ETFs are constructed like mutual funds but trade like stocks. A passively managed ETF is often a fund that follows a specific index, such as the OMXH25 index. There are also actively managed ETF:s on the market. Essentially, they are priced continuously and can be bought or sold throughout the trading day. ETF:s are attractive to individual and institutional investors alike because they often provide liquid, cost-efficient exposure to a broad range of asset classes.

WHAT IS SELIGSON & CO OMX HELSINKI 25 ETF?

Seligson & Co OMX Helsinki 25 ETF invests its assets in stocks that are members of the OMXH25 index. The investment strategy is to follow accurately the OMXH25 index, and thus offer a cost effective and simple way to diversify into a stock portfolio consisting of the 25 most traded stocks on the Helsinki Stock Exchange.

HOW CAN I TRADE OMXH25 ETF UNITS?

OMXH25 ETF-units can be bought or sold on the Helsinki stock exchange like stocks. Trading is possible throughout the trading day and the units are priced continuously. Read more about how to buy ETF units.

WHAT COSTS ARE ARE CHARGED FROM THE INVESTOR?

OMXH25 ETF is world class in cost effectiveness. The annual management fee is 0,11 % – 0,18 % p.a. depending on the size of the fund. There are no subscription or redemption fees in the fund.
N.B.! The brokers charge commissions when buying and selling units according to their price lists.

HOW DO DIVIDENDS AFFECT THE ETF UNIT PRICE?

When the fund receives dividend payments from the companies it invests in, the dividends are included in the unit price, and the unit price rises. The received dividends are paid out once a year as income to the unit holders.

The actual distribution is a little lower than the amount of the accrued dividends, because the fund’s management fee is covered with a small part of the dividend payments. On the other hand, the stock lending premiums that the fund receives have a positive impact on the net asset value.

The amount of distribution and the distribution date is decided by the general meeting of the Fund Management Company. Usually, the distribution takes place in the beginning of June after the dividend period.

HOW ARE ETF UNITS TAXED?

Finland, the OMXH25 ETF units are taxed in the same manner as taxation of normal fund units. The annual distribution paid to the unit holders and the possible sales profit are taxable income. Please consult your local tax expert for up-to-date information about fund and ETF unit taxation in your country.

HOW DO OMXH25 ETF:S DEVELOP COMPARED TO THE OMXH25 INDEX?

The fund unit price develops in the same manner as the OMXH25 index. There is a slight difference in the returns due to the different costs in the fund, such as the management fee and trading commissions. On the other hand, the fund receives stock lending premiums, which cover a part of the costs. The latest published tracking error was 0,25% (30.06.2007, calculated from the previous 12 month period).

WHAT IS MEANT BY REACHING GAINS THROUGH STOCK LENDING?

OMXH25 ETF strives to lend its shares continuously in order to get lending premiums for the fund. The borrower pays a premium to the fund for the lending period, and these premiums are added to the fund’s assets.

HOW IS THE FUND UNIT VALUE DEFINED?

The unit price follows the movements of the OMXH25 index, since the fund owns the same shares as in the index and with same weights. The value of one fund unit is normally about 1/100 of the index value. This means that if the index value is 3250,40 points, the value of one fund unit is 32,50 €.

The unit price can vary from the index point, mainly due to the dividends paid out by the companies that the fund invests in. The dividends are added to the net asset value of the fund, which raises the fund price to a higher level than the index. The dividends are paid out to the fund unit holders in the end of the dividend period and the fund unit price is adjusted back to match 1/100 of the index point.

HOW CAN I FOLLOW THE DEVELOPMENT OF THE FUND PRICE?

The Fund Management Company calculates the net asset value each day when the Helsinki Stock Exchange is open. The fund value is published daily for example on our website www.seligson.fi and in local newspapers.

Seligson & Co Fund Managemnt Company also publishes a real-time indicative unit price. This indicative price is called INAV and is published on Bloomberg on the page HEXX25IN Index <go>.

The indicative price is calculated by adjusting the official unit price from the previous day with the percentage change of the fund unit value during the next day:

(1 + ( A – B) / B ) * C
A = real-time OMXH25 index
B = the closing value of the OMXH25 index for the previous day
C = the net asset value of the fund for the previous day (calculated by using close-prices for the stocks)

N.B.! The Fund Management Company cannot be held liable for the accuracy of the real-time indicative NAV.

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