Money Market Funds
Due to the severe shocks experienced by the Icelandic financial market in early October 2008, which led to the introduction of Act No. 125/2008, IS Funds decided in accordance with guidelines from the Icelandic Financial Supervisory Authorities to liquidate all foreign Money Market Funds managed by the company. The funds in question are:
- 9.1 EUR
- 9.2 NOK
- 9.3 USD
The funds’ assets have been divided into two classes, Class A and Class B. All bank deposits and cash have been moved to Class A while all other financial instruments issued by companies (including financial institutions) have been moved to Class B.
All redemptions from the funds have been suspended. IS Funds has paid out all Class A cash and deposits to the respective unit holders in proportion to their holdings. Other Class B assets will be paid in the same manner as soon as their value is realised until no assets remain in the Class B portfolio. The cash and deposits from Class A were paid into deposit accounts of the respective unit holders at Íslandsbanki hf.
This change in the funds’ regulations is made in accordance with Article 11 of Act 128/2011.
Investment restrictions: The funds may invest in accordance with paragraphs 3 and 4 of Article 59 and Part F of Chapter II of Act 128/2011. The funds may also invest in accordance with point 5 of Article 54. However, the funds are not allowed to short sell any financial instruments.
Payments from money market funds
A total of ISK 2,760 million has been paid to unit holders of the money market funds.
| Payments 2008-2010 | Fund 9.1 EUR* | Fund 9.2 NOK* | Fund 9.3 USD* |
|---|---|---|---|
| Payment 04.12.2008 | 0 | 310 | 0 |
| Payment 03.02.2009 | 875 | 0 | 615 |
| Payment 11.03.2009 | 605 | 0 | 0 |
| Payment 17.09.2010 | 0 | 94 | 0 |
| Payment 05.10.2010 | 261 | 0 | 0 |
| *Amounts are in ISK million | |||
General disclaimer
This summary is intended for informative purposes only and should not be interpreted as a recommendation to take, or not to take, any particular investment action. The summary does not represent an offer or an invitation to buy, sell or subscribe to any particular financial instruments.
Taxation
The taxation of fund units is governed by the Act on Income and Net Worth Tax No. 90/2003 and the Act on Withholding Tax on Capital Gains No. 94/1996. Further taxation can occur. Unit holders not residing in Iceland can apply to the Icelandic tax authorities for an exemption from such taxation. The final taxation of non-resident unit holders depends on the local tax rules in the jurisdiction where they reside for tax purposes.
Investment in derivatives
In accordance with its Investment policy, the Fund is permitted to use derivatives to lock in profits, to minimize risk or to lock in prices in Fixed Income instruments because of forseeable redemptions or to act on market changes. A detailed description of use of derivatives can be found in the Funds Prospectus.
Risks
Various financial risks are always associated with investment activities, such as the risk of no yield or the risk of losing the capital invested. It should further be noted that international investing includes risks related to political and economic uncertainties as well as currency risk. Past performance does not indicate nor guarantee future performance of an investment. Each investor's investment objectives and financial situation is different. Before making an investment decision, it is important to seek expert advice and familiarise oneself with the investment market and different investment alternatives. Investors are encouraged to familiarise themselves with each fund´s Prospectus, especially regarding risk.