db x-trackers Portfolio Income UCITS ETF
Supplement to the Prospectus
This Supplement contains information in relation to db x-trackers Portfolio Income UCITS ETF (the “Fund”), a
Fund of Concept Fund Solutions plc (the “Company”) an umbrella type open-ended investment company with
segregated liability between sub-funds and with variable capital governed by the laws of Ireland and authorised
by the Central Bank of Ireland (the “Central Bank”).
This Supplement forms part of, may not be distributed unless accompanied by (other than to prior
recipients of the Prospectus of the Company dated 18 December 2014 (the “Prospectus”)), and must be
read in conjunction with, the Prospectus.
Concept Fund Solutions plc
Dated 18 December 2014
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________________________________________________________________________________________
IMPORTANT INFORMATION
The Fund is an ETF. The Shares of this Fund are fully transferable to investors and will be listed for
trading on one or more stock exchanges.
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________________________________________________________________________________________
TERMS OF THE SHARES REPRESENTING INTERESTS IN THE FUND
________________________________________________________________________________________
Investment Objective
The investment objective of the Fund is to replicate the performance before fees and expenses of the Portfolio
Income Strategy (the “Strategy” as described below under “General Description of the Strategy”).
The Strategy is a balanced and diversified portfolio of exchange-traded funds ("ETFs") linked to equities, fixed
income and commodities as more particularly described in the section entitled “General Description of the
Strategy”.
Investment Policy
In order to achieve the investment objective, the Fund will adopt a Direct Investment Policy. There is no
assurance that the Investment Objective of the Fund will actually be achieved. In order to seek to achieve its
investment objective, the Fund will invest in ETFs that comprise all or a representation of all of the ETFs in the
Strategy as may be proposed by the Allocation Agent, which the Investment Manager may accept, reject or
amend in its sole discretion in consultation with the Allocation Agent (the “Invested Assets”). Accordingly the
Investment Manager retains discretion in respect of the Strategy and the appointment of the Allocation Agent is
in an investment advisory capacity. A description of the ETFs that comprise the Strategy is set out in the section
entitled “General Description of the Strategy”. This may include ETFs that are sister sub-funds of the
Company.
The value of the Fund's Shares is linked to the Strategy, the performance of which may rise or fall. Hence,
investors should note that the value of their investment could fall as well as rise and they should accept that
there is no guarantee that they will recover their initial investment.
The return that the Shareholder will receive will be dependent on the performance of the Strategy and the
performance of the Invested Assets.
The Fund may invest in ancillary liquid assets which will include secured and/or unsecured cash deposits.
Invested Assets (other than permitted unlisted investments) will be listed or traded on the Markets referred to in
Appendix I of the Prospectus.
The purchasing and selling of Strategy constituents will be performed by the Investment Manager.
The Fund will have no Final Repurchase Date. However, the Board of Directors may decide to terminate the
Fund in accordance with the terms set out in the Prospectus and/or the Articles of Association.
Allocation Agent
The Investment Manager is responsible for the discretionary investment management of the Fund. The
Investment Manager has appointed Index Capital GmbH as allocation agent (the “Allocation Agent”) to
propose respective allocations to the relevant Strategy constituents to the Investment Manager. The Allocation
Agent will follow certain principles in its proposals in relation to the respective Strategy constituent allocations of
the Fund as described under the section headed “General Description of the Strategy”. The Investment
Manager may terminate the appointment of the Allocation Agent in certain circumstances, as set out in the
allocation agreement entered into between the Investment Manager and the Allocation Agent (the “Allocation
Agreement”).
The Allocation Agent is registered in Munich, Germany with registered number WA 35-K
5000-126538-2011/0001. The registered office address is Heilmaierstraße 5, 81477 München, Germany. Index
Capital GmbH is authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin") to
provide investment advice and reception and transmission of orders in relation to one or more financial
instruments, as outlined in Annex I, Section A, paragraphs (1) and (5) of Directive 2004/39/EC ("MiFID").
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Investment Restrictions
The general investment restrictions set out under "Investment Restrictions" in the Prospectus apply to the Fund.
The Directors may from time to time impose such further investment restrictions as shall be compatible with or
in the interests of Shareholders, in order to comply with the laws and regulations of the countries where
Shareholders are located.
In the case of cross-investment by the Fund in a sister sub-fund of the Company the following additional
restrictions apply:
1.
An investment must not be made in a sub-fund which itself holds shares in other sub-funds of the
Company;
2.
The Fund must not pay a fee to the Investment Manager in respect of that portion of its assets invested
in other sub-funds of the Company.
Borrowing
The Company may only borrow, for the account of the Fund, up to 10% of the Net Asset Value of the Fund
provided that such borrowing is for temporary purposes. The assets of the Fund may be charged as security for
any such borrowings.
Specific Risk Warning
Investors should note that the Fund is not capital protected or guaranteed and that the capital invested
is not protected or guaranteed and investors in this Fund should be prepared and able to sustain losses
up to the total capital invested. Investors will also bear some other risks as described under the section
"Risk Factors".
Prospective purchasers of the Fund should ensure that they understand fully the nature of the Fund, as well as
the extent of their exposure to risks associated with an investment in the Fund and should consider the
suitability of an investment in the Fund.
Profile of a Typical Investor
Prospective investors in the Fund should ensure that they understand fully the nature of the Fund, as well as
the extent of their exposure to risks associated with an investment in the Fund and should consider the
suitability of an investment in the Fund.
Investment in the Fund may be appropriate for retail investors who have knowledge of, and investment
experience in this particular financial product and understand and can evaluate the strategy, characteristics and
risks in order to make an informed investment decision. Further, they have free and available cash for
investment purposes and are looking to gain exposure to a balanced and diversified portfolio of ETFs linked to
equities, fixed income and commodities. As the Net Asset Value per Share of the Fund will fluctuate and may
fall in value, investment in the Fund should be viewed as suitable for investors who seek a return over the
medium to long term. However, prospective investors should be prepared and able to sustain losses up to the
total amount of capital invested.
The Prospectus sets out statements on taxation regarding the law and practice in force in the relevant
jurisdiction at the date of the Prospectus. The statements are by way of a general guide to potential investors
and Shareholders only and do not constitute legal or tax advice to Shareholders or potential investors.
Shareholders and potential investors are therefore advised to consult their professional advisers concerning
any investment in the Fund particularly as the tax position of an investor and the rates of tax may change over
time.
Dividend Policy
Dividends may be declared and paid on the 1D Shares on a semi-annual basis.
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General Information Relating to the Fund
Base Currency
EUR
Business Day
Means a day (other than a Saturday or a Sunday), which is a business day for
the ETFs in which the Fund invests and on which commercial banks, foreign
exchange markets and clearing agents are open and settle payments in
Dublin, Luxembourg and on which the Trans-European Automated Real-time
Gross settlement Express Transfer (TARGET2) system is open.
Dealing Day
Means every Business Day or such other days as the Directors may from time
to time determine provided that there is at least one Dealing Day per fortnight.
Dealing Deadline
Means for subscription and redemption orders, 4:00 p.m. Dublin time on the
Business Day prior to the relevant Dealing Day.
Minimum Fund Size
EUR 50,000,000.
Valuation Point
Means the valuation point for the Strategy, which is close of business in the
relevant markets where the underlying ETFs are domiciled on the relevant
Dealing Day.
NAV Publication Day
Means the first Business Day following the relevant Dealing Day.
Settlement Date
Means two Business Days after the Dealing Day.
Description of the Shares
Class
"1D"
Currency
EUR
ISIN Code
IE00B3Y8D011
German Security Identification A1C1G8
Number (WKN)
Minimum
Amount
Initial
Investment EUR75,000
Minimum
Additional EUR75,000
Investment Amount
Fees and Expenses
Investment Manager Fee
Up to 0.45% per annum
Platform Fee
0.0016667% per month
(0.20% per annum)
All-In Fee
Up to 0.65% per annum
Preliminary Charge
2
Up to 3.00%
3
Up to 2.00%
Repurchase Charge
1
1
The Allocation Agent shall receive a fee (Allocation Agent Fee) from the Investment Manager out of the Investment Manager Fee.
2
The Preliminary Charge, the amount of which will revert to the Distributor, is a maximum percentage that will be calculated on the
basis of the Net Asset Value of the relevant Class.
3
The Repurchase Charge, the amount of which will revert to the Distributor, is a maximum percentage that will be calculated on the
basis of the Net Asset Value of the relevant Class.
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Transaction Costs
Applicable
Where the Fund invests in a “linked” ETF the manager of the ETF cannot charge subscription or redemption
fees on account of the investment. An ETF will be regarded as a linked ETF where both the Company and the
ETF are managed, directly or by delegation, by the same company or where the Investment Manager is linked
by common management or control, or by a substantial direct or indirect holding, to the management company
of the ETF.
The maximum level of the Investment Management Fee that may be charged in respect of the Fund is set out
above and the maximum level of the investment management fee that may be charged by each of the ETFs in
which the Fund invests will not exceed 0.65% per annum of the net asset value of each of these funds. Details
of such fees will also be contained in the Company’s annual report.
This section headed "Fees and Expenses" should be read in conjunction with the section headed "Fees and
Expenses" in the Prospectus.
_________________________________________________________________________________
GENERAL DESCRIPTION OF THE STRATEGY
_________________________________________________________________________________
General Description
Portfolio and Selection
The Portfolio Income Strategy (the “Strategy”) is a balanced and diversified portfolio of exchange-traded funds
(“ETFs”) linked to equities, fixed income and commodities selected by the Investment Manager, upon receipt of
a proposal from the Allocation Agent or otherwise, in its discretion, from a pre-defined selection universe of
UCITS ETFs which includes all ETFs issued by db x-trackers, db x-trackers II or the Company (the "Selection
Universe").
As of the date of this Supplement, the asset classes comprising the Strategy are subject to the following
weighting restrictions:
Asset class
Exposure
Minimum
weight
Maximum
weight
Equities
Developed markets equities, emerging markets equities, Dividend
yield strategies
15%
30%
Fixed
income
Sovereign debt, corporate debt and credit, inflation linked securities
and money market returns
60%
85%
Commodities
Diversified commodity indices
0%
10%
Furthermore as of the date of this Supplement, the individual ETFs making up the Strategy are subject to a
minimum weight of 0% and a maximum weight of 18% (with reference to the overall Strategy exposures) at the
time of each rebalance, subject to specific limits for the following ETFs:
ETF Name
ISIN
and
Bloomberg Code
db x-trackers DBLCI - OY
Balanced UCITS ETF
LU0292106167
db x-trackers II EONIA
UCITS ETF
LU0290358497
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Share
Class
Asset Class
Minimum
Weight
Maximum
Weight
1C
Commodities
0%
10%
1C
Fixed Income
0%
10%
XDBC GR
XEON GR
The Allocation Agent will propose the composition of the portfolio to the Investment Manager on a quarterly
basis from the Selection Universe. The Allocation Agent will also make proposals to the Investment Manager as
to the allocation of the Strategy, which will be reviewed up to eight times a year, consisting of scheduled
reviews each quarter and up to an additional four reviews which the Allocation Agent may recommend to the
Investment Manager as being necessary. Such additional reviews may be conducted at the discretion of the
Investment Manager. The Strategy and therefore the assets of the Fund may be constituted in accordance with
the proposals of the Allocation Agent at the discretion of the Investment Manager.
In addition, the Allocation Agent may from time to time, make proposals to the Investment Manager as follows
(i) that one or more new ETFs be added to the Selection Universe provided that each such new ETF falls within
a permitted asset class and has previously been approved by the CSSF or any other competent authority of a
member state of the European Economic Area as a UCITS, or (ii) that one or more existing ETFs be removed
from the Selection Universe. The Investment Manager will decide if ETFs are added or removed from the
Selection Universe upon receipt of a proposal from the Allocation Agent or otherwise, in its discretion.
The constituents of the Strategy, as proposed by the Allocation Agent and implemented by the Investment
Manager (in its full and absolute discretion), will be based on the primary aim of creating a total return strategy,
which seeks to benefit from capital appreciation and income generated by the exposures of the Strategy, while
limiting volatility. When proposing constituents of the Strategy, the Allocation Agent will consider and analyse
data which is considered relevant in the selection of the constituents of the Strategy, such as, but not limited to,
dividend yield, price-to-earning ratios and the financial and economic data as further described below. The aim
of the Strategy is to also limit volatility by exploiting correlation benefits between the included asset classes as
well as through continuous risk management and weighting decisions on individual asset classes or Strategy
constituents which may be revised on the basis of macroeconomic and other indicators. No assurance can be
given that such strategy will be successful and the underlying constituents of the Strategy may be subject to
change from time to time. Such changes will be subject to the requirement to maintain a diversified portfolio (i)
such that there will be no disproportionate over-allocation to any single ETF, even if its yields are exceptionally
high over time, and (ii) to avoid any concentration to any single risk factor, such as currency risks or interest
risks.
In proposing the Strategy constituents to the Investment Manager, the Allocation Agent may consider such
financial and economic data – in addition to those mentioned in the paragraph above – as it may consider
relevant. Such data may include, without limitation, financial information issued by the companies comprised in
the strategy of any ETF, research published by financial institutions and analysis provided by asset managers
and brokers. Without prejudice to any provision herein, neither the Allocation Agent nor the Investment
Manager gives any assurance or warranty as to the actual performance of any Strategy constituent or the
Strategy.
The aggregate of the weights of each of the Strategy constituents quoted in Euro must be at least 60% and the
remaining constituents will be quoted in any currency or currencies other than Euro. Since such remaining
constituents of the Strategy may not be hedged regarding the cross currency exposure, the Strategy as a whole
implies exchange rate risk to a certain extent.
Further information in relation to the Strategy constituents can be accessed via the relevant Bloomberg codes
set out above and are also available at http://etf.db.com. The complete prospectus and key investor information
document or other description relating to the relevant ETF are available from the website http://etf.db.com.
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