Notice to the unitholders of Nordea Eastern Europe Fund

Nordea Eastern Europe Fund will be split into two funds. The fund’s illiquid securities in companies with a Russian background will be left in Nordea Eastern Europe Fund. All other holdings will be transferred to the new Nordea Emerging Europe Fund.

As a unitholder of Nordea Eastern Europe Fund, you will own units in both funds after the split, provided that your holding is not too small to be split. The number of units in the new Nordea Emerging Europe Fund will be determined in the same proportion as the assets of Nordea Eastern Europe Fund are divided into Russian assets and emerging Europe assets.

The Finnish Financial Supervisory Authority approved the execution of the split on 2 August 2023. Eastern Europe Fund will be split into Nordea Eastern Europe Fund and Nordea Emerging Europe Fund on 29 September 2023.

Nordea Eastern Europe Fund will close for redemptions on Tuesday 26 September 2023 at 16.30 Finnish time and will be closed for the duration of the split. Trading in the units of Nordea Emerging Europe Fund will begin on 2 October 2023.

Why is the fund being split into two?

Russia’s invasion of Ukraine in late February 2022 led to a serious and exceptional disruption in the market for Russian securities. The market disruption was caused by heavy sanctions imposed on Russia that have excluded Russian companies from the global financial markets, as well as by Russia’s counter-sanctions that restrict the activities of foreign investors. For this reason, Nordea Eastern Europe Fund has not been able to operate normally.

Due to the exceptional circumstances, the fund company closed the Nordea Eastern Europe Fund for new subscriptions in order to safeguard the interests and equal treatment of the unitholders. The aim is to prevent subscriptions by speculators that could dilute the value of the units held by current unitholders if the value of Russian investments were to rise in the future. Redemptions have been possible since mid-March 2022. However, the decline in the value of securities connected to Russia has lowered the value of the fund units considerably.

Nordea Eastern Europe Fund cannot be fully opened before the Russian equity market resumes normal operations. However, no changes are expected in the situation at the moment. In order to be able to open the fund partially, Nordea Eastern Europe Fund must be split into two funds.

How will the fund split affect my holdings?

The split requires no action on your part and will not result in any costs for you. Unitholders with general tax liability in Finland will not incur any tax consequences as a result of the split. The split won’t affect the total risk involved in your fund holdings, either.

You will remain a unitholder of Nordea Eastern Europe Fund, provided that your holding is not too small to be split, and in connection with the split you will receive new fund units in Nordea Emerging Europe Fund.  The number of new fund units will be determined in the same proportion as the assets of Nordea Eastern Europe Fund are divided into Russian assets and emerging Europe assets.

The majority of the splitting fund’s assets will be transferred to Nordea Emerging Europe Fund, as the valuation of the Russian assets is low. The precise split ratio and the number of new fund units will be determined in accordance with the fund’s NAV calculated after 17.00 on 28 September 2023.

If your holding in the fund is too small to be split (less than 0.00005 units in Nordea Eastern Europe Fund after the fund split), you will only receive units in Nordea Emerging Europe Fund. In such a situation, you will not have any units left in Nordea Eastern Europe Fund after the split.

How will the funds operate after the split?

Trading in the new Nordea Emerging Europe Fund will begin as of 2 October 2023. Nordea Emerging Europe Fund will continue to operate under the same investment policy that was previously used in Nordea Eastern Europe Fund. The fund will no longer invest in companies with a Russian background.

Nordea Eastern Europe Fund will remain closed for new subscriptions and redemptions.

More information

The funds’ rules, key investor information documents, fees and other additional information are available at www.nordea.fi/fund.

If you need more information on the fund’s split or to discuss other investment alternatives, please contact our Customer Service. If you are a personal customer, the best way to reach us is via Nordea Mobile by selecting Help > Phone call. This way, your identity will be automatically verified. You can also call us directly on 0200 70 000 (local rates apply), Mon–Fri 8–18.

Our Private Banking Customers can also get in touch with their personal adviser, and corporate customers can call Nordea Business Centre on 0200 26262 (local rates apply).

 

Helsinki, 25 August 2023

Nordea Funds Ltd

The Board of Directors