it now!

Objective

The It Now IPSA fund has the mission of replicating the performance of the Selective Stock Price Index (IPSA) of the Santiago Stock Exchange after fees and expenses. To this end, the fund tries to replicate the IPSA portfolio, observing the limits set forth in the Bylaws of the Fund on basket diversification and composition.

Values for Creation and Redemption of Shares

You can invest in Units of at least XX shares or in multiples of the minimum unit of xx shares.

Creation and redemption of Instruments

How to create and redeem shares:
Fund shares can be created or redeemed in Units or multiples of Units only, pursuant to the provisions set forth in a Creation Order or Redemption Order, accordingly, duly submitted by an Authorized Agent or directly by the Administrator, by delivering or receiving, accordingly, the Instrument Portfolio in effect at the time of the transaction, pursuant to the provisions set forth in the Bylaws of the Fund.

Composition of the Instrument Portfolio
The composition of the Instrument Portfolio for the purpose creating or redeeming Units or multiples of Units will obey the following rules:
- Index stocks will represent at least 90% (ninety per cent) of the instrument portfolio.
- Financial assets permitted by the Investment and Cash Policy of the Fund may represent up to a maximum of 10% (ten percent) of the basket.
- Amount in cash will be paid by the investor or the Fund while the liquidation of the stocks making up part of the Instrument Portfolio, according to the mechanism by which the Creation and/or Redemption Order was issued.
- The Administrator, at its sole discretion, may define different Instrument Portfolios to execute the Creation Orders or the Redemption Orders, accordingly, highlighting that the Instrument Portfolio applicable to each Creation or Redemption Order will have an Instrument Portfolio Composition File that will be disclosed on a daily basis in this website and in the Stock Exchange website, before the opening of the Stock Exchange trading session.
- In situations in which it is exceptionally difficult to execute a Creation Order or Redemption Order because of the low liquidity of one or more of the Index stocks that make up the Instrument Portfolio, the Administrator, at its sole discretion, may replace such stocks with Amounts in Cash, limited to 10% (ten per cent) of the Instrument Portfolio value.

Procedures for the creation and redemption of instruments  

1) By means of the Stock Exchange

Cut-off time: fifteen minutes before the closing time of the Telepregón trading system of the Stock Exchange.

For the purpose of creation and/or redemption orders of Units, the closing time for Fund trading will be set at fifteen minutes before the closing time of the Telepregón trading system of the Stock Exchange. This schedule and any changes made by the Stock Exchange will be immediately published in this website.

The Creation Orders and/or Redemption Orders presented by an Authorized Agent will be entered for clearance and/or settlement in the Central Counterparty System of the CCLV, Contraparte Central SA, the Chilean central counterparty, which is a subsidiary of the Stock Exchange. The Orders will be settled in the same period of time required for settling traded stocks with a Normal Cash settlement condition. This will occur without prejudice to the fact that the creation or redemption received will be expressed in Fund shares, using the share price of the day in which it is received if the operation is carried out before the closing of the Fund trading session. As of this date, these stocks will be considered part of the Fund portfolio, in the case of a Creation Order, or excluded from the Fund portfolio in the case of a Redemption Order. Any changes in the previous matter will be immediately published in this website. Whenever one or more stocks to be delivered to the Fund because of a Creation Order or that the Fund must deliver to Shareholders because of a Redemption Order cease to be traded before the closing time of the trading session of the Fund, the Administrator may suspend and/or terminate all the Creation and Redemption Orders of shares submitted on such days. This fact will be published immediately in this website and communicated to the Securities and Insurance Exchange Supervising Authority as a material fact and to the Shareholders, as set forth in the Bylaws of the Fund and applicable regulations.

To meet their responsibilities, the Authorized Agents should register the Creation Orders and/or Redemption Orders in the systems made available by the Stock Exchange for this purpose, as well as comply with all the obligations and standards set by the Stock Exchange for this type of operation.

2) By means of Itaú Chile Administradora General de Fondos

Cut-off time: up to 12 p.m. (Santiago).

Investors opting for submitting a Creation Order and/or a Redemption Order directly to the Administrator should comply with and accept the following instructions:

The Creation Orders and/or Redemption Orders submitted by investors directly to the Administrator should be settled in the same period of time set for the orders carried out through an Authorized Agent. Whenever one or more stocks to be delivered to the Fund because of a Creation Order or that the Fund must deliver to Shareholders because of a Redemption Order cease to be traded before the closing time of the trading session of the Fund, the Administrator may suspend and/or terminate all the Creation and Redemption Orders of shares submitted on such days. This fact will be informed immediately in this website and communicated to the Securities and Insurance Exchange Supervising Authority as a material fact and to the Shareholders, as set forth in the Bylaws of the Fund and applicable regulations. The investor and the Administrator will comply with the obligations and operating standards set by the Central Securities Depository (CSD) for the settlement of the Creation Orders and/or Redemption Orders.

The same day the Creation Order and/or Redemption Order is submitted, before the closing time of the trading session of the Fund, that is until 12:00 pm (Santiago), the investors and Administrator should have available, free of liens and prohibitions in the respective custody accounts of the CSD, all the stocks and financial assets that make up the Instrument Portfolio in effect and the respective equivalent shares and vice-versa, if it is a Creation Order or a Redemption Order respectively, except for the Amount in Cash. This condition will be verified by the CSD.

The investor and Administrator authorize the CSD to proceed to block all the above-mentioned assets, once their availability is certified in the respective custody accounts, in order to ensure that the settlement of the transaction will be performed in the established terms.

The CSD will proceed to settle the creation and/or the redemption of Fund shares, as long as it is formally communicated by the investor and Administrator that the cash component, if any, has been settled bilaterally. If the CSV cannot confirm this information, it shall not settle the position in stocks and other financial assets, if any, and this transaction will only be settled when the settlement of the cash component is confirmed. In this case, the CSV will proceed to inform both parties about this situation in writing.

Value of investment share for conversion of creations

The investment will be expressed in Fund shares, using the share price on the day the investment is received, if it is made before the closing time of the trading session of the Fund or the share price on the day after the investment was received if it was made after the closing time of the referred trading session.

Value of redemption share for settlement of redemptions

If the redemption request is submitted before the closing time of the trading session of the Fund, the share price to be used to settle the redemption request will be the share price on the date the request was received or on the date the request was redeemed, in the case of a programmed redemption. If the redemption application is presented after the closing time of the trading session of Fund, the share price to be used will be that on the day subsequent to the date the request was received.

Restrictions to creations and redemptions in cash

The Fund does not consider the possibility of receiving creations or redemptions in cash only. Shares will be issued or redeemed only in Units or multiples of Units. A Unit can only be issued in accordance with a Redemption Order, duly submitted by an Authorized Agent, or in response to a Creation Order submitted by any investor directly to the Administrator through the delivery an Instrument Portfolio. The Units may only be redeemed by means of a Redemption Order duly submitted by an Authorized Agent or through a Redemption Order submitted by the Shareholder directly to the Administrator, through the delivery of an Instrument Portfolio by the Fund.

Mechanism for creation of shares and settlement of investments

Considering what is set forth in the final paragraph of article 16 of Executive Order #1,328 of 1976, in article 33 of the Regulatory Definition of the Ministry of Finance #1,179 of 2010 and in the instructions set forth in General Standard #312 of 2011 of the Securities and Insurance Exchange Supervising Authority or any agency that may come to change or replace it, Fund shares will be traded in the Stock Exchange, and the Administrator will maintain at least one market-maker agreement with a national stock broker during the time the Fund is valid. This agreement will establish the following:

(i) The broker shall perform purchase and sales offers of Fund shares during the entire trading session of the Stock Exchange or until operations for a total of 3,000 UF (Unidad de Fomento, a Chilean unit of account)have been completed in the respective day.

(ii) The maximum percentage difference between the purchase and sale prices cannot be greater than 3%. This way Shareholders can count upon a suitable and permanent secondary market for their shares. If the Administrator cannot comply with this instruction for reasons beyond its control or exceptional circumstances, such as an earthquake or other natural disasters, public disturbance, domestic or foreign terrorist attacks, abnormal fluctuations of traded volumes in the markets or other similar phenomena, the Administrator may remain non-compliant for up to three months. This fact will be communicated to the Securities and Insurance Exchange Supervising Authority as a material fact and to the Shareholders, pursuant to the Bylaws of the Fund and applicable regulations. If the situation is not back to normal in three months, the Fund will be liquidated.

Relevant Glossary for Investing and Redeeming

Unit(s): Minimum amount of Fund shares set and disclosed by the Administrator that the Shareholder may create or redeem using instruments, pursuant to the terms of a Creation Order or a Redemption Order of shares, duly submitted by an Authorized Agent or submitted directly to the Administrator, in the terms set forth in the Bylaws. The Unit set for creating shares may differ from the one defined to settle redemptions.

Instrument Portfolio: The exact basket of instruments and Amount in Cash that a Shareholder should invest to create Units (creation Instrument Portfolio) or that Shareholders will receive if they decide to redeem any Units (redemption Instrument Portfolio), as set forth in the Bylaws of the Fund. The Instrument Portfolio will be made up of Index stocks, Amount in Cash and other financial assets, according to the investment policy of the Fund. The composition of the Fund portfolio will follow the rules set forth in Title F of the Bylaws of the Fund.

Creations Orders: Order issued by an Authorized Agent at the request of an Authorized Shareholder or submitted by the Shareholder directly to the Administrator, requesting the Fund to issue one or more Units in exchange for the delivery of one or more Instrument Portfolios.

Redemption Order: Order issued by an Authorized Agent at the request of an Authorized Shareholder or submitted by the Shareholder directly to the Administrator, requesting the Fund to deliver one or more Instrument Portfolios in exchange for the delivery of one or more Units.

Description

The Selective Stock Price Index (IPSA) is designed to measure the results of companies that show the highest liquidity in the Chilean market and are listed in the Santiago Stock Exchange. This is why the IPSA index is considered the best outcome indicator in the Chilean stock market. Market capitalization of the companies that make up the IPSA index is equal to USD 211.774 million, accounting for 70.53% of the total market cap of all the companies listed in the CSE on July 2012. Most Index companies are leaders in their industries and well known brands. In addition, the list of companies that make up the index is stable and these companies show high stock-trading activity, which means the turnover rate is low and the liquidity level is high.

Key Characteristics:
● The universe of choice is represented by all the stocks listed in the CSE with a real market cap greater than USD200 million.
● Companies with a free float greater than or equal to 5%.
● Then, the 40 companies with the highest Annual Weighted Traded Total are chosen (MTPA, Monto Transado Ponderado Anual).
● The index is constructed with the weighted market value of the Index companies adjusted for free float.
● The value of the index is adjusted for any kind of capital variation. Both a “With Dividends” version and a “Without Dividends” version of the index are estimated.
● The IPSA index was calculated for the first time in 1977, and its base value was 1,000 points.
● It is built with transparent methodology and rules.
● Quality of the stocks: it is made up of stocks listed in the CSE only, meaning they are all in compliance with demanding quality standards.
● Diversification: it is made up of companies representing various industries of the domestic economy.

The IPSA is made up of shares listed on the Bolsa de Comercio de Santiago of the most representative companies in the fields of financial intermediation, sundry financial services and pensions and insurance (see the make-up of the index portfolio) that meet the inclusion criteria described below.

Calculation Methodology and Selection Criteria of Index Companies IPSA is designed in conformity with internationally applied rules and calculation standards. Therefore, the companies that make up the index are weighted by their market value adjusted for free float. This allows each company in the index to have a relative weight that represents the actual availability of its stocks in the market.

The objective is to create and maintain a series of high-quality market, equity and sector indexes that make it possible to measure the return of the individual components.

 

Before deciding to invest in shares of ETFs It Now, read this important information, especially the fund’s Bylaws.