Objective
The fund aims to provide a combination of capital growth and income to deliver a return of 4-8% above the 3-month LIBOR, over any five-year period. LIBOR is the rate at which banks borrow money from each other.
Investment policy and strategy
Core investment: Typically, the fund will use derivatives to invest in a range of assets, including shares in companies, bonds, currencies, cash or assets that can be turned quickly into cash. The fund may also invest directly. The fund is fully flexible and has no limits or ranges in any particular asset class. The fund may also invest in China A-Shares via the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect.
Other investment: The fund may also invest in other funds, including real estate investment trusts, asset-backed securities, convertibles and warrants.
Use of derivatives: The fund can use derivatives to take short positions and to gain exposure to investments exceeding the fund’s value, thus increasing potential returns (or losses) in both rising and falling markets.
For more information on the types of derivatives used, please refer to the Prospectus.
Strategy in brief: The fund has a highly flexible investment approach, with the freedom to invest in different types of assets from anywhere in the world.
The approach combines in-depth research to work out the ‘fair’ value of assets over the medium to long term, with analysis of market reactions to events to identify investment opportunities. In cases where the investment manager believes the opportunities are limited to a few areas, the fund may be very concentrated in certain assets or markets. Such strategies may result in greater changes in the fund’s short-term performance.
Performance comparator: The fund’s performance will be referenced against the 3-month LIBOR.
Glossary terms
Bonds: Loans to governments and companies that pay interest.
Convertibles: Bonds issued by companies that usually pay a set rate of interest and which can be exchanged for predetermined amounts of company shares.
Derivatives: Financial contracts whose value is derived from other assets.
Warrants: Financial contracts which allow the fund manager to buy stocks for a fixed price until a certain date.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset’s value vary in an unexpected way, the fund will incur a loss. The fund’s use of derivatives may be extensive and exceed the value of its assets (leverage). This has the effect of magnifying the size of losses and gains, resulting in greater fluctuations in the value of the fund.
The fund may be highly concentrated at times in a limited number of investments or areas of the market, which could result in large price rises and falls.
The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.
Investing in emerging markets involves a greater risk of loss due to greater political, tax, economic, foreign exchange, liquidity and regulatory risks, among other factors. There may be difficulties in buying, selling, safekeeping or valuing investments in such countries.
The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
Other information
The fund may invest more than 35% in securities issued by any one or more of the governments listed in the fund prospectus. Such exposure may be combined with the use of derivatives in pursuit of the fund objective. It is currently envisaged that the fund’s exposure to such securities may exceed 35% in the governments of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, New Zealand, Singapore, Sweden, Switzerland, UK, USA although these may vary subject only to those listed in the prospectus.
The Fund allows for the extensive use of derivatives
The fund may be very concentrated at times which could result in greater fluctuations in the funds short-term performance.