La Française LUX A Luxembourg SICAV Prospectus May 2021 - La Française Group
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VISA 2021/165209-2377-0-PC
L'apposition du visa ne peut en aucun cas servir
d'argument de publicité
Luxembourg, le 2021-06-04
Commission de Surveillance du Secteur Financier
La Française LUX
A Luxembourg SICAV
Prospectus • May 2021
la-francaise.com
May 2021 Prospectus La Française LUXContents A Word to Potential Investors 3 Sub-Fund Descriptions 4 EQUIT Y SUB-FUNDS Inflection Point Carbon Impact Euro 5 Inflection Point Carbon Impact Global 6 Sustainable Real Estate Securities 7 FIXED INCOME SUB-FUNDS Euro Inflation 9 JKC Asia Bond 10 JKC Asia Bond 2023 11 Multistrategies Obligataires 12 Protectaux 14 DIVERSIFIED SUB-FUNDS GTS Réactif 15 Multi-Asset Income 16 NOTES ON SUB-FUND COSTS 17 RISK DESCRIP TIONS 18 GENERAL INVESTMENT POWERS AND RESTRICTIONS 22 HOW THE SUB-FUNDS USE DERIVATIVES AND TECHNIQUES 26 ENVIRONMENTAL, SOCIAL AND GOVERNANCE INDICATORS 28 SUSTAINABILIT Y-REL ATED DISCLOSURES 29 Investing in the Sub-Funds 30 The SICAV 37 The Management Company 42 List of Available Share Classes 44 May 2021 Prospectus La Française LUX 2
A Word to Potential Investors
ALL INVESTMENTS INVOLVE RISK WHO CAN INVEST IN THESE SUB-FUNDS
With these sub-funds, as with most investments, future Distributing this prospectus, offering these shares for
performance may differ from past performance. There is sale, or investing in these shares is legal only where the
no guarantee that any sub-fund will meet its objectives or shares are registered for public sale or where sale is not
achieve any particular level of performance. prohibited by local law or regulation. This prospectus is
Sub-fund investments are not bank deposits. The value of not an offer or solicitation in any jurisdiction, or to any
your investment can go up and down, and you could lose investor, where such a solicitation is not legally permitted.
some or all of your invested money. No sub-fund in this Neither these shares nor the SICAV are registered with
prospectus is intended as a complete investment plan, the US Securities and Exchange Commission or any other
nor are all sub-funds appropriate for all investors. US entity, federal or otherwise. Therefore, unless the
Before investing in any sub-fund, you should understand SICAV is satisfied that it would not constitute a violation
its risks, costs and terms of investment, and how well of US securities laws, these shares are not available to, or
these characteristics align with your own financial for the benefit of, US persons.
circumstances and risk tolerance. For more information on restrictions on share ownership,
As a potential investor, it is your responsibility to know or to request board approval to invest in a restricted
and follow the laws and regulations that apply to you, class, contact us (see “The SICAV”).
including any foreign exchange restrictions, and to be WHICH INFORMATION TO RELY ON
aware of potential tax consequences. We recommend
that you consult an investment adviser, legal adviser and In deciding whether or not to invest in a sub-fund, you
tax adviser before investing. should look at the most recent prospectus, relevant
Any difference among portfolio security currencies, share Key Investor Information Document (KIID), and recent
class currencies, and your home currency may expose annual and semi-annual report (all available online at
you to currency risk. If your home currency is different la-francaise.com). By buying shares in any of these sub-
from your share class currency, the performance you funds, you are considered to accept the terms described
experience as an investor could be very different from in these documents.
the published performance of the share class. Together, all these documents contain the only approved
information about the sub-funds and the SICAV. The
board is not liable for any statements or information
about the sub-funds or the SICAV that is not contained
in these documents. Information in this prospectus,
or any document about the SICAV or sub-funds, may
have changed since the publication date. In case of any
inconsistency in translations of this prospectus, the
English version will prevail.
May 2021 Prospectus La Française LUX 3Sub-Fund Descriptions
Terms with specific meanings
All of these sub-funds are part of La Française
The terms in this box have the following meanings within this
LUX, a SICAV that functions as an umbrella prospectus. Words and expressions that are defined in the 2010
Law but not here have the same meaning as in the 2010 Law.
structure. The SICAV exists to offer investors 2010 Law The Luxembourg law of December 17, 2010 on
Undertakings for Collective Investment, as amended.
access to professional investment management articles of incorporation The Articles of Incorporation of the
SICAV, as amended.
through a range of sub-funds, each aiming base currency The currency in which a sub-fund does the
accounting for its portfolio and maintains its primary NAV.
to achieve as high a degree of performance below investment grade See “credit quality”.
board The Board of Directors of the SICAV.
as is reasonably consistent with the risks the
business day Any day that the sub-fund calculates a NAV and
processes transactions in shares, as defined for each sub-
investment manager considers appropriate. fund in “Sub-Fund Descriptions”.
credit quality Investment grade debt securities are those
Descriptions of the specific investment objectives, rated at least BBB-/Baa3. Below investment grade securities,
which are considered more speculative, are rated BB+/Ba1 or
lower. Unrated securities may be assigned to either category
main investments and other key characteristics of based on credit analysis by the investment manager at the
time of purchase.
each sub-fund begin on the next page. In addition,
distressed debt Debt instruments issued by a company
that has failed in the past 12 months to remedy a default in
all sub-funds follow the regulatory policies coupon or principal payment within the 60-day grace period
typically built in the indenture of any of its outstanding debt
and restrictions found in “General Investment instruments.
eligible state Any state that the board considers to be
Powers and Restrictions”. Share class and consistent with a given sub-fund’s investment portfolio.
institutional investors Investors who qualify as institutional
dealing information appears in both "Sub-Fund investors under article 175 of the 2010 Law or under the
guidelines or recommendations of the CSSF.
Descriptions" and "Investing in the Sub-Funds". investment grade See “credit quality”.
KIID Key Investor Information Document.
The board of the SICAV has overall responsibility member state A member state of the EU or of the European
Economic Area.
for the SICAV’s business operations and its MiFID Directive 2014/65/EU and Regulation EU 600/2014 on
markets in financial instruments and any EU or Luxembourg
investment activities, including the investment implementing laws and regulations.
NAV Net asset value per share; the value of one share of a
activities of all of the sub-funds. The board has sub-fund.
prospectus This document, as amended from time to time.
delegated the day-to-day management of the SICAV La Française LUX.
sub-funds to the management company, which in shareholder reports The annual and semi-annual reports of
the SICAV.
turn has delegated some of its responsibilities to US person Any of the following:
• an individual who is a US • an individual or entity
investment managers and service providers. The resident that meets the substantial
• a partnership, company presence test or that is not
board retains supervisory approval and control or other entity that is a foreign person
organised or incorporated • an individual or entity
over the management company. under the laws of the considered to be a US person
United States by the board
we, us The SICAV, acting through the board or through any
More information about the SICAV, the board, the service providers described in this prospectus except for the
auditor and any distributors.
management company and the service providers you Any past, current or prospective shareholder, or an agent
for the same.
appears in the final sections of this prospectus,
Currency abbreviations
“The SICAV” and “The Management Company”. AUD Australian dollar GBP British pound sterling
CAD Canadian dollar JPY Japanese yen
CHF Swiss franc SEK Swedish krona
EUR Euro USD United States dollar
May 2021 Prospectus La Française LUX 4Inflection Point Carbon Impact Euro
Investment Objective and Policy Main Risks
Objective To contribute to the transition to a low carbon See “Risk Descriptions” for more information.
economy while achieving long-term capital growth. Risks typically associated with ordinary market conditions
Investment policy The sub-fund invests mainly in equities • Credit • Investment fund
issued by Eurozone companies that have committed to • Currency • Management
reducing their carbon emissions, expanding their low • Equity • Market
carbon strategy and replacing fossil energy sources with • ESG investment risk
low-carbon emission alternatives. Risks typically associated with unusual market conditions
Specifically, the sub-fund invests at least 85% of net • Liquidity • Operational
assets in equities and equity-related securities issued by Risk management method Commitment.
companies of any sector and market capitalisation that are
registered in the Eurozone.
Planning your Investment
The sub-fund may invest in, or be exposed to, the following
investments up to the percentage of net assets indicated: Suitability Designed for investors who understand the risks
• equities (including exposure from derivatives): 85% to of the sub-fund and plan to invest for at least 5 years.
105%
The sub-fund may appeal to investors who:
• equities from anywhere in the world, including emerging • are looking for a responsible investment with exposure to
markets: 10% Eurozone equities
• investment grade bonds: 10% • are interested in diversifying a core investment portfolio
• other UCITS/UCIs: 10% Subscription, redemption and switch orders Requests
The sub-fund may hold cash and cash equivalents on an received and accepted by the transfer agent by 11:00 AM CET
ancillary basis. These may include monetary UCIs or UCIs any day on which banks are normally open in Luxembourg
whose investments’ overall weighted maturity or rate reset and France are ordinarily processed the same business day.
frequency does not exceed 12 months.
Costs and minimum investments for major share classes
The sub-fund’s net exposure to non-EUR currencies does
R I
not exceed 10% of net assets.
Minimum initial investment
Derivatives and techniques The sub-fund may use
Currency EUR EUR
derivatives as a substitute for direct investment, for hedging
and for efficient portfolio management. Amount None 100,000
Strategy In selecting securities, the investment manager One-off charges taken before or after you invest (maximum %)
uses a 3-step investment process: Subscription 3.00 3.00
• exclusion of companies that are exposed to controversial Charges taken from the sub-fund over a year (maximum %)
weapons or are from blacklisted countries, or those with
Management 1.65 1.00
lowest environmental, social and governance (ESG) ratings
(bottom 20% of the investment universe) Operation 0.30 0.30
• fundamental analysis of companies including Performance fee (maximum; charged as a % of outperformance)
environmental, strategic and financial criteria Performance None None
• rigorous portfolio construction aiming to calibrate overall
carbon footprint while ensuring geographic and sector See “Notes on Sub-Fund Costs” immediately following the last sub-
fund description for a fuller explanation of these fees, including the
diversification
performance fee. For a current and complete listing of available share
See "Environmental, Social and Governance Indicators" on classes, go to la-francaise.com.
page 28 for more information on company exclusion and
carbon emission measurement.
Investment manager(s) La Française Asset Management,
Paris.
Base currency EUR.
May 2021 Prospectus La Française LUX 5Inflection Point Carbon Impact Global
Investment Objective and Policy Main Risks
Objective To contribute to the transition to a low carbon See “Risk Descriptions” for more information.
economy while achieving long-term capital growth. Risks typically associated with ordinary market conditions
Investment policy The sub-fund invests mainly in equities • Currency • Investment fund
of global companies, including those in emerging markets, • Emerging markets • Management
that have committed to reducing their carbon emissions, • Equity • Market
expanding their low carbon strategy and replacing fossil • ESG investment risk
energy sources with low-carbon emission alternatives. Risks typically associated with unusual market conditions
Specifically, the sub-fund invests in equities and equity- • Liquidity • Operational
related securities issued by large capitalisation companies Risk management method Commitment.
in any sector. Investments may include American and global
depositary receipts (ADRs and GDRs).
Planning your Investment
The sub-fund may invest in, or be exposed to, the following
investments up to the percentage of net assets indicated: Suitability Designed for investors who understand the risks
• equities (including exposure from derivatives): 90% to of the sub-fund and plan to invest for at least 5 years.
105%
The sub-fund may appeal to investors who:
• investment grade bonds: 10% • are looking for a responsible investment with exposure to
• other UCITS/UCIs: 10% global equities
The sub-fund may hold cash and cash equivalents on an • are interested in diversifying a core investment portfolio
ancillary basis. These may include monetary UCIs or UCIs Subscription, redemption and switch orders Requests
whose investments’ overall weighted maturity or rate reset received and accepted by the transfer agent by 11:00 AM CET
frequency does not exceed 12 months. any day on which banks are normally open in Luxembourg
The sub-fund’s net exposure to non-EUR currencies may be and France are ordinarily processed the same business day.
up to 100% of net assets. Costs and minimum investments for major share classes
Derivatives and techniques The sub-fund may use
R I
derivatives as a substitute for direct investment, for hedging
Minimum initial investment
and for efficient portfolio management.
Currency EUR EUR, USD
Strategy In selecting securities, the investment manager
Amount None 100,000
uses a 3-step investment process:
• exclusion of companies that are exposed to controversial One-off charges taken before or after you invest (maximum %)
weapons or are from blacklisted countries, or those with Subscription 3.00 3.00
lowest environmental, social and governance (ESG) ratings
Charges taken from the sub-fund over a year (maximum %)
(bottom 20% of the investment universe)
Management 1.65 1.00
• fundamental analysis of companies including
environmental, strategic and financial criteria Operation 0.30 0.30
• rigorous portfolio construction aiming to calibrate overall Performance fee (maximum; charged as a % of outperformance)
carbon footprint while ensuring geographic and sector Performance None None
diversification
See “Notes on Sub-Fund Costs” immediately following the last sub-
See "Environmental, Social and Governance Indicators" on fund description for a fuller explanation of these fees, including the
page 28 for more information on company exclusion and performance fee. For a current and complete listing of available share
carbon emission measurement. classes, go to la-francaise.com.
Investment manager(s) La Française Asset Management,
Paris.
Base currency EUR.
May 2021 Prospectus La Française LUX 6Sustainable Real Estate Securities
Investment Objective and Policy • third, from the reduced investment universe, the
investment manager selects the most attractive
Objective To achieve income and long-term capital growth companies using its proprietary multi-factor model
(total return) by investing in global real estate with high ESG
See "Environmental, Social and Governance Indicators" on
(Environmental, Social & Governance) characteristics.
page 28 for more information on company exclusion.
Investment policy The sub-fund invests mainly in equities
Investment manager(s) La Française Asset Management GmbH.
of real estate companies from OECD countries.
Investment advisor(s) La Française Forum Securities (UK)
Specifically, the sub-fund invests at least 80% of net
Limited, London.
assets in equities and equity-related securities issued by
companies, including real estate investment trusts (REITs) Base currency USD.
that qualify as transferable securities under the 2010 Law
and related regulations and generate at least 50% of gross Main Risks
revenues or net profits from, or have 50% of their assets in,
real estate or related activities. Examples of these activities See “Risk Descriptions” for more information.
include owning, developing, building, financing, managing Risks typically associated with ordinary market conditions
and marketing real estate, including commercial, industrial,
• Concentration • Illiquid securities
residential or niche real estate sectors. The sub-fund may • Currency • Investment fund
invest up to 15% of net assets in non-OECD countries. • Derivatives • Management
The sub-fund may invest in, or be exposed to, the following • Emerging markets • Market
investments up to the percentage of net assets indicated: • Equity • Real estate investments
• preferred stocks: 10% • ESG investment risk
• bonds from issuers in the real estate sector: 10% Risks typically associated with unusual market conditions
• money market instruments: 10% • Counterparty • Operational
• other UCITS/UCIs: 10% • Liquidity
The sub-fund may also invest in credit notes. Risk management method Commitment.
The sub-fund may hold cash and cash equivalents on an
ancillary basis. These may include monetary UCIs or UCIs Planning your Investment
whose investments’ overall weighted maturity or rate reset
frequency does not exceed 12 months. Suitability Designed for investors who understand the risks
of the sub-fund and plan to invest for at least 5 years.
Derivatives and techniques The sub-fund may use
derivatives for hedging and for efficient portfolio The sub-fund may appeal to investors who:
management. • are looking for an investment with a social/environmental
emphasis
In addition to core derivatives (defined in “How the Sub-
Funds Use Derivatives and Techniques”), the sub-fund may • are looking for exposure to a sector that may have a
relatively low correlation to equities or bonds
use contracts for difference (CFDs) on real estate stocks.
• are looking for exposure to the real estate sector that is
The sub-fund may also use repurchase and reverse comparatively liquid
repurchase agreements for efficient portfolio management.
• are interested in diversifying a core investment portfolio
Strategy The investment manager combines a financial
Subscription, redemption and switch orders Requests
and a proprietary extra-financial analysis to select, within a
received and accepted by the transfer agent by 11:00 AM CET
universe of approximately 350 real estate companies, in a
any day on which banks are normally open in Luxembourg are
three step analysis:
ordinarily processed the following business day.
• first, the best 50% of companies are selected from
the investment universe based on an ESG score; the Settlement of subscription and redemption transactions
investment manager uses the ESG scoring established by occurs 3 business days after a request is received and
La Française Sustainable Investment Research accepted.
• second, companies that do not have sufficient
trading volume on the stock exchanges and are not Continued on next page.
headquartered in developed markets are excluded from
the investable universe
May 2021 Prospectus La Française LUX 7Sustainable Real Estate Securities (continued)
Costs and minimum investments for major share classes
R R I I
Minimum initial investment
Currency EUR H USD EUR H USD
Amount None None 50,000 50,000
One-off charges taken before or after you invest (maximum %)
Subscription 5.00 5.00 None None
Charges taken from the sub-fund over a year (maximum %)
Management 1.50 1.50 1.00 1.00
Operation 0.40 0.35 0.36 0.31
Performance fee (maximum; charged as a % of outperformance)
Performance None None None None
See “Notes on Sub-Fund Costs” immediately following the last sub-
fund description for a fuller explanation of these fees, including the
performance fee. For a current and complete listing of available share
classes, go to la-francaise.com.
May 2021 Prospectus La Française LUX 8Euro Inflation
Investment Objective and Policy Investment manager(s) La Française Asset Management,
Paris.
Objective To outperform (net of fees) the Barclays Capital Base currency EUR.
Euro Government Inflation-Linked Bond Index, over any
given 3-year period.
Main Risks
Investment policy The sub-fund invests mainly in
investment grade government bonds issued in the Eurozone. See “Risk Descriptions” for more information.
Specifically, the sub-fund invests in fixed rate, floating rate Risks typically associated with ordinary market conditions
or inflation-indexed debt securities and negotiable debt • Credit • Investment fund
instruments that are issued or guaranteed by a Eurozone • Derivatives • Leverage
member state. At the time of investment, these securities • Inflation • Management
are rated investment grade or judged equivalent by the • Interest rate • Market
investment manager; however, if they subsequently decline Risks typically associated with unusual market conditions
in quality, the sub-fund may continue to hold them.
• Counterparty • Operational
The sub-fund may invest in, or be exposed to, the following • Liquidity
investments up to the percentage of net assets indicated: Risk management method Absolute VaR.
• corporate bonds issued in the Eurozone: 50%
Expected maximum gross level of leverage 500%.
• bonds issued in OECD countries outside the Eurozone: 10% To understand what the leverage metrics do and do not
• below investment grade bonds: 10% mean, see “Management and monitoring of derivatives risk”.
• other UCITS/UCIs: 10%
The sub-fund may invest in credit notes.
Planning your Investment
The sub-fund may hold cash and cash equivalents on an
ancillary basis. These may include monetary UCIs or UCIs Suitability Designed for investors who understand the risks
whose investments’ overall weighted maturity or rate reset of the sub-fund and plan to invest for at least 3 years.
frequency does not exceed 12 months. The sub-fund may appeal to investors who:
Non-EUR investments may be up to 10% of net assets and • are looking to protect the value of an investment against
are hedged to EUR. inflation
The sub-fund’s modified duration may vary from 0 to 10. • are interested in a core investment
Derivatives and techniques The sub-fund may use Subscription, redemption and switch orders Requests
derivatives as a substitute for direct investment, for received and accepted by the transfer agent by 11:00 AM CET
hedging, for efficient portfolio management and to create any day on which banks are normally open in Luxembourg
leverage. and France are ordinarily processed the same business day.
The sub-fund may also use repurchase and reverse Costs and minimum investments for major share classes
repurchase agreements for efficient portfolio management R I
and to create arbitrage positions designed to profit from Minimum initial investment
changes in interest rate spreads. Currency EUR EUR
Strategy The investment manager uses a combination of Amount None 100,000
various derivative-based strategies.
One-off charges taken before or after you invest (maximum %)
Specifically, these strategies include:
Subscription 3.00 3.00
• a directional strategy aiming to optimise the performance
Charges taken from the sub-fund over a year (maximum %)
of the portfolio based on interest rate and inflation
expectations Management 1.34 0.68
• an interest rate curve strategy aiming to exploit the Operation 0.21 0.21
variations of the spreads between long-term rates and Performance fee (maximum; charged as a % of outperformance)
short-term rates
Performance 20 20
• an arbitrage strategy between fixed-rate and inflation-
linked bonds Reference for performance fee Barclays Capital Euro Government
Inflation-Linked Bond Index.
• an international diversification strategy aiming to take
See “Notes on Sub-Fund Costs” immediately following the last sub-
advantage of the opportunities offered by the OECD bond
fund description for a fuller explanation of these fees, including the
markets performance fee. For a current and complete listing of available share
• a credit diversification strategy founded on the use of classes, go to la-francaise.com.
bonds issued by the private sector
May 2021 Prospectus La Française LUX 9JKC Asia Bond
Investment Objective and Policy Main Risks
Objective To achieve income and capital growth (total See “Risk Descriptions” for more information.
return). Risks typically associated with ordinary market conditions
Reference benchmark (for context purposes only) Markit • Coco bonds • Inflation
iBoxx Asian Dollar Bond Index. • Country risk – China • Interest rate
Investment policy The sub-fund invests mainly in • Credit • Investment fund
government and corporate bonds of any credit quality from
• Currency • Leverage
• Derivatives • Management
Asian Pacific countries, excluding Japan.
• Emerging markets • Market
Specifically, the sub-fund invests up to 100% net assets in Risks typically associated with unusual market conditions
fixed and floating rate debt securities as well as in inflation
• Counterparty • Liquidity
rate and money market instruments that are issued in those
• Default • Operational
countries. The sub-fund may also invest in debt securities
issued in any other countries. Risk management method Absolute VaR.
The sub-fund may invest in, or be exposed to, the following Expected maximum gross level of leverage 400%.
investments up to the percentage of net assets indicated: To understand what the leverage metrics do and do not
mean, see “Management and monitoring of derivatives risk”.
• convertible bonds: 30%
• contingent convertible bonds (coco bonds): 20%
• equities (through exposure from convertible bonds): 10% Planning your Investment
• other UCITS/UCIs: 10% Suitability Designed for investors who understand the risks
The sub-fund may hold cash and cash equivalents on an of the sub-fund and plan to invest for at least 3 years.
ancillary basis. These may include monetary UCIs or UCIs
The sub-fund may appeal to investors who:
whose investments’ overall weighted maturity or rate reset
frequency does not exceed 12 months. • are looking for exposure to Asia-Pacific economies
• are interested in diversifying a core investment portfolio
Net exposure to local currencies may be up to 20% of
net assets, and to G7 currencies up to 100%. Non-USD Subscription, redemption and switch orders Requests
investments may be hedged to USD. received and accepted by the transfer agent by 11:00 AM CET
any day on which banks are normally open in Luxembourg and
The sub-fund’s modified duration may vary from 0 to 10. Hong Kong are ordinarily processed the following business
Derivatives and techniques The sub-fund may use day.
derivatives as a substitute for direct investment, for Costs and minimum investments for major share classes
hedging, for efficient portfolio management and to create
R I
leverage.
Currency and minimum initial investment
In addition to core derivatives (defined in “How the Sub-
Currency EUR, USD EUR, EUR H, USD
Funds Use Derivatives and Techniques”), the sub-fund may
use credit default swaps (including those based on indices). Amount None 100,000
Strategy The investment manager uses a long-only One-off charges taken before or after you invest (maximum %)
approach that is based on global economic and financial Subscription 3.00 3.00
analysis as well as analysis of companies’ balance sheets and Charges taken from the sub-fund over a year (maximum %)
insights into sovereign debt fundamentals.
Management 1.50 1.00
Investment manager(s) JK Capital Management Limited,
Operation 0.40 0.40
Hong Kong.
Performance fee (maximum; charged as a % of outperformance)
Base currency USD.
Performance None None
See “Notes on Sub-Fund Costs” immediately following the last sub-
fund description for a fuller explanation of these fees, including the
performance fee. For a current and complete listing of available share
classes, go to la-francaise.com.
May 2021 Prospectus La Française LUX 10JKC Asia Bond 2023
Investment Objective and Policy Main Risks
Objective To achieve high income, over an investment See “Risk Descriptions” for more information.
period of 7 years from the launch date of the sub-fund. Risks typically associated with ordinary market conditions
Investment policy The sub-fund invests mainly in • Country risk – China • Interest rate
government and corporate bonds of any credit quality from • Credit • Investment fund
Asian Pacific countries, excluding Japan, that mature on or • Currency • Management
before 31 December 2023. • Derivatives • Market
• Emerging markets
Specifically, the sub-fund invests up to 100% of net assets
in fixed and floating rate debt securities as well as in money Risks typically associated with unusual market conditions
market instruments that are issued in those countries. The • Counterparty • Liquidity
sub-fund may also invest in debt securities issued in other • Default • Operational
countries. The sub-fund does not invest in securities that Risk management method Commitment.
are distressed or defaulted at the time of investment. The
sub-fund may hold securities that become distressed or
defaulted.
Planning your Investment
The sub-fund may invest in, or be exposed to, the following Suitability Designed for investors who understand the risks
investments up to the percentage of net assets indicated: of the sub-fund and plan to invest until the maturity of the
• convertible bonds: 30% sub-fund (31 December 2023).
• equities (through exposure from convertible bonds): 10% The sub-fund may appeal to investors who:
• distressed or defaulted securities: 10% • are looking for exposure to Asia-Pacific economies
• other UCITS/UCIs: 10% • are interested in diversifying a core investment portfolio
The sub-fund may hold cash and cash equivalents on an Subscription, redemption and switch orders Requests
ancillary basis. These may include monetary UCIs or UCIs received and accepted by the transfer agent by 11:00 AM CET
whose investments’ overall weighted maturity or rate reset any day on which banks are normally open in Luxembourg and
frequency does not exceed 12 months. Hong Kong are ordinarily processed the following business day.
The sub-fund’s exposure to local or G7 currencies may be Subscriptions will be closed on 31 December 2021 at 11:00
up to 100%. Non-USD investments are hedged to USD. PM CET. From then on, only a subscription preceded by a
The sub-fund’s modified duration may vary from 0 to 6 and redemption by the same shareholder on the same day and
decreases over time. for the same number of shares may be executed.
Note: In the interest of shareholders, until 31 December 2021 Costs and minimum investments for major share classes
(when the subscription period ends), portfolio securities R I
that are listed or traded on an official stock market or Currency and minimum initial investment
other regulated market will be valued using the ask price;
Currency EUR H, USD EUR H, USD
thereafter, these securities will be valued using the bid price.
Amount 1,000 100,000
Derivatives and techniques The sub-fund may use
One-off charges taken before or after you invest (maximum %)
derivatives as a substitute for direct investment, for hedging
and for efficient portfolio management. Subscription 3.00 3.00
In addition to core derivatives (defined in “How the Sub- Charges taken from the sub-fund over a year (maximum %)
Funds Use Derivatives and Techniques”), the sub-fund may Management 1.10 0.60
use credit default swaps (single name only). Operation 0.365 0.325
For efficient portfolio management, the sub-fund may also Performance fee (maximum; charged as a % of outperformance)
use repurchase and reverse repurchase agreements.
Performance None None
Strategy The investment manager uses a long only approach
that is based on global economic and financial analysis as See “Notes on Sub-Fund Costs” immediately following the last sub-
fund description for a fuller explanation of these fees, including the
well as analysis of companies’ balance sheets and insights performance fee. For a current and complete listing of available share
into sovereign debt fundamentals. The investment manager classes, go to la-francaise.com.
may also use arbitrage strategies in the event of market
opportunities or changes in companies’ risk profile.
Investment manager(s) JK Capital Management Limited,
Hong Kong.
Base currency USD.
May 2021 Prospectus La Française LUX 11Multistrategies Obligataires
Investment Objective and Policy • a short-or-long directional strategy aiming to optimise the
performance of the portfolio based on interest rate and
Objective To achieve income and capital growth (total inflation expectations
return). Specifically, the sub-fund seeks to outperform (net • an arbitrage strategy aiming to seek the relative value on
of fees) the reference benchmark by at least 3.5%, over any various bond asset classes
given 3-year period. • an interest rate curve strategy aiming to exploit the
Reference benchmark variations of the spreads between long-term rates and
• CHF-denominated shares: 3-month Libor Index in CHF short-term rates
• EUR-denominated shares: 3-month Euribor Index • a credit diversification strategy founded on the use of
• GBP-denominated shares: 3-month Libor Index in GBP bonds issued by the private sector
• USD-denominated shares: 3-month Libor Index in USD Investment manager(s) La Française Asset Management,
Investment policy The sub-fund invests mainly in bonds of any Paris.
credit quality, including below investment grade bonds, and in Base currency EUR.
any currency from OECD issuers.
Specifically, the sub-fund invests in fixed rate, floating rate Main Risks
or inflation-indexed debt securities and negotiable debt
instruments. See “Risk Descriptions” for more information.
The sub-fund may invest in, or be exposed to, the following Risks typically associated with ordinary market conditions
investments up to the percentage of net assets indicated: • ABS/MBS/TBA • Inflation
• convertible bonds: 100% • Coco bonds • Interest rate
• contingent convertible bonds (coco bonds): 20% • Convertible securities • Investment fund
• Credit • Leverage
• mortgage- or asset-backed securities: 20% • Currency • Management
• other UCITS/UCIs: 10% • Derivatives • Market
• equities (through exposure from convertible bonds): 5% • Illiquid securities
The sub-fund may invest in credit notes. It does not invest in Risks typically associated with unusual market conditions
distressed/defaulted securities.
• Counterparty • Liquidity
The sub-fund may hold cash and cash equivalents on an • Default • Operational
ancillary basis. These may include monetary UCIs or UCIs
whose investments’ overall weighted maturity or rate reset Risk management method Absolute VaR.
frequency does not exceed 12 months. Expected maximum gross level of leverage 500%.
The sub-fund’s net exposure (after hedging) to non-EUR To understand what the leverage metrics do and do not
currencies may be up to 10% of net assets. mean, see “Management and monitoring of derivatives risk”.
The sub-fund’s modified duration may vary from -3 to 5.
Planning your Investment
Derivatives and techniques The sub-fund may use
derivatives as a substitute for direct investment, for hedging, Suitability Designed for investors who understand the risks
for efficient portfolio management and to create leverage. of the sub-fund and plan to invest for at least 3 years.
In addition to core derivatives (defined in “How the Sub- The sub-fund may appeal to investors who:
Funds Use Derivatives and Techniques”), the sub-fund may • are looking for exposure to international bonds
use credit default swaps and total return swaps based on • are interested in diversifying a core investment portfolio
developed and emerging market government debt and
Subscription, redemption and switch orders Requests
corporate bonds.
received and accepted by the transfer agent by 11:00 AM CET
The sub-fund may also use repurchase and reverse any day on which banks are normally open in Luxembourg
repurchase agreements for efficient portfolio management and France are ordinarily processed the same business day.
and to create arbitrage positions designed to profit from
changes in interest rate spreads.
Strategy The investment manager uses a combination of Continued on next page.
various derivative-based strategies.
Specifically, these strategies include:
May 2021 Prospectus La Française LUX 12Multistrategies Obligataires (continued)
Costs and minimum investments for major share classes
R I
Currency and minimum initial investment
Currency EUR, USD CHF H, EUR
Amount None 100,000
One-off charges taken before or after you invest (maximum %)
Subscription 3.00 3.00
Charges taken from the sub-fund over a year (maximum %)
Management 1.04 0.48
Operation 0.25 0.25
Performance fee (maximum; charged as a % of outperformance)
Performance 25 25
Reference for performance fee 3-month Libor Index in CHF + 3.5% for
class CHF; 3-month Euribor Index + 3.5% for class EUR; 3-month Libor
Index in GBP + 3.5% for class GBP; 3-month Libor Index in USD + 3.5% for
class USD.
See “Notes on Sub-Fund Costs” immediately following the last sub-
fund description for a fuller explanation of these fees, including the
performance fee. For a current and complete listing of available share
classes, go to la-francaise.com.
May 2021 Prospectus La Française LUX 13Protectaux
Investment Objective and Policy Main Risks
Objective To achieve a positive performance over a 2-year See “Risk Descriptions” for more information.
period, in an environment of rising 10-year interest rates Risks typically associated with ordinary market conditions
within the Eurozone. Specifically, the sub-fund seeks to
• Credit • Investment fund
correlate its return with long-term interest rates.
• Derivatives • Management
Reference benchmark (for context purposes only) Lyxor • Interest rate • Market
Bund Daily (-1x) Inverse UCITS ETF – Acc (Bloomberg BUNS FP). Risks typically associated with unusual market conditions
Investment policy The sub-fund invests mainly in top-rated • Counterparty • Operational
government bonds that are denominated in EUR and are issued • Liquidity
either in France or in other OECD countries. Risk management method Commitment.
Specifically, the sub-fund invests in fixed debt securities and
negotiable debt instruments that are issued or guaranteed
Planning your Investment
by the French state or an OECD member state. At the time
of investment, these securities are rated AAA by Standard Suitability Designed for investors who understand the risks
& Poor’s or judged equivalent by the investment manager; of the sub-fund and plan to invest for at least 2 years.
however, if they subsequently decline in quality, the sub-
The sub-fund may appeal to investors who:
fund may continue to hold them. However, the sub-fund
• are interested in a bond investment that offers potential
will not allow more than 10% of net assets to be invested
protection against interest rate risk
in securities that have declined to below investment grade
levels.
• are interested in a core investment portfolio
Subscription, redemption and switch orders Requests
The sub-fund may invest in, or be exposed to, the following
received and accepted by the transfer agent by 11:00 AM CET
investments up to the percentage of net assets indicated:
any day on which banks are normally open in Luxembourg
• corporate bonds: 20% and France are ordinarily processed the same business day.
• other UCITS/UCIs: 10%
Costs and minimum investments for major share classes
The sub-fund may hold cash and cash equivalents on an
ancillary basis. These may include monetary UCIs or UCIs I -
whose investments’ overall weighted maturity or rate reset Minimum initial investment
frequency does not exceed 12 months. Currency EUR —
The sub-fund’s modified duration may vary from -10 to 2. Amount 100,000 —
Derivatives and techniques The sub-fund may use One-off charges taken before or after you invest (maximum %)
derivatives as a substitute for direct investment, for hedging Subscription 3.00 —
and for efficient portfolio management.
Charges taken from the sub-fund over a year (maximum %)
The sub-fund may also use repurchase and reverse Management 0,39 —
repurchase agreements for efficient portfolio management
Operation 0.20 —
and to create arbitrage positions designed to profit from
changes in interest rate spreads. Performance fee (maximum; charged as a % of outperformance)
Strategy The investment manager actively manages Performance None —
short positions on futures and forward contracts to take
See “Notes on Sub-Fund Costs” immediately following the last sub-
advantage of potential interest rate rises. fund description for a fuller explanation of these fees, including the
performance fee. For a current and complete listing of available share
Investment manager(s) La Française Asset Management, classes, go to la-francaise.com.
Paris.
Base currency EUR.
May 2021 Prospectus La Française LUX 14GTS Réactif
Investment Objective and Policy Main Risks
Objective To achieve long-term capital growth. See “Risk Descriptions” for more information.
Investment policy The sub-fund invests mainly in equities Risks typically associated with ordinary market conditions
and bonds from anywhere in the world, including emerging • Coco bonds • Interest rate
markets, directly or indirectly through investments in other • Credit • Investment fund
funds. • Emerging markets • Management
Specifically, the sub-fund invests in equities and in floating
• Equity • Market
rate, fixed rate or inflation-indexed debt securities and Risks typically associated with unusual market conditions
negotiable debt instruments. Although the fund has no • Default • Operational
minimum or maximum requirements as to sectors, countries • Liquidity
or regions, at any given time it may have heavy exposure to
Risk management method Commitment.
specific types of investments.
The sub-fund may invest in, or be exposed to, the following
investments up to the percentage of net assets indicated: Planning your Investment
• UCITS/UCIs: 60% Suitability Designed for investors who understand the risks
• equities: 50% of the sub-fund and plan to invest for at least 5 years.
• contingent convertible bonds (coco bonds): 10% The sub-fund may appeal to investors who:
The sub-fund may hold cash and cash equivalents on an • are looking for exposure to a global asset mix
ancillary basis. These may include monetary UCIs or UCIs
• are interested in diversifying a core investment portfolio
whose investments’ overall weighted maturity or rate reset
frequency does not exceed 12 months. Subscription, redemption and switch orders Requests
received and accepted by the transfer agent by 11:00 AM CET
Derivatives and techniques The sub-fund may use any day on which banks are normally open in Luxembourg and
derivatives as a substitute for direct investment, for hedging France are ordinarily processed the following business day.
and for efficient portfolio management.
Costs and minimum investments for major share classes
Strategy The investment uses an active management
R I
approach (stock picking), selecting from a universe of listed
equities and funds while limiting equity risk exposure. The Minimum initial investment
investment manager also uses a short-or-long directional Currency EUR EUR
strategy. Amount None 50,000
Investment manager(s) La Française Asset Management, One-off charges taken before or after you invest (maximum %)
Paris.
Subscription 3.00 3.00
Base currency EUR. Charges taken from the sub-fund over a year (maximum %)
Management 2.00 0.60
Operation 0.50 0.50
Performance fee (maximum; charged as a % of outperformance)
Performance None None
The maximum management charge applied by the targeted UCITS/UCIs
is 1.80%.
See “Notes on Sub-Fund Costs” immediately following the last sub-
fund description for a fuller explanation of these fees, including the
performance fee. For a current and complete listing of available share
classes, go to la-francaise.com.
May 2021 Prospectus La Française LUX 15Multi-Asset Income
Investment Objective and Policy Main Risks
Objective To achieve regular income and capital growth See “Risk Descriptions” for more information.
(total return) over the medium to long term. Risks typically associated with ordinary market conditions
Investment policy The sub-fund invests mainly in equities, • Coco bonds • lnterest rate
government and corporate bonds, and real estate • Credit • Investment fund
securities, from anywhere in the world, including emerging • Currency • Leverage
markets. • Derivatives • Management
• Emerging markets • Market
Specifically, the sub-fund invests up to 100% of net assets
• Equity • Real estate investments
in equities and/or floating rate, fixed rate or inflation- • Illiquid securities
indexed debt securities and negotiable debt instruments of
any credit quality. The sub-fund may invest substantially in Risks typically associated with unusual market conditions
issuers that are rated lower than BBB- by Standard & Poor’s • Counterparty • Liquidity
or judged equivalent by the investment manager at the time • Default • Operational
of the purchase. Although the fund has no minimum or Risk management method Absolute VaR.
maximum requirements as to sectors, countries or regions,
Expected maximum gross level of leverage 500%.
at any given time it may have heavy exposure to specific
To understand what the leverage metrics do and do not
types of investments.
mean, see “Management and monitoring of derivatives risk”.
The sub-fund may invest in, or be exposed to, the following
investments up to the percentage of net assets indicated:
• equities: 100% (including exposure from contingent Planning your Investment
convertible bonds up to 10%)
Suitability Designed for investors who understand the risks
• real estate investment trusts (REITs) that qualify as of the sub-fund and plan to invest for at least 3 years.
transferable securities under the 2010 Law and related
regulations, publicly traded real estate preferred equities The sub-fund may appeal to investors who:
and debt securities, and equity-related securities of real • are looking for exposure to a global asset mix
estate operating companies: 40% • are interested in diversifying a core investment portfolio
• contingent convertible bonds (coco bonds): 10% Subscription, redemption and switch orders Requests
• other UCITS/UCIs: 10% received and accepted by the transfer agent by 11:00 AM CET
any day on which banks are normally open in Luxembourg
The sub-fund may hold cash and cash equivalents on an
and France are ordinarily processed the same business day.
ancillary basis. These may include monetary UCIs or UCIs
whose investments’ overall weighted maturity or rate reset Costs and minimum investments for major share classes
frequency does not exceed 12 months. Net exposure to R I
non-EUR currencies may be up to 100% of net assets. Currency and minimum initial investment
The sub-fund’s modified duration may vary from 0 to 15. Currency EUR, USD EUR, USD
Distribution shares The sub-fund intends to distribute Amount None 100,000
income of at least 3% each year (rate defined at the
One-off charges taken before or after you invest (maximum %)
beginning of each calendar year). These payments may
reduce the sub-fund’s capital. Subscription 3.00 3.00
Derivatives and techniques The sub-fund may use derivatives Charges taken from the sub-fund over a year (maximum %)
as a substitute for direct investment, for hedging, for efficient Management 1.60 0.80
portfolio management and to create leverage. Operation 0.30 0.30
In addition to core derivatives (defined in “How the Sub-Funds Performance fee (maximum; charged as a % of outperformance)
Use Derivatives and Techniques”), the sub-fund may use credit
Performance None None
default swaps and total return swaps based on emerging
market government debt, corporate bonds and equities. See “Notes on Sub-Fund Costs” immediately following the last sub-
fund description for a fuller explanation of these fees, including the
Strategy The investment manager uses a dynamic and performance fee. For a current and complete listing of available share
flexible allocation process across selected asset classes. classes, go to la-francaise.com.
Investment manager(s) La Française Asset Management, Paris.
Sub-investment manager(s) La Française Asset Management
GmbH (real estate investments only).
Base currency EUR.
May 2021 Prospectus La Française LUX 16Notes on Sub-Fund Costs
These notes apply only to the share class tables in “Sub- When this number is positive, the share class has
Fund Descriptions”. outperformed its performance standard, and the amount
of this outperformance is the basis for any performance
GENERAL fees accrued that day. When this number is zero or
The charges you pay as an investor in the sub-fund go to negative, the share class has failed to outperform its
cover sub-fund operating costs, including marketing and performance standard, and no performance fee is payable.
distribution costs. These ongoing charges reduce the The performance fee amount per share is the
performance of your investment. performance fee percentage (as stated in “Sub-
Fund Descriptions”) multiplied by the amount of
CHARGES TAKEN FROM THE SUB-FUND OVER A YEAR outperformance.
These charges are the same for all shareholders of a given Fee caps Regardless of results of any performance fee
share class. calculations, no sub-fund is permitted to pay out more
The management fee is payable to the management than 2.50% of its assets in aggregate performance fees,
company to cover the charges from the investment with the following exceptions:
manager(s) and any sub-investment managers and • Multistrategies Obligataires: no fee cap
investment advisors. High water mark Regardless of results of any
The operation fee includes, among others, the fees performance fee calculations, the following will pay
payable to the depositary bank, administrator and no performance fee if the NAV as of the time of fee
transfer agent. crystallisation is no higher than the highest NAV ever
previously achieved: n/a.
PERFORMANCE FEE
Crystallisation A performance fee crystallises (becomes
General description A performance fee is charged only payable) under any of the following circumstances:
on certain sub-funds and share classes, and only when a • on the last business day of a cycle
share class of a sub-fund outperforms its performance • when any shares are switched or redeemed (for those
standard (a measure of relevant market performance) as shares only)
stated in “Sub-Fund Descriptions”. • when any sub-fund is merged or liquidated
Measurement period The cycle for performance Once crystallised, a performance fee becomes non-
fee measurement periods is the calendar year. The refundable and is paid out to the management company.
measurement period resets yearly, whether any Performance fees are paid out of sub-fund assets (or, in
performance fee has been paid or not. the case of fees on redemptions or switches, deducted
from the shares in question before the transaction is
If a sub-fund or share class that carries a performance
processed).
fee is launched during the course of a cycle, its first
measurement period will extend from the launch date Because different share classes of a given sub-fund may
until the end of the calendar year. The same is true for have different NAVs, the actual performance fees paid
any sub-fund or share class to which a performance fee may vary by share class. For distributing shares, any
is added. distributions paid out are counted as part of performance
for purposes of performance fee calculation. Swing
Performance standard For each applicable sub-fund and
pricing or other adjustments intended to mitigate the
share class, the performance standard is a hypothetical
effects of transaction volumes or costs are not counted in
sub-fund that has all the same daily subscriptions and
performance fee calculations.
redemptions as the real sub-fund and class, but whose
investment performance is that of a stated benchmark FEES FOR OTHER AVAILABLE CLASSES
(such as an index, blend of indexes, or a rate).
See complete list of available share classes and fees on
How the fee is calculated At the beginning of each
page 44.
performance period, the fee is zero. On every day that is a
business day for a sub-fund, we subtract the performance
of the applicable performance standard from the
performance of the actual sub-fund and share class.
May 2021 Prospectus La Française LUX 17Risk Descriptions
All investments involve risk. The risks of some of these is either into equity (at a price ostensibly fixed at issue)
sub-funds may be comparatively high. or via a writedown mechanism (again, depending on
The risk descriptions below correspond to the main structure or the jurisdiction of the issuer). Additional Tier
risk factors listed for each sub-fund. A sub-fund could 1 securities were first issued in the second quarter of
potentially be affected by risks beyond those listed for 2013 and there are currently c80 liquid issues outstanding
it or described here, nor are these risk descriptions from c40 (largely European bank) issuers. To date no
themselves intended as exhaustive. Each risk is described security has been triggered and all notes remain current.
as if for an individual sub-fund. Issuers of such securities may tend to be those that are
vulnerable to weakness in the financial markets. Because
Any of these risks could cause a sub-fund or a share conversion occurs after a specified event, conversion
class to lose money, to perform less well than similar may occur when the share price of the underlying equity
investments or a benchmark, to experience high volatility is less than when the security was issued or purchased,
(ups and downs in NAV), or to fail to meet its objective over resulting in greater potential compared to conventional
any period of time. convertible securities for capital loss.
RISKS TYPICALLY ASSOCIATED WITH ORDINARY MARKET The investments in contingent convertible securities may
CONDITIONS also entail the following risks (non-exhaustive list):
• Coupon cancellation: for some contingent convertible
Risks included in this section are generally present to a securities, coupon payments are entirely discretionary
material degree in ordinary market conditions, but also and may be cancelled by the issuer at any point, for any
tend to be present — and more potent — in unusual market reason and for any length of time.
conditions.
• Yield: investors have been drawn to the instruments as a
ABS/MBS/TBA risk Mortgage-backed and asset-backed result of the coco’s often attractive yield which may be
securities (MBSs and ABSs) typically carry prepayment and viewed as a complexity premium.
extension risk and can carry above-average liquidity risk. • Valuation and write-down risks: the value of contingent
MBSs (a category that includes collateralised mortgage convertible securities may need to be reduced due to
obligations, or CMOs) and ABSs represent an interest in a a higher risk of overvaluation of such asset class on the
pool of debt, such as credit card receivables, auto loans, relevant eligible markets. Therefore, a sub-fund may
student loans, equipment leases, home mortgages and lose its entire investment or may be required to accept
home equity loans. cash or securities with a value less than its original
investment.
MBSs and ABSs also tend to be of lower credit quality than
many other types of debt securities. To the extent that the • Call extension risk: some contingent convertible
securities are issued as perpetual instruments, callable
debts underlying an MBS or ABS go into default or become
at pre-determined levels only with the approval of the
noncollectable, the securities based on those debts will
competent authority.
lose some or all of their value.
• Capital structure inversion risk: contrary to classical
To-be-announced (TBA) securities, which are MBSs or capital hierarchy, contingent convertible securities'
ABSs that are purchased sight unseen 48 hours before investors may suffer a loss of capital when equity
they are issued, can fall in value between the time the holders do not.
sub-fund commits to the purchase and the time of
• Conversion risk: it might be difficult for the investment
delivery.
manager of the relevant sub-fund to assess how the
Coco bonds risk Contingent convertible securities (coco securities will behave upon conversion. In case of
bonds) are comparatively untested, their income payments conversion into equity, the investment manager might
may be cancelled or suspended, they are more vulnerable be forced to sell these new equity shares since the
to losses than equities and they can become highly volatile investment policy of the relevant sub-fund does not
and less liquid. allow equity in its portfolio. This forced sale may itself
Additional Tier 1 securities - often referred to lead to liquidity issue for these shares.
as contingent convertible notes - are perpetual • Unknown risk: the structure of contingent convertible
subordinated instruments issued by banks globally, securities is innovative yet untested
notably in Europe, to meet specific post-financial crisis • Industry concentration risk: investment in contingent
regulatory requirements. They are structured such that convertible securities may lead to an increased industry
they absorb losses at a time of stress. A stress event is concentration risk as such securities are issued by a
defined as either a) a breach of a pre-determined core limited number of banks.
regulatory capital ratio (ie common equity Tier 1 capital- • Trigger level risk: trigger levels differ and determine
to-risk weighted assets falling below either 5.125%, 7% or exposure to conversion risk depending on the distance
in a few cases higher levels, depending on the domicile of the capital ratio to the trigger level. It might be
of the issuer) or b) at the bequest of the regulator difficult for the investment manager of the relevant
should (higher) required capital levels no longer be met sub-fund to anticipate the triggering events that would
(a so-called "point of non-viability" event). Conversion require the debt to convert into equity.
May 2021 Prospectus La Française LUX 18You can also read
