Change to Governance of Dimensional’s Irish UCITS funds
In December 2021, we gave advisers and investors advanced notice of a proposed governance change affecting Dimensional’s Irish UCITS fund range. We now wish to let you know this change will be proceeding with effect on or about 1 April 2022.
Over the past few years, there have been a number of developments in the political, regulatory and economic landscape in Europe which have led to the Central Bank of Ireland (“CBI”) requiring fund management companies to increase their presence in Ireland. As a result of these changes, the boards of Dimensional Funds plc and Dimensional Funds II plc (together, the “Funds”) have conducted a thorough review of the Funds’ operating model and determined it would be prudent and more cost effective for the Funds to convert from self-managed investment companies (“SMICs”) to manager-managed investment companies, rather than the Funds hiring resources themselves.
Therefore, the Funds have determined to appoint Dimensional Ireland Limited (“Dimensional Ireland”) as the UCITS management company (“ManCo”) to the Funds and their sub-funds with effect on or about 1 April 2022. Once effective, Dimensional Ireland’s appointment as ManCo will include services such as investment management and global distribution of the Funds. Dimensional Fund Advisors Ltd. (“Dimensional UK”) currently acts as the investment manager to the Funds and global distributor. Dimensional Ireland’s affiliated entities, such as Dimensional UK, will continue to be involved in the management and distribution of the Funds, but in the capacity as delegated sub-investment managers and sub-distributors of Dimensional Ireland.
Dimensional Ireland will be entitled to receive compensation for providing ManCo services to the Funds up to a maximum of 0.02% of the net asset value (“NAV”) of the Funds per year. Notwithstanding the maximum annual fee payable, the actual fee agreed between the Funds and Dimensional Ireland means that based on the NAV of the Funds as at 31 December 2021, the fee payable to Dimensional Ireland will represent an expense increase of 0.0034% to the NAV of the Funds in years one and two, and 0.0038% in year three, assuming the NAV does not change.
The Fund’s prospectuses and Key Investor Information Documents (“KIIDs”) will be updated to reflect these changes, and formal notice of the date of Dimensional Ireland’s appointment as ManCo to the Funds was sent out to shareholders on 23 February, 2022.
There are no material changes in the way the Fund’s sub-funds are invested as a result of this governance change.
Please contact your Regional Director if you wish to discuss this proposed change.
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