Board Approves Changes to Sub-Adviser, Fees, and Strategies for Voya Emerging Markets High Dividend Equity Fund
March 28 2019 - 6:30PM
Business Wire
The Board of Trustees (“the Board”) of Voya Emerging Markets
High Dividend Equity Fund (the “Fund”) (NYSE:IHD) has
approved changes to the Fund’s sub-advisory relationship. In
connection with these approvals, the investment strategies 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‐advisory agreement between Voya Investments, LLC
(the “Adviser”) and NNIP Advisors B.V. Voya IM currently serves as
a consultant to the Adviser, although it does not manage any of the
Fund’s assets.
Investment Strategies
The Fund will maintain its current investment objective of total
return through a combination of current income, capital gains, and
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:
Under normal market conditions, the Fund invests at least 80% of
its managed assets in dividend-producing equity securities of, or
derivatives having economic characteristics similar to the equity
securities of, issuers in emerging markets. The Sub-Adviser seeks
to construct a portfolio with a weighted average gross dividend
yield that exceeds the dividend yield of the MSCI Emerging Markets
IndexSM (the “Index”) For the purpose of the Fund’s investments,
the Fund will invest in emerging market countries as defined by the
Index.
The Fund will invest 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 a proprietary multi-factor model. The Sub-Adviser
then uses optimization techniques to seek to achieve the
portfolio’s target dividend yield, 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.
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 by the Adviser
and the Fund.
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 1.25% of the Fund’s average 1.15% of the Fund’s
average
daily managed assets1
daily managed assets
Current Expense
Limit Expense Limit effective May 6,
2019 1.50% 1.45%
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.
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).
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For Voya Investment ManagementKris Kagel, 212-309-6568
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