DMG Diversified Portfolio - EQT · 2020-02-10 · DMG Diversified Portfolio Product Disclosure Statement ARSN 163 142 292 APIR SLT0039AU Issue Date 10 February 2020 About this PDS

DMG Diversified PortfolioProduct Disclosure StatementARSN 163 142 292APIR SLT0039AUIssue Date 10 February 2020

About this PDSThis Product Disclosure Statement (“PDS”) has been prepared and issued by EquityTrustees Limited (“Equity Trustees”, “we” or “Responsible Entity”) and is a summary ofthe significant information relating to an investment in the DMG Diversified Portfolio (the“Fund”). It contains a number of references to important information (including a glossaryof terms) contained in the DMG Diversified Portfolio Reference Guide (“ReferenceGuide”), which forms part of this PDS. You should carefully read and consider both theinformation in this PDS, and the information in the Reference Guide, before making adecision about investing in the Fund.

The information provided in this PDS is general information only and does not takeaccount of your personal objectives, financial situation or needs. You should obtainfinancial and taxation advice tailored to your personal circumstances and considerwhether investing in the Fund is appropriate for you in light of those circumstances.

The offer to which this PDS relates is available to any investor receiving this PDS(electronically or otherwise) in Australia.

This PDS does not constitute a direct or indirect offer of securities in the US or to any USPerson as defined in Regulation S under the Securities Act of 1933 as amended (“USSecurities Act”). Equity Trustees may vary this position and offers may be accepted on meritat Equity Trustees’ discretion. The units in the Fund have not been, and will not be,registered under the US Securities Act unless otherwise approved by Equity Trustees andmay not be offered or sold in the US to, or for, the account of any US Person (as defined inthe Reference Guide) except in a transaction that is exempt from the registrationrequirements of the US Securities Act and applicable US state securities laws.

Contents1. About Equity Trustees Limited

2. How the DMG DiversifiedPortfolio works

3. Benefits of investing in the DMGDiversified Portfolio

4. Risks of managed investmentschemes

5. How we invest your money

6. Fees and costs

7. How managed investmentschemes are taxed

8. How to apply

9. Other information

The Reference GuideThroughout the PDS, there are references to additional information contained in the Reference Guide. You can obtain a copy of the PDS andthe Reference Guide, free of charge, by contacting your financial planner or visiting www.eqt.com.au/insto or by calling the Responsible Entity.

The information contained in the Reference Guide may change between the day you receive this PDS and the day you acquire the product. Youmust therefore ensure that you have read the Reference Guide current as at the date of your application.

Updated informationInformation in this PDS is subject to change. We will notify you of any changes that have a material adverse impact on you or othersignificant events that affect the information contained in this PDS. Any information that is not materially adverse information is subject tochange from time to time and may be obtained by contacting your financial planner or visiting www.eqt.com.au/insto. A paper copy of theupdated information will be provided free of charge on request.

Investment ManagerClearwater Portfolio Management Pty LimitedABN 40 609 673 645PO Box 429Sale VIC 3850Web: www.clearwaterpm.com.au

AdministratorRBC Investor Services TrustGPO Box 4471Sydney, NSW 2001Australia

Responsible EntityEquity Trustees LimitedABN 46 004 031 298, AFSL 240975GPO Box 2307Melbourne VIC 3001Ph: +61 3 8623 5000Web: www.eqt.com.au/insto

DMG Diversified Portfolio PDS 1

1. About Equity Trustees LimitedThe Responsible EntityEquity Trustees LimitedEquity Trustees Limited ABN 46 004 031 298 AFSL 240975, asubsidiary of EQT Holdings Limited ABN 22 607 797 615, which is apublic company listed on the Australian Securities Exchange (ASX:EQT), is the Fund’s responsible entity and issuer of this PDS.Established as a trustee and executorial service provider by a specialAct of the Victorian Parliament in 1888, today Equity Trustees is adynamic financial services institution which continues to grow thebreadth and quality of products and services on offer.

Equity Trustees’ responsibilities and obligations as the Fund’sresponsible entity are governed by the Fund’s constitution(“Constitution”), the Corporations Act and general trust law. EquityTrustees has appointed Clearwater Portfolio Management Pty Ltd asthe portfolio manager of the Fund. Equity Trustees has appointed acustodian to hold the assets of the Fund. The custodian has nosupervisory role in relation to the operation of the Fund and is notresponsible for protecting your interests.

The Investment ManagerClearwater Portfolio Management Pty Limited (CPM)CPM has responsibility for the day to day operations andmanagement of the DMG Diversified Portfolio. CPM oversees theportfolio research and the portfolio construction process. To assist inportfolio research and construction, CPM has engaged specialists tolead the process. CPM also operates an Investment Committee thatincludes these parties, along with representatives from DMGFinancial Planning Pty Ltd and the CEO of CPM. It has guidelines anda framework to determine how the portfolio is constructed andmanaged.

CPM is a corporate authorised representative of DMG FinancialPlanning Pty Ltd (AFS Licensee No. 238354).

2. How the DMG DiversifiedPortfolio works

The Fund is a registered managed investment scheme governed bythe Constitution. The Fund comprises assets which are acquired inaccordance with the Fund’s investment strategy. Direct investorsreceive units in the Fund when they invest. In general, each unitrepresents an equal interest in the assets of the Fund subject toliabilities; however, it does not give investors an interest in anyparticular asset of the Fund.

If you invest in the Fund through an IDPS (as defined in the ReferenceGuide) you will not become an investor in the Fund. The operator orcustodian of the IDPS will be the investor entered in the Fund’sregister and will be the only person who is able to exercise the rightsand receive the benefits of a direct investor. Your investment in theFund through the IDPS will be governed by the terms of yourIDPS. Please direct any queries and requests relating to yourinvestment to your IDPS Operator. Unless otherwise stated, theinformation in the PDS applies to direct investors.

Applying for unitsYou can acquire units by completing the Application Form thataccompanies this PDS. The minimum initial investment amount forthe Fund is $1,000.

Completed Application Forms should be sent along with youridentification documents (if applicable) to:

RBC Investor Services Trust Registry OperationsGPO Box 4471Sydney, NSW 2001AustraliaFax: 02 8262 5492

Please note that cash cannot be accepted.

We reserve the right to accept or reject applications in whole or inpart at our discretion. We have the discretion to delay processingapplications where we believe this to be in the best interest of theFund’s investors.

The price at which units are acquired is determined in accordancewith the Constitution (“Application Price”). The Application Price ona Business Day is, in general terms, equal to the Net Asset Value(“NAV”) of the Fund, divided by the number of units on issue andadjusted for transaction costs (“Buy Spread”). At the date of thisPDS, the Buy Spread is 0.20%.

The Application Price will vary as the market value of assets in theFund rises or falls.

Making additional investmentsYou can make additional investments into the Fund at any time bysending us your additional investment amount together with acompleted Application Form. The minimum additional investmentinto the Fund is $100.

DistributionsAn investor’s share of any distributable income is calculated inaccordance with the Constitution and is generally based on thenumber of units held by the investor at the end of the distributionperiod.

The Fund usually distributes income at least annually at the end ofJune, however, Equity Trustees may change the distributionfrequency without notice. Distributions are calculated effective thelast day of each distribution period and are normally paid to investorsas soon as practicable after the distribution calculation date.

Investors in the Fund can indicate a preference to have theirdistribution:

• reinvested back into the Fund; or• directly credited to their AUD Australian domiciled bank

account.

Investors who do not indicate a preference will have theirdistributions automatically reinvested. Applications for reinvestmentwill be taken to be received immediately prior to the next BusinessDay after the relevant distribution period. There is no Buy Spread ondistributions that are reinvested.

In some circumstances, the Constitution may allow for an investor’swithdrawal proceeds to be taken to include a component ofdistributable income.

Indirect Investors should review their IDPS Guide for information onhow and when they receive any income distribution.

Access to your moneyInvestors in the Fund can generally withdraw their investment bycompleting a written request to withdraw from the Fund and mailingit to:


The minimum withdrawal amount is $1,000. Once we receive andaccept your withdrawal request, we may act on your instructionwithout further enquiry if the instruction bears your account numberor investor details and your (apparent) signature(s), or yourauthorised signatory’s (apparent) signature(s).

Equity Trustees will generally allow an investor to access theirinvestment within 14 days of acceptance of a withdrawal request bytransferring the withdrawal proceeds to such investor’s nominatedbank account. However, Equity Trustees is allowed to rejectwithdrawal requests, and also to make payment up to 180 days afteracceptance of a request (which may be extended in certaincircumstances) as outlined in the Constitution and Reference Guide.

We reserve the right to accept or reject withdrawal requests in wholeor in part at our discretion.

2 DMG Diversified Portfolio PDS

The price at which units are withdrawn is determined in accordancewith the Constitution (“Withdrawal Price”). The Withdrawal Price ona Business Day is, in general terms, equal to the NAV of the Fund,divided by the number of units on issue and adjusted for transactioncosts (“Sell Spread”). At the date of this PDS, the Sell Spread is0.20%.

The Withdrawal Price will vary as the market value of assets in theFund rises or falls.

Equity Trustees reserves the right to fully redeem your investment ifyour investment balance in the Fund falls below $1,000 as a result ofprocessing your withdrawal request. In certain circumstances, forexample, when there is a freeze on withdrawals, where accepting awithdrawal is not in the best interests of investors in the Fundincluding due to one or more circumstances outside its control orwhere the Fund is not liquid (as defined in the Corporations Act),Equity Trustees can deny or suspend a withdrawal request and youmay not be able to withdraw your funds in the usual processing timesor at all. When the Fund is not liquid, an investor can only withdrawwhen Equity Trustees makes a withdrawal offer to investors inaccordance with the Corporations Act. Equity Trustees is not obligedto make such offers.

If you are an Indirect Investor, you need to provide your withdrawalrequest directly to your IDPS Operator. The time to process awithdrawal request will depend on the particular IDPS Operator andthe terms of the IDPS.

Unit pricing discretions policyEquity Trustees has developed a formal written policy in relation tothe guidelines and relevant factors taken into account whenexercising any discretion in calculating unit prices (includingdetermining the value of the assets and liabilities). A copy of thepolicy and, where applicable and to the extent required, any otherrelevant documents in relation to the policy will be made availablefree of charge on request.

Additional informationIf and when the Fund has 100 or more direct investors, it will beclassified by the Corporations Act as a ‘disclosing entity’. As adisclosing entity, the Fund will be subject to regular reporting anddisclosure obligations. Investors would then have a right to obtain acopy, free of charge, of any of the following documents:

• the most recent annual financial report lodged with ASIC(“Annual Report”);

• any subsequent half yearly financial report lodged with ASICafter the lodgement of the Annual Report; and

• any continuous disclosure notices lodged with ASIC after theAnnual Report but before the date of this PDS.

Equity Trustees will comply with any continuous disclosure obligationby lodging documents with ASIC as and when required.

Copies of these documents lodged with ASIC in relation to the Fundmay be obtained from ASIC through ASIC’s website.

Further readingYou should read the important information in the ReferenceGuide about:

• Application cut-off times;

• Application terms;

• Authorised signatories;

• Reports;

• Withdrawal cut-off times;

• Withdrawal terms; and

• Withdrawal restrictions,

under the “Investing in the DMG Diversified Portfolio”,“Managing your investment” and “Withdrawing yourinvestment” sections before making a decision. Go to theReference Guide which is available atwww.clearwaterpm.com.au or www.eqt.com.au/insto. Thematerial relating to these matters may change between the timewhen you read this PDS and the day when you acquire theproduct.

3. Benefits of investing in the DMGDiversified Portfolio

3.1. Significant featuresInvesting in the Fund is designed to provide a diversifiedportfolio with a focus on growth investments and utilising rigorousportfolio construction and risk management techniques, attemptingto enhance the long term return potential of an investor’s investmentportfolio. Managing risk and preserving capital is also a high priority.

The Fund is a growth oriented investment portfolio with the flexibilityto be managed more conservatively or aggressively as determinedby the manager.Investors can use the Fund as the core part of their own portfolio, orwhere appropriate as a total investment solution, if they considerthat the holdings, asset allocation and ranges available, suit theirtolerance and capacity for risk.

3.2. Significant benefitsThere are many benefits of investing in the Fund. Some of thesignificant benefits include:

• to improve diversification• the investments are continually reviewed and rebalanced as

economic and market conditions change,• utilising investment, economic and research specialists to

provide insight into micro- and macro-economic conditions,• applying systematic risk management and rigorous due

diligence processes to better manage risk• accessing wholesale investment vehicles not ordinarily available

to investors.

4. Risks of managed investmentschemes

All investments carry risks. Different investment strategies may carrydifferent levels of risk, depending on the assets acquired under thestrategy. Assets with the highest long-term returns may also carry thehighest level of short-term risk. The significant risks below should beconsidered in light of your risk profile when deciding whether toinvest in the Fund. Your risk profile will vary depending on a range offactors, including your age, the investment time frame (how long youwish to invest for), your other investments or assets and your risktolerance.


The Responsible Entity and Investment Manager do not guaranteethe liquidity of the Fund’s investments, repayment of capital or anyrate of return or the Fund’s investment performance. The value of theFund’s investments will vary. Returns are not guaranteed and you maylose money by investing in the Fund. The level of returns will vary andfuture returns may differ from past returns. Laws affecting managedinvestment schemes may change in the future. The structure andadministration of the Fund is also subject to change.

In addition, we do not offer advice that takes into account yourpersonal financial situation, including advice about whether the Fundis suitable for your circumstances. If you require personal financial ortaxation advice, you should contact a licensed financial adviserand/or taxation adviser.

Investment riskThis is the risk that the value of the entire portfolio may change orbecome more volatile, potentially causing a loss.

Reasons may include changes in an investment’s operations,management or business environment, or what people think of theinvestment.

How is investment risk addressed?

The Portfolio Investment Committee selects and monitors theunderlying investments and managers carefully, and changes themwhen it thinks it appropriate.

The Portfolio is diversified, including by setting limits for the amountheld in each asset class.

Market riskThis is the risk that an entire market, country or economy changes invalue or becomes more volatile, including the risk that thepurchasing power of the currency changes (either through inflationor deflation), potentially causing a reduction in the value of theportfolio.

Reasons can include changes in economic, financial, technological,political or legal conditions, natural and man-made disasters,conflicts and changes in market sentiment.

How is market risk addressed?

The Portfolio Investment Committee monitors markets globally,undertaking its own research as well as analysing leading marketresearch, and uses tools to model Portfolio behaviour under variousconditions. The Portfolio is diversified across markets and isrepositioned strategically as considered appropriate.

Financial instruments riskThis is the risk associated with using sophisticated financialinstruments such as derivatives, including swaps and options. Risksassociated with using these tools include the value of a derivativefailing to move in line with the underlying asset, potential illiquidityof a derivative, the Portfolio (or the underlying investment) not beingable to meet payment obligations as they arise, potential leverage(or gearing) resulting from the position and counterparty risk.

Counterparty risk is where the other party to the derivative cannotmeet its obligations.

How is financial instruments risk addressed?

The Portfolio Investment Committee may use derivatives where itconsiders it appropriate to reduce Portfolio risk or to gain exposuresto certain types of assets.

Leading professionals are employed and always have a thoroughunderstanding of the financial instruments used. We deal with issuersand counterparties we consider to be reputable. If using a financialinstrument brings with it the potential to pay more money, thePortfolio Investment Committee makes sure it has the money orassets set aside.

Such exposures are monitored frequently, and they may be adjustedto maintain appropriate exposures. To the extent consideredappropriate and practicable the Portfolio Investment Committeeaims to ensure that underlying investment managers havederivatives strategies which are considered acceptable.

Unfortunately using Derivatives to reduce Portfolio risk is not alwayssuccessful, is not always used to offset all relevant Portfolio risk, andis sometimes not cost effective or practical to use.

Interest rates riskThis is the risk that changes in interest rates can have a negativeimpact on certain investment values or returns. Reasons for interestrates changes are many and include changes in inflation, economicactivity and Central Bank policies.

How is interest rate risk addressed?

The Portfolio Investment Committee monitors interest rate impacton the Portfolio, and adjusts the Portfolio as it considers appropriate.It may also seek to offset (or hedge) some interest rate exposurewhere practicable and cost effective.

Inflation riskIncreases in inflation will undermine the performance of the variousinvestment markets in which the Portfolios invest. As noted aboveinflation can also have an effect on Central Bank policies.

Reasons for inflation can include (but are not limited to) growth of themoney supply and the rising costs of raw materials, labour and/orproduction.

How is inflation risk addressed?

The Portfolio Investment Committee monitors inflation rates in keyeconomies that could impact on the Portfolio. The Portfolio caninvest in assets whose goal is to partly or fully reduce the risk ofinflation on the Portfolio. Such investments can have anti-inflationarycharacteristics such as inflation linked bonds, gold and productslinked to the price of gold.

Currency riskThis is the risk that changes in the value of currencies can have anegative impact on returns.

It arises because investments which are based overseas or which areexposed to other countries are often denominated in othercurrencies. When currencies change in value relative to one another,the value of investments based on those currencies can change aswell.

Investment managers sometimes aim to “hedge” some of this risk.This involves a financial arrangement designed to offset changes incurrencies. Derivatives can be used for this purpose.

How is currency risk addressed?

To the extent it is considered appropriate and practicable, thePortfolio Investment Committee may hedge some foreign currencyrisk or use investment managers which do so from time to time.

But in spite of some potential hedging, currency risk remains andcurrency movements will have both a positive and negative impacton the Portfolio.

Withdrawal riskThis is the risk that your withdrawal requests cannot be met when youexpect.

Cash is paid to your account when you withdraw, and as suchinvestments of the Fund may need to be sold to pay you. Dependingon factors such as the state of the markets, selling investments is notalways possible, practicable or consistent with the best interests of allinvestors.

This is one of the reasons why the constitution for the Fund specifieslimited circumstances where there could be a delay in meeting yourwithdrawal requests. The law sometimes restricts withdrawals.

The Fund is not listed on any stock exchange, so you cannot sell yourunits through a stockbroker and, although you may sell your units,you may not find a buyer or a buyer at the price you want.

How is withdrawal risk addressed?

The Fund seeks to meet withdrawal requests soon after the Fundreceives them


CPM does this by monitoring Fund liquidity and transaction levelsand seeks to ensure it has, or anticipates having access to, enoughliquid assets for when it is anticipated they would normally beneeded.

Structure riskThis is the risk associated with having someone invest for you.

Risks associated with investing in the Fund include that it could beterminated, there can be changes in the responsible entity or ourchosen investment managers (or in investment and managementteams or key relationships), someone involved with your investment(even remotely) does not meet their obligations or perform asexpected, assets may be lost, not recorded properly ormisappropriated, laws may adversely change, insurers may not paywhen expected or insurance may be inadequate.

Investment decisions by us or chosen investment managers,although taken carefully, are not always successful.

Investing through an administration platform also brings some risksthat the operator of the platform may not perform its obligationsproperly.

Investing in the Fund may give inferior results compared to investingdirectly (for example you avoid the impact of others investing andwithdrawing).

How is structure addressed?

We diligently comply with laws. Disaster recovery systems andprocedures are regularly tested. Insurance is maintained as lawrequires. We employ a range of people we trust, who are ethical,experienced and professional.

Information riskWe use the internet in operating the Portfolio, including records thatmay be stored in remote server locations otherwise known as “thecloud”. If stored overseas, different privacy and other standards mayapply there. Our Privacy Policy is discussed below.

The internet does not always result in a secure informationenvironment.

How is information risk addressed?

We are committed to ensuring that your information is kept secureand protected from misuse and loss and from unauthorized access,modification and disclosure. Although we take steps we considerreasonable to protect your information, we cannot absolutelyguarantee its security.

5. How we invest your money

Warning: Before choosing to invest in the Fund you shouldconsider the likely investment returns, the risks of investing andyour investment time frame.

Investment objectiveOur objectives are to achieve, over rolling 5 year periods:

• returns of 4% p.a. above the Cash Rate1, and• 8% p.a. target volatility

as measured by standard deviation of returns but neither of these areguaranteed, forecast or promised.

BenchmarkThe Cash Rate is the 30 day Australian Bank Bill return.

Minimum suggested time frameThe minimum suggested investment time frame for the Fund is 5years.

Risk level of the FundMedium.

Investor suitabilityThe Fund is generally suited for persons seeking a diversifiedportfolio with a focus on growth based investments.

Investment style and approachThe investment process is a dynamic one that aims to ensure that theinvestment objectives of the Portfolio are met.

In short, the aim is to help investors create wealth carefully over timethrough a Portfolio designed to do well in rising markets but alsolimit major losses in difficult market conditions.

This is done by:

• positioning the Portfolio with the appropriate asset mix toachieve the investment objectives based on forward lookingscenarios, asset class valuation models, and further researchmaterial, Combining defensive and growth assets in a mannerthat provides a level of protection, but not immunity, in periodswhen stockmarkets fall.

• investing across different markets, investment managers andstrategies using a rigorous due diligence process,

• focusing on preserving capital by aiming to limit major capitallosses during difficult market conditions, through the use ofalternative investments and portfolio protection strategies, andtaking a medium to long term approach.

• using both direct and indirect investments.

Asset allocationThe Fund maintains an exposure to the asset allocation viainvestments in underlying funds.

In general approximately 70% of the funds will be invested in growthassets and 30% in defensive assets.

More specifically:

Defensive Assets RangeNeutralPosition

Cash & Fixed Interest 0-40% 30%

Growth Assets

Alternatives/Opportunistic (e.g. hedge fundsor other funds employing leverage)

0-35% 13.5%

Property & Infrastructure 5-25% 11.5%

Australian shares 10-50% 21.5%

International shares 10-50% 23.5%

Changing the investment strategyThe investment strategy and asset allocation parameters may bechanged. If a change is to be made, investors in the Fund will benotified in accordance with the Corporations Act.

Labour, environmental, social and ethicalconsiderationsEquity Trustees and CPM may consider labour standards orenvironmental, social or ethical considerations for the purposes ofselecting, retaining or realising investments.

Fund performanceUp to date information on the performance of the Fund can beobtained from clearwaterpm.com.au. A free of charge paper copy ofthe information will also be available on request.


6. Fees and costs

DID YOU KNOW?Small differences in both investment performance and feesand costs can have a substantial impact on your long-termreturns.

For example, total annual fees and costs of 2% of your accountbalance rather than 1% could reduce your final return by up to20% over a 30 year period (for example, reduce it from$100,000 to $80,000).

You should consider whether features such as superiorinvestment performance or the provision of better memberservices justify higher fees and costs.

You may be able to negotiate to pay lower contribution feesand management costs where applicable. Ask the fund or yourfinancial adviser.

TO FIND OUT MOREIf you would like to find out more, or see the impact of the feesbased on your own circumstances, the Australian Securities andInvestments Commission (ASIC) website(www.moneysmart.gov.au) has a managed funds fee calculatorto help you check out different fee options.

The information in the following template can be used to comparecosts between different simple managed investment schemes. Feesand costs can be paid directly from an investor’s account ordeducted from investment returns. For information on tax please seeSection 7 of this PDS.

Type of fee or cost Amount

Fees when your money moves in or out of the Fund

Establishment Fee Nil

Contribution Fee Nil

Withdrawal Fee Nil

Exit Fee Nil

Management costs

The fees and costs formanaging yourinvestment1

Management fees: 0.49% p.a. of the NAVof the Fund2.

Indirect Costs 0.83% of the NAV of theFund3.

1 All fees quoted above are inclusive of Goods and Services Tax (GST)and net of any Reduced Input Tax Credits (RITC).2 Management fees can be negotiated. See “Differential fees”below. See below for more details as to how Management Costs(including indirect costs) are calculated.3 The indirect costs are calculated with reference to the relevant costsincurred during the financial year ended 30 June 2019. See “Indirectcosts” below for more information.

Additional Explanation of fees and costsWhat do the Management costs pay for?Management costs comprise the additional fees or costs that aunitholder incurs by investing in the Fund rather than by investingdirectly in the underlying assets of the Fund. Management costsinclude management fees and indirect costs.

In addition, management costs do not include transactional andoperational costs (i.e. costs associated with investing the underlyingassets, some of which may be recovered through Buy/Sell Spreads).

Management feesThe management fee of 0.49% p.a. of the NAV of the Fund is payableto the Responsible Entity of the Fund for managing the assets andoverseeing the operations of the Fund. The management fee isaccrued daily and paid from the fund monthly in arrears. As at thedate of this PDS, ordinary expenses such as investment managementfees, custodian fees (excluding transaction-based fees such astrading or settlement costs incurred by the custodian),administration and audit fees, and other ordinary expenses ofoperating the Fund are covered by the management fee at noadditional charge to you.

The management fees shown above do not include extraordinaryexpenses (if they are incurred in future) such as litigation costs, thecosts of convening Unitholder meetings and other costs.

Indirect costsIndirect costs include fees and management costs (if any) arisingfrom underlying funds. Indirect costs are reflected in the unit price ofthe Fund and borne by Investors, but they are not paid to theResponsible Entity or Investment Manager.

The actual components of the Fund’s indirect costs are based on thefinancial year ended 30 June 2019.

Actual indirect costs for future years may differ. If in future there is anincrease to indirect costs disclosed in this PDS, updates will beprovided on Equity Trustees’ website at www.eqt.com.au/instowhere they are not otherwise required to be disclosed to investorsunder law.

Transactional and operational costsIn managing the assets of the Fund, the Fund may incur transactioncosts such as brokerage, settlement costs, clearing costs andapplicable stamp duty when assets are bought and sold. Thisgenerally happens when the assets of a fund are changed inconnection with day-to-day trading or when there are applications orwithdrawals which cause net cash flows into or out of a fund.

The Buy/Sell Spread is a reasonable estimate of transaction coststhat the Fund will incur when buying or selling assets of the Fund.These costs are an additional cost to the investor but areincorporated into the unit price and arise when investing applicationmonies and funding withdrawals from the Fund and are notseparately charged to the investor. The Buy Spread is paid into theFund as part of an application and the Sell Spread is left in the Fundas part of a redemption and not paid to Equity Trustees or theInvestment Manager. The estimated Buy/Sell Spread is 0.20% uponentry and 0.20% upon exit. The dollar value of these costs based onan application or a withdrawal of $1,000 is $2 for each individualtransaction. The Buy/Sell Spread can be altered by the ResponsibleEntity at any time. The Responsible Entity may also waive theBuy/Sell Spread in part or in full at its discretion.

Transactional costs which are incurred other than in connection withapplications and redemptions arise through the day-to-day tradingof the Fund’s assets and are reflected in the Fund’s unit price. Asthese costs are factored into the asset value of the Fund’s assets andreflected in the unit price, they are an additional implicit cost to theinvestor and are not a fee paid to the Responsible Entity. These costscan arise as a result of bid-offer spreads being applied by tradingcounterparties to securities traded by the Fund.

During the financial year ending 30 June 2019, the total transactioncosts for the Fund were estimated to be 0.25% of the Fund’s net assetvalue, of which 26.94% of these transaction costs were recouped viathe Buy/Sell Spread, resulting in a net transactional cost of the Fundof 0.18% p.a. However, such costs for future years may differ.


Can the fees change?Yes, all fees can change without investor consent, subject to themaximum fee amounts specified in the Constitution. Equity Trusteeshas the right to recover all proper and reasonable expenses incurredin managing the Fund and as such these expenses may increase ordecrease accordingly. We will generally provide investors with atleast 30 days’ notice of any proposed change to the ManagementCosts. Expense recoveries may change without notice, for example,when it is necessary to protect the interests of existing members andif permitted by law. In most circumstances, the Constitution definesthe maximum fees that can be charged for fees described in thisPDS.

Differential feesThe Responsible Entity or Investment Manager may from time totime negotiate a different fee arrangement (by way of a rebate orwaiver of fees) with certain investors.

Example of annual fees and costs for the FundThis table gives an example of how the fees and costs for thismanaged investment product can affect your investment over a 1year period. You should use this table to compare this product withother managed investment products.

Example – DMG Diversified Portfolio

BALANCE OF $50,000 WITH A CONTRIBUTION OF A $5,000DURING THE YEAR

Contribution Fees Nil For every $5,000 you put in,you will be charged $0.

Management fee 0.49% p.a. And, for every $50,000 youhave in the Portfolio you willbe charged $245 each year

Indirect costs 0.83% p.a. And, for every $50,000 youhave in the Portfolio you willbe charged an estimatedamount up to $415 each year.

EqualsManagementCosts

1.32% p.a. If invest $5,000 during a yearand your average balancewas $50,000 over the courseof the year, then for that yearyou will be chargedestimated fees of up to:$660**

**This example assumes the $5,000 contribution occurs at the end ofthe first year, therefore management costs are calculated using the$50,000 balance only.

Additional fees may apply. Please note that this example does notcapture all the fees and costs that may apply to you such as theBuy/Sell Spread. Additional fees may be paid to a financial adviser ifyou have engaged one. You should refer to the Statement of Adviceprovided by your financial adviser in which details of their fees are setout.

ASIC provides a fee calculator on www.moneysmart.gov.au, whichyou may use to calculate the effects of fees and costs on yourinvestment in the Fund.

Further reading�

You should read the important information about Indirect costsunder the “Additional information on fees and costs” sectionbefore making a decision. Go to the Reference Guide which isavailable at www.clearwaterpm.com.au orwww.eqt.com.au/insto. The material relating to these mattersmay change between the time when you read this PDS and theday when you acquire the product.

7. How managed investment schemesare taxed

Warning: Investing in a registered managed investmentscheme (such as the Fund) is likely to have tax consequences.You are strongly advised to seek your own professional taxadvice about the applicable Australian tax (including incometax, GST and duty) consequences and, if appropriate, foreigntax consequences which may apply to you based on yourparticular circumstances before investing in the Fund.

The Fund is an Australian resident for tax purposes and does notgenerally pay tax on behalf of its investors. Australian residentinvestors are assessed for tax on any income and capital gainsgenerated by the Fund to which they become presently entitled or,where the Fund has made a choice to be an Attribution ManagedInvestment Trust (“AMIT”) and the choice is effective for the incomeyear, are attributed to them.

Further readingYou should read the important information about Taxationunder the “Other important information” section before makinga decision. Go to the Reference Guide which is available atwww.clearwaterpm.com.au or www.eqt.com.au/insto. Thematerial relating to these matters may change between the timewhen you read this PDS and the day when you acquire theproduct.

8. How to applyTo invest please complete the Application Form accompanying thisPDS, send funds (see details in the Application Form) and yourcompleted Application Form to:


Please note that cash cannot be accepted and all applications mustbe made in Australian dollars.

Who can invest?Anyone can invest directly however individual investors must be 18years of age or over.

Investors investing through an IDPS should use the Application Formprovided by the operator of the IDPS.

Cooling off periodIf you are a Retail Client you may have a right to ‘cool off’ in relationto 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.

No cooling off applies if you are a Wholesale Client.

A Retail Client may exercise this right by notifying Equity Trustees inwriting. A Retail Client is entitled to a refund of their investmentadjusted for any increase or decrease in the relevant ApplicationPrice between the time we process your application and the time wereceive the notification from you, as well as any other tax and otherreasonable administrative expenses and transaction costs associatedwith the acquisition and termination of the investment.


The right of a Retail Client to cool off does not apply in certainlimited situations, such as if the issue is made under a distributionreinvestment plan, switching facility or represents additionalcontributions required under an existing agreement. Also, the rightto cool off does not apply to you if you choose to exercise your rightsor powers as a unit holder in the Fund during the 14 day period, thiscould include selling part of your investment or switching it toanother product.

Indirect investors should seek advice from their IDPS Operator as towhether cooling off rights apply to an investment in a fund by theIDPS. The right to cool off in relation to a fund are not directlyavailable to an indirect investor. This is because an indirect investordoes not acquire the rights of a unit holder in a fund. Rather, anindirect investor directs the IDPS Operator to arrange for theirmonies to be invested in a fund on their behalf. The terms andconditions of the IDPS Guide or similar type document will govern anindirect investor’s investment in relation to a fund and any rights anindirect investor may have in this regard.

Complaints resolutionEquity Trustees has an established complaints handling process andis committed to properly considering and resolving all complaints. Ifyou have a complaint about your investment, please contact us on:

Phone: 1300 133 472Post: Equity Trustees LimitedGPO Box 2307, Melbourne VIC 3001Email: [email protected]

We will acknowledge receipt of the complaint as soon as possibleand in any case within 3 days of receiving the complaint. We will seekto resolve your complaint as soon as practicable but not more than45 days after receiving the complaint.

If you are not satisfied with our response to your complaint, you maybe able to lodge a complaint with the Australian FinancialComplaints Authority (“AFCA”).

Contact details are:Online: www.afca.org.auPhone: 1800 931 678Email: [email protected]: GPO Box 3, Melbourne VIC 3001.

The external dispute resolution body is established to assist you inresolving your complaint where you have been unable to do so withus. However, it’s important that you contact us first.

9. Other informationConsentThe Investment Manager has given and, as at the date of this PDS,has not withdrawn:

• its written consent to be named in this PDS as the investmentmanager of the Fund; and

• its written consent to the inclusion of the statements made aboutit which are specifically attributed to it, in the form and context inwhich they appear.

The Investment Manager has not otherwise been involved in thepreparation of this PDS or caused or otherwise authorised the issueof this PDS. None of the Investment Manager nor their employees orofficers accept any responsibility arising in any way for errors oromissions, other than those statements for which they have providedtheir written consent to Equity Trustees for inclusion in this PDS.

Further readingYou should read the important information in the ReferenceGuide about:

• Your privacy;

• The Constitution;

• Anti-Money Laundering and Counter Terrorism Financing(“AML/CTF”);

• Indirect Investors;

• Information on underlying investments;

• Foreign Account Tax Compliance Act (“FATCA”); and

• Common Reporting Standard (“CRS”),

under the “Other important information” section before makinga decision. Go to the Reference Guide which is available atwww.clearwaterpm.com.au or www.eqt.com.au/insto. Thematerial relating to these matters may change between the timewhen you read this PDS and the day when you acquire theproduct.


Equity Trustees Application Form – 2020

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•

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Financial details and customer identification declaration

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Equity Trustees Application Form – 2020

RBC I&TS

GPO Box 4471 Sydney NSW 2001

Additional applications may be faxed to: +61 2 8262 5492

Please complete if you are investing individually, jointly or you are an individual or joint trustee.

See Group A AMUCTF Identity Verification Requirements in Section 9

Investor 1

Title First name(s) Surname

I �---�

Residential address (not a PO Box/RMB/Locked Bag)

Suburb State Postcode

l��l�I ��Country

Email address Contact no.

Date of birth (DD/MM/YYYY)

I I

Country of birth Occupation

Investor 2

Title First name(s)

I � -'-'----� Residential address (not a PO Box/RMB/Locked Bag)

Tax File Number* - or exem tion code

Surname

Suburb State Postcode Country

l��l�I ��Email address Contact no.

Date of birth (DD/MM/YYYY) Tax File Number* - or exem tion code

I I

Country of birth Occupation

If there are more than 2 beneficial owners, please provide details as an attachment.

Do any of the investors named hold a prominent public position or function in a government body (local, state, territory, national or foreign) or in an international organisation or are you an immediate family member or a business associate of such a person?

□ No □ Yes, please give details:

Equity Trustees Application Form - 2020


Beneficial owner 2

Title First name(s)

I ..--------�-------.


Surname



I I

Country


Do any of the beneficial owners named hold a prominent public position or function in a government body (local, state, territory, national or foreign) or in an international organisation or are you an immediate family member or a business associate of such a person?

D No D Yes, please give details:


Please complete if you are investing for a trust or superannuation fund.

See Group C AML/CTF Identity Verification Requirements in section 9

Full name of trust or superannuation fund

Full name of business (if any) Country where established

Australian Business Number* (if obtained)

Tax File Number* - or exem tion code

Trustee details - How many trustees are there?

D Individual trustee(s) - complete section 3 - Investor details - Individuals/Joint

D Company trustee(s) - complete section 4 - Investor details - Companies/Corporate Trustee

D Combination - trustee(s) to complete each relevant section

Type of Trust

D Registered Managed Investment Scheme

Australian Registered Scheme Number (ARSN)

D Regulated Trust (including self-managed superannuation funds and registered charities that are trusts)

Name of Regulator (e.g. ASIC, APRA, ATO, ACNC)

Registration/Licence details

D Other Trust (unregulated)Please describe

Beneficiaries of an unregulated trust Please provide details below of any beneficiaries who directly or indirectly are entitled to an interest of 25% or more of the trust.

1 2

3 4

If there are no beneficiaries of the trust, describe the class of beneficiary (e.g. the name of the family group, class of unit holders, the charitable purpose or charity name):

Please provide the full name of the settlor of the trust where the initial asset contribution to the trust was greater than $10,000 and the settlor is not deceased:

Beneficial owners of an unregulated trust Please provide details below of any beneficial owner of the trust. A beneficial owner is any individual who directly or indirectly has a 25% or greater interest in the trust or a person who exerts control over the trust. This includes the appointer of the trust who holds the power to appoint or remove the trustees of the trust.


All beneficial owners will need to provide Group A AML/CTF Identity Verification Requirements in Section 9

Beneficial owner 1

Title First name(s)

I �---�


Surname



I I

Beneficial owner 2

Title First name(s)

I ��--� Surname

Country

Residential address (not a PO Box/RMB/Locked Bag) �-----------------------,

Suburb State Postcode Country


I I


Do any of the beneficial owners named hold a prominent public position or function in a government body (local, state, territory, national or foreign) or in an international organisation or are you an immediate family member or a business associate of such a person?

□ No □ Yes, please give details:







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Documents

DMG Diversified Portfolio - EQT · 2020-02-10 · DMG Diversified Portfolio Product Disclosure Statement ARSN 163 142 292 APIR SLT0039AU Issue Date 10 February 2020 About this PDS