Threadneedle UK Property Trust€¦ · The operation of the Fund is governed by the FCA Rules together with the Fund’s trust deed (“Trust Deed”) and this Prospectus. The Fund

PROSPECTUS 30 MARCH 2015

THREADNEEDLE UK PROPERTY TRUST

Important Information

An extraordinary general meeting of unitholders of the Threadneedle UK Property Trust was held on 9 April 2015 at which a resolution detailing the conversion of the Threadneedle UK Property Trust into the Threadneedle UK Property Authorised Investment Fund, an Open-Ended Investment Company was successfully passed. Whilst the intention had been for the conversion to take place on 2 May 2015, it has now been agreed between the Manager, ACD and Trustee to postpone the effective date of the conversion. Once the revised date for the conversion has been agreed, we will inform all unitholders of the new effective date.

Details of the conversion can be found at columbiathreadneedle.com/PAIF.

Threadneedle UK Property Trust

Contents

Definitions ....................................................................................................................... 2 1. Constitution ......................................................................................................... 3 2. Units in the Fund ................................................................................................. 3 3. Investment Objective and Policy......................................................................... 3 4. Buying, Selling and Switching Units ................................................................... 4 4.1 General ............................................................................................................... 4 4.2 Minimum subscriptions and holdings .................................................................. 4 4.3 Client money ....................................................................................................... 4 4.4 Buying Units ........................................................................................................ 4 4.5 Selling Units ........................................................................................................ 5 4.6 Switching/Converting .......................................................................................... 6 4.7 Dealing charges .................................................................................................. 6 4.8 Restrictions and compulsory transfer and redemption ...................................... 6 4.9 Liquidity risk management .................................................................................. 7 4.10 In specie redemptions .................................................................................... 7 4.11 Issue of Units in exchange for in specie assets ............................................ 7 4.12 Suspension of dealing in the Fund ................................................................. 7 5. Other dealing information ................................................................................... 8 5.1 Anti-money laundering ........................................................................................ 8 5.2 Market Timing and Late Trading ......................................................................... 8 6. Fees and expenses ............................................................................................. 8 6.1 General ............................................................................................................... 8 6.2 The Fees and Expenses of the Manager ........................................................... 9 6.3 Registrar Charge ................................................................................................. 9 6.4 Investment Manager’s fee .................................................................................. 9 6.5 Trustee’s fee ....................................................................................................... 9 6.6 Trustee’s expenses ........................................................................................... 10 6.7 Charges to capital ............................................................................................. 10 6.8 Allocation of assets and liabilities ..................................................................... 10 6.9 Ongoing Charges Figure (‘OCF’) ...................................................................... 10 7. Valuation of the Fund ........................................................................................ 10 7.1 General ............................................................................................................. 10 7.2 Valuations ......................................................................................................... 10 7.3 Prices of Units ................................................................................................... 11 7.4 Publication of prices .......................................................................................... 12 8. Risk factors ....................................................................................................... 12

9. Management and administration ...................................................................... 15 9.1 The Manager and AIFM ................................................................................... 15 9.2 The Trustee ...................................................................................................... 16 9.3 The Investment Manager ................................................................................. 17 9.4 Auditor .............................................................................................................. 18 9.5 Legal advisers .................................................................................................. 18 9.6 Registrar and register of Unitholders ............................................................... 18 9.7 General ............................................................................................................. 18 10. Policies of the Manager and the Investment Manager .................................... 18 10.1 Conflicts of interest ...................................................................................... 18 10.2 Exercise of Voting rights .............................................................................. 19 10.3 Best Execution ............................................................................................. 19 10.4 Controversial Weapons ............................................................................... 19 10.5 Responsible Investment .............................................................................. 19 11. Unitholder meetings and voting rights.............................................................. 19 11.1 Powers of a Unitholders’ meeting ................................................................ 19 11.2 Voting rights ................................................................................................. 20 12. Taxation ............................................................................................................ 20 12.1 General ........................................................................................................ 20 12.2 Taxation of the Fund .................................................................................... 20 12.3 Taxation of Unitholders ................................................................................ 21 12.4 Foreign Account Tax Compliance Act ......................................................... 22 13. Winding Up of the Fund ................................................................................... 22 14. General Information.......................................................................................... 22 14.1 Accounting periods ...................................................................................... 22 14.2 Determination of income .............................................................................. 22 14.3 Allocation and distribution dates .................................................................. 23 14.4 Income equalisation ..................................................................................... 23 14.5 Delegation .................................................................................................... 23 14.6 Reports and Accounts ................................................................................. 23 14.7 Risk management ........................................................................................ 23 14.8 Privacy statement ........................................................................................ 23 14.9 Business changes ........................................................................................ 23 14.10 Overseas transfers....................................................................................... 23 14.11 Access to/correction of your information ..................................................... 23 15. Additional information ....................................................................................... 24

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15.1 Notice to Unitholders .................................................................................... 24 15.2 Changes to the Fund .................................................................................... 24 15.3 Information available to Unitholders ............................................................. 24 15.4 Fair treatment of investors ............................................................................ 24 15.5 Unitholders’ rights ......................................................................................... 25 15.6 Professional liability risks ............................................................................. 25 15.7 Complaints .................................................................................................... 25 15.8 Governing law and jurisdiction ..................................................................... 25 15.9 Other information .......................................................................................... 25 Appendix I (Fund details) ............................................................................................. 26 Appendix II (Investment and Borrowing Powers) ......................................................... 31 Appendix III Countries in which the Fund may invest in property, eligible securities markets and eligible derivatives markets ..................................................................... 34 Appendix IV .................................................................................................................. 35 Appendix V ................................................................................................................... 37 Directory ....................................................................................................................... 38

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Definitions The information on Threadneedle UK Property Trust set out below should be read in conjunction with the full text of this document, from which it is derived.

“Accumulation Units” means Units (of whatever Class) in the Fund as may be in issue from time to time in respect of which income allocated thereto is credited periodically to capital pursuant to the FCA Rules

“AIFM” means the legal person appointed on behalf of the Fund, which (through this appointment) is responsible for managing the Fund in accordance with the AIFM Directive and the Alternative Investment Fund Managers Regulations 2013, which at the date of this Prospectus is the Manager

“AIFM Directive” means the Alternative Investment Fund Managers Directive 2011/61/EU of the European Parliament and Council of 8 June 2011 as amended from time to time

“Business Day” shall constitute a “Dealing Day”

“Class” or “Classes” means in relation to Units (according to the context) all of the Units related to the Fund or a particular Unit or classes of Unit related to the Fund

“COLL” means the appropriate chapter or rule in the FCA Rules

“COLL Sourcebook” means the Collective Investment Schemes Sourcebook issued by the FCA as amended from time to time

“Dealing Day” means Monday to Friday excluding public and bank holidays in England and Wales and other days at the Manager’s discretion

“FCA” means the Financial Conduct Authority or any successor organisation

“FCA Handbook” means the FCA Handbook of Rules and Guidance, as amended

“FCA Rules” means the rules contained in the Collective Investment Schemes Sourcebook and the Investment Fund Sourcebook, as amended, published as part of the FCA Handbook which shall, for the avoidance of doubt, not include guidance or evidential requirements contained in that Sourcebook

“Fund” means Threadneedle UK Property Trust, an authorised unit trust

“Income Units” means Units (of whatever Class) in the Fund as may be in issue from time to time in respect of which income allocated thereto is distributed periodically to the holders pursuant to the FCA Rules

“Investment Fund Sourcebook” means the Investment Fund Sourcebook issued by the FCA as amended from time to time

“Investment Manager” means Threadneedle Asset Management Limited, the investment manager to the Manager

“Manager” means Threadneedle Investment Services Limited

“Trustee” means Citibank International Limited

“Unit” shall mean both Income Units and Accumulation Units which are available as Class 1 Units and Class 2 Units. A unitholding may include a fraction of a Unit

“Unitholder” means a holder for the time being of the Units

“US Person” means for the purposes of the Foreign Account Tax Compliance Act a US citizen or resident individual, a partnership or corporation organised in the United States or under the laws of the United States or any State thereof, a trust if (i) a court within the United States would have authority under applicable law to render orders or judgements concerning substantially all issues regarding administration of the trust, and (ii) one or more US person has the authority to control all substantial decisions of the trust, or an estate of a decedent that is a citizen or resident of the United States. This paragraph shall be interpreted in accordance with sections 1471 to 1474 of the US Internal Revenue Code of 1986

“Valuation Point” means the point, whether on a periodic basis or for a particular valuation, decided by the Manager, at which the Manager carries out a valuation of the property of the Fund (as the case may be) for the purpose of determining the price at which Units of a Class may be issued, cancelled, sold or redeemed. The current Valuation Point is 12 noon UK time on each Dealing Day

Further details and explanations appear later in this document. Unless otherwise expressly provided, terms in this Prospectus have the meanings used in the FCA Rules.

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This document is important If you are in any doubt as to the meaning of any information contained in this document, you should consult the Manager or your independent financial adviser.

This Prospectus is intended for distribution in the United Kingdom only. Its distribution may be restricted in other countries. It does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not lawful or in which the person making such offer or solicitation is not qualified to do so, or to anyone to whom it is unlawful to make such an offer or solicitation. Potential investors should inform themselves about and observe the legal requirements within their own countries for the acquisition of Units of Threadneedle UK Property Trust and any taxation or exchange control legislation affecting them personally, including the obtaining of any requisite governmental or other consents and the observation of any other formalities.

Units in the Trusts are not available for offer or sale in any state in the United States, or to persons (including companies, partnerships, trusts or other entities) who are US Persons), nor may Units be owned or otherwise held by such persons. Accordingly, this Prospectus may not be distributed in the United States or to a US Person. The Manager reserves the right to give notice to any Unitholder that is or that subsequently becomes incorporated in the United States or to a US Person to (i) transfer the Units to a person that is not a US Person or (ii) request a redemption or cancellation of the Units and the Manager may redeem or cancel the Units if the Unitholder fails to make such transfer or request within 30 days of that notice provided by the Manager.

1. Constitution THREADNEEDLE UK PROPERTY TRUST is an authorised unit trust pursuant to section 243(1) of the Financial Services and Markets Act 2000 and authorised by the FCA with effect from 25 January 2007.

The Fund is a non-UCITS retail scheme for the purposes of the FCA Rules.

Subject to the terms set out in this Prospectus, holders of Units in the Fund are entitled to:

− the net income derived from the Fund; and

− redeem their Units at a price linked to the value of the assets of the Fund.

Unitholders are not liable for the debts of the Fund.

Head office: Cannon Place, 78 Cannon Street, London EC4N 6AG.

Address for service: The head office is the address of the place in the United Kingdom for service on the Fund of notices or other documents required or authorised to be served on it.

Base currency: The base currency of the Fund is pounds Sterling. Each Class is designated in Pounds Sterling.

The operation of the Fund is governed by the FCA Rules together with the Fund’s trust deed (“Trust Deed”) and this Prospectus.

The Fund will be managed so as to be eligible as an ISA investment for the purposes of the Individual Savings Account Regulations 1998 (as amended). The new ISA regime (“NISA”) took effect from 1 July 2014.

2. Units in the Fund Several Classes of Unit may be issued in respect of the Fund. The Classes of Unit presently available are set out in in Appendix I (Fund details) of this Prospectus. Subject to compliance with the FCA Rules, the Manager may create new Classes of Unit in respect of the Fund. Investors may hold Accumulation Units and/or Income Units in Class 1 and/or Class 2 Units.

Income arising in respect of an Income Unit is distributed among holders of Income Units.

Holders of Accumulation Units do not receive payments of income. Any income arising in respect of an Accumulation Unit is automatically accumulated and is reflected in the Unit price.

Where a Fund has different Classes, each Class may attract different charges and expenses and so monies may be deducted from Classes in unequal proportions. In these circumstances the proportionate interests of the Classes within a Fund will be adjusted accordingly.

Unitholders are entitled (subject to certain restrictions) to Switch all or part of their Units in the Fund for Units in another Class within the Fund. Details of this switching facility and the restrictions are set out in the section ‘Buying, Selling and Switching Units’.

3. Investment Objective and Policy Details of the Fund, including its investment objectives and policy are contained in Appendix I (Fund details).

Investment of the assets of the Fund must comply with the FCA Rules and the investment objective and policy of the Fund. The eligible securities markets and eligible derivatives markets on which the Fund may invest are set out in Appendix III Countries in which the Fund may invest in property, eligible securities markets and eligible derivatives markets. A detailed statement of the general investment management and borrowing powers, including a full list of eligible investments and investment restrictions is set out in Appendix II (Investment and Borrowing Powers).

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4. Buying, Selling and Switching Units

4.1 General

The dealing office of the Manager is open from at least 8 a.m. until at least 6 p.m. UK time on each Dealing Day to receive requests for the issue, redemption and switching of Units.

Prices for the Fund are calculated every Dealing Day at 12 noon UK time. Units in the Fund that are bought or sold before 12 noon will obtain the price calculated on that Dealing Day. Units in Fund that are bought or sold after 12 noon will obtain the price calculated at 12 noon on the next Dealing Day.

Requests for the issue, redemption and switching of Units are normally dealt with by the issue or cancellation of Units by the Trustee on the instructions of the Manager. However, in certain circumstances the Manager may, in accordance with COLL, deal with such requests by selling Units to, and/or repurchasing them from, the applicant as appropriate. The Manager is entitled to hold Units for its own account and to satisfy requests for the sale of Units from its own holding; it is required by COLL to procure the issue or cancellation of Units by the Fund where necessary to meet any obligation to sell or redeem Units.

If on receiving instructions from the Manager to issue or cancel Units, the Trustee is of the opinion that it is not in the interests of the Unitholders that the Units should be issued or cancelled either at all or in the number instructed by the Manager, the Trustee must give notice to the Manager that it refuses to issue, or as the case may be cancel, all, or a specified number of the Units.

The Manager may not sell a Unit at a higher price, or redeem a Unit at a lower price (in both cases before application of any initial charge or dilution levy), than the price notified to the Trustee in respect of the Valuation Point concerned.

The Manager is not obliged to account to the Fund or to Unitholders or any of them for any profit it makes on the issue of Units or on the reissue or cancellation of Units which it has redeemed.

Please note that the Manager may reject a request to buy, sell or switch Units if the investor is unable to demonstrate to the satisfaction of the Manager (acting reasonably) that the investor has complied with applicable law and regulation. By way of example only, such circumstances may include an inability to provide appropriate anti-money laundering documentation or confirmation that the investor has received the most recently available non-UCITS Retail Scheme Key Investor Information document for the Fund.

4.2 Minimum subscriptions and holdings

Details of the minimum investment amounts, subsequent investment amounts and minimum holding for each of the Fund is set out in Appendix I (Fund details). These minimum amounts may be waived at the Manager’s discretion.

The Manager may at its discretion accept subscriptions lower than the minimum amount. If a holding is below the minimum holding the Manager has the discretion to require redemption of the entire holding. The value of Units for these purposes is calculated by reference to their current price, net of any initial charge and before any application of a dilution levy.

The minimum holding requirements will not be treated as being breached if the value of Units held falls below the relevant minimum solely as a result of a fall in the Unit price.

4.3 Client money

The Manager does not treat monies received for the issuance of units or monies payable to the investor upon redemption as client money as long as: (i) in relation to monies for the issuance of units, the Manager has paid the subscription monies in exchange for units to the Depositary by the close of business on the day following receipt of monies from the investor; or (ii) in relation to proceeds from a redemption, paid the redemption monies to the investor within four business days of receipt by the Manager of the fully authorised form of renunciation (or other sufficient instruction) and in any event by the close of business on the day following receipt of the monies from the Depositary.

In the event that the above time limits are not met by the Manager, the Manager will treat the relevant sum received with respect to subscriptions and redemptions as client money as defined under the FCA Rules. This means that the money is held in an account separate from that the Manager uses to hold its own money. The Manager will not calculate or pay to the investor any interest that might arise on those monies.

4.4 Buying Units

When Units in the Fund are priced on a “bid” basis (see the section with the heading “Prices of Units” on page 11) the Manager has discretion to require any large deal (meaning a subscription for not less than £15,000) be carried out at a higher price than the published offer price, provided that the revised price does not exceed the maximum price permitted under the FCA Rules.

Investors dealing through third parties should note that a fund platform or similar nominee service may aggregate its deals such that the total transaction received by the Manager is greater than £15,000, even if the individual investor’s deal is not.

For indicative purposes and based upon current maximum spread, the impact of a price revision from the “offer” price to the creation price would be c. 0.1% for Class 1 Units and 5.0% for Class 2 Units. For the period from 1 January 2014 to 31 December 2014, the Manager did not re-price any such deals.

4.4.1. Procedure:

Units can be bought by:

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(i) calling the Manager (followed by written confirmation);

(ii) sending an instruction to the Manager by fax; or

(iii) sending an instruction by post to the Manager.

Contact details can be found in the Directory at page 38 of this Prospectus (Manager Client Services).

Any initial purchase of Units must be accompanied by a completed application form, which can be obtained from the Manager. Completed forms should be sent by fax or by post to the Manager. Subsequent investments can be made by telephone, but still require written confirmation. Unless the Manager receives instructions to the contrary, all deals will be processed on receipt and payment immediately becoming due.

Settlement is the relevant Dealing Day plus four business days. As part of its credit control policy, the Manager reserves the right to cancel any contract without notice where payment has not been received by the relevant settlement date and will be entitled to recover any losses incurred, as well as interest.

The Manager has the right to reject any application for Units in whole or part, provided it has reasonable grounds for doing so. If the Manager exercises this right, the Manager will return any money sent, or the balance of such monies to the applicant, at the applicant’s risk.

4.4.2. Documents the purchaser will receive:

A contract note giving details of the Units purchased and the price obtained will be issued by the end of the business day following the later of (i) receipt of the application to purchase Units or (ii) the Valuation Point by reference to which the purchase price is determined, together with a notice of the applicant’s right to cancel (where appropriate).

Share certificates will not be issued in respect of Units. Ownership of Units will be evidenced by an entry on the Fund’s register of Unitholders. Statements in respect of periodic distributions will show the number of Units held or accumulated by the Unitholder. Individual statements of a Unitholder’s (or, when Units are jointly held, the first-named holder’s) Units will also be issued at any time on request by the registered Unitholder.

4.5 Selling Units

Every Unitholder has the right to require that his Units be redeemed on any Dealing Day. However, where the value of Units held by a Unitholder will be less than the minimum value of Units for the Fund (as set out in Appendix I (Fund details)), the Manager may require that the Unitholder redeem their full holding.

Requests to redeem Units may be made by:




Contact details can be found in the “Directory” at page 38 of this Prospectus (Manager Client Services).

The Manager will make an electronic fund transfer in payment for Units within four business days of receiving instructions to redeem or the later of (a) receipt by the Manager of the form of renunciation (or other sufficient written instructions) duly signed by all the relevant Unitholders and completed as to the appropriate number of Units, together with any other appropriate evidence of title and (b) the Valuation Point following receipt by the Manager of the request to redeem. The Manager will only issue a cheque in payment for Units upon request.

Where the total consideration for the transaction would include a fraction of one penny it will be rounded up or down to the nearest penny.

In the event of a large deal (meaning a redemption for not less than £15,000) the Manager may re-price Units in accordance with the FCA Handbook. The revised price will be less than the published “bid” price but will not be lower than the cancellation price.


The decision to re-price a large deal will depend upon whether there are net redemptions from the same unit class on that dealing day. If so, the Manager will proceed to determine whether the size of the deal exceeds the Manager’s current tolerance policy.

For indicative purposes and based upon the current maximum spread, the impact of a price revision from the ‘bid’ price to cancellation price would be approximately 4.6% for Class 1 Units and Class 2 Units. For the period from 1 January 2014 to 31 December 2014, the Manager re-priced large deals on 29 occasions.

4.5.1. Documents the seller will receive:

A contract note setting out the number and price of Units sold will be sent to the selling Unitholder (to the first-named, in the case of joint Unitholders) together (if sufficient written instructions have not already been given) with a form of renunciation for completion and execution by the Unitholder(s) by no later than the end of the business day following the later of the request to redeem Units or the Valuation Point by reference to which the redemption price is determined.

Neither the Trustee, the Manager nor the Registrar is required to make payment in respect of a redemption of Units where the money due on the earlier issue of those Units has not yet been received or where the Registrar considers it necessary to carry out or complete identification procedures in relation to the holder or another person pursuant to a statutory, regulatory or European Community obligation.

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4.6 Switching/Converting

Units in the Fund may be switched from one class of Unit to another class of Unit on any Dealing Day. Units to be switched pursuant to a switch request received before the Valuation Point on a Dealing Day will be switched at the respective prices based on that day's Valuation Point. Units to be switched pursuant to a switch request received after that time, or on a day which is not a Dealing Day, will be switched at a price calculated at the Valuation Point on the next Dealing Day. Any Business Day will constitute a “Dealing Day”.

A Unitholder may at any time Switch all or some of his Units of one Class or Fund (‘Original Units’) for Units of another Class or Fund (‘New Units’) provided they meet the eligibility criteria for the New Units. The number of New Units issued will be determined by reference to the respective prices of New Units and Original Units at the Valuation Point applicable at the time the Original Units are repurchased and the New Units are issued. Switching may be effected by:




Contact details can be found in the “Directory” at page 38 of this Prospectus (Manager Client Services).

Unitholder(s) may be required to complete a switching form.

Where the value of Original Units held by a Unitholder will be less than the minimum value of Units for the relevant Fund (as set out in Appendix I (Fund details)), the Manager may, at its discretion, convert the Unitholder’s full holding of Original Units to New Units or refuse to effect any Switch.

No Switch will be made during any period when the right of Unitholders to require the redemption of their Units is suspended (as described in the section with the heading “Suspension of dealing in the Fund” on page 7 of this Prospectus. The general provisions on procedures relating to redemption will apply equally to a Switch. A duly completed switching form must be received by the Manager before the Valuation Point on a Dealing Day in the Fund or Fund concerned to be dealt with at the prices at those Valuation Points on that Dealing Day, or at such other date as may be approved by the Manager. Switching requests received after a Valuation Point will be held over until the next Dealing Day in the relevant Fund or Fund.

The Manager may adjust the number of New Units to be issued to reflect any switching fee together with any other charges or levies in respect of the issue or sale of the New Units or repurchase or cancellation of the Original Units as may be permitted pursuant to the FCA Rules. A Switch of Units from one Class to another Class in the same Trust is not, in general, a disposal for the purposes of capital gains taxation.

A contract note will be sent on or before the business day next following the relevant Dealing Day, together with a form of renunciation for completion and execution by the Unitholders. Where the total consideration for the

transaction would include a fraction of one penny it will be rounded up or down to the nearest penny.

In order to help Unitholders to comply with their legal and regulatory obligations including complying with the FCA’s Retail Distribution Review a Unitholder may convert (as opposed to Switch) Units of one Class of the Fund for Units in another class of the Fund at the absolute discretion of the Manager.

Transfer A Unitholder is entitled (subject as mentioned below) to transfer Units by an instrument of transfer in any usual or common form or in any other form approved by the Manager. The Manager is not obliged to accept a transfer if it would result in the holder, or the transferee, holding less than the minimum holding of Units. The instrument of transfer, duly stamped if it is required to be stamped, must be lodged with the Registrar for registration. The transferor remains the holder until the name of the transferee has been entered in the register.

The Manager or the Registrar may require the payment of such reasonable fee as the Manager and the Trustee may agree for the registration of any grant of probate, letters of administration or any other documents relating to or affecting the title to any Unit.

4.7 Dealing charges

The Manager may impose charges for the issue, redemptions and switching of Units in the Fund. Details of such fees are set out in Appendix I (Fund details).

The initial charge is payable to the Manager and may be used to remunerate intermediaries. To the extent permitted by the FCA Rules, the Manager may agree to waive or reduce the initial charge at its discretion in respect of a subscription by any person, including a holder of Units in any other collective investment scheme operated by the Manager, where such subscription is at or about the same time as the redemption of units or Units (or other interests) in that other collective investment scheme and thereby represents a ‘Switch’ to the Fund.

4.8 Restrictions and compulsory transfer and redemption

The Manager may from time to time impose such restrictions as it may think necessary for the purpose of ensuring that Units are not directly or indirectly acquired or held by any person in breach of any law or governmental rule or regulation (or any interpretation of a law or governmental rule or regulation by a competent authority or entity with equivalent status) of any country or territory, or which would (or would if other Units were acquired or held in like circumstances) result in the Fund incurring any liability to taxation which the Fund is not able to recoup itself or suffering any other adverse consequence, including a requirement to register under any securities or investment or similar laws or governmental regulation of any country or territory. In this connection, the Manager may, among other things, and in its sole discretion reject any application for the purchase, sale or Switch of Units, or compulsorily redeem or require the sale or transfer of any Units.

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If Units (‘affected Units’) are directly or indirectly owned, acquired or controlled in any of the circumstances described above, or if the Manager believes this to be the case, the Manager may give notice to the holder(s) of the affected Units requiring (i) the transfer of such Units to a person who is qualified or entitled to own them without causing any of the adverse consequences outlined above or (ii) that a request in writing be given for the redemption or cancellation of such Units in accordance with the FCA Rules. If the recipient of such a notice does not within 30 days after the date of receipt of such notice so transfer his affected Units to a person qualified to own them without causing any of the adverse consequences outlined above, or establish to the satisfaction of the Manager (whose judgement is final and binding) that he or the beneficial owner is qualified and entitled to own the affected Units without causing any of the adverse consequences outlined above, the Manager will compulsorily redeem the affected Units having relied on the failure to respond to the notice as a request in writing to redeem or cancel all of the affected Units pursuant to the FCA Rules and from that date, such person will no longer be the beneficial owner of the Units.

A person who becomes aware that he has directly or indirectly acquired or holds affected Units in a manner that may cause one of the adverse consequences outlined above, shall forthwith, unless he has received a notice from the Manager as aforesaid, either transfer all his affected Units to a person qualified to own them without causing any of the adverse consequences outlined above or give a request in writing for the redemption or cancellation of all his affected Units pursuant to the FCA Rules.

For the avoidance of doubt, and by way of example only, the rights afforded to the Manager as set out above apply in the event that a person that holds Units (beneficially or otherwise) is, or is reasonably believed by the Manager to be, a US Person at any time during the life of the investment. Accordingly, the Manager reserves the right to give notice to such Unitholders to request a transfer of the Units, or the redemption or cancellation of the Units. The Manager further reserves the right to compulsorily redeem such Units 30 days after giving notice to the Unitholder that he is required to transfer or redeem or cancel the Units.

4.9 Liquidity risk management

The Fund is managed so that the liquidity profile of the Fund is aligned with the requirement in relation to the Fund to meet redemption requests from Unitholders on each Dealing Day. In normal circumstances, redemption requests will be processed as set out in the section with the heading “Selling Units”.

The Manager has tools to deal with temporary liquidity constraints in relation to the Fund. The Fund may (i) borrow cash to meet redemptions within the limits in Appendix II (Investment and Borrowing Powers); or (ii) apply the in specie redemption provisions in the section with the heading “In specie redemptions”.

To manage and monitor liquidity risk, the Manager maintains liquidity risk management policies and procedures. The liquidity risk management policies and procedures include the management, implementation and maintaining of appropriate liquidity limits for the Fund and periodic stress testing of the

liquidity risk of each Fund under both normal and exceptional liquidity conditions to ensure that anticipated redemption requests can be met.

If the Fund’s policy for managing liquidity should change, this will be set out in the annual report or will otherwise be appropriately notified to Unitholders.

4.10 In specie redemptions

Where a Unitholder requests redemption of Units whose value in aggregate exceeds £15,000 (calculated by reference to their current price net of any initial charge), the Manager at its discretion may, by serving a notice of election on the Unitholder not later than the close of business on the second business day following the day of receipt of the request, elect that the Unitholder shall not be paid the redemption price of his or her Units but instead there shall be a transfer to that holder of assets of the Fund having the appropriate value. Where such a notice is so served on a Unitholder, the Unitholder may serve a further notice on the Manager not later than the close of business on the third business day following the day of receipt by the Unitholder of the first mentioned notice requiring the Manager, instead of arranging for a transfer of assets, to arrange for a sale of those assets and the payment to the Unitholder of the net proceeds of that sale.

The selection of assets to be transferred (or sold) is made by the Manager in consultation with the Trustee, with a view to achieving no more advantage or disadvantage to the Unitholder requesting redemption of his or her Units than to continuing Unitholders.

The Fund may retain out of the assets to be transferred (or the proceeds of sale) assets or cash of value or amount in respect of any applicable exit charge on the redemption of the Units. It should be noted that the Unitholder may also be liable to fixed rate stamp duty of £5 on each transfer of UK assets received.

4.11 Issue of Units in exchange for in specie assets

The Manager may, by special arrangement and at its discretion (but subject always to the requirements set out in COLL), agree to arrange for the issue of Units in exchange for assets other than cash but only if the Trustee is satisfied that acquisition of the assets in exchange for the number of Units to be created is not likely to result in any material prejudice to the interests of holders or potential holders of Units in the Fund.

4.12 Suspension of dealing in the Fund

The Manager may, with the prior agreement of the Trustee, and shall if the Trustee so requires, without prior notice to holders, temporarily suspend the issue, cancellation, sale and redemption of Units where, due to exceptional circumstances, it is in the interests of all holders to do so. Unitholders will be notified of such suspension in dealings as soon as is practicable after suspension commences and will be kept informed about the suspension. Suspension will continue only for so long as it is justified having regard to the interests of the Unitholders. On a resumption of dealings following suspension, it is anticipated that Unit pricing and dealing will take place at the Dealing Days and times stated in this Prospectus.

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The Manager or the Trustee (as appropriate) will immediately inform the FCA of the suspension and the reasons for it and will follow this up as soon as practicable with written confirmation of the suspension and the reasons for it to the FCA.

The Manager shall notify Unitholders as soon as is practicable after the commencement of the suspension, including giving details of the exceptional circumstances which led to the suspension in a clear, fair and not misleading way and details of how Unitholders may find out further information about the suspension. In the event of suspension, the Manager shall publish sufficient details on its website or by other general means to keep Unitholders appropriately informed about the suspension including, if known, its possible duration.

The Manager and the Trustee will formally review the suspension at least every 28 days and will inform the FCA of such review and any change to the information supplied to Unitholders.

Suspension will cease as soon as practicable after the exceptional circumstances leading to the suspension have ceased. On a resumption of dealings following suspension, it is anticipated that pricing and dealing will take place at the Dealing Days and times stated in this Prospectus.

The circumstances under which suspension of dealing may occur include, for example, those where the Manager cannot reasonably ascertain the value of the assets or realise assets of the Fund, or the closure or suspension of dealing on a relevant exchange.

During any suspension, a holder may withdraw his redemption notice provided that such withdrawal is in writing and is received before the end of the suspension. Any notice not withdrawn will be dealt with on the Dealing Day next following the end of the suspension.

5. Other dealing information

5.1 Anti-money laundering Deals in Units and deals otherwise in connection with the Company will be covered by United Kingdom legislation designed to prevent money laundering. In order to meet these requirements, the Manager may ask investors to provide proof of identity when buying or redeeming Units. For this purpose, the Manager may use credit reference agencies (who will record that an enquiry has been made) and/or may check electronic databases.

Until satisfactory proof of identity is provided the Manager reserves the right to refuse to sell Shares or to delay processing and/or withhold any payments due to investors in respect of their investment and to discontinue any deals it is conducting on behalf of those investors.

5.2 Market Timing and Late Trading

The repeated purchasing and selling of Units in response to short-term market fluctuations is known as “market timing”. The processing of subscriptions after the dealing cut off time and/or Valuation Point is known as “late trading”. Units in a Fund are not intended for market timing or late

trading. The Manager has a policy in relation to market timing and late trading. As part of its policy, the Manager may refuse to accept an application for Units from persons that they reasonably believe are engaged in market timing or late trading and the Manager will actively monitor trading patterns to assist it in maintaining the stability and integrity of the prices of Units.

6. Fees and expenses

6.1 General

The Manager will give written notice to the Unitholders in a time period in accordance with the FCA Rules before making an increase any of the fees or rates specified in this Prospectus and the Manager will make available a Prospectus to reflect the increased rates.

The following expenses (being the actual amounts incurred) may be payable by the Fund out of its capital or income in accordance with COLL:

a) direct Property expenses, including but not limited to the repairs, maintenance, refurbishment, and management of Property owned or leased by the Fund;

b) buying and selling costs;

c) restructuring, consultant costs and other similar costs regarding the Fund’s assets;

d) re-letting, rent reviews, breaches, notices, legal advice and similar expenses regarding the Fund’s assets;

e) interest on and other charges relating to permitted borrowings;

f) taxation and other duties payable regarding the Fund’s assets and any SDRT charges;

g) any costs incurred in amending the Trust Deed, including costs incurred in respect of meetings of Unitholders convened for the purpose of approving any such amendments;

h) any costs incurred in respect of any other meeting of Unitholders convened on a requisition by holders not including the Manager or an associate of the Manager;

i) in relation to a scheme of arrangement where the assets of a body corporate (such as an investment company) or of another collective investment scheme are transferred to the Fund in consideration of the issue of Units in the Fund to Unitholders in that body corporate or to participants in that other scheme, any liability arising after the transfer which, had it arisen before the transfer, could probably have been paid out of those other assets provided the Manager is of the opinion that proper provision was made for meeting such liabilities as were known or could reasonably have been anticipated at the time of the transfer;

j) the fees of the FCA and the corresponding periodic fees of any relevant regulatory authority outside the UK;

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k) reports, accounts and amendments to the same for the Fund;

l) costs of preparing and printing any key features document in respect of the Fund;

m) the audit fee and any proper expenses of the auditors;

n) the Standing Independent Valuer's fees;

o) Value Added Tax in respect of any of the costs, expenses, fees and charges payable by the Fund; and

p) any other charges/expenses that may be taken out of the Fund's assets in accordance with the COLL Sourcebook. The Manager will give written notice to the Unitholders in a time period in accordance with the FCA Rules before any increase to the rates specified above and the Manager will make available a Prospectus to reflect the increased rates At any particular time the actual amount of ongoing registration and general expenses listed in (a)-(p) above may be more or less than Manager collects from the Fund, however, the Manager is under no obligation to account to the Trustee or the Unitholders for any surplus it retains in relation to the payment it receives.

In addition, all Property forming part of the Fund’s assets will be insured, up to its reinstatement value, against all risks of physical loss or damage and loss of rent, including where such loss or damage is caused by terrorism (provided cover is available in the UK insurance market), and the costs of such insurance shall be charged to the Fund.

Subject to any restrictions set out in the Trust Deed, and to the COLL Sourcebook, the above expenses will be payable out of the income assets of the Fund. However, interest on and other charges relating to permitted borrowings; taxation and other duties payable in respect of the Fund may be payable from capital as the Trustee having taken reasonable care determines is appropriate in accordance with the governing law of trusts. Where in respect of any annual accounting period, taken as a whole, the amount of income received or receivable for the Fund is less than the amount to be paid from the income in respect of the other payments of the Fund, the shortfall will, at the end of that period, be paid from the capital of the Fund.

6.2 The Fees and Expenses of the Manager

As remuneration for carrying out its duties and responsibilities for Class 1 Units and Class 2 Units, the Manager is paid an annual fee out of each Fund as set out in Appendix I (Fund details) together with any Value Added Tax on these charges where applicable.

6.3 Registrar Charge

The Manager or companies in its group will pay the following ongoing registration and general expenses:

(i) fees and expenses in respect of establishing and maintaining the register of Unitholders and related functions including the fees payable to IFDS;

(ii) expenses incurred in distributing income to Unitholders;

(iii) fees in respect of the publication and circulation of details of the NAV;

(iv) the fees and expenses of tax, legal and other professional advisers of the Fund but for the avoidance of doubt not those property related costs listed under the heading “General” at page 8 above;

(v) the costs of convening and holding Unitholder meetings; and

(vi) the costs of printing and distributing reports, accounts and any prospectus, publishing prices and any costs incurred as a result of periodic updates of any prospectus and any other administrative expenses.

In return for paying or satisfying (i)-(vi), the Manager shall be entitled to make a periodic charge which accrues daily and is paid monthly, as set out in Appendix I (Fund details). The Manager will give written notice to the Unitholders in a time period in accordance with the FCA Rules before any increase to the rates specified above and the Manager will make available a Prospectus to reflect the increased rates At any particular time the actual amount of ongoing registration and general expenses listed in (i)-(vi) above may be more or less than the Manager collects from the Fund, however, the Manager is under no obligation to account to the Trustee or the Unitholders for any profit it makes in relation the payment it receives.

6.4 Investment Manager’s fee

All fees of the Investment Manager are payable by the Manager and are not charged directly to the Fund. The fees of all Unit classes are calculated with reference to the previous day’s NAV of the Fund plus or minus any sales or redemptions. While no commission is payable to the Investment Manager for any investment deal done or which could be done on behalf of the Fund, the Investment Manager may receive other payments for ancillary services rendered including commission which may be payable in respect of arranging reinstatement and loss of rent insurance together with other forms of insurance.

6.5 Trustee’s fee

The Trustee’s remuneration, which is payable out of the assets of the Fund, is a periodic charge of 0.008% being paid on the same basis as the Manager's annual management charge.

The Manager will notify Unitholders before making any material increase to the Trustee’s fee in accordance with the FCA Rules.

The Trustee is also entitled to receive out of the assets of the Fund remuneration for performing or arranging for the performance of such functions as the Manager and the Trustee may from time to time agree, being functions conferred on the Trustee by the Trust Deed or the FCA Handbook. The Trustee’s remuneration under this paragraph shall accrue when the relevant transaction or other dealing is effected and shall be paid in arrears on the next following date on which payment of the Trustee’s periodic charge

9


is to be made or as soon as practicable thereafter. Currently, the Trustee does not receive any remuneration under this paragraph.

6.6 Trustee’s expenses

In addition to the remuneration referred to above, the Trustee is entitled to receive reimbursement for expenses properly incurred by it in the discharge of its duties or exercising any of the powers conferred upon it in relation to the Trustee and the Trust, subject to approval by the Manager. This would include a right to be reimbursed out of the property of the Trust for claims brought against the Trustee by third parties where the Trustee has acted properly and the Trustee has the right to be reimbursed out of the assets of the relevant Trust.

The Trustee has appointed Citibank N.A. (the “Custodian”) as the custodian of the assets of the Fund and is entitled to receive reimbursement of the Custodian's fees as an expense of the Fund.

The Custodian’s remuneration for acting as custodian in respect of assets, other than UK Property, is calculated at an ad valorem rate determined by the territory or country in which the assets of the Fund are held. Currently, the lowest rate is 0.002% and the highest rate is 0.40%. In addition, the Custodian makes a transaction charge determined by the territory or country in which the transaction is effected. Currently, these transaction charges range from £3 to £65 per transaction. Custodian fee arrangements for UK Property holdings are charged at a rate of £100 per annum per physical holding.

Any material increase to the Custodian's charges set out above will be subject to the agreement of the Trustee and the Manager. The Manager will notify Unitholders in writing before making any material increase to the rates set out above, in accordance with the FCA Rules.

6.7 Charges to capital

The annual management charge and fees and expenses of the Trustee referred to above may be taken out of the income or the capital of the Fund. In particular, such fees and expenses may be charged to capital in order to manage the level of income paid and/or available to Unitholders. See “Risk Factors”.

6.8 Allocation of assets and liabilities

The Fund is required to allocate (and the Manager may from time to time reallocate) any assets, costs, charges or expenses between the Units in the Fund in a manner that is fair to the Unitholders of the Fund generally.

6.9 Ongoing Charges Figure (‘OCF’)

The OCF is the European standard method of disclosing the charges of a share class of a fund based on the last year’s expenses and may vary from year to year. It includes charges such as the Fund’s annual management charge, registration fee, custody fees and distribution cost but ordinarily excludes the costs of buying or selling assets for the Fund. The non-UCITS retail scheme key investor information documents contain the current OCF.

7. Valuation of the Fund

7.1 General

Each Unit linked to the Fund represents the overall assets of the Fund, so a valuation of Units of any given class in the Fund is achieved by valuing the assets in the Fund attributable to that class, less expenses and charges, and dividing that value by the number of Units of the relevant class in issue.

Dealings are at forward prices (i.e. at a price calculated by reference to the next Valuation Point following receipt of an application). Units to satisfy an application received before the Valuation Point on a Dealing Day will be issued at a price based on that day's Valuation Point and Units to satisfy an application received after that time, or on a day which is not a Dealing Day, will be issued at a price calculated at the Valuation Point on the next Dealing Day.

7.2 Valuations

Valuations are made at 12.00 noon (GMT) on each Business Day for the purpose of determining the price at which Units in the Fund may be purchased or redeemed. This is the Valuation Point for the Fund.

The calculation of prices of Units commences at or about the Valuation Point on each Dealing Day. The Manager may carry out additional valuations in accordance with COLL if it considers it desirable to do so. Valuations will not be made during a period of suspension of dealings. The Manager is required to notify Unit prices to the Trustee on completion of a valuation.

The assets of the Fund are valued on the following basis in accordance with the NAV determination provisions of the Fund’s Trust Deed, as set out in Appendix III hereto:

1) Property held by the Fund is valued by the Standing Independent Valuer, appointed by the Manager with the approval of the Trustee, on the basis of a full valuation with a physical inspection at least once a year. Any inspection of adjacent properties of a similar nature may be limited to that of one such representative Property. The Standing Independent Valuer also values each Property on the basis of a review of the last full valuation at least once a month. The figure arrived at using that valuation is used as part of the valuation for the entire Fund calculated on each Dealing Day for the next month. If either the Manager or the Trustee becomes aware of any matter that appears likely to affect the outcome of a valuation of Property or to cause the Standing Independent Valuer to decide to value on the basis of a full valuation with full inspection instead of a review of the last full valuation, it will immediately inform the Standing Independent Valuer of that matter. The Manager will also use its best endeavours to ensure that any other affected person (as defined in the FCA Handbook) reports to the Standing Independent Valuer immediately upon that person becoming aware of any such matter. Any valuation of a Property by the Standing Independent Valuer must be on the basis prescribed as an “open market value” in Practice Statement 3 in the Statements of Asset Valuation Practice and Guidance Notes published by the Royal Institution of Chartered Surveyors, but subject to the FCA Handbook. Where the Standing Independent Valuer is acting as a

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connected party to a purchase transaction carried out by the Fund, the Fund will appoint an alternative Standing Independent Valuer for that transaction only. An agreement to transfer Property or an interest in Property will be disregarded for the purpose of the valuation unless it reasonably appears to the Manager to be legally enforceable.

2) Transferable securities for which market quotations are available are valued at their last quoted price where available (or, if separate buying and selling prices are quoted at the average of such prices); in the case of order-driven markets the most recently known price at which the securities were traded on the relevant exchange is used. In the case of collective investment schemes with separate bid and offer prices, the value is taken as the average of such prices before application of any initial or exit charges. Where the Manager has reasonable grounds to believe that no reliable price exists or, the most recent price available does not reflect the Manager's best estimate of the actual value of the security in question, the security concerned will be attributed a value which in the Manager’s opinion is fair and reasonable.

3) Cash and amounts held in current and deposit accounts and other time-related deposits are valued at their nominal value.

4) Contingent liability transactions will be valued using a method agreed between the Manager and the Trustee incorporating the following requirements: written options will be valued after deduction of the premium receivable; off-exchange futures will be valued at the net value of closing out; all other contingent liability transactions will be valued at the net value of margin on closing out.

5) Any other assets will be valued at what the Manager considers a fair and reasonable mid-market price.

6) In valuing assets, any fiscal or other charges paid or payable on the acquisition or disposal of the asset are excluded.

7) Deductions are made for anticipated UK and non-UK tax liabilities and for an estimated amount of other liabilities payable out of the assets of the Fund, and for outstanding borrowings together with accrued but unpaid interest.

8) Amounts are added in respect of prudently estimated, recoverable tax and any other amounts due to be paid into the Fund.

9) A sum representing any interest or any income accrued due or deemed to have accrued but not received will be added.

For the above purposes, instructions given to issue or cancel Units are assumed to have been carried out (and any cash paid or received); and uncompleted arrangements for the unconditional sale or purchase of assets are (with certain exceptions) assumed to have been completed and all consequential action taken. Any currency conversions will be at a rate that is designed to be fair to holders and potential holders.

7.3 Prices of Units

The Fund deals on a forward price basis, that is at the price for a Unit in the Fund at the next Valuation Point following receipt of a request to issue or redeem Units.

The Fund operates on the basis of “dual pricing”. This means that there are different prices for the sale of Units to investors and the redemption of Units by investors.

The maximum price at which Units may be sold to an investor (“issue price”) is established by valuing the assets on the basis of the costs of acquiring those assets divided by the number of Units in existence and adding on any initial charge.

The minimum price at which Units may be sold back to the Manager (“cancellation price”) is calculated by valuing the assets on the basis of the amount that would be received if they were sold, and dividing the result by the number of Units in existence.

The difference between the issue price and the cancellation price is known as the “maximum spread”. The actual spread (or “dealing spread”) that is applied by the Manager may, however, be less than the maximum spread.

If the actual spread is less than the maximum spread, the Manager is permitted under the FCA Rules, to choose to price the Fund on either an “offer” or “bid” basis depending on the prevailing circumstances.

When the Fund is on an “offer” basis, the offer price is set to the maximum permitted under the FCA Rules, and the actual spread deducted to calculate the published bid price. This bid price is then higher than the minimum required under FCA Rules.

Conversely, on a “bid” basis, the bid price is set to the minimum permitted by FCA Rules, and the actual spread added to calculate the published offer price. The offer price is then lower than the maximum permitted by FCA Rules.

An “offer” basis is likely to apply when the Fund receives more inflows than outflows and a “bid” basis when the Fund’s size is falling as investors sell their Units. The Manager reserves the right to change the basis depending on the daily net flows, in order to protect remaining Unitholders.

When on a “bid” basis, the Manager reserves the right to price on the basis of the maximum permitted offer price and not the published offer price for any deal transactions of £15,000 or more (“large deal”). When on an “offer” basis, the Manager also reserves the right to impose the minimum bid price instead of the published bid price for any large deal transaction.


The price of a Unit is calculated (to at least four significant figures) by:

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1) taking the value of the Fund attributable to the relevant Class at the next valuation of the Fund; and

2) dividing the result by the number of Units of the relevant Class in the Fund in issue immediately before the valuation concerned.

7.4 Publication of prices

The prices of the Units will be published daily electronically on www.columbiathreadneedle.com or can be obtained by telephone* by contacting the Manager Client Services department at the details provided in the section of this Prospectus with the heading “Directory”. Investors will be informed in accordance with the FCA Rules of any change in the method of publication of prices.

As the Manager deals on a forward pricing basis, the price that is available will not necessarily be the same as the price at which investors can currently deal. The Manager may also, at its sole discretion, decide to publish certain unit prices in other third party websites or publications but the Manager does not accept responsibility for the accuracy of the prices published in, or for the failure to publish prices by such sources for reasons beyond the control of the Manager.

*Please note that calls may be recorded.

8. Risk factors Potential investors should consider the following risk factors before investing in the Fund. Please also note the specific risk factors which apply to the Fund, as set out in the section with the heading ‘Investment Objective and Policy” at page 3 of this Prospectus and at Appendix I (Fund details)’.

8.1 General

The investments of the Fund is subject to normal market fluctuations and other risks inherent in investing in securities. There can be no assurance that any appreciation in value of investments will occur. The value of investments and the income derived from them may fall as well as rise and investors may not recoup the original amount invested in the Fund. Past performance is not indicative of future performance. There is no assurance that the investment objective of the Fund will actually be achieved.

8.2 Effect of initial charge

Where an initial charge is imposed, an investor who realises his Units after a short period may not (even in the absence of a fall in the value of the relevant investments) realise the amount originally invested. Therefore, the Units should be viewed as a mid to long-term investment.

8.3 Valuation Point

Although the value of the Fund is calculated at 12 noon UK time on each Dealing Day, details on the daily creation or liquidation of Fund Units is not available to the Manager until later in the day.

The Manager has introduced controls to mitigate the impact of this delay on the Fund, however there is a risk that during periods of high market volatility a Trust may be affected if the market prices of the assets dealt in the Fund are significantly different from the prices used to price the Fund. Price movements between the time of pricing and dealing may adversely or positively impact the effective value of Units in the Fund at the time of investment. In normal market conditions, it is expected that such price differentials would be minimal.

8.4 Currency exchange rates

When investing in the Fund, currency fluctuations may adversely affect the value of an investment and the level of income.

8.5 Liabilities of the Fund

Although each Fund (or Unit class) so far as possible will be treated as bearing the liabilities, expenses, costs and charges attributable to it, if its assets are not sufficient the Manager may re-allocate assets, liabilities, expenses, costs and charges in a manner which is fair to the Unitholders of the Fund generally. The Manager would normally expect any such re-allocation to be effected on a pro rata basis having regard to the value of the Fund. If there is any such re-allocation the Manager will advise Unitholders of it in the next succeeding annual or half-yearly report to Unitholders.

Unitholders are not, however, liable for the debts of the Fund. A Unitholder is not liable to make any further payment to the Fund after he has paid the purchase price of the Units.

8.6 Regulatory

The Fund is resident in the United Kingdom and non-United Kingdom investors should note that the regulatory protections provided by the regulatory authorities in their country of domicile may not apply. Investors should consult their financial advisors for further information in this area.

8.7 Investment objectives

Investors should be aware of the investment policy of the Fund as this may state that the Fund may invest on a limited basis into markets not naturally associated with the name of the Fund. These other markets may act with more or less volatility than the core investment area and performance will be in part dependent on these investments. Investors should ensure (prior to any investment being made) that they are satisfied with the risk profile of the overall objectives disclosed.

8.8 Warrants

When a Fund invests in warrants, the price per Unit of the Fund may fluctuate more than if the Fund was investing in the underlying securities because of the greater volatility of the warrant price.

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http://www.columbiathreadneedle.com/


8.9 Risk to capital growth

All or part of the Manager’s fee, as well as all or part of other fees and expenses of the Fund, may be charged against capital instead of against income. The Fund will charge such fees and expenses to capital in order to manage the level of income paid and/or available to Unitholders. This may result in capital erosion or may constrain capital growth.

8.10 Investments in collective investment schemes

The Fund may invest all or part of its assets in collective investment schemes, subject to the FCA Rules and the Trust Deed, and as otherwise provided herein. Investors are therefore exposed to the risk of investing in the underlying assets of those collective investment schemes and should consider that exposure in the context of all of their investments.

8.11 Investments in derivatives and forward transactions

The FCA Rules for “NURS Schemes” permit the use of derivatives and forward transactions for both EPM and investment purposes (including short selling and leverage). Investors should consider potential exposure to derivatives in the context of all their investments.

The Investment Manager maintains a ‘Risk Management Process’ in respect of the measurement and monitoring of risks attached to financial derivative instrument positions entered into by the Company. This policy document has been sent to the Depositary and to the FCA and is available upon request. The use of the Risk Management Process does not guarantee that the derivative strategies will work in every instance.

US federal legislation has been enacted that provides for new clearing, margin and reporting requirements for participants in the derivatives market. European regulations on clearing, margin and reporting are currently under discussion.. While ultimate impact is not yet clear, these new laws, rules and regulations may impose restrictions, additional operational requirements and/or significant costs upon a Portfolio’s participation in financial derivative instruments.

Each of the Fund is permitted by the FCA Rules to use derivatives for the purposes of EPM. The investment and policy of the Fund will detail whether they may also use derivatives and forward transactions for investment purposes. The risks relating to the different use are explained below:

8.11.1. Use of derivatives and forward transactions for EPM purposes

The use of derivatives and forward transactions for the purposes of EPM will not materially alter the risk profile of any Fund.

EPM is used by the Fund to reduce risk and/or costs in the Fund and to produce additional capital or income in the Fund. The Fund may use derivatives, borrowing, cash holding and stock lending for EPM. It is not

intended that using derivatives for efficient portfolio management will increase the volatility of the Fund.

In adverse situations, however, a Fund’s use of derivatives may become ineffective in hedging or EPM and a Fund may suffer significant loss as a result. A Fund’s ability to use EPM strategies may be limited by market conditions, regulatory limits and tax considerations.

When making use of EPM techniques, the Investment Manager may use one or more separate counterparties to undertake transactions on behalf of these Fund. The Fund may be required to pledge or transfer collateral paid from within the assets of the relevant Fund to secure such contracts entered into for efficient portfolio management including in relation to derivatives and stocklending. There may be a risk that a counterparty will wholly or partially fail to honour their contractual arrangements under the arrangement with regard to the return of collateral and any other payments due to the relevant Fund. The Manager measures the creditworthiness of counterparties as part of the risk management process. A counterparty may be an associate of the Manager or the Investment Manager, which may give rise to a conflict of interest. For further details on the ACD’s conflicts of interest policy please contact the Manager.

The Manager, the Investment Manager or the Fund will not be liable for their failure to implement an EPM strategy so long as they have acted reasonably and in accordance with the FCA rules.

The use of derivatives for EPM does however allow the Fund to manage various risks including the following: default risk, market risk, interest rate or duration risk, currency risk and curve risk. A brief description of the ACD’s interpretation of each of these risks is set out below:

− Default risk is the risk that the issuer fails to pay.

− Market risk is the risk that general market conditions impact the price of the assets owned by the Fund.

− Interest rate or duration risk is the risk that the price of a bond is sensitive to a change in its yield. It should be noted that the Investment Manager may use individual derivative transactions (for example, an interest rate swap) to manage these risks or a combination of derivatives designed to act in combination with one another (for example, long and short bond futures used collectively) as a means of managing these risks and/or changing the interest rate or duration risk (for example, such as to effect the change from interest rate risk/duration risk in one country back to another).

− Currency risk is the risk that can arise when assets are denominated in a currency that is not the base currency of the Fund.

− Curve risk recognises that the shape of both the credit yield curve and maturity yield curve can change significantly over time.

In addition, the FCA Rules permit the Manager to use certain techniques when investing in derivatives in order to manage a Fund’s exposure to particular counterparties and in relation to the use of collateral, to reduce

13


overall exposure to OTC derivatives; for example the Fund may take collateral from counterparties with whom they have an OTC derivative position and use that collateral to net off against the exposure they have to the counterparty under that OTC derivative position, for the purposes of complying with counterparty spread limits.

The AIFM Directive and associated guidance on how leverage is to be calculated means that some derivative trades classified as EPM may create leverage under the commitment approach. The maximum amount of that leverage is set out in Appendix I but will never be more than 120% of the NAV using the gross method and 110% using the commitment approach. For all derivative trades made for EPM the Manager will mitigate the leverage by holding appropriate assets to cover the derivative exposure so that there is no material impact to the risk profile of the Fund.

8.11.2. Use of derivatives forward transactions for investment purposes

The use of derivatives for investment purposes may increase the risk profile of the Fund. The Funds’ exposure involves synthetic short sales of investments and leverage, which may increase the risk of the Fund and may carry a higher degree of volatility than a fund which does not gain short exposure. Leverage has the overall effect of increasing positive returns, but causes a faster decrease in the value of assets if prices fall. These techniques may be achieved through the use of derivatives and forward transactions.

8.12 Emerging Markets

The Fund may invest in Emerging Markets. These investments may carry risks associated with failed or delayed settlement of market transactions and with the registration and custody of securities.

Investment in emerging markets may involve a higher than average risk. In addition, an investment in emerging market currencies and debt may in involve higher risk than an investment in debt and currencies issued in more developed markets.

Companies in emerging markets may not be subject to:

a) accounting, auditing and financial reporting standards, practices and disclosure requirements comparable to those applicable to companies in major markets;

b) the same level of government supervision and regulation of stock exchanges as countries with more advanced securities markets.

Accordingly, certain emerging markets may not afford the same level of investor protection as would apply in more developed jurisdictions:

c) Restrictions on foreign investment in emerging markets may preclude investment in certain securities by the Fund and, as a result, limit investment opportunities for the Fund. Substantial government involvement in, and influence on, the economy may affect the value of securities in certain emerging markets.

d) The reliability of trading and settlement systems in some emerging markets may not be equal to that available in more developed markets, which may result in delays in realising investments.

e) Lack of liquidity and efficiency in certain of the stock markets or foreign exchange markets in certain emerging markets may mean that from time to time the Manager may experience more difficulty in purchasing or selling holdings of securities than it would in a more developed market. The proceeds for illiquid securities that form part of the redemption will in these circumstances be paid in cash once the proceeds become available. Please see the section of this Prospectus with the heading “In Specie redemption”

f) Economic and/or political instability could lead to legal, fiscal and regulatory changes or the reversal of legal/fiscal regulation/market reforms. Assets could be compulsorily acquired without adequate compensation.

g) Fund registration services, whilst appropriately licensed in Russia, may not be subject to such tight controls as those in more developed countries. This may mean that the Investment Manager may not secure good title to the Russian securities held.

h) Higher volatility than in the more developed markets of the world. The paucity of accurate and meaningful information, and inefficiencies in distribution, can leave emerging markets prone to sudden and unpredictable changes in sentiment. The resultant investment flows can trigger significant volatility in these relatively small and illiquid markets. At the same time, this lack of liquidity together with low dealing volumes can restrict the Investment Manager’s ability to execute deals.

i) Some emerging markets countries may restrict investment into securities and/or currency and therefore the Manager may seek exposure to emerging markets through securities and derivatives that invest in underlying emerging markets currencies and securities. These securities and derivatives may be less liquid than a direct investment in the underlying security or currency.

8.13 High Yield Bond

Where a Fund’s investment policy is to generate a higher yield through the use of fixed interest securities, many of the investments will be in ‘below investment grade’ securities (generally defined as below BBB- by leading rating agencies) and may also include non-traditional types of debt securities. Investment in such securities brings an increased risk of default on repayment and therefore increases the risk that the income and capital of the Fund will be affected.

As a general rule, fixed interest securities with an above average yield tend to be less liquid than securities issued by issuers with a higher investment rating. Furthermore, the solvency of issuers of such fixed interest securities may not be guaranteed in respect of either the principal claim or regarding the interest payments and it cannot be excluded that such issuers may become insolvent. Investors should be fully aware of such risks.

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8.14 No Guarantee of Capital

Investors should note that the Fund does not offer any form of guarantee with respect to investment performance and no form of capital protection will apply.

8.15 Fixed Income Fund

The interest rate on corporate bonds and most government bonds will not increase in line with inflation. Thus, over time, the real value of investor’s income could fall.

8.16 Credit Risk

The value of the Fund may be adversely affected if any of the institutions with which the cash is invested or deposited suffers insolvency or other financial difficulties

8.17 Property Related Risks

Investments in property are relatively illiquid and more difficult to realise than equities or bonds.

Property and Property-related assets are inherently difficult to value due to the individual nature of each Property. As a result, valuations are subject to uncertainty and are a matter of an independent valuer's opinion. There is no assurance that the estimates resulting from the valuation process will reflect the actual sales price even where a sale occurs shortly after the valuation date.

The performance of the Fund would be adversely affected by a downturn in the Property market in terms of capital value or a weakening of rental yields.

Commercial Property values are affected by factors such as the level of interest rates, economic growth, fluctuations in Property yields and tenant default. In the event of a default by an occupational tenant, there will be a rental shortfall and additional costs including legal expenses are likely to be incurred in maintaining, insuring and re-letting the Property.

9. Management and administration

9.1 The Manager and AIFM

The manager and AIFM of the Fund is Threadneedle Investment Services Limited which is a private company limited by shares incorporated under the Companies Act 1985 in England and Wales on 26 January 1999.

The issued and paid up share capital of the Manager is £17.02 million.

The Manager is responsible for managing and administering the Fund’s affairs in compliance with the FCA Rules.

The ultimate holding company of the Manager is Ameriprise Financial Inc., a corporation incorporated in Delaware, USA.

Registered office and head office: Cannon Place, 78 Cannon Street, London EC4N 6AG.

The Manager also acts as authorised corporate director of Threadneedle Focus Investment Funds ICVC, Threadneedle Investment Funds ICVC, Threadneedle Investment Funds II ICVC, Threadneedle Investment Funds III ICVC, Threadneedle Investment Funds IV ICVC, Threadneedle Opportunity Investment Funds ICVC and Threadneedle Specialist Investment Funds ICVC, and as a manager in respect of the following authorised unit trusts:

− Threadneedle Defensive Equity and Bond Fund

− Threadneedle Defensive Fund

− Threadneedle Equity and Bond Fund

− Threadneedle Global Equity and Bond Fund

− Threadneedle Global Equity Fund

− Threadneedle Managed Income Fund

− Threadneedle Navigator Adventurous Managed Trust

− Threadneedle Navigator Balanced Managed Trust

− Threadneedle Navigator Cautious Managed Trust

− Threadneedle Navigator Growth Managed Trust

− Threadneedle Navigator Growth Trust

− Threadneedle Navigator Income Trust

− Threadneedle Navigator UK Index Tracker Trust

The directors of the Manager are Mr. Campbell Fleming (Chairman and Chief Executive Officer), Mr. Tim Gillbanks, Mr. Don Jordison, Mr. Nick Ring and Mrs. Ann Roughead (non-executive director). The directors act as directors of companies other than the Manager (including companies that are within the same group of companies as the Manager) but do not engage in business activities that are not connected with the Fund that would be “significant” to the Fund’s business in terms of the FCA Rules.

Third party administrative functions, such as customer applications and record keeping, dealing with subscriptions, switching, withdrawals and terminations, and all communication centre activity in relation to the Fund, have been delegated by the Manager to International Financial Data Services (UK) Limited (“IFDS”).

Further certain administrative and ancillary services in relation to the Fund have been delegated by the Manager to Citibank N.A..

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The Manager will satisfy itself on an ongoing basis that IFDS and Citibank N.A. are competent to carry out these functions and associated responsibilities.

The Manager is entitled to be indemnified out of the Scheme Property in respect of all liabilities and expenses properly incurred in the execution or purported execution of any powers, authorities or discretions vested in it pursuant to the Trust Deed and against all actions, proceedings, costs, claims and demands in respect of any matter or thing done or omitted in anyway relating thereto (provided that such indemnity shall not apply in relation to any liability or expense attributable to the negligence, fraud or wilful default of the Manager).

9.2 The Trustee

Citibank International Limited is the Trustee of the Fund. It is a company limited by shares incorporated in England and Wales on 21 December 1972 with registered number 1088249.

The Trustee provides its services under the terms of a Trust Deed. The Trustee is required to carry out the duties specified in COLL including responsibility for the safekeeping of all of the assets of the Fund entrusted to it.

Head office and registered office: Citibank International Limited, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB

Ultimate holding company: Citigroup Inc., a company which is incorporated in New York, USA

Principal business activity: Acting as corporate trustee including trusteeship of unit trust schemes and depositary of open ended investment companies.

Terms of appointment: Under the terms of a Depositary Agreement, the Trustee has been appointed as depositary of the Scheme Property and the Scheme Property has been entrusted to the Trustee for safekeeping.

The key duties of the Trustee consist of:

(i) cash monitoring and verifying the cash flows of the Fund;

(ii) safekeeping of the Fund’s assets;

(iii) taking reasonable care to ensure the Fund is managed in accordance with its investment and borrowing restrictions;

(iv) ensuring that the sale, issue, re-purchase, redemption, cancellation and valuation of Units are carried out in accordance with the Instrument of Incorporation and applicable law, rules and regulations;

(v) ensuring that in transactions involving the Fund’s assets any consideration is remitted to the Fund within the usual time limits;

(vi) ensuring that the income of the Fund is applied in accordance with the Trust Deed the Fund, applicable law, rules and regulations; and

(vii) carrying out instructions from the Manager unless they conflict with the applicable Trust Deed or applicable law, rules and regulations.

Under the terms of the Depositary Agreement the Trustee has the power to delegate its safekeeping functions. The Trustee has delegated to Citibank N.A. the custody of financial instruments belonging to the Fund and other assets of the Fund entrusted to the Trustee for safekeeping.

As a general rule, whenever the Trustee delegates any of its custody functions to a delegate, the Trustee will remain liable for any losses suffered as a result of an act or omission of the delegate as if such loss had arisen as a result of an act or omission of the Trustee. See below for situations in which the Trustee is not liable for acts or omission of a delegate which is not an associate of the Trustee or of the Manager.

In addition, a delegate (other than an associate of the Trustee or the Manager) ("A") to which custody of a financial instrument has been delegated by the Trustee and to which the obligation to return a financial instrument of the identical type or corresponding amount, to the Trustee or the investors of the Fund, has been properly transferred, will be liable to return a financial instrument of identical type or corresponding amount unless it can prove that:

(viii) the lost financial instrument was held in custody by another third party ("B");

(ix) A had properly sub-delegated its functions to B;

(x) a written contract between A and B:

(a) expressly transfers from A to B the obligation to return a financial instrument of the identical type or corresponding amount to the Fund, or the investors of the Fund; and

(b) enables the Fund, or the Manager acting on behalf of the Fund, to make a claim against B in respect of the loss of the financial instrument, or for the Trustee to make such a claim on their behalf; and

(xi) a written contract between A and the Trustee expressly allows a transfer of A's obligation to return a financial instrument of the identical type or corresponding amount to the relevant Fund, or the investors of that Fund, and establishes an objective reason for the transfer.

The fees to which the Trustee is entitled are set out in the section with the heading “Trustee’s fee” on page 9 of this Prospectus.

The Trustee is entitled to be indemnified out of the Scheme Property in respect of all liabilities and expenses properly incurred in the execution or purported execution of any powers, authorities or discretions vested in it pursuant to the Trust Deed and against all actions, proceedings, costs, claims and demands in respect of any matter or thing done or omitted in anyway

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relating thereto (provided that such indemnity shall not apply in relation to any liability or expense attributable to the negligence, fraud or wilful default of the Trustee).

Liability of the Trustee As a general rule the Trustee is liable for any losses suffered as a result of the Trustee's negligent or intentional failure to properly fulfil its obligations except that it will not be liable for any loss where:

(i) the event which has led to the loss is not the result of any act or omission of the Trustee or of such third party;

(ii) the Trustee could not have reasonably prevented the occurrence of the event which led to the loss despite adopting all precautions incumbent on a diligent trustee as reflected in common industry practice; and

(iii) despite rigorous and comprehensive due diligence, the Trustee could not have prevented the loss.

However, in the case of loss of a financial instrument by the Trustee, or by a third party who is its own associate or an associate of the Manager, the Trustee is under an obligation to return a financial instrument of identical type or corresponding amount without undue delay.

In addition, in the case of loss of a financial instrument by the Trustee or by a third party who is neither an associate of its own nor an associate of the Manager to whom its custody has been properly delegated, the Trustee is under an obligation to return a financial instrument of identical type or corresponding amount without undue delay, but it will not be under such an obligation:

(i) if it can prove that the loss arose as a result of an external event beyond the Trustee's reasonable control, the consequences of which would have been unavoidable despite all reasonable efforts to the contrary; or

(ii) if it can prove that:

(a) the lost financial instrument was held in custody by a third party;

(b) the Trustee had properly delegated its functions to the third party;

(c) a written contract between the Trustee and the third party:

(A) expressly transfers such obligation to the third party; and

(B) enables the Fund, or the Manager acting on behalf of that Fund, to make a claim against the third party in respect of the loss of the financial instrument, or for the Trustee to make such a claim on their behalf; and

(d) a written contract between the Trustee and the AIF, or the AIFM acting on behalf of the AIF, expressly allows a transfer of the

Trustee's said obligation and establishes an objective reason for the transfer.

(iii) if the Trustee delegates custody functions to a custodian in any of the following circumstances:

(a) where the Trustee has no presence in the jurisdiction where any such financial instrument is issued or commonly held; or holding such financial instrument other than through a Sub-custodian would be inefficient or uneconomic; or it is not practicable to hold the financial instrument other than through a Clearance System in which the Trustee is not a participant; or

(b) where the Trustee intends to retain the services of a global Sub-custodian, but the Trustee has no practicable way of holding assets of the type in which the Fund and/or the Manager wishes to invest without appointing such global custodian; or

(c) the law of a country requires certain financial instruments to be held in custody by a local entity and there are no local entities that are subject to effective prudential regulation and supervision and, despite this, the Fund or the Manager has instructed the Trustee to delegate the custody of such financial instruments to a local entity,

and the contract between the Trustee and such custodian or local entity contains a clause transferring the liability of the Trustee to such custodian or local entity and makes it possible for the Fund or the Manager to make a claim against such custodian or local entity in respect of the loss of a financial instrument belonging to the Fund or for the Trustee to make such a claim on their behalf.

9.3 The Investment Manager

The Manager has appointed Threadneedle Asset Management Limited as investment manager to provide portfolio management services to the Manager.

Terms of appointment: The Investment Manager was appointed by an agreement dated 31 January 2007 between the Manager and the Investment Manager, as restated with effect from 21 July 2014.

The Investment Management Agreement may be terminated on 12 months’ notice by the Investment Manager or the Manager.

Subject to the overall policies, directions and control of the Manager, all relevant laws and regulations (including the FCA Rules), this Prospectus, the Trust Deed and all proper directions of the Trustee, the Investment Manager has the complete discretion to take all day to day portfolio management decisions and to deal in investments in relation to the portfolio management of the Fund, without prior reference to the Manager.

Under the Investment Management Agreement the Manager provides indemnities to the Investment Manager (except in the case of any matter

17


arising as a direct result of its fraud, negligence, default or bad faith). The Manager may be entitled under the indemnities in the Manager Agreement to recover from the Fund amounts paid by the Manager under the indemnities in the Investment Management Agreement.

The Investment Manager also acts as the investment manager of the open-ended investment companies and unit trusts listed in the section with the heading “The Manager and AIFM” on page 15 above, and a number of other collective investment schemes and segregated accounts.

Threadneedle Asset Management Limited is in the same group of companies as the Manager. Its registered office is at Cannon Place, 78 Cannon Street, London EC4N 6AG. The principal activity of the Investment Manager is acting as an investment manager.

FCA authorised status: Threadneedle Asset Management Limited is authorised and regulated by the FCA under the Financial Services and Markets Act 2000 to carry on regulated activities in the UK.

9.4 Auditor

The auditor of the Fund is PricewaterhouseCoopers LLP. The auditor is responsible for auditing the annual accounts of the Fund and expressing an opinion on certain matters relating to the Fund in the annual report including whether its accounts have been prepared in accordance with applicable accounting standards, the FCA Rules and the Trust Deed.

9.5 Legal advisers

The Fund is advised by Eversheds LLP.

9.6 Registrar and register of Unitholders

The Manager acts as registrar to the Fund and has delegated to IFDS the responsibility of maintaining the register of Unitholders at its offices at the address detailed in the Directory. The register may be inspected at that address during normal business hours by any Unitholder or any Unitholder’s duly authorised agent.

Certificates are not issued. To assist Unitholders in monitoring their holdings of Units a six-monthly valuation showing current holdings will be sent (with tax vouchers where applicable) to all Unitholders in the Fund, or to the first named Unitholder in the case of joint holdings.

The register is prima facie evidence as to matters properly entered in it. No notice of any trust express, implied or constructive may be entered in the register although this will not affect the obligations of the Manager in respect of any plan register. The Registrar is not obliged to register more than four persons as the joint holders of any Units.

If a Unitholder requires evidence of title to Units the Manager will, upon such proof of identity as may reasonably be required, supply a certified copy of the relevant entry in the register relating to that Unitholder’s holding of Units.

9.7 General

Unitholders must notify the Registrar of any change of name or address.

Units in the Fund are not listed or dealt in on any investment exchange.

No bearer Units will be issued.

10. Policies of the Manager and the Investment Manager

10.1 Conflicts of interest

The Trustee, the Manager or any associate of them may (subject to COLL) hold money on deposit from, lend money to, or engage in stocklending transactions in relation to the Fund, so long as the services concerned are provided on arm’s length terms (as set out in COLL) and in the case of holding money on deposit or lending money the Trustee, Manager or any associate of them is an eligible institution or an approved bank.

The Trustee, the Manager, or any associate of any of them may sell or deal in the sale of assets to the Fund or purchase assets from the Fund provided the applicable provisions of COLL apply and are observed.

Subject to compliance with COLL the Manager may be party to or interested in any contract, arrangement or transaction in which the Fund is interested.

The Trustee, the Manager, or any associate of any of them will not be liable to account to the Fund or any other person, including the holders of Units or any of them, for any profit or benefit made or derived from or in connection with:

a) their acting as agent for the Manager in the sale or purchase of assets to or from the Fund; or

b) their part in any transaction or the supply of services permitted by COLL; or

c) their dealing in assets equivalent to any owned by (or dealt in for the account of) the Fund.

When managing investments of the Fund, the Manager will not be obliged to make use of information which in doing so would be a breach of duty of confidence to any other person or which comes to the notice of an employee or agent of the Manager but properly does not come to the notice of an individual managing the assets of the Fund.

The Manager, the Investment Manager and other companies within the group of companies to which they belong may (the “Group”), from time to time, act as the investment manager or adviser to other fund or sub-fund which follow similar investment objectives to the Fund. It is therefore possible that the Manager and/or the Investment Manager may in the course of their business have potential conflicts of interest with the Fund.

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Each member of the Group will, however, have regard in such event to its legal obligations and, in particular, to its obligation to act in the best interests of the Fund so far as practicable, having regard to its obligations to other clients when undertaking any investment where potential conflicts of interest may arise. As more than one company within the same group of companies as the Manager will have access to the same information, and may be trading in the same investments through different trading desks, policies and procedures are in place to manage this potential conflict. Where a conflict of interest cannot be avoided, the Manager will ensure that the Fund and the other fund it manages are treated fairly.

From time to time conflicts may arise from the appointment by the Depositary of any of its delegates. For example, Citibank N.A. has been appointed to act as Custodian of the property of the Trusts. It is therefore possible that a conflict of interest could arise in the course of business. Citibank N.A. will manage such conflict having regard to the FCA Handbook and its duties to the Trustee and the Investment Manager.

The FCA Rules contain provisions on conflicts of interest governing any transaction concerning the Fund which is carried out by or with any ‘affected person’, an expression which covers the Fund, an associate of the Fund, the Manager, an associate of the Manager, the Trustee, an associate of the Trustee, any investment manager and any associate of any investment manager.

These provisions, among other things, enable an affected person to sell or deal in the sale of property to the Fund or Trustee for the account of the Fund; vest property in the Fund or the Trustee against the issue of Units in the Fund; purchase property from the Fund (or the Trustee acting for the account of the Trustee); enter into a stocklending transaction in relation to the Fund; or provide services for the Fund. Any such transactions with or for the Fund are subject to best execution on exchange, or independent valuation or arm’s length requirements as set out in the FCA Rules. An affected person carrying out such transaction is not liable to account to the Trustee, the Manager, any other affected person, or to the holders of Units or any of them for any benefits or profits thereby made or derived.

Investment of the property of the Fund may be made on arm’s length terms through a member of an investment exchange (acting as principal) who is an affected person in relation to the Fund. Neither the Manager nor any such affected person will be liable to account for any profit out of such dealings.

10.2 Exercise of Voting Rights

The Manager has a strategy for determining when and how voting rights attached to ownership of Scheme Property are to be exercised for the benefit of the Fund. A summary of this strategy is available on the Manager’s website atwww.columbiathreadneedle.com. Details of the actions taken on the basis of this strategy in relation to the Fund are available by writing to the Manager’s Client Services Department at the address detailed in the Directory.

10.3 Best Execution

The Manager’s best execution policy sets out the basis upon which the Manager will effect transactions and place orders in relation to the Fund whilst complying with its obligations under the FCA Handbook to obtain the best possible result for the Fund. Details of the best execution policy are available from the Manager on request and on the Manager’s website atwww.columbiathreadneedle.com.

10.4 Controversial Weapons

The UN Convention on Cluster Munitions came into force on 1 August 2010. This Convention prohibits all use, stockpiling, production and transfer of cluster munitions. The Manager and the Investment Manager acknowledge the importance of the Convention and the Investment Manager actively screens companies for evidence of their corporate involvement in controversial weapons that include but are not limited to anti-personnel mines, cluster munitions, biochemical weapons and depleted uranium ammunition and armour). Where a company is verified to undertake such activities, the Investment Manager’s policy is not to invest in the securities issued by that company however it reserves the right to take short positions on such securities.

10.5 Responsible Investment

In discharging its obligations, the Investment Manager will have regard, as appropriate, to its Policies on and the Principles for Responsible Investment (PRI) and the UK Stewardship Code.

11. Unitholder meetings and voting rights

11.1 Powers of a Unitholders’ meeting

The Fund’s Trust Deed and the FCA Rules empower the Unitholders in general meeting to sanction or require various steps (usually subject to FCA approval), including (among other things):

− changes to certain provisions of the Fund’s Trust Deed and this Prospectus, and

− the removal of the Manager.

In certain cases (for example, the approval of changes to the investment objectives of a Fund) an extraordinary resolution, i.e. a resolution notified and proposed as such and passed by a majority of not less than three-quarters of the votes validly cast, is required.

Other provisions of the Fund’s Trust Deed and this Prospectus may be changed by the Manager without the sanction of a Unitholders’ meeting in accordance with the FCA Rules.

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11.2 Voting rights

Those persons who are holders of Units in the Fund on the “cut off date” will be entitled to receive notice of a particular meeting or adjourned meeting. The cut-off-date is a date selected by the Manager and which is a reasonable time before the notice of the meeting is sent out. Persons who are entitled to attend a meeting will receive not less than 14 days’ written notification by post.

In order to be able to vote at a meeting, a person must be entered in the register at the time determined by the Manager and specified in the notice of the relevant meeting (which must be not more than 48 hours before the meeting).

The quorum at a meeting of holders is two Unitholders present in person or by proxy or (in the case of a corporation) by a duly authorised representative. If a quorum is not present within a reasonable time after the time appointed for the meeting will (if convened on the requisition of Unitholders) be dissolved and in any other case will be adjourned to such day and time not being less than seven days thereafter. If at such adjourned meeting a quorum is not present within a reasonable time after the time appointed for the adjourned meeting, one person entitled to count in a quorum will be a quorum.

At a meeting of Unitholders, on a show of hands every holder who (being an individual) is present in person or (if a corporation) is present by a properly authorised representative, has one vote. On a poll votes may be given either personally or by proxy or in the case of a body corporate by a properly authorised representative. The voting rights attached to a Unit are such proportion of the total voting rights attached to all Units in issue as the price of the Unit bears to the aggregate price of all Units in issue on the cut-off date. A holder entitled to more than one vote need not, if he votes, use all his or her votes or cast all the votes he uses in the same way.

A vote will be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman, by the Trustee or by two or more Unitholders.

An extraordinary resolution must be carried by a majority of not less than 75% of votes cast at a meeting.

An instrument appointing a proxy may be in any usual or common form or in any other form approved by the Trustee. It should be in writing under the hand of the appointor or his or her attorney or, if the appointor is a corporation, either under the common seal or under the hand of a duly authorised officer or attorney. A person appointed to act as a proxy need not be a holder.

A corporation, being a holder, may by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of holders and the person so authorised is entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual holder.

In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority is determined by the order in which the names stand in the register of holders.

The Manager is entitled to attend any meeting but, except in relation to third party Units, is not entitled to vote or be counted in the quorum and any Units it holds are treated as not being in issue for the purpose of such meeting. An associate of the Manager is entitled to attend any meeting and may be counted in the quorum, but may not vote except in relation to third party Units. For this purpose, “third party Units” are Units held on behalf of or jointly with a person who, if himself the registered Unitholder, would be entitled to vote, and from whom the Manager or the associate (as relevant) has received voting instructions.

12. Taxation

12.1 General

The information given under this section is a general summary of the current UK taxation law and practice that applies to the Fund and investments in the Fund. The basis and rates of taxation may change in the future. It does not describe the taxation treatment of Unitholders that are subject to special tax regimes or the detailed taxation treatment of persons resident in jurisdictions other than the United Kingdom. Unitholders should consult their professional advisors for specific advice in connection with any decision to acquire, hold or dispose of Units.

12.2 Taxation of the Fund

As the Fund is an authorised unit trust, the Fund is deemed to be a separate taxable entity. The Fund is exempt from UK taxation in respect of capital gains realised on the disposal of investments held within it.

The Fund is, however, liable to UK corporation tax on most sources of income, net of allowable expenses. This includes income from offshore property unit trusts established as transparent for the purposes of taxation on income (Baker trusts). Dividends from both UK and overseas companies are exempt from tax if they fall into one of five exemptions. The most relevant exemption will be that which exempts distributions in respect of portfolio holdings (holdings of 10% or less). It is anticipated that the majority of dividends will be exempt in the hands of the Fund. The rate of corporation tax is equivalent to the basic rate of income tax, currently 20%. Where foreign tax has been deducted from income from overseas sources, that tax can in some instances be offset against corporation tax payable by the Fund by way of double tax relief.

The Fund intends to enter into assets derivative contracts. The Fund will be exempt from UK taxation in respect of any capital profits, gains or losses (as defined by the appropriate accounting statements of practice) arising from these contracts to the Fund.

The new ISA regime (“NISA”) took effect from 1 July 2014 and the Fund is managed so as to be eligible as a NISA investment.

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12.3 Taxation of Unitholders

Income distribution and accumulation For the purposes of UK taxation on income, similar consequences will follow whether a Fund’s income is distributed to a Unitholder or accumulated on his behalf. References in the following paragraphs to the distributions of a Fund are of equal application where income is accumulated.

Individual Unitholders Distributions Distributions by the Fund will be dividend distributions.

The Fund will make distributions or accumulations that will be treated as dividends of a UK company and will comprise dividend income for UK tax purposes. An individual recipient of a dividend distribution or accumulation will be entitled to receive a notional tax credit of 10% of the gross dividend. This tax credit is sufficient to cover the liability of taxpayers liable to pay tax at the basic rate of tax. Higher rate taxpayers are taxed at 32.5% and additional rate tax payers are taxed at 37.5% on the gross dividend against which the 10% tax credit can be credited and will have further tax to pay. Since 6 April 2004, it is no longer possible for Unitholders who hold their Units in ISAs to reclaim the 10% tax credit. Non-taxpayers are not entitled to reclaim the tax credit.

An individual Unitholder who is resident for tax purposes in the United Kingdom is entitled to a tax credit in respect of any dividend distribution received and is subject to income tax on the aggregate of the dividend distribution and the tax credit (the “gross dividend”). The value of the tax credit will be equal to one-ninth of the net dividend distribution (i.e. 10% of the gross dividend). Thus on a dividend distribution of £90 the tax credit will be £10. Distributions plus tax credits will be treated as the top slice of an individual’s income. A UK resident individual who is not liable to tax will generally not be able to reclaim the tax credit from HM Revenue and Customs. In the case of a UK resident individual liable to basic rate tax, the tax credit will match the individual’s tax liability on the dividend distributions and there will be no further tax to pay and again generally no right to claim any repayment from HM Revenue and Customs. A UK resident individual who is liable to higher rate or additional rate income tax will be subject to income tax at the rate of 32.5% or 37.5% accordingly on the amount of the gross dividend but will be able to set off the tax credit against part of this liability. An individual who is subject to higher rate income tax will thus have to pay additional tax of 22.5% of the gross dividend (25% of the net dividend distribution) whilst an individual Unitholder who is subject to additional rate income tax will have to pay additional tax of 27.5% of the gross dividend (30.6% of the net dividend distribution) to the extent that such sum when treated as the top slice of his or her taxable income falls above the threshold for higher rate or additional rate tax.

Individual Unitholders resident in jurisdictions benefiting from a double taxation agreement with the UK will usually not be entitled to claim payment of a tax credit from HM Revenue and Customs in respect of dividend distributions because such agreements generally provide for a deduction from the tax credit, which will effectively eliminate the payable credit. However, no withholding tax is levied on the dividend distribution itself, which will therefore be received by the non-resident Unitholder in full. Non-UK

resident Unitholders should consult their own advisors as to whether they are entitled to a payment in respect of the tax credit, the procedure for claiming it and their liability on the dividends in the jurisdiction in which they are resident.

Capital gains Any profits arising to individual Unitholders who are resident in the UK on the sale, exchange or other disposal of their Units are, depending on their personal circumstances, subject to capital gains tax. For individuals, there is an annual exempt amount. For basic rate taxpayers the rate of 18% is applied to all chargeable gains in excess of the annual exempt amount. From 22 June 2010 for higher rate and additional rate taxpayers the rate of 28% is applied to all chargeable gains in excess of the annual exempt amount.

Corporate Unitholders Distributions A UK resident corporate Unitholder receiving a dividend distribution or accumulation is treated as receiving a payment which may consist of two parts, a “franked” portion and an “unfranked” portion. In broad terms, the portion treated as franked will be such proportion as is equal to the proportion of the total income of the Fund (brought into account when determining the distribution for the period in question) which consists of exempt dividend income. The “franked” portion of the payment is treated as dividend income, on which the UK resident corporate Unitholder is not chargeable to corporation tax. No reclaim of tax credits can be made in relation to the “franked” portion of a dividend distribution. At present, the “unfranked” portion, which is such proportion as is equal to the proportion of the income of the fund which does not relate to exempt dividend income, is treated as an annual payment from which income tax at 20% has been deducted; it is therefore chargeable to corporation tax at the rate applicable to the UK resident corporate Unitholder but with credit for the income tax treated as deducted.

Non-UK resident corporate Unitholders resident in certain jurisdictions and holding a substantial percentage of the voting power in the Fund may be entitled, on receipt of dividend distributions, to payment of a very small tax credit by HM Revenue and Customs under an applicable double taxation agreement. In other cases, no tax credit will generally be payable to the non-resident corporate Unitholders.

Capital gains Any chargeable gains (after taking account of indexation relief) arising to UK resident corporate Unitholders on the sale, exchange or other disposal of their Units will be subject to corporation tax.

Exempt Unitholders Exempt Unitholders such as pension fund will not generally be subject to United Kingdom taxation on distributions received from the Fund. Furthermore, any capital gains derived from the sale, exchange or other disposal of Units held by such Unitholders will not generally be subject to tax.

Equalisation Distributions paid to Unitholders in respect of the accounting period in which they take out their investment are equal in amount to the distributions paid to existing Unitholders. However part of the distribution is received as equalisation. This amount is not taxable as income. It represents a return of

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part of the original cost of the Units and is deducted from their cost for the purpose of calculating the profit or loss arising on any disposal of the Units.

12.4 Foreign Account Tax Compliance Act

Pursuant to U.S. withholding provisions commonly referred to as the Foreign Account Tax Compliance Act 2010 (“FATCA”), a Foreign Financial Institution (“FFI”) is under an obligation to broadly collect and provide information regarding US account holders (which includes certain equity and debt holders as well as certain account holders that are non US entities with US owners). An FFI is a non-US entity that either i) accepts deposits in the ordinary course of business or ii) holds financial assets for the account of others as a substantial portion of its business or iii) is engaged primarily in the business of investing or trading in securities or partnership interests or iv) is an insurance company or a holding company that is a member of an expanded affiliated group where the insurance company or holding company is obligated to make payments with respect to a cash value insurance or annuity contract or v) is an entity that is a holding company or treasury centre that is part of an expanded affiliated group that includes a depository institution, custodial institution, investment entity or is formed in connection with or availed by a collective investment vehicle or any similar investment vehicle established with an investment strategy of investing, reinvesting or trading in financial assets.

The FATCA legislation imposes a withholding tax of 30% on withholdable payments and in the future on foreign passthru payments made to a non-US entity that are not an FFI unless such entity provides the withholding agent with certification identifying the substantial US owners of the entity, which includes any US Person who directly or indirectly owns a percentage (depending on jurisdiction) of the entity, or an exception applies. In order to avoid incurring withholding tax on withholdable payments, certain information regarding the direct and indirect investors in the fund will need to be disclosed.

Please note that the Manager has determined that US Persons are not permitted to own Units in the Fund.

13. Winding Up of the Fund The Fund is to be wound up if:

a) the order declaring the Fund to be an authorised unit trust scheme is revoked; or

b) in response to a request to the FCA by the Manager or the Trustee for the revocation of the order declaring the Fund to be an authorised unit trust scheme, the FCA has agreed (albeit subject to there being no material change in any relevant factor) that, on the conclusion of the winding up of the Fund, the FCA will accede to that request; or

c) an extraordinary resolution winding up the Fund is passed, provided the FCA’s prior consent to the resolution has been obtained by the Manager or Trustee; or

d) an approved scheme of amalgamation or reconstruction becomes effective pursuant to COLL; or

e) the expiration of any period specified in the Trust Deed as the period at the end of which the Fund is to be wound up.

On a winding up (otherwise than in accordance with an approved scheme of amalgamation or reconstruction) the Trustee is required as soon as practicable after the Fund falls to be wound up, to realise the assets of the Fund and, after paying thereout or retaining adequate provision for all liabilities payable and for the costs of the winding up, to distribute the proceeds of that realisation to the Unitholders and the Manager proportionately to their respective interests in the Fund. The Trustee may, in certain circumstances (and with the agreement of the affected Unitholders), distribute assets of the Fund (rather than the proceeds on the realisation of those assets) to Unitholders on a winding-up after making adjustments or retaining provisions as appears appropriate or ensuring that Unitholders bear a proportionate share of such costs.

Any unclaimed net proceeds or other cash (including unclaimed distribution payments) held by the Trustee after the expiration of twelve months from the date on which the same became payable is to be paid by the Trustee into court subject to the Trustee having a right to retain thereout any expenses incurred in making the payment into court.

If the Fund is to be wound up in accordance with an approved scheme of amalgamation or reconstruction, the Trustee is required to wind up the Fund in accordance with the resolution of Unitholders approving such scheme. Distributions will only be made to Unitholders entered on the register. Any net proceeds or cash (including unclaimed distribution payments) held by the Trustee which have not been claimed after 12 months will be paid into court, after the deduction by the Trustee of any expenses it may incur.

On completion of a winding up, the Trustee will notify the FCA in writing of that fact and the Trustee or Manager shall request the FCA to revoke the order or authorisation.

14. General Information

14.1 Accounting periods

The annual accounting period for the Fund will end on 15 May (the “Accounting Reference Date”) each year. The half-yearly accounting period will end on 15 November.

Tax certificates together with current valuations will be sent to Unitholders in the Fund at least once in each accounting year.

14.2 Determination of income

The income available to be allocated to holders is determined in accordance with COLL. Broadly, it comprises all sums deemed by the Manager (after consultation with the auditor) to be in the nature of income received or receivable for the account of the Fund and attributable to the Fund in respect of the accounting period concerned, after deducting net charges and

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expenses paid or payable out of such income in respect of the period and adding the Manager’s best estimate of any relief from tax on such charges and expenses and making such adjustments as the Manager considers appropriate, after consulting the auditors in accordance with COLL, in relation to taxation and other matters.

14.3 Allocation and distribution dates

The income for the period of 16 May to 15 November will be allocated to Unitholders on 15 January and the income for the period of 16 November to 15 May will be allocated to Unitholders on 15 July. Income will be distributed or reinvested as appropriate following these dates.

14.4 Income equalisation

The price of a Unit in the Fund is based on the value of the Units’ entitlement in the Fund including its entitlement to the income of the Fund since the previous distribution, or in the case of accumulation Units, deemed distribution. In the case of the first accumulation made in respect of a Unit, part of the amount, namely the equalisation payment, is a return of capital and is not taxable as income in the hands of the Unitholder. In the case of Accumulation Units, the equalisation amount may only be eligible for taper relief/indexation allowance from the date of allocation (as distinct from the date of acquisition of the original Units).

Equalisation applies only to Units purchased during the relevant accounting period. It is calculated as the average amount of income included in the issue price of all Units of the Fund issued during the period.

14.5 Delegation

The Manager and, subject to exceptions specified in the COLL Sourcebook, the Trustee may retain (or arrange for the Fund to retain) the services of other persons to assist them in the performance of their respective functions and, in relation to certain functions, the Manager or the Trustee (as applicable) will not be liable for the actions of the persons so appointed provided certain provisions of the COLL Sourcebook apply.

14.6 Reports and Accounts

The Manager will prepare both a long-form and a short report in respect of both the annual accounting period and the half-yearly accounting period.

The long form annual report of the Fund will be published on or before 15 September and the half yearly long form report will be published on or before 15 January in each year. The report includes the accounts for the Fund for the relevant period. Copies of the most recent annual and half yearly long form reports may be inspected at the registered office of the Manager where also copies may be obtained free of charge.

On or before the dates when the long form reports are published, a copy of the corresponding short report will be sent to Unitholders, on the first named holder in the case of joint holders.

14.7 Risk management

Upon request, the Manager will provide further information relating to the quantitative limits applying in the risk management of any Fund and the methods used.

14.8 Privacy statement

Your data controller For the purposes of the UK Data Protection Act 1998, the data controller in respect of any personal information provided is Threadneedle Investment Services Limited. In this privacy statement ‘we’, ‘us’ and ‘our’ means Threadneedle Investment Services Limited.

Uses made of your personal information The personal information that you provide to us will be used for a number of different purposes including: to manage and administer your account; to offer you investment products and services (except where you have asked us not to do so) and to help us develop new ones; to contact you with details of changes to the products you have bought; for internal analysis and research; to comply with legal or regulatory requirements; and to identify you when you contact us. We may use external third parties to process your personal information on our behalf in accordance with these purposes.

Sharing of your personal information Where you have notified us of your adviser, the personal information provided may be shared with such adviser. You must notify us in writing if you no longer wish us to share your personal information with your adviser or of any change to your adviser. Your adviser should have its own arrangements with you about its use of your personal information. The personal information provided may also be shared with other organisations in order for us to comply with any legal or regulatory requirements. In addition, we may share your personal information with the companies within the Threadneedle group for the purposes set out in this privacy statement.

14.9 Business changes

If we or the Threadneedle group undergoes a group reorganisation or is sold to a third party, the personal information provided to us may be transferred to that reorganised entity or third party and used for the purposes stated above.

14.10 Overseas transfers

We may transfer your personal information to countries located outside of the European Economic Area (the EEA), this may happen when our servers, suppliers and/or, service providers are based outside of the EEA. The data protection laws and other laws of these countries may not be as comprehensive as those that apply within the EEA – in these instances we will take steps to ensure that your privacy rights are respected. Details of the countries relevant to you will be provided upon request.

14.11 Access to/correction of your information

With limited exceptions, you have the right to ask for a copy of the information that we hold on you. There may be a charge for this (if a charge is permitted).

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If any of the information that we hold about you is wrong, please tell us and we will put it right. You can write to us at the details provided in the Directory.

15. Additional information

15.1 Notice to Unitholders

In the event that the Manager is required to give notice to Unitholders for any reason, or otherwise chooses to do so, such notice will normally be given in writing. Alternatively, and to the extent permitted by the FCA Rules, notice to Unitholders may be made by way of publishing the information onwww.columbiathreadneedle.com, or by including the information in a mailing to the Unitholders such as the Fund’s annual report and accounts. Any document served on Unitholders by the Manager will be served to the current address of the Unitholder with reference to the records of the Manager.

Any document or notice to be served by a Unitholder on the Manager or the Fund may be served at the head office of the Fund.

15.2 Changes to the Fund

Where any changes are proposed to be made to the Fund the Manager will assess whether the change is fundamental, significant or notifiable in accordance with COLL 4.3 of the FCA Regulations. Some changes will not be fundamental, significant or notifiable, but those which do fall within these categories will be submitted to the FCA for approval. Changes to the Fund’s investment objective, policy or strategy will usually be significant or fundamental, unless those changes are only for the purposes of clarification and do not result in any change in how the Fund is managed.

If the change is regarded as fundamental, Unitholder approval will be required. If a change requires Unitholder approval, this will mean that Unitholders will need to approve the change at a meeting. The procedure for Unitholder meetings is described above at the section with the heading “Unitholder meetings and voting rights”.

If the change is regarded as significant, not less than 60 days’ prior written notice will be given to unitholders. If the change is regarded as notifiable, unitholders will receive suitable pre or post event notice of the change.

15.3 Information available to Unitholders

The following information will be made available to Unitholders as part of their periodic reporting:

− the percentage of each Fund’s assets which will be subject to special arrangements arising from their illiquid nature, including an overview of any special arrangements in place, the valuation methodology applied to assets which are subject to such arrangements, and how management and performance fees will apply to these assets;

− the current risk profile of each Fund and information on the risk management systems used by the Manager to manage those risks;

− the total amount of leverage employed by each Fund calculated in accordance with the gross and commitment methods; and

− any material changes to the information above.

It is intended that unitholders will be notified appropriately of any material changes to the liquidity management systems and procedures such as the suspension of redemptions, the deferral of redemptions or similar special liquidity arrangements. It is intended that notice of any changes to the maximum level of leverage that a Fund may employ will be provided to unitholders.

Such information will, at a minimum, be disclosed in the annual report for the relevant Fund.

15.4 Fair treatment of investors

Procedures, arrangements and policies have been put in place by the Manager to ensure compliance with the principles of fair treatment of investors. The principles of treating investors fairly include, but are not limited to:

− acting in the best interests of the Fund and of the investors;

− executing the investment decisions taken for the account of each Fund in accordance with their objective, investment policy and risk profile;

− ensuring that the interests of any group of investors are not placed above the interests of any other group of investors;

− ensuring that fair, correct and transparent pricing models and valuation systems are used for the Fund;

− preventing undue costs being charged to the Fund and investors;

− taking all reasonable steps to avoid conflicts of interest and, when they cannot be avoided, identifying, managing, monitoring and, where applicable, disclosing those conflicts of interest to prevent them from adversely affecting the interests of investors;

− recognising and dealing with complaints fairly.

From time to time, the Manager may afford preferential terms of investment to certain groups or types of investor. In assessing whether any such terms are afforded, the Manager will ensure that any such concession is not inconsistent with its obligations to act in the overall best interests of unitholders. In particular, the Manager may exercise its discretion to waive the initial charge or minimum investment amounts for investors that are investing sufficiently large amounts, either initially or who are anticipated to do so over time. The Manager may also have agreements in place with certain types of investors that result in them paying a reduced annual management charge.

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The types of investors that might obtain such concessions would typically include platform service providers, distributors and institutional investors (including fund of fund investors and life companies investing as fund-link investors).

15.5 Unitholders’ rights

Unitholders are entitled to participate in the Fund on the basis set out in the Prospectus (as amended from time to time). The sections of this prospectus with the headings “Complaints”,“Unitholder meetings and voting rights” and “Notice to Unitholders” set out important rights about unitholders’ participation in the Fund.

Unitholders may have no direct rights against the service providers to the Fund.

Unitholders may be able to take action if the contents of this Prospectus are inaccurate or incomplete.

Unitholders have statutory and other legal rights including the right to complain and which may include the right to cancel an order or seek compensation.

Unitholders that are concerned about their rights in respect of the Fund should seek legal advice.

15.6 Professional liability risks

The Manager covers potential professional liability risks arising from its activities as AIFM for the Fund using its own fund.

15.7 Complaints

Complaints may be referred to the Manager Client Services at the details provided in the Directory. A copy of the Manager’s ‘Complaint Handling Procedure’ is available upon request. Complaints may also be referred to the Financial Ombudsman Service which is based at South Quay Plaza, 183 Marsh Wall, London E14 9SR.

15.8 Governing law and jurisdiction

The Manager treats a Unitholder’s participation in the Fund as being governed by the laws of England and Wales. Subject to any contrary mandatory law on jurisdiction, the English courts shall have exclusive jurisdiction to settle any disputes or claims which may arise out of, or in connection with, a Unitholder’s participation in the Fund.

15.9 Other information

Unless otherwise expressly provided, terms used in this Prospectus have the same meanings as used in COLL.

All documents and remittances are sent at the risk of the Unitholder.

A notice of an applicant’s right to cancel the agreement to purchase Units will be forwarded, where this is required by rules made under the Financial Services and Markets Act 2000.

An applicant who is entitled to cancel and does so will not get a full refund of the money paid by him if the purchase price of the Units falls before the cancellation notice is received by the Registrar (on behalf of the Manager), because an amount equal to such fall (the “shortfall”) will be deducted from the refund he would otherwise receive. Where the purchase price has not yet been paid the applicant will be required to pay the amount of the shortfall to the Manager. The deduction does not apply where the applicants’ service of the notice of the cancellation notice precedes the purchase of the Units. Cancellation rights must be exercised by posting a cancellation notice to the Registrar (on behalf of the Manager) on or before the 14th day after the date on which the Applicant receives the Notice of the Right to Cancel.

The address for service on the Fund of notices or other documents required or authorised to be served on it is Cannon Place, 78 Cannon Street, London EC4N 6AG.

Copies of this Prospectus may be inspected at, and obtained free of charge from, the Manager at Cannon Place, 78 Cannon Street, London EC4N 6AG during ordinary office hours.

Copies of the Trust Deed and any amendments thereto may be inspected and copies obtained from the Manager, at Cannon Place, 78 Cannon Street, London EC4N 6AG and the Trustee at Citibank International Limited, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB during ordinary office hours; a fee may be charged for copies of the Trust Deed.

This Prospectus describes the constitution and operation of the Fund at the date of issue of this Prospectus. In the event of any materially significant change in the matters stated herein or any materially significant new matter arising which ought to be stated herein this Prospectus will be revised. Investors should check with the Manager that this is the latest version and that there have been no revisions or updates.

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Appendix I (Fund details)

Fund details NAME Threadneedle UK Property Trust Date of launch February 2007

INVESTMENT OBJECTIVE & POLICY Please also refer to the section with the heading “Investment Objective and Policy" on page 3 of this Prospectus for further information about the investment objective and policy of the Fund.

Investment objective The objective of Threadneedle UK Property Trust is to obtain a total return based on income and capital appreciation primarily through investment in certain kinds of real estate, property-related securities, government and public securities and Units in collective investment schemes.

Investment policy The Fund will invest primarily in UK commercial real estate. It may also invest in US or Continental European real estate, property-related securities, property investment companies, collective investment schemes (including other collective investment schemes managed, advised or operated by the Manager or its associates), cash and near cash, warrants, deposits and money market instruments. Derivatives may be used for efficient portfolio management purposes only.

By way of further explanation of how the Manager proposes to implement this policy, the Fund expects to invest in:

a) Property that qualifies as approved immovables for the purposes of the FCA Handbook of Rules and Guidance (the “FCA Handbook”) in the United Kingdom, but the Manager may consider it appropriate to invest in real estate in other countries permitted by the FCA Handbook and listed in Appendix II. The Fund may invest up to 100% of its assets in Property that qualifies as approved immovables for the purposes of the FCA Handbook;

b) transferable securities, with an emphasis on property-related securities. The Fund may hold up to 100% of its assets in transferable securities that are approved securities as defined in the FCA Handbook, and up to 20% in transferable securities that are non-approved;

c) government and other public securities. The Fund may invest up to 35% of its assets in government and public securities (increased to 100% for certain types of securities);

d) Units in regulated and unregulated collective investment schemes (which may include unauthorised property Unit trusts) up to 15% of its assets; and

e) unregulated collective investment schemes (which may include unauthorised property Unit trusts) together with investments in non-approved transferable securities up to 20% of its assets.

Further to paragraph (a) above, the Manager intends to invest predominantly in real estate assets located in the UK. In the event that the Manager decides to make a significant investment in real estate assets located outside of the UK, the Manager will give notice of this fact to Unitholders in the next short report of the Fund.

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The Fund may also invest in such other investments as the Manager deems appropriate, including warrants, money market instruments, derivatives and forward transactions and deposits, but subject always to the FCA Handbook.

The investment policy of the Fund means that it may be appropriate for the Fund to hold cash or near cash. This will only occur where the Manager reasonably regards it as necessary to enable the pursuit of the Fund's objective, redemption of Units, efficient management of the Fund in accordance with its objective, or for purposes ancillary to its objective.

The Fund may use property derivative instruments in accordance with the FCA Handbook and to the extent that these are used, this will be for hedging purposes using efficient portfolio management style techniques. It is not envisaged that the risk profile of the Fund will be affected by the use of such instruments. The use of such derivative instruments will not contravene the investment objective or any relevant investment limits.

A detailed description of the types of assets the Fund may invest in and the limitations on the extent to which the Fund may invest is set out under the section entitled: “Investment and Borrowing Powers” in this Prospectus.

In this Prospectus, the phrase “Property” is used to cover all of the following terms which are used in the FCA Handbook or in the industry: “property”, “real property”, “real estate”, and “immovables”.

Investor’s profile The Fund may be suitable for investors with a medium to long term investment horizon (i.e. 5-7+ years) seeking growth and income in the property market who are prepared to tolerate large price fluctuations. If investors are uncertain whether this product is suitable for them, they are advised to contact a financial adviser.

RISK FACTORS Investors should note the “Risk Factors” section of this Prospectus in terms of risks applicable to investing in the Fund. The following risks are considered to be particularly relevant to the Fund.

Investment Risk The value of investments may fall as well as rise and investors may not get back the sum originally invested.

Property Liquidity Risk It may be difficult or impossible to realise an investment in the Fund because the underlying property concerned may not be readily saleable.

Property Valuation The value of a property is a matter of a valuer's opinion and the true value may not be recognised until the property is sold.

Property Market Risk The performance of the Fund would be adversely affected by a downturn on the property market in terms of capital value or a weakening of rental yields.

Uninvested Cash Risk Due to the illiquid nature of property and the time it can take to buy or sell assets, under normal circumstances up to 20% of the Fund’s assets may be held as cash deposits. In exceptional circumstances, the level of cash held by the fund may be significantly higher. Holding high levels of cash will have an impact on the performance of the fund and its distributable income until the excess cash is invested in property assets.

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Dual Pricing The Fund is dual priced, and there is a price to buy units and a different price to sell them (see the section with the heading “Prices of Units” on page 11). Because of the cost of transacting in property, the difference between the two prices is likely to be wider than for other funds. The price at which you deal may change depending on whether the Fund is experiencing inflows or outflows of cash, and any change will mean an increase or decrease in the price at which you deal .

Volatility Risk The Fund may exhibit significant price volatility.

These “Risk factors” must be understood before making an investment in the Fund.

DEALING INFORMATION Dealing cut-off point 12.00 noon, UK time Valuation Point 12.00 noon UK time SHARE CLASS AVAILABILITY Details of the Share Classes that are currently available for the Fund are published on the website www. columbiathreadneedle.com Available Share Classes (at the date of this Prospectus)

Class 1 Net Accumulation Units

Class 1 Net Income Units

Class 2 Net Accumulation Units

Class 2 Net Income Units

Approved Share Classes (Share Classes that have been approved by the Manager but have not been launched as at the date of this Prospectus)

Not applicable.

MINIMUM SUBSCRIPTIONS AND HOLDINGS Initial investment (minimum)

Fund Minimum Investment

Class 1 Units £1,000


Subsequent investment (minimum) Share class Subsequent Investment



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Minimum holding Share class Minimum Holding

Class 1 Units Unitholders must maintain a minimum holding of £500 in the Trust.

Class 2 Units Unitholders must maintain a minimum holding of £25,000 in the Trust.

FEES AND EXPENSES One-off charges

Initial charge Unit Class Initial Charge Class 1 Units 5.00% of the gross amount invested*

Class 2 Units Nil (0.00% of the gross amount invested)

* Unitholders may elect to use their dividend income to purchase new Units in the Fund. For Units purchased using the reinvestment of dividend income any initial charge will be waived.

Switching / conversion fee Unit Class Switching / Conversion Fee

Class 1 Units Nil (0.00% for switches between Unit Classes)

Class 2 Units Nil (0.00% for switches between Unit Classes)

Redemption fee No redemption fee

Ongoing charges Further details on all fees and expenses paid are described in the section with the heading “Fees and expenses” on page 8 of this Prospectus.

Annual management fee Further details of the annual management fee can be found in the section of the Prospectus with the heading “The Fees and Expenses of the Manager” on page 9.

Class 1 Units: 1.50% of the net asset value (accrued daily and paid monthly)

Class 2 Units: 0.75% of the net asset value (accrued daily and paid monthly)

Investment management fee Paid from the annual management fee

Registrar’s fee Further details of the Registrar’s fee can be found in the section of the Prospectus with the heading “Registrar Charge” on page 9.

For Class 1 Units: 0.11% of net assets.

For Class 2 Units: 0.035% of net assets..

Trustee’s fee Further details of the Trustee’s fee can be found in the section of the Prospectus with the heading “Trustee’s fee” on page 9.

The Trustee’s remuneration is 0.008% per annum, accrued daily and paid monthly.

DIVIDENDS & ACCOUNTING PERIOD XD Date(s) 16 November and 16 May of each year

Dividend payment date(s) 15 January and 15 July of each year

Accounting period Ends on 15 May of each year

LEVERAGE The maximum level of leverage for this Trust (a) under the Gross Method – 120% of the Fund’s Net Asset Value; and

(b) under the Commitment Method – 110% of the Fund’s Net Asset Value.

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HISTORICAL PERFORMANCE

Performance* to 31 December 2014 quoted in sterling (on a bid to bid price basis, net of fees, with income net of UK basic rate tax reinvested). Annualised performance since launch is quoted to 28 February 2015 (source: Morningstar).

Calendar year performance (%)

Annualised Performance since

launch

Fund name Launch Date 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


February 2007 n/a n/a n/a -8.24 0.15 3.99 1.68 -1.53 3.14 13.44 1.18

Past performance is not a guide for future performance.

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Appendix II (Investment and Borrowing Powers)

Investment and Borrowing Powers Except as provided below, but subject to the applicable restrictions in COLL and to the Fund’s stated investment objective and policy, the Manager may exercise in respect of the Fund the full authority and powers permitted by COLL for an authorised unit trust belonging to the “non-UCITS retail scheme” category.

General Except where COLL permits otherwise, but subject at all times to this Prospectus and/or the Fund’s Trust Deed, the assets of the Fund may consist of Property, transferable securities, money-market instruments, Units in collective investment schemes, derivatives, forward transactions and deposits.

Property: the Fund may invest up to 100% in value of its assets in Property situated in the countries listed in Appendix I.

If situated in England and Wales or Northern Ireland, the Property must be a freehold or leasehold interest and if situated in Scotland, the Property must comprise an interest or estate in or over land or comprise a heritable right including a long lease, or if situated elsewhere, be equivalent to any of the interests mentioned in this paragraph.

The Manager must take reasonable care to determine that the title to the Property is a good marketable title.

The Manager must either:

a) have received a report from an appropriate valuer which contains a valuation of the Property (with and without any relevant subsisting mortgage) and which states that in the appropriate valuer's opinion the Property would, if acquired by the Fund, be capable of being disposed of reasonably quickly at that valuer's valuation; or

b) have received a report from an appropriate valuer stating that the Property is adjacent to, or in the vicinity of another Property included in the Fund or is another legal interest permitted by the FCA Handbook in a Property which is already included in the assets of the Fund, and that in the opinion of the appropriate valuer, the total value of both Properties would at least equal the sum of the price payable for the Property and the existing value of the other Property.

A Property must be bought or be agreed by enforceable contract to be bought within six months after receipt of the report of the appropriate valuer. A Property must not be bought, if it is apparent to the Manager that the report of the appropriate valuer could no longer reasonably be relied on. A Property must not be bought at more than 105% of the valuation for the relevant Property in the report of the appropriate valuer.

Any furniture, fittings or other contents of any building may be regarded as part of the relevant Property.

An appropriate valuer must be a person who:

a) has knowledge of and experience in the valuation of Property of the relevant kind in the relevant area;

b) is qualified to be a standing independent valuer or be considered by the Fund's standing independent valuer or be considered by the Fund’s standing independent valuer to hold an equivalent qualification;

c) is independent of the Manager and the Trustee; and

d) has not engaged himself or any of his associates in relation to the finding of the Property for the Fund or the finding of the Fund for the Property.

Not more than 15% in value of the Fund's assets may consist of any one Property. The figure of 15% may be increased to 25% once the Property has been included in the Fund's assets.

The income receivable from any one group of companies in any accounting period must not be attributable to Property comprising more than 25% of the value of the Fund’s assets or, in the case of a government or public body more than 35% of the value of the Fund’s assets.

Not more than 20% in value of the Fund’s assets may consist of mortgaged Property and the maximum mortgage on any one Property must not exceed 100% of the value in the appropriate valuer's report. No more than 20% of the value of the assets of the Fund is to consist of the aggregate of mortgages on Property, any borrowing by the Fund and any transferable securities which are not approved securities.

Not more than 50% in value of the Fund’s assets is to consist of Property which are unoccupied and non-income producing or in the course of substantial development, redevelopment or refurbishment.

No option may be granted to a third party to buy any Property comprised in the Fund’s assets unless the value of the relevant Property does not exceed 20% of the value of the Fund's assets together with, where appropriate, the value of investments in unregulated collective investment schemes and any transferable securities which are not approved securities.

The Manager may undertake, where appropriate, Property development and the funding of such development to the extent permitted by COLL.

Transferable securities and money-market instruments: up to 20% in value of the assets of the Fund may consist of transferable securities which are not:

(i) “approved securities” (the relevant limit being considered in aggregate together with the value of assets of the Fund which consists of Units in unregulated collective investment schemes); or

(ii) liquid money-market instruments whose value can be determined accurately at any time.

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Up to 10% in value of the assets of the Fund may consist of transferable securities and money-market instruments issued by any single body. This rule does not apply for government and public securities.

There is no limit on the value of the assets of a Fund which may consist of transferable securities which are approved securities. A transferable security is an approved security if it is:

a) admitted to official listing in a member State of the EEA; or

b) traded on or under the rules of an eligible securities market (otherwise than by virtue of the specific permission of the market authority).

Transferable securities and money-market instruments which form part of the assets of the Fund must be admitted to, or dealt in/on an eligible market. An eligible market consists of:

a) a regulated market (as defined in COLL);

b) a market in an EEA State which is regulated, operates regularly and is open to the public; or

c) any market on the lists in Appendix I.

Collective investment schemes: up to 15% in value of the assets of the Fund may consist of Units in other regulated or unregulated collective investment schemes, subject to COLL.

The Fund shall not invest in Units in a collective investment scheme (“second scheme”) unless that second scheme:

a) satisfies the conditions necessary for it to enjoy the rights conferred by the UCITS Directive (as defined in the FCA Handbook); or

b) is a “non-UCITS retail scheme” (as defined in the FCA Handbook); or

c) is a scheme recognised pursuant to Sections 264, 270 or 272 of the Financial Services and Markets Act 2000; or

d) is constituted outside the UK and the investment and borrowing powers of which are the same or more restrictive than those of a non-UCITS retail scheme; or

e) is a scheme not falling within (a) to (d) and in respect of which no more than 15% in value of the Fund’s assets is invested.

Furthermore, the second scheme must:

a) operate on the principle of prudent spread of risk; and

b) be prohibited from having more than 15% in value of the property of that scheme consisting of Units in collective investment schemes,

and the participants in the second scheme must be entitled to have their Units redeemed in accordance with the scheme at a price:

(i) related to the net value of the assets to which the Units related; and

(ii) determined in accordance with the scheme.

Investment may be made in schemes which are managed or operated by (or in the case of a UK open-ended investment company, have as its authorised corporate director) the Manager or an associate (as defined in COLL) of the Manager. Where this happens COLL imposes a duty on the Manager to pay into the assets of the Fund before the close of business on the fourth business day next after the agreement to buy or to sell Units:

on investment if the Manager pays more for the Units issued to it than the then prevailing creation price, the full amount of the difference; or

if this is not known, the maximum permitted amount of any charge which may be made by the issuer on the issue of the Units; and

on disposal any amount charged by the issuer on redemption of Units.

Note that this duty does not apply to other charges and, if the Fund were to invest in any such scheme, the Manager or an associate of the Manager would benefit therefrom.

Government and public securities: generally, up to 35% in value of the assets of the Fund may be invested in government and public securities issued by the same body. However, this limit may be exceeded (up to 100%) in respect of such securities if they are issued by any of the following states or bodies:

Australia Portugal Austria Spain Belgium Sweden Canada Switzerland Denmark United Kingdom Finland United States France International Organisations Germany Asian Development Bank (ADB) Greece Council of Europe Development Bank Iceland Deutsche Ausgleichsbank (DTA) Ireland Eurotima Italy European Bank for Reconstruction Japan and Development (EBRD) Liechtenstein International Finance Corporation (IFC) Luxembourg Kreditanstalt für Wiederaufbau (KFW) Netherlands Nordic Investment Bank (NIB) New Zealand Northern Ireland Norway

Underwriting: subject to the provisions of COLL, including as to covering the exposure, a Fund’s powers to invest in transferable securities may be used for the purpose of entering into underwriting, sub-underwriting and placing agreements in respect of certain transferable securities.

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Warrants: up to 5% of the value of the assets of the Fund may consist of warrants. However, warrants only fall within the Fund’s powers of investment if, on the assumption that the right conferred by the warrant will be exercised (whether or not it is intended that it will be), the right to subscribe could be exercised without contravening COLL.

Nil or partly paid securities: transferable securities or money-market instruments on which any sum is unpaid fall within the Fund’s powers of investment only if it is reasonably foreseeable that the amount of any existing and potential call for any sum unpaid could be paid by the Fund, at the time when payment is required, without contravening COLL.

Deposits: up to 20% in value of the assets of the Fund may consist of deposits with a single body that is an approved bank if the deposit is repayable on demand or has the right to be withdrawn, and matures in 12 months or less.

Cash and near cash: the Manager may at its discretion, and as considered appropriate, retain liquid fund in the Fund at any time pending suitable investment opportunities. This cash may be held to enable the pursuit of the Fund's objectives, the redemption of Units, efficient management of the Fund in accordance with its objectives, or any other purposes which may reasonably be regarded as ancillary to the objectives of the Fund.

Cash forming part of the assets of the Fund or standing to the credit of the distribution account may be placed in any current, deposit or loan account with the Trustee, the Manager or any investment advisor or any associate of any of them provided it is an eligible institution and the arrangements are at least as favourable to the Fund concerned as would be those of any comparable arrangements effected on normal commercial terms negotiated at arm’s length between two independent parties.

Borrowing: subject to COLL, the Trustee may borrow money for the use of the Fund. Such borrowing may only be made from an eligible institution or an approved bank and may be on a temporary or a permanent basis. The borrowing of a Fund must not, on any business day, exceed 10% of the value of the assets of the Fund.

The above provisions on borrowing do not apply to “back to back” borrowing, which is an arrangement under which an amount of currency is borrowed from an eligible institution or an approved bank and an amount in another currency at least equal to the amount of currency borrowed is kept on deposit with the lender (or his agent or nominee).

Borrowings may be made from the Trustee, the Manager, the directors or any investment advisor or any associate of any of them provided it is an eligible institution or an approved bank and the arrangements are at least as favourable to the Fund concerned as would be those of any comparable arrangements effected on normal commercial terms negotiated at arm’s length between two independent parties.

Efficient portfolio management: means the use of techniques and instruments which relate to transferable securities and approved money-market instruments and which fulfill the following criteria:

a) they are economically appropriate in that they are realised in a cost effective way; and

b) they are entered into for one or more of the following specific aims:

– reduction of risk;

– reduction of cost;

– generation of additional capital or income for the scheme with a risk level which is consistent with the risk profile of the scheme and the risk diversification rules laid down in COLL.

The Fund may use its assets to enter into transactions for the purposes of efficient portfolio management. The use of derivatives for efficient portfolio management is not intended to increase the risk profile of the Fund.

Efficient portfolio management may not include speculative transactions.

Stocklending: The Fund has power to engage in stocklending in the manner permitted by, and subject to the requirements of, COLL. The power may be exercised when it reasonably appears to the Manager to be appropriate to do so with a view to generating additional income for a Fund with an acceptable degree of risk, and on the approval of the Trustee and on terms agreed with the Trustee. There is no limitation on the value of the assets of a Fund that may be the subject of permitted stocklending transactions.

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Appendix III Countries in which the Fund may invest in property, eligible securities markets and eligible derivatives markets

Countries in which the Fund may invest in property Subject to its investment objectives and policy and the restrictions, the Fund may invest in Property in the following countries:

Austria Latvia Belgium Liechtenstein Cyprus Lithuania Czech Republic Luxembourg Denmark Malta Estonia Netherlands Finland Norway France Poland Germany Portugal Greece Slovak Republic Hungary Slovenia Iceland Spain Ireland Sweden Italy Switzerland United Kingdom

Eligible Securities Markets Subject to its investment objectives and policy, the Fund may deal through any securities markets established in member States of the EEA on which transferable securities admitted to official listing in the member State are dealt in or traded.

Set out below are the additional securities markets through which the Manager may invest or deal for the account of this Fund (subject to the Fund’s respective investment objective and policy) when dealing in approved securities.

Australia ASX Limited (ASX)

Canada The Montreal Stock Exchange, The Toronto Stock Exchange and The TSX Exchange (CDN X)

Hong Kong The Stock Exchange of Hong Kong

Japan Osaka Exchange, The Nagoya Stock Exchange, NASDAQ Japan, The Sapporo Stock Exchange, JASDAQ OTC

Mexico The Mexican Stock Exchange

Norway Oslo Stock Exchange

Singapore Singapore Exchange (SGX)

South Africa The JSE Securities Exchange

Switzerland International Capital Market Association

Thailand The Stock Exchange of Thailand (SET)

USA The New York Stock Exchange, The American Stock Exchange, The Chicago Stock Exchange, NASDAQ

Eligible Derivatives Markets Subject to its investment objectives and policy, the Fund’s investments may be dealt in or traded on any derivatives markets established in member States of the EEA on which transferable securities admitted to official listing in the member State are dealt in or traded.

Set out below are the additional derivatives markets through which the Fund’s investments may be dealt in or traded on (subject to the Fund’s respective investment objective and policy) when dealing in approved securities.

American Stock Exchange, Australian Stock Exchange, Chicago Board of Trade, Chicago Board Options Exchange, Chicago Mercantile Exchange (CME), Hong Kong Exchanges and Clearing Ltd., JSE Securities Exchange, Kansas City Board of Trade, Korea Stock Exchange, OMLX, MEFF Renta Fija, MEFF Renta Variable, Montreal Stock Exchange, New York Futures Exchange, New York Mercantile Exchange, New York Stock Exchange, NXZ Derivatives, OM Stockholm AB, Osaka Exchange, Pacific Stock Exchange, Philadelphia Board of Trade, Philadelphia Stock Exchange, Singapore Exchange, South Africa Futures Exchange (SAFEX), Sydney Futures Exchange, Toronto Futures Exchange and Toronto Stock Exchange.

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Appendix IV The value of the property of the Fund shall be the value of its assets less the value of its liabilities determined (subject to COLL) in accordance with the following provisions.

(1) All the property of the Fund (including receivables) is to be included, subject to the following provisions.

(2) Immovable property shall be valued as follows:

a) Real property held by the Fund shall be valued by the Standing Independent Valuer, appointed by the Manager with the approval of the Trustee, on the basis of a full valuation with a physical inspection at least once a year.

b) Any inspection of adjacent properties of a similar nature may be limited to that of one such representative property.

c) The Standing Independent Valuer shall also value each immovable on the basis of a review of the last full valuation at least once a month. The figure arrived at using that valuation shall be used as part of the valuation for the entire Fund calculated on each Dealing Day for the next month.

d) If either the Manager or the Trustee becomes aware of any matter that appears likely to affect the outcome of a valuation of real property or to cause the Standing Independent Valuer to decide to value on the basis of a full valuation with full inspection instead of a review of the last full valuation, it will immediately inform the Standing Independent Valuer of that matter. The Manager will also use its best endeavours to ensure that any other affected person (as defined in the FCA Handbook) reports to the Standing Independent Valuer immediately upon that person becoming aware of any such matter.

e) Any valuation of an immovable by the Standing Independent Valuer must be on the basis prescribed as an “open market value” in Practice Statement 3 in the Statements of Asset Valuation Practice and Guidance Notes published by the Royal Institution of Chartered Surveyors, but subject to the FCA Handbook.

f) Where the Standing Independent Valuer is acting as a connected party to a purchase transaction carried out by the Fund, the Fund will appoint an alternative Standing Independent Valuer for that transaction only.

g) An agreement to transfer real property or an interest in real property will be disregarded for the purpose of the valuation unless it reasonably appears to the Manager to be legally enforceable.

(3) Property which is not cash (or other assets dealt with in paragraph 4 below) or a contingent liability transaction shall be valued as follows and the prices used shall (subject as follows) be the most recent prices which it is practicable to obtain:

a) Units or shares in a collective investment scheme:

(i) if a single price for buying and selling Units or shares is quoted, at that price; or

(ii) if separate buying and selling prices are quoted, at the average of the two prices provided the buying price has been reduced by any initial charge included therein and the selling price has been increased by any exit or redemption charge attributable thereto; or

(iii) if, in the opinion of the Manager, the price obtained is unreliable or no recent traded price is available or if no recent price exists, at a value which, in the opinion of the Manager, is fair and reasonable;

any other transferable security:

(i) if a single price for buying and selling the security is quoted, at that price; or

(ii) if separate buying and selling prices are quoted, at the average of the two prices; or

(iii) if, in the opinion of the Manager, the price obtained is unreliable or no recent traded price is available or if no price exists, at a value which, in the opinion of the Manager, is fair and reasonable;

property other than that described in (a)and (b) above:

at a value which, in the opinion of the Manager, represents a fair and reasonable mid-market price.

(4) Cash and amounts held in current and deposit accounts and in other time-related deposits shall be valued at their nominal values.

(5) Property which is a contingent liability transaction shall be treated as follows:

a) if a written option, (and the premium for writing the option has become part of the Fund property), deduct the amount of the net valuation of premium receivable. If the property is an off-exchange derivative the method of valuation shall be agreed between the Manager and the Trustee;

b) if an off-exchange future, include at the net value of closing out in accordance with a valuation method agreed between the Manager and the Trustee;

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c) if any other form of contingent liability transaction, include at the net value of margin on closing out (whether as a positive or negative value). If the property is an off exchange derivative, the method of valuation shall be agreed between the Manager and the Trustee.

(6) In determining the value of the Fund property, all instructions given to issue or cancel Units shall be assumed to have been carried out (and any cash paid or received) whether or not this is the case.

(7) Subject to paragraph 2 above and paragraphs 8 and 9 below, agreements for the unconditional sale or purchase of property which are in existence but uncompleted shall be assumed to have been completed and all consequential action required to have been taken. Such unconditional agreements need not be taken into account if made shortly before the valuation takes place and, in the opinion of the Manager, their omission shall not materially affect the final net asset amount.

(8) Futures or contracts for differences which are not yet due to be performed and unexpired and unexercised written or purchased options shall not be included under paragraph 7.

(9) All agreements are to be included under paragraph 6 which are, or ought reasonably to have been, known to the person valuing the property.

(10) Deduct an estimated amount for anticipated tax liabilities at that point in time including (as applicable and without limitation) capital gains tax, income tax, corporation tax and advance corporation tax, value added tax, stamp duty and stamp duty reserve tax.

(11) Deduct an estimated amount for any liabilities payable out of the property of the Fund and any tax thereon treating periodic items as accruing from day to day.

(12) Deduct the principal amount of any outstanding borrowings whenever payable and any accrued but unpaid interest on borrowings.

(13) Add an estimated amount for accrued claims for tax of whatever nature which may be recoverable.

(14) Add any other credits or amounts due to be paid into the property of the Fund.

(15) Add a sum representing any interest or any income accrued due or deemed to have accrued but not received.

(16) Currencies or values in currencies other than base currency shall be converted at the relevant Valuation Point at a rate of exchange that is not likely to result in any material prejudice to the interests of Unitholders or potential Unitholders.

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Appendix V Details of availability of net income and accumulation Units are set out below:

Net Income Units in

Net Accumulation

Units in

Class 1 Class 2 Class 1 Class 2


√ Launch date:

February 2007

√ Launch date:

February 2007

√ Launch date:

February 2007

√ Launch date:

February 2007

37


Directory Manager Threadneedle Investment Services Limited (authorised and regulated by the FCA)

Registered Office and Head Office Cannon Place 78 Cannon Street London EC4N 6AG

Client Services Details Address: Threadneedle Investment Services Limited PO Box 10033, Chelmsford, Essex CM99 2AL Telephone UK Investors: (dealing & customer enquiries): 0800 953 0134 Telephone non-UK Residents: (dealing & customer enquiries): +44 (0) 1268 441520 Fax UK Investors (dealing): 0845 113 0274 Fax non-UK Residents (dealing): +352 2452 9807 Email (enquiries): [email protected]

Trustee Citibank International Limited (authorised and regulated by the Prudential Regulatory Authority and regulated by the Financial Conduct Authority)

Head Office and Registered Office Citigroup Centre Canada Square Canary Wharf London E14 5LB

Investment Manager Threadneedle Asset Management Limited (authorised and regulated by the FCA) Cannon Place 78 Cannon Street London EC4N 6AG

Legal Advisers Hogan Lovells International LLP Atlantic House 50 Holborn Viaduct London EC1A 2FG

Auditors PricewaterhouseCoopers LLP 7 More London Riverside London SE1 2RT

Registrar Threadneedle Investment Services Limited delegated to International Financial Data Services (UK) Limited St Nicholas Lane Basildon Essex SS15 5FS (the register of Unitholders can be inspected at this address)

Standing Independent Valuer CBRE Limited St. Martin's Court 10 Paternoster Row London EC4M 7HP

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mailto:[email protected]

To find out more visit columbiathreadneedle.com Important information: Threadneedle Investment Services Limited, ISA Manager, Authorised Corporate Director and Unit Trust Manager. Registered No. 3701768. Registered in England and Wales. Registered Office: Cannon Place, 78 Cannon Street, London EC4N 6AG. Authorised and regulated by the Financial Conduct Authority. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com J22604 | Issued 05 14 | Valid to 05 15 | T235472