Kempen (Lux) European Small-cap Fund - Class A

Profile

Kempen International Funds SICAV - Kempen (Lux) European Small-cap Fund (the Fund) aims to generate strong long-term investment results by investing in a concentrated portfolio of small European companies. The Fund is managed on the basis of a bottom-up stock picking strategy that focuses on the identification of high quality companies and special situations. High quality companies have a proven and sustainable competitive advantage which is characterised by strong returns on invested capital, while special situations include companies that will benefit from a restructuring of their cost base or capital structure, a change in management, or for example, new regulation.

The fund manager believes that consistent investment results can be achieved using its investment philosophy that focuses on earnings as a key driver of stock prices in the long run, and change within a company as a catalyst. The Fund only invests when risk and reward are asymmetrically related.

Management team

Mark McCullough, Tommy Bryson, Analysts: Karen McGrath, Michael Gray, Athole Skinner

Performance per 2018-06-30 (rebased)

No chart data available

Performance per 2018-06-30

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  Fund Benchmark
1 month -3.4 % -1.1 %
3 months 2.6 % 4.7 %
This year -0.9 % 1.9 %
2015 21.8 % 24.3 %
2016 2.0 % 3.2 %
2017 12.3 % 19.1 %
1 year (on annual basis) 0.9 % 9.8 %
3 years (on annual basis) i 6.1 % 9.3 %
5 years (on annual basis) i 12.1 % 15.3 %
Since inception (on annual basis) i 10.5 % 7.4 %
On 23 October 2013 Kempen European Smallcap Fund (KESF) was merged with Kempen (Lux) European Smallcap Fund (the Fund). In May 2009 the first private class of the Fund was launched. The results shown of the periods before 15 May 2009 (date of first private class) are those of KESF. KESF had a similar investment and cost structure, but had a different tax regime that could have influenced the returns shown. Until 31 May 2011 the benchmark of the Fund was the HSBC Smaller European Companies Index. As of 31 May 2011 until 28 February 2017 the benchmark of the Fund was the MSCI Europe Small Cap Total Return Index, of which the constituents are adjusted by reducing the UK component by 50%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 359.41 M 2018-06-30
Share class size
EUR 3.39 M 2018-06-30
Number of shares
39,076 2018-06-30
Net Asset Value i
EUR 87.18 2018-07-18
Morningstar rating â„¢
Morningstar Analyst rating
Neutral

Fund characteristics per 2018-06-30

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  Fund Benchmark
Number of holdings 35 1018
Dividend yield i 2.69 % 2.46 %
Weighted average market capitalization i EUR 2,541 M EUR 2,805 M
P/E ratio i 17.66 14.72
Active share i 96.16 %
Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Market developments per 2018-06-30

The Fund decreased in June, underperforming the benchmark. The best performing companies were Kingspan, Straumann and Hilton Food Group. CIE, IMA and BE Semiconductor were the worst performers.

The European small-cap index fell by 1.1% in June. International politics dominated news flow in June with Trade War rhetoric driving market volatility. While the tariff commitments announced to date are as yet relatively immaterial in the context of global trade, and unlikely to derail economic growth, fears of escalating tensions are pushing markets lower. This negative sentiment drove Industrial companies lower, particularly those in the Automobile supply chain, which created a strong headwind for our strategy given significant exposure to that sector. Good buying opportunities often emerge amid such sentiment-driven volatility. Fundamental economic data, meanwhile, remains broadly supportive – particularly in the US where confidence, production, spending and earnings data depict a strong economy. In Europe, the core market of most of our investments, June saw a modest improvement in economic indicators and supportive comments from the ECB, with Draghi suggesting no rate rises until September 2019 at earliest.

Denmark, Ireland and Italy were the best performing countries during June while Germany, Austria and France were the worst. Healthcare, telecoms and utilities were the best performing sectors during the month while materials, consumer discretionary and IT were the worst.

Portfolio developments per 2018-06-30

We purchased a new position in TKH Group during the month. TKH is a Dutch company bought as a ‘Special Situation’ investment. They are in the midst of a substantial corporate transformation, shifting from a manufacturer of largely commoditised components to a provider of valuable, integrated solutions. While this range of solutions is broad – ranging from surveillance and intercom systems from parking garages and tunnels to airport runway lighting systems and tyre manufacturing systems – they are all built upon advanced proprietary technology and a clear focus on customers’ needs. We believe that the long-term profitable growth prospects created by this transformation are undervalued by the market.

We sold our position in the Swiss dental implant producer Straumann during the month. The shares have enjoyed tremendous success over recent years on the back of a well-conceived and executed strategy, growing their penetration globally in all segments of the dental implant market. We have been consistently reducing the portfolio weighting over the past year as the market cap continued to increase. In the interest of remaining true small-cap investors we have exited the position altogether as the market cap now exceeds EUR 10bn. We have redeployed the capital into exciting new opportunities in European small-caps, specifically the abovementioned TKH.

We welcome the news this month that UK Government proposes to clarify the fiduciary duties of pension schemes in law, in particular requiring schemes to consider and state publicly their approach to ESG factors. Specifically, this will mean a change to UK law to require trustees ‘to consider the impacts on their investments from a changing environment, corporate governance and social trends’. On a broader view we have seen the European Commission publish legislative proposals linked to the Action Plan on Sustainable Finance. This includes a legislative proposal to clarify investors’ legal obligation to consider sustainability factors in investment decisions. This could provide additional momentum in transitioning to a more sustainable and long-term oriented financial system, which we support.

Looking forward, European growth should remain robust and we expect further moderate monetary policy tightening from Central Banks. Given the greater domestic focus of European small-caps we believe the asset class is well placed to benefit from the macroeconomic improvement. Politics will remain an important influence on market sentiment - particularly the continuing evolution of Brexit negotiations. This combination of modest uncertainty in a favourable economic landscape provides good opportunity in seeking out our favoured combination of quality companies at attractive valuations.
Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Performance per 2018-06-30 (rebased)

No chart data available

Performance per 2018-06-30

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  Fund Benchmark
1 month -3.4 % -1.1 %
3 months 2.6 % 4.7 %
This year -0.9 % 1.9 %
2015 21.8 % 24.3 %
2016 2.0 % 3.2 %
2017 12.3 % 19.1 %
1 year (on annual basis) 0.9 % 9.8 %
3 years (on annual basis) i 6.1 % 9.3 %
5 years (on annual basis) i 12.1 % 15.3 %
Since inception (on annual basis) i 10.5 % 7.4 %
On 23 October 2013 Kempen European Smallcap Fund (KESF) was merged with Kempen (Lux) European Smallcap Fund (the Fund). In May 2009 the first private class of the Fund was launched. The results shown of the periods before 15 May 2009 (date of first private class) are those of KESF. KESF had a similar investment and cost structure, but had a different tax regime that could have influenced the returns shown. Until 31 May 2011 the benchmark of the Fund was the HSBC Smaller European Companies Index. As of 31 May 2011 until 28 February 2017 the benchmark of the Fund was the MSCI Europe Small Cap Total Return Index, of which the constituents are adjusted by reducing the UK component by 50%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing
No

Risk analysis (ex post) per 2018-06-30

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  3 years Since inception
Maximum drawdown i -7.90 % -59.77 %
Tracking error i 4.68 % 8.10 %
Information ratio i -0.68 0.38
Beta i 0.97 1.04
Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Top 5 contribution (2018-06-30)

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  Contribution i Performance i
Kingspan Group 0.40 % 8.32 %
Straumann Holding 0.19 % 11.64 %
Hilton Food Group 0.15 % 8.07 %
Hill & Smith 0.14 % 4.17 %
Viscofan 0.13 % 4.12 %

Bottom 5 contribution (2018-06-30)

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  Contribution i Performance i
Cie Automotive -0.53 % -11.63 %
Industria Macchine Automatiche -0.48 % -9.63 %
BE Semiconductor Industries -0.42 % -19.50 %
Aurelius -0.41 % -10.76 %
Huhtamaki -0.27 % -9.14 %

Geographic allocation (2018-06-30)

23.5 %
United Kingdom
12.0 %
Italy
10.8 %
Switzerland
10.5 %
Germany
9.0 %
Finland
8.9 %
Spain
8.9 %
Sweden
4.3 %
Ireland
4.1 %
Netherlands
2.8 %
Cash
5.1 %
Overig
Totaal
100 %

Top 10 holdings (2018-06-30)

4.7 %
Industria Macchine Automatiche
4.5 %
Amer Sports
4.3 %
Kingspan Group
4.2 %
Sweco
3.8 %
Hill & Smith
3.8 %
Cie Automotive
3.7 %
Moncler
3.7 %
Aurelius
3.6 %
Brembo Spa
3.5 %
Implenia
Totaal
39.8 %

Sector allocation (2018-06-30)

32.0 %
Industrial Goods & Services
15.0 %
Retail
10.9 %
Technology
8.8 %
Automobiles & Parts
6.8 %
Personal & Household Goods
6.6 %
Construction & Materials
5.6 %
Food & Beverage
4.5 %
Health Care
3.7 %
Financial Services
3.0 %
England
3.2 %
Overig
Totaal
100 %
Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Ongoing charges

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Management fee i
1.50 %
Service fee i
0.20 %
Taxe d'abonnement i
0.05 %
Expected ongoing charges i
1,75 %

Other costs

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Upward swing factor i
0.50 %
Downward swing factor i
0.30 %
As of 1 January 2018 the swing factor has been adjusted from 0.45%/0.45% to 0.50%/0.30%.
Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Share class details

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Share class
A i
Investor type
Private
Distributing
No
Benchmark i
MSCI Europe Small Cap Total Return Index
Investment category
Small-caps
Universum
European Small- & Mid-caps
Inception date
2009-05-15
Domicile
Luxembourg
May be offered to all investors in
Belgium, Finland, France, Germany, Italy, Luxembourg, Sweden, Switzerland, The Netherlands, United Kingdom
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Custodian
J.P. Morgan Bank Luxembourg S.A.
Morningstar rating â„¢
Morningstar Analyst rating
Neutral

Tradability

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Minimum subscription
Initial subscription €1,000
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0427931596
Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.
Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

KCM Vision

Kempen Capital Management is an asset manager with a long-term investment approach. We strongly believe in engaged shareholdership that benefits all stakeholders. As a long-term responsible investor, we firmly believe that active ownership and shareholder engagement contribute to positive change across the board.

Our KCM wide approach to responsible investment

To put our vision into action we engage with our investment targets on a wide array of strategic, financial, environmental, social and governance (ESG) topics. Our long-term investment worldview paired with thorough analysis and an experienced and diverse ESG team allow us to use both voting and engagement as means to consistently encourage positive change. Through this process of constructive engagement, we are able to contribute to the development of principles and standards of corporate responsibility within companies that we invest in. Our full voting records are available here.

Our fund approach to Responsible Investment

Exclude

Screen on controversies using MSCI ESG research.

Excludes investment in entities involved in the production of controversial weapons, such as cluster munitions, anti-personnel mines, nuclear warheads, chemical and biological weapons.

Integrate

We will only invest in companies that have either a Provisional or Pass rating

We undertake our own fundamental ESG research on each company then an independent sustainability consultant applies the scores which drive the rating.

If a company receives a Fail rating then we will not invest

Engage

ESG engagement can enhance performance through increasing upside and mitigating downside risk.

We believe that all companies face material ESG issues and that it is important to address these before investment.

As long-term shareholders it is our fiduciary duty to consistently encourage positive change through engagement and exercising our proxy voting rights.

Kempen (Lux) European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”),domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets. The management company has entrusted, under its control and responsibility, Kempen Capital Management (UK) Ltd. with the execution of the investment policy of the Subfund. This investment firm is subject to regulation of the Financial Conduct Authority and registered under no. 166063.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.