Expat Bulgaria SOFIX UCITS ETF

Expat Bulgaria SOFIX UCITS ETF is the exchange-traded fund which tracks the performance of the SOFIX Index, using the direct physical replication method. The fund is traded on the Bulgarian Stock Exchange, on the London Stock Exchange, on the Frankfurt Stock Exchange (XETRA), and on the Ljubljana Stock Exchange. It is suitable for Bulgarian and foreign investors who want a liquid and diversified exposure to the Bulgarian market and the region as a whole.

The indicative net asset value of the ETF (iNAV) can be found here (ISIN iNAV DE000A2J0QC5).

Exchange Traded Funds (ETF, Exchange-Traded Funds) invest in shares of companies in a particular index or sector, or in commodities, etc. Expat Bulgaria SOFIX UCITS ETF invests in the shares of the companies included in the SOFIX Index. The SOFIX Index is the main index of the Bulgarian Stock Exchange and consists of the 15 most liquid companies on BSE. The ETF invests in all SOFIX companies in proportions closely matching those of the index and within the legal limitations. The return of the fund follows that of the index – i.e. if the Bulgarian market goes up, the market value of the ETF shares would increase proportionally.

The ETF is an open-ended passively managed collective investment scheme.The fund does not pay dividend. The profit is reinvested, and this increases the net asset value of the fund to the benefit of investors.

Eligible investors can buy and sell their ETF units directly from and to the ETF in the primary market, while all investors can trade the ETF's units on the stock exchange (the secondary market).

Expat Bulgaria SOFIX UCITS ETF was licensed by the Financial Supervision Commission on August 19, 2016. It was listed on the BSE on September 27, 2016, on the Frankfurt Stock Exchange (XETRA) on Janyuary 10, 2018, and on London Stock Exchange on Oct 1, 2018. It is organized in full compliance with the EU UCITS directive.

The chart below shows the net asset value per share after the fund exceeded the minimum NAV of BGN 500 000 required under the Collective Investment Schemes Act.

At the beginning of June 2017, the Fund’s Rules were changed allowing the fund to replicate the reference index more closely. After those changes, there are no limitations for concentration of positions. For this reason, the chart of NAV/share and the SOFIX Index, normalized to start at 1, begins on 9 June 2017 – after the rebalancing of the fund according to the new rules. The chart for the period before June 2017 may be seen here.

Advantages:

• An easy and transparent way for investing in the Bulgarian stock market. Investors buy all the companies from the SOFIX Index. The portfolio of the index ETF is published and updated daily on the website of Expat Asset Management.

• Diversification. Investors gain exposure to the 15 largest and most liquid stocks on BSE. Diversification lowers the volatility of the investment.

• Superior liquidity. The Bulgarian index ETF is among the most liquid positions on the BSE. The primary market for purchase and redemption of shares is also open every day to larger qualified investors.

• Easy to follow. There is no need to devote time and resources to analyze, pick and follow individual stocks. Index investing is a convenient and efficient macro play.

• No income tax for investors. Capital gains (profits) from instruments traded on the Bulgarian Stock Exchange are exempt from taxation in Bulgaria.

• No corporate taxation for the ETF. UCITS-compliant vehicles, such as the index ETF, are exempt from corporate taxation in Bulgaria.

• Low transaction fees. It is cheaper to invest in one instrument rather than in shares of multiple companies. There are no taxes in Bulgaria when buying and selling shares, only brokerage and settlement commissions.

• European regulation. The ETF is fully compliant with the UCITS directive of the European Union.

The fund is exposed to market risk – the possibility of losses due to adverse changes in the value of the reference indices. Other risk factors:

• The net asset value of the shares and their returns may fall, the returns are not guaranteed, and the investors take the risk that they may get back less than they originally invested.
• Unusual circumstances such as trading obstruction on the stock exchange, surcharges, extremely volatile markets and others can lead to significant differences between the performance of the Fund and the performance of the Index.
• Liquidity – the risk under certain conditions that it becomes difficult or impossible to sell portfolio holdings.
• Other risks – credit risk, interest risk, tax risk, regulatory risk, political risk, operational risk, price risk, currency risk, concentration risk, systemic risk, risk of the passive fund management, risk of corporate events, tracking error risk, events that affect the Reference Index, etc.

More information about risks can be found in the Prospectus of each fund.

Ξ Portfolio Structure & Basket of Securities as of 03 Apr 2024 Ξ

PRIMARY MARKET INFORMATION: