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Sandhurst
                      Professional Series
                      Product Disclosure Statement

                  ...
Responsible Entity and issuer of             To help you make an informed investment
  Contact                            ...
Contents



                            Page

Significant features         3

The Funds: a snapshot        4

About this P...
Why choose the Sandhurst Professional Series?



              The Funds provide a simple cost effective
                 ...
Significant features



                              Sandhurst             Sandhurst             Sandhurst              S...
The Funds: a snapshot


           Important: This is a general description of the Funds. You should read the entire PDS t...
Benchmark
The Benchmark is not a guarantee of                                                        Target underlying ass...
About this PDS                                               About the Funds


           Accessing up-to-date investment ...
Who manages the Funds?                                    Investors Mutual Limited
                                       ...
How your money is managed


                                                                                              ...
Additional information on the investment style for            Use of derivatives across all Funds
the Sandhurst Profession...
Benefits and risks



          What are the benefits?                                      What are the risks?
          ...
Funds affected by the risk

                                                                                         Sandh...
Benefits and risks Continued



                                                                                          ...
Funds affected by the risk

                                                                                         Sandh...
Fees and other costs



           This section shows fees and other costs that you may be charged. These fees and other c...
Table of Fees and cost

 Type of fee or cost                                                           Amount             ...
Fees and other costs Continued



           Additional explanation of fees and other costs                3. Transaction ...
Each Fund’s Constitution also gives us the right to accept     Sandhurst may pay a fee or commission out of its own
lower ...
Fees and other costs Continued


           The Australian Securities and Investments Commission
           website, www.f...
How to invest


Initial investments                                           Cut-off time for receipt of applications
Inv...
Sandhurst Professional Series
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Sandhurst Professional Series
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Transcript of "Sandhurst Professional Series"

  1. 1. Sandhurst Professional Series Product Disclosure Statement Dated 30 November 2009 The Responsible Entity and Issuer of the Sandhurst Professional Series is Sandhurst Trustees Limited, ABN 16 004 030 737 AFSL 237906, a subsidiary of Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL 237879. Investment Managers
  2. 2. Responsible Entity and issuer of To help you make an informed investment Contact the Funds decision, you should consider obtaining information Sandhurst Trustees Limited professional advice from a licensed financial adviser before investing in any of (Sandhurst or Responsible Entity) For all queries please contact the Funds. ABN 16 004 030 737 AFSL 237906 our Customer Service Centre, All investments have inherent risk, from Monday to Friday Sandhurst is a wholly owned subsidiary including a reduction in the capital value of: Bendigo and Adelaide Bank Limited of the amount invested, a less than 8.30am – 5.00pm (the Bank) ABN 11 068 049 178 expected return on funds invested or a Victorian time. AFSL 237879. delay in payment. For this reason, neither Telephone: 1800 634 969 Sandhurst, the Bank, nor any company in Facsimile: 1800 835 800 Investment Managers the Bendigo and Adelaide Bank Group, Email: managedfunds@ The Investment Managers of the nor any Associated Company (nor any sandhursttrustees.com.au relevant Underlying Managed Funds into of their officers, employees or agents) which the Funds invest are: guarantees the repayment of capital www.sandhursttrustees.com.au/ invested, the payment of income or the professionalseries • Investors Mutual Limited (IML) investment performance of the Funds. ABN 14 078 030 752; and The Bank does not stand behind or Postal address • Global Value Investors Limited (GVI) guarantee the performance of Sandhurst. Sandhurst Professional Series ABN 76 111 397 392. Importantly, an investment in the Funds Level 5, 120 Harbour Esplanade is not a deposit, or other liability of, Docklands VIC 3008 Important Information the Bank, Sandhurst, any Associated It is important that you read this Product Company or any other company in the Disclosure Statement (PDS) carefully in Bendigo and Adelaide Bank Group. The Funds its entirety before deciding whether to Sandhurst is not an authorised deposit- invest and before lodging an application taking institution within the meaning of • Sandhurst Professional IML for Units in any of the Funds. We the Banking Act 1959 (Cth). Australian Share Fund suggest that you keep this PDS and any The offer to invest in the Funds is ARSN 119 357 809 supplementary information for future available to persons receiving a copy APIR STL0016AU reference. (electronic or otherwise) of the most • Sandhurst Professional IML This PDS is dated 30 November 2009. up-to-date PDS for the Funds within Industrial Share Fund Australia. If you receive this PDS ARSN 119 357 498 This PDS describes the features and electronically, you should ensure that you APIR STL0018AU benefits of the Sandhurst Professional have received the complete Application Series and, it will help you to: • Sandhurst Professional IML Form and PDS. If you are unsure whether Future Leaders Fund • decide whether these Funds will the electronic document is complete, you ARSN 119 357 756 meet your needs; and should contact Sandhurst. A printed copy APIR STL0017AU is available free of charge. • compare these Funds with other • Sandhurst Professional IML funds you may be considering. This PDS does not constitute an offer in Value & Income Fund any jurisdiction in which, or to any person The information contained in this PDS to whom, it would not be lawful to make ARSN 135 917 421 is general information only. It does such an offer including, but not limited to, APIR STL0019AU not constitute advice or contain a Investors in the United States of America. • Sandhurst Professional GVI recommendation to invest in any of the Applications from outside Australia will Global Industrial Fund Funds. The PDS has not been prepared not be accepted. ARSN 119 357 890 taking into account the particular APIR STL0015AU All references to dollar amounts and objectives, financial situation or needs application and withdrawal prices in this of any Investor. Before making an Referred to collectively as the PDS are in Australian currency. investment in any of the Funds, you “Sandhurst Professional Series”, the should consider the appropriateness Words and expressions that are “Funds” or individually as the “Fund”. of the investment having regard to your capitalised in this PDS are defined in the objectives, financial situation and needs. Glossary (refer to page 29). This PDS has been prepared by A copy of this PDS has not been Sandhurst alone. lodged with ASIC and ASIC takes no responsibility for the contents of this PDS.
  3. 3. Contents Page Significant features 3 The Funds: a snapshot 4 About this PDS 6 About the Funds 6 How your money is managed 8 Benefits and risks 10 Fees and other costs 14 How to invest 19 Taxation information 23 Other information 25 Glossary 29 Guide to completing your 31 Application Form Application Form A1 Sandhurst Trustees Limited 1
  4. 4. Why choose the Sandhurst Professional Series? The Funds provide a simple cost effective Page solution to help you save for your future. Sandhurst acts as Responsible Entity of the Funds Since 1888 Sandhurst has assisted Australian families with their financial needs. Adopting the motto “Mindful, Faithful and Lasting” Sandhurst embraces a prudent investment philosophy and 7 is committed to delivering high quality investment solutions. Sandhurst is part of the Bendigo and Adelaide Bank Group and shares its values of honesty, ethical behaviour and personal service. Direct Access – the alternative to a wrap account An investment of $25,000 can give you direct 6 & 15 access to IML and GVI at a competitive fee when compared to traditional retail funds and wrap accounts. Managed by leading professional Investment Managers Sandhurst has developed relationships with quality 7-8 Investment Managers including IML and GVI who are the Investment Managers of the Professional Series. Funds that suit you With the help of a financial adviser you should be 4-5 able to find a Fund that suits your financial goals. A “traditional value” investment style IML, and more recently GVI, have built their 7-8 reputation as specialist “value” Investment Managers. Flexibility You can usually add to your managed fund investments or make a withdrawal if you need to, 19 - 21 and all within a matter of days. Please refer to page 20 for more information on withdrawals. Administration and time management The Funds are administered by Sandhurst. When you invest, Sandhurst will handle all the paperwork 22 and administration and provide you with regular information and reporting on your investment. 2 Sandhurst Professional Series
  5. 5. Significant features Sandhurst Sandhurst Sandhurst Sandhurst Sandhurst Professional Professional Professional Professional Professional IML Australian IML Industrial IML Future IML Value & GVI Global Share Fund Share Fund Leaders Fund Income Fund Industrial Fund Australian shares Australian shares, Predominant Australian outside the top International Australian shares International investment class industrial shares 50 ASX listed industrial shares shares and cash shares Investment Manager IML IML IML IML1 GVI For the most up-to-date information, including the most recent Fund performance, actual asset allocations and the size of the Funds, you can: • visit our website at www.sandhursttrustees.com.au/professionalseries; Access to current information • telephone us on 1800 634 969 (Mon-Fri 8.30am to 5.00pm Victorian time); or • write to us (see inside cover for our contact details). A printed copy of Fund updates is available free of charge on request. 30 June, 30 June and 30 June and 30 June and 30 September, 30 June and Distributions2 31 December 31 December 31 December 31 December 31 December and 31 March Unit pricing Daily – refer to page 21 for more details. Minimum $25,000 – refer to page 19 for more details. initial investment Minimum $5,000 – refer to page 19 for more details. additional investment Minimum $5,000 – refer to page 20 for more details. withdrawal amount Indirect Cost 1.30% 1.30% 1.30% 1.35% 1.40% Ratio (ICR)3 Contribution Fee3 Nil Withdrawal Fee3 Nil 0.30% of the net Transaction Cost3 0.25% of the net value of the Fund per unit. value of the Fund per Unit. 1. IML manages the overall Fund and the Australian share and cash and cash equivalent portfolios. GVI manages the international share portfolio. Refer to the sections titled ‘Investment philosophy’ and ‘Investment style’ on page 8 for information on how IML and GVI will manage the assets of the Fund. 2. Please refer to page 21 for more details regarding distributions. 3. Please refer to pages 14 – 18 for more details on fees and costs. Sandhurst Trustees Limited 3
  6. 6. The Funds: a snapshot Important: This is a general description of the Funds. You should read the entire PDS to make an informed decision about whether to invest in the Funds. Investment objective Investment strategy The objective is not an indication or This is the means by which the Fund seeks to achieve its investment guarantee of the possible performance objectives and the grounds on which the Funds’ investment objectives are set. of the Fund in the future. Sandhurst Professional IML Australian Share Fund To achieve, over the long term, capital growth To primarily invest indirectly in a diversified portfolio of quality Australian and income and to deliver a return (after fees industrial and resource shares (including listed property trusts), where these and costs and before taxes) that is in excess assets are identified by the Investment Manager as being undervalued. of the benchmark listed over a rolling four year basis. Sandhurst Professional IML Industrial Share Fund To achieve, over the long term, capital growth To primarily invest indirectly in a diversified portfolio of quality Australian and income and to deliver a return (after fees industrial shares (including listed property trusts), where these assets are and costs and before taxes) that is in excess identified by the Investment Manager as being undervalued. of the benchmark listed over a rolling four year basis. Sandhurst Professional IML Future Leaders Fund To achieve, over the long term, capital growth To primarily invest indirectly in a diversified portfolio of quality Australian and some income and to deliver a return shares outside the top 50 shares listed on the ASX, where these assets are (after fees and costs and before taxes) that identified by the Investment Manager as being undervalued. is in excess of the benchmark listed over a rolling four year basis. Sandhurst Professional IML Value & Income Fund To achieve, over the long term, a regular To primarily invest indirectly in a defensive portfolio of investments that quarterly income stream and returns (after the Investment Manager believes is of high quality and offer good value. fees and costs and before taxes) that is in The Fund has a broad allocation of Australian and International shares, hybrids excess of the benchmark listed over a rolling securities, cash and cash equivalents (including investment grade interest two year period. bearing securities) and derivatives (except for gearing purposes). The asset classes have different performance and risk characteristics. The Investment Manager will seek a combination of investments from each asset class with the aim of meeting the objectives of the Fund. Sandhurst Professional GVI Global Industrial Fund To achieve, over the long term, capital growth To primarily invest indirectly in a diversified portfolio of quality international and some income and to deliver a return industrial shares, where these assets are identified by the Investment (after fees and expenses and before taxes) Manager as being undervalued. that is in excess of the benchmark listed over a rolling three year basis. 1. Including interests in Australian equity derivatives and hybrid securities such as preference shares. The Funds may invest indirectly a maximum of 5% of Fund assets in unlisted securities provided that the relevant securities are expected to list within 12 months of making the investment. 2. In exceptional market conditions the Funds may have higher levels of cash where in the Investment Manager’s opinion, more attractive investment opportunities cannot be found. Current asset allocations are updated on our website each quarter. 4 Sandhurst Professional Series
  7. 7. Benchmark The Benchmark is not a guarantee of Target underlying asset allocation the possible performance of the Funds Investments This provides an indication of the in the future. It represents the targeted intended holdings in the Fund and may return for the Funds on the basis set be higher or lower from time to time. out in the ‘Investment objective’. S&P/ASX 300 Accumulation Index Investors Mutual Australian Share Australian shares Fund (ARSN 093 182 695), for which (industrial and resource)1 IML is the responsible entity and Range 90 – 100% Investment Manager. Cash and cash equivalents2, 3 Range 0 – 10% S&P/ASX 300 Industrial Investors Mutual Industrial Share Australian shares (industrial)1 Accumulation Index Fund (ARSN 093 182 195), for which Range 80 – 100% IML is the responsible entity and Cash and cash equivalents2, 3 Investment Manager. Range 0 – 20% S&P/ASX 300 Accumulation Investors Mutual Future Leaders Australian shares (outside ASX Top Index (excluding S&P/ASX 50 Fund (ARSN 093 182 828), for which 50)1 and property trusts) IML is the responsible entity and Range 80 – 100% Investment Manager. Cash and cash equivalents2, 3 Range 0 – 20% UBS Warburg Australian Investors Mutual Value & Income Australian shares1 Bank Bill Index + 2% Fund (ARSN 107 095 438), for which Range 20 – 80% IML is the responsible entity and International shares (industrial)4 Investment Manager. Range 0 – 50% Cash and cash equivalents2, 3 Range 0 – 50% MSCI World Accumulation GVI Global Industrial Share Fund International shares (industrial)4 Index (AUD) Hedged (ARSN 112 369 552), for which Treasury Range 80 – 100% Group Investment Services Limited is Cash and cash equivalents3 the responsible entity and Range 0 – 20% GVI is the Investment Manager. 3. Cash equivalents include deposits with banks and other investment grade interest-bearing securities. 4. Including international equity derivatives and hybrid securities such as preference shares. Also includes American Depository Receipts and Global Depository Receipts of companies domiciled outside the US and Europe but that are listed on US and European exchanges. The Fund may invest indirectly a maximum of 5% of Fund assets in unlisted securities provided that the relevant securities are expected to list within 12 months of making the investment. 5. Cash may be held directly by the Funds for liquidity and market timing purposes. Sandhurst Trustees Limited 5
  8. 8. About this PDS About the Funds Accessing up-to-date investment information. General Fund information Some of the information contained in this PDS may The Sandhurst Professional Series combines change from time to time. Where those changes are specialist investment management with a competitive not materially adverse to Investors, we may not always management fee compared to traditional retail funds. update or replace this PDS to reflect the changes. The Funds are known as the “Sandhurst Professional To find out about any up-to-date information, including Series” because they are designed for Investors who quarterly reports providing details of the performance are able to make an initial contribution, and maintain of the Funds, asset allocation and the size of the Funds a minimum balance, of at least $25,000 in any one you can: Fund. The Funds provide the opportunity to invest in Underlying Managed Funds that are managed by • visit our website at Investor Managers IML and GVI. www.sandhursttrustees.com.au/professionalseries; You should note that the expression “professional • telephone us on 1800 634 969 investor” is given a specific meaning under the (Mon-Fri 8.30am to 5.00pm Victorian time); or Corporations Act. The term “professional series”, • write to us (see inside cover for our contact details). when used in this PDS to describe the Funds, is not intended to have the technical meaning given A paper copy of any updated information will be to the term under the Corporations Act. An Investor provided to you free of charge upon request. in the Funds will not necessarily be classified as Please note that past performance is not a reliable a “professional investor” for the purposes of the indicator of future performance. Corporations Act. Investment timeframe Investors should take account of the short term volatility of share markets and consider an investment horizon of five years for an investment in the Funds. Investors in the Funds should understand that the value of an investment in the Funds may change over time. Structure Sandhurst is the responsible entity of the Funds. As Responsible Entity we are the issuer of interests in the Funds. The Funds are registered managed investment schemes regulated under the Corporations Act. Sandhurst has chosen IML and GVI to manage the assets of the Funds. The Funds will invest directly into the relevant Underlying Managed Funds managed by either IML or GVI. The Funds may also invest directly in cash for liquidity and market timing purposes. 6 Sandhurst Professional Series
  9. 9. Who manages the Funds? Investors Mutual Limited IML is an Investment Manager specialising in Australian Sandhurst Trustees Limited equities. IML was established in 1998, and has grown Since 1888, Sandhurst has been assisting Australian since then with approximately $3.1 billion in funds families with their financial needs. Sandhurst under management as at 30 June 2009. IML is the specialises in providing trustee, custody and funds Investment Manager of the: management services. Today, Sandhurst has grown • Sandhurst Professional IML Australian Share Fund; its funds management business with approximately $2.4 billion in funds under management as at 30 June • Sandhurst Professional IML Industrial Share Fund; 2009. • Sandhurst Professional IML Future Leaders Fund; Sandhurst is responsible for the management and • Sandhurst Professional IML Value & Income Fund*. administration of the Funds and their investments. Sandhurst will monitor the performance and * IML is the overall Investment Manager of this Fund and also manages the Australian shares and cash and cash management of each Investment Manager. Sandhurst equivalent asset portfolios. IML has engaged GVI to manage employs a two tiered approach to monitoring the the international share portfolio of this Fund. activities of the Investment Managers: IML has a conservative investment style with a long 1. monitoring the investment performance and term focus, and aims to deliver consistent returns stability of the Funds by our experienced funds for clients. IML achieves this through the disciplined management team; and application of a fundamental and value-based approach 2. monitoring via a dedicated Sandhurst Board to investing. appointed investment committee. The IML investment team is a committed team whose Our monitoring procedures include, but are not limited remuneration structure aligns their interest with those to: of their clients. • regularly reviewing the investment performance Global Value Investors Limited of each Investment Manager and the Underlying Managed Funds; GVI is the Investment Manager of the Sandhurst Professional GVI Global Industrial Fund. GVI also • maintaining regular contact and ongoing liaison with manages the international share portfolio of the key personnel within each Investment Manager’s Sandhurst Professional IML Value & Income Fund. business; GVI manages approximately $556 million of funds • reviewing and assessing the use of derivatives by under management as at 30 June 2009. GVI is a each Investment Manager; specialist international equities Investment Manager • reviewing any market research reports on the established in 2004 by its key investment staff, Investment Managers; and Treasury Group Limited, and IML. Treasury Group Investment Services Limited is the responsible entity of • addressing any concerns we may have with key the GVI Global Industrial Share Fund. personnel of each Investment Manager. GVI manages clients’ money using a conservative, disciplined and value based approach to investing. The GVI investment team is a committed and specialist team which aims to deliver consistent returns for clients over the long term by investing in international industrial companies that exhibit recurring earnings and a strong, stable and competitive business. Sandhurst Trustees Limited 7
  10. 10. How your money is managed Investment Investment philosophy Investment style characteristics IML (Australian shares) IML’s investment philosophy is based on a belief that a IML has an active, ‘bottom up’ approach The effect of company’s share price will reflect its underlying value in the to identifying, researching and valuing IML’s investment long term. IML believes that markets are not fully efficient quality companies. IML’s approach is philosophy and style and there will be times that a company’s share price will not systematic and disciplined focusing on is that their funds reflect that company’s true underlying value. Such situations finding companies that meet its investment generally: provide the IML investment team with the opportunity to criteria and then determining an appropriate • are less volatile build long term portfolio positions in quality companies at valuation for those companies. (risky) than the attractive valuations. market in which IML believes that the underlying value of a The IML investment team is focused on both quality company is best determined by quantifying they trade and and value when researching and analysing companies. and valuing the sustainability, quality and therefore should IML looks to invest in companies with four main growth potential of a company’s future minimise the characteristics: earnings stream. The earnings stream from impact of a a company is important to IML because it falling market on • competitive advantage; enables both the payment of dividends to the value of your • recurring earnings; investment; and shareholders and the Reinvestment into the • capable management; and business for future growth. • seek to • the ability to grow over time. outperform the The investment team at IML conducts Additionally, from a valuation perspective it is important benchmark over detailed, in-house research and valuation that such companies trade at a price below what IML the longer term. on every investment being considered believes represents the long term underlying value for the relevant IML funds and on every of the company. investment held by those IML funds. GVI (International shares) GVI believes that markets are not fully efficient and GVI has an active, ‘bottom up’ approach The effect of therefore at times a company’s share price will not reflect to identifying, researching and valuing GVI’s investment that company’s true underlying value. GVI seeks to take quality companies. GVI’s approach is philosophy and style advantage of those times when the market price falls systematic and disciplined focusing is that their funds below what it believes to be the long term underlying and on finding companies that meet its generally: sustainable value of a company. investment criteria and then determining • are less volatile The GVI investment team are focused on both quality an appropriate valuation for those (risky) than the and value when researching and analysing companies. companies. market in which The quality attributes GVI looks for in potential investments are: GVI will construct its portfolios using they trade and individual stock selections which are not therefore should • strong competitive position; constrained by reference to any market minimise the • strong, stable business model; index. GVI expects that this portfolio impact of a • history of recurring earnings; will show a significant departure from falling market on • the ability to grow earnings over time; benchmark indices in regards to the the value of your weightings to sectors, countries and investment; and • capable management; and individual stocks. • primary listing in a developed market. • seek to GVI aims to remove the effect of From a value perspective, the investment team is focused outperform the foreign currency on international shares on determining the underlying value of a company. Once benchmark over it manages whenever it is possible a value for a company has been determined, GVI is then the longer term. and prudent to do so. Therefore the able to compare it to the market price for that company to international shares GVI manage will be determine whether to invest or wait for an opportunity to predominantly hedged back to Australian arise at a future date. This is a significant element of the dollars. Whilst GVI is aware of the impact overall research and analysis effort. of foreign currency on international The result of these factors is long term portfolio positions investments, its primary focus is to invest in quality, stable businesses that are purchased when their in high quality international industrial valuations are attractive. companies and shares. 8 Sandhurst Professional Series
  11. 11. Additional information on the investment style for Use of derivatives across all Funds the Sandhurst Professional IML Value & Income The Funds do not invest directly in derivatives. However, Fund the Underlying Managed Funds in which the Funds invest Individual investments from all allowable asset classes may invest in derivatives. In this regard, IML and GVI, will generally be selected on the basis of their ability to as the Investment Managers of the Underlying Managed fulfil all or part of the objectives of the Fund. Funds, may use options, futures and other derivatives to gain exposure to particular securities and markets As markets move through different cycles some asset or to enhance the returns of the underlying physical classes will be more attractive in their ability to deliver investments. GVI may also use options, futures and on the objectives of the Fund. The overall make up of other derivatives to manage foreign currency risk. the investments of the Underlying Managed Fund will The international share portfolios managed by GVI are therefore change from time to time to reflect this relative predominantly hedged back to Australian dollars to valuation. This is the approach IML adopts in order to remove the effect of exchange rate fluctuations. manage the asset allocation of the Underlying Managed Fund. IML and GVI do not use derivatives for the purpose of gearing the relevant Underlying Managed Funds. The overall investment portfolio will be regularly reviewed by IML in order to ensure that the Fund’s risk and return Statement on socially responsible investing objectives are being met by the current investments. Sandhurst does not take into account labour standards or environmental, social or ethical considerations for the purpose of selecting or retaining Investment Managers for the Funds. IML and GVI do not take into account labour standards or environmental, social or ethical considerations for the purpose of selecting, retaining or realising the investments of the Underlying Managed Funds. In making investment decisions, Sandhurst, IML and GVI take into account the expected return and performance of individual investments. In doing so neither of Sandhurst, IML nor GVI have a predetermined view on what it regards to be a labour standard or an environmental, social or ethical consideration and, how any such considerations are to be taken into account. Therefore, such factors are considered only where they are expected to have a material financial impact on an individual investment. Sandhurst Trustees Limited 9
  12. 12. Benefits and risks What are the benefits? What are the risks? An investment in the Funds has certain advantages It is important to understand that there are inherent including: risks in any investment. The purpose of this section is to inform you of the types of risks that may apply to • access to the investment expertise of a team of an investment in the Funds. This section is a summary professionals who have access to investment of what we consider to be the significant risks that techniques that may not be available to retail should be considered before deciding to invest in the Investors; Funds. However, this section does not purport to be a • a conservative investment style, that is expected to comprehensive summary of all the risks of investing in exhibit lower volatility (risk) compared to the Funds the Funds. benchmarks and the markets they operate in; Whilst we are not able to remove all of the risks • access to investment opportunities and markets that associated with an investment in any of the Funds, may not normally be accessible to retail Investors; Sandhurst and the Investment Managers employ a range of investment and risk management strategies to identify, • easy access to withdraw your investment on any evaluate and manage these risks. Business Day (refer to page 20 for details on withdrawing from the Funds); All investments are subject to varying risks. Different asset classes perform differently at different times and • fund managers can usually invest at a lower cost than have different risk characteristics and volatility. Generally, individual Investors; the higher the expected return of an investment, • from its investments, the Funds aim to generate for the higher the risk and the greater the variability of Investors: returns and the risk of loss of capital. When you consider • dividends; an investment in one or more of the Funds, you should take into account your personal risk tolerance. • franking credits; The significant risks for the Funds, and the way we aim • interest; and to manage them, are discussed below. The performance • capital gains (although capital losses may result of the Funds and the return of capital are not guaranteed depending on market performance). and the value of your investment may go up or down depending on the value of the Funds’ assets. 10 Sandhurst Common Funds
  13. 13. Funds affected by the risk Sandhurst Sandhurst What is the risk? The Sandhurst IML Professional IML Professional GVI Share Funds* Value & Income Global Industrial Fund Fund Individual investment risk Yes Yes Yes Individual investments made by the Funds will fluctuate in How we manage the risk value, meaning that they can, and do, fall in value for many reasons including changes in the business environment. The Investment Managers conduct analysis and research of all For example, a company’s share price may fluctuate as a investments in the Underlying Managed Funds. result of its financial or operating circumstances. The Investment Managers adopt a conservative, disciplined This is an inherent risk associated with all and value-based approach to investing, with the aim to managed funds. provide a portfolio with defensive characteristics (refer also to Investment Philosophy and Style on page 8) and reducing individual investment risk. Market, country and political risk The Funds may be either impacted directly or indirectly by Yes Yes Yes market, country and/or political risk. How we manage the risk Market risk relates to the performance of the market as a whole impacting on the Funds’ investment returns. The Investment Managers undertake research and analysis to Factors that may influence the market include economic, form a view on these matters as best they can, and then adjust technological, political, taxation and legal conditions and the investments of the relevant Underlying Managed Funds, even market sentiment. respectively, to reduce the impact where possible. The GVI Global Industrial Share Fund and the IML Value Each Fund invests in a diversified portfolio of investments & Income Fund are directly exposed to market risk that within its prescribed asset class (refer page 5 for asset impacts overseas markets as well as the Australian market. allocations) to help reduce the impact of market, political and/ The other Funds may hold securities in or with Australian or country risk. Additionally, the Investment Managers adopt a companies which, through their business activities, have an conservative and disciplined approach to investment with the exposure to overseas countries. Therefore the economic, aim to reduce the impact of these risks. technological, political, legal and market conditions in these overseas countries may impact on the operations of these companies, which may in turn, have an impact upon the value of the Funds’ assets. * The Sandhurst IML Share Funds refers to the Sandhurst Professional IML Australian Share Fund, Sandhurst Professional IML Industrial Share Fund and Sandhurst Professional IML Future Leaders Fund. Sandhurst Trustees Limited 11
  14. 14. Benefits and risks Continued Funds affected by the risk Sandhurst Sandhurst What is the risk? The Sandhurst IML Professional IML Professional GVI Share Funds* Value & Income Global Industrial Fund Fund Foreign currency risk This is the risk that currency movements can adversely affect No Yes Yes the value of international investments. How we manage the risk The GVI Global Industrial Share Fund and the IML Value GVI predominantly hedges its & Income Fund invest in other countries, and, if their international portfolios back to Australian currencies change in value relative to our dollar, the value of Not applicable dollars reducing the impact of currency the investment can change. risk. Fund risk Fund risk includes the risk that the Funds could be Yes Yes Yes terminated, the fees and costs could change, Sandhurst could be replaced as the Responsible Entity and any of How we manage the risk the Investment Managers could be replaced as Investment Sandhurst aims to keep Fund risk to a minimum by monitoring Manager, or any individual portfolio managers and other key how these risks may impact on the Funds and by acting in your personnel could change. best interest. While we have an obligation to act in the best There is also a risk that investing in the Funds may give interest of Investors the way we enforce those obligations may different results than investing directly in securities because not suit your individual circumstances or preferences. of income or capital gains accrued in the Funds, and the We reduce the risk that the Investment Managers may change consequences of investments and withdrawals by other by engaging Investment Managers that we believe will assist us Investors. in meeting the Funds’ investment objectives. In relation to the engagement of IML and GVI, please refer to our summary of the Strategic Alliance Agreements on page 26. Counterparty credit risk Counterparty credit risk represents the loss that would Yes Yes Yes be recognised if counterparties to the investments of the Underlying Managed Funds How we manage the risk (i.e. the other party to the contract) failed to perform as IML and GVI invest on recognised market exchanges contracted. (e.g. ASX, SFE) thus reducing this risk. * The Sandhurst IML Share Funds refers to the Sandhurst Professional IML Australian Share Fund, Sandhurst Professional IML Industrial Share Fund and Sandhurst Professional IML Future Leaders Fund. 12 Sandhurst Professional Series
  15. 15. Funds affected by the risk Sandhurst Sandhurst What is the risk? The Sandhurst IML Professional IML Professional GVI Share Funds* Value & Income Global Industrial Fund Fund Derivatives risk The Funds do not directly invest in derivatives. However, the Yes Yes Yes Underlying Managed Funds in which the Funds invest may invest in derivatives (see ‘Use of derivatives’ on page 9). How we manage the risk Derivatives risks include: Although not all of these risks can be eliminated, IML and GVI manage these risks as far as practicable by: • the value of derivative positions not moving in line with the movement in the underlying asset; • regular monitoring of the Underlying Managed Funds derivative exposure; • potential illiquidity of the derivative; and • monitoring that the relevant Underlying Managed Funds can • the Underlying Managed Funds being unable to meet pay all of the obligations associated with derivatives from payment obligations in relation to derivatives contracts, the appropriate amount of cash or physical assets held by and hence impacting on the value of the net assets of the relevant Underlying Managed Fund; the Funds. • not borrowing against an Underlying Managed Fund’s assets for the purposes of leveraging the portfolio; • only investing in exchange-traded options; • only investing in derivatives that IML and GVI consider to have adequate market depth; and • using intermediaries that IML and GVI consider reputable. Liquidity risk Liquidity risk is the risk that investments can not be readily Yes Yes Yes sold to fund Investor withdrawals. How we manage the risk The Underlying Managed Funds will invest in shares listed (or expected to be listed) on a recognised stock exchange (e.g. the ASX). If there is an interruption in the regular trading of the market or a security there may be delays in processing withdrawal requests. Similarly, for some shares in the Underlying Managed Funds where the volume of trading is low, the ability to liquidate those securities in a timely manner may be impacted, in turn potentially delaying a withdrawal request from the Funds. The underlying investments are listed on recognised stock exchanges providing a mechanism to buy and sell thus contributing to the liquidity of the investment in normal market conditions. In addition, IML and GVI closely monitor cash levels in the relevant Underlying Managed Funds to manage this risk and seek to maintain adequate liquidity to meet the needs of Investors in ordinary circumstances. * The Sandhurst IML Share Funds refers to the Sandhurst Professional IML Australian Share Fund, Sandhurst Professional IML Industrial Share Fund and Sandhurst Professional IML Future Leaders Fund. Sandhurst Trustees Limited 13
  16. 16. Fees and other costs This section shows fees and other costs that you may be charged. These fees and other costs may be deducted from your money, from the returns on your investment or from the Fund assets as a whole. Information on taxation is set out on page 23. You should read all of the information about fees and costs because it is important to understand their impact on your investment. CONSUMER ADVISORY WARNING DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website www.fido.asic.gov.au has a superannuation fee calculator to help you check out different fee options. 14 Sandhurst Professional Series
  17. 17. Table of Fees and cost Type of fee or cost Amount How and when paid Fees when your money moves in or out of the Fund: Establishment fee Nil Not applicable The fee to open your investment. Contribution fee Nil Not applicable The fee on each amount contributed to your investment. Withdrawal fee Nil Not applicable The fee on each amount you take out of your investment. Termination fee Nil Not applicable The fee to close your investment. Management costs:1 The fees and costs for managing your investment.1 This fee is calculated on the Net Asset Value of each Fund. Please refer to item 1 in the “Additional explanation of fees and costs” section on page 16 for an explanation of Management Costs. This fee is accrued daily and reflected in the Unit Price of each Fund. The fee • Sandhurst Professional IML Australian Share Fund 1.30% pa is paid monthly in arrears to Sandhurst • Sandhurst Professional IML Industrial Share Fund 1.30% pa from the assets of the Funds. • Sandhurst Professional IML Future Leaders Fund 1.30% pa The Management Costs include the fees and costs payable to the Investment • Sandhurst Professional IML Value & Income Fund 1.35% pa Managers in respect of the Underlying • Sandhurst Professional GVI Global Industrial Fund 1.40% pa Managed Funds. Service fees: Investment switching fee Nil Not applicable The fee for changing investment options.2 Adviser service fee This payment is deducted from your This is the fee charged, in agreement with your financial adviser for initial and/or additional investments Up to advice sought about your investment. We do not charge this fee if into the Funds and paid by Sandhurst $10,000 you have not invested via a financial adviser. 3 to your financial adviser. The payment is inclusive of GST. 1. The Fund does not pay any adviser commissions from Management Costs. Please refer to item 5 in the “Additional explanation of fees and costs” section on page 17. 2. Transaction costs may apply. Please refer to item 3 in the “Additional explanation of fees and costs” section on page 16 for an explanation of transaction costs. 3. Please refer to item 6 in the “Additional explanation of fees and costs” section on page 17 for an explanation of adviser service fees. Example of annual fees and costs The table below gives an example of how the fees and costs of investing in the Funds can affect your investment over a one year period. You should use this table to compare the Fund with other managed investment products. The Fund used in this example is the Sandhurst Professional IML Australian Share Fund. Example – the Sandhurst Professional IML Balance of $50,000 with a contribution of $5,000* during the year. Australian Share Fund Contribution Fees Nil For every additional $5,000 you put in, you will be charged $0. PLUS AND, for every $50,000 you have in the Fund, you will be charged 1.30% pa $650 each year. Management Costs EQUALS If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be Cost of Fund charged fees of $650. What it costs you will depend on the Fund you choose and the fees you negotiate with your fund or financial adviser. * The minimum additional investment for this Fund is $5,000. This example assumes that the additional investment of $5,000 is contributed at the end of the year. Sandhurst Trustees Limited 15
  18. 18. Fees and other costs Continued Additional explanation of fees and other costs 3. Transaction costs (buy/sell spread) Application and withdrawal prices of the Funds reflect an 1. Management Costs adjustment known as the buy/sell spread. The buy/sell Management Costs are the total fees and costs incurred spread is incorporated in the Unit pricing to cover the in managing the Funds and your investment. They include cost of buying investments (in the case of an application) costs such as investment management fees, responsible and the cost of selling investments (in the case of a entity fees, administration expenses and other expense withdrawal). The buy/sell spread is an additional cost recoveries. Management Costs are deducted from the payable by Investors. The buy/sell spread does not Fund assets as a whole. represent a fee or income to Sandhurst or the Investment Managers. The Management Costs set out in the “Fees and Costs Table” on page 15 includes the fee paid to Sandhurst as The purpose of charging the buy/sell spread is to fairly Responsible Entity and fees and costs of the Underlying allocate the costs associated with buying and selling Managed Funds in which the Funds invest (i.e. the fee securities as a result of Investors acquiring or withdrawing paid to IML and GVI). The Constitutions of the Funds also Units in the Funds. allow Sandhurst to recover all proper expenses incurred in The buy/sell spread reflects the underlying buy/sell administering the Funds. However, until otherwise notified, spreads charged by the Underlying Managed Funds we will pay all expenses from our fee without further in which the Funds invest. The buy/sell spread as at charge to the Funds. This means we have effectively 31 December 2008 for each of the Funds is +0.25% capped the Management Costs until further notice. on applications and –0.25% on withdrawals, with the exception of the Sandhurst Professional GVI Global 2. Indirect Cost Ratio (ICR) Industrial Fund which is +0.30% on applications and The ICR is a useful measure of the ongoing fees and -0.30% on withdrawals. costs you can expect to pay if you invest in the Funds. For instance, if on a particular date the valuation of the It is the total of Management Costs (that is, ongoing Sandhurst Professional IML Australian Share Fund Units, fees and costs) of each Fund during a financial year determined as described in the section ‘Application and represented as a percentage of the average Net Asset withdrawal Unit prices’ on page 21, is $1.00 then the Value of the relevant Fund. application and withdrawal prices calculated for that day’s Sandhurst has agreed to maintain the ICR at the following transactions will be $1.0025 and $0.9975 respectively percentages until Investors are otherwise notified as set or $125 when you invest or withdraw from a fund Units out in item 8 on page 17. worth $50,000. Sandhurst Professional 1.30% pa The buy/sell spread is Sandhurst’s reasonable estimate IML Australian Share Fund ($650 pa for every $50,000) of the total cost of buying/selling the assets of the Funds expressed as a percentage of the Net Asset Value per Sandhurst Professional 1.30% pa Unit. The buy/sell spread may be altered by Sandhurst at IML Industrial Share Fund ($650 pa for every $50,000) any time without prior notice. Up-to-date buy/sell spreads Sandhurst Professional 1.30% pa are displayed on our website. IML Future Leaders Fund ($650 pa for every $50,000) 4. Maximum fees and waiver Sandhurst Professional 1.35% pa IML Value & Income Fund ($675 pa for every $50,000) Under the Constitution of each Fund, we are permitted to charge the following maximum fees (plus GST if applicable): Sandhurst Professional 1.40% pa GVI Global Industrial Fund ($700 pa for every $50,000) • Contribution fee: Up to 5% of the Application Money. • Withdrawal fee: Up to 5% of the Aggregate Redemption The ICR for the Funds includes the ICR of the Underlying Price for the Units withdrawn. Managed Funds in which the Funds invest. The ICR does • Switching fee: Up to 5% of the Aggregate Redemption not include Fund transaction costs (e.g. the buy/sell Price for the Units withdrawn. spread). • Management fee: Up to 5% per annum of the Gross Asset Value of the Fund. 16 Sandhurst Professional Series
  19. 19. Each Fund’s Constitution also gives us the right to accept Sandhurst may pay a fee or commission out of its own lower fees than we are entitled to receive under the resources to a Bendigo Community Bank® for introducing Constitution, to defer payment, or to waive our entitlement their customers to the Funds. The fee or commission forms to such fees. part of a profit sharing arrangement between the parties We do not currently charge a contribution fee, withdrawal from time to time. Refer also to item 10 “Related party fee or switching fee and do not currently intend to fees”. introduce such fees. 6. Adviser service fee The Funds’ Constitutions allow Sandhurst to recover all proper expenses from the Funds. These are commonly You can authorise us to pay an Adviser service fee to your referred to as expense recoveries and include, but are financial adviser on your behalf from your initial and/or not limited to, audit, taxation, legal, establishment, additional investments in the Funds. Any Adviser service administration, stationery, postage and compliance costs. fee you authorise us to pay is additional and separate to However, until otherwise notified, we have agreed to pay the fees we charge you in respect of your investments in for these costs from our management fee without further the Funds. You can direct us to pay this fee by completing charges to the Funds or Investors. Step 7 of the application form. The fee must be a flat dollar amount that is no greater than $10,000 for each As noted on page 5, the Sandhurst Professional IML contribution. Future Leaders Fund invests directly in the Investors Mutual Future Leaders Fund (ARSN 093 182 828), of The agreed amount will be deducted from your contribution which IML is the responsible entity and Investment monies at the time of application and paid to your adviser. Manager. IML is entitled to charge a performance fee in The net amount (i.e. total contribution less Adviser service relation to the Investors Mutual Future Leaders Fund. fee) will be invested in your account. The fee you agree However, for so long as the Strategic Alliance Agreement with your adviser is inclusive of GST. is in place (see page 26), IML has agreed that no The default value for each Adviser service fee is $nil. performance fee will be on-charged to the Sandhurst Each time you and your adviser agree to a fee you need to Professional IML Future Leaders Fund. notify us in writing by completing Step 7 of the application Please refer to item 8 “Can the fees change?” for form. information on the circumstances in which fees charged by us may change. 7. Application of goods & services tax (GST) Fees and costs are subject to GST, usually 10% of the 5. Adviser remuneration amount shown. The Funds may be entitled to Reduced There is no upfront or trail adviser commission built Input Tax Credits (RITC) of 75% of any GST paid. into the Management Costs payable under the Funds. This will effectively reduce the GST of 10% to 2.5%, where As such, we do not directly pay advisers a commission applicable. The fees and costs shown in the preceding fee from the Management Costs earned by Sandhurst. If you tables are shown as inclusive of GST, less the maximum do have an adviser, he/she may charge you an adviser fee applicable reduced input tax credits. that you agree to pay directly or via Sandhurst for services For the purposes of this PDS, it has been assumed that your adviser provides to you (Please refer item 6 “Adviser Sandhurst will be entitled to the maximum amount of service fee” for more information if you choose for an RITCs applicable when stating fee amounts. However, Adviser service fee to be paid via Sandhurst). you should be aware that, if the GST rate increases, or The amount of fees you will pay (if any) to your adviser if the full amount of RITC’s is not applicable, the Funds’ should be set out in a statement of advice given to you by Constitutions allow us to recoup the extra amount from the your financial adviser. We recommend that you check with Funds. Please see item 8 regarding changes to fees. your adviser if you will be charged a fee for the provision of their advice. You may be able to negotiate the amount 8. Can the fees change? of the adviser service fee charged with your adviser. The fees and costs may change subject to the maximum Sandhurst may provide remuneration to your adviser limits specified in the Funds’ Constitutions. Reasons might indirectly by paying them amounts such as market include changing economic conditions and changes in support payments or contributions towards conferences. regulation. Fees and costs may only be increased by giving These are often referred to as soft dollars benefits. Investors at least 30 days prior notice. Sandhurst Trustees Limited 17
  20. 20. Fees and other costs Continued The Australian Securities and Investments Commission website, www.fido.asic.gov.au offers a fee calculator to help Investors understand the impact of charges over time. The impact of small increases or decreases can be significant. The fee calculator may also help Investors compare the charges of the Funds to other investment products. 9. Differential fee arrangements Sandhurst may offer rebates of Management Costs to wholesale Investors on an individually negotiated basis in accordance with the relevant law. We do not negotiate fees with retail Investors. 10. Related party fees The Bendigo and Adelaide Bank Group provides certain advisory and administrative services to Sandhurst (e.g. distribution, legal, IT and marketing). Any fees paid to a member of the Bendigo and Adelaide Bank Group for these services are paid by Sandhurst from its own resources and not out of the Funds. We may pay out of our own resources a commission of up to 0.25% (inclusive of GST) to a Bendigo Community Bank® for introducing their customers to the Funds. Related party fees are paid on a commercial, arm’s length basis. 11. Taxes Information regarding some taxes relevant to your investment in the Funds is set out in the ‘Taxation Information’ section of this PDS on page 23. 18 Sandhurst Professional Series
  21. 21. How to invest Initial investments Cut-off time for receipt of applications Investing in the Sandhurst Professional Series is a simple If a completed Application Form (for initial or additional two step procedure: investments) is received and accepted by Sandhurst before 12 noon Victorian time on a Business Day, 1. Complete the Application Form located at the back of the application will be processed at the application price this PDS in accordance with the instructions on pages based on the Net Asset Value of the Fund calculated 31 to 33 and provide the necessary identification as at the close of business on that day. Otherwise the documents. application will be processed at the application price If you are investing through a financial planner they based on the Net Asset Value of the Fund as at the will identify you on our behalf. close of business on the following Business Day. The Net Asset Values of the Funds are calculated on a daily 2. Attach your cheque or Direct Debit Request basis (details of how application and withdrawal prices (page A11) to the Application Form and mail to: are calculated are set out in the section “Application Sandhurst Professional Series and withdrawal Unit Prices” on page 21). Please note Sandhurst Trustees Limited, applications made using the Direct Debit Request 5/120 Harbour Esplanade facility will be processed on the Business Day the Docklands Victoria 3008. monies are received by us or the next Business Day Please make your cheque payable to ‘Sandhurst where received after 12 noon Victorian time. Professional Series – Name of Applicant’ and cross ‘Not Negotiable’. Is there a cooling-off period? Subject to applicable law, retail Investors have access The minimum initial investment is $25,000 for each Fund. to a cooling-off period relating to their investment except We reserve the right to accept lesser amounts for the for investments made under distribution reinvestment initial investment at our absolute discretion. plans or as additional investments. There may be other circumstances in which a retail Investor is not entitled In circumstances where your application cannot be to exercise cooling-off rights; for instance, if the Fund is processed, we will contact you. For this reason please not liquid at the time an investment is made or where include your telephone number on the Application Form. investments are made by ‘wholesale clients’ or if the During this period your application monies will be held in Investor had exercised any of their rights as an Investor a trust account in accordance with the Corporations Act. in the Fund prior to providing notification of cancellation Any interest earned on the trust account will form part of (as defined in the Corporations Act). For retail Investors the Fund assets as a whole. only, your cooling-off rights are described below. Additional investments Immediately following the earlier of the date on which you Please follow the steps under “Initial investments” above. receive confirmation of your investment or the 5th day However, you will not be required to provide identification after the day on which your investment was issued to you, documents for additional investments. there is a 14 day period during which you may cancel your investment (subject to applicable law). The minimum additional investment in each Fund is $5,000. We reserve the right to accept a lesser amount Should you choose to cancel your investment during this for additional investments at our absolute discretion. period, the amount returned to you will be adjusted to take account of any movements in investment values If you plan to make additional investments in the Funds since the day on which you acquired the investment. you should obtain a copy of the most up-to-date PDS and The cancellation of your investment will be processed at any information that updates the PDS. Each additional the price that you would have paid for your investment investment will be made on the terms of the most on the date your request is received, subject to the up-to-date PDS. cut-off times specified in the above section. Sandhurst Copies of the most up-to-date PDS are available may deduct from the amount returned to you any free of charge from Sandhurst via our website reasonable administrative and transaction costs because www.sandhursttrustees.com.au/PDS or by contacting our of the issue, and cancellation, of your investment. Customer Service Centre on 1800 634 969. If a distribution has occurred between acceptance of your application and receipt of your cooling-off period notification, there may be taxation implications for you. We suggest that you seek professional advice in these circumstances. Sandhurst Trustees Limited 19

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