Fixed Income Strategy 2 (Open Daily) 

The Fixed Income Strategy 2 (“FIS2” or “the Fund”) objective is to invest substantially all of the Fund’s assets through a multi-manager fixed income strategy, aimed at providing a return equivalent to the 3-Month Australian Financial Markets Association (AFMA) Bank Bill Swap rate + 2.50% per annum.

Upon inception, the Fund will be invested in TCW’s MetWest Unconstrained Bond Fund (85% of FIS2) and Nephilia Capital’s Rubik Holdings Limited (15% of FIS2).

TCW’s MetWest Unconstrained Bond Fund is an absolute return strategy. TCW is a US based fixed income asset manager that was founded in 1971 by Robert A. Day in Los Angeles, California. TCW’s investment strategy utilises a “top down” and “bottom up” approach. Macroeconomic factors are considered in their top down approach and focuses on identifying the business and credit cycle. From a bottom up perspective, TCW uses a value based approach in assessing the relative attractiveness of securities.

Nephila Capitak (Nephilia) is a manger of Insurance Linked Securities (ILS) with an underlying exposure to catastrophe risk. Nephila is a dedicated manager for ILS. Nephila launched their first ILS fund in April 1998 and manages ILS assets across a range of multi-investor products and tailored managed accounts. ILS is an asset class that has fundamentally different characteristics to equities and property. ILS pays regular coupons and provides income returns similar to floating-rate notes. Nephilia Capital’s Rubik Holding Limited, however does not pay out dividends, all coupons generated out of the ILS are generally reinvested.

Units will be issued at a price equal to the net asset value (“NAV”) of the Fund adjusted for any transaction costs (also described as Buy Spread), divided by the number of Units on issue at the relevant time. At the date of this PDS, the Buy Spread is 0.10% (or 10 basis points).

The price of Units will vary as the value of the assets in the Fund rises or falls. Units issued on the First Allotment Date will be issued at a price of $1.00

The minimum initial investment is $5,000 and thereafter in $1,000 increments.

The minimum suggested time frame for investment in the Fund is 3 – 5 years.

What are the benefits of investing in the Fund?

  • The Fund is structured as a multi-manager fund, designed to provide exposure to a diverse range of specialist investment managers across the fixed income asset class, all in the single fund.

  • The Fund’s investments will be managed via an unconstrained approach, providing flexibility for the underlying fund managers to invest wherever the highest risk adjusted opportunities can be found irrespective of location, sectors or fixed income categories, while maintaining the Fund’s investment risks according to predetermined limits.

  • The flexible, unconstrained approach of the Fund provides a good diversifier to your fixed income portfolio that can be complementary to other asset classes.

  • A retail investor will be able to gain an indirect exposure to the underlying funds of the Fund for a minimum investment of $5,000 in the Fund. (The underlying funds in which the Fund will be investing are currently available to Australian retail investors).

  • The Fund is well suited to investors looking for potentially higher levels of returns compared to cash with moderate volatility (fluctuation in the value of the investment), with an investment timeframe of 3-5 years.


Important Information

This information is of a general nature only and has been prepared without taking into account your objectives, financial situation and needs. Before acting on this information you should consider its appropriateness having read to your circumstances. You should obtain and consider the latest product disclosure statement before making a decision to invest in the fund.