RUBICON GLOBAL FUND

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RUBICON GLOBAL FUND

  1. 1. RUBICON GLOBAL FUND Dated 29 April 2005 This Product Disclosure Statement is issued by Rubicon Asset Management Limited (ACN 095 433 720) as Responsible Entity for the Rubicon Global Fund (ARSN 113 197 809)
  2. 2. IMPORTANT INFORMATION We recommend that you read the entire Product Disclosure Jurisdiction. This PDS does not constitute, and may not Statement (PDS) thoroughly and consult your financial adviser be used for the purpose of, an offer or solicitation in any before investing. This PDS dated 29 April 2005 has been jurisdiction other than the Commonwealth of Australia or prepared by Rubicon Asset Management Limited ACN 095 433 in circumstances in which such offer or solicitation is not 720 (the Responsible Entity, Manager or Rubicon) to provide authorised other than as set out in the separate international background information for investors considering applying for disclosure statement. No recipient of this PDS in any units in the Rubicon Global Fund (ARSN 113 197 809). jurisdiction other than the Commonwealth of Australia may Investments in the Fund are not deposits with or other treat it as constituting an invitation to them to apply for units liabilities of Rubicon Asset Management Limited, Perennial in the Fund nor should any recipients in any event use the Investment Partners Limited or related bodies corporate, application form attached to this PDS unless, in the relevant affiliates, associates or officers of any of the above entities jurisdiction, such an invitation could lawfully be made to that and are subject to investment risk, including possible recipient or the application form could lawfully be used in delays in repayment and loss of income and capital compliance with applicable law. invested. None of Rubicon Asset Management Limited, Auditor. The appointed Auditor, PricewaterhouseCoopers, Perennial Investment Partners Limited or related bodies does not make any representations or warranties as to the corporate, affiliates, associates or officers of any of the completeness or appropriateness of any information contained above entities guarantees any particular rate of return or in this PDS. the performance of the Fund, nor do they guarantee the Authorised use. Rubicon authorises the use of this PDS for repayment of capital from the Fund. investors who wish to access the Fund through an Investor Independent advice required. Prospective investors are not to Directed Portfolio Service (IDPS or IDPS like scheme construe the contents of this PDS as tax, legal or investment commonly referred to as a master trust or wrap account) or a advice, nor a recommendation to invest in the Rubicon Global nominee or custody service (collectively referred to as master Fund (the Fund). An investment in the Fund may not be trusts or wrap accounts in this PDS). appropriate for all persons or entities, and it is not possible Consents. Perennial Investment Partners Limited, UBS for the Manager, its directors, officers, employees, advisers or AG, Australia Branch, UBS Nominees Pty Limited, HSBC representatives to have regard to the investment objectives, Institutional Trust Services (Asia) Limited and any other service financial situation and particular needs of each person who provider named in this PDS required to give their consent have reads or uses the information in this PDS. Prior to subscribing given and not withdrawn their consent to be referenced in this for an interest in the Fund, investors should seek appropriate PDS. They are acting in the capacities described in this PDS professional advice and should conduct independent only. They are not issuing, selling, guaranteeing, underwriting investigation and analysis regarding any information contained or performing any other function in relation to the Fund. in this PDS. Prospective investors should rely on their own inquiries, in particular in obtaining their own legal, investment Further information. If you have any further questions relating and tax advice in determining whether to invest in the Fund. to the issue of units in the Fund please contact our Client Service Centre by phone on 1800 302 191 or email at enquiries@rubiconasset.com.au.
  3. 3. IMPORTANT INFORMATION A DIVERSIFIED PORTFOLIO OF GLOBAL STOCKS WITH HIGH DIVIDEND YIELD 1 Section 1 / Summary of offer 3 Section 2 / Investment strategy and process 7 Section 3 / Management and administration 10 Section 4 / Investment risks 13 Section 5 / Important investor information 20 Section 6 / Additional investor information 27 Section 7 / Taxation implications 30 Section 8 / Glossary 33 Application form Rubicon Asset Management Limited (ACN 095 433 720) as Responsible Entity for the Rubicon Global Fund C / RUBICON GLOBAL FUND
  4. 4. FUND FEATURES AT A GLANCE Set out below is a summary of some of the key features of the Rubicon Global Fund (the Fund), including references to other sections of this PDS where further information can be found. SECTION INVESTMENT STRATEGY Through a process of active stock selection, the Rubicon Global 2.1 Fund (the Fund) seeks to identify and invest in global stocks that have high dividend yields and sound financial positions. The ob- jective of the Fund is to generate attractive income for investors while reducing the volatility associated with investing in global equities and the consequential risk of capital loss over any 12 month timeframe. The Manager seeks to achieve this objective primarily by investing in global stocks with a high dividend yield and lower than average correlation with global equity markets, combined with active hedging of foreign currency risk. MINIMUM INVESTMENT $20,000 inclusive of any Entry Fee payable. 5.1.1 STRUCTURE Australian resident open-ended unit trust. 6.1 APPLICATIONS Monthly. 5.1 DISTRIBUTIONS Distributions will be paid annually for the period ending 30 June 5.6 each year and will be reinvested into or applied to the issue of additional units or credited to an Australian resident bank ac- count. WITHDRAWALS Monthly, except in special circumstances where daily withdrawals 5.4 available. UNIT PRICES Available at www.rubiconasset.com.au. 5.5 MANAGEMENT FEE(1) 1.05% per annum (including GST). 5.2.2 MER(1) 1.50% per annum (including GST). 5.2.1 PERFORMANCE FEE Performance Fee per unit of 20% (plus GST) of the increase in 5.2.1 the Unit Price above the Prior High Water Mark indexed to a 6% per annum benchmark rate. ADVISER SERVICE FEE(1) An optional ongoing service fee of 0.5% per annum and/or an 5.2.1 agreed upfront percentage of the amount invested to a maximum of 3.0%. MANAGER Rubicon Asset Management Limited (ACN 095 433 720). 1.1 INVESTMENT ADVISER Perennial Investment Partners Limited (ABN 59 087 901 620). 2.3 PRIME BROKER UBS AG, Australia Branch. 3.3 ADMINISTRATOR AND CASH HSBC Institutional Trust Services (Asia) Limited. 3.4 CUSTODIAN AUDITOR PricewaterhouseCoopers. 3.5 (1) THESE FIGURES ARE INCLUDING GST AFTER TAKING INTO ACCOUNT THE EFFECT OF REDUCED INPUT TAX CREDITS. 4 / RUBICON GLOBAL FUND
  5. 5. SECTION 1 SUMMARY OF OFFER SECTION 1 SUMMARY OF OFFER 1 / RUBICON GLOBAL FUND
  6. 6. 1 / SUMMARY OF OFFER benchmark index rather than in absolute terms. 1.1 / ABOUT THE RUBICON GLOBAL FUND As at the date of this PDS, the Manager had total assets under management of approximately $440 The Rubicon Global Fund (the Fund) seeks to million. provide investors with attractive income while reducing the volatility of investing in global equities 1.3 / INVESTMENT HIGHLIGHTS and the consequential risk of capital loss over any The Manager believes the Fund provides investors 12 month timeframe. The Manager seeks to achieve with a number of benefits: this objective primarily by investing in global stocks with a high dividend yield and lower than average Potential for attractive income. The Fund seeks correlation with global equity markets, combined to provide investors with attractive income by with active hedging of foreign currency risk. The investing in global stocks with high dividend yields achievement of this investment objective is subject and sound financial positions. to the risk factors set out in Section 4 of this PDS. Potential for superior risk-adjusted returns. The The Fund is managed by Rubicon Asset Fund aims to provide investors with superior risk- Management Limited (the Manager). The Manager adjusted returns to traditional global equity funds. has entered into a 10 year agreement appointing The achievement of this investment objective is Perennial Investment Partners Limited as investment subject to the risk factors set out in Section 4 of this adviser to the Fund (the Investment Adviser), as PDS. described in Section 2.3 of this PDS. Lower correlation with global stock markets. By The Fund commenced trading on 8 January 2004. selecting global stocks with a lower than average Monthly unit prices for the Fund since inception are correlation with global market indices, the Fund available from the Manager upon request and at aims to achieve lower correlation with global stock www.rubiconasset.com.au. markets than traditional global equities funds. The performance of the Fund to 31 March 2005 is Protection against foreign currency risk. The set out in the table below: Manager will seek to protect the value of the Fund by actively hedging their foreign currency exposure RETURN TO 31 MARCH 2005 (%) into Australian dollars. VOLATILITY CORRELATION WITH INDEX Diversified portfolio. The Manager intends to hold 1 MONTH 3 MONTHS 6 MONTHS 1 YEAR SINCE INCEPTION (PER ANNUM) approximately 80-100 global stocks in the portfolio of the Fund, providing considerable diversification. 1.4 / SUITABLE INVESTORS An investment in the Fund may suit investors who: FUND -0.5% 6.1% 14.2% 17.2% 22.0% 8.4% 0.44 > seek an independent style of investment INDEX (1) -1.2% -0.6% 8.8% 9.2% 8.4% 6.3% 1.00 management; > seek income from a diversified portfolio of global (1) THE MSCI ALL COUNTRY WORLD FREE DAILY TOTAL RETURN NET AUD INDEX stocks; Past performance is no guarantee of future > understand and accept that equity investment performance. intrinsically involves certain risks but seek to 1.2 / ABOUT THE MANAGER minimise exposure to unnecessary risks (for example, foreign currency risk); The Manager is an independent Australian fund manager founded in 2001 to provide investors > wish to diversify their portfolios with an investment in with access to specialised investment strategies global equities that seeks to have a lower correlation including absolute return strategies. Such strategies with global equity markets than traditional global rely primarily on the skill of the manager to exploit equities funds; and market inefficiencies, seek to protect against capital > emphasise the preservation of investment capital loss by hedging out unwanted risk and, as a result, across varied market conditions. seek to generate returns that have a high degree of independence from the direction of traditional 1.5 / HOW TO APPLY investment markets. Absolute return strategies may All applications must be made through the be contrasted with relative return strategies, where application form at the back of this PDS. investment performance is measured relative to a 2 / RUBICON GLOBAL FUND
  7. 7. SECTION 2 INVESTMENT STRATEGY AND PROCESS SECTION 2 INVESTMENT STRATEGY AND PROCESS 3 / RUBICON GLOBAL FUND
  8. 8. 2 / INVESTMENT STRATEGY AND PROCESS 2.2 / INVESTMENT PROCESS 2.1 / INVESTMENT STRATEGY The key elements of the investment process are described further below: At the heart of the investment strategy is a fundamental stock selection methodology under Stock selection. The Investment Adviser provides which the Investment Adviser seeks to identify global generalised advice in relation to individual stock stocks that have high dividend yields and sound selection. The Manager considers the advice of financial positions. These stocks tend to have a the Investment Adviser, exercises its discretion lower than market average correlation with their in deciding whether to act on the advice of the respective market indices. Investment Adviser and is solely responsible for any investment made by the Fund. The Investment The objective of the Fund is to generate attractive Adviser uses an analytical process which seeks to income for investors while reducing the volatility identify high dividend yield stocks that have solid associated with investing in global equities and financial positions. By constructing a portfolio of the consequential risk of capital loss over any 12 stocks that has broad geographic and sectoral month time frame. This is primarily achieved through diversification, the Manager believes that the risk the combination of high dividend yield, lower than of absolute loss from investing in global equities is average correlation of the stocks with the global reduced. These stocks tend to be relatively mature equity markets and active hedging of foreign businesses with good cash flow and low debt levels. currency risk. When global equity markets fall, the As a result, they tend to have lower than market lower than market average correlation may result average correlation with the global stock market in a smaller fall in the value of the Fund. In addition, indices. These stocks tend to be neglected by any fall which occurs may be partially or completely investors, particularly during periods of excessive offset by the income from the high dividend yield and stock market speculation. The Manager believes potential gains from the foreign currency hedging that this creates opportunities to generate capital strategy. gains, in addition to high dividend income, over the The global pool of stocks provides the Manager with long term. The Fund may seek to short-sell stocks greater opportunities to identify stocks that have considered to be overvalued, including stocks that high dividend yields and sound financial positions. In have low or zero dividend yields and weak financial order to enhance the opportunities available to the positions. The Fund may also seek to short-sell Manager, the typical benchmark-related constraints index futures in order to reduce the correlation of the for a global equities fund have been removed. The Fund’s portfolio with global equity markets. Fund will aim for broad geographic and sectoral The Fund is able to invest in stocks (and other diversification. The Manager believes that this is a securities of an equity nature) that are listed better method of risk management than targeting (or about to be listed) on all recognised stock benchmark-driven allocations. exchanges in North America, Europe and Asia. To identify suitable stocks for investment, the Fund combines a proprietary ranking methodology with stock specific research, the key elements of which are shown in Figure 1: 4 / RUBICON GLOBAL FUND
  9. 9. SECTION 2 INVESTMENT STRATEGY AND PROCESS FIGURE 1: STOCK SELECTION METHODOLOGY OVER 15000 STOCKS SCREENING TOOLS RANKING HIGH YIELD STOCK UNIVERSE BY FINANCIAL POSITION RESEARCH CONVICTION ANALYSIS STOCK RANKING INDIVIDUAL STOCK SELECTION In the first instance, the Investment Adviser Protection against broad market risk. Hedging uses quantitative screening tools to select those against broad market risk is the responsibility of companies which satisfy certain criteria from the Manager, although it may be executed by the a universe of over 15,000 global stocks. The Investment Adviser in accordance with instructions Investment Adviser creates a universe of high yield by the Manager. The net market exposure of the stocks (over 1,500 global stocks) which are ranked Fund to movement in global stock markets may by financial position and dividend quality. For the vary from 0% to 100%. It is expected that the highest ranked stocks, the research undertaken Fund will tend to have high net market exposure, includes verifying the input data (including dividend provided that the Manager believes that the history, cash flow dividend cover), and the relevant dividend yield available from stocks with sound financial position criteria) and seeking to source financial positions is sufficient to provide adequate dividend and cash flow forecasts. The Investment downside protection. In the event that there are Adviser then produces a conviction rating for each not sufficient opportunities available, the Fund may suitable investment candidate, primarily based on hold a substantial cash position. If short-sell stock the sustainability of the future dividend stream. opportunities arise, the net exposure of the Fund may be reduced. If the Manager considers the The Manager will determine the stock selection correlation of the portfolio with global equity markets taking into account the advice of the Investment is too high, then individual stock positions may be Adviser. The Manager will direct the Investment hedged by short-selling the relevant country index Adviser to implement the stock selection. However, stock futures. the Manager is solely responsible for any investment made by the Fund. The stocks are selected Protection against foreign currency risk. Hedging based on the dividend yield, financial position and against foreign currency risk is the responsibility of conviction rating. The potential stock weighting the Manager, although it may be executed by the is calculated using the liquidity of the stock. The Investment Adviser in accordance with instructions actual stock weighting may differ based on the by the Manager. The Manager seeks to actively subjective judgment of the Investment Adviser, manage the Fund’s foreign currency exposure with reference to the conviction rating and the by fully hedging into Australian dollars wherever overall characteristics of the portfolio. In particular, the Investment Adviser seeks to achieve a lower than market average correlation with global equity markets and broad diversification by country, region and sector. 5 / RUBICON GLOBAL FUND
  10. 10. appropriate. This will generally involve hedging the invest more than 20% (or benchmark weight) of its foreign currency exposure that results from individual portfolio in any one country market. In addition, the stock position into Australian dollars. Where it is Fund will not invest more than 50% (or benchmark more cost effective, the Manager may consider weight) of its portfolio in any one of the major regions using the US$ as a proxy for the currency of the (North America, Europe and Asia) or more than 25% individual stock. (or benchmark weight) of its portfolio in any one industrial sector. Leverage. The Fund may employ leverage, with cash borrowing not exceeding 50% of the value 2.3 / INVESTMENT ADVISER of the Fund’s portfolio and expected to average The Manager has entered into a 10 year agreement between 25% and 40% of the value of the Fund’s appointing Perennial Investment Partners Limited portfolio. Subject to these limits the Manager as the Investment Adviser, subject to the rights will determine the appropriate level of leverage of the parties to terminate in certain specified and instruct the Investment Adviser accordingly. circumstances, including on 12 months’ notice. The The Manager intends to employ leverage in the Investment Adviser is a specialist fund manager with Fund where a positive spread exists between the assets under management of more than $13 billion expected dividend income and the interest cost of across a range of funds including global equities. the leverage employed. The Investment Adviser provides generalised advice Portfolio construction. Because the Fund employs to the Manager on stock selection and portfolio a stock selection investment methodology, the construction, and confers at regular intervals with geographic composition of the portfolio of the Fund the Manager regarding the investments of the Fund. is the outcome of individual stock selections, and The Manager considers the advice of the Investment will likely depart considerably from benchmark Adviser, exercises its discretion in deciding whether country weightings. The number of long stocks in to act on the advice of the Investment Adviser and the portfolio is expected to be approximately 80-100 is solely responsible for any investment made by when the Fund is fully invested. While the number the Fund. Notwithstanding the important role that of short stocks or index futures in the portfolios will is played by the Investment Adviser, the Manager is vary, the Fund will always maintain a positive net solely responsible for the performance of the Fund. market exposure. To ensure adequate diversification, the Manager has determined portfolio concentration limits in relation 2.4 / HISTORICAL PERFORMANCE to individual stock selections (no more than 5% of The performance of the Fund to 31 March 2005 is the value of the Fund’s portfolio). The Fund will not set out in the table below: RETURN TO 31 MARCH 2005 (%) VOLATILITY CORRELATION WITH INDEX 1 MONTH 3 MONTHS 6 MONTHS 1 YEAR SINCE INCEPTION (PER ANNUM) FUND -0.5% 6.1% 14.2% 17.2% 22.0% 8.4% 0.44 INDEX (1) -1.2% -0.6% 8.8% 9.2% 8.4% 6.3% 1.00 (1) THE MSCI ALL COUNTRY WORLD FREE DAILY TOTAL RETURN NET AUD INDEX Past performance is no guarantee of future performance. 6 / RUBICON GLOBAL FUND
  11. 11. SECTION 3 MANAGEMENT AND ADMINISTRATION SECTION 3 MANAGEMENT AND ADMINISTRATION 7 / RUBICON GLOBAL FUND
  12. 12. 3 / MANAGEMENT AND ADMINISTRATION 3.2 / INVESTMENT ADVISER 3.1 / THE MANAGER The Manager has entered into a 10 year agreement appointing the Investment Adviser, as described in The directors of the Manager are: Section 2.3 of this PDS. Gordon Fell. Dr Fell is the Managing Director The following executive provides generalised advice and Chief Investment Officer of Rubicon Asset to the Manager on individual stock selection and Management. Previously, he was the Joint Chief portfolio construction: Executive of Ord Minnett, an independent Australian investment bank which was acquired in 2000 by Charles Stodart. Mr Stodart is a Senior Investment Chase Manhattan (now JP Morgan). Prior to that, Analyst at Perennial Investment Partners and is he was Head of Corporate Finance at Ord Minnett. the Investment Adviser’s Portfolio Manager for the Before joining Ord Minnett he was a Director of Rubicon Global Fund. Mr Stodart started his career Schroders Australia Corporate Finance and a in 1995 at Murray Johnstone Ltd in Glasgow. He management consultant with McKinsey & Company. began as a Graduate Trainee on the American desk Dr Fell holds a Bachelor of Science (Honours) and before moving to the Japanese desk as Assistant Bachelor of Laws (Honours) from the University of Investment Manager, where he analysed and Sydney. He received a Doctor of Philosophy from researched Japanese companies in a wide range Oxford University, where he was a Rhodes Scholar. of industries. In 1998, Mr Stodart became an Dr Fell is a director of Record Investments Limited Investment Manager on the Japanese desk and held (ASX:RCD) and the chairman of Record Funds regional responsibility for several funds. He is a CFA Management Limited, the responsible entity for charterholder and an Associate member of UKSIP Record Realty (ASX:RRT). He is the Chairman of and holds a Masters degree from St. Andrews Opera Australia and a Trustee of Sydney Grammar University School. Mr Stodart is able to draw upon the research Matthew Cooper. Mr Cooper is the Chief Operating capabilities of the Perennial International Equities Officer of Rubicon Asset Management. Previously, team for regional input into potential investment Mr Cooper was a director within the investment candidates. The Perennial International Equities banking team of Ord Minnett, an independent team has experience in actively managing exposure Australian investment bank acquired in 2000 by to diversified portfolios of international shares Chase Manhattan (now JP Morgan). Prior to that, across the developed markets, including North he was with UBS Warburg Corporate Finance, America, Japan, the UK and Continental Europe, spending six years with the Bank. Mr Cooper holds and emerging markets throughout the Far East. The a Bachelor of Commerce from Victoria University Perennial International Equities team carefully selects (New Zealand). He received a Master of Applied investment ideas using a fundamental, research- Finance degree from Macquarie University and is a driven process. Chartered Accountant (New Zealand). Executives within this capacity at the Investment David Coe. Mr Coe is the Chairman and Managing Adviser include: Director of Allco Finance Group Limited. Prior to Diane Lin. Ms Lin is Head of Japan/Asia Equities, joining Allco, he was a Partner at Mallesons Stephen having joined Perennial Investment Partners in Jaques, specialising in international financing and March 2000. She is the Investment Adviser’s leasing. Mr Coe holds a Bachelor of Arts (Honours) Portfolio Manager for the Rubicon Asia Fund. Ms and Bachelor of Laws from the University of Sydney. Lin has over twelve years experience in analysing Mr Coe is the Chairman of Allco Equity Partners Asian companies, providing investment advice and (ASX:AEQCA), a director of Record Investments managing Asian equity portfolios. Previously, Ms Limited (ASX:RCD) and is a founding director of Lin was in charge of stock selection for the Japan Sports & Entertainment Limited. He is a director Fund and the Japan portfolio of the Global Fund for of the Sydney Children’s Hospital Foundation Platinum Asset Management, Sydney. From 1994 to and the National Gallery of Australia Foundation 1998, Ms Lin managed discretionary accounts for and the Chairman of the Australian Museum of high-net worth individuals and provided investment Contemporary Art. advisory services to UK-based Asian equity investors Executives employed by the Manager will provide at Nomura International plc, where she established risk management, operational and administrative the Asian Equity Desk, and at UBS, as Associate functions. Director, both in London. She holds an Economics Degree from Osaka University, Japan. 8 / RUBICON GLOBAL FUND
  13. 13. SECTION 3 MANAGEMENT AND ADMINISTRATION Scott King. Mr King is Head of International the Fund and providing certain other administrative Equities at Perennial Investment Partners. Prior to services to the Fund. Responsibilities of the Cash joining Perennial in July 1999, Mr King spent 3 years Custodian include receiving and processing with First State Fund Managers as the Head of North application monies and withdrawal payments, American Equities, where he was responsible for the holding and dispersing such other cash assets and portfolio management and growth of the Group’s monies as are deposited with it in accordance with $1 billlion worth of North American equities. In the instructions of the Manager. 1994, he joined BT Corporate Finance in a 3.5 / AUDITOR Management position where he was involved in the origination and execution of financial transactions to PricewaterhouseCoopers has been appointed as fund research and development projects. Prior to Auditor of the Fund. this, Mr King spent 3 years with Digital Equipment 3.6 / LEGAL COUNSEL Corporation in financial and project management roles. Mr King commenced his career in the US Gilbert + Tobin has been appointed as legal counsel working for a variety of companies in engineering to the Fund. roles, before his employment as a management 3.7 / TAX COUNSEL consultant with Schumaker and Company. Mr King received Bachelors of Science in Electrical Clayton Utz has been appointed as tax counsel to Engineering and in Computer Engineering and a the Fund. Master of Business Administration (Graduate School of Business) where he graduated with honors from the University of Michigan, which is rated consistently within the top ten business schools in America. 3.3 / PRIME BROKER The Manager has appointed UBS AG, Australia Branch (UBS) as prime broker to the Fund (Prime Broker). The Prime Broker will settle and finance transactions for the Fund as well as provide cash and stock borrowing facilities. The Prime Broker will also provide custodial services in respect of investments in the Fund deposited with it for that purpose. 3.4 / CASH CUSTODIAN AND ADMINISTRATOR The Manager has appointed HSBC Institutional Trust Services (Asia) Limited to act as Cash Custodian and Administrator to the Fund. Responsibilities of the Administrator include assisting the Manager to maintain the Fund’s register of unitholders, arranging the issue, redemption and valuation of units, preparation of unaudited financial statements of 9 / RUBICON GLOBAL FUND
  14. 14. SECTION 4 INVESTMENT RISKS 10 / RUBICON GLOBAL FUND
  15. 15. 4 / INVESTMENT RISKS Company and sector considerations. Stock prices are influenced by a range of company- Investment in the Fund entails a degree of risk and is specific factors, including financial performance suitable only for investors who understand and are and the quality of management, as well as the capable of assessing the risks of an investment in general prospects of the industry sector in which a the Fund. These risks are set out below. company operates. Unexpected changes can have 4.1 / GENERAL MARKET RISKS a detrimental impact on stock prices which in turn SECTION 4 INVESTMENT RISKS affect the performance of the Fund’s investments. nvestment values can fall as well as rise. Units in the Fund are priced according to the market value 4.2 / RISKS SPECIFIC TO THE FUND of the underlying assets to which they correspond, Apart from the general market risks which pertain which will generally be in exchange-traded shares to the Fund, there are certain risks specific to the and related securities as well as unlisted unit trusts. Fund which arise due to the investment strategy Share markets can be volatile. The value of the employed, including: underlying assets can fall as well as rise as can the price of units in the Fund. Foreign currency exposure. While foreign currency exposures of the underlying investments are actively Past performance is not a guide to future managed, the Fund may be exposed to adverse performance. Market conditions and trading exchange rate fluctuations resulting from unhedged approaches are continually changing and the fact currency exposures, which may at times be that any investment adviser or investment manager substantial. happened to be successful in the past is not a guide to future performance. Reliance on key personnel. The performance of the Fund depends on the expertise and investment Macroeconomic environment. Stock prices and decisions of the Manager, the Investment Adviser therefore the price of units in the Fund are influenced and their staff. The Manager is solely responsible for by macroeconomic factors internationally which the performance of the Fund. may affect their underlying investments, including changes in taxation policy, monetary policy, interest Leverage. Investments made by the Fund will be rates, inflation, currency exchange rates, regulatory available as security to support leveraged positions. policy, employment and consumer demand. Any purchase or sale of leveraged investments may result in losses in excess of the amount initially International considerations. The Fund will be deposited as margin for the investment. As well subject to fiscal and taxation policies, regulatory as magnifying returns, leverage can also magnify regimes including securities regulations, market and losses. The Fund’s assets may be used as security settlement practices and sovereign and political for short term cash borrowing. If there were to be a risks of the countries in which the Fund invest. default under the loan terms, unitholders may rank Non-Australian issuers of securities are not generally behind lenders to the Fund in entitlement to the subject to Australian reporting requirements and Fund’s assets. there may be less information available concerning certain non-Australian issuers of securities in which Interest rate risk. Rising interest rates will increase the underlying funds invest than is available for the cost of leverage undertaken by the Fund. The Australian companies. In addition, securities of Manager will regularly review the cost of leverage emerging markets may have greater risk profiles compared with the likely level of offsetting income. including sovereign, political, market, regulatory, Limitations of hedging techniques. The Fund legal, currency, liquidity and credit risks. may employ various hedging techniques with a Legal, tax and regulatory risks. Legal, tax and view to managing the risk of investment positions. regulatory changes in the Australian investment A substantial risk remains nonetheless that such environment, or otherwise, may occur during the techniques will not always be available and, when term of the Fund, which could have an adverse available, will not always be effective in limiting effect on the Fund. The Fund may not be in a losses or locking in profits. As a result of the Fund’s position to take legal or management control of hedging strategy, the Fund may under-perform the its investments. The Fund may have limited legal market during rising market conditions. recourse in the event of a dispute, and remedies may have to be pursued in the courts. 11 / RUBICON GLOBAL FUND
  16. 16. Liquidity. Unforeseen events can result in abnormal periods of lower market liquidity which can hamper the efforts of the Fund to, among other things, liquidate investments. In this case, and in other unusual circumstances detailed in the Constitution of the Fund, the Manager may suspend temporarily the withdrawal of investments in the Fund (see Section 6.11 of this PDS). Special withdrawals. As described in Section 5.4.2 of this PDS, daily liquidity may be provided in certain circumstances. This may mean that substantial withdrawals of units in the Fund or investments into units in the Fund may be made from time to time. Short-selling. The Fund may short-sell securities. Short-selling involves borrowing and selling securities the fund does not own and incurring an obligation to redeliver the securities borrowed (or equivalent securities) on an agreed date. The potential loss on a short position is theoretically unlimited. Stock lenders can also make margin calls to cover unrealised losses on borrowed shares, which may cause the Fund to have to liquidate other positions to finance the call. Stocks can generally be recalled by lenders with a minimum of 48 hours notice which can have similar liquidity consequences. Finally, not all shares can be borrowed, which may militate against the desired strategy of the Manager. Derivatives. The Fund may trade in derivative securities. Derivatives are financial instruments and contracts (including options and futures) whose value is linked to an underlying financial instrument. While many of the risks of holding derivatives are related to the risks of holding the underlying instrument, the structure of the derivatives may result in these risks being magnified. Service provider risk. The appointments of the Prime Broker and the Cash Custodian and Administrator are able to be terminated on short notice. There is a risk that the Manager would be unable to secure replacement service providers at the same commercial rates. 12 / RUBICON GLOBAL FUND
  17. 17. SECTION 5 IMPORTANT SECTION 5 IMPORTANT INVESTOR INFORMATION INVESTOR INFORMATION 13 / RUBICON GLOBAL FUND
  18. 18. 5 / IMPORTANT INVESTOR INFORMATION than electronic fund transfers. Application forms received by the Manager and/or application monies 5.1 / APPLICATIONS FOR UNITS cleared after 5pm on the second last Business Day 5.1.1 Applications of a month will be processed the following month. Application monies will be held in an interest bearing Applications for units in the Fund can only be made account, with all interest payable to the Fund. on the application form accompanying a current PDS. An application form and instructions for 5.1.3 “Cooling off” period completing it are contained at the back of this PDS. Investors who are retail investors under the Law Application forms should be sent to the Manager at are granted a right which allows the investor, the address shown on the application form. during the 14 day cooling off period, to cancel their The minimum investment amount for the Fund subscription for units and request their money be is $20,000 inclusive of any Adviser Service Fee repaid. The cooling off period commences from payable. Payment for units in the Fund can be made the earlier of the time their application is confirmed by electronic funds transfer, telegraphic transfer or by the Manager or the end of the fifth day after the by cheque (refer to “Instructions for completing the units are issued, and runs for 14 days. The amount application form” at the back of this PDS). to be repaid may not be the exact amount invested and will be the Exit Price determined as at the last The Manager may, in its absolute discretion, accept Business Day of the month in which the cooling off in whole or in part, or reject, an application for units. period has expired, from which any taxes, duties Applications which are not accepted will be refunded and a reasonable amount for transaction and without interest. If an application is accepted, units administration costs may be deducted. The cooling of the relevant class in the Fund will be issued as off period will not apply to units subscribed for under at the last Business Day of the calendar month on the reinvestment plan. which the Entry Price for each unit class of the Fund has been determined. Units of each class for the Fund will be issued at the prevailing Entry Price of the relevant class, the calculation of which is set out in Section 5.5 of this PDS. When an application is accepted by the Manager, an application acknowledgement will be sent to the unitholder setting out the amount invested in the Fund, the number and class of units issued and the Entry Price. 5.1.2 Processing cut-off times Application forms, duly completed and signed by the relevant investor, together with application monies in cleared and identified funds in respect of applications for units in the Fund must be received by the Manager no later than 5pm (Sydney time) on the second last Business Day of the month. Payment mechanisms vary as to the time taken to result in cleared and identified funds. Cheques will generally take longer to result in cleared funds 14 / RUBICON GLOBAL FUND
  19. 19. 5.2 / FEES AND EXPENSES 5.2.1 Significant fees The following table sets out the significant fees that are expected to be paid by investors. Potential investors SECTION 5 IMPORTANT INVESTOR INFORMATION should read all of the information about the fees as it is important to understand their impact on an investment in the units and the Fund. FEE TYPE AMOUNT HOW AND WHEN PAID Ongoing fees: This is the total of all 1.5% per annum (including Accrued daily in the Unit Price ongoing administration, investment GST) of the net asset value of and paid monthly in arrears. management, expense recovery and the Fund. For example, for an other fees charged by the Fund. Refer investment of $20,000, the level to section 5.2.2 of this PDS for a of ongoing service fee would breakdown of ongoing fees. be $300 per annum (including GST). See Section 5.2.2 for further details. Adviser Service Fee: This is the fee Investors may agree with their charged by an investor’s adviser for financial advisers to have an advice about their investment in the adviser service fee paid from Fund. their investment in the Fund. To apply for this option, tick the relevant box in Part 7 of the application form. > Ongoing service fee 0.5% per annum (including Deducted from the value of the GST) of the value of the investment monthly in arrears investment in the Fund. For and paid directly to the financial example, for an investment of adviser. $20,000, the level of ongoing service fee would be $100 per annum (including GST). > Upfront service fee Up to 3.0% (including GST) of Deducted from the initial the initial investment amount. investment and paid directly to For example, for an investment the financial adviser. of $20,000, the level of upfront service fee would be $600 (including GST). Fund establishment fee $440,000 (including GST). Payable by the Fund to the Manager on in relation to units issued under this PDS, on the date of issue of this PDS. Amortised over a five year period on a straight line basis for the purposes of calculating Unit Prices of the units issued under this PDS, once the value of units issued under this PDS exceeds $5 million. See Section 5.5 for further details. 15 / RUBICON GLOBAL FUND
  20. 20. 5.2.2 Breakdown of ongoing fees and expenses The table below sets out a break-down of the ongoing fees described in section 5.2.1 of this PDS. These fees are not additional to the fees described in the preceding table. ONGOING FEES AMOUNT HOW AND WHEN PAID Management Fee: This is the 1.05% per annum (including GST) Accrued daily in the Unit Price and fee for managing the Fund’s of the value of the investment. payable to the Manager monthly in investments. For example, for an investment of arrears. $20,000, the level of Management Fee is $210 per annum (including GST). Performance Fee: This is also 20% (excluding GST) of the Payable by the Fund six monthly in for the management of the Fund increase in value of the investment arrears or such other time as the and to provide alignment of above a 6% hurdle and subject Manager determines. See Section interests between unitholders to a Prior High Water Mark. See 5.2.3 for further details. and the Manager. Section 5.2.3 for further details. Expense recoveries: This The Manager is entitled to Expenses are reimbursed to the is an estimate of the out-of- recover all proper and reasonable Manager out of the total assets pocket expenses the Manager expenses from the Fund. These of the Fund. These expenses are is entitled to recover from the recoveries are reimbursed to the generally payable when they are Fund. Manager out of the total assets incurred or invoiced. of the Fund. Although there is no limit in the Fund’s constitution on expense recovery, however, the Manager does not expect these expenses to exceed 0.45% per annum (including GST) of the net asset value of the Fund based on a fund size of $50 million. 5.2.3 Important additional disclosure in relation of the relevant class of units must exceed 6% per to fees and expenses annum before any Performance Fee is earned by the Manager. The Performance Fee is calculated in Increases or alterations to the fees. The Manager accordance with the Constitution of the Fund and may vary the fees specified in Section 5.2 of this an example of the method of calculation will be PDS at any time in its absolute discretion, within the provided by the Manager on request. The Manager limits prescribed in the Constitution of the Fund. The is entitled to receive Performance Fees based on the Constitution of the Fund provides for a maximum performance of the Fund during the periods ending management fee of 2% per annum. Investors will be 31 December and 30 June each year or such other advised of any increase in a fee. time as the Manager determines. Generally, the Performance Fee. The Manager is entitled to Performance Fee will be paid within 10 Business receive a Performance Fee of 20% (plus GST) of Days of falling due. the increase in the net asset value of each unit class Remuneration of financial advisers. A licensed of the Fund (adjusted for issues and withdrawals financial adviser who introduces a prospective of units and distributions) in excess of the Prior investor to the Fund, and whose details appear on High Water Mark of the relevant class of units. The the application form, may be paid an adviser service Prior High Water Mark of each class of units of the fee. This is an arrangement between the investor Fund will be indexed for a performance hurdle of and the financial adviser which the Manager will 6% per annum, which means that the increase in facilitate on behalf of the investor, provided that the net asset value above the Prior High Water Mark 16 / RUBICON GLOBAL FUND
  21. 21. investor indicates their agreement by marking the > will be effected at the prevailing Exit Price; relevant box in Part 7 of the application form at the back of this PDS. > may be reduced by the Manager in certain unusual circumstances to protect the interests of all Differential fees. During the life of this PDS the unitholders in accordance with the Corporations Act SECTION 5 IMPORTANT INVESTOR INFORMATION Manager may permit the issue of units to certain (see Section 6.11 of this PDS). investors such as sophisticated, professional or wholesale investors with reduced Management Cash proceeds resulting from the withdrawal of Fees or Performance Fees, based on individual investments will be paid to unitholders within 10 negotiations with prospective investors. The Business Days of determination of the prevailing Exit number and class of units to be issued in these Price, which generally occurs within 10 Business circumstances will be determined by the Manager. Days of the first Business Day of the month after Such an issue of units would be subject to the withdrawal request is received. In exceptional compliance with legal requirements and any circumstances, the Manager may compulsorily applicable ASIC relief. redeem units. 5.3 / UNIT CLASSES 5.4.2 Special withdrawals In accordance with the Constitution of the Fund, The Manager has entered into (and is likely in the Fund can issue different classes of units. the future to enter into) arrangements with third During the life of this PDS the Manager may permit parties under which investments in (or exposures the issue of units to certain investors such as to) the Fund are managed using an investment sophisticated, professional or wholesale investors management technique known as threshold with reduced Management Fees, Performance Fees management (also known as dynamic management or Application Fees, based on individual negotiations or constant proportion portfolio insurance). with prospective investors. The number and class The goal of threshold management is to ensure that of units to be issued in these circumstances will the value of an asset (or portfolio of assets) at the be determined by the Manager. Such an issue of end of an investment period is at least equal to the units would be subject to compliance with legal amount initially invested. Threshold management requirements and any applicable ASIC relief. may, depending on the performance of the asset Investors who agree to pay their financial adviser (or portfolio of assets), involve switching out of an ongoing service fee (see Section 5.2.1 of this investments in the asset (or portfolio of assets) into PDS for further details) will receive a unit class cash or other assets (or vice versa). that reflects this arrangement by incorporating the To give effect to threshold management ongoing service fee into the calculation of the Unit arrangements, the Constitution of the Fund allows Price for the relevant class. for special withdrawals with daily liquidity for 5.4 / WITHDRAWALS investors in certain circumstances. Provided that 5.4.1 General withdrawals the Fund is liquid (ie. able to satisfy withdrawal requests), special withdrawals allow investors to Investors may make a request at any time to withdraw all or some of their units in the Fund on any convert all or part of their investment into cash given day for a 28 day period where: by withdrawing their investment in the Fund. Withdrawal requests: > the Manager has failed to comply with its investment mandate in relation to one or more of the Rubicon > should be made via the withdrawal request form for Funds (the investment mandates for the Rubicon the Fund available from the Manager; Funds are set out in the relevant fund constitution); > must be signed by the unitholder; or > may be made at any time but must be received by > the Manager has failed to comply with its material 5pm (Sydney time) five Business Days before the obligations under any threshold management withdrawal date (generally the last Business Day of arrangements or a withdrawal of units in one or each calendar month) to be effective that month; more of the Rubicon Funds is required to be made under the terms of any threshold management > must be for at least $1,000 in units; arrangements. Material obligations of the Manager > must not result in a holding of less than $20,000 in under the threshold management arrangements the Fund. In the event that it does, the withdrawal that are currently in place include (but are not limited request will be deemed to be for the entire holding; to) obligations to: 17 / RUBICON GLOBAL FUND
  22. 22. > use the settlement proceeds of a redemption 5.5 / UNIT PRICES of units in any Rubicon Funds, net of any The Unit Price of each class of unit in the Fund deductions, to purchase certain cash assets is calculated by dividing the net asset value of or further units in Rubicon Funds (pursuant to the Fund attributable to that class (adding back certain reallocation principles) on the applicable unamortised establishment and promotion costs) settlement day; by the number of units of the relevant class on > pay, by the applicable settlement day, the required issue. It should be noted that net asset value of settlement sum for the purchase of units in the the units issued under this PDS will be reduced Rubicon Funds by redeeming cash assets; and by the full amount of the Fund establishment fee of $440,000 (including GST) in accordance with > not change the threshold management principles Australian accounting standards. To ensure that without the prior written consent of parties bound the burden of establishment and promotion costs under any threshold management arrangement; falls equitably as between earlier and later investors or in units in the Fund issued under this PDS, the > the Manager ceases to be the sole manager of one Manager has determined to amortise establishment or more of the Rubicon Funds or one or more of the and promotion costs over a five year period on a Rubicon Funds is terminated; or straight line basis for the purposes of calculating Unit Prices, in relation to these units. This amortisation > the property of one or more of the Rubicon Funds is will commence once the value of units issued under brought into court or is administered by a court or is this PDS exceeds $5 million and will continue on under the control of a court; or a straight line basis for five years. This results in a > the Constitution of one or more of the Rubicon monthly aggregate charge of approximately $6,700 Funds is varied in a manner which could reasonably which will be borne for five years across all units be expected to materially adversely affect the rights issued under this PDS (but not units issued prior of any lender under the terms of any loan or other to the date of this PDS). Thereafter, there will be security agreement relating to units in one or more of no monthly charge in relation to establishment and the Rubicon Funds. promotion costs. Unamortised establishment and promotion costs are added back to net asset value If any one of these events occurs, unitholders must in the calculation of Unit Prices. This will not affect be notified that the special withdrawal provisions the accounting treatment in Fund accounts to be begin to apply. All special withdrawal requests distributed to unitholders, which will show a net must be satisfied to the fullest extent possible and asset value including the full impact of establishment as soon as reasonably practicable. These special and promotion costs. As a result, the Unit Prices of withdrawal provisions are set out in more detail in the each class of unit in the Fund issued under this PDS Constitutions of the Fund. will be higher than the net asset value of the Fund Investors should note that their investment in attributable to that class, until the amortisation of the the Fund is not itself managed using threshold Fund establishment has finished. management. In addition, substantial withdrawals The Entry Price and Exit Price of each unit used to of units in the Fund or investments into units in process applications and withdrawals in a given the Fund may occur from time to time, when the month are both based on the Unit Price of the threshold management principles apply and in any relevant class of the Fund determined at the close other circumstance where daily liquidity in the Fund of business in the last relevant market to close is provided. on the last Business Day of the month in which Future threshold management arrangements the subscription/withdrawal is effected. The Entry that the Manager may enter into may include Price is the Unit Price of the relevant unit class plus additional material obligations that have not been the buy/sell spread. All prices are rounded to the contemplated in current threshold management nearest $0.0001. The buy/sell spread represents the arrangements. transaction costs incurred in facilitating the purchase and sale of securities and includes taxes, brokerage and fees. The Manager estimates the buy/sell spread will be no more than 0.75% of the Unit Price for the Fund. The buy/sell spread is intended to recover the transaction costs incurred and is paid to the Fund. The Manager derives no benefit from it. 18 / RUBICON GLOBAL FUND
  23. 23. 5.6 / DISTRIBUTIONS The income of the Fund will be distributed to unitholders in proportion to their unitholdings at the distribution date (30 June each year and SECTION 5 IMPORTANT INVESTOR INFORMATION any other time the Manager elects). A unitholder present on the Fund register at the distribution date will be entitled to a full distribution from the Fund. The Manager will calculate the distributable income from the Fund as at the distribution date. This calculation will be verified by the Auditor. Distributions will comprise dividends, interest and other income including realised capital gains from the disposal of assets. Distributions will be made as soon as practicable after each distribution date. Immediately after each distribution date, the Unit Price of each class of unit of the Fund will fall by the amount of the distribution per unit of the relevant class. Where a distribution is to be reinvested in additional units in the Fund, the Entry Price for units will be the prevailing (ex-distribution) Entry Price of the relevant class of unit for the Fund at the time of the reinvestment. Unitholders may nominate on the application form whether they wish to reinvest their distributions or have them paid into a nominated Australian resident bank account. If no nomination is made, distributions will be automatically reinvested in additional units. Nominations may be changed up to 15 Business Days prior to the distribution date. Notwithstanding any nomination made by a unitholder, the Manager may determine that a distribution may not be reinvested. 19 / RUBICON GLOBAL FUND
  24. 24. SECTION 6 ADDITIONAL INVESTOR INFORMATION 20 / RUBICON GLOBAL FUND
  25. 25. SECTION 6 LOAN FACILITY 6 / ADDITIONAL INVESTOR INFORMATION The Manager has prepared a compliance plan for the Fund setting out the key ways in which 6.1 / CONSTITUTION OF THE FUND the Manager will ensure compliance with the The Fund is a managed investment scheme that Corporations Act and the Constitution. has been registered with ASIC in accordance with Subject to compliance with the Constitution of the Chapter 5C of the Corporations Act. Fund, the Manager has absolute discretion as to The Fund has been established in the form of a the exercise of its powers under the Constitution. unit trust pursuant to its Constitution. Rubicon The Manager must at all times monitor the Fund in SECTION 6 ADDITIONAL INVESTOR INFORMATION Asset Management Limited is named as the initial relation to the ability to meet withdrawal requests. Responsible Entity under the Constitution. The main 6.3 / MANAGER’S INDEMNITY functions of the Responsible Entity are to make investment decisions and to administer the Fund. Except for its own fraud, wilful violation of law, gross Rubicon Asset Management Limited is the holder of negligence, breach of trust or breach of duty, where an Australian Financial Services Licence (220481) the Manager properly and in good faith performs which permits it to operate certain managed its functions or duties or exercises its powers in investment schemes and deal in financial products accordance with the Constitution of the Fund and for retail clients. the Corporations Act, it is not personally liable and is irrevocably indemnified out of the Fund against any This PDS provides a brief summary of the principal claim, action, damage, loss, liability, costs, expense terms of the Constitution. To the extent that or payment including costs incurred in conducting there is any inconsistency between this PDS and legal proceedings, which the Manager incurs or is the Constitution, the latter prevails. Copies of liable for arising from anything which it, as Manager the Constitution can be viewed at ASIC or are of the Fund, does or fails to do. available to investors free of charge. Provisions of the Corporations Act affect the manner in which 6.4 / RETIREMENT AND REMOVAL OF THE the Constitution is interpreted and the rights and MANAGER obligations of the Manager and the unitholders under The Manager may retire or be removed from the it. These provisions have not been summarised Fund in accordance with the law. If the Manager in this document. Investors should confirm all retires or is removed from the Fund, it is entitled to information by reference to the Constitution. any accumulated Performance and Management The Constitution may be amended by a deed Fees. Any new Manager must agree to be bound executed by the Manager, provided that the by the Constitution of the Fund and must release Manager reasonably considers that the amendment the Manager from all its obligations in respect of the will not adversely affect the rights of the unitholders Fund. of the Fund, or by a resolution of unitholders. 6.5 / UNITS IN THE FUND If the Constitution is amended, the Manager must The Fund is divided into units, each of which confers lodge a copy of the modification with ASIC. The a proportional beneficial interest in the net assets amendment will not be effective until the modification of the Fund. A unit does not confer any interest in is lodged with ASIC. a particular part or asset of the Fund, nor does it 6.2 / DUTIES OF THE MANAGER confer any rights over the management of the Fund. The Manager is responsible for the proper and The Manager may issue units upon receipt of efficient administration and management of application monies. The Manager may accept in the Fund, including all investment decisions. In whole or in part, or reject, an application for units. discharging this responsibility, the Manager is Units will be issued at the prevailing Entry Price of required to comply with the Constitution of the Fund, the relevant class of unit in the Fund. the Corporations Act, the general law in Australia A register of unitholders is maintained for the Fund and any additional obligations contained in this PDS. by the Manager. The Manager must keep true accounts of the Fund. These accounts must be audited annually and sent to unitholders. 21 / RUBICON GLOBAL FUND
  26. 26. 6.6 / RIGHTS OF UNITHOLDERS administration agreements entered into between the Manager and the Administrator. Conversion of this The rights of unitholders in the Fund include rights information to comply with Australian accounting to: principles will be carried out by the Manager. > receive income and other distributions attributable to 6.11 / UNUSUAL CIRCUMSTANCES units held; Investments held by the Fund may not always be > withdraw units; quickly or easily realised. In this case, and in other > transfer units with the consent of the Manager; unusual circumstances detailed in the Constitution of the Fund, it is possible that the Fund may experience > convene, or request that the Manager convene, a periods of illiquidity. The Manager may suspend meeting of unitholders; temporarily the determination of the net asset value > attend and vote at meetings of unitholders; of the Fund and the issue of units and withdrawals of investments. The ability of a unitholder to > receive annual audited accounts; and withdraw some or all of their investment in the Fund > participate in the winding up of the Fund. depends on whether or not the Fund is liquid at the time of the withdrawal request. To protect the 6.7 / LIABILITY OF UNITHOLDERS interests of all unitholders, no more than 15% of The provisions of the Constitution of the Fund limit total units on issue in the Fund may be redeemed in the liability of unitholders of the Fund to the Entry any month, although this restriction can be waived Price of the units plus any tax or user pay fees the by the Manager and will not apply in certain special Manager incurs as a result of any act or omission on withdrawal circumstances (outlined in Section 5.4.2 the part of the unitholder. of this PDS). If the Fund is illiquid, a unitholder may only withdraw some or all of their investment in that 6.8 / MEETINGS OF UNITHOLDERS fund during a withdrawal offer made by the Manager The Manager may convene a meeting of unitholders in accordance with the Corporations Act. of the Fund at any time, and must convene a 6.12 / POWERS OF THE MANAGER meeting when required by and in accordance with the Corporations Act. A meeting of unitholders The Manager has all the powers available to be must be convened by the Manager on receipt of conferred under law as the trustee and absolute written requests from the lesser of 5% or 100 of the owner of all the assets of the Fund. In the case of unitholders of the Fund. Meetings must be convened the Fund, this includes the power to borrow money and conducted in accordance with the Corporations to an upper limit of 50% of total assets of the Fund. Act. 6.13 / EXPENSES, TAXES AND CHARGES 6.9 / TERMINATION OF THE FUND Expenses. All expenses and outgoings properly The Fund will terminate on the earliest to occur of incurred by the Manager in connection with the Fund the following: must be reimbursed to the Manager out of the total assets of the Fund, including: > the 80th anniversary of the day before the Fund commenced; > custodian, prime broker and administration fees; > the date specified by the Manager in a notice given > audit, accounting and record keeping fees; to unitholders of the Fund; or > fees related to the provision of reports to unitholders; > the written consent of the Manager and a special > fees paid to the compliance committee; resolution of the unitholders of the Fund is obtained. > fees incurred in convening and conducting 6.10 / VALUATION OF THE FUND unitholder meetings; and The Manager is responsible for valuing the assets > costs associated with the establishment and of the Fund and calculating its net asset value. The promotion of the Fund (including preparation of this Administrator will value the total assets of the Fund PDS and related documentation). and calculate its net asset value in accordance with International Accounting Standards (except in respect of the amortisation of the establishment costs incurred by the Fund over a period of five years) and in accordance with the provisions of the 22 / RUBICON GLOBAL FUND
  27. 27. Transaction costs, borrowing costs and Certain assets of the Fund will, subject to the government charges. The Fund pays for all costs following paragraph, be held by the Prime Broker arising out of its operation, including transaction Custodian in segregated accounts together with costs and government charges arising out of its assets deposited by it or the Prime Broker’s other trading activities, costs associated with borrowing customers. Such assets will not be mixed with cash or shares and costs to satisfy its regulatory the property of the Prime Broker Custodian or the requirements. Prime Broker and should not be available to third party creditors of the Prime Broker Custodian or the 6.14 / WRAP ACCOUNTS AND MASTER SECTION 6 ADDITIONAL INVESTOR INFORMATION Prime Broker in the event of insolvency of the Prime TRUSTS Broker Custodian or the Prime Broker (as the case Indirect investors investing through an IDPS or IDPS may be). However, the assets of the Fund held by a like scheme (such as a wrap account or a master Prime Broker Custodian will be subject to a charge trust) do not become investors nor do they acquire to secure the Fund’s obligations to the Prime Broker. the rights of an investor. The operator of that service The liability of the Fund to the Prime Broker in acquires those rights and can exercise, or decline respect of any transactions will be secured by to exercise, them on behalf of indirect investors. transferring to the Prime Broker by way of security Indirect investors do not receive income or reports title to certain investments, cash or other assets directly from the Manager, nor do they directly of the Fund (together referred to as collateral). The participate in investor meetings or winding up of Prime Broker is entitled to sell, lend or otherwise the Fund. They do not complete the application use any collateral for their own purposes, subject to form in this PDS. Withdrawal times depend on the an obligation to return equivalent securities or cash withdrawal times of the operator of that service. value. Such collateral is not segregated from the Investors should consult their financial adviser if they Prime Broker’s own property and may be available have any questions on investing in the Fund through to third party creditors of the Prime Broker in the a master trust or wrap account, nominee or custody event of the insolvency of the Prime Broker. These service. Agreements may be terminated by any of the parties 6.15 / PRIME BROKER on the giving of written notice of one Business Day. The Manager has appointed UBS to be Prime Under the Prime Broker Agreements, the Prime Broker and UBS Nominees Pty Ltd to be Prime Broker shall not be responsible for and is not liable Broker Custodian to the Fund, pursuant to prime for any loss on settlement of a transaction, any acts brokerage agreements. or omission of the executing broker, its employees or agents, non-compliance with any regulatory In accordance with the terms of these agreements requirements to report transactions, refusing to (together, the Prime Broker Agreements), the Prime settle a transaction or failing to notify the Fund of its Broker will settle and finance transactions for the failure to settle a transaction. Fund. A related entity of each Prime Broker (the Prime Broker Custodian) will also provide certain The Fund will incur a commission of between 0.1% custodial services in respect of assets of the Fund and 0.75% of the value of transactions involving the deposited with it for that purpose. purchase and sale of securities (which may be paid to the Prime Broker or another broker). The Fund The fees of the Prime Broker and the Prime Broker will also incur interest of 0.6% to 0.8% above the Custodian are payable out of the Fund. The Prime short term benchmark interest rate on debt provided Broker has no decision making discretion relating to by the Prime Broker (the interest rate charged on the investment of the assets of the Fund and makes cash borrowing at the date of this PDS is 6.1% per no representation in respect of the Fund or the annum). The Fund will earn interest of 0.5% to 0.7% investment of the assets. below the short term benchmark interest rate on cash on deposit with the Prime Broker (the interest rate earned on cash on deposit at the date of this PDS is 5.0% per annum). 23 / RUBICON GLOBAL FUND

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