AV Chindia Opportunities Fund
ARSN 122 302 881
APIR ETL0081AU
Product Disclosure Statement
The Responsible Entity
Equity Trustees Limited (ABN 46 004 031 298 AFSL No 240975)
The Investment Manager
Metisq Capital Pty Ltd (ACN 104 642 613). AFSL No 234717)
Date issued 29 July 2015
1
This Product Disclosure Statement (“PDS”) is for
the AV Chindia Opportunities Fund (the “Fund”)
and was issued on 29 July 2015. This PDS has
been prepared and issued by Equity Trustees
Limited (ABN 46 004 031 298, Australian
Financial Services Licence (“AFSL”) No. 240975)
in its capacity as the responsible entity of the
Fund (referred throughout this PDS as the
“Responsible Entity”, “EQT”, “us” or “we”).
The Investment Manager of the Fund is Metisq
Capital Pty Ltd (ACN 104 642 613 160, Australian
Financial Services Licence (“AFSL”) No. 234717)
and is referred to throughout this PDS as the
“Investment Manager” or “Metisq”. The Sponsor of
the Fund is Garnaut Private Wealth and is
referred to throughout this PDS as the “Sponsor”
or “GPW”.
The Administrator for the Fund is FundBPO Pty
Ltd, ACN 118 902 891 (ABN 75 116 809 824) and
is referred to throughout this PDS as “FundBPO”.
The Custodian for the Fund is FundBPO.
This PDS is prepared for your general information
only. It is not intended to be a recommendation by
the Responsible Entity, any associate, employee,
agent or officer of the Responsible Entity or any
other person to invest in the Fund. This PDS does
not take into account the investment objectives,
financial situation or needs of any particular
investor. You should not base your decision to
invest in the Fund solely on the information in this
PDS. You should consider the suitability of the
Fund in view of your financial position and
investment objectives and needs and you may
want to seek advice before making an investment
decision. The Responsible Entity has authorised
the use of this PDS as disclosure to investors and
prospective investors who invest directly in the
Fund, as well as investors and prospective
investors of an investor directed portfolio service,
master trust, wrap account or an investor directed
portfolio service-like scheme (‘IDPS’). This PDS is
available for use by persons applying for units
through an IDPS (‘Indirect Investors’).
The operator of an IDPS is referred to in this PDS
as the ‘IDPS Operator’ and the disclosure
document for an IDPS is referred to as the ‘IDPS
Guide’. If you invest through an IDPS, your rights
and liabilities will be governed by the terms and
conditions of the IDPS Guide. Indirect Investors
should carefully read these terms and conditions
before investing in the Fund.
Indirect Investors should note that they are
directing the IDPS Operator to arrange for their
money to be invested in the Fund on their behalf.
Indirect Investors do not become unit holders in
the Fund or have rights of unit holders. The IDPS
Operator becomes the unit holder in the Fund and
acquires these rights. The IDPS Operator can
exercise or decline to exercise the rights on an
Indirect Investor’s behalf according to the
arrangement governing the IDPS. Indirect
Investors should refer to their IDPS Guide for
information relating to their rights and
responsibilities as an Indirect Investor, including
information on any fees and charges applicable to
their investment. Information regarding how
Indirect Investors can apply for units in the Fund
(including an Application Form where applicable)
will also be contained in the IDPS Guide. EQT
accepts no responsibility for IDPS Operators or
any failure by an IDPS Operator to provide
Indirect Investors with a current version of this
PDS as provided by EQT or to withdraw the PDS
from circulation if required by EQT.
Please ask your adviser if you have any questions
about investing in the Fund (either directly or
indirectly through an IDPS).
The Responsible Entity, the Investment Manager
and their respective employees, agents or officers
do not guarantee the success, repayment of
capital or any rate of return on income or capital
or the investment performance of the Fund. Past
performance is no indication of future
performance. Units in the Fund are offered and
issued by the Responsible Entity on the terms and
conditions described in this PDS. You should read
this PDS in its entirety because you will become
bound by it if you become a direct investor in the
Fund.
The offer made in this PDS is available only to
persons receiving this PDS in Australia
(electronically or otherwise). If you received this
PDS electronically we will provide a paper copy
free upon request during the life of this PDS.
Please call EQT for a copy.
Certain information in this PDS is subject to
change. We will notify investors of any changes
that have a materially adverse impact or other
significant events that affect the information in this
PDS. Any updated information which is not
materially adverse may be obtained:
•
from Garnaut Private Wealth Client
Services by calling (03) 9856-4500
• on our website at www.eqt.com.au/insto
• from your financial adviser
A paper copy of the updated information will be
provided free of charge on request.
Unless otherwise stated, all fees quoted in the
PDS are inclusive of GST, after allowing for an
estimate for Reduced Input Tax Credits (“RITCs”),
and all amounts are in Australian dollars.
2
CONTENTS
Page
1.
Fund at a Glance
4
2.
ASIC governance benchmarks
6
3.
Disclosure Principles
7
4.
Who is managing the Fund?
9
5.
How the Fund invests
11
6.
Managing risk
16
7.
Investing and withdrawing
18
8.
Keeping track of your investment and
contacting us
22
9.
Fees and other costs
24
10. Taxation
29
11. Other important information
32
12. Glossary of important terms
36
Application form
3
1
Fund at a Glance
Name of Fund
AV Chindia Opportunities Fund
Registration date
03 November 2006
ARSN
122 302 881
APIR
ETL0081AU
Performance objective
To achieve capital growth over the long term (at least five years) by
investing primarily in global equity securities that are related to or
expected to benefit from growth in China, India and the broader Asia
ex-Japan region
Asset class allocations
Global equities & cash
Investments strategy and
investments held
The Fund will typically hold around 40 to 80 stocks comprising
companies that are listed on recognised stock exchanges.
The type(s) of investor(s) for whom
the Fund would be suitable
The fund would be suitable for long term investors (at least five
years) who are looking to achieve capital growth from exposure to a
concentrated portfolio of global equities that are related to or
expected to benefit from growth in China, India and the broader Asia
ex-Japan region.
Gearing
The Fund may be geared to a maximum level of 30% of NAV.
Benchmark
MSCI AC Asia ex-Japan (AUD) Index net of dividends.
Indicative investment timeframe
5 – 7 years
Minimum initial investment
1
Minimum additional investment
$50,000
1
1
Minimum withdrawal
Minimum balance
1
$5,000
$10,000
$40,000
Cut off time for applications
By 3.00 p.m. on a Business Day
Cut off time for withdrawals
By 3.00 p.m. on a Business Day
Cooling Off
Retail clients have a right to 'cool off' .
Access to funds
2
2
Usually within 14 days
Income Distribution
Half yearly
Valuation of underlying investments
Generally determined each Business Day
Unit price
Generally determined each Business Day based on the NAV of Fund
1
The Responsible Entity may in its discretion accept lower initial amounts, additional amounts, withdrawal amounts,
holding amounts and/or charge lower fees from Wholesale Clients and alter the minimum withdrawal and the minimum
balance amounts specified, at any time without prior notice to investors.
2
Refer to ‘Access to your money’ for further details.
4
Management Costs
,3
2.5% p.a.
Performance fee
10% (exclusive of GST) of the Fund return above the Performance
Hurdle.
Buy/Sell Spread
buy 0.50% / sell 0.50%
Investment Manager
Metisq Capital Pty Ltd
3
The Management Costs include payments to the Investment Manager and the Responsible Entity. This amount is
expressed as a percentage of GAV. This includes GST after an allowance is made for RITCs. Refer to ‘Fees and Other
Costs’ for further details.
5
2
ASIC governance benchmarks
The information summarised in the tables in section 2 and 3 of this PDS and explained in detail in the
identified section references is intended to assist investors with analysing an investment in the Fund.
Investors should read this information together with the detailed explanation of these aspects and the
disclosure principles in this PDS. Please note that in this section, the reference to “Benchmark” represents a
criterion set by ASIC and has no meaning in relation to the widely used investment management concept of
“Benchmark”.
Is the
benchmark
satisfied?
Benchmark 1 - Valuation of assets
This benchmark addresses whether the
Responsible Entity will provide periodic
disclosure of certain key information on
an annual and monthly basis.
For further
information
Yes
Please refer to page
14 for further
information on the
valuation of assets
Yes
Please refer to page
22 for further
information on
periodic reporting
This benchmark addresses whether
valuations of the Fund’s non-exchange
traded assets are provided by an
independent
administrator
or
an
independent valuation service provider.
Benchmark 2 - Periodic reporting
If not, why not?
6
3
Disclosure principles
Investment strategy
Summary
Section (for
further
information)
The Fund seeks to provide investors with incremental, returns
in excess of the MSCI AC Asia ex-Japan (AUD) Index net of
dividends over time (at least five years).
5
The Fund may invest in global and Asian (ex-Japan)
companies (including Australia) that have substantial
economic exposure to China and India and the broader AsiaPacific region, including equity securities, hybrid securities,
and shares in listed and unlisted companies (provided they
are expected to list within 18 months).
The Fund is a concentrated global equities fund which does
not track a particular index.
The Fund may use options, futures and other derivatives to
achieve its performance objective. The Fund can also invest in
stocks that are not domiciled in the Asian region so long as
these stocks have substantial economic exposure to China
and India and the broader Asia-Pacific region.
Diversification guidelines for the Fund are set out in section 5.
The specific risks of investing in the Fund are described in
section 6.
Investment manager
Metisq Capital Pty Ltd (Metisq) is the investment manager of
the Fund.
4
Further details in relation to the expertise of the Investment
Manager and the investment management agreement are set
out in section 4.
Fund structure
This Fund is registered with ASIC as the AV Chindia
Opportunities Fund ARSN 122 302 881.
5.3 and 9
The responsible entity of the Fund is EQT. When an Investor
invests in the Fund, EQT issues units in the Fund (i.e. Units)
to the Investors. Each unit represents an equal share in the
net assets of the Fund; however units do not entitle its holder
ownership of any particular underlying asset of the Fund. The
Fund’s units are not listed on any securities exchange.
All of the investment functions (including research and
portfolio management) for the Fund are carried out by the
Investment Manager, Metisq.
FundBPO Pty Ltd, ACN 118 902 891 has been contracted to
provide administration and custodial services for the Fund.
EQT ensures that key service providers comply with their
service level obligations through its service provider
monitoring program.
The management cost of the Fund (excluding Performance
Fee) will be 2.50%. See Section 9 for further details on fees
and expenses.
Valuation, location and
custody of assets
FundBPO is the administrator and custodian of the Fund
(“Administrator” or “Custodian”) and provides administrative,
accounting, registrar, custody and transfer agency services.
The Administrator is responsible for determining the Fund’s
5.5
7
Net Asset Value.
See section 5.5 for further information on custodial
arrangement and the geographical location of assets.
Liquidity
The Fund invests predominately in liquid assets and is
expected to be liquid for the purposes of the Corporations Act.
Payment is generally within 14 Business Days of receipt of a
withdrawal request.
5.9 and 7
However, refer to Section 5.9 and Section 7 for further
explanation of withdrawal procedures where the Fund is not
liquid.
Leverage
The Fund’s underlying strategy employs leverage which may
result from the use of derivatives or cash borrowings See
section 5.4 for an explanation of leverage arrangements for
the Fund.
5.4
Derivatives
Where the Fund uses derivatives, Metisq aims to manage the
Fund to keep sufficient liquid assets in the Fund to meet all
obligations associated with the derivatives. Metisq uses
derivatives to gain exposure when they offer a more effective
way of purchasing the underlying security or implementing
investment exposure for the Fund.
5.8
Derivatives can be used to implement investment decisions,
including hedging, and as a risk management tool (such as
managing the effect of interest rate or foreign currency
movements). They may also be used to adjust or implement
investment decisions and to gain, or avoid, exposure to a
particular market rather than purchasing physical assets.
The investment guidelines of the Fund allow leverage through
the use of Derivatives or direct borrowing from a bank in
certain circumstances.
The gross equity exposure is limited to 130%. The net
exposure to equities will usually be in the range of 50% to
100%.
An example of how leverage could impact the Fund’s returns
is set out in Section 5.8
Short selling
The Fund does not utilise short selling
5.7
The Fund cannot short sell individual companies. The Fund
may, however, short sell and hedge using derivatives, such as
futures, swaps and exchange traded options and exchangetraded funds (ETFs).
Withdrawals
Generally daily. All withdrawal requests must be received by
3:00 p.m. on a Business Day for processing at the unit price of
that day.
5.9
Risks and limitation on withdrawal are set out in section 5.9
8
4
Who is managing the Fund?
ABOUT THE RESPONSIBLE ENTITY
Equity Trustees Limited
EQT is a publicly listed company on the Australian
Securities Exchange.
Established as a trustee and executorial service
provider by a special Act of the Victorian
Parliament in 1888, EQT today is a dynamic
financial services institution which will continue to
grow the breadth and quality of the products and
services on offer.
Specialist services of EQT include the provision of
estate management services, trustee services,
financial and taxation advice, personal investment
advice – including superannuation – and
responsible entity services for external fund
managers. EQT’s responsibilities and obligations,
as the responsible entity of the Fund, are
governed
by
the
Fund’s
constitution
(“Constitution”) as well as by the Corporations Act
and general trust law.
EQT also assists not-for-profit and charitable
organisations with their services and financial
product needs and offers philanthropy advice to
families and individuals seeking to establish
charitable trusts.
EQT is committed to acting in the best interests of
its clients via wealth management solutions over a
range of Asset Classes carrying different risk
profiles.
ABOUT THE INVESTMENT MANAGER
Metisq Capital Pty Ltd
EQT has appointed Metisq Capital as the
investment manager of this Fund.
Formerly known as MIR Investment Management,
Metisq Capital is an Australian boutique manager
with in excess of $1bn FUM. Staff in Metisq
Capital hold a controlling interest with the
remaining minority (approximately 40%) owned by
Fidante, a part of the Challenger group. Fidante
provide middle and back office functions as well
as distribution support to allow the team to focus
on its core investment management capability.
The Metisq team are highly experienced and well
resourced. The investment process is divided in
two parts. A quantitative team based in Australia
is led by John Beggs (CEO) and has three
dedicated analysts which operate the proprietary
systems. The qualitative or fundamental team led
by Kenny Tjan (CIO) is based in Singapore and
has four dedicated analysts plus access to a
further six fundamental analysts via a joint venture
with China specialist Libra Capital.
Metisq focus on investing in quality undervalued
companies that exhibit positive price momentum.
The quantitative team run daily screening of the
available universe using various value and
momentum indicators to provide a shortlist for the
fundamental team to conduct further research.
The team is also responsible for ensuring that the
current portfolio continues to show these
characteristics as well as each mandate adhering
to the specific parameters. The proprietary
systems provide transparent information to all
members of the investment team; this ensures
strong accountability and adherence to their
investment management process.
The fundamental team based in Singapore travel
to meet with company management and produce
recommendations which are then assessed by the
investment committee led by CIO Kenny Tjan who
has the final say on the portfolio construction.
Key investment team people
John Beggs - Chief Executive Officer.
Before joining Metisq in 2007, John held
executive positions at the Commonwealth Bank of
Australia. He was the Bank’s first Head of
Equities and led the Bank’s development as a
major player in the Australian retail equity market
via CommSec. From 2003 he also managed the
Bank's Global Markets division that provided the
Bank’s institutional and corporate clients with
fixed interest, currency, commodities, equities,
and derivative products. John managed several
substantial new-technology initiatives during his
time at the Bank.
From 1995 to 1997 John was a founding partner
and executive director of GMO Australia, the
boutique funds management subsidiary of the
large US funds manager GMO. Prior to this he
was the founding chief executive of the
Australian stockbroking subsidiary of a large
Japanese securities company Daiwa Securities
[1990 to 1995]. During 1988 and 1989, John
was an asset consultant with Towers Perrin and
advised several major Melbourne-based
superannuation funds. Before moving to
Melbourne in 1988, John held academic faculty
appointments at Yale University [1979 to 1983]
and the Australian National University [1984 to
1988]. John received a Doctorate of Philosophy
(Econometrics) from Northwestern University in
1980, a Masters of Arts from Northwestern
University in 1977, and a Bachelor of
Economics (Hon) in 1973 from the University of
Queensland.
Kenny Tjan Sing Pong - Chief Investment
Officer.
Kenny is head of Metisq’s qualitative research,
Managing Director of Metisq Capital Singapore
and is responsible for the Resources and Heavy
Industrials Sectors. Kenny has over 18 years of
9
experience in Asian Pacific equities, and prior to
joining Metisq, was Co-Head of Goldman Sachs
Asset Management’s Global Emerging Markets
and Asia ex-Japan Equities Team and CIO of the
China Equity Team. Kenny won the Lipper Fund
Awards Hong Kong 2005 for the Best Fund over 5
years. Prior to 2001, Kenny was an Investment
Director at Rothschild Asset Management Ltd,
responsible for Asia Pacific ex-Japan portfolios,
the Chief Portfolio Manager for Asia ex-Japan
equities products at Nomura Asset Management
and an Investment Manager with Citibank NA,
Singapore. Kenny has a B. Bus. Admin from
National University of Singapore and is a CFA.
Edwin Goh - Fundamental Analyst.
Edwin is responsible for qualitative research on
Asia ex Japan technology and telecommunication
stocks. Prior to joining Metisq, Edwin was head of
Asian Research at ABN Amro Asia Securities
from 2005. In that position, Edwin was ranked in
the top three technology analysts in Singapore by
Asia Money Poll in 2005. From 2000 -2004,
Edwin was a Senior Investment Analyst at
Allianz
Dresdner
Asset
Management,
responsible for the coverage of Asia ex-Japan
technology stocks. Prior to 2000, Edwin was a
Senior Investment Analyst at RHB Cathay
Securities and Keppel Securities. From 19951997, Edwin was a Financial Analyst at Apple
Computer in Singapore. Edwin has a Bachelor of
Accountancy
from
Nanyang
Technology
University and is a Certified Public Accountant.
Neither the Investment Manager nor the
Delegated Investment Manager has been subject
to any significant adverse regulatory finding.
The appointment of Metisq can be terminated by
the Responsible Entity at any time by written
notice to Metisq if Metisq is in default under the
investment management agreement (the “IMA”)
between the Responsible Entity and Metisq,
including where: (i) a receiver, manager,
administrative receiver or similar person is
appointed with respect to the assets and
undertaking (or any part thereof) of Metisq, (ii)
Metisq goes into liquidation, ceases to carry on
business as an investment manager, breaches
any material provision of the IMA and fails to
rectify the breach within 10 days’ written notice by
the Responsible Entity requiring it to do so, (iii)
Metisq sells or transfers its main business and
undertaking, other than to a related body
corporate for purposes of corporate reconstruction
on terms previously approved in writing by the
Responsible Entity, or (iv) relevant law requires
the IMA to be terminated. The Responsible Entity
may also terminate Metisq’s appointment in the
absence of Metisq default by giving not less than
5 Business Days’ written notice of termination to
Metisq.
accrue on the Responsible Entity under the
Investment Management Agreement is as follows:
the Responsible Entity indemnifies the Investment
Manager against any losses or liabilities
reasonably incurred by the Investment Manager
arising out of or in connection with and any costs,
charges and expenses incurred by it in connection
with the Investment Management Agreement or
on account of its bona fide investment decision
except in so far as where the loss, charge, costs,
expenses or liabilities is caused by negligence,
fraud or dishonesty of its officers or supervised
agents; and the Responsible Entity will be
responsible to any broker appointed by the
Investment Manager in accordance with the
Investment Management Agreement for all
brokerage and other charges arising from the
implementation by the broker of any authorised
transaction initiated by the Investment Manager.
ABOUT THE CUSTODIAN AND
ADMINISTRATOR
FundBPO Pty Ltd, ACN 118 902 891
The Fund has appointed FundBPO Pty Ltd, ACN
118 902 891 ("FundBPO") as the Custodian and
Administrator of the Fund. FundBPO offers a
range of fund services worldwide including;
Custody, Unit Registry, Investment Administration,
Fund Accounting and Middle Office services.
FundBPO is a wholly owned subsidiary of
MainstreamBPO ACN 112 252 114
(“MainstreamBPO”) The MainstreamBPO group
through its subsidiaries offers a wide range of
investor services across the financial services
industry to institutions worldwide.
FundBPO is a service provider to the fund and is
not responsible for the preparation of this
document or activities of the fund and therefore
accepts no responsibility for information contained
in this document. FundBPO will not participate in
the investment decision making process.
ABOUT THE FUND SPONSOR
Garnaut Private Wealth Pty Ltd CAN 097 860 574
(“GPW”) is the Sponsor of the Fund, GPW is an
independent, privately owned, advisory firm that
tailors to the specific needs and objectives of its
sophisticated client base. GPW is committed to
acting in the best interests of its clients and thus
all investment solutions are rigorously analyzed
from both a qualitative and quantitative
perspective before being approved by its
Investment Committee.
Other than the management fees and expenses
the other material potential liability which may
10
5
How the Fund invests
5.1 Investment objective
The Fund’s objective is to achieve capital growth
by investing primarily in equity securities that are
related to or expected to benefit from growth in
China and India and the broader Asia Pacific
region. The Fund may also provide an income
stream from dividends and interest over the term
of the investment. The Investment Manager will
select companies which it considers to be of high
quality, good value and that have the potential to
experience growth over the long term.
5.2 Investment strategy
Metisq Capital is a specialist manager of equity
portfolios that combines both quantitative and
qualitative investment disciplines to produce
successful investment outcomes. The Metisq
investment team comprises specialists located in
Singapore, Sydney and Melbourne. As equity
owners in the business, this team has a strong
boutique investment culture focused on achieving
outperformance and meeting clients’ needs.
The Metisq investment process is designed to
exploit market inefficiencies by applying a
combination of quantitative and qualitative
investment disciplines that together aim to identify
undervalued investment opportunities. Metisq
seeks investments with financial strength and
favourable
momentum
characteristics.
Its
qualitative disciplines are intended to provide
flexibility to profit from a wide range of investment
opportunities. Metisq believes that over a medium
to long-term time frame, under-appreciated stocks
can generate returns in excess of the market, and
that stocks with positive momentum can outperform over the short to medium term.
The final portfolio reflects the output of the
investment
manager’s
fundamental
stock
selection process. The Fund generally invests in
approximately 40-80 stocks. Portfolio construction
guidelines are applied to ensure that the final
portfolio meets the Fund’s investment objectives
and is managed in a risk-controlled manner.
Metisq manages the currency exposures of the
portfolio in-line with the foreign currency
denomination of the underlying equity/security
positions. Metisq believes that over the medium to
long term, this approach can maximise the riskadjusted return for investors.
Investment guidelines
As a guide, the Fund is intended to hold a portfolio
of between 40 and 80 stocks. There will be no
geographic or industry restriction on the securities
in the Fund. The types of stocks which the Fund
may invest in will typically fall into a combination
of the below asset classes:
- ordinary or preference shares which are
listed on approved stock exchanges;
- equity and property trusts listed on the
approved stock exchanges;
- listed converting preference shares,
rights, convertible notes, options and
warrants that are listed and traded on
approved exchanges;
- equity index futures contracts and options
on futures traded on approved exchanges
- exchange traded options where the
underlying investment and the option
contract are authorized investments and
the option contract is listed on approved
exchanges
- Over The Counter ("OTC") options;
- investment in companies to be listed on
an approved exchange provided that the
listing is effected within 18 months of
investment;
- currency forwards, futures and options
- equity linked swaps;
- underwriting/sub-underwriting relating to
shares able to held by the Fund provided
that there are sufficient liquid assets in the
Fund to cover such obligations.
Estimated cash range: 0-50% of Net Asset Value,
Estimated equity range: 50-100% of Net Asset
Value
The gross equity exposure of the portfolio is
limited to 130% of the fund’s Net Asset Value. The
portfolio must maintain a minimum of 50% equity
exposure of the Net Asset Value. Where there is a
material change to the investment strategy or the
mix of asset class/type of the Fund we will notify
you in writing within 30 days.
Key dependencies underpinning the strategy’s
ability to produce investment returns
The Fund will operate within a net equity exposure
band of 0-100 and expected returns will reflect a
level of correlation with overall equity returns
(typically the higher the level of net equity
exposure, the higher the correlation with market
returns).
Where the Fund operates with a net equity
exposure less than 100%, this typically insulates
investors from the full extent of any market
11
decline. Conversely, the lower the Fund’s net
equity exposure, the more likely the Fund returns
will trail a rising equity market. The investment
manager deploys judgement and experience to
determine the net equity exposure of the Fund.
The remaining component of overall fund returns
will also be determined by the success and failure
of individual stock selection, referred to as stock
alpha. Individual stock selection is determined by
the application of the investment manager's stated
investment philosophy and style.
investors. Risks relating to the use of third party
service providers are outlined in section 6.
The Responsible Entity has entered into service
agreements with the service providers and will,
with the assistance of FundBPO, regularly monitor
the performance of the service providers against
service standards set out in the relevant
agreements.
Please refer to the diagram on the following page.
Risk management strategy
Metisq manages investments with strong risk
controls at the portfolio level and the stock specific
level. While the Fund is concentrated and
comprised of high conviction ideas, Metisq aims to
maintain a diversified portfolio, with any stock
specific risk closely monitored and stop losses
used where appropriate. The concentrated nature
of the portfolio assists in portfolio monitoring as
each stock position would be well researched by
the investment team.
Significant benefits of Investing in the Fund
Some of the significant benefits of investing in the
Fund are as follows:
•
•
•
Allocation to assets which are liquid and
transparent.
Risk
Management:
The
Fund
has
implemented
systematic
measuring,
monitoring and management of investment
risk.
Regular Reporting: The Fund provides regular
investment reporting (annual as well as
periodic) with respect to your investment.
5.3 Fund Structure
As at the date of this PDS, the service providers
to the Fund are:
• Investment
Manager:
Metisq
is
responsible for managing the investments
of the Fund and the Underlying Funds.
For further details on Metisq’s role please
refer to section 4.
• Custodian: FundBPO holds the assets of
the Fund on behalf of the Responsible
Entity.
•
Administrator:
FundBPO
provides
administration services in connection with
the Fund.
The service providers engaged by the
Responsible Entity may change without notice to
12
The Fund’s investment structure
DIRECT AND INDIRECT
INVESTORS
Application
monies
Units issued
$$
RESPONSIBLE ENTITY
EQT
Management fee
and performance fee
(if payable) is received
RE pays investment manager
management fee and
performance fee (if applicable)
$$
$$
FUND
AV Chindia Opportunities
Fund
INVESTMENT MANAGER
Metisq
Investment Manager
appointed by RE via the
Investment Management
Agreement
FUND ASSETS
CUSTODIAN
FundBPO
ADMINISTRATOR
FundBPO
13
5.4 Leverage
The Fund can borrow up to 30% of the portfolio’s
net asset value (subject to overall gross equity
exposure limits).
The below example shows the impact of leverage
on investment returns and losses, assuming
maximum anticipated levels of leverage (including
leverage embedded in assets of the Fund, other
than leverage embedded in holdings of listed
equities and bonds).
Comparison of long only fund against AV Chindia
Opportunities Fund leveraged by 20%.
5.5 Valuation, location and custody of assets
The value of a unit is generally derived on a
Business Day and is determined on the basis of
the Net Asset Value of the Fund. The Net Asset
Value is calculated by deducting the value of the
liabilities of the Fund from the gross value of the
Fund assets. Generally, investments will be
valued at the next available market value but
other valuation methods and policies may be
applied by EQT if appropriate or if otherwise
required by law or applicable accounting
standards. The application price of a unit in the
Fund is based on the Net Asset Value divided by
the number of units on issue. The Responsible
Entity can also make an allowance for transaction
costs required for buying investments when an
investor acquires units.
Example of leverage
Net assets
Long equities
Borrowing
Net assets
Net equity
exposure
Market
movement up
10%
Long equities
Borrowing
Net assets
Gain
Market
movement
down 10%
Long equities
Borrowing
Net assets
Gain
Long
only
fund ($)
100
100
100
100%
110
0
110
10%
90
0
90
-10%
AV Chindia
Opportunities
Fund ($)
120
120
-20
100
100%
132
-20
112
12%
108
-20
88
-12%
Gearing
The Fund may borrow money to make additional
investments. The Investment Manager intends to
borrow money on behalf of the Fund from an
approved bank financial party as required from
time to time as part of its investment strategy.
Except as set out in this paragraph, and for the
use of temporary overdraft facilities for settlement
purposes, the Investment Manager does not
currently intend that the Fund will otherwise
borrow money for other purposes.
Borrowing to finance additional investments has
the potential to increase the return on the Fund. It
also raises the risk associated with the
investment.
The valuation and fund accounting services for
the Fund are provided by Fund BPO.
FundBPO is located in Sydney, Australia.
The Custodian of the assets is FundBPO and the
assets are located in Sydney.
The Fund may invest in shares of companies but
may also invest in equity securities, hybrid
securities, and shares in unlisted companies
provided they are expected to list within 18
months.
The Fund can also invest in stocks that are not
domiciled in the Asian region so long as the
stocks have substantial economic exposure to the
Asia-Pacific region.
Asset allocation of the Fund (ranges)
Asset class
Min (%)
Max (%)
International listed
50
100
equities
Exchange-traded
0
40
1
derivatives
Over-the-counter
0
10
1
derivatives
Cash equivalent
0
50
investments
Other
Net equity
0
100
exposure
Gross equity
0
130
exposure
(the combination
of long and short
equity exposure)
1
The use of exchange traded and OTC
derivatives is subject to the limits in the table, and
the total derivatives exposure is subject to an
overall gross exposure limit of 130% of net asset
value.
5.6 Liquidity
The majority of assets currently traded and held
by the Fund are liquid. It is unlikely that illiquidity
14
will result from withdrawal requests. Generally, it
is the investment manager’s policy to ensure that
the Fund remains liquid as the size of the Fund
grows. Withdrawal request are accepted each
Business Day and are generally processed and
paid within 14 Days of receipt of a withdrawal
request although a longer period of time is
permitted under the Constitution.
5.7 Short selling
The Fund does not undertake short selling.
5.8 Derivatives
The term ‘derivative’ is used to describe any
financial product that has a value that is derived
from another security, liability or index. The Fund
may at times invest in or obtain exposure to
derivatives, such as futures and options.
Derivatives can be used to implement investment
decisions and can be traded either on market or
via a derivatives broker counterparty, including
hedging, and as a risk management tool.
Derivatives can be used to gain exposure to
assets and markets as part of implementing
investment or asset allocation decisions.
Derivatives may also be used to manage risk
(such as currency hedging). ‘Derivative risk’ in
the Managing Risk section provides information
on the risks associated with derivatives.
Purpose and rationale
Derivatives are used to gain exposure when they
offer a more cost-effective way of purchasing the
underlying security.
Types of derivatives
The Fund may also use options, futures and other
derivatives (including OTC and exchange traded
derivatives) to achieve its performance objective.
When appointing counterparties and external
service providers, Metisq will, amongst other
things, consider the provider’s:
•
•
•
•
•
market position, reputation and industry
accreditation;
past experience (with both the company
and the financial services industry);
expertise, capacity systems and ability to
conduct
outsourced
functions
in
compliance with relevant laws;
financial position; and
potential conflicts of interest.
Please refer to section 6 for key risks associated
with the collateral requirements of derivative
counterparties.
5.9 Withdrawals
The Fund trades predominately in liquid
instruments and therefore it is likely that
withdrawal requests can be satisfied in virtually all
market conditions.
However, note that in
exceptional circumstances the Responsible Entity
has a right to suspend withdrawals.
Such
circumstances may include, but are not
necessarily limited to:
•
a severe breakdown in markets in which
the Fund trades; and
•
a credit event which impairs the short
dated cash instruments held in custody;
In certain circumstances, such as when there is a
suspension of withdrawal or where the proportion
of liquid assets of the Fund falls below the
specified thresholds under the Corporations Act,
investors may not be able to withdraw their
investments within the usual period upon request.
In the unlikely event that material changes to
withdrawal rights are made, investors will be
notified via correspondence.
Please see section 7 for details of applications
and withdrawals under normal circumstances.
5.10 Suggested investment timeframe
The suggested investment timeframe is 5 to 7
years.
5.11 Labour standards and environmental,
social and ethical considerations
EQT and the Investment Manager do not take into
account labour standards or environmental, social
or ethical considerations for the purposes of
selecting, retaining or realising investments.
15
6
MANAGING RISK
Investment in any fund carries risks, including
volatility of returns. Volatility refers to the degree
to which returns may fluctuate around their longterm average. Each Asset Class, whether it is
cash, fixed interest, property, Australian or
international stocks, has associated investment
risks and the return achieved by each will vary
accordingly. Historically, higher risk assets such
as international and Australian stocks, on average
produce higher long term returns than lower risk
investments, such as fixed income or cash.
You should be aware that an investment in the
Fund contains risk and neither the performance of
the Fund nor the security of your investment is
guaranteed by the Responsible Entity or the
Investment Manager. Investment in the Fund is
generally subject to risks, including possible
delays in the payment of withdrawal proceeds,
and loss of income and capital. We recommend
you talk to an adviser about the risks involved in
investing in the Fund and how they might impact
on your individual financial circumstances.
The main risk factors which may affect the returns
of the Fund include:
Sector selection risk
The Investment Manager may make poor
investment decisions resulting in sub-standard
returns (for example, where the Investment
Manager gains exposure to a sector which
significantly underperforms relative to other
sectors). This may be brought about by a change
of employees at the Investment Manager or a
change of Investment Manager. This risk is
mitigated to some extent by the knowledge and
experience of the Investment Manager.
Investment selection risk
The Investment Manager uses an investment
selection
process
to
identify
investment
opportunities which it believes are most likely to
outperform over the term of the Fund. There is a
risk that these investments will not perform in line
with the Investment Manager’s expectations
however this risk is mitigated to some extent by
the knowledge, experience and processes of the
Investment Manager.
Derivative risk
The value of derivative instruments is linked to the
value of an underlying asset (or an interest rate,
share index or some other reference point) and
can be highly volatile. While derivatives offer the
opportunity for higher gains for a smaller initial
cash outlay, they can also result in significant
losses, sometimes significantly in excess of the
amount invested to obtain the derivative.
Risks associated with using derivatives might
include the value of the derivative failing to move
in line with that of the underlying asset, potential
illiquidity of the derivative, a Fund not being able
to meet payment obligations as they arise, and
counterparty risk (where the counterparty to the
derivative contract cannot meet its obligations
under the derivative contract).
The Investment Manager may Gear the Fund
through the use of derivatives as part of its
investment process. In certain circumstances this
could result in substantial losses to the Fund.
Counterparty Risk
Counterparty risk is the risk that a counterparty to
a contract will fail to perform contractual
obligations (eg default in either whole or part)
under the contract. This is also sometimes
referred to as 'credit risk'. The Fund may be
subject to the default of a counterparty. The
institutions (such as brokerage and trading firms
and banks) with which the Fund does business, or
to which securities have been entrusted for
custodial purposes, could encounter financial
difficulties. This could impair the operational
capabilities or the capital position of the Fund or
create unanticipated trading risks.
Sub-custodian risk
The Custodian to the Fund is FundBPO. While
FundBPO shall have primary responsibility of
custody of the Fund's assets, FundBPO may
appoint sub-custodians which may or may not be
an affiliate of the Custodian.
Concentration risk
Concentration of investments in the Fund
(between individual investments and types of
investments) reduces the potential diversification
benefits. As the Fund has a concentrated portfolio
of investments (approximately 40-80 stocks) it
may experience higher volatility than a more
diversified portfolio.
Investment specific risk
There may be instances where an investment in
which the Fund invests will fall in price because of
investment specific factors (for example, where a
company’s major product is subject to a product
recall). The value of investments can vary
because of changes to management, product
distribution,
investor
confidence,
internal
operations
or
the
company’s
business
environment.
16
Leverage/ Gearing risk
The Fund intends to borrow from approved
counterparties from time to time and to make
additional investments for the Fund.
This
increases the risk of volatility of the Fund’s unit
price by potentially magnifying gains and losses
from the Fund’s investments. The value of, and
liabilities associated with, leveraged investments
can be more variable than traditional investments
and there may be greater exposure to possible
losses. Accordingly, the Fund has a higher risk
profile than a comparable fund which does not
borrow to make investments.
The level of the Fund’s gearing may change due
to factors such as market movements,
applications, withdrawals or changes in the level
of borrowings. The returns of a geared fund
depend not only on the type of fund investments,
but also on the level of gearing and the costs of
borrowing. The Fund may have to expedite a
reduction of its Gearing Ratio by selling assets at
unfavourable prices which may affect unit value.
If the Gearing Ratio exceeds that agreed between
the Responsible Entity and the Investment
Manager from time to time, the Investment
Manager may be required to dispose of assets at
an inappropriate time which could adversely
impact performance. In this situation, the required
sale may result in increased liquidity risk.
Emerging market risk
Asian and emerging markets, including India and
China, are more likely to experience greater
volatility than developed countries. Securities
traded in emerging markets may also have limited
liquidity compared to developed countries which
means those securities may fall more sharply and
rapidly than developed countries. Further risks
include: differences in auditing and financial
accounting standards, less regulated markets,
less developed corporate laws and political risk.
Changes in legal and economic policy, political
events, technology failure, changes in interest
rates, economic cycles, investor sentiment and
social climate can all directly or indirectly create
an environment that may influence (negatively or
positively) the value of your investments in the
Fund. In addition, a downwards move in the
general level of the equity market can have a
negative influence on the performance of the
Fund.
Currency management
The Fund will have exposure to foreign
currencies. This means that changes in the value
of the Australian dollar relative to other currencies
may affect the value of the assets of the Fund.
The Investment Manager may implement a
currency hedging strategy, if and when it deems
appropriate.
Fund risk
As with all managed funds, there are risks
particular to the Fund, including that it could
terminate, the fees and expenses could change,
EQT is replaced as responsible entity or Metisq is
replaced as investment manager. There is also a
risk that investing in the Fund may give different
results than investing directly in securities
because of income or capital gains accrued in the
Fund and the consequence of withdrawal by other
investors.
Interest rate risk
Changes in official interest rates can directly and
indirectly impact (negatively or positively) on
investment returns. Generally, an increase in
interest rates has a contractionary effect on the
state of the economy and thus the valuation of
stocks. For instance, rising interest rates can have
a negative impact on a fund’s or company’s value
as increased borrowing costs may cause earnings
to decline. As a result, the unit value or share
price may fall.
Investment manager risk
The investment style of an investment manager
can have a substantial impact on the investment
returns of a fund. No single investment style
performs better than all other investment styles in
all market conditions. Investment performance will
also depend on the skill of the investment
manager
in
selecting,
combining
and
implementing investment decisions. Changes in
the personnel of the investment manager may
also have an impact on investment returns of a
Fund.
Liquidity risk
There may be times when securities may not be
readily saleable (for example, in falling market
conditions). If there is an interruption to regular
trading in the market generally, or for a particular
investment of the Fund, there may be delays in
processing withdrawal requests. Note that neither
the Responsible Entity nor the Investment
Manager guarantees the liquidity of the Fund’s
investments.
Legal risk
There is a risk that laws, including tax laws, might
change or become difficult to enforce. This risk is
generally higher in emerging markets.
17
7
INVESTING AND WITHDRAWING
Distributions
An Income Distribution comprises the investor’s
share (based on the number of units held at the
end of the distribution period) of any net income
(includes taxable capital gains) earned by the
Fund. An investor’s share of any net income is
generally based on the number of units held by
the investor at the end of the distribution period.
However, in some circumstances, an investor may
receive an income distribution when they have
made a large withdrawal from the Fund such as
where the withdrawal comprises 5% or more of
the units on issue. In these circumstances their
withdrawal proceeds are taken to include a
component of distributable income.
Generally, distribution calculations are half yearly
and distributions are normally paid within 30 days
of the end of June and December, although the
distribution at the end of the financial year may
take longer. Although EQT proposes to calculate
and pay income distributions half yearly, the
Constitution of the Fund allows for a distribution
period of up to 12 months.
You can have your distribution reinvested
(Australian investors only) or directly credited to a
bank account held in the name of the investor with
an Australian domiciled bank. If you do not make
a direction, your income Distribution will be
automatically reinvested. The Fund’s Constitution
provides for money payable to an investor to be
reinvested where the Responsible Entity attempts
to pay the money by electronic transfer and the
electronic transfer fails on three (3) occasions.
Units which are issued on a reinvestment of
distribution are taken to be issued on the first
Business Day after the end of the period to which
the distribution relates at the first available price
after the end of the distribution period.
Indirect Investors should review their IDPS Guide
for information on how and when they receive any
income Distribution.
There is no guarantee that any income will be
available for distribution at the end of a distribution
period.
The payment of Income Distributions may be
suspended in some circumstances including
where the Gearing Ratio exceeds 40%, but the
period of suspension will not exceed that
permitted under the Fund’s Constitution.
Valuation of the Fund and application price of
units
The value of a unit is generally determined every
Business Day and is determined on the basis of
the Net Asset Value of the Fund. The Net Asset
Value is calculated by deducting from the gross
value of the Fund assets the value of the liabilities
of the Fund.
Generally, investments will be valued at the next
available market value but other valuation
methods and policies may be applied by EQT if
appropriate or if otherwise required by law or
applicable accounting standards.
The application price of a unit in the Fund is
based on the Net Asset Value divided by the
number of units on issue. The Responsible Entity
can also make an allowance for transaction costs
required for buying investments when an investor
acquires units; this is known as the buy spread.
As at the date of this PDS the buy spread is
0.50%. Refer to the "Fees and other costs"
section for additional information on buy spreads.
Unit pricing discretions policy
EQT has developed a formal written policy in
relation to the guidelines and relevant factors
taken into account when exercising any discretion
in calculating unit prices (including determining
the value of assets and liabilities). A copy of the
policy and, where applicable and to the extent
required, any other relevant documents in relation
to the policy will be made available to investors
free of charge on request to EQT.
Making an application
To invest, please complete the Application Form
accompanying this PDS, and send it to:
FundBPO Pty Ltd
Attention: Client services registry team
GPO Box 4968
Sydney NSW 2001
Fax: (02) 9251 3525
Tel: 1300 133 451
Application money should be transferred to the
following bank account:
National Australia Bank
105 Miller Street
North Sydney, NSW 2060
Account name: Equity Trustees Limited as RE for
AV Chindia Opportunities Fund - Application
BSB: 082 401
Account Number: 149244732
Reference: INVESTOR NAME/NUMBER
Please note that cash cannot be accepted.
If you are using direct credit please send your
Application Form by fax to
18
(02) 9251 3525, then mail the original Application
Form and identification documents (as required)
to the Administrator.
All initial Application Forms and associated
identification documents, for direct applications,
must be mailed to the Administrator:
FundBPO Pty Ltd
Attention: Client services registry team
GPO Box 4968
Sydney NSW 2001
Tel: 1300 133 451
Investors investing through an IDPS should use
the application form attached to their IDPS Guide
(and not the Application Form attached to this
PDS) to invest in the Fund.
Applications can be made between 9:00 a.m. and
5:00 p.m. on any Business Day. However, for unit
pricing purposes and income accrual purposes
any application received after 3:00 p.m. on a
Business Day will generally be treated as having
been received the following Business Day. If you
are investing via an IDPS, you need to contact
your IDPS Operator regarding the cut-off times for
pricing purposes.
more in certain circumstances). The Responsible
Entity reserves the right to change these
withdrawal timeframes for the Fund subject to the
above extensions of time.
If you have invested indirectly in the Fund through
an IDPS, you need to provide your withdrawal
request directly to your IDPS Operator. The time
to process a withdrawal request will depend on
the particular IDPS Operator.
Where the Fund is not liquid (as defined in the
Corporations Act) an investor does not have a
right to withdraw from the Fund and can only
withdraw where the Responsible Entity makes a
withdrawal offer to investors in accordance with
the Corporations Act. The Responsible Entity is
not obliged to make such offers. A Fund will be
liquid if at least 80% of the assets of the Fund are
liquid assets. Generally, liquid assets are money
in an account or on deposit with a financial
institution, bank accepted bills, marketable
securities, other prescribed property and other
assets that the Responsible Entity reasonably
expects can be realised for their market value
within the period specified in the Constitution for
satisfying redemption requests while the Fund is
liquid.
Withdrawals
EQT reserves the right to refuse any application
without giving a reason. If for any reason EQT
refuses or is unable to process your application to
invest in the Fund, subject to regulatory
considerations, EQT will return your application
money to you. You will not be entitled to any
interest on your application money in this
circumstance.
Who can invest?
Investors can be any of: individual or joint
investors, trusts, clubs and associations,
partnerships and companies or the trustee(s) of a
superannuation fund. Applicants must be 18 years
of age or over.
Additional investments
You can make additional investments of $5,000 or
more in the Fund at any time by completing an
Application Form accompanying a current PDS
together with your additional investment amount.
The minimum investment amount is determined
by the Responsible Entity and can be altered at
any time.
Access to your money
The Responsible Entity will generally allow
investors of the Fund to access their investment
within 14 days of receipt of a withdrawal request
for the relevant amount. However, the Constitution
allows the Responsible Entity to make payment
up to 30 days after receipt of a withdrawal request
(which may be extended by a further 30 days or
Withdrawal price
The withdrawal price of a unit in the Fund is based
on the Net Asset Value of the Fund divided by the
number of units on issue. The Responsible Entity
can also make an allowance for the transaction
costs required for selling investments to satisfy a
withdrawal request which is known as the sell
spread. As at the date of this PDS the sell spread
is 0.50%. Refer to "Fees and other costs" for
additional information on sell spreads.
Making withdrawals
Investors of the Fund can withdraw
investment by written request either by:
their
• mailing to:
FundBPO Pty Ltd
Attention: Client services registry team
GPO Box 4968
Sydney NSW 2001
Tel: 1300 133 451
or
• faxing to (02) 9251 3525.
The minimum withdrawal amount is $10,000.
Refer below for terms and conditions for making
fax withdrawals. All withdrawal requests must be
signed by the investor(s) and should be received
by 3.00 p.m. on a Business Day for processing at
the unit price of that day. Any withdrawal request
19
received after that time will generally be treated as
having been received the following Business Day.
Alternatively, if you have invested indirectly in the
Fund through an IDPS, you will need to provide
your withdrawal request directly to your IDPS
Operator. You will need to contact the relevant
IDPS Operator regarding their withdrawal request
cut-off times for pricing purposes. The time to
process a withdrawal request will depend on the
particular IDPS Operator. You should refer to the
IDPS Guide for the minimum withdrawal amount.
Other withdrawal information
The Responsible Entity can deny a withdrawal
request in certain circumstances, including where
accepting the request would cause the Fund to
cease to be liquid or where accepting the request
would unfairly prejudice another investor. The
Responsible Entity may also refuse to comply with
any request if the requesting party does not
satisfactorily identify themselves as the investor or
an authorised nominee. Withdrawals will only be
made payable to the nominated bank account
which is in the name of the registered Unit holder
and held at a branch of an Australian domiciled
bank.
In some circumstances, where an investor makes
a large withdrawal request (5% or more of the
units on issue at the start of the relevant
distribution period), their withdrawal proceeds may
be taken to include a component of distributable
income.
Refer
to
the
section
headed
‘Distributions’.
Please note that EQT has the right to fully redeem
your investment in the Fund if it falls below the
required minimum balance of $40,000 or such
other amount as the Responsible Entity
determines from time to time. If you are investing
through an IDPS you should refer to the IDPS
Guide for the minimum balance.
In the event that there are any material changes
to your withdrawal rights, you will be notified in
writing within 30 days.
Terms and conditions for fax withdrawals
By lodging a fax withdrawal request you release,
discharge and agree to indemnify EQT from and
against any and all losses, liabilities, actions,
proceedings, account claims and demands arising
from any fax withdrawal. You also agree that any
payment made in accordance with the fax request
shall be a complete satisfaction of the obligations
of EQT, notwithstanding any fact or circumstance
including that the payment was made without your
knowledge or authority. You agree that if the
payment is made in accordance with the fax
withdrawal request, you and any person claiming
through or under you shall have no claim against
EQT in relation to the payment.
Investments through an IDPS
The Responsible Entity is not responsible for the
operation of any IDPS. Indirect Investors should
note that they are directing the IDPS Operator to
arrange for their money to be invested in the Fund
on their behalf. Indirect Investors do not become
unit holders in the Fund or have rights of unit
holders. The IDPS Operator becomes the unit
holder in the Fund and acquires these rights. The
IDPS Operator can exercise or decline to exercise
the rights of an investor on their behalf according
to the arrangement governing the IDPS.
Indirect Investors should read the IDPS Guide
carefully to understand the structure, fees and
communication procedures for the relevant IDPS.
Please ask your adviser if you have any questions
about investing in the Fund through an IDPS.
Joint account operation
For joint accounts, unless indicated to the contrary
on the Application Form, each signatory must sign
withdrawal requests. Please ensure all signatories
sign the declaration in the Application Form. Joint
accounts will be held as joint tenants unless we
are advised to the contrary in writing.
Appointment of authorised nominee to operate
account
Investors may elect to appoint an authorised
nominee to operate their account. The relevant
sections on the Application Form need to be
completed, including the name and signature of
the authorised nominee, the signature of the
investor and the date. Only investors can appoint
authorised nominees. If you appoint an authorised
nominee we suggest that you ensure that:
•
•
they cannot appoint another nominee
the appointment lasts until cancelled by you in
writing or the Responsible Entity.
The Responsible Entity may cancel an
appointment by giving the investor 14 days notice
in writing. If an appointment is cancelled the
Responsible Entity will not be obliged to act on the
instructions of the authorised nominee. If the
instructions are varied, the Responsible Entity will
act only in accordance with the varied instructions.
By completing and lodging the relevant sections
on authorised nominees on the Application Form
you release, discharge and agree to indemnify
EQT from and against any and all losses,
liabilities, actions, proceedings, account claims
and demands arising from EQT acting on the
instructions of your authorised nominee.
You also agree that any instructions of your
authorised nominee to EQT, which are followed
by EQT, shall be a complete satisfaction of the
obligations of EQT, notwithstanding any fact or
circumstance, including that the instructions were
20
made without your knowledge or authority. You
agree that if the authorised nominee’s instructions
are followed by EQT, you and any person
claiming through or under you shall have no claim
against EQT in relation to the instructions.
•
Powers of an authorised nominee
An authorised nominee can, among other things:
•
apply for additional investment units;
•
request that Distribution instructions be
altered;
•
change bank account details;
Withdrawal payments will not be made to third
parties. If a company is appointed as an
authorised nominee, the powers will extend to any
director and authorised officer of the company. If a
partnership, the powers will extend to all partners.
•
request to withdraw all or part of your
investment; and
enquire as to the status of your
investment and obtain copies of
statements.
21
8
Keeping track of your investment and contacting us
Enquiries
If you have any enquiries regarding
management of the Fund please contact.
the


Garnaut Private Wealth
Client Services Attn: AV Chindia Opportunities
Fund
Phone: (03) 9856-4500
Email: gpw@garnaut.com.au
Level 10 - 499 St Kilda Rd,
Melbourne, VIC 3004

Complaints
EQT seeks to resolve potential and actual
complaints over the management of the Fund to
the satisfaction of investors. If an investor wishes
to lodge a formal complaint please write to:
Complaints Officer – Enterprise Risk Equity
Trustees Limited
GPO Box 2307
Melbourne Vic 3001
Email: compliance@eqt.com.au
Phone: 1300 133 472
EQT will seek to resolve any complaint and will
acknowledge a written complaint within 14 days of
receiving the letter. If we are unable to resolve
your complaint, you may be able to seek
assistance from the:
The latest annual report will be available online
from www.eqt.com.au/insto from 30 September
each year.
•
Financial Ombudsman Services (FOS)
GPO Box 3
Melbourne Vic 3001
Telephone: 1300 78 08 08
Email: info@fos.org.au
Please include the EQT FOS membership number
with your enquiry: 10395.
FOS is an independent body that can assist you if
EQT cannot. FOS may not consider a dispute
where the value of a person’s claim exceeds
$500,000. FOS is only able to make a
determination of up to $280,000 per managed
investment claim (excluding compensation for
costs and interest payments).
If you are investing through an IDPS, then
enquiries and complaints should be directed
to the IDPS Operator, not EQT.
Reporting to investors
We will make the following statements available to
all investors:

A transaction confirmation statement,
showing a change in your unit holding
(provided when a transaction occurs or on
request);
The Fund’s annual audited accounts for
each period ended 30 June;
Annual distribution, tax and confirmation
of holdings statements for each period
ended 30 June;
Annual report detailing each of the
following:
− the actual allocation to each asset
type;
− the liquidity profile of the portfolio
assets as at the end of the period;
− the maturity profile of the liabilities
as at the end of the period;
− the derivative counterparties
engaged (including capital
protection providers); and
− the key service providers if they
have changed since the latest
report given to investors,
including any change in their
related party status.
•
•
The following information is available on
the Fund’s factsheet that is available on
EQT’s website www.eqt.com.au/insto and
is disclosed monthly: the current total net
asset value of the fund and the
redemption value of a unit in each class
of units as at the date the net asset value
was calculated;
the net return on the fund’s assets after
fees, costs and taxes;
•
any material change in the fund’s
risk profile;
•
any material change in the fund’s
strategy; and
•
any change in the individuals
playing a key role in investment
decisions for the fund.
and the key service providers if they have
changed since the last report given to
investors, including any change in their
related party status.
Please note that Indirect Investors who access the
Fund through an IDPS may receive reports
directly from the IDPS Operator and not from the
Responsible Entity. However, EQT will make
available the reports described above to relevant
IDPS Operators. Indirect Investors should refer to
their IDPS Guide for information on the reports
they will receive regarding their investment.
22
The Fund is currently a disclosing entity for the
purposes of the Corporations Act which means
EQT has regular reporting and disclosure
obligations under the Corporations Act. If at any
time the Fund ceases to be a disclosing entity
these obligations may no longer apply. Copies of
any documents which we have lodged with ASIC
to comply with these requirements may be
obtained from or can be inspected at an ASIC
office. On request, we will provide you free of
charge with copies of the most recent Annual
Report for the Fund, the half yearly financial report
and any continuous disclosure notices lodged with
ASIC.
23
9
FEES AND OTHER COSTS
Below is a Consumer Advisory Warning which is required by law to be displayed at the beginning of the fees
and other costs section of Product Disclosure Statements. The fee example given in the Consumer Advisory
Warning does not relate to any investments described within this PDS, and is a standard example required
by law.
Detailed information about the fees and other costs related to the Fund are provided in the section following
the Consumer Advisory Warning.
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 account 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 administration fees. Ask the Fund or your financial
adviser.
TO FIND OUT MORE
If you would like to find out more, or see the impact of fees based on your own circumstances, the
Australian Securities and Investments Commission (ASIC) website (www.fido.asic.gov.au) has a
managed investment fee calculator to help you check out different fee options.
Fees and other costs
The tables below describe fees and other costs that you may be charged. These fees and costs may be
deducted from your money, from the returns on your investment or from the Fund’s assets as a whole.
Information on taxes is set out in section 10 of this document.
You should read all the information about fees and costs because it is important to understand their impact
on your investment.
The fees (unless otherwise stated) are inclusive of any remuneration paid to an adviser or third party (if
relevant) and are inclusive of GST after allowing for an estimate for RITCs.
TYPE OF FEE OR COST
AMOUNT
HOW AND WHEN PAID
Fees when your money moves in or out of the Fund
Establishment fee
The fee to open your
investment
1
Up to 2.0%
(based on an
initial investment
of $50,000 the
maximum dollar
amount is
$1,000)
Deducted from your initial application amount when
you first open your investment in the Fund. You may
negotiate this with your financial adviser. See
‘Payment to financial advisers’ in ‘Additional
explanation of fees and expenses.’
Nil
There is no contribution fee payable when you invest
in the Fund.
Nil
There is no withdrawal fee payable when you make
withdrawals from the Fund.
2
Contribution fee
The fee on each amount
contributed to your
investment
2
Withdrawal fee
The fee on each amount
24
TYPE OF FEE OR COST
you take out of your
investment
Termination fee
The fee to close your
investment
Management Costs
AMOUNT
HOW AND WHEN PAID
Nil
There is no termination fee payable when you close
your investment in the Fund.
3
2.5% p.a.
The fees and costs for
managing your investment
Plus Performance Fee
Expense
Service fees
(Based on a
constant
investment of
$50,000 the
amount in dollars
is $1,250.00)
10% (exclusive of
GST) of the
Fund’s
investment
performance
above the
Performance
Hurdle
Management costs (excluding the performance fee
are calculated and accrued daily based on the Gross
Asset Value (“GAV”) of the Fund. The accrued fee is
paid monthly in arrears from the Fund assets at the
end of each month. The Management fees reduce the
GAV and NAV of the Fund and are reflected in the
unit price.
If payable, the performance fee is paid in arrears to
the Investment Manager at the end of each 12 month
period ending 30 June as an expense of the Fund.
See “Performance fee” under the “Additional
explanation of fees and expenses” section for more
details.
4
Investment switching fee
The fee for changing
investment options
Nil
Not applicable
1
You may also incur a Buy/Sell Spread when you invest in or withdraw from the Fund. See ‘Buy/Sell’ Spread
in the ‘Additional explanation of fees and expenses’ section.
2
The Responsible Entity is entitled to charge contribution and withdrawal fees under the Fund’s Constitution.
See ‘Can the fees change?’ in the ‘Additional explanation of fees and expenses’ section.
3
The amount of this fee can be negotiated. This fee may also include an amount payable to an adviser. See
the ‘Additional explanation of fees and expenses’ section.
4
There may be additional fees payable to advisers. See ‘Payment to financial advisers’ in the ‘Additional
explanation of fees and expenses’ section.
Additional explanation of fees and expenses
IDPS
Investors investing through an IDPS should note
that the fees outlined in the table ‘Example of
annual fees and costs’ are in addition to (i.e. do
not include) any other fees charged by the IDPS
Operator.
What do the Management Costs pay for?
The Management Costs include responsible entity
fees, investment management fees, custodian
fees, administration fees, and certain other
expenses. The management costs are calculated
and accrued daily based on the GAV of the Fund.
The accrued fees are paid in arrears from the
assets of the Fund at the end of each month. The
Management Costs reduce the GAV and NAV of
the Fund and are reflected in the unit price.
Payment to financial advisers
An establishment fee of up to 2.0% may be paid
to your financial adviser. This fee may be payable
when you first open your investment. If this fee is
charged, it will be deducted from your initial
application amount. You can negotiate this fee
with your financial adviser.
Performance fee
Metisq as Investment Manager is entitled to
receive a performance fee. Management costs
include performance fees. The performance fee is
10% (exclusive of GST) of the investment
performance of the Fund above the Performance
Hurdle for the 12 month period ending on each 30
June (‘Performance fee Period’ or ‘Period’),
subject to the Fund recovering any previous
under-performance. The Performance Hurdle is
an absolute return of 10% (exclusive of GST) as
measured by the Adjusted Withdrawal Price (see
formula below).
25
amount for each accrual interval plus any
negative amount carried forward is
negative, no performance fee will be
reflected in the daily unit price.
The amount of the performance fee is determined
by:
•
Calculating the performance fee amount
each accrual interval in accordance with
the following formula:
10% x [A – B – ( B x 10% x C / 365 ) + D /
E] x E
where:
A
is the Adjusted Withdrawal Price
for a unit at the end of the accrual
interval, after Distribution paid or
payable on that day is deducted
from the price.
B
is the Adjusted Withdrawal Price
for a unit at the end of the
previous accrual interval, after
Distribution paid or payable on
that day is deducted from the
price.
C
is the number of days in the
accrual interval;
D
is the aggregate amount (if any)
entered during the accrual interval
in any Distribution account for
Distributions to investors other
than due to the redemption of
units and which is excluded from
the determination of the value of
the assets at the end of the
accrual interval for the purposes
of determining withdrawal prices
at that time; and
E
is the number of units on issue at
the end of the accrual interval.
Adjusted Withdrawal Price is the
withdrawal price increased by the
management costs of 2.50% per annum
of the Gross Asset Value of the Fund,
paid and payable during the accrual
interval, on a per unit basis. The actual
expense recoveries may be greater or
less than 2.50% per annum.
An accrual interval will generally be the
period of time between one unit price
calculation and the next.
•
The performance fee amounts for each
accrual interval are aggregated added to
any negative amount carried forward from
the previous Performance fee Period to
determine whether any performance fee
is deducted from the unit price. Where the
aggregate amount for each accrual
interval plus any negative amount carried
forward is positive, this amount is
reflected in the daily unit price as an
expense provision. Where the aggregate
If the total of the performance fee amounts
calculated each accrual interval and any negative
amount carried forward from the previous
Performance fee Period is positive at the end of a
Period, this total is the amount of the performance
fee and is payable at the end of the Period.
If the total of the performance fee amounts
calculated each accrual interval and any negative
amount carried forward from the previous
Performance fee Period is negative at the end of a
Period, this total is carried forward to the next
Period and no performance fee is paid for that
Period.
EQT does not consider there is any reasonable
basis on which it may estimate performance fees
for the Fund. To estimate performance fees would
involve speculation about the return of the Fund
against the Performance Hurdle. EQT therefore
considers that to estimate performance fees may
potentially be misleading.
The following is an example of the calculation of
the performance fee:
Assumptions:
•
•
•
•
on 30 June in the previous Performance
fee Period, the Adjusted Withdrawal Price
for units in the Fund was $1.00;
there are 20 million units on issue in the
Fund throughout the Performance fee
Period;
a Distribution was paid in early July of
$400,000 ($0.02 per unit); and
on 30 June in the Performance fee
Period, the Adjusted Withdrawal Price for
units in the Fund was $1.18.
On the basis of the above assumptions, the
performance fee would be $200,000.00 for the
Period. If you had an investment in the Fund of
$20,000 at the end of the Period, your investment
would bear a notional amount of the performance
fee of approximately $200.00 for the Period. This
is not indicative of the actual performance fees
likely to be payable. These figures are provided
for information and illustrative purposes only so
that investors can have an indication of the effect
of performance fees on returns. This example
disregards other fees and expenses that may be
charged during the Period.
Buy/Sell Spread
The Buy/Sell Spread reflects the estimated
transaction costs associated with buying and
selling the assets of the Fund when investors
26
invest in, or withdraw from, the Fund. The
Buy/Sell Spread is an additional cost to the
investor but is included in the unit price and
incurred when an investor invests in or withdraws
from the Fund and is not charged as an additional
fee. The Buy/Sell Spread is retained by the Fund
and not paid to EQT or the Investment Manager.
The Buy/Sell Spread for the Fund as at the date of
the PDS is 0.50% upon entry ($250 for an
investment of $50,000) and 0.50% upon exit
($250 for a withdrawal of $50,000). The Buy/Sell
Spread can be altered by the Responsible Entity
at any time.
Payments to IDPS Operators
We may make payments on an annual basis to
some IDPS Operators because they offer the
Fund on their investment menus (product access
payments). We may also make ongoing payments
to some IDPS Operators of a percentage of funds
under management (fund manager payments).
Fund manager payments are effectively rebates of
management costs. The amount of product
access and fund manager payments is negotiated
directly with IDPS Operators and is based on the
volume of business generated by the IDPS
Operator. Product access and fund manager
payments are paid by EQT out of our fees and are
not an additional cost to the investor. Further
details on these payments (if any are received by
your IDPS Operator and not rebated to you) may
be obtained directly from your IDPS Operator.
As a part of the Federal Government’s Future of
Financial Advice reforms, certain types of fees
paid to IDPS Operators are prohibited. EQT will
not pay fees to IDPS Operators where it is
prohibited from doing so under the law.
Transaction and other costs
All Government taxes such as stamp duty and
GST will be deducted from the Fund as
appropriate. Relevant tax information is provided
in the ‘Taxation’ section. RITCs will also be
claimed by the Fund where appropriate to reduce
the cost of GST to the Fund.
The Fund may incur transaction costs. These
transaction costs include brokerage, settlement
costs (including custody costs), clearing costs and
stamp duty. Transaction costs include costs
incurred by the Fund when investors invest in or
withdraw from the Fund and when transacting to
meet investment objectives. These costs are an
additional cost to the investor but are generally
reflected in the unit price and not charged as an
additional fee. Transaction costs which are not
recovered through the Buy/Sell Spread are
deducted from the Fund from time to time as they
are incurred and are reflected in the unit price.
undertaken. As such, EQT is unable to provide a
meaningful amount or percentage of the
estimated transaction costs for the Fund.
Fees to the Investment Manager
Metisq will receive fees (as a proportion of GAV
for its investment management services described
in this PDS). All fees paid to the Investment
Manager will be paid by the Responsible Entity
out of its responsible entity fee as specified in this
PDS.
Alternative forms of remuneration
As a member of the IFSA we maintain an
Alternate Forms of Remuneration Register. The
register, which you can review by contacting us,
outlines some alternative forms of remuneration
that we may pay to or receive from AFS licensees,
fund managers or representatives (if any are paid
or received at all in relation to the Fund).
Can the fees change?
Yes, all fees can change without investor consent,
subject to the maximum fee amounts specified in
the Constitution. Reasons might include changing
economic conditions and changes in regulation.
We have the right to recover all proper and
reasonable expenses incurred in managing the
Fund and as such these fees may increase or
decrease accordingly. We will generally provide
investors with at least 30 days notice of any
proposed change to the responsible entity fee.
Expense recoveries and the Buy/Sell Spread may
change without notice, for example, when it is
necessary to protect the interests of existing
members and if permitted by law. The Constitution
in some circumstances defines the maximum fees
that can be charged for some fees described in
this PDS. The Constitution defines the maximum
level of responsible entity fees the Fund may
charge which is 2.05% (including GST after
allowing for an estimate for RITCs) of GAV, which
is equivalent to $102.50 per annum for every
$5,000 invested. The maximum contribution and
withdrawal fees the Fund can charge is 6.15%
(including GST after allowing for an estimate for
RITCs), which is equivalent to $307.50 for every
$5,000 contributed or withdrawn. There are no
maximum fee amounts defined for the other fee
components which make up the Management
Costs of the Fund.
The exact amount of transaction costs incurred by
the Fund is dependent on a number of different
variables, including the level of trading
27
Example of annual fees and costs for the Fund
This table gives an example of how the fees and costs for this managed investment product can affect your investment
over a 1 year period. You should use this table to compare this product with other managed investment products.
.
1
Balance of $50,000 with a contribution of $5,000 during
the year
EXAMPLE
Contribution fees
Nil
For every additional $5,000 you put in you will be charged
$0.
PLUS Management costs
2.50% p.a.
And for every $50,000 you have in the Fund, you will be
charged $1,250 each year.
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 charged fees from:
EQUALS Cost of Fund
$1,250.00 to $1,375.00
2
What it costs you will depend on the fees you negotiate
with the Fund or your financial adviser.
1
An establishment fee may be paid to your financial adviser out of your initial application amount when you
first open your investment in the Fund.
2
This amount assumes an investment balance of $50,000 and an additional contribution of $5,000 at either
the beginning or the end of the year. Management Costs charged in relation to the additional contribution of
$5,000 during the year will depend on the proportion of the year during which the additional contributions are
invested. Additional fees may also apply, including a performance fee. Please see the “Additional
explanation of fees and expenses” section above.
28
10
Taxation
This summary of taxation matters is a general
guide that outlines the taxation implications
applicable to the Fund and resident investors who
hold their investment on capital account and are
not considered to be trading in investments for tax
purposes. The summary is based on the tax laws
as at the date of this PDS. The information should
be used as a guide only and does not constitute
professional
tax
advice
as
individual
circumstances may differ.
A number of tax reform measures are currently
under review by the Government, including the
proposed new regime for the taxation of Managed
Investment Trusts (“MITs”), the taxation of trusts
more broadly and rules relating to the treatment of
foreign sourced income. These reforms may
impact on the tax position of the Fund and its
investors going forward. Accordingly, it is
recommended that investors seek their own
professional tax advice, specific to their own
circumstances, of the taxation implications of
investing in the Fund.
Taxation of the Fund
General
The Fund is a resident trust estate for Australian
tax purposes. On the basis that the Fund has
distributable income and investors are presently
entitled to all of the Fund’s distributable income,
(which is the Responsible Entity's intention) and
the Fund is not a public trading trust, the Fund
should be taxed as a flow-through trust. This
means that investors should be taxed on their
share of the Fund’s net taxable income, and the
Fund should not be subject to Australian income
tax.
In the case where the Fund makes a loss for
Australian tax purposes, the Fund cannot
distribute the tax loss to investors. However, the
tax loss may be carried forward by the Fund for
offset against taxable income of the Fund in
subsequent years, subject to meeting certain trust
loss recoupment tests.
Deemed Capital Gains Tax (“CGT”) election
Eligible MITs may make an irrevocable election to
apply a deemed capital account treatment for
gains and losses on disposal of certain eligible
investments, including equities and units and
certain rights and options over equities and units
but excluding derivatives and foreign exchange
contracts. To the extent the Fund’s investment
strategy includes options to which the MIT capital
election may not apply, depending on the
circumstances these options may be on revenue
account.
The Fund has made the MIT capital election. The
MIT capital election may apply to some of the
Fund’s investments, including certain equities and
units held in unit trusts. As a result, an investor’s
share of the net income of the Fund may include
an amount that consists of net capital gains, which
includes discount capital gains and CGT
concession amounts, derived by the Fund.
Taxation of Financial Arrangements (“TOFA”)
Broadly, under TOFA, the gains or losses
(including income and/or deductions) on financial
arrangements are brought to account under a
compounding accruals and realisation basis. Any
gain or loss in relation to a financial arrangement,
such as a futures derivative, where TOFA applies
would generally be treated on revenue account
(and would not be covered by the MIT capital
election). This could also include options over
shares in certain circumstances.
The TOFA provisions may apply to the Fund in
the future. The Investment Manager and Tax
Adviser of the Fund will assist the Responsible
Entity with ongoing monitoring and compliance
with the TOFA rules.
Tax File Numbers (“TFN”) and Australian
Business Numbers (“ABN”)
It is not compulsory for an investor to quote their
TFN or ABN. If an investor is making this
investment in the course of a business or
enterprise, the investor may quote an ABN
instead of a TFN. Failure by an investor to quote
an ABN or TFN or claim an exemption may cause
the Responsible Entity to withhold tax at the top
marginal rate, plus the Medicare Levy, on gross
payments including distributions of income to the
investor. The investor may be able to claim a
credit in their tax return for any TFN or ABN tax
withheld.
Foreign Account Tax Compliance Act
The United States of America enacted the Foreign
Account Tax Compliance Act (“FATCA”) in 2010
to identify U.S. residents that invest in assets
through non-U.S. entities. In April 2014, the
Australian
Government
signed
an
intergovernmental agreement (IGA) with the U.S.,
which requires all Australian financial institutions
to comply with FATCA, as modified by the IGA.
Broadly, the Fund is required to collect and review
information to determine whether it has an
obligation to report information about certain
investors in the Fund to the ATO (which will pass
that information onto the IRS). Accordingly, the
Fund may request certain information from you to
29
enable the Fund to comply with its FATCA
obligations.
Failure to comply with FATCA obligations may
result in the Fund, to the extent relevant, being
subject to a 30% withholding tax on payment of
U.S. income or gross proceeds from the sale of
certain U.S. investments. The Fund will provide
information about its FATCA status where
required so that FATCA withholding is not applied
to the relevant U.S. income or gross proceeds.
Taxation of Australian Resident Investors
Distributions
Each Australian resident investor will be subject to
taxation on their proportionate share of the net
taxable income derived by the Fund.
Investors who become entitled to a distribution
from the Fund in respect of a financial year will
receive an annual tax statement detailing all
relevant
taxation
information
concerning
distributions.
The tax consequences for investors of receiving
distributions from the Fund depend on the
components of the distributable income to which
investors have become entitled.
Foreign Source Income and Foreign Income Tax
Offset (‘FITO’)
The Fund is expected to mainly derive income
that consists of foreign source income that may be
subject to tax overseas, for example withholding
tax, which (under some circumstances) may be
distributed to investors. Where a distribution to the
investor consists of a FITO, the investor may be
entitled to a FITO for the tax paid. The FITO may
be used to offset the Australian tax payable on the
foreign source income. Investors should include
their share of both the foreign income and the
amount of the FITO (if any) in their assessable
income. To the extent to which the investor does
not have sufficient foreign source income to utilise
all of the FITOs relevant to a particular year of
income, the excess FITOs cannot be carried
forward to a future income year and as such will
be lost.
Imputation Credits and Franked Dividends
As the Fund's investments may also include
Australian equities, income distributions from the
Fund may include an entitlement to franked
dividends. Generally, investors should include the
franked dividends and the franking credits
(imputation credits) they receive in their
assessable income.
dividends. The investor's particular circumstances
and that of the Fund will be relevant to determine
whether the investor is entitled to any franking
credits, in respect of the investor's share of the
franked dividends.
Any excess imputation credits may be refundable
to some investors, such as individuals and
complying superannuation funds.
Non-assessable distributions
Under current practice, distributions of nonassessable amounts are generally not subject to
tax in the hands of passive investors. Broadly, the
receipt of certain non-assessable amounts will
generally reduce the cost base of the Australian
resident investor's units in the Fund for CGT
purposes. This results in either an increased
capital gain, or a reduced capital loss, upon the
subsequent disposal of the investor's units in the
Fund.
Capital Gains
An investor’s share of the net taxable income of
the Fund may include an amount that consists of
net capital gains, derived by the Fund. Where the
Fund’s net taxable income includes capital gains
(including any discount capital gains), the investor
needs to ‘gross up’ any discount capital gain (by
the amount of any reduction in the discount capital
gain that the Fund obtained). Regardless of
whether the ‘discount concession’ amount is
distributed by the Fund, individual, trust, and
complying superannuation fund investors may be
entitled to the discount capital gain concessions in
determining their net capital gain. Investors may
also be able to offset certain other capital losses
they may have against their share of the capital
gains included in the net taxable income
distributed by the Fund (after grossing up any
discount capital gains).
Disposal of Units by Australian Resident Investors
If an Australian resident investor transfers or
redeems their units in the Fund, this will generally
constitute a disposal for tax purposes. Where an
investor holds their units in the Fund on capital
account, a capital gain or loss on the disposal
may arise and each investor should calculate their
capital gain or loss according to their own
particular facts and circumstances. In calculating
the taxable amount of a capital gain, a discount of
50% for individuals and trusts or 33 1/3% for
complying Australian superannuation funds may
be allowed where the units in the Fund have been
held for more than 12 months. No CGT discount is
available to companies.
Australian Taxation of Non-Resident Investors
Certain additional requirements, including the 45
day holding period rule may need to be satisfied in
order to obtain franking credits in relation to
Non-resident investors
30
The following comments are general in nature and
non-resident investors should seek independent
tax advice before investing, taking into account
their particular circumstances and the provisions
of
any
relevant
Double
Taxation
Agreement/Exchange of Information Agreement
(“EOI”) between Australia and their country of
residence.
Tax on income
The Fund expects to derive predominantly foreign
source income which would generally not be
subject to Australian withholding tax when
distributed by the Fund to non-resident investors.
The Fund is required to withhold Australian tax
from distributions to non-resident investors for
certain types of Australian sourced net taxable
income, including unfranked dividends, Australian
sourced interest income or other Australian
sourced income (e.g. certain options or derivative
gains). The rate of tax deducted will depend on
the type of income distributed and the country of
residence of the investor.
For investors that are tax resident and provide an
address or place for payment in countries that
hold a tax EOI with Australia, a concessional
withholding tax rate of 15% applies to ‘fund
payments’, which are distributions of other
Australian source income. The fund payment
withholding tax rate is 30% for fund payments to
non-resident investors who are tax resident or
provide an address or place for payment in
countries that do not hold an EOI with Australia.
Capital gains
Based on the Fund’s investment profile, generally
non-resident investors should not be subject to
Australian capital gains tax on the disposal of
units in the Fund unless the units were capital
assets held by the investor in carrying on a
business through a permanent establishment in
Australia. Australian tax may apply in certain
circumstances if the non-resident holds their units
on revenue account.
The CGT discount is not available for non-resident
investors. It is strongly recommended that nonresident investors seek their own tax advice.
31
11
Other Important Information
Cooling off period
If you are a Retail Client (as defined in the
Glossary section of this PDS) you may have a
right to ‘cool off’ in relation to an investment in the
Fund within 14 days of the earlier of:
•
•
confirmation of the investment being
received or available; and
the end of the fifth Business Day after the
units are issued or sold.
A Retail Client may exercise this right by notifying
EQT in writing (including by email) at the address
as stated in the Directory of this PDS. A Retail
Client is entitled to a refund of their investment
adjusted for any increase or decrease in the
relevant application price(s) between the time we
process your application and the time we receive
the notification from you, as well as any other tax
and other reasonable administrative expenses
and transaction costs associated with the
acquisition and termination of the investment.
A Retail Client’s right to cool off does not apply in
certain limited situations, such as if the issue is
made under a Distribution reinvestment plan,
switching facility or represents additional
contributions required under an existing
agreement. Also, the right to cool off does not
apply to you if you choose to exercise your rights
or powers as an investor in the Fund during the
14-day period. This could include selling part of
your investment or switching it to another product.
Indirect Investors should seek advice from their
IDPS Operator as to whether cooling off rights
apply. The right to cool off may not apply if you
are an Indirect Investor, even if you are a Retail
Client. This is because you do not acquire the
rights of a unit holder in the Fund. Rather, you will
direct the IDPS Operator to arrange for your
monies to be invested in the Fund on your behalf.
The terms and conditions of the IDPS Guide or
similar type document will govern your investment
in relation to the Fund and any rights you may
have in this regard.
Investor’s liability
The Constitution of the Fund provides that unless
there is a separate agreement with an investor, no
investor can be called on to contribute to the
assets of the Fund or to its creditors if the Fund is
liquidated or becomes insolvent. Therefore it is
expected that investors will not be under any
obligation if a deficiency in the assets of the Fund
was to occur. However, this view has not been
fully tested at law and so it is not possible to give
an absolute assurance that an investor’s liability
will be limited in all circumstances.
In general, an investor’s liability is limited to the
amount (if any) which remains unpaid in relation
to their subscription for units in the Fund and any
outstanding tax obligations arising from the
operation of the Fund. The Responsible Entity
may redeem some or all of an investor’s units to
satisfy an amount of money due from the investor
to the Responsible Entity. The Responsible Entity
is also permitted to deduct certain amounts of
money from the proceeds of an investor’s
withdrawal request. The Responsible Entity is
entitled to be indemnified in certain circumstances
by an investor or a person who was at any time an
investor in respect of any tax referable to that
person.
Termination of the Fund
The Responsible Entity may resolve at any time to
terminate and liquidate the Fund in accordance
with the Constitution and the Corporations Act. If
this occurs the Responsible Entity will provide
notice to investors. Upon termination and after
conversion of the assets of the Fund into cash
and payment of, or provision for, all costs,
expenses and liabilities (actual and anticipated),
the net proceeds will be distributed pro-rata
among all unit-holders according to the number of
units they hold in the Fund and the withdrawal
price for those units.
Non-listing of units
The Fund’s units are not listed on any stock
exchange and no application will be made to list
the units of the Fund on any stock exchange.
Constitution of the Fund
You will receive units in the Fund when you
invest. Subject to the rights, obligations and
restrictions of a class, each unit represents an
equal undivided beneficial interest in the assets of
the Fund as a whole subject to liabilities, but does
not give you an interest in any particular property
of the Fund.
EQT’s responsibilities and obligations, as the
responsible entity of the Fund, are governed by
the Constitution as well as the Corporations Act
and general trust law. The Constitution contains a
number of provisions relating to the rights, terms,
conditions and obligations imposed on both EQT,
as the responsible entity of the Fund, and
investors. Some of the provisions of the
Constitution are discussed elsewhere in this PDS.
Other provisions relate to an investor’s rights
under the Constitution, and include:
•
an investor’s right to share in any Fund
income, and how we calculate it;
•
what you are entitled to receive when you
withdraw or if the Fund is wound up;
32
•
•
•
an investor’s right to withdraw from the
Fund - subject to the times when we can
cease processing withdrawals - such as if
a Fund becomes ‘illiquid’;
the nature of the units - identical rights
attach to all units within a class; and
an investor’s rights to attend and vote at
meetings – these provisions are mainly
contained in the Corporations Act.
There are also provisions governing our powers
and duties, including:
•
how we calculate unit prices, the
maximum amount of fees we can charge
and expenses we can recover;
•
when we can amend the Constitution generally we can only amend the
Constitution where we reasonably believe
that the changes will not adversely affect
investors’
rights.
Otherwise
the
Constitution can only be amended if
approved at a meeting of investors;
•
when we can retire as the Responsible
Entity of the Fund - which is as permitted
by law;
•
when we can be removed as the
Responsible Entity of the Fund - which is
when required by law; and
•
our broad powers to invest, borrow and
generally manage the Fund.
The Constitution also deals with our liabilities in
relation to the Fund and when we can be
reimbursed out of the Fund’s assets, for example:
•
subject to the Corporations Act we are not
liable for acting in reliance and good faith
on professional advice;
•
subject to the Corporations Act we are not
liable for any loss unless we fail to act in
good faith or we act negligently; and
•
we can be reimbursed for any liabilities
we incur in connection with the proper
performance of our powers and duties in
respect of the Fund.
As mentioned above, EQT’s responsibilities and
obligations as the responsible entity of the Fund
are governed by the Constitution as well as the
Corporations Act and general trust law, which
generally require that we:
•
act in the best interests of investors and, if
there is a conflict between investors’
interests and our own, give priority to
investors;
•
ensure the property of the Fund is clearly
identified, held separately from other
Fund and our assets, and is valued
regularly;
•
ensure payments from the Fund’s
property are made in accordance with the
Constitution and the Corporations Act;
and
•
report to ASIC any breach of the
Corporations Act in relation to the Fund
which has had, or is likely to have, a
materially adverse effect on investors’
interests.
Copies of the Constitution are available free of
charge on request from EQT.
Compliance plan
EQT has prepared and lodged a compliance plan
with ASIC for the Fund. The compliance plan
describes the procedures used by EQT to comply
with the Corporations Act and the Constitution of
the Fund. Each year the compliance plan for the
Fund is audited and the audit report is lodged with
ASIC.
Indemnity
EQT, as the Responsible Entity of the Fund, is
indemnified out of the assets of the Fund for any
liability incurred by it in properly performing or
exercising any of its powers or duties in relation to
the Fund. To the extent permitted by the
Corporations Act, this indemnity includes any
liability incurred as a result of any act or omission
of a delegate or agent appointed by the
Responsible Entity. EQT may retain and pay out
of any money in its hands all sums necessary to
affect such an indemnity.
Consents
Metisq Pty Ltd has given, and at the date of this
PDS, has not withdrawn, its written consent to be
named in the PDS as the Investment Manager of
the Fund.
Metisq Pty Ltd has also given, and has not
withdrawn, its written consent to the inclusion in
the PDS of:
(a)
(b)
the statements made about Metisq Pty
Ltd and the Fund of which it is described
as Investment Manager; and
the tables and statistical information
specifically attributed to it in the form and
context in which they appear.
By providing this consent, Metisq Pty Ltd confirms
that:
(a)
(b)
(c)
the statements, tables and statistical
information referred to above are correct
in every material respect and are not
misleading or deceptive in the forms and
contexts in which they appear in the PDS;
it will, as reasonably required by EQT,
formally verify such statements, tables
and statistical information in accordance
with EQT’s due diligence procedures; and
it will notify EQT immediately if it
becomes
aware
that
any
such
statements,
tables
or
statistical
33
information are not correct in every
material respect or are misleading or
deceptive (whether or not they were
correct and not misleading or deceptive at
the date of the PDS).
Metisq Pty Ltd has not been involved in the
preparation of this PDS or caused or otherwise
authorised the issue of this PDS. Neither Metisq
Pty Ltdnor its employees or officers, accept any
responsibility arising in any way for errors or
omissions in this PDS, other than those
statements for which it has provided its written
consent to EQT for inclusion in this PDS.
FundBPO Pty Ltd, ACN 118 902 891 (“FundBPO”)
has given, and at the date of this PDS, has not
withdrawn, its written consent to be named in the
PDS. FundBPO has been appointed as the
Administrator for the Fund and the Custodian.
FundBPO is responsible for the day to day
administration of the Fund. FundBPO was not
involved in preparing and does not take any
responsibility for this PDS. FundBPO makes no
guarantee of the success of the Fund or the
repayment of capital or any particular rate of
capital or income return.
Privacy Statement
When you provide instructions to EQT or its
related bodies corporate, EQT will be collecting
personal information about you. You must ensure
that all personal information which you provide to
EQT is true and correct in every detail, and should
your personal details change it is your
responsibility to ensure that you promptly advise
EQT of the changes in writing. This information is
needed to facilitate, administer and manage your
investment, and to comply with Australian taxation
laws and other laws and regulations. Otherwise,
your application may not be processed or EQT
and its delegates will not be able to administer or
manage your investment.
The information that you provide may be
disclosed to certain organisations, including but
not limited to:
▪▪ the ATO, AUSTRAC and other government or
regulatory bodies;
▪▪ your broker, financial adviser or adviser dealer
group, their service providers and/or any joint
holder of an
investment;
▪▪ organisations involved in providing,
administering and managing the Fund, the
administrator, custodian, auditors, or those that
provide mailing or printing services; and
▪▪ those where you have consented to the
disclosure and as required by law.
Currently, neither Fund BPO nor EQT disclose
any privacy information to parties outside
Australia but this is subject to change
EQT may from time to time provide you with direct
marketing and/or educational material about
products and services EQT believes may be of
interest to you. Should you not wish to receive this
information from EQT (including by email or
electronic communication), you have the right to
“opt out” by advising EQT by telephoning + 613
8623 5000, or alternatively by contacting us via
email at privacy@eqt.com.au.
Subject to some exceptions allowed by law, you
can ask for access to your personal information.
We will give you reasons if we deny you access to
this information. EQT’s Privacy Statement outlines
how you can request to access and seek the
correction of your personal information. EQT’s
Privacy Statement is available at www.eqt.com.au
and can be obtained by contacting EQT’s Privacy
Officer on +613 8623 5000, or alternatively by
contacting us via email at privacy@eqt.com.au.
EQT’s Privacy Statement contains information
about how you can make a complaint if you think
EQT has breached your privacy and about how
EQT will deal with your complaint.
You should refer to EQT’s Privacy Statement for
more detail about the personal information that
EQT collects and how EQT collects, uses and
discloses your personal information.
Information on underlying investments
Information regarding the underlying investments
of the Fund will be provided to a member on
request, to the extent EQT is satisfied that such
information is required to enable the member to
comply with its statutory reporting obligations.
This information will be within a reasonable
timeframe having regard to these obligations.
Anti-Money Laundering and Counter Terrorism
Financing (AML/CTF)
Australia’s AML/CTF laws require EQT to adopt
and maintain an Anti-Money Laundering and
Counter Terrorism Financing program. A
fundamental part of the AML/CTF program is that
EQT knows certain information about investors in
the Fund.
To meet this legal requirement, we need to collect
certain identification information and
documentation (“KYC Documents”) from new
investors. Existing investors may also be asked to
provide KYC Documents as part of a reidentification process to comply with the AML/CTF
laws. Processing of applications or withdrawals
will be delayed or refused if investors do not
provide the applicable KYC Documents when
requested.
34
Under the AML/CTF laws, EQT is required to
submit regulatory reports to AUSTRAC. This may
include the disclosure of your personal
information. EQT may not be able to tell you when
this occurs and, as a result, AUSTRAC may
require EQT to deny you (on a temporary or
permanent basis) access to your investment. This
could result in loss of the capital invested, or you
may experience significant delays when you wish
to transact on your investment.
EQT shall not be liable for any loss you may suffer
because of compliance with the AML/CTF laws.
Translated documents
Non English language documents must be
accompanied with a translation prepared by an
accredited translator. An accredited translator is
a person currently accredited by the National
Accreditation
Authority for Translators and
Interpreters
Ltd. (NAATI) at the
level of
Professional Translator, or above, to translate
from a language other than English into English;
or a person who currently holds an accreditation
that is consistent with this standard.
If you are unable to provide the identification
documents described please contact the
Responsible Entity.
FATCA
The Fund will be required to comply with the US
Foreign Account Tax Compliance Act (“FATCA”)
when arrangements are made under Australian
tax law. To comply with these requirements, the
Fund will collect certain additional information
from you and will disclose such information to the
ATO or the US Internal Revenue Service, where
required.
35
GLOSSARY OF IMPORTANT TERMS
Administrator – FundBPO Pty Ltd, ACN 118 902
891 (ABN 75 116 809 824; AFSL 295018).
Gearing – Using borrowed money to purchase
extra investments.
AML/CTF Act – The Anti-Money Laundering and
Counter-Terrorism Financing Act 2006 (Cth).
Gearing Ratio – The ratio of the book value of
debt to assets.
Application Form – The Application Form used
by investors who wish to subscribe for units
directly in the Fund (other than indirectly through
an IDPS Operator) and attached to this PDS.
Gross Asset Value - means the total value of the
assets of the Fund.
ASIC – Australian Securities and Investments
Commission.
Gross Equity Exposures - is the combination of
long equity positions and short/hedged equity
positions.
GST – Goods and Services Tax.
Asset Class – A category of financial assets. The
major asset classes are shares, property, fixed
interest securities and cash.
Business Day – Any day other than Saturday or
Sunday on which banks are open for general
banking business in Sydney.
Buy/Sell Spread – The Buy Spread is the
difference between NAV per unit and the
application price, whereas the Sell Spread is the
difference between NAV per unit and the
withdrawal price of units in the Fund. Collectively
this is known as the Buy/Sell Spread. The
Buy/Sell Spread reflects the estimated transaction
costs associated with buying and selling the
assets of the Fund, when investors invest in or
withdraw from the Fund.
Constitution – The constitution of the Fund
describes the rights, responsibilities and beneficial
interests of both investors and the responsible
entity in relation to the Fund.
Corporations Act – The Corporations Act 2001
(Cth) and Corporations Regulations 2001 (Cth),
as amended from time to time.
Custodian -, FundBPO Pty Ltd, ACN 118 902
891 (ABN 75 116 809 824).
Distribution – The amount that is paid to
investors after the end of a Distribution period.
This generally includes any income from dividend
and interest accruals.
Derivatives – The term ‘derivative’ is used to
describe any financial product that has a value
that is derived from another security, liability or
index. The Fund may at times invest in or obtain
exposure to derivatives, such as futures and
options.
Financial Services Authority or FSA - Financial
Services Authority of the United Kingdom.
IDPS – Investor directed portfolio service. An
IDPS service is generally the vehicle through
which an investor purchases a range of underlying
investment options from numerous investment
managers, with the IDPS Operator providing the
investor with consolidated and streamlined
transaction statements and other reporting.
IDPS Operator – An entity that operates and
offers an IDPS.
Indirect Investor – A person who invests
indirectly in units in the Fund through an IDPS
Liquidity – The ability of an investment to be
easily converted into cash with little or no loss of
capital and minimum delay.
Management Costs - Total costs associated with
investment in the Fund (including responsible
entity fee and estimated expense recoveries).
Net Asset Value or NAV – the value of assets of
the Fund, less the value of the liabilities of the
Fund.
Performance Hurdle – The Performance Hurdle
is an absolute return of 10% (exclusive of GST)
per annum as measured by the Adjusted
Withdrawal Price (as described in the
performance fee section of this PDS).
Retail Client – Persons or entities as defined
under section 761G of the Corporations Act.
RITC – Reduced Input Tax Credits. EQT will apply
for reduced input tax credits where applicable to
reduce the cost of GST to the Fund.
US Person - A person so classified under
securities or tax law in the United States of
America (“US”) including, in broad terms, the
following persons:
(a) any citizen of, or natural person resident in, the
US, its territories or possessions; or
36
(b) any corporation or partnership organised or
incorporated under any laws of or in the US or of
any other jurisdiction if formed by a US Person
(other than by accredited investors who are not
natural persons, estates or trusts) principally for
the purpose of investing in securities not
registered under the US Securities Act of 1933; or
(c) any agency or branch of a foreign entity
located in the US; or
(d) a pension plan primarily for US employees of a
US Person; or
(e) a US collective investment vehicle unless not
offered to US Persons; or
(f) any estate of which an executor or
administrator is a US Person (unless an executor
or administrator of the estate who is not a US
Person has sole or substantial investment
discretion over the assets of the estate and such
estate is governed by non-US law) and all the
estate income is non-US income not liable to US
income tax; or
(g) any trust of which any trustee is a US Person
(unless a trustee who is a professional fiduciary is
a US Person and a trustee who is not a US
Person has sole or substantial investment
discretion over the assets of the trust and no
beneficiary (or settlor, if the trust is revocable) of
the trust is a US Person); or
(h) any discretionary account or similar account
(other than an estate or trust) held by a dealer or
other fiduciary for the benefit or account of a US
Person; or
(i) any non-discretionary account or similar
account (other than an estate or trust) held by a
dealer or other fiduciary organised, incorporated
or (if an individual) resident in the US for the
benefit or account of a US Person.
Wholesale Client - Persons or entities as defined
under section 761G of the Corporations Act.
37
DIRECTORY
Responsible Entity
Equity Trustees Limited
ABN 46 004 031 298
AFSL 240975
Level 2, 575 Bourke Street
Melbourne Vic 3000
Telephone: 03 8623 5000
Fax: 03 8623 5395
Email: equity@eqt.com.au
Website: www.eqt.com.au
Investment Manager
Metisq Capital Pty Ltd
ACN 104 642 613
AFSL No 234717
For application and redemption requests:
FundBPO Pty Ltd, ACN 118 902 891
Attention: Client services registry team
GPO Box 4968
Sydney NSW 2001
Fax: (02) 9251 3525
Tel: 1300 133 451
Custodian
FundBPO Pty Ltd, ACN 118 902 891
For further information about the Fund please contact your financial adviser.
38
AV Chindia Opportunities Fund
Application Form

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

If completing by hand, use a black or blue pen and print within the boxes in BLOCK LETTERS
Use ticks in boxes where applicable
The applicant must complete, print and sign this form
Keep a photocopy of your completed Application Form for your records
Please ensure all relevant sections are complete before submitting this form
This application form is part of the Product Disclosure Statement dated 29 July 2015 ('PDS') relating to units in the AV Chindia
Opportunities Fund issued by Equity Trustees Limited (ABN 46 004 031 298, AFSL 240975).
•
The PDS contains information about investing in the Fund. You should read the PDS before applying for units in the Fund.
•
A person who gives another person access to the Application Form must at the same time and by the same means give the
other person access to the PDS.
•
EQT will provide you with a copy of the PDS and the Application Form on request without charge (If you make an error while
completing your application form, do not use correction fluid. Cross out your mistakes and initial your changes).
US Persons:
This offer is not open to any US Person. Please refer to the Product Disclosure Statement for further information.
Section 1 – Introduction
Do you have an existing investment in the AV Chindia Opportunities Fund?
YES – my details are:
Account Number
Account Name
Contact Telephone Number (Including Country
Code)
Now go to section 8.
NO – only complete the sections relevant to you, as indicated below:
Account Type
Sections to Complete
Identification Requirement
Groups to Complete
Individual(s)
1,2,7,8,9,10
Group A
Partnership(s)
1,3,7,8,9,10
Group A & B
Trust/Superannuation fund with
an individual trustee
1,2,4,7,8,9,10
Group C or D, & E
Trust/Superannuation fund with
a corporate trustee
1,4,5,7,8,9,10
Group C or D, & E
Company
1,5,7,8,9,10
Group F or G
Select One
And complete these if you would like to appoint a power of attorney or agent
Power of attorney or agent
Section 6
Group H
Financial Adviser
Section 7
Group H
Contacting the Fund
Client Services:
Ph: 1300 133 451
registry@fundbpo.com
Post your completed
application to:
FundBPO Pty Ltd
Attention: Client services registry team
GPO Box 4968
Sydney NSW 200
AV Chindia Opportunities Fund – Application Form – 1 January 2016
Page 1 of 13
AML/Identification Requirements
•
•
•
•
The AML/CTF Act requires the Responsible Entity to adopt and maintain an anti-money laundering and counter-terrorism
financing ('AML/CTF') compliance program. The AML/CTF compliance program includes ongoing customer due diligence, which
may require the Responsible Entity to collect further information.
Identification documentation provided must be in the name of the Applicant.
Non-English language documents must be translated by an accredited translator.
Applications made without providing this information cannot be processed until all the necessary information has been
provided.
If you are unable to provide the identification documents described please call FundBPO Pty Limited on 1300 133 451.
These documents should be provided as a CERTIFIED COPY of the original.
GROUP A – Individuals
Each individual investor, individual trustee, partner or individual agent must provide one of the following:
A current Australian driver’s licence (or foreign equivalent) that includes a photo
An Australian passport
A current passport (or similar) issued by a foreign government or the United Nations (UN) (or an agency of the UN) that
provides your signature
An identity card issued by a State or Territory Government that includes a photo
GROUP B – Partnerships
Provide one of the following:
A certified copy or certified extract of the partnership agreement
A certified copy or certified extract of minutes of a partnership meeting
A notice issued by the Australian Taxation Office (“ATO”) within the last 12 months
An original or certified copy of a certificate of registration of business name issued by a government agency in Australia
Group A verification requirements for each partner and beneficial owner of the Partnership
GROUP C – Registered Managed Investment Scheme, Regulated Superannuation Fund (including self- managed) or
Government Superannuation Fund
Provide one of the following:
A copy of the company search on the ATO database
A copy of the company search of the relevant regulator’s website
A copy or relevant extract of the legislation establishing the government superannuation fund sourced from a
government website
GROUP D – Other Trusts
Provide one of the following:
A certified copy or certified extract of the Trust Deed
Signed meeting minutes showing the full name of the trust
Annual report or audited financial statements
A certified copy of a notice issued by the ATO within the previous 12 months
Group A verification requirements for each beneficial owner of the trust
GROUP E – Trustees
If you are an Individual Trustee – please provide the identification documents listed under Group A
If you are a Corporate Trustee – please provide the identification documents listed under Group F or G
If you are a combination of both – please complete for one trustee from each investor type listed under Group A and F
or G
GROUP F – Australian Companies
Provide one of the following:
A certified copy of the Certificate of Registration or Licence
A copy of a company search on the ASIC database
A copy of information regarding the company / trustee’s licence or other information held by the relevant
Commonwealth, State or Territory regulatory body
All of above must clearly show the company’s full name and type (i.e. public or private).
Group A verification requirements for each beneficial owner (senior managing official and shareholder) listed in Section
5.4 of the application.
GROUP G – Non-Australian Companies
Provide one of the following:
A certified copy of the company’s Certificate of Registration or incorporation (issued by ASIC or equivalent in the
domestic jurisdiction) showing the company’s registration number
A certified copy of the company’s articles of association or constitution
A copy of a company search on the ASIC database or relevant foreign registration body
All of above must clearly show the company’s full name and type (i.e. public or private).
Group A verification requirements for each beneficial owner (senior managing official and shareholder) listed in Section
5.4 of the application.
GROUP H – Agents
If you are an Individual Agent – please provide the identification documents listed under Group A
If you are a Corporate Agent – please provide the identification documents listed under Group F or G
AV Chindia Opportunities Fund – Application Form – 1 January 2016
Page 2 of 13
Important Information
Additional information required under the Anti-Money
Laundering and Counter-Terrorism Financing Act 2006 and the
Foreign Account Tax Compliance Act.
In accordance with the Anti-Money Laundering and CounterTerrorism Financing Act 2006 (the ‘AML/CTF Act’) and the Foreign
Account Tax Compliance Act (the ‘FATCA’) the Responsible Entity is
required to collect additional information about you. The Responsible
Entity may also ask you to provide certified copies of certain
identification documents along with the Application Form.
Under the AML/CTF Act and FATCA, the Responsible Entity is
prohibited from processing your application until all of the information
and supporting documentation requested in this form has been
received. In most cases, the information that you provide in this form
will satisfy the AML/CTF Act & FATCA. However, in some instances
the Responsible Entity may contact you to request further information.
It may also be necessary for the Responsible Entity to collect
information (including sensitive information) about you from third
parties in order to meet its obligations under the AML/CTF Act and
FATCA.
Declarations
When you complete this Application Form you make the
following declarations:









I/We have read the PDS to which this Application Form applies
and agree to be bound by the terms and conditions of the PDS
and the Constitution of the Fund in which I/we have chosen to
invest.
I/We acknowledge that EQT is not responsible for the delays in
receipt of monies caused by the postal service or the applicant’s
bank.
If I/we have provided an email address, I/we consent to receive
ongoing investor information including PDS information,
confirmations of transactions and additional information as
applicable via email.
I/We hereby consent to the transfer of any of my/our personal
information to external third parties including but not limited to
fund administrators, fund investment manager(s) and related
bodies corporate who are located outside Australia for the
purpose of administering the products and services which I/we
have engaged the services of EQT or its related bodies
corporate and to foreign government agencies (if necessary).
I/We hereby acknowledge and agree that EQT have outlined in
the PDS provided to me/us how and where I/we can obtain a
copy of the EQT Group Privacy Statement.
I/we hereby confirm that the personal information that I/we have
provided to EQT is correct and current in every detail, and
should these details change, I/we shall promptly advise EQT in
writing of the change(s).
If I/we lodge a fax application request, I/we acknowledge and
agree to release, discharge and agree to indemnify EQT from
and against any and all losses, liabilities, actions, proceedings,
account claims and demands arising from any fax application.
I/We have received and accepted this offer in Australia or New
Zealand.
I/We acknowledge that EQT does not guarantee the repayment
of capital or the performance of the Fund or any particular rate of
return from the Fund.
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I/We acknowledge that an investment in the Fund is not a
deposit with or liability of EQT and is subject to investment risk
including possible delays in repayment and loss of income or
capital invested.
If I/we have completed and lodged the relevant sections on
authorised representatives/agents on the Application Form then
I/we agree to release, discharge and agree to indemnify EQT
from and against any and all losses, liabilities, actions,
proceedings, account claims and demands arising from EQT
acting on the instructions of my/our authorised representatives,
agents and/or nominees.
By signing this Application Form, I/we acknowledge that I/we
have read and understood the PDS
I/We have considered our personal circumstances and, where
appropriate, obtained investment and / or taxation advice.
If this is a joint application each of us agrees that our investment
is held as joint tenants.
I/We acknowledge that I am/we are 18 years of age or over and I
am/we are eligible to hold units in the Fund in which I/we have
chosen to invest.
I/We acknowledge and agree that where the Responsible Entity,
in its sole discretion, determines that:
o I/we are ineligible to hold units in a Fund or have provided
misleading information in my/our Application Form; or
o I/we owe any amounts to EQT,
then I/we appoint the Responsible Entity as my/our agent to
submit a withdrawal request on my/our behalf in respect of
all or part of my/our units, as the case requires, in the Fund.
I/We agree to provide further information or personal details to
the Responsible Entity if required to meet its obligations under
anti-money laundering and counter-terrorism legislation and
acknowledge that processing of my/our application may be
delayed and will be processed at the unit price applicable for the
Business Day as at which all required information has been
received and verified.
I/We hereby declare that I/we are not a US Person as defined in
the PDS.
Terms and conditions for collection of Tax File Numbers (TFN) and Australian Business Numbers (ABN)
Collection of TFN and ABN information is authorised and its use
and disclosure strictly regulated by tax laws and the Privacy Act.
Investors must only provide an ABN instead of a TFN when the
investment is made in the course of their enterprise. You are not
obliged to provide either your TFN or ABN, but if you do not
provide either or claim an exemption we are required to deduct tax
from your distribution at the highest marginal tax rate plus
Medicare levy to meet Australian taxation law requirements. For
more information about the use of TFNs for investments, contact the
enquiries section of your local branch of the ATO. Once provided, your TFN
will be applied automatically to any future investments in the Fund where
formal application procedures are not required (e.g. distribution
reinvestments), unless you indicate, at any time, that you do not wish to
quote a TFN for a particular investment. Exempt investors should attach a
copy of the certificate of exemption. For super funds or trusts list only the
applicable ABN or TFN for the super fund or trust.
When you sign this Application Form you declare that you have read and agree to the declarations above.
AV Chindia Opportunities Fund – Application Form – 1 January 2016
Page 3 of 13
Section 2 – Individual(s) or Individual Trustee(s)
Complete this section if you are investing in your own name or as an individual trustee.
For AML requirements please refer to page 2.
2.1 Type of investor
Tick one box only and complete the specified parts of this section.
Individual – complete 2.2
Sole Trader – complete 2.2 and 2.4
Jointly with another individual(s) – complete 2.2,
Individual trustee for an individual – complete 2.2,
2.3 and 2.5
2.3 and 2.5 (if there is more than one individual
trustee)
Individual trustee for a trust – complete 2.2 and
2.3 (also complete section 4)
2.2 Investor 1
Title
Given Name(s)
Surname
Telephone Number (Including Country Code) (daytime)
Date of Birth (DDMMYY)
Tax File Number (TFN) – or exemption code
Reason for TFN Exemption
Street Address (not a PO Box)
Unit Number
Street Number
Street Name
Suburb
State
Post Code
Country of Birth
Are you a foreign resident for tax purposes?
No
Yes, please advise country of residence
Do you hold dual citizenship?
No
Yes, please advise which countries
2.3 Investor 2
Title
Given Name(s)
Surname
Telephone Number (Including Country Code) (daytime)
Date of Birth (DDMMYY)
Tax File Number (TFN) – or exemption code
Reason for TFN Exemption
Street Address (not a PO Box)
Unit Number Street Number
Street Name
Suburb
State
Post Code
Country of Birth
Are you a foreign resident for tax purposes?
No
Yes, please advise country of residence
Do you hold dual citizenship?
No
Yes, please advise which countries
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Page 4 of 13
2.4 Sole Trader Details
Business Name (if applicable, in full)
Australian Business Number (ABN) (if obtained)*
Street Address
Suburb
State
Postcode
Country
2.5 Signing Authority
Please tick to indicate signing requirements for future instructions (e.g. withdrawals, change of account details, etc.)
Only one investor required to sign
All investors must sign
* See page 3 of the Application Form for terms and conditions relating to the collection of TFNs and ABNs
Section 3 – Partnerships
Complete this section if you are investing for a partnership or as a partner.
For AML requirements please refer to page 2.
3.1 General Information
Full Name of Partnership
Registered Business Names of Partnership (if any)
Country where Partnership is established
Tax File Number (TFN) – or exemption code
Reason for TFN Exemption
3.2 Type of Partnership
Is the partnership regulated by a professional association?
Yes, please provide details
Name of Association
Membership Details
No, provide number of partners
Partner 1
Title
Given Name (s)
Surname
Telephone Number (including Country Code) (daytime)
Unit
Street Number
Postcode
Street Name
Country
Partner 2
Title
Given Name (s)
Telephone Number (including Country Code) (daytime)
Unit
Street Number Street Name
Postcode
Country
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Date of Birth (DDMMYY)
Suburb
State
Country of Birth
Surname
Date of Birth (DDMMYY)
Suburb
State
Country of Birth
Page 5 of 13
Section 4 – Trust / Superannuation Fund
Complete this section if you are investing for a trust or superannuation fund.
For AML requirements please refer to page 2.
4.1 General Information
Full Name of Trust or Superannuation Fund
Full Name of Business (if any)
Country where Trust established
Tax File Number (TFN) – or exemption code
Reason for TFN Exemption
4.2 Trustee Details
How many trustees are there?
Individual - at least one trustee must complete Section 2 of this form
Company - at least one trustee must complete Section 5 of this form
Combination - at least one trustee from each investor type must complete the relevant section of this form
4.3 Type of Trust
Registered Managed Investment Scheme
Australian Registered Scheme Number (ARSN)
Regulated Trust (including self managed superannuation funds)
Name of Regulator (e.g. ASIC, APRA, ATO)
Registration/License Details
Australian Business Number (ABN)*
Other Trust (also complete section 4.4)
Please Describe
4.4 Beneficiaries
Complete Section 4.4 and 4.5 only if you ticked ‘Other Trust’ in 4.3
Does the Trust Deed name beneficiaries?
Yes, how many?
Provide the full name of each
1
beneficiary: (If more than 8, please provide as an attachment)
2
3
4
5
6
7
8
No, describe the class of beneficiary: (e.g. the name of the family group, class of unit holders, the charitable
purpose of charity name)
* See page 3 of the Application Form for terms and conditions relating to the collection of TFNs and ABNs.
4.5 Beneficial Owners
Please provide the Full Name of any beneficial owner of the trust. A Beneficial owner of a trust is any individual who has
a 25% or more interest in the trust or controls the trust. This includes the appointor of the trust (who holds the power
to appoint or remove the trustees of the trust), the settlor of any trust over $10,000 upon establishment, and
beneficiaries with at least a 25% interest in the trust. All beneficial owners will need to provide AML verification
documents as per page 2. Please provide beneficial owners as an attachment if there is insufficient space below:
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Page 6 of 13
Section 5 – Company / Corporate Trustee
Complete this section if you are investing for a company or where a company is acting as a trustee.
For AML requirements please refer to page 2.
5.1 Company Type
Australian Listed Public Company – complete 5.2
Australian Proprietary Company or non-listed public company – complete 5.2 and 5.4
Foreign Company – complete all sections
5.2 Company Details
Company Name
ACN/ABN (if registered in Australia)
Tax File Number (TFN) – or exemption code
Reason for TFN Exemption
Given Name(s) of Contact Person
Registered Street Address (Not PO Box)
State
Suburb
Post Code
Country
Principal place of business in Australia
Note for non-Australian companies: you must provide a local agent name and address if you do not have a principal
place of business in Australia.
Tick if the same as above, otherwise provide:
Registered Street Address (Not PO Box)
Suburb
State
Post Code
5.3 Additional Details for non-Australian Company
Tick if the company is registered with ASIC
Australian Registered Body Number (ARBN)
Tick if the company is registered with a regulatory body
Name of Regulatory Body
Company Identification Number Issued (if any)
Registered Company Address (Not PO Box)
State
Suburb
Post Code
Country
5.4 Beneficial owner
a. Managing Officials: All proprietary or non-listed public domestic companies and foreign companies must
provide the full name of each senior managing official/s of the company (such as the managing director or directors who are
authorised to sign on the company’s behalf):
1
2
3
4
If there are more than 4 directors please provide as an attachment.
b. Shareholders: All proprietary or non-listed public domestic companies and foreign companies must provide
details of each shareholder who owns directly, jointly or beneficially at least 25% of the company’s issued capital.
Shareholder 1
Full Name
Registered Street Address (Not PO Box)
State
Post Code
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Suburb
Country
Page 7 of 13
Shareholder 2
Full Name
Registered Street Address (Not PO Box)
State
Post Code
Suburb
Country
If there are more than 2 shareholders that each have at least 25% of the company’s issued capital, provide as an attachment.
* See page 2 of the Application Form for terms and conditions relating to the collection of TFNs and ABNs.
Section 6 – Authorised representative or agent
Complete this section if you are completing this Application Form as an agent under a direct authority such as a Power of
Attorney. You must also complete the section relevant to the investor/applicant that you are acting on behalf of.
For AML requirements please refer to page 2.
6.1 Appointment of Power of Attorney
I would like to appoint an authorised representative to operate on this account OR
I am an agent under Power of Attorney or the investor’s legal or nominated representative - complete 6.2
Full name of authorised representative / agent
Title of role held with applicant
Signature
6.2 Power of Attorney Documentation
You must attach a valid Power of Attorney.
The document is an original or certified copy
The document is signed by the applicant / investor
The document is current and complete
The document permits the attorney / agent (you) to transact on behalf of the applicant / investor
Section 7 – Financial adviser
By completing this section you nominate the named adviser as your financial adviser for the purposes of your investment in the
Fund. You also consent to give your financial adviser / authorised representative / agent access to your account information
unless you indicate otherwise by ticking the box below.
For AML requirements please refer to page 2.
7.1 Financial adviser
I am a financial adviser completing this application form as an authorised representative or agent.
Name of Adviser
AFSL Number
Dealer Group
Name of Advisory Firm
Postal Address
State
Suburb
Post Code
Country
Email Address of Advisory Firm (required)
Email Address of Adviser
Business Telephone
Facsimile
7.2 Financial Adviser Declaration
I/We hereby declare that I/we are not a US Person as defined in the PDS
I/We hereby declare that the investor is not a US Person as defined in the PDS
I have completed an appropriate customer identification procedure (CID) on this investor which meets the AML/CTF
Act.
AND EITHER
I have attached the relevant CID documents
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Page 8 of 13
OR
I have not attached the CID documents however I will retain them and agree to provide them to EQT on request. I
also agree to forward these documents to EQT if I ever become unable to retain the documents.
I have provided personal financial advice to the investor(s) named in this Application taking into account their personal
needs, objectives, financial and taxation situation (having regard to the nature and any complexities of this product), have
complied with all requirements of the Corporations Act and applicable law in relation to this investment by the investor(s)
and have provided the Investor with a statement of advice. If I cease being the financial advisor for the Investor I will notify
the Administrator at that time.
Financial Adviser Signature
Date
7.3 Access to Information
Unless you elect otherwise, your financial adviser will have access to your account information and will receive copies of all
statements and transaction confirmations.
Please tick this box if you DO NOT want your financial adviser to have access to information about your investment.
Please tick this box if you DO NOT want copies of statements and transaction confirmations sent to your adviser.
Section 8 –INVESTMENT INSTRUCTIONS (All investors MUST complete)
8.1 Contact Details
Title
Given Name (s)
Surname
Home Telephone Number (including Country)
Unit
Date of Birth (DDMMYY)
Street Number Street Name
Postcode
Suburb
Country
State
Mobile Telephone (including Country)
Email Address
Business Telephone (including Country)
Facsimile
8.2 Investment Details
AV Chindia Opportunitites Fund (ETL0081AU)
Full name investment to be held in
Investment Amount
,
$
,
.
The minimum initial investment in the Fund is $50,000
8.3 Distribution Instructions
Reinvest distributions
If you select this option your distributions will be reinvested in the Fund.
Pay distributions to the bank account below (Australian investors only)
8.4 Investor Banking Details for Redemptions and Distributions (if applicable)
Account name
Financial Institution
Branch (including Country)
BSB
Account Number
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Page 9 of 13
8.5 Payment Method
Cheque
Make cheques payable to “Equity Trustees Ltd as RE for AV Chindia Opportunities Fund”
Electronic Funds Transfer
Bank Name & Address
(including country)
Account Name
NAB
105 Miller Street, North Sydney, NSW 2060 (AUSTRALIA)
Equity Trustees Limited as RE for AV Chindia Opportunities Fund - Application
BSB Number
082 401
Account Number
149 244 732
Reference
8.6 Elections
Annual Financial Report
The annual financial report for the Fund will be available on www.eqt.com.au from 30 September each year,
however, if you would like a hard copy of the annual financial report sent to you please tick the box.
Privacy
Do you wish to receive marketing information from EQT (and EQT’s related bodies corporate) about products and
services that may be of interest to you? This information may be distributed by mail, email or other form of
communication.
Yes
No
8.7 Purpose of Investment and Source of Funds
Please outline the purpose of investment (e.g. superannuation, portfolio investment, etc)
Please outline the source/s of initial funding and anticipated ongoing funding (e.g. salary, savings, business activity,
financial investments, real estate, inheritance, gift, etc and expected level of funding activity or transactions)
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Page 10 of 13
Section 9 – Foreign Account Tax Compliance Act (FATCA) (All Investors MUST complete)
The US Foreign Tax Compliance Act (FATCA) requires us to collect certain information about each investor’s tax residency and tax
classifications. In certain circumstances (including if the below section is not completed by you) we may be obliged to share information
on your account with the Australian Tax Authorities. If you have any questions about your tax status, please contact your tax adviser.
9.1 Individual and joint investors (Company, Superannuation and other Trusts, Partnership etc please complete
section 9.2)
Investor 1
PERMANENT TAX RESIDENCE ADDRESS. If your tax residence address is different from the registered address in
Section 2, please complete the following:
For the attention of:
Address (Not PO Box)
State
Suburb
Post Code
Country
Are you a U.S. citizen or U.S. resident for tax purposes?
No (go to section 10)
Yes
Please provide your US Taxpayer Identification Number (TIN):
(please note that you may not be eligible to enter in the funds, in which case we will contact you).
Investor 2
PERMANENT TAX RESIDENCE ADDRESS. Should your tax residence address be different from the registered address
in Section 1, please complete the following:
For the attention of:
Address (Not PO Box)
State
Suburb
Post Code
Country
Are you a U.S. citizen or U.S. resident for tax purposes?
No (go to section 10)
Yes Please provide your US Taxpayer Identification Number (TIN):
(please note that you may not be eligible to enter in the funds, in which case we will contact you).
9.2 Companies, Superannuation and other Trusts, Partnership (Entities)
Please choose one of the following options:
A US Entity (established under the laws of the US, or, for a trust, administered under the laws of the US)
Please provide the Entity’s US Taxpayer Identification Number (TIN):
Is the Entity an exempt payee for US tax purposes?
 Yes  No
If the Entity is an exempt payee, provide its exemption code:
(please note that you may not be eligible to enter in the funds, in which case we will contact you).
A Foreign Financial Institution
Provide the Entity’s Global Intermediary Identification Number (GIIN), if applicable:
GIIN
If the Entity is a Financial Institution but does not have a GIIN, provide its FATCA Status:
Deemed Compliant Financial Institution (includes Registered Deemed Compliant FFI)
Exempt Beneficial Owner (includes Certified Deemed Compliant FFIs)
Nonparticipating Financial Institution
Other (please provide specific status as per US FATCA legislation)
)
A Trustee Documented Trust
Provide the Trustee’s Global Intermediary Identification Number (GIIN), if applicable:
GIIN
If you are not a Financial Institution, please confirm your FATCA status below:
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Page 11 of 13
Non-Financial Australian Public Listed Company, Corporate Australian Registered Charity, or Australian
Government Body (Active Non-Financial entities for FATCA purposes)
Non- Financial Proprietary Company, Private Company, Unlisted Public Company, or other trust (Passive
NFFE for FATCA purposes).
If so, do you have any Controlling Person/s (including beneficial owners) who are US citizens or residents of the US
for tax purposes?
No
Yes
If yes, please provide details of any controlling individuals or entities below:
Full Name
Full Name
Date of Birth
Date of Birth
Full Residence Address
Full Residence Address
Details of controlling person’s
beneficial ownership (%)
Details of controlling person’s
beneficial ownership (%)
US TIN
US TIN
Declaration and undertakings
I undertake to advise the recipient promptly for FATCA self-certification where any of the information above changes.
Please note that the Fund Administrator will review your self-certification in the context of the FATCA due diligence, and may have to
request additional supporting documentation.
Key definitions for the FATCA section
It is the responsibility of prospective investors to inform
themselves as to the tax consequences to them of buying,
holding, selling (or otherwise transferring) or redeeming shares
under the laws of the country(ies) in which they are or may be
taxable. These definitions are provided for your information
only and you are encouraged to seek the assistance of an
independent financial professional or tax adviser to facilitate the
completion of this form.
A Foreign Financial Institution is a non-US entity (e.g.
company, partnership or trust) that engages in one of the
following:
i)
ii)
iii)
accepts deposits in the ordinary course of a banking or
similar business (depository institution);
holds as a substantial portion of its business (equals or
exceeds 20 percent of the entity's gross income) financial
assets for the account of others (custodial institution);
is an investment entity including entities that trade in
financial assets or that are investing, administering,
managing funds, money, or certain financial assets on
behalf of other persons
AV Chindia Opportunities Fund– Application Form – 1 January 2016
iv)
v)
is an insurance company; or
is an entity that is a holding company or treasury centre
that is a part of a group that includes one of the above.
For further information regarding these definitions refer to
http://www.irs.gov/Businesses/Corporations/Information-forForeign-Financial-Institutions
An IGA (Inter-Governmental Agreement) means an agreement
between the US or the Treasury Department and a foreign
government to implement FATCA through reporting by
Financial Institutions to such foreign government (Model 1) or
to the IRS (Model 2).
A controlling person is any individual who directly or indirectly
exercises ultimate effective control over the entity. For a
company, this includes beneficial owners controlling more than
25% of the shares in the company. For a Trust, this includes
Trustees, Settlors, Protectors or Beneficiaries. For a
partnership this includes any partners.
Page 12 of 13
Section 10 – DECLARATIONS (All Investors MUST complete)
Applicant 1
Applicant Given Name(s)
Capacity
Individual Signatory
Director
Executive Office
Partner
Sole Director / Secretary
Authorised Signatory
Signature
Date
Company Seal (if applicable)
Applicant 2
Applicant Given Name(s)
Capacity
Individual Signatory
Director
Executive Office
Partner
Sole Director / Secretary
Authorised Signatory
Signature
Date
Company Seal (if applicable)
Application Checklist
Have you completed all sections relevant to you (as set out in the introduction)?
Have you nominated your financial adviser in section 7 (if applicable)?
Have you provided certified copies of your identification documents or has your financial adviser completed this for you?
Have you completed all other relevant details and SIGNED the Application Form?
If you can tick all of the boxes above, send the following:

Completed Application Form;

Certified copies of identification documents

A cheque made payable to ‘Equity Trustees Ltd as RE for AV Chindia Opportunities Fund’ (unless you are paying by direct
debit);
by post to
FundBPO Pty Ltd
Attention: Client services registry team
GPO Box 4968
Sydney NSW 2001
For additional applications the duly completed Application Form (including details regarding your direct credit payment) may be
mailed to the postal address above or faxed to the following fax number: +61 2 9251 3525 FundBPO Pty Ltd, Attention: Client
services registry team – AV Chindia Opportunities Fund.
AV Chindia Opportunities Fund– Application Form – 1 January 2016
Page 13 of 13