Board Approves Changes to Sub-Adviser, Fees, Strategies, and Benchmark for Voya International High Dividend Equity Income Fund
March 28 2019 - 6:30PM
Business Wire
The Board of Trustees (“the Board”) of Voya International High
Dividend Equity Income Fund (the “Fund”) (NYSE:IID) has
approved changes to the Fund’s sub-advisory relationship. In
connection with these approvals, the investment strategies,
benchmark, and portfolio managers of the Fund will change and the
Fund’s investment advisory fee rate and expense limit arrangements
will be reduced as described below. Each of the foregoing changes
will be effective on or about May 6, 2019.
Sub-Advisory
Relationship
The Fund’s Board has appointed Voya Investment Management Co.
LLC (“Voya IM” or “Sub-Adviser”) to serve as the sole sub‐adviser
to the Fund beginning on May 6, 2019, following the termination of
the current sub-sub‐advisory agreement between Voya Investments,
LLC (the “Adviser”) and NNIP Advisors B.V. (“NNIP”). Voya IM
currently serves as the Fund’s Sub-Adviser and NNIP serves as the
Fund’s sub-sub-adviser.
Investment Strategies
The Fund will maintain its current investment objective of total
return through a combination of current income and realized gains,
with a secondary objective of long-term capital appreciation. The
Fund will continue to pursue an option overlay strategy in the same
manner as the current strategy. Upon the implementation of the
changes, Voya IM will employ a dividend focused quantitative
strategy in selecting equity investments for the Fund. A
description of the revised portions of the Fund’s equity investment
strategies are included below:
The Fund seeks to achieve its investment objectives by investing
at least 80% of its managed assets in a portfolio of international
dividend-producing securities, or derivatives linked to such
securities or indices that include such securities, which the
sub-adviser believes will pay above-average, sustainable,
dividends. The Fund normally invests across a broad range of
countries, industries and market sectors, included in the MSCI
EAFE® Index (the “Index”).
The Fund invests in equity securities and will select securities
based upon quantitative analysis. The Sub-Adviser uses an
internally developed quantitative computer model to create a target
universe of global securities with above average dividend yields
compared to the Index, which the Sub-Adviser believes exhibit
stable dividend yields within each geographic region and industry
sector. The model also seeks to exclude from the target universe
securities issued by companies that the Sub-Adviser believes
exhibit characteristics that indicate that they are at risk of
reducing or eliminating the dividends paid on their securities.
Once the Sub-Adviser creates this target universe, the Sub-Adviser
seeks to identify the most attractive securities within various
geographic regions and sectors by ranking each security relative to
other securities within its region or sector, as applicable, using
proprietary fundamental sector-specific models. The Sub-Adviser
then uses optimization techniques to seek to achieve the
portfolio’s target dividend yield, manage target beta, determine
active weights, and neutralize region and sector exposures in order
to create a portfolio that the Sub-Adviser believes will provide
the potential for maximum total return consistent with maintaining
lower volatility than the Index. Under certain market conditions,
the Fund will likely earn a lower level of total return than it
would in the absence of its strategy of maintaining a relatively
lower level of volatility.
For a period after May 6th until on or about May 20th, Voya IM
will work to transition the Fund’s portfolio in accordance with the
investment strategy described herein. During this time, the Fund
may deviate from its stated investment objectives and strategies,
and the Fund’s limitations on permissible investments and
investment restrictions may not apply. Transition of the Fund’s
investments may result in the realization of taxable capital gains
and may have an adverse effect on the Fund’s performance during the
period of the transition. In addition, these transactions will also
result in transactional costs, which will be borne equally by the
Adviser and the Fund.
Benchmark
The Fund’s Board also approved changing the Fund’s primary
benchmark from 55% MSCI Europe Index/45% MSCI All Country Asia
Pacific ex-Japan Index to the MSCI EAFE Index which better reflects
the Fund’s new strategies that are being employed.
Portfolio Management
Effective with the implementation of the changes discussed
herein, Paul Zemsky CFA, Vincent Costa, CFA, Peg DiOrio, CFA and
Steve Wetter, of Voya IM, will become the Fund’s portfolio
managers, responsible for the day to day management of the Fund.
Paul Zemsky serves as Portfolio Manager, and Chief Investment
Officer of Voya IM’s Multi-Asset Strategies. Mr. Zemsky joined Voya
IM in 2005 as head of derivative strategies. Vinnie Costa serves as
Head of the global equities team and as portfolio manager for the
U.S. and Global active quantitative strategies and the U.S. large
cap value portfolios. Mr. Costa joined Voya IM in April 2006 as
head of portfolio management for quantitative equity. Peg DiOrio
and Steve Wetter serve as portfolio managers on the quantitative
equity team and both joined the firm in 2012.
Revised Fee Arrangements
The Fund’s Board also approved a reduction in the Fund’s
management fee and expense limitation arrangements. Set out below
are the Fund’s current and new fee arrangements:
Current Management Fee
Rate Management Fee Rate effective
May 6, 2019
1.10% of the Fund’s average
daily managed assets1
0.95% of the Fund’s average
daily managed assets
Current Expense Limit
Expense Limit effective May 6, 2019
1.25% 1.15%
1 Managed assets are defined as the Fund’s average daily gross
asset value, minus the sum of the Fund’s accrued and unpaid
dividends on any outstanding preferred shares and accrued
liabilities (other than liabilities for the principal amount of any
borrowings incurred, commercial paper or notes issued by the Fund
and the liquidation preference of any outstanding preferred
shares).
About Voya Investment Management
A leading, active asset management firm, Voya Investment
Management manages, as of September 30, 2018, more than $210
billion for affiliated and external institutions as well as
individual investors. With 40 years of history in asset management,
Voya Investment Management has the experience and resources to
provide clients with investment solutions with an emphasis on
equities, fixed income, and multi-asset strategies and solutions.
Voya Investment Management was named in 2015, 2016, 2017 and 2018
as a “Best Places to Work” by Pensions and Investments magazine.
For more information, visit voyainvestments.com. Follow Voya
Investment Management on Twitter @VoyaInvestments.
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