofinterest. The exchange of Shares is not available in certaincountries and prospective investors should inform themselves asto whether the exchange of Shares is available in their country.To exercise the right to exchange Shares, the Shareholder mustdeliver an exchange order in proper form to the SICAV’s Registrarand Transfer Agent, either directly or through the ManagementCompany or a sub-distributor.The number of Shares in the newly selected Portfolio/Class ofShares will be calculated in accordance with the followingformula:(B x C) – EA =Dwhere:A is the number of Shares to be allocated in the newPortfolio/Class of SharesB is the number of Shares relating to the original Portfolio/Classof Shares to be exchangedIn all cases, exchanges may be made as long as the Shareholderremains in the currency in which he or she first subscribed. Theseexchanges shall be made at the prevailing Net Asset Value perShare for the relevant Classes.Cis the Net Asset Value per Share as determined for theoriginal Portfolio/Class of Shares calculated in the mannerreferred to herein41


Threadneedle (Lux) ProspectusDEis the Net Asset Value per Share as determined for the newPortfolio/Class of Shares calculated in the manner referred tohereinis the exchange fee (if any) that may be levied to the benefitof any distributor or any agent appointed by it as disclosed inthe sales documents of the SICAV.Market Timing & Late TradingThe SICAV may reject or cancel any purchase orders, includingexchanges, for any reason.For example, excessive trading of Shares in response to shorttermfluctuations in the market, a trading technique sometimesreferred to as ‘market timing’, has a disruptive effect on portfoliomanagement and increases Portfolio expenses. Accordingly, theSICAV may in the sole discretion of the Directors compulsorilyredeem or reject any purchase orders, including exchanges, fromany investor that the SICAV reasonably believes has engaged inmarket timing activity, or investors that in the Directors’ solediscretion, may be disruptive to the SICAV or any Portfolio. Forthese purposes, the Directors may consider an investor’s tradinghistory in the Portfolios and accounts under common control orownership.Moreover, in addition to the exchange fees listed elsewhere inthis Prospectus, the SICAV may impose a penalty of 2.00% of theNet Asset Value of the Shares redeemed or exchanged where theSICAV reasonably believes that an investor has engaged inmarket timing activity. The Shareholders concerned will bewarned in advance if such a fee is likely to be charged and thatpenalty shall be credited to the relevant Portfolio. The Directorswill not be held liable for any loss resulting from rejected ordersor mandatory redemption.Late trading is not allowed by the SICAV.Suspension of Issue, Redemption andExchange of Shares and Calculation ofNet Asset ValueAll subscriptions, redemptions or exchanges will be done on theNet Asset Value next calculated after the order is received (e.g. anunknown Net Asset Value).The SICAV may suspend the determination of the Net AssetValue, the issue of Shares and the right of any Shareholder torequire redemption or exchange of Shares of any Portfolio:(a) During any period when any principal stock exchange,Regulated Market or any Other Regulated Market in aMember State or in an Other State on which a substantialpart of the SICAV’s investments attributable to such Portfoliois quoted, or when one or more foreign exchange markets inthe currency in which a substantial portion of the assets ofthe Portfolio is denominated, are closed otherwise than forordinary holidays or during which dealings are substantiallyrestricted or suspended; or(b) Political, economic, military, monetary or other emergencybeyond the control, liability and influence of the SICAV makesthe disposal of the assets of any Portfolio impossible undernormal conditions or such disposal would be detrimental tothe interests of the Shareholders; or(c) During any breakdown in the means of communicationnetwork normally employed in determining the price of any ofthe relevant Portfolio’s investments or the current prices onany market or stock exchange or any other reason makes itimpossible to determine the value of a major portion of theassets of any Portfolio; or(d) During any period when the remittance or transfer of monieswhich will or may be involved in the realisation of, or in thepayment of the relevant Portfolio’s investments or in theredemption of Shares is not possible or where it can beobjectively demonstrated that purchases and sales of theassets of any Portfolio cannot be effected at normal prices; or(e) In case of a decision to liquidate the SICAV or a Portfolio onand after the day of publication of the first notice conveningthe general meeting of Shareholders for this purpose ornotice given by the Board to this effect, as applicable; or(f)When the NAV calculation of a UCI or Portfolio in which aPortfolio has invested more than 50% of its NAV, issuspended.The SICAV shall suspend the issue, exchange and redemption ofShares of any Class within a Portfolio forthwith upon occurrenceof an event causing it to enter into liquidation or upon the order ofthe Regulatory Authority.Any suspension shall be published, if appropriate, by the SICAVand Shareholders requesting subscription, exchange orredemption of their Shares shall be notified by the SICAV of thesuspension at the time of the filing of the written request for suchsubscription, exchange and redemption. The suspension as to anyPortfolio will have no effect on the determination of Net AssetValue and the issue, redemption or exchange of Shares in anyClass of the other Portfolios.Dividend PolicyThe policy of the SICAV in respect of all Share Classes ofPortfolios, with the exception of Class AEP, Class AGP, Class AUP,Class AEC, Class IGP, Class SUP, Class SEP and Class P, is tomake no distributions, to accumulate in such Portfolios all netearnings and to reinvest these within the same Portfolio andClass. In respect of Class AEP, Class AGP, Class AUP, Class AEC,Class IGP, Class SUP, Class SEP and Class P, the SICAV intends tomake distributions, with a frequency, at least annually, and in an42


Threadneedle (Lux) Prospectusamount to be determined by the Directors. The Shareholders ofthese Share Classes have the option to receive the dividend or toreinvest it in the SICAV.Tax ConsiderationsGeneralProspective purchasers of Shares of each Portfolio should consulttheir own tax advisors as to the taxes applicable to theacquisition, holding or disposition of the Shares, or distributionsmade with regard to Shares under the laws of the countries oftheir respective citizenship, residence or domicile.Grand Duchy of LuxembourgUnder current legislation, non-resident Shareholders are notsubject to any capital gains or income tax in Luxembourg exceptfor those who maintain a permanent establishment inLuxembourg to which the share capital of the SICAV is allocated.Corporate Shareholders resident in Luxembourg, or having apermanent establishment in Luxembourg to which the shares ofthe SICAV are allocated, are subject to tax in Luxembourg on theamount of the distribution made by the SICAV and on capital gainsrealised at the ordinary applicable corporate income tax rate.Individual Shareholders domiciled or resident in Luxembourg aresubject to personal tax in Luxembourg on the amount of thedistribution made by the SICAV at a progressive rate. They areonly subject to tax on capital gains realised on disposal of theirshares in the SICAV if (i) they personally or by attribution hold, orhave held at any time during the last 5 years, 10% or more of theissued share capital of the SICAV or (ii) dispose of all or part oftheir holdings within six months from the date of acquisition orbefore their acquisition.For the avoidance of doubt, these asset based taxes (“taxed’abonnement”) form part of the Operating Expenses.Dividends and interest received by the SICAV on portfolioinvestments generally will be subject to non-recoverablewithholding taxes in the countries of origin.Any dividends, other distributions of income made by the SICAVor payments of the proceeds of sale and/or redemption of Sharesin the SICAV, may since July 1, 2005 (depending on theinvestment portfolio of the SICAV) be subject to the withholdingtax and/or information providing regime imposed by EU TaxSavings Directive 2003/48/EC of 3 June 2003 (the “Directive”) ontaxation of savings income in the form of interest payments,where payment is made to a Shareholder who is an individualresident in a Member State for the purposes of the Directive (or a“residual entity” established in a Member State) by a payingagent resident in another Member State.Restrictions on OwnershipThe Articles permit to restrict or prevent the ownership of Sharesof each Portfolio by any person, firm or corporate body including,but without limitation, any United States Person.If it shall come to the attention of the SICAV at any time thatShares of any Portfolio are beneficially owned by a United StatesPerson either alone or in conjunction with any other person, theSICAV will compulsorily redeem such Shares at their redemptionprice as described herein. Not less than ten days after the SICAVgives notice of such compulsory redemption, the Shares will beredeemed and Shareholders will cease to be the owners of suchShares.The foregoing is based on the Directors’ understanding of the lawand practice currently in force in Luxembourg and is subject tochanges therein. It should not be taken as constituting legal or taxadvice and investors are advised to obtain information and, ifnecessary, advice regarding the laws and regulations applicable tothem by reason of the subscription, purchase, holding andrealisation of Shares in their countries of origin, residence ordomicile.The SICAV is subject to a tax of 0.05% per annum levied on theNet Asset Value at the last day of each calendar quarter inaccordance with the 2010 Law, provided that no such tax is dueon the portion of the assets of the SICAV invested in otherLuxembourg UCIs (if any).In respect of the Institutional Share Classes of the otherPortfolios, the SICAV is subject to a tax of 0.01% per annumlevied on the Net Asset Value, as at the last day of each calendarquarter, in accordance with the 2010 Law, as amended, providedthat no such tax is due on the portion of the assets of the SICAVinvested in other Luxembourg UCIs (if any).The Institutional Share Classes are available only to InstitutionalInvestors.Share Classes SU, SUP and SEP are exclusively available toShareholders subscribing through certain select sub-distributors.Meetings and ReportsThe annual general meeting of Shareholders of the SICAV is heldin Luxembourg on the last Friday in July in each year at 2.00 p.m.(or if such a day is a legal holiday on the next following BusinessDay). Other general meetings of Shareholders may be held atsuch time and place in Luxembourg as are indicated in thenotices of such meetings. Notices of general meetings are givenin accordance with Luxembourg law and in accordance withapplicable rules in the relevant countries where Shares arepublicly offered for sale. Notices will specify the place and time ofthe meeting, the conditions of admission, the agenda, thequorum and voting requirements.An annual report containing the audited financial accounts of theSICAV, describing those of each Portfolio, will be made availableto Shareholders in respect of the preceding fiscal year ended43


Threadneedle (Lux) Prospectus31 March, at least 15 days before the annual general meeting.Unaudited semi-annual reports will also be made available toShareholders at the registered office of the SICAV in respect of theperiod ending on 30 September in each year within two monthsthereafter. The consolidated accounts of the SICAV shall beexpressed in U.S. Dollar.The SICAV also intends to make available to Shareholders andpotential investors abridged versions of the financial reports referredto above, which will not contain the detailed list of portfoliosecurities of each of the Portfolios. Such abridged annual reportsand abridged semi-annual reports will, however, contain the offer toprovide to those persons upon request and free of charge a copy ofthe complete version of such documents which are also availablefor inspection at the offices of the Registrar and Transfer Agent andthe Management Company.The Shareholders of a specified Portfolio may, at any time, holdgeneral meetings with the aim to deliberate on a subject thatconcerns only the Portfolio.The Shareholders of any Class of Shares, issued in respect of anyPortfolio may hold, at any time, general meetings to decide on anymatters, which relate exclusively to such Class of Shares.Domiciliary and Administrative AgentThe Management Company has undertaken to provide the SICAVwith certain administration services, including generaladministration as well as bookkeeping and maintenance of allaccounts of the SICAV, the periodic determination of the Net AssetValue per Share, the preparation and filing of the SICAV’s financialreports and the liaison with the Auditors.In addition, the Management Company will, under the terms of theManagement Company Services Agreement act as corporate anddomiciliary agent for the SICAV.The Management Company has delegated the above mentioneddomiciliary and administrative functions to RBC Dexia InvestorServices Bank S.A. pursuant to the Investment Fund ServiceAgreement dated 31 March 2006. The agreement was concludedfor an unlimited duration and may be terminated as providedtherein.CustodianThe SICAV has entered into a Custodian Agreement dated 31 March2006 with RBC Dexia Investor Services Bank S.A. This agreement isconcluded for an unlimited duration and may be terminated asprovided therein.Unless otherwise stipulated by law or in the Articles, the decision ofthe general meeting of a specified Portfolio or Class of Shares willbe reached by a simple majority of Shareholders present orrepresented.Service ProvidersAuditorsPricewaterhouseCoopers, S.à r.l., 400, Route d’Esch, B.P. 1443,L-1014 Luxembourg, Grand Duchy of Luxembourg act as Auditors.Registrar and Transfer AgentThe Management Company has undertaken to provide the SICAVwith registrar and transfer agent services. As such the ManagementCompany will be responsible for handling processing ofsubscriptions of Shares, dealing with requests for redemption andconversion, and accepting transfers of funds, for the safekeeping ofthe register of Shareholders of the SICAV and the safekeeping of allnon-issued Share certificates of the SICAV.The Management Company has delegated the registrar and transferagent services to International Financial Data Services(Luxembourg) S.A., 47, Avenue J.F. Kennedy, L-1855 Luxembourg,pursuant to the Registrar and Transfer Agency Agreement. 33 Thisagreement has been entered into for an unlimited duration and maybe terminated as provided in such agreement.This agreement provides that all securities and cash of eachPortfolio of the SICAV, other than cash held in trading accounts orheld in any operating accounts for expense disbursement accounts(which may be maintained at other banks) are to be held by, or tothe order of, the Custodian, provided that the SICAV also maydeposit securities and liquid assets directly with third partiesapproved by the Custodian.The Custodian will also be responsible for the collection of principaland income on and the payment for and collection of proceeds of,securities bought and sold for each Portfolio of the SICAV. TheCustodian will charge the SICAV fees for these services which aremore fully described under Fees and Expenses.Under the 2010 Law the Custodian must ensure that:(a) the sale, issue, redemption and cancellation of Shares effectedby the SICAV are carried out in accordance with the 2010 Lawand the Articles;(b) in transactions involving the assets of the SICAV, theconsideration is remitted to it within the usual time limits; and(c) the income of the SICAV is applied in accordance with theArticles.33With effect from 31 October 2011 (included). Up to 31 October 2011 theManagement Company delegated the registrar and transfer agent services to TheBank of New York Mellon (Luxembourg) S.A., Vertigo Building – Polaris, 2-4 RueEugène Ruppert, L-2453 Luxembourg, pursuant to an assignment agreementdated 31 October 2005 to a registrar and transfer agency agreement entered intoby the SICAV and the Bank of New York Mellon (Luxembourg) S.A. on 1 October2004.The Custodian may from time to time, under its responsibility,delegate duties to other banks and financial institutions for thepurpose of providing local custody of assets.44


Threadneedle (Lux) ProspectusThe Custodian shall, in accordance with article 35 of the 2010 Law,be liable to the Shareholders for any loss suffered by them as aresult of its wrongful failure to perform its obligations under theCustodian Agreement or its wrongful improper performancethereof.The Custodian is appointed for an unlimited period of time, subjectto the right of the SICAV or the Custodian to terminate the role ofthe Custodian.Data ProtectionThe SICAV collects, stores and processes by electronic or othermeans the data supplied by Shareholders at the time of theirsubscription (“Personal Data”). Personal Data will be used by theSICAV for maintaining the register of Shareholders, processingShareholder transactions and dividends, and complying with itslegal and regulatory obligations. The SICAV will delegate theprocessing of Personal Data to various entities (the “Processors”)located either in the European Union or in countries outside theEuropean Union including the Management Company, theAdministrative Agent and the Registrar and Transfer Agent, andundertakes not to transfer the Personal Data to any other thirdparties, unless required by law or upon Shareholder consent.Communication of Personal Data in countries outside the EuropeanUnion implies the transfer of data to a country that may not providelegal protection of Personal Data equivalent to that of Luxembourg.The Shareholder has a right to access and correct its Personal Data,in case of error, upon request. The SICAV will maintain PersonalData for such periods as may be required by law.The data processing is more fully detailed in any initial relationshipdocument executed by the Shareholders (e.g. the application form).Documents Available for InspectionCopies of the following contracts, which are governed by the lawsof Luxembourg and are incorporated herein by reference, areavailable for inspection during normal business hours at theregistered office of the SICAV:(a) the Management Company Services Agreement;(b) the Custodian Agreement;(c) the Investment Fund Service Agreement; and(d) the Registrar and Transfer Agency Agreement.The Agreements listed above may be amended at any time bymutual consent of the parties thereto.A copy of the Prospectus, Key Investor Information, the most recentfinancial statements and the Articles may be obtained free ofcharge upon request at the registered office of the SICAV.45


Threadneedle (Lux) ProspectusAppendix AInvestment RestrictionsThe SICAV shall, based upon the principle of risk spreading, havepower to determine the corporate and investment policy for theinvestments for each Portfolio, the Base Currency, as the casemay be, and the course of conduct of the management andbusiness affairs of the SICAV.Except to the extent that more restrictive rules are provided for inconnection with a specific Portfolio under “Investment Objectivesand Policies” in the Prospectus, the investment policy of eachPortfolio shall comply with the rules and restrictions laid downhereafter:A. Investments in the Portfolios shall consist solely of:(1) Transferable Securities and Money Market Instruments listedor dealt in on a Regulated Market;(2) Transferable Securities and Money Market Instruments dealtin on an Other Regulated Market in a Member State;(3) Transferable Securities and Money Market Instrumentsadmitted to official listing on a stock exchange of an OtherState or dealt in on an Other Regulated Market in an OtherState;(4) recently issued Transferable Securities and Money MarketInstruments, provided that:– the terms of issue include an undertaking that applicationwill be made for admission to official listing on a stockexchange in an Other State or on a Regulated Market oron any Other Regulated Market as described under (1)-(3)above;– such admission is secured within one year of issue;(5) units of UCITS authorised according to the UCITS Directive(including shares of other Portfolios of the SICAV under theconditions set forth by Luxembourg laws and regulations)and/or other UCIs within the meaning of the first and secondindent of Article 1 (2) of the UCITS Directive, whethersituated in a Member State or in an Other State, providedthat:– such other UCIs are authorised under laws which providethat they are subject to supervision considered by theRegulatory Authority to be equivalent to that laid down inCommunity law, and that cooperation betweenauthorities is sufficiently ensured;– the level of protection for shareholders in such other UCIsis equivalent to that provided for shareholders in a UCITS,and in particular that the rules on assets segregation,borrowing, lending, and short sales of TransferableSecurities and Money Market Instruments are equivalentto the requirements of the UCITS Directive;– the business of the other UCIs is reported in half-yearlyand annual reports to enable an assessment of the assetsand liabilities, income and operations over the reportingperiod;– no more than 10% of the net assets of the UCITS or ofthe other UCIs, whose acquisition is contemplated, can,according to their constitutional documents, in aggregatebe invested in units of other UCITS or other UCIs;(6) deposits with credit institutions which are repayable ondemand or have the right to be withdrawn, and maturing inno more than 12 months, provided that the credit institutionhas its registered office in a Member State or, if theregistered office of the credit institution is situated in anOther State, provided that it is subject to prudential rulesconsidered by the Regulatory Authority as equivalent to thoselaid down in Community law;(7) financial derivative instruments, i.e. in particular options,futures, including equivalent cash-settled instruments, dealt inon a Regulated Market or on an Other Regulated Marketreferred to in (1), (2) and (3) above, and/or financial derivativeinstruments dealt in over-the-counter (“OTC derivatives”),provided that:(i) the underlying consists of instruments covered by thisSection A., financial indices, interest rates, foreignexchange rates, Transferable Securities or currencies, inwhich the Portfolio may invest according to its investmentobjectives; the counterparties to OTC derivativetransactions are institutions subject to prudentialsupervision, and belonging to the categories approved bythe Regulatory Authority, andthe OTC derivatives are subject to reliable and verifiablevaluation on a daily basis and can be sold, liquidated orclosed by an offsetting transaction at any time at their fairvalue at the SICAV’s initiative;(ii) under no circumstances shall these operations cause thePortfolio to diverge from its investment objectives;If a Portfolio invests in financial derivative instruments on afinancial index or sub-index (both referred to below as an “index”)the following rules shall also apply:(a) if the relevant financial derivative instruments are used totrack or gain high-exposure to an index, such index must besufficiently diversified, in that the following criteria arefulfilled:46


Threadneedle (Lux) Prospectus(x) the index is composed in such a way that pricemovements or trading activities regarding one componentdo not unduly influence the performance of the wholeindex;(y) where the index is composed of assets referred to undersection A in Appendix A, its composition is at leastdiversified in accordance with section C(a)(7) inAppendix A;(z) where the index is composed of assets other than thosereferred to under section A in Appendix A, it is diversifiedin a way which is equivalent to that provided for in sectionC(a)(7) in Appendix A;itself regulated for the purpose of protecting investors andsavings, and provided that such instruments are:– issued or guaranteed by a central, regional or localauthority or by a central bank of a Member State, theEuropean Central Bank, the EU or the EuropeanInvestment Bank, an Other State or, in case of a FederalState, by one of the members making up the federation,or by a public international body to which one or moreMember States belong, or– issued by an undertaking any securities of which are dealtin on Regulated Markets or on Other Regulated Marketsreferred to in (1), (2) or (3) above, or(b) if the relevant financial derivative instruments are not used totrack or gain high-exposure to an index there is no need tolook at the underlying components of the individual index toensure that they are sufficiently diversified, provided that theexposure of the Portfolio to each index complies with the5/10/40% ratios;– issued or guaranteed by an establishment subject toprudential supervision, in accordance with criteria definedby Community law, or by an establishment which issubject to and complies with prudential rules consideredby the Regulatory Authority to be at least as stringent asthose laid down by Community law; orin both cases the underlying index must in addition:(c) represent an adequate benchmark for the market to which itrefer, in that the following criteria are fulfilled:(x) the index measures the performance of a representativegroup of underlyings in a relevant and appropriate way;(y) the index is revised or rebalanced periodically to ensurethat it continues to reflect the markets to which it refersfollowing criteria which are publicly available;(z) the underlyings are sufficiently liquid, which allows usersto replicate the index, if necessary;– issued by other bodies belonging to the categoriesapproved by the Regulatory Authority provided thatinvestments in such instruments are subject to investorprotection equivalent to that laid down in the threeparagraphs directly above and provided that the issuer isa company whose capital and reserves amount to at leastten million Euro (10,000,000 Euro) and which presentsand publishes its annual accounts in accordance withdirective 78/660/EEC, is an entity which, within a Groupof Companies which includes one or several listedcompanies, is dedicated to the financing of the group oris an entity which is dedicated to the financing ofsecuritisation vehicles which benefit from a bankingliquidity line.and(d) be published in an appropriate manner, in that the followingcriteria are fulfilled:(x) its publication process relies on sound procedures tocollect prices and to calculate and to subsequentlypublish the index value, including pricing procedures forcomponents where a market price is not available;(y) material information on matters such as index calculation,rebalancing methodologies, index changes or anyoperational difficulties in providing timely or accurateinformation is provided on a wide and timely basis.(8) Money Market Instruments other than those dealt on aRegulated Market or on an Other Regulated Market, to theextent that the issue or the issuer of such instruments isB. Each Portfolio may however:(1) Invest up to 10% of its net assets in assets other than thosereferred to above under A(1) through (4) and (8).(2) Hold cash on an ancillary basis; such restriction mayexceptionally and temporarily be exceeded if the SICAVconsiders this to be in the best interest of the Shareholders.(3) Borrow up to 10% of its net assets, provided that suchborrowings are made only on a temporary basis. Suchborrowings may be used for liquidity purposes (e.g. to covercash shortfall caused by mismatched settlement dates onpurchase and sale transactions, finance repurchases or payfees reverting to a service provider) and/or for investmentpurposes. The assets of the relevant Portfolio may be chargedas security for any such borrowings in accordance with theprinciple of segregation of assets and liabilities provided byArticle 181(5) of the 2010 Law. Collateral arrangements with47


Threadneedle (Lux) Prospectusrespect to the writing of options or the purchase or sale offorward or futures contracts are not deemed to constitute“borrowings” for the purpose of this restriction.(4) Acquire foreign currency by means of a back-to-back loan.C. In addition, the SICAV shall comply in respect ofthe net assets of each Portfolio with the followinginvestment restrictions per issuer:(a) Risk Diversification rulesFor the purpose of calculating the restrictions described in (1) to(5), (8), (9), (13) and (14) hereunder, companies which are includedin the same Group of Companies are regarded as a single issuer.To the extent an issuer is a legal entity with multiple portfolioswhere the assets of a portfolio are exclusively reserved to theinvestors in such portfolio and to those creditors whose claim hasarisen in connection with the creation, operation and liquidation ofthat portfolio, each portfolio is to be considered as a separateissuer for the purpose of the application of the risk spreadingrules described under items (1) to (5), (7) to (9) and (12) to (14)hereunder.• Transferable Securities and Money Market Instruments(1) No Portfolio may purchase additional Transferable Securitiesand Money Market Instruments of any single issuer if:(i)(ii)upon such purchase more than 10% of its net assetswould consist of Transferable Securities or Money MarketInstruments of one single issuer; orthe total value of all Transferable Securities and MoneyMarket Instruments of issuers in each of which it investsmore than 5% of its net assets would exceed 40% of thevalue of its assets. This limitation does not apply todeposits and OTC derivative transactions made withfinancial institutions subject to prudential supervision.“qualifying debt securities” are securities the proceeds ofwhich are invested in accordance with applicable law inassets providing a return which will cover the debt servicethrough to the maturity date of the securities and which willbe applied on a priority basis to the payment of principal andinterest in the event of a default by the issuer. To the extentthat a relevant Portfolio invests more than 5% of its netassets in qualifying debt securities issued by such an issuer,the total value of such investments may not exceed 80% ofthe net assets of such Portfolio.(5) The securities specified above under (3) and (4) are not to beincluded for purposes of computing the ceiling of 40% setforth above under (1)(ii).(6) Notwithstanding the ceilings set forth above, eachPortfolio is authorised to invest, in accordance with theprinciple of risk spreading, up to 100% of its net assets inTransferable Securities and Money Market Instrumentsissued or guaranteed by a Member State, by its localauthorities, by any other member state of the OECD suchas the United States or by a public international body ofwhich one or more Member State(s) are member(s),provided that (i) such securities are part of at least sixdifferent issues and (ii) the securities from any such issuedo not account for more than 30% of the total assets ofsuch Portfolio.(7) Without prejudice to the limits set forth hereunder under (b),the limits set forth in (1) are raised to a maximum of 20% forinvestments in stocks and/or bonds issued by the same bodywhen the aim of the Portfolio’s investment policy is toreplicate the composition of a certain stock or bond indexwhich is recognised by the Regulatory Authority, on thefollowing basis:– the composition of the index is sufficiently diversified,(2) A Portfolio may invest on a cumulative basis up to 20% of itsnet assets in Transferable Securities and Money MarketInstruments issued by the same Group of Companies.(3) The limit of 10% set forth above under (1)(i) is increased to35% in respect of Transferable Securities and Money MarketInstruments issued or guaranteed by a Member State, by itslocal authorities, by any Other State or by a publicinternational body of which one or more Member State(s) aremember(s).– the index represents an adequate benchmark for themarket to which it refers,– it is published in an appropriate manner.The limit of 20% is raised to 35% where that proves to bejustified by exceptional market conditions in particular inRegulated Markets where certain Transferable Securities orMoney Market Instruments are highly dominant. The investmentup to this limit is only permitted for a single issuer.(4) The limit of 10% set forth above under (1)(i) is increased up to25% in respect of qualifying debt securities issued by a creditinstitution which has its registered office in a Member Stateand which, under applicable law, is submitted to specificpublic supervision in order to protect the holders of suchqualifying debt securities. For the purposes hereof,• Bank Deposits(8) A Portfolio may not invest more than 20% of its net assets indeposits made with the same body.48


Threadneedle (Lux) Prospectus• Derivative Instruments(9) The risk exposure to a counterparty in an OTC derivativetransaction may not exceed 10% of the Portfolio’s net assetswhen the counterparty is a credit institution referred to in A.(6) above or 5% of its net assets in other cases.(10) Investment in financial derivative instruments shall only bemade, and within the limits set forth in (2), (5) and (14),provided that the exposure to the underlying assets does notexceed in aggregate the investment limits set forth in (1) to(5), (8), (9), (13) and (14). When the Portfolio invests in indexbasedfinancial derivative instruments, these investments donot necessarily have to be combined to the limits set forth in(1) to (5), (8), (9), (13) and (14).(11) When a Transferable Security or Money Market Instrumentembeds a derivative, the latter must be taken into accountwhen complying with the requirements of A (7) (ii) and C (a)(10) and (D) hereunder as well as with the risk exposure andinformation requirements laid down in the sales documentsof the SICAV.• Units of Open-Ended FundsUnder the Law, no Portfolio may invest more than 20% of its netassets in the units of a single UCITS or other UCIs. However, thePortfolios will limit their investment in units of UCITS or otherUCIs to 10% of their net assets unless otherwise specified withinthe Portfolio’s investment objective and policy.(12) For the purpose of the application of this investment limit,each portfolio of a UCI with multiple portfolios within themeaning of Article 181 of the 2010 Law is to be considered asa separate issuer provided that the principle of segregation ofthe obligations of the various portfolios vis-à-vis third partiesis ensured. Investments made in units of UCIs other thanUCITS may not in aggregate exceed 30% of the net assets ofa Portfolio.When a Portfolio has acquired units of UCITS and/or other UCIs,the assets of the respective UCITS or other UCIs do not have tobe combined for the purposes of the limits laid down in (1) to (5),(8), (9), (13) and (14).When a Portfolio invests in the units of other UCITS and/or otherUCIs that are managed, directly or by delegation, by theManagement Company or any appointed Sub-Advisor or by anyother company with which the Management Company or anyappointed Sub-Advisor is linked by common management orcontrol, or by a substantial direct or indirect holding, theManagement Company or any appointed Sub-Advisor or othercompany may not charge subscription or redemption fees onaccount of the Portfolio’s investment in the units of such otherUCITS and/or UCIs.A Portfolio that invests a substantial proportion of its assets inother UCITS and/or other UCIs shall disclose in the Prospectusthe maximum level of the asset management fee that may becharged both to the Portfolio itself and to the other UCITS and/orother UCIs in which it intends to invest. In its annual report, theSICAV shall indicate the maximum proportion of assetmanagement fee charged both to the Portfolio itself and to theUCITS and/or other UCIs in which it invests.• Combined limits(13) Notwithstanding the individual limits laid down in (1), (8) and(9) above, a Portfolio may not combine:– investments in Transferable Securities or Money MarketInstruments issued by;– deposits made with, and/or;– exposures arising from OTC derivative transactionsundertaken,with a single body in excess of 20% of its net assets.(14) The limits set out in (1), (3), (4), (8), (9) and (13) above may notbe combined, and thus investments in Transferable Securitiesor Money Market Instruments issued by the same body, indeposits or derivative instruments made with this bodycarried out in accordance with (1), (3), (4), (8), (9) and (13)above may not exceed a total of 35% of the net assets ofeach Portfolio of the SICAV.(b) Limitations on Control(15) No Portfolio may acquire such amount of shares carryingvoting rights which would enable the SICAV to exercise asignificant influence over the management of the issuer.(16) Neither any Portfolio nor the SICAV as a whole may acquire (i)more than 10% of the outstanding non-voting shares of anyone issuer; (ii) more than 10% of the outstanding debtsecurities of any one issuer; (iii) more than 10% of the MoneyMarket Instruments of any one issuer; or (iv) more than 25%of the outstanding shares or units of any one UCITS and/orUCI.The limits set forth in (ii) to (iv) may be disregarded at the time ofacquisition if at that time the gross amount of bonds or of theMoney Market Instruments or the net amount of the instrumentsin issue cannot be calculated.The ceilings set forth above under (15) and (16) do not apply inrespect of:– Transferable Securities and Money Market Instrumentsissued or guaranteed by a Member State or by its localauthorities;49


Threadneedle (Lux) Prospectus– Transferable Securities and Money Market Instrumentsissued or guaranteed by any Other State;– Transferable Securities and Money Market Instrumentsissued by a public international body of which one ormore Member State(s) are member(s);– shares in the capital of a company which is incorporatedunder or organised pursuant to the laws of an Other Stateprovided that (i) such company invests its assetsprincipally in securities issued by issuers of that State, (ii)pursuant to the laws of that State a participation by therelevant Portfolio in the equity of such companyconstitutes the only possible way to purchase securitiesof issuers of that State, and (iii) such company observesin its investment policy the restrictions set forth under C.,items (1) to (5), (8), (9) and (12) to (16); and– shares in the capital of subsidiary companies which,exclusively on behalf of the SICAV carry on only thebusiness of management, advice or marketing in thecountry where the subsidiary is located, in regard to theredemption of Shares at the request of Shareholders.D. In addition, the SICAV shall comply in respect of itsassets with the following investment restrictions perinstrument:Except as otherwise stated therein, each Portfolio shall ensurethat its global exposure relating to financial derivative instrumentsdoes not exceed its total net value.The exposure is calculated taking into account the current valueof the underlying assets, the counterparty risk, foreseeablemarket movements and the time available to liquidate thepositions.E. Finally, the SICAV shall comply in respect of theassets of each Portfolio with the following investmentrestrictions:(1) No Portfolio may acquire commodities or precious metals orcertificates representative thereof. For the avoidance ofdoubt, transactions in foreign currencies, financialinstruments, indices, or Transferable Securities as well asfutures and forward contracts, options and swaps are notconsidered as commodities for the purposes of thisrestriction.(2) No Portfolio may invest in real estate provided thatinvestments may be made in securities secured by realestate or interests therein or issued by companies whichinvest in real estate or interests therein.(3) No Portfolio may issue warrants or other rights to subscribefor its Shares.(4) A Portfolio may not grant loans or guarantees in favour of athird party, provided that such restriction shall not preventeach Portfolio from investing in non fully paid-up TransferableSecurities, Money Market Instruments or other financialinstruments, as mentioned under A., items (5), (7) and (8).(5) The SICAV may not enter into uncovered sales of TransferableSecurities, Money Market Instruments or other financialinstruments.F. Notwithstanding anything to the contrary hereincontained:(1) The ceilings set forth above may be disregarded by eachPortfolio when exercising subscription rights attaching toTransferable Securities and Money Market Instruments insuch Portfolio’s portfolio.(2) If such ceilings are exceeded for reasons beyond the controlof a Portfolio or as a result of the exercise of subscriptionrights, such Portfolio must adopt as its priority objective in itssale transactions the remedying of such situation, taking dueaccount of the interests of its Shareholders.The SICAV has the right to determine additional investmentrestrictions to the extent that those restrictions are necessary tocomply with the laws and regulations of countries where Sharesof the SICAV are offered or sold.G. Global Exposure and Risk ManagementIn accordance with CSSF Circular 11/512 and article 13 of CSSFRegulation 10-4, the SICAV must employ a risk managementprocess which enables it to monitor and measure at any time therisk of the positions in its portfolios and their contribution to theoverall risk profile of its portfolios.In relation to financial derivative instruments the SICAV mustemploy a process (or processes) for accurate and independentassessment of the value of OTC derivatives and the SICAV shallensure for each Portfolio that its global exposure relating tofinancial derivative instruments does not exceed the total netvalue of its portfolio.Except as otherwise noted below, each Portfolio may invest,according to its investment policy and within the limits laid downin Appendix A and in Appendix B in financial derivativeinstruments (including options, forwards, futures and/or swaps(including credit default swaps, credit default swaps on loans,interest rate swaps and total/excess return swaps) onTransferable Securities and/or any financial instruments andcurrencies) provided that the exposure to the underlying assetsdoes not exceed in aggregate the investment limits laid down inAppendix A. Certain Portfolios may use financial derivativeinstruments as a principal investment objective, as more fullydescribed in the investment policy of each relevant Portfolio.Shareholders should be aware that the use of derivative50


Threadneedle (Lux) Prospectusinstruments as a principal investment objective carries a greaterdegree of risk.When a Portfolio invests in index-based financial derivativeinstruments, these investments do not necessarily have to becombined to the limits laid down in Appendix A item C(a)(1)-(5),(8), (9), (13) and (14).When a Transferable Security or Money Market Instrumentembeds a derivative, the latter must be taken into account whencomplying with the requirements of this Section.Whenever risk management processes adequate to perform thefunctions described above are employed on behalf of the SICAVby the Management Company and/or Sub-Advisors in managingthe Portfolios, they are deemed to be employed by the SICAV.As a consequence of the above, the Management Company hasimplemented procedures to ensure that all the day-to-day dutiesconcerning active risk management of the Portfolio(s) are beingcarried out by the Sub-Advisors and Custodian. The oversightprocess is performed by the responsible person(s) of theManagement Company (the “Responsible Persons”) and the riskmanagement committee (“RMC”). These individuals along withother resources monitor reports that are provided by the Sub-Advisors as well as the Custodian. Such reports are at a minimumreceived monthly. The individuals involved in such riskmanagement monitoring are located in London at ThreadneedleAsset Management Limited. All relevant documents are madeavailable to a Luxembourg-resident Responsible Person(s).Information about the risk management process used by theManagement Company to monitor and measure the risk of thepositions and their contribution to the overall risk profile of eachPortfolio is set out in the “Risk Factors” section of thisProspectus.Moscow Interbank Currency Exchange serves as a basis for thenationwide system of trading in the currency, stocks andderivatives sectors of the financial market, covering Moscow andRussia’s largest financial and industrial centres. Jointly with itspartners the MICEX Group (the MICEX Stock Exchange, theMICEX Settlement House, the National Depositary Center,regional exchanges and other), the MICEX provides settlementand clearing as well as depositary services for about 1500organisations and participants in the stock market.(2) For so long as the sale of Shares in a Portfolio is authorised inTaiwan and to the extent the Taiwan regulations continue toso require, the total value of the non offset short position inderivatives for hedging purpose shall not exceed the totalmarket value of the relevant securities held by the Portfolioand the risk exposure of the non offset long position inderivatives for purposes of increase of investment efficiencyshall not exceed 40% of the Net Asset Value of the Portfolio.(3) Important information for Italian investors–The local documents that Italian investors receive prior tosubscribing in Shares may provide:(a) the ability for investors to appoint a distributor or a local payingagent to send orders in its own name on behalf of theinvestors and to be recorded as holder of the Shares onbehalf of the effective underlying Shareholder (a so callednominee arrangement); and/or(b) the possibility for local paying agents to charge a fee toinvestors in relation to the execution and subscription,redemption and/or exchange transactions; and/or(c) the possibility for Italian investors to subscribe the SICAVshares through regular saving plans.In addition to the above:(1) The SICAV will not make direct investments in Russia (i.e.,Russian securities that are physically deposited with Russiantransfer agents) which exceed 10% of the Net Asset Value ofeach Portfolio, at the time of purchase except for TransferableSecurities and Money Market Instruments which are listed ortraded on the Russian Trading System and on the MoscowInterbank Currency Exchange which are recognised asRegulated Markets.The Russian Trading System was established in 1995 toconsolidate separate regional securities trading floors into aunified regulated Russian securities market. It lists in particularleading Russian securities. The Russian Trading Systemestablishes market prices for a wide range of stocks and bonds.The trading information is distributed worldwide through financialinformation services companies, such as Reuters and Bloomberg.(4) For investors in France, the Pan European Equities and PanEuropean Smaller Companies Portfolios are an eligibleinvestment for a PEA. This means the Portfolios have at least75% of its Net Asset Value invested in the equity of corporateissuers with their registered office in an EEA country(excluding Liechtenstein).The Directors reserve the right to cease managing the abovePortfolios so that they are eligible for investment through a PEAshould it determine that doing so would no longer enable thePortfolios to comply with its investment objectives, not be in theinterests of all Shareholders in the Portfolios or be impractical dueto changing market conditions. Should the Directors decide tocease managing the Portfolios so they are eligible for investmentthrough a PEA, the Directors will notify the registeredShareholders resident in France at least one month in advance ofthe Portfolios ceasing to be managed to be eligible for investmentthrough a PEA.51


Threadneedle (Lux) ProspectusDefinition of the Expression “Connected Person”The expression “Connected Person” in relation to the SICAV, anySub-Advisor appointed by the SICAV or the ManagementCompany (a “Sub-Advisor”) or any company appointed for thepurpose of distributing Shares or the Custodian (the relevant suchSICAV being referred to below as “the relevant SICAV”) means:(a) any person or company beneficially owning, directly orindirectly, 20% or more of the ordinary share capital of therelevant SICAV, or able to exercise directly or indirectly 20%or more of the total votes in the relevant SICAV;(b) any person or company controlled by a person who fallswithin (a) above;(c) any company 20% or more of whose ordinary share capital isbeneficially owned, directly or indirectly, by the relevantcompany and each of the others of the ManagementCompany and Sub-Advisor and taken together or by theCustodian and any company 20% or more of the total votesof which can be exercised, directly, or indirectly by therelevant SICAV and each of the others of the ManagementCompany and Sub-Advisor taken together or by theCustodian; and(d) any director or officer of the relevant SICAV or any ConnectedPerson of the relevant SICAV, as defined in (a), (b) or (c)above.52


Threadneedle (Lux) ProspectusAppendix BInvestment Techniques and InstrumentsThe SICAV may employ techniques and instruments relating toTransferable Securities and other financial liquid assets forefficient portfolio management and hedging purposes within theconditions and limits of the relevant Regulatory Authorityregulation.When these operations concern the use of derivativeinstruments, these conditions and limits shall conform to theprovisions laid down in Appendix A “Investment Restrictions”.Under no circumstances shall these operations cause a Portfolioto diverge from its investment objectives as laid down under“Investment Objective Policies” in the Prospectus.In particular, some Portfolios may also enter into credit defaultswaps:A credit default swap is a bilateral financial contract in whichone counterparty (the protection buyer) pays a periodic fee inreturn for a contingent payment by the protection sellerfollowing a credit event of a reference issuer. The protectionbuyer acquires the right to sell a particular bond or otherdesignated reference obligations issued by the referenceissuer for its par value or the right to receive the differencebetween the par value and the market price of the said bondor other designated reference obligations when a credit eventoccurs. A credit event is commonly defined as bankruptcy,insolvency, receivership, material adverse restructuring ofdebt, or failure to meet payment obligations when due.Provided it is in its exclusive interest, the relevant Portfoliosmay sell protection under credit default swaps (individually a“credit default swap Sale Transaction”, collectively the “creditdefault swap Sale Transactions”) in order to acquire a specificcredit exposure.In addition, the relevant Portfolios may, provided it is in itsexclusive interest, buy protection under credit default swaps(individually a “credit default swap Purchase Transaction”,collectively the “credit default swap Purchase Transactions”)without holding the underlying assets.Such swap transactions must be effected with first classfinancial institutions specialising in this type of transactionsand executed on the basis of standardised documentationsuch as the International Swaps and Derivatives Association(ISDA) Master Agreement.The relevant Portfolios must ensure adequate coverage ofcommitments linked to such credit default swap and maintainsufficient liquidity to honor redemption requests frominvestors.Furthermore, some Portfolios may enter into interest rate swapsand total/excess return swaps.A total/excess return swap is a transaction in which one party(“the First Party”) makes an initial payment equal to the valueof a loan, debt security or other financial instrument (the“Reference Obligation”) issued, guaranteed or otherwiseentered into by a third party (the “Reference Entity”) to theother party (“the Second Party”). The Second Party shall payto the First Party any interest, dividend and fee payments, asapplicable, on the Reference Obligation and the market valueof the Reference Obligation at the maturity of the transaction(this will typically, absent default or another referenced event,be the notional amount of the Reference Obligation if thetotal/excess return swap is linked to the maturity of theReference Obligation).Such swap transactions must be effected with first classfinancial institutions specializing in this type of transactions.Furthermore, the SICAV may also enter into securities lendingtransactions and repurchase agreements provided that theycomply with the provisions of CSSF Circular 08/356 and thefollowing rules.I. Techniques and Instruments relating to transferablesecurities1. Lending of Portfolio SecuritiesThe SICAV may engage in securities lending transactions eitherdirectly or through a standardised lending system organised by arecognised clearing institution or by a financial institutionspecialising in this type of transaction and subject to prudentialsupervision rules which are considered by the RegulatoryAuthority as equivalent to those provided by Community law, inexchange for a securities lending fee. To limit the risk of loss tothe SICAV, the borrower must post in favor of the SICAV collateralrepresenting at any time, during the lifetime of the agreement, atleast 90% of the total value of the securities loaned in favor ofthe SICAV. The amount of collateral is valued daily to ensure thatthis level is maintained.Collateral may consist of cash, or securities or instrumentspermissible under Luxembourg law or regulations, such as (i)liquid assets and/or (ii) sovereign OECD bonds, (iii) shares or unitsissued by specific money market UCIs, calculating a daily netasset value and having a rating of AAA or its equivalent (iv) sharesor units issued by UCITS investing in bonds issued or guaranteedby first class issuers offering an adequate liquidity, (v) shares orunits issued by UCITS investing in shares listed or dealt on astock exchange of a Member State of the OECD provided theyare included in a main index, (vi) direct investment in bonds orshares with the characteristics mentioned in (iv) and (v). Cashcollateral can be reinvested in liquid assets in the mannerdescribed in CSSF circular 08/356 in shares or units of UCIs ofthe money market-type, calculating a daily net asset value and53


Threadneedle (Lux) Prospectuswhich have a rating of AAA or its equivalent, short-term bankdeposits, money market instruments as defined in Directive2007/16/EC of 19 March 2007, short-term bonds issued orguaranteed by a Member State of the European Union,Switzerland, Canada, Japan or the United States or by their localauthorities or by supranational institutions and undertakings witha European Union, regional or world-wide scope, bonds issued orguaranteed by first class issuers offering an adequate liquidity andreverse repurchase agreements. Non-cash guarantees must beissued by an entity that is not affiliated with the counterparty.The SICAV may pay fees to third parties for services in arrangingsuch loans, as such persons may or may not be affiliated with theSICAV, the Management Company or any Sub-Advisor aspermitted by applicable securities and banking law.The principal risk when lending securities is that the borrowermight become insolvent or refuse to honor its obligations toreturn the securities. In this event, a Portfolio could experiencedelays in recovering its securities and may possibly incur a capitalloss. A Portfolio may also incur a loss in reinvesting the cashcollateral it receives. Such a loss may arise due to a decline in thevalue of the investment made with cash collateral received from asecurities lending counterparty. A decline in the value of suchinvestment of the cash collateral would reduce the amount ofcollateral available to be returned by the Portfolio to the securitieslending counterparty at the conclusion of the securities lendingcontract. The Portfolio would be required to cover the differencein value between the collateral originally received and the amountavailable to be returned to the counterparty, thereby resulting in aloss to the Portfolio.The counterparty risk of the SICAV vis-à-vis a single counterpartyarising from one or more securities lending transaction(s) may notexceed 10% of the assets of the relevant Portfolio when thecounterparty is a financial institution falling within Section A (6) ofAppendix A, or 5% of its assets in all other cases.The Portfolios of the SICAV may enter into securities lending andborrowing transactions of up to 50% of the aggregate marketvalue of the securities in the Portfolio. The SICAV must ensurethat securities lending transactions remain within appropriatelevels, or must be able to request the return of the securities onloan so that it can satisfy its redemption obligations at any timeand so that these lending transactions do not jeopardise themanagement of the SICAV’s assets in compliance with itsinvestment policy.The SICAV will seek to deal with counterparties from a list ofapproved borrowers whose short-term and long-term ratings sorated by S&P or Moody’s or Fitch Ratings must not be lower thansuch level of short-term and long-term ratings determined by therelevant Sub-Advisor of the relevant Portfolio.At least 80% of income generated from any securities lendingtransaction will accrue to the relevant Portfolio. The remainder willbe paid to (i) the security clearing body or financial institutionarranging the securities lending transaction and (ii) the Sub-Advisor or their respective agents for the management of, andadditional administrative work involved in, entering into andmonitoring securities lending transactions for the relevantPortfolios.2. When-Issued Securities and Delayed Delivery TransactionsEach Portfolio may purchase securities on a when-issued basis,and it may purchase or sell securities for delayed delivery. Thesetransactions occur when securities are purchased or sold by thePortfolio with payment and delivery taking place in the future tosecure what is considered an advantageous yield and price to thePortfolio at the time of entering into the transactions. EachPortfolio will maintain a segregated account with its Custodian ofcash or liquid securities of governmental entities in an aggregateequal to the amount of its commitments in connection with suchpurchase transactions.3. Repurchase AgreementsThe SICAV may enter into repurchase agreement transactionswhich consist of the purchase and sale of securities with a clausereserving the seller the right or the obligation to repurchase fromthe acquirer the securities sold at a price and term specified bythe two parties in their contractual arrangement.The SICAV can act either as purchaser or seller in repurchaseagreement transactions or a series of continuing repurchasetransactions. Its involvement in such transactions is, however,subject to the following rules:(i) The SICAV may not buy or sell securities using a repurchaseagreement transaction unless the counterparty in suchtransactions is a first class financial institution specialising inthis type of transaction subject to prudential supervision rulesconsidered by the Regulatory Authority as equivalent to thoseprovided by Community law.(ii) During the life of a repurchase agreement contract, the SICAVcannot sell the securities which are the object of the contract,either before the right to repurchase these securities hasbeen exercised by the counterparty, or the repurchase termhas expired, except to the extent the SICAV has other meansof coverage.(iii) As the SICAV is exposed to redemptions of its own Shares, itmust take care to ensure that the level of its exposure torepurchase agreement transactions is such that it is able, atall times, to meet its redemption obligations.II. WarrantsThe Global Asset Allocation Portfolio, the Equity Portfolios andsome Bond Portfolios may invest in warrants to purchase54


Threadneedle (Lux) Prospectuscommon stock. The gearing effect of investments in warrants andthe volatility of warrant prices make the risks attached toinvestments in warrants higher than is the case with investmentsin equities.III. PoolingThe SICAV may invest and manage all or any part of the assetsestablished for two or more Portfolios (for the purposes hereof“Participating Portfolios”) on a pooled basis. Any such asset poolshall be formed by transferring to it cash or other assets (subjectto such assets being appropriate in respect of the investmentpolicy of the pool concerned) from each of the ParticipatingPortfolios. Thereafter, the SICAV may from time to time makefurther transfers to each asset pool. Assets may also betransferred back to a Participating Portfolio up to the amount ofthe participation of the Portfolio concerned. The share of aParticipating Portfolio in an asset pool shall be measured byreference to notional units of equal value in the asset pool. Onformation of an asset pool, the SICAV shall determine the initialvalue of notional units (which shall be expressed in such currencyas the SICAV may consider appropriate) and shall allocate to eachParticipating Portfolio notional units having an aggregate valueequal to the amount of cash (or the value of other assets)contributed. Thereafter, the value of the units shall be determinedby dividing the net assets of the asset pool by the number ofnotional units existing.When additional cash or assets are contributed to or withdrawnfrom an asset pool, the allocation of notional units of theParticipating Portfolio concerned will be increased or reduced, asthe case may be, by a number of notional units determined bydividing the amount of cash or the value of assets contributed orwithdrawn by the current value of a unit in such asset pool.Where a contribution is made in cash, it may be treated for thepurpose of this calculation as reduced by an amount which theSICAV considers appropriate to reflect fiscal charges and dealingand purchase costs which may be incurred in investing the cashconcerned; in the case of cash withdrawal, a correspondingdeduction may be made to reflect costs which may be incurred inrealising securities or other assets of the asset pool.Dividends, interest and other distributions of an income natureearned in respect of the assets in an asset pool will be applied tosuch asset pool and cause the respective net assets to increase.Upon the dissolution of the SICAV, the assets in an asset pool willbe allocated to the Participating Portfolios in proportion to theirrespective participation in the asset pool.IV. Co-managementIn order to reduce operational and administrative charges whileallowing a wider diversification of the investments, the Directorsmay decide that part or all of the assets of one or more Portfolioswill be co-managed with assets belonging to the other Portfolioswithin the SICAV and/or other collective investment schemes. Inthe following paragraphs, the words “co-managed entities” shallrefer to the SICAV or Portfolio and all entities with and betweenwhich there would exist any given co-management arrangementand the words “co-managed assets” shall refer to the entireassets of these co-managed entities and co-managed pursuant tothe same co-management arrangement.Under the co-management arrangement, the investment advisorsto the Portfolios will be entitled to take, on a consolidated basisfor the relevant co-managed entities, investment, disinvestmentand Portfolio readjustment decisions which will influence thecomposition of the relevant Portfolio’s assets. Each co-managedentity shall hold a portion of the co-managed assetscorresponding to the proportion of its net assets to the total valueof the co-managed assets. This proportional holding shall beapplicable to each and every line of investment held or acquiredunder co-management. In case of investment and/ordisinvestment decisions these proportions shall not be affectedand additional investments shall be allotted to the co-managedentities pursuant to the same proportion and assets sold shall belevied proportionately on the co-managed assets held by each comanagedentity.In the case of new subscriptions in one of the co-managedentities, the subscription proceeds shall be allotted to the comanagedentities pursuant to the modified proportions resultingfrom the net asset increase of the co-managed entity which hasbenefited from the subscriptions and all lines of investment shallbe modified by a transfer of assets from one co-managed entityto the other in order to be adjusted to the modified proportions.In a similar manner, in case of redemptions in one of the comanagedentities, the cash required may be levied on the cashheld by the co-managed entities pursuant to the modifiedproportions resulting from the net asset reduction of the comanagedentity which has suffered from the redemptions and, insuch case, all lines of investment shall be adjusted to themodified proportions. Shareholders should be aware that, in theabsence of any specific action by the Directors or their appointedagents, the co-management arrangement may cause thecomposition of assets of the relevant Portfolio to be influenced byevents attributable to other co-managed entities such assubscriptions and redemptions. Thus, all other things being equal,subscriptions received in one entity with which the SICAV is comanagedwill lead to an increase of the SICAV’s reserve cash.Conversely, redemptions made in one entity with which anyPortfolio is co-managed will lead to a reduction of the SICAV’sreserve of cash. Subscriptions and redemptions may, however, bekept in the specific account opened for each co-managed entityoutside the co-management arrangement and through whichsubscriptions and redemptions must pass. The possibility toallocate substantial subscriptions and redemptions to thesespecific accounts together with the possibility for the Directors ortheir appointed agents to decide at any time to terminate theirparticipation in the co-management arrangement permit the55


Threadneedle (Lux) ProspectusSICAV or the relevant Portfolio to avoid the re-adjustments of theirPortfolio if these re-adjustments are likely to affect the interest ofthe SICAV and of its Shareholders.If a modification of the composition of the relevant Portfolio or theSICAV’s assets resulting from redemptions or payments ofcharges and expenses peculiar to another co-managed entity (i.e.,not attributable to the SICAV) is likely to result in a breach of theinvestment restrictions applicable to the relevant Portfolio or theSICAV, the relevant assets shall be excluded from the comanagementarrangement before the implementation of themodification in order for it not to be affected by the ensuingadjustments.Co-managed assets of the Portfolios shall, as the case may be,only be co-managed with assets intended to be investedpursuant to investment objectives identical to those applicable tothe co-managed assets in order to assure that investmentdecisions are fully compatible with the investment policy of therelevant Portfolio. Co-managed assets shall only be co-managedwith assets for which the Custodian is also acting as depositoryin order to assure that the Custodian is able, with respect to theSICAV, to fully carry out its functions and responsibilities pursuantto the applicable provisions of the 2010 Law. The Custodian shallat all times keep the SICAV’s assets segregated from the assetsof other co-managed entities, and shall therefore be able at alltime to identify the assets of the SICAV. Since co-managedentities may have investment policies which are not strictlyidentical to the investment policy of the relevant Portfolio, it ispossible that as a result the common policy implemented may bemore restrictive than that of the SICAV.A co-management agreement shall be signed between theManagement Company, the Custodian and, as appropriate, therelevant investment advisor in order to define each of the parties’rights and obligations. The Management Company may decide atany time and without notice to terminate the co-managementarrangement.Shareholders may at all times contact the registered office of theSICAV to be informed of the percentage of assets which are comanagedand of the entities with which there is such aco-management arrangement at the time of their request. Annualand half-yearly reports shall state the co-managed assets’composition and percentages.56


Threadneedle (Lux) ProspectusAppendix CPortfolio ChargesSHARE CLASSES AU, AE, AG, AEC, AUC, AUH, AEH AGH, AGP, AFH, ASH, AUP and AEPPortfolio(s) Initial Sales Charge Exchange Feeas a % of the amountinvestedBond Portfolios Maximum 2.0% Maximum 0.75%Equity Portfolios and Asset Allocation Portfolio Maximum 5.0% Maximum 0.75%Target Return (US$) Portfolio Maximum 3.0% Maximum 0.75%Absolute Return Portfolios except for the Target Return (US$) Portfolio Maximum 5.0% Maximum 0.75%Specialist Portfolio Maximum 5.0% Maximum 0.75%Sales charges are maximums, which distributors or sub-distributors are allowed to waive in whole or in part, depending on the size of thesubscription or upon local market considerations.Until 31 March 2012 (included)Portfolio Name of Asset Shareholder Operating BaseType Portfolio Management Fee Servicing Fee 34 Expenses 35 CurrencyBond PortfoliosGlobal Bonds (Euro) 36 0.85% 0.25% Footnote 35 EuroGlobal Aggregate Bond 0.75% 0.25% Footnote 35 US$Euro Active Bonds 0.85% 0.25% Footnote 35 EuroEmerging MarketCorporate Bonds 1.00% 0.50% Footnote 35 US$Emerging Market Debt 1.00% 0.50% Footnote 35 US$Global Emerging MarketShort-Term Bonds 1.15% 0.25% Footnote 35 US$US$ High Income Bonds 1.25% 0.50% Footnote 35 US$Global High Yield andEmerging Market (Euro) 37 1.25% 0.50% Footnote 35 EuroEuropean High Yield Bond 1.00% 0.25% Footnote 35 EuroAsset Allocation PortfolioGlobal Asset Allocation 1.25% 0.50% Footnote 35 US$Equity PortfoliosGlobal Focus 1.25% 0.50% Footnote 35 US$Global Emerging MarketEquities 1.50% 0.50% Footnote 35 US$American 38 1.00% 0.50% Footnote 35 US$American Select 1.25% 0.50% Footnote 35 US$US Contrarian CoreEquities 1.00% 0.50% Footnote 35 US$Pan European Equities 1.25% 0.50% Footnote 35 EuroPan European SmallerCompanies 1.40% 0.50% Footnote 35 EuroEuropean QuantitativeEquities 1.25% 0.50% Footnote 35 EuroAsia 1.50% 0.50% Footnote 35 US$Greater China Equities 1.50% 0.50% Footnote 35 US$Global Energy Equities 1.25% 0.50% Footnote 35 US$Global Technology 1.25% 0.50% Footnote 35 US$UK Equities 1.25% 0.25% Footnote 35 GBPLatin America 1.25% 0.25% Footnote 35 US$34From 1 April 2012, the shareholder servicing fee will be included in the Asset Management Fee.35Please refer to the “Fees and Expenses” section of the Prospectus and in particular the paragraph immediately under the heading “Portfolio Operating Expenses until31 March 2012 (included)”.36These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Aggregate Bond Portfolio.37These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Emerging Market Short-Term Bonds Portfolio.38Until 30 November 2011 (included), this Portfolio will remain named “Threadneedle (Lux) – US Equities”.57


Threadneedle (Lux) ProspectusAppendix CUntil 31 March 2012 (included)Portfolio Name of Asset Shareholder Operating BaseType Portfolio Management Fee Servicing Fee 34 Expenses 35 CurrencyEquity Portfolios (continued)Absolute Return PortfoliosSpecialist PortfolioUS Smaller Companies 1.25% 0.25% Footnote 35 US$Global Equity Dividend 1.25% 0.25% Footnote 35 US$Target Return (US$) 1.00% 0.25% Footnote 35 US$American Absolute Alpha 1.25% 0.25% Footnote 35 US$Absolute EmergingMarket Macro 1.25% 0.50% Footnote 35 US$Multi Asset AbsoluteAlpha 1.00% 0.25% Footnote 35 EuroEuropean Smaller CompaniesAbsolute Alpha 1.25% 0.25% Footnote 35 EuroGlobal OpportunitiesBond 1.15% 0.25% Footnote 35 US$European Absolute Alpha 1.25% 0.25% Footnote 35 EuroEnhanced Commodities 1.25% 0.50% Footnote 35 US$From 1 April 2012Portfolio Name of Asset Operating BaseType Portfolio Management Fee Expenses CurrencyBond PortfoliosGlobal Aggregate Bond 1.00% 0.30% US$Euro Active Bonds 0.90% 0.30% EuroEmerging Market Corporate Bonds 1.50% 0.30% US$Emerging Market Debt 1.50% 0.30% US$Global Emerging Market Short-Term Bonds 1.40% 0.30% US$US$ High Income Bonds 1.25% 0.30% US$European High Yield Bond 1.25% 0.30% EuroAsset Allocation PortfolioGlobal Asset Allocation 1.50% 0.35% US$Equity PortfoliosGlobal Focus 1.50% 0.35% US$Global Emerging Market Equities 1.50% 0.35% US$American 39 1.50% 0.35% US$American Select 1.50% 0.35% US$US Contrarian Core Equities 1.50% 0.35% US$Pan European Equities 1.50% 0.35% EuroPan European Smaller Companies 1.50% 0.35% EuroEuropean Quantitative Equities 1.50% 0.35% EuroAsia 1.50% 0.35% US$Greater China Equities 1.50% 0.35% US$Global Energy Equities 1.75% 0.35% US$Global Technology 1.75% 0.35% US$UK Equities 1.50% 0.35% GBPLatin America 1.50% 0.35% US$US Smaller Companies 1.50% 0.35% US$Global Equity Dividend 1.50% 0.35% US$39Until 30 November 2011 (included), this Portfolio will remain named “Threadneedle (Lux) – US Equities”.58


Threadneedle (Lux) ProspectusAppendix CFrom 1 April 2012 (continued)Portfolio Name of Asset Operating BaseType Portfolio Management Fee Expenses CurrencyAbsolute Return PortfoliosSpecialist PortfolioTarget Return (US$) 1.25% 0.30% US$American Absolute Alpha 1.50% 0.35% US$Absolute Emerging Market Macro 1.75% 0.35% US$Multi Asset Absolute Alpha 1.25% 0.30% EuroEuropean Smaller Companies Absolute Alpha 1.50% 0.35% EuroGlobal Opportunities Bond 1.40% 0.30% US$European Absolute Alpha 1.50% 0.35% EuroEnhanced Commodities 1.75% 0.35% US$59


Threadneedle (Lux) ProspectusAppendix DPortfolio ChargesSHARE CLASSES DU, DE, DG, DUH and DEHShare Class Portfolios Initial Sales Charge Exchange Feeas a % of the amountinvestedClasses DU, DE, DG, DUHand DEH All Portfolios Maximum 1.00% Maximum 0.75%Sales charges are maximums, which distributors or sub-distributors are allowed to waive in whole or in part, depending on the size of thesubscription or upon local market considerations.Until 31 March 2012 (included)Portfolio Name of Asset Shareholder Operating BaseType Portfolio Management Fee Servicing Fee 40 Expenses 41 CurrencyBond PortfoliosGlobal Bonds (Euro) 42 0.85% 0.60% Footnote 41 EuroGlobal Aggregate Bond 0.75% 0.60% Footnote 41 US$Euro Active Bonds 0.85% 0.60% Footnote 41 EuroEmerging MarketCorporate Bonds 1.00% 1.00% Footnote 41 US$Emerging Market Debt 1.00% 1.00% Footnote 41 US$Global Emerging MarketShort-Term Bonds 1.15% 0.40% Footnote 41 US$US$ High Income Bonds 1.25% 1.00% Footnote 41 US$Global High Yield andEmerging Market (Euro) 43 1.25% 1.00% Footnote 41 EuroEuropean High Yield Bond 1.25% 1.00% Footnote 41 EuroAsset Allocation PortfolioGlobal Asset Allocation 1.25% 1.00% Footnote 41 US$Equity PortfoliosGlobal Focus 1.25% 1.00% Footnote 41 US$Global Emerging MarketEquities 1.50% 1.00% Footnote 41 US$American 44 1.00% 1.00% Footnote 41 US$American Select 1.25% 1.00% Footnote 41 US$US Contrarian CoreEquities 1.00% 1.00% Footnote 41 US$Pan European Equities 1.25% 1.00% Footnote 41 EuroPan European SmallerCompanies 1.40% 1.00% Footnote 41 EuroEuropean QuantitativeEquities 1.25% 1.00% Footnote 41 EuroAsia 1.50% 1.00% Footnote 41 US$Greater China Equities 1.50% 1.00% Footnote 41 US$Global Energy Equities 1.25% 1.00% Footnote 41 US$Global Technology 1.25% 0.75% Footnote 41 US$UK Equities 1.50% 0.75% Footnote 41 GBPLatin America 1.50% 1.00% Footnote 41 US$US Smaller Companies 1.50% 0.90% Footnote 41 US$Global Equity Dividend 1.50% 0.75% Footnote 41 US$40From 1 April 2012, the shareholder servicing fee will be included in the Asset Management Fee.41Please refer to the “Fees and Expenses” section of the Prospectus and in particular the paragraph immediately under the heading “Portfolio Operating Expenses until31 March 2012 (included)”.42These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Aggregate Bond Portfolio.43These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Emerging Market Short-Term Bonds Portfolio.44Until 30 November 2011, this Portfolio will remain named “Threadneedle (Lux) – US Equities”.60


Threadneedle (Lux) ProspectusAppendix DUntil 31 March 2012 (included) (continued)Portfolio Name of Asset Shareholder Operating BaseType Portfolio Management Fee Servicing Fee 40 Expenses 41 CurrencyAbsolute Return PortfoliosSpecialist PortfolioTarget Return (US$) 1.00% 0.75% Footnote 41 US$American Absolute Alpha 1.25% 0.75% Footnote 41 US$Absolute EmergingMarket Macro 1.25% 1.00% Footnote 41 US$Multi Asset AbsoluteAlpha 1.00% 0.75% Footnote 41 EuroEuropean Smaller CompaniesAbsolute Alpha 1.25% 0.75% Footnote 41 EuroGlobal OpportunitiesBond 1.15% 0.75% Footnote 41 US$European Absolute Alpha 1.25% 0.75% Footnote 41 EuroEnhanced Commodities 1.25% 1.00% Footnote 41 US$From 1 April 2012Portfolio Name of Asset Operating BaseType Portfolio Management Fee Expenses CurrencyBond PortfoliosGlobal Aggregate Bond 1.35% 0.30% US$Euro Active Bonds 1.45% 0.30% EuroEmerging Market Corporate Bonds 2.00% 0.30% US$Emerging Market Debt 2.00% 0.30% US$Global Emerging Market Short-Term Bonds 1.55% 0.30% US$US$ High Income Bonds 2.25% 0.30% US$European High Yield Bond 2.25% 0.30% EuroAsset Allocation PortfolioGlobal Asset Allocation 1.75% 0.35% US$Equity PortfoliosGlobal Focus 2.25% 0.35% US$Global Emerging Market Equities 2.50% 0.35% US$American 45 2.00% 0.35% US$American Select 2.25% 0.35% US$US Contrarian Core Equities 2.00% 0.35% US$Pan European Equities 2.25% 0.35% EuroPan European Smaller Companies 2.40% 0.35% EuroEuropean Quantitative Equities 2.25% 0.35% EuroAsia 2.50% 0.35% US$Greater China Equities 2.50% 0.35% US$Global Energy Equities 2.25% 0.35% US$Global Technology 2.00% 0.35% US$UK Equities 2.25% 0.35% GBPLatin America 2.50% 0.35% US$US Smaller Companies 2.40% 0.35% US$Global Equity Dividend 2.25% 0.35% US$45Until 30 November 2011 (included), this Portfolio will remain named “Threadneedle (Lux) – US Equities”.61


Threadneedle (Lux) ProspectusAppendix DFrom 1 April 2012 (continued)Portfolio Name of Asset Operating BaseType Portfolio Management Fee Expenses CurrencyAbsolute Return PortfoliosSpecialist PortfolioTarget Return (US$) 1.75% 0.30% US$American Absolute Alpha 2.00% 0.35% US$Absolute Emerging Market Macro 2.25% 0.35% US$Multi Asset Absolute Alpha 1.75% 0.30% EuroEuropean Smaller Companies Absolute Alpha 2.00% 0.35% EuroGlobal Opportunities Bond 1.90% 0.30% US$European Absolute Alpha 2.00% 0.35% EuroEnhanced Commodities 2.25% 0.35% US$62


Threadneedle (Lux) ProspectusAppendix EPortfolio ChargesSHARE CLASSES W, WEH and PShare Class Initial Sales Charge Exchange Feeas a % of the amountinvestedClasses W, WEH and P Maximum 5.0% 46 Maximum 0.75%Sales charges are maximums, which distributors or sub-distributors are allowed to waive in whole or in part, depending on the size of thesubscription or upon local market considerations.Until 31 March 2012 (included)Portfolio Name of Asset Shareholder Operating BaseType Portfolio Management Fee Servicing Fee 47 Expenses 48 CurrencyBond PortfoliosGlobal Bonds (Euro) 49 0.85% – Footnote 48 EuroGlobal Aggregate Bond 0.75% – Footnote 48 US$Euro Active Bonds 0.85% – Footnote 48 EuroEmerging MarketCorporate Bonds 1.00% – Footnote 48 US$Emerging Market Debt 1.00% – Footnote 48 US$Global Emerging MarketShort-Term Bonds 50 1.15% – Footnote 48 US$US$ High Income Bonds 1.25% – Footnote 48 US$Global High Yield andEmerging Market (Euro) 1.25% – Footnote 48 EuroAsset Allocation PortfolioGlobal Asset Allocation 1.25% 0.15% Footnote 48 US$Equity PortfoliosGlobal Focus 1.25% 0.15% Footnote 48 US$Global Emerging MarketEquities 1.40% 0.25% Footnote 48 US$American 51 1.00% 0.15% Footnote 48 US$American Select 1.25% 0.15% Footnote 48 US$Pan European Equities 1.25% 0.15% Footnote 48 EuroPan European SmallerCompanies 1.40% 0.15% Footnote 48 EuroEuropean QuantitativeEquities 1.25% 0.15% Footnote 48 EuroAsia 1.40% 0.25% Footnote 48 US$Greater China Equities 1.40% 0.25% Footnote 48 US$Global Energy Equities 1.25% 0.15% Footnote 48 US$46The maximum sales charge is equivalent to 5.00% of the Class W, WEH and P Net Asset Value per Share.47From 1 April 2012, the shareholder servicing fee will be included in the Asset Management Fee.48Please refer to the “Fees and Expenses” section of the Prospectus and in particular the paragraph immediately under the heading “Portfolio Operating Expenses until31 March 2012 (included)”.49These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Aggregate Bond Portfolio.50These fees will apply until 12January 2012, when the Portfolio will be merged with the Global Emerging Market Short-Term Bonds Portfolio.51Until 30 November 2011 (included), this Portfolio will remain named “Threadneedle (Lux) – US Equities”.63


Threadneedle (Lux) ProspectusAppendix EFrom 1 April 2012Portfolio Name of Asset Operating BaseType Portfolio Management Fee Expenses CurrencyBond PortfoliosGlobal Aggregate Bond 0.75% 0.30% US$Euro Active Bonds 0.85% 0.30% EuroEmerging MarketCorporate Bonds 1.00% 0.30% US$Emerging Market Debt 1.00% 0.30% US$Global Emerging MarketShort-Term Bonds 1.15% 0.30% US$US$ High Income Bonds 1.25% 0.30% US$Asset Allocation PortfolioGlobal Asset Allocation 1.40% 0.35% US$Equity PortfoliosGlobal Focus 1.40% 0.35% US$Global Emerging MarketEquities 1.65% 0.35% US$American 52 1.15% 0.35% US$American Select 1.40% 0.35% US$Pan European Equities 1.40% 0.35% EuroPan European SmallerCompanies 1.55% 0.35% EuroEuropean QuantitativeEquities 1.40% 0.35% EuroAsia 1.65% 0.35% US$Greater China Equities 1.65% 0.35% US$Global Energy Equities 1.40% 0.35% US$52Until 30 November 2011 (included), this Portfolio will remain named “Threadneedle (Lux) – US Equities”.64


Threadneedle (Lux) ProspectusAppendix FPortfolio ChargesSHARE CLASSES SU, SUP and SEPShare Class Initial Sales Charge Exchange Feeas a % of the amountinvestedClasses SU, SUP and SEP Maximum 5.0% Maximum 0.75%Sales charges are maximums, which distributors or sub-distributors are allowed to waive in whole or in part, depending on the size of thesubscription or upon local market considerations.Until 31 March 2012 (included)Portfolio Name of Asset Shareholder Operating BaseType Portfolio Management Fee Servicing Fee 53 Expenses 54 CurrencyBond PortfoliosEmerging Market Debt 1.00% 0.50% Footnote 54 US$Global High Yield andEmerging Market (Euro) 55 1.25% 0.50% Footnote 54 EuroFrom 1 April 2012Portfolio Name of Asset Operating BaseType Portfolio Management Fee Expenses CurrencyBond PortfoliosEmerging Market Debt 1.50% 0.30% US$53From 1 April 2012, the shareholder servicing fee will be included in the Asset Management Fee.54Please refer to the “Fees and Expenses” section of the Prospectus and in particular the paragraph immediately under the heading “Portfolio Operating Expenses until31 March 2012 (included)”.55These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Emerging Market Short-Term Bonds Portfolio.65


Threadneedle (Lux) ProspectusAppendix GPortfolio ChargesSHARE CLASSES IU, IE, IG, IGP, IEH, IUH, IGH, IFH, ISH, XU, XEH, XG, XGH, XFH and XSHShare Class Initial Sales Charge Exchange Feeas a % of the amountinvestedClasses IU, IE, IG, IEH, IUH, IGH, IGP, IFH, ISH,XU, XEH, XG, XGH, XFH, and XSH N/A Maximum 0.75%FOR THE AVOIDANCE OF DOUBT THERE ARE NO ASSET MANAGEMENT FEES FOR CLASSES XU, XEH, XG, XGH, XFH and XSHUntil 31 March 2012 (included)Portfolio Name of Asset Operating BaseType Portfolio Management Fee for Expenses 56 CurrencyClasses IU, IE, IG, IGP, for Classes IU,IEH, IUH, IGH, IFH IE, IG, IGP, IEH,and ISHIUH, IGH, IFH, ISH,XU, XEH, XG, XGH,XFH and XSHBond PortfoliosGlobal Bonds (Euro) 57 0.55% Footnote 56 EuroGlobal Aggregate Bond 0.50% Footnote 56 US$Euro Active Bonds 0.55% Footnote 56 EuroEmerging Market Corporate Bonds 0.80% Footnote 56 US$Emerging Market Debt 0.80% Footnote 56 US$Global Emerging Market Short-Term Bonds 0.80% Footnote 56 US$US$ High Income Bonds 0.80% Footnote 56 US$Global High Yield and EmergingMarket (Euro) 58 0.85% Footnote 56 EuroEuropean High Yield Bond 0.65% Footnote 56 EuroAsset Allocation PortfolioGlobal Asset Allocation 0.85% Footnote 56 US$Equity PortfoliosGlobal Focus 0.85% Footnote 56 US$Global Emerging Market Equities 1.00% Footnote 56 US$American 59 0.85% Footnote 56 US$American Select 0.85% Footnote 56 US$US Contrarian Core Equities 0.80% Footnote 56 US$Pan European Equities 0.85% Footnote 56 EuroPan European Smaller Companies 1.00% Footnote 56 EuroEuropean Quantitative Equities 1.00% Footnote 56 EuroAsia 1.00% Footnote 56 US$Greater China Equities 1.00% Footnote 56 US$Global Energy Equities 1.00% Footnote 56 US$Global Technology 1.00% Footnote 56 US$UK Equities 0.80% Footnote 56 GBPLatin America 0.85% Footnote 56 US$US Smaller Companies 0.85% Footnote 56 US$Global Equity Dividend 0.80% Footnote 56 US$56Please refer to the “Fees and Expenses” section of the Prospectus and in particular the paragraph immediately under the heading “Portfolio Operating Expenses until31 March 2012 (included)”.57These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Aggregate Bond Portfolio.58These fees will apply until 12 January 2012, when the Portfolio will be merged with the Global Emerging Market Short-Term Bonds Portfolio.59Until 30 November 2011 (included), this Portfolio will remain named “Threadneedle (Lux) – US Equities”.66


Threadneedle (Lux) ProspectusAppendix GUntil 31 March 2012 (included) (continued)Portfolio Name of Asset Operating BaseType Portfolio Management Fee for Expenses 56 CurrencyClasses IU, IE, IG, IGP, for Classes IU,IEH, IUH, IGH, IFH IE, IG, IGP, IEH,and ISHIUH, IGH, IFH, ISH,XU, XEH, XG, XGH,XFH and XSHAbsolute Return PortfoliosTarget Return (US$) 0.65% Footnote 56 US$American Absolute Alpha 0.75% Footnote 56 US$Absolute Emerging Market Macro 1.00% Footnote 56 US$Multi Asset Absolute Alpha 0.65% Footnote 56 EuroEuropean Smaller Companies Absolute Alpha 0.75% Footnote 56 EuroGlobal Opportunities Bond 0.65% Footnote 56 US$European Absolute Alpha 0.75% Footnote 56 EuroSpecialist PortfolioEnhanced Commodities 1.00% Footnote 56 US$67


Threadneedle (Lux) ProspectusAppendix GFrom 1 April 2012Portfolio Name of Asset Operating BaseType Portfolio Management Fee for Expenses CurrencyClasses IU, IE, IG, IGP, for Classes IU,IEH, IUH, IGH, IFH IE, IG, IGP, IEH,and ISHIUH, IGH, IFH, ISH,XU, XEH, XG, XGH,XFH and XSHBond PortfoliosGlobal Aggregate Bond 0.50% 0.20% US$Euro Active Bonds 0.50% 0.20% EuroEmerging Market Corporate Bonds 0.80% 0.20% US$Emerging Market Debt 0.80% 0.20% US$Global Emerging Market Short-Term Bonds 0.80% 0.20% US$US$ High Income Bonds 0.65% 0.20% US$European High Yield Bond 0.65% 0.20% EuroAsset Allocation PortfolioGlobal Asset Allocation 0.75% 0.25% US$Equity PortfoliosGlobal Focus 0.80% 0.25% US$Global Emerging Market Equities 0.85% 0.25% US$American 60 0.80% 0.25% US$American Select 0.80% 0.25% US$US Contrarian Core Equities 0.80% 0.25% US$Pan European Equities 0.80% 0.25% EuroPan European Smaller Companies 0.85% 0.25% EuroEuropean Quantitative Equities 0.80% 0.25% EuroAsia 0.80% 0.25% US$Greater China Equities 0.85% 0.25% US$Global Energy Equities 1.00% 0.25% US$Global Technology 1.00% 0.25% US$UK Equities 0.80% 0.25% GBPLatin America 0.85% 0.25% US$US Smaller Companies 0.85% 0.25% US$Global Equity Dividend 0.80% 0.25% US$Absolute Return PortfoliosTarget Return (US$) 0.65% 0.20% US$American Absolute Alpha 0.75% 0.25% US$Absolute Emerging Market Macro 1.00% 0.25% US$Multi Asset Absolute Alpha 0.65% 0.25% EuroEuropean Smaller Companies Absolute Alpha 0.75% 0.25% EuroGlobal Opportunities Bond 0.65% 0.20% US$European Absolute Alpha 0.75% 0.25% EuroSpecialist PortfolioEnhanced Commodities 1.00% 0.25% US$60Until 30 November 2011 (included), this Portfolio will remain named “Threadneedle (Lux) – US Equities”.68


Threadneedle (Lux) ProspectusGlossary“Articles”the articles of incorporation of the SICAV;“Asset Management Fee”the monthly fee payable by the SICAV to the Management Company under the terms of theManagement Company Services Agreement at the annual rates set forth in Appendices C, D, E,F and G (except with respect to Classes BU, M and MGH for which charges are describeddirectly in the body of this Prospectus);“Auditors”PricewaterhouseCoopers S.à r.l. or such other service provider as may be lawfully appointed toserve as auditor to the SICAV;“Base Currency”currency in which a Portfolio is denominated;“Below Investment Grade”are securities rated below “Baa3” by Moody’s, “BBB–” by S&P or that have an equivalent ratingby another NRSRO, or are unrated and believed to be of equivalent quality in the opinion of theManagement Company or of the relevant Sub-Advisor;“Business Day”with respect to each Portfolio any day on which banks are open for normal banking business inLuxembourg and when the Directors believe that sufficient markets in which the Portfolioinvested are also open and permit sufficient trading and liquidity to enable such Portfolio to bemanaged efficiently;“CDSC”Contingent Deferred Sales Charge;“CHF”the legal currency of the Swiss Confederation;“Class”a class of Shares in the SICAV;“Companies Law”the Luxembourg law of 10 August 1915 on Commercial Companies, as amended;“Continental Europe”all European countries ex-United Kingdom and ex-Ireland;“CSSF”the Luxembourg Commission de Surveillance du Secteur Financier;“CSSF Circular 11/512”the circular issued by the CSSF on 30 May 2011 to all Luxembourg management companies inrelation to (i) the presentation of the main regulatory changes in risk management following thepublication of CSSF Regulation 10-4 and ESMA clarifications; (ii) further clarifications from theCSSF on risk management rules; and (iii) the definition of the content and format of the riskmanagement process to be communicated to the CSSF;“CSSF Circular 08/356”the circular issued by the CSSF on 4 June 2008 to all Luxembourg UCIs and those who act inrelation to their operation and outlining rules applicable to UCIs when they employ certaintechniques and instruments relating to transferable securities and money market instruments;“CSSF Regulation 10-4”the regulation issued by the CSSF on 24 December 2010 transposing Commission Directive2010/43/EU of 1 July 2010 implementing Directive 2009/65/EC of the European Parliament andof the Council as regards organisational requirements, conflicts of interest, conduct ofbusiness, risk management and the content of the agreement between a depositary and amanagement company;“Custodian”RBC Dexia Investor Services Bank S.A. or such other service provider as may be lawfullyappointed to serve as custodian to the SICAV;“Custodian Agreement”an agreement made between the SICAV and the Custodian dated 31 March 2006, as may beamended from time to time;69


Threadneedle (Lux) Prospectus“Domiciliary and Administrative Agent” RBC Dexia Investor Services Bank S.A. or such other service provider as may be lawfullyappointed to serve as domiciliary and administrative agent to the SICAV;“Directors”the board of directors from time to time of the SICAV including any duly authorised committeethereof;“Dow Jones Euro Stoxx 50”a leading Blue-chip index whose stated objective is to provide a representation of supersectorleaders in the Euro Area. The index covers 50 stocks from 12 Euro Area countries: Austria,Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,Portugal and Spain;“Eligible Investor”an existing or new investor of the SICAV that is eligible at the SICAV’s discretion to invest inClass XU, XE, XUH, XEH, XG, XGH, XFH, and XSH either (i) upon entering into an agreementwith the Management Company or Threadneedle Portfolio Services Hong Kong Limited onbehalf of the SICAV and fulfilling the eligibility conditions set by the SICAV from time to time or(ii) other UCIs or UCITS which have the same Management Company or have the sameultimate owner as the Management Company and therefore will not be subject to an assetmanagement fee, shareholder servicing fee 61 or subscription fee;“Eligible Market”a regulated market in an Eligible State which operates regularly and is recognised and open tothe public;“Eligible State”any member state of the OECD and all other countries of the American continents, Europe,Asia, Africa and Oceania;“Eligible Transferable Securities”(i) transferable securities admitted to official listing on a stock exchange in an Eligible State;and/or(ii) transferable securities dealt in on another Eligible Market; and/or(iii) recently issued transferable securities, provided that the terms of issue include anundertaking that application will be made for admission to official listing on a stock exchange inan Eligible State or on an Eligible Market and such admission is achieved within a year of theissue;“Emerging Market Countries”those countries represented in the MSCI Emerging Markets Index. However, if a country is notrepresented in that particular stated index, the relevant Sub-Advisor will adopt the followingapproach: any country that is not represented in the MSCI World Index will be considered as anEmerging Market Country;“EU”current and any future member countries of the European Union;“Euro” or “€”the legal currency of the countries participating in the European Economic and Monetary Union;“Euro Area”the collective group of countries whose legal currency is the Euro;“Europe”all countries that are members of the European Economic Area and Switzerland and the term“European” shall be construed accordingly;“European Smaller Companies”European companies either headquartered in Europe or exercising a predominant part of theiractivities in Europe, that at the time of purchase are not represented in the top 300 companiesin the FTSE World Europe Index;61From 1 April 2012, the shareholder servicing fee will be included in the Asset Management Fee.70


Threadneedle (Lux) Prospectus“GBP”the legal currency of the United Kingdom;“G-7”Canada, France, Germany, the United Kingdom, Italy, Japan and the United States;“Group of Companies”companies belonging to the same body of undertakings and which must draw up consolidatedaccounts in accordance with Council Directive 83/349/EEC of 13 June 1983 on consolidatedaccounts and according to recognised international accounting rules or would be required to doso if they were located in the EU;“High Yield”securities having a rating below “Baa3” by Moody’s, “BBB–” by S&P or that have an equivalentrating by another NRSRO, or are unrated and believed to be of similar quality;“Institutional Investors”Institutional Investors, as defined by guidelines or recommendations issued by the RegulatoryAuthority from time to time;“Institutional Share Classes”Classes which are only available for subscription and holding by Institutional Investors;“Investment Fund Service Agreement”an agreement made between the SICAV and the Domiciliary and Administrative Agent dated31 March 2006, as may be amended from time to time;“Investment Grade”are securities rated within the four highest rating categories as determined by Moody’s or S&Por that have an equivalent rating band by another NRSRO, or are unrated and believed to be ofequivalent quality in the opinion of the Management Company or of the relevant Sub-Advisor;“Key Investor Information”the Key Investor Information contains the essential characteristics of the SICAV and shall beprovided to investors before their proposed subscription of Shares. Subscription of the Sharesimplies acceptance of terms of the Key Investor Information. A version of the Key InvestorInformation is available on the website www.threadneedle.com;“Latin America”all countries in the Americas except the United States and Canada, and where the context sorequires “Latin America” refers to the Portfolio of that name;“2010 Law” the Luxembourg law of 17 December 2010 relating to UCI, as amended;“LIBOR”the London Interbank Offered Rate, the daily reference rate based on the interest rates at whichbanks borrow unsecured funds from other banks in the London wholesale money market (orinterbank lending market);“Management Company”Threadneedle Management Luxembourg S.A., the designated management company of theSICAV;“Management Company ServicesAgreement”an agreement made between the SICAV and the Management Company dated as of31 October 2005, as may be amended from time to time;“Member State”a member state of the European Union;“Memorial”Memorial, Recueil des Sociétés et Associations of the Grand Duchy of Luxembourg;“Money Market Instruments”instruments normally dealt in on the money market which are liquid and have a value which canbe accurately determined at any time;“Moody’s ® ”Moody’s Investors Service;“MSCI”Morgan Stanley Capital International Index;71


Threadneedle (Lux) Prospectus“Multiple Payment Currencies”U.S. Dollar and Euro;“Net Asset Value”the net asset value of each Class within each Portfolio, as described in Section “Net Asset ValueDetermination”;“North America”the United States and Canada;“NRSRO”a nationally recognised statistical rating organisation;“OECD”the members of the Organisation for Economic Co-operation and Development;“Other Regulated Market”market which is regulated, operates regularly and is recognised and open to the public, namelya market (i) that meets the following cumulative criteria: liquidity; multilateral order matching(general matching of bid and ask prices in order to establish a single price); transparency (thecirculation of complete information in order to give clients the possibility of tracking trades,thereby ensuring that their orders are executed on current conditions); (ii) on which thesecurities are dealt in at a certain fixed frequency; (iii) which is recognised by a State or by apublic authority which has been delegated by that State or by another entity which isrecognised by that State or by that public authority such as a professional association; and (iv)on which the securities dealt are accessible to the public;“Other State”any State of Europe which is not a Member State, any State of America, Africa, Asia andOceania;“Portfolios”segregated portfolios of assets of the SICAV, each represented by one or more Classes andmanaged in accordance with a specified investment objective and policy;“principally”each time that the word “principally” is used in the description of the investment objective of aPortfolio, this means at least two thirds of the assets of the relevant Portfolio are directlyinvested in the currency, the country, the type of security or the other material element inrelation to which the term “principally” is used in description of the relevant Portfolio’sinvestment objective;“Redemption Price”the redemption price per Share of each Class in respect of each Portfolio, calculated inaccordance with the methodology set out under the “Redemption of Shares” section;“Registrar and Transfer Agency an agreement made between the SICAV and the Registrar and Transfer Agent datedAgreement” 62 31 October 2012;“Registrar and Transfer Agent” 63International Financial Data Services (Luxembourg) S.A. or such other service provider as maybe lawfully appointed to serve as registrar and transfer agent to the SICAV;“Regulated Market”a regulated market as defined in the Parliament and Council Directive 2004/39/EC of 21 April2004 on markets in financial instruments as amended (“Directive 2004/39/EC”) namely amultilateral system operated and/or managed by a market operator, which brings together orfacilitates the bringing together of multiple third party buying and selling interests in financialinstruments – in the system and in accordance with its non-discretionary rules – in a way thatresults in a contract, in respect of the financial instruments admitted to trading under its rulesand/or systems, and which is authorised and functions regularly and in accordance with theprovisions of Title III of Directive 2004/39/EC. An updated list of Regulated Markets is availableat: http://eur–lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:280:0005:0011:EN:PDF;62With effect from 31 October 2011 (included). Prior to 31 October 2011, an agreement made between the SICAV and The Bank of New York Mellon (Luxembourg) S.A. dated1 October 2004 as assigned to the Management Company on 31 October 2005.63With effect from 31 October 2011 (included). Prior to 31 October 2011, The Bank of New York Mellon (Luxembourg) S.A. of Vertigo Building – Polaris, 2-4, Rue Eugène Ruppert,L-2453 Luxembourg, Grand Duchy of Luxembourg acted as the Registrar and Transfer Agent.72


Threadneedle (Lux) Prospectus“Regulatory Authority”the Luxembourg authority or its successor in charge of the supervision of UCI in the GrandDuchy of Luxembourg;“secondarily”each time that the word “secondarily” is used in the description of the investment objective ofa Portfolio, this means that no more than one third of the assets of the relevant Portfolio areinvested in the currency, the country, the type of security or the other material element inrelation to which the term “secondarily” is used in the description of the relevant Portfolio’sinvestment objective;“Securities Act”the U.S. Securities Act of 1933, as amended;“Shareholders”holders of Shares in the SICAV, as recorded in the books of the SICAV on file with the Registrarand Transfer Agent;“SICAV”Threadneedle (Lux), a société d’investissement à capital variable (an open-ended investmentfund of the corporate type);“Sub-Advisor”a service provider appointed under the terms of an agreement with the Management Companyto provide investment management or advisory services with respect to one or more portfolios,as set out in the section “Investment Advisory Arrangements”;“Subscription Price”the subscription price per Share of each Class in respect of each Portfolio, calculated inaccordance with the methodology set out under the “Purchase of Shares” section;“S&P ® ”Standard and Poor’s Corporation;“S&P 500 Index ® ”the index compiled by S&P consisting of 500 stocks chosen for market size, liquidity andindustry group representation and being a market-value weighted index, with each stock’sweight in the index being proportionate to its market value;“Shares”shares of the SICAV of no par value each designated into different Classes with reference to thePortfolios of the SICAV;“SGD”means the legal currency of Singapore;“Transferable Securities”– shares and other securities equivalent to shares;– bonds and other debt instruments;– any other negotiable securities which carry the right to acquire any such transferablesecurities by subscription or exchange with the exclusion of techniques and instruments;– loan participations;“UCI”an undertaking for collective investment as defined by Luxembourg law;“UCITS”an undertaking for collective investment in Transferable Securities under Article 1 (2) of theUCITS Directive;“UCITS Directive”Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on thecoordination of laws, regulations and administrative provisions relating to undertakings forcollective investment in transferable securities as may be amended;“UK” or “United Kingdom”the United Kingdom of Great Britain and Northern Ireland, its territories and possessions;“US” or “United States”the United States of America, its territories and possessions, any State of the United Statesand the District of Columbia;73


Threadneedle (Lux) Prospectus“United States Person”a person as defined in Regulation S of the Securities Act and thus shall include but not limitedto, (i) any natural person resident in the United States; (ii) any partnership or corporationorganised or incorporated under the laws of the United States; (iii) any estate of which anyexecutor or administrator is a U.S. Person; (iv) any trust of which any trustee is a U.S. Person; (v)any agency or branch of a foreign entity located in the United States; (vi) any non-discretionaryaccount or similar account (other than an estate or trust) held by a dealer, or other fiduciary forthe benefit or account of a U.S. Person; (vii) any discretionary account or similar account (otherthan an estate or trust) held by a dealer or other fiduciary organised, incorporated, or (if anindividual) resident in the United States; and (viii) any partnership or corporation if: (A) organisedor incorporated under the laws of any foreign jurisdiction; and (B) formed by a U.S. Personprincipally for the purpose of investing in securities not registered under the Securities Act,unless it is organised or incorporated, and owned, by accredited investors (as defined in Rule501(a) under the Securities Act) who are not natural persons, estates or trusts; but shall notinclude (i) any discretionary account or similar account (other than an estate or trust) held forthe benefit or account of a non -U.S. Person by a dealer or other professional fiduciaryorganised, incorporated, or (if an individual) resident in the United States or (ii) any estate ofwhich any professional fiduciary acting as executor or administrator is a U.S. Person if anexecutor or administrator of the estate who is not a U.S. Person has sole or shared investmentdiscretion with respect to the assets of the estate and the estate is governed by foreign law;“U.S. Dollar” or “US$”the currency of the United States;“Valuation Date”any Business Day;“VaR”Value at risk.74


Threadneedle (Lux) ProspectusTHREADNEEDLE (LUX)Société d’investissement à capital variable69, route d’EschL-1470 LuxembourgR.C.S. Luxembourg B 50 216A Luxembourg Undertaking for Collective Investmentin Transferable SecuritiesLoose Leaf to the Prospectus dated November 2011 (the “Prospectus”)This loose leaf forms an integral part of the Prospectus for THREADNEEDLE (LUX) (the “SICAV”) and may not be distributed separately.I. The initial offering prices for the launch of the following Share Classes in the Multi Asset Absolute Alpha Portfolio will be as followsand will be available upon request:15 EUR for Share Class AE;15 US$ for Share Class AUH;15 GBP for Share Class AGH;15 CHF for Share Class AFH;10 SGD for Share Class ASH;12 EUR for Share Class DE;12 US$ for Share Class DUH;20 EUR for Share Class IE;20 US$ for Share Class IUH;20 GBP for Share Class IGH;20 CHF for Share Class IFH;20 SGD for Share Class ISH;25 EUR for Share Class XE;25 US$ for Share Class XUH;25 GBP for Share Class XGH;25 CHF for Share Class XFH; and25 SGD for Share Class XSH.The above mentioned initial offering prices are increased by any applicable sales charge.Subscriptions orders and subscription proceeds should be made in accordance with the Prospectus.II.The initial offering prices for the launch of the following Share Classes in the European Absolute Alpha Portfolio will be as follows andwill be available upon request:15 EUR for Share Class AE;15 US$ for Share Class AUH;15 CHF for Share Class AFH;15 GBP for Share Class AGH;10 SGD for Share Class ASH;12 EUR for Share Class DE12 US$ for Share Class DUH;20 EUR for Share Class IE;20 US$ for Share Class IUH;20 CHF for Share Class IFH;20 GBP for Share Class IGH;20 SGD for Share Class ISH;25 EUR for Share Class XE;25 US$ for Share Class XUH;25 CHF for Share Class XFH;25 GBP for Share Class XGH; and25 SGD for Share Class XSH.The above mentioned initial offering prices are increased by any applicable sales charge.Subscriptions orders and subscription proceeds should be made in accordance with the Prospectus.75


Threadneedle (Lux) ProspectusIII. The initial offering prices for the launch of the following Share Classes in the European High Yield Bond Portfolio will be as follows andwill be available upon request:15 EUR for each of Share Classes AE and AEP;15 US$ for each of Share Classes AUH and AUC;15 CHF for Share Class AFH;15 GBP for Share Class AGH;10 SGD for Share Class ASH;12 EUR for Share Class DE;12 US$ for Share Class DUH;20 EUR for Share Class IE;20 US$ for Share Class IUH;20 SGD for Share Class ISH;20 CHF for Share Class IFH;20 GBP for Share Class IGH;25 EUR for Share Class XE;25 US$ for Share Class XUH;25 SGD for Share Class XSH;25 CHF for Share Class XFH; and25 GBP for Share Class XGH.IV. The initial offering prices for the launch of the following Share Classes in the UK Equities Portfolio will be as follows and will beavailable upon request:15 GBP for Share Class AG;15 GBP for Share Class AGP;15 US$ for Share Class AUH;15 CHF for Share Class AFH;15 EUR for Share Class AEH;10 SGD for Share Class ASH;12 GBP for Share Class DG;12 EUR for Share Class DEH;20 GBP for Share Class IG;20 GBP for Share Class IGP;20 US$ for Share Class IUH;20 CHF for Share Class IFH;20 EUR for Share Class IEH;20 SGD for Share Class ISH;25 GBP for Share Class XG;25 US$ for Share Class XUH;25 CHF for Share Class XFH;25 EUR for Share Class XEH; and25 SGD for Share Class XSH.The above mentioned initial offering prices are increased by any applicable sales charge.Subscriptions orders and subscription proceeds should be made in accordance with the Prospectus.V. The initial offering prices for the launch of the following Share Classes in the Latin America Portfolio will be as follows and will beavailable upon request:15 US$ for Share Class AU;15 EUR for Share Class AEH;15 CHF for Share Class AFH;15 GBP for Share Class AGH;10 SGD for Share Class ASH;12 US$ for Share Class DU12 EUR for Share Class DEH;20 US$ for Share Class IU;20 EUR for Share Class IEH;20 CHF for Share Class IFH;20 GBP for Share Class IGH;20 SGD for Share Class ISH;76


Threadneedle (Lux) Prospectus25 US$ for Share Class XU;25 EUR for Share Class XEH;25 CHF for Share Class XFH;25 GBP for Share Class XGH; and25 SGD for Share Class XSH.The above mentioned initial offering prices are increased by any applicable sales charge.Subscriptions orders and subscription proceeds should be made in accordance with the Prospectus.VI. The initial offering prices for the launch of the following Share Classes in the US Smaller Companies Portfolio will be as follows andwill be available upon request:`15 US$ for Share Class AU;15 EUR for Share Class AEH;15 CHF for Share Class AFH;15 GBP for Share Class AGH;10 SGD for Share Class ASH;12 US$ for Share Class DU12 EUR for Share Class DEH;20 US$ for Share Class IU;20 EUR for Share Class IEH;20 CHF for Share Class IFH;20 GBP for Share Class IGH;20 SGD for Share Class ISH;25 US$ for Share Class XU;25 EUR for Share Class XEH;25 CHF for Share Class XFH;25 GBP for Share Class XGH; and25 SGD for Share Class XSH.The above mentioned initial offering prices are increased by any applicable sales charge.Subscriptions orders and subscription proceeds should be made in accordance with the Prospectus.VII. The initial offering prices for the launch of Classes AEC, WEH and XSH in the Emerging Market Corporate Bonds will be, respectively;15 EUR for Share Class AEC, 15 EUR for Share Class WEH and 25 SGD for Share Class XSH. The above mentioned initial offering pricesare increased by any applicable sales charge. Subscriptions orders and subscription proceeds should be made in accordance with theProspectus.VIII.The initial offering price for the launch of Class WEH in the Global Aggregate Bond will be 15 EUR. The above mentioned initial offeringprice is increased by any applicable sales charge. Subscriptions orders and subscription proceeds should be made in accordance withthe Prospectus.IX. The initial offering prices for the launch of the following Share Classes in the Global Equity Dividend Portfolio will be as follows andwill be available upon request:15 US$ for Share Class AUP;15 EUR for Share Class AEC;15 CHF for Share Class AFC;15 GBP for Share Class AGC;10 SGD for Share Class ASC;12 US$ for Share Class DUP12 EUR for Share Class DEC;20 US$ for Share Class IUP;20 EUR for Share Class IEC;20 CHF for Share Class IFC;20 GBP for Share Class IGC;20 SGD for Share Class ISC;25 US$ for Share Class XUP;25 EUR for Share Class XEC;25 CHF for Share Class XFC;25 GBP for Share Class XGC; and25 SGD for Share Class XSC.77


Threadneedle (Lux) ProspectusThe above mentioned initial offering prices are increased by any applicable sales charge.Subscriptions orders and subscription proceeds should be made in accordance with the Prospectus.X. The initial offering price for the launch of Class AEP in the Euro Active Bonds will be 15 EUR. The above mentioned initial offering priceis increased by any applicable sales charge. Subscriptions orders and subscription proceeds should be made in accordance with theProspectus.XI. The initial offering price for the launch of Class AEC in the US$ High Income Bonds will be 15 EUR. The above mentioned initialoffering price is increased by any applicable sales charge. Subscriptions orders and subscription proceeds should be made inaccordance with the Prospectus.XII. The initial offering price for the launch of Class AEC in the Target Return (US$) will be 15 EUR. The above mentioned initial offeringprice is increased by any applicable sales charge. Subscriptions orders and subscription proceeds should be made in accordance withthe Prospectus.XIII. The initial offering price for the launch of Class AEC in the Absolute Emerging Market Macro will be 15 EUR. The above mentionedinitial offering price is increased by any applicable sales charge. Subscriptions orders and subscription proceeds should be made inaccordance with the Prospectus.XIV.The initial offering price for the launch of Class AEC in the Global Opportunities Bond will be 15 EUR. The above mentioned initialoffering price is increased by any applicable sales charge. Subscriptions orders and subscription proceeds should be made inaccordance with the Prospectus.XV. The Portfolios of the SICAV offer the following Share Classes:• Class AU, Class AE, Class AUH, Class AEH, Class AFH, Class AG, Class AGH, Class AGP, Class ASH, Class AUP, Class AUC, Class AEP,Class AEC, Class DU, Class DE, Class DEH, Class DUH and Class DG.• Class W, Class WEH and Class P.• Class BU.• Class SU, Class SUP, Class SEC and Class SEP. These Share Classes are exclusively available to Shareholders subscribing throughcertain select sub-distributors.• Institutional Share Classes: Class XU, Class XE, Class IU, Class IE, Class IEH, Class XUH, Class XEH, Class XGH, Class XG, Class XFH,Class XSH, Class IFH, Class IG, Class IGH, Class IGP, Class IUH, Class ISH, Class M, Class MGH and Class WS.The below characters are contained in the name of the Share Classes, whereas:“A” reflects that the Shares are intended for both retail and Institutional Investors;“B” reflects that Shares have a CDSC;“D” reflects that the Shares are intended for both retail and Institutional Investors and have a different fee structure than “A”;“I” reflects that the Shares are Institutional Share Classes with a different minimum initial subscription amount;“U” reflects that the Shares are denominated in USD;“E” reflects that the Shares are denominated in EUR;“F” reflects that the Shares are denominated in CHF;“G” reflects that the Shares are denominated in GBP;“S” reflects that the Shares are denominated in SGD when it appears as the second character;“H” reflects hedging between the currency of the Share Class and the Base Currency of the Portfolio;“P” flects that the Shares are dividend paying;“C” reflects (i) hedging between the currency of the Share Class and the Base Currency of the Portfolio and (ii) that the Shares aredividend paying;“M” reflects that the Shares are intended for exclusive availability to the clients of Mondrian Investment Partners Limited;“X” reflects that the Shares are also Institutional Share Classes with a higher minimum initial subscription amount than Class I andare only available to Eligible Investors;“W” reflects that the Shares are intended for distribution to existing Shareholders only; and“WS” reflects that the Shares are intended for exclusive availability to the clients of Walter Scott & Partners Limited.Classes AUH, AUC, DUH, IUH and XUH shall be expressed in U.S. Dollars although the Net Asset Value of the relevant Portfolio isexpressed in Euro or GBP. These Classes will be hedged, with the objective of minimizing currency risk exposure. This activity may increaseor decrease the return to investors in these Classes. The Net Asset Value of the remaining Classes of the relevant Portfolio shall beexpressed in Euro or GBP.78


Threadneedle (Lux) ProspectusClasses AEH, AEC, DEH, IEH, WEH, and XEH shall be expressed in Euro although the Net Asset Value of the relevant Portfolio is expressedin U.S. Dollars or GBP. These Classes will be hedged, with the objective of minimizing currency risk exposure. This activity may increase ordecrease the return to investors in those Classes. The Net Asset Value of the remaining Classes of the relevant Portfolio shall be expressedin U.S. Dollars or GBP.Classes AGH, IGH, MGH, XGH shall be expressed in GBP although the Net Asset Value of the relevant Portfolio is expressed in U.S. Dollarsor Euro. These Classes will be hedged, with the objective of minimizing currency risk exposure. This activity may increase or decrease thereturn to investors in those Classes. The Net Asset Value of the remaining Classes of the relevant Portfolio shall be expressed in U.S. Dollarsor in Euro.Classes AFH, IFH and XFH shall be expressed in CHF although the Net Asset Value of the relevant Portfolio is expressed in U.S. Dollars,GBP or Euro. These Classes will be hedged, with the objective of minimizing currency risk exposure. This activity may increase or decreasethe return to investors in those Classes. The Net Asset Value of the remaining Classes of the relevant Portfolio shall be expressed in U.S.Dollars, GBP or in Euro.Classes ASH, ISH, and XSH shall be expressed in SGD although the Net Asset Value of the relevant Portfolio is expressed in U.S. Dollars,GBP or Euro. These Classes will be hedged, with the objective of minimizing currency risk exposure. This activity may increase or decreasethe return to investors in those Classes. The Net Asset Value of the remaining Classes of the relevant Portfolio shall be expressed in U.S.Dollars or in Euro.Classes W, WS and M are denominated in the Base Currency of the relevant Portfolio.79


Threadneedle (Lux) ProspectusThreadneedle (Lux) PortfoliosBaseCurrency A A A A Dof Base Hedge Dividend Hedge BasePortfolio Currency Currency Paying Currency CurrencyDividendPayingBond PortfoliosGlobal Bonds (Euro) EUR AE AUH/ASH DEGlobal Aggregate Bond USD AU AEH/AFH/ AEC DUAGH/ASHEuro Active Bonds EUR AE ASH AEP DEEmerging Market Corporate Bonds USD AU AEH/AFH/ AUP AEC DUAGH/ASHEmerging Market Debt USD AU AEH/AFH/ AUP AEC DUAGH/ASHGlobal Emerging Market Short-Term Bonds USD AU AEH/AFH/ AUP AEC DUAGH/ASHUS$ High Income Bonds USD AU AEH/AFH/ AUP AEC DUAGH/ASHGlobal High Yield and Emerging Market (Euro) EUR AE AUH/ASH AEP DEEuropean High Yield Bond EUR AE AUH/AFH/ AEP AUC DEAGH/ASHAsset Allocation PortfolioGlobal Asset Allocation USD AU AEH/AFH/ AUP AEC DUAGH/ASHEquity PortfoliosGlobal Focus USD AU AEH/AFH/ DUAGH/ASHGlobal Emerging Market Equities USD AU AEH/AFH/ AUP DUAGH/ASHAmerican USD AU AEH/AFH/ DUAGH/ASHAmerican Select USD AU AEH/AFH/ AUP DUAGH/ASHUS Contrarian Core Equities USD AU AEH/AFH/ DUAGH/ASHPan European Equities EUR AE ASH/AGH DEPan European Smaller Companies EUR AE ASH/AGH DEEuropean Quantitative Equities EUR AE ASH DEAsia USD AU AEH/AFH/ DUAGH/ASHGreater China Equities USD AU AEH/AFH/ DUAGH/ASHGlobal Energy Equities USD AU AEH/AFH/ DUAGH/ASHGlobal Technology USD AU AEH/AFH/ DUAGH/ASHGlobal Equities – Walter Scott & PartnersEURMondrian Investment Partners –Focused Emerging Markets EquityUSDUK Equities GBP AG AUH/AFH/ AGP DGAEH/ASH80


Threadneedle (Lux) ProspectusShare ClassesD W* P X X B I I WS M M S SHedge Base Dividend Base Hedge Base Base Hedge Base Base Hedge Base DividendCurrency Currency Paying Currency Currency Currency Currency Currency Currency Currency Currency Currency Paying(or with and with and with and with and with“H” Hedge “P” “P” “P” “P”Currency) identifies identifies identifies identifiesDividend Dividend Dividend DividendPaying Paying Paying PayingW XE XUH /XFH/ IE IUH/ISHXGH/XSHDEH W/WEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHW XE XUH /XFH/ IE ISHXGH/XSHDEH W/WEH P XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/ SU SUPXGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/X IU IEH/IFH/GH/XSHIGH/ISHW XE XUH/XFH/ IE ISH SEPXGH/XSHDUH XE XUH/XFH/ IE IUH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XGH/ IU IEH/IFH/XFH/XSHIGH/ISHW XE XUH /XFH/ IE ISH/IGHXGH/XSHW XE XUH /XFH/ IE ISH/IGHXGH/XSHW XE XUH/XFH/ IE ISHXGH/XSHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH W XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XFH/ BU IU IEH/IFH/XGH/XSHIGH/ISHWSDEH XG XUH/XFH/ IG/ IGP IUH/IFH/XEH/XSHIEH/ISHMMGH81


Threadneedle (Lux) ProspectusThreadneedle (Lux) PortfoliosBaseCurrency A A A A Dof Base Hedge Dividend Hedge BasePortfolio Currency Currency Paying Currency CurrencyDividendPayingEquity Portfolios (continued)Latin America US$ AU AEH/AFH/ DUAGH/ASHUS Smaller Companies US$ AU AEH/AFH/ DUAGH/ASHGlobal Equity Dividend US$ AUP AEC/AFC/ DUPAGC/ASCAbsolute Return PortfoliosTarget Return (US$) USD AU AEH/AFH/ AEC DUAGH/ASHAmerican Absolute Alpha USD AU AEH/AFH/ DUAGH/ASHAbsolute Emerging Market Macro USD AU AEH/AFH/ AEC DUAGH/ASHMulti Asset Absolute Alpha EUR AE AUH/ AFH/ DEAGH/ASHEuropean Smaller Companies Absolute Alpha EUR AE AUH/AFH/ DEAGH/ASHGlobal Opportunities Bond USD AU AEH/AFH/ AEC DUAGH/ASHEuropean Absolute Alpha EUR AE AUH/AFH/ DEAGH/ASHSpecialist PortfolioEnhanced Commodities USD AU AEH/AFH/ DUAGH/ASHClasses W and WEH are available exclusively to existing Shareholders of such Share Class.82


Threadneedle (Lux) ProspectusShare ClassesD W* P X X B I I WS M M S SHedge Base Dividend Base Hedge Base Base Hedge Base Base Hedge Base DividendCurrency Currency Paying Currency Currency Currency Currency Currency Currency Currency Currency Currency Paying(or with and with and with and with and with“H” Hedge “P” “P” “P” “P”Currency) identifies identifies identifies identifiesDividend Dividend Dividend DividendPaying Paying Paying PayingDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEC XUP XGC/XEC/ IUP IGC/IEC/XFC/XSCIFC/ISCDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDUH XE XUH/XFH/ IE IUH/IFH/XGH/XSHIGH/ISHDUH XE XUH/XFH/ IE IUH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISHDUH XE XUH/XFH/ IE IUH/IFH/XGH/XSHIGH/ISHDEH XU XEH/XFH/ IU IEH/IFH/XGH/XSHIGH/ISH83


Threadneedle (Lux) ProspectusXI. The minimum initial subscription amounts accepted for investment are as follows:Share ClassMinimum Initial Investment per PortfolioClasses AU, DU, AUH and AUP US$ 2,500Classes AE, DE, AEH, DEH, AEP and AEC EUR 2,500Class AFH CHF 3,500Classes AG, AGH and AGP GBP 2,000Class ASH SGD 2,500Class BUNot ApplicableClasses W, WEH and P US$ 10,000 or EUR 10,000(depending on the Base Currency of the Portfolio)Classes XE and XEH EUR 5,000,000Classes XU and XUH US$ 5,000,000Classes XG and XGH GBP 3,000,000Class XFH CHF 7,500,000Class XSH SGD 5,000,000Classes IU and IUH US$ 100,000Classes IE and IEH EUR 100,000Class IFH CHF 150,000Classes IG, IGH and IGP GBP 100,000Class ISHSGD100,000Class M US$ 10,000,000Class MGH GBP 6,000,000Class WS EUR 10,000,000Classes SU and SUP US$ 2,500Class SEP EUR 2,500The minimum initial subscription amount may be waived at the discretion of the board of directors of the Management Company, providedthe principle of fair and equal treatment between Shareholders be respected. For Shares purchased through a sub-distributor, differentminimum initial subscription amounts may apply, as determined by the sub-distributors through which the Shares are subscribed.The SICAV retains the right to offer only one Share Class of the Portfolio for purchase by investors in any particular jurisdiction in order toconform to local law or any other reason.XI. A summary of the fees associated with an investment in each Share Class for each Portfolio, including any applicable AssetManagement Fee, shareholder servicing fees 64 or front-end sales charges, is found in the section entitled “Fees and Expenses” and inAppendices C, D, E and F of the Prospectus (except with respect to Classes BU, M and MGH for which charges are described directlyin the body of this Prospectus).November 201164From 1 April 2012, the shareholder servicing fee will be included in the Asset Management Fee.84


Issued by Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Societes (Luxembourg), Registered No. B 110242, 74, rue Mühlenweg, L-2155Luxembourg, Grand Duchy of Luxembourg. Threadneedle Asset Management Limited (TAML) Registered in England and Wales, Registered No. 573204, 60 St Mary Axe, London EC3A8JQ, United Kingdom. Authorised and regulated in the UK by the Financial Services Authority. Threadneedle Investments is a brand name and both the Threadneedle Investments nameand logo are trademarks or registered trademarks of the Threadneedle group of companies. threadneedle.com

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