The Board of Trustees (the Board) of Voya International High Dividend Equity Income Fund (the Fund) (NYSE:IID) has approved changes to the Funds sub-advisory relationship. In connection with these approvals, the investment strategies, benchmark, and portfolio managers of the Fund will change and the Funds 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.
The Funds Board has appointed Voya Investment Management Co. LLC (Voya IM or Sub-Adviser) to serve as the sole subadviser to the Fund beginning on May 6, 2019, following the termination of the current sub-subadvisory agreement between Voya Investments, LLC (the Adviser) and NNIP Advisors B.V. (NNIP). Voya IM currently serves as the Funds Sub-Adviser and NNIP serves as the Funds sub-sub-adviser.
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 Funds 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 portfolios 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 Funds 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 Funds limitations on permissible investments and investment restrictions may not apply. Transition of the Funds investments may result in the realization of taxable capital gains and may have an adverse effect on the Funds 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.
The Funds Board also approved changing the Funds 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 Funds new strategies that are being employed.
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 Funds portfolio managers, responsible for the day to day management of the Fund. Paul Zemsky serves as Portfolio Manager, and Chief Investment Officer of Voya IMs 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 Funds Board also approved a reduction in the Funds management fee and expense limitation arrangements. Set out below are the Funds current and new fee arrangements:
|Current Management Fee Rate|| Management Fee Rate effective |
May 6, 2019
1.10% of the Funds average
daily managed assets1
| 0.95% of the Funds average|
daily managed assets
|Current Expense Limit||Expense Limit effective May 6, 2019|
1 Managed assets are defined as the Funds average daily gross asset value, minus the sum of the Funds 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.
SHAREHOLDER INQUIRIES: Shareholder Services at (800) 992-0180; voyainvestments.com
Kagel, (212) 309-6568