Pre Select 100%+ Cap. Protected Growth (2) Fund 1

Transcription

1 Pre Select 100%+ Cap. Protected Growth (2) Fund 1 ARSN APIR code DAM0008AU Distributor of the Fund: Navigator Australia Limited ABN Australian Financial Services Licence No Issuer and Responsible Entity: Deutsche Asset Management (Australia) Limited ABN Australian Financial Services Licence No Date issued: 1 June 2008 Product Disclosure Statement 1. For further details regarding Capital Protection see page 9.

2 Distributor Navigator Australia Limited ( Navigator ) ABN St Kilda Road Melbourne VIC 3004 GPO Box 2567W Melbourne VIC 3001 Aviva Investor Services Telephone Monday to Friday 8:00am to 6:00pm (Melbourne time) Facsimile (03) services@avivagroup.com.au Website Issuer and Responsible Entity Deutsche Asset Management (Australia) Limited ABN Level 16, Deutsche Bank Place Cnr. Hunter & Phillip Streets Sydney NSW 2000 The Pre Select 100%+ Capital Protected Growth (2) Fund is the managed investment scheme registered with ASIC as the Pre Select 100%+ Cap. Protected Growth (2) Fund ARSN References in this PDS to the Fund or to the Pre Select 100%+ Cap. Protected Growth (2) Fund are references to this managed investment scheme. Auditor PricewaterhouseCoopers Darling Park Tower Sussex Street GPO Box 2650 Sydney NSW 1171 Contacts If you have any questions regarding your investment, or if you want to obtain up-to-date information on the Pre Select 100%+ Cap. Protected Growth (2) Fund, please contact Aviva Investor Services on Important information to remember Units in the Pre Select 100%+ Cap. Protected Growth (2) Fund 1 do not represent deposits or other liabilities of Deutsche Bank AG (ABN ), Deutsche Asset Management (Australia) Limited or any other member of the Deutsche Bank AG Group. Investing in the Fund is subject to investment risk, including possible delays in repayment and loss of income and principal invested. Although the Fund is capital protected in certain circumstances, neither Deutsche Bank AG, Deutsche Asset Management (Australia) Limited, Navigator Australia Limited, any entity in the Deutsche Bank AG Group or the Aviva Group nor any other entity guarantees the performance of the Fund or the repayment of capital invested in the Fund. For further details regarding capital protection see page 9. The capital protection offered by this Fund may, having regard to the basis upon which the initial capital protected price is determined (see page 9), mean that the initial capital protected price may be higher than the price paid for your units this is the 100%+ feature of the Fund. Responsible Entity Client Services Telephone Monday to Friday 8:30am to 5:30pm (Sydney time) Facsimile (02) dwsclient.aus@dws.com Website

3 Pre Select 100%+ Cap. Protected Growth (2) Fund Contents You are invited to invest in the Pre Select 100%+ Cap. Protected Growth (2) Fund. We hope you find this document easy to use. We encourage you to read it all before you make any investment decision. Before you start...2 About managed funds....3 About Navigator and Aviva...4 About the issuer and responsible entity...5 Fund features at a glance....6 About the Fund...8 Risks of investing...11 Investing in the Fund...13 Accessing your money...15 Unit pricing...16 Income distributions and reinvestment...17 Fees and other costs...18 Consumer Advisory Warning...18 Additional explanation of fees and costs...21 Keeping you informed...23 Tax Additional information for investors Key dates Fund inception date....1 June 2008 Application period opens...30 June 2008 Capital protection start date...30 June 2008 Application period closes...29 May 2009 Capital protection maturity date...30 May 2014 Applications may be made on and from 1 June 2008, however units in the Fund will not be issued until the application period opens.

4 Section one Before you start You should read this Product Disclosure Statement (PDS) carefully before investing in the Pre Select 100%+ Cap. Protected Growth (2) Fund 1. It will help you to decide if this Fund will meet your needs and assists you to compare this fund to others you may be considering. The issuer of units in the Fund and responsible entity of the Fund under the Corporations Act is Deutsche Asset Management (Australia) Limited, AFS Licence No , referred to in this PDS as we, us, our, the responsible entity or Deutsche Asset Management (Australia) Limited References in this PDS to the unitholder are references to the operator/trustee of the Portfolio Administration Service. People who invest through a Portfolio Administration Services are referred to as indirect investors. We are a member of the Deutsche Bank group of companies. Subject to the capital protection offered in respect of the Fund, neither we nor any company in the Deutsche Bank Group promises that you will earn any return on your investment or that your investment will gain or retain its value unless otherwise stated. The capital protection only applies to investments redeemed on the capital protection maturity date. Capital protection is subject to the creditworthiness of the capital protection provider. For further details see page 26. No Deutsche Bank Group company other than Deutsche Bank and Deutsche Asset Management (Australia) Limited makes any statement or representation in this PDS. Neither Deutsche Asset Management (Australia) Limited nor Deutsche Bank AG or any other member of the Deutsche Bank AG Group endorses any statement regarding Navigator Australia Limited. None of Aviva plc or any of their related companies or their related entities take any responsibility for this PDS except in respect of statements made in relation to the particular Aviva group entity concerned. This Fund is only available in Australia to persons investing through an investor directed portfolio service, master trust, wrap account or Navigator feeder fund ( Portfolio Administration Services ) administered or operated by Navigator or a related company or entity. For further information see page 4. The Fund is not available in any other country. If you have received this PDS electronically the responsible entity will provide a paper copy free on request. Any information contained in this PDS is general information only and does not take into account your individual objectives, tax and financial situation or particular needs or circumstances. You should assess whether the information is appropriate for you with regards to your specific circumstances. We recommend that you get professional advice from your financial adviser and/or your tax adviser before investing. Certain information in this PDS is subject to change and may be updated from time to time. We will notify unitholders of any changes that have a materially adverse impact on their investment or other significant events that affect the information in this PDS. A paper copy of any updated information will be provided to unitholders free of charge on request. Information regarding any Fund updates can be obtained from your financial adviser, or directly from Aviva Investor Services on All references to monetary amounts in this PDS are in Australian dollars (unless otherwise specified). Need help? If you need help about investing generally, then we suggest you speak to a licensed financial adviser. The Australian Securities and Investments Commission (ASIC) can help you check if they re licensed. They have a website at gov.au as well as a helpline you can call on If you have any questions with regard to your investment in the Fund offered by this PDS, or if you want to obtain up-todate information on the Fund, please contact your financial adviser. Alternatively, you can contact Aviva Investor Services on For further details regarding capital protection see page 9. 2

5 Section two About managed funds The Pre Select 100%+ Cap. Protected Growth (2) Fund is a managed fund. The term managed fund is a general term for funds that pool the money of several investors and are managed by a team of investment professionals. Which managed fund you choose will depend on the investment strategy you wish to use to achieve your financial goals. This is best determined with the assistance of your financial adviser who can help you decide on an investment approach suited to your individual needs. Choosing the right managed fund as part of your investment strategy can be a very effective way of achieving your financial goals. It is important to realise that no two funds are the same and investing in a managed fund should be viewed over the longer term. If you decide to invest in the Fund you must accept that the value of your investment will go up and down, subject to the capital protection offered in respect of the Fund. The capital protection only applies to investments redeemed on the capital protection maturity date. Capital protection is subject to the creditworthiness of the capital protection provider. You should be aware that the capital protected price per unit, as at the capital protection maturity date, is unlikely to have the same real value as it would today due to the effect of both the time value of money and inflation over the capital protection period. For further details see page 9. Investing in a managed fund can offer a number of benefits to you. These benefits include: increased purchasing power. The sheer size of a managed fund means it can buy and sell assets at a cheaper cost than an individual investing directly; investment opportunities. Managed funds give you the opportunity to access a range of domestic and international assets that you could not normally access as an individual investor; professional investment management. Your money is managed by a team of professionals who use their resources, experience and specialist skills to make the investment decisions on behalf of all investors in the fund; and managing investor needs. Investing in managed funds can offer diversification benefits, that is, not putting all your eggs in one basket. Diversification (or spreading your investments around) allows you to be exposed to those investments that are performing well, while minimising your exposure to those investments which are not performing so well, hence smoothing out your investment returns. Diversification can also assist you in maintaining an investment portfolio that suits both your risk and investment return profile. There are several different managed investment structures. Most managed funds are structured so that you buy units in the fund. The number of units you will receive depends on the amount of money invested and the unit price at the date of application. The value of the units will change over time due to fluctuations in the market value of the fund. Within a given structure, managed investments can be further categorised by the type of assets they invest in (including cash, fixed interest, property, shares and alternative investments like infrastructure) and the location of those assets (Australia or overseas). 3

6 Section three About Navigator and Aviva Aviva is the world s fifth-largest insurance group and the largest insurance services provider in the United Kingdom. We are the leading provider of life and pension products in Europe and are actively growing our long-term savings businesses in Asian markets, the USA and Australia. We have premium income and investment sales of $ billion and $ billion of assets under management. We have 59,000 employees serving over 40 million customers.* In Australia, Aviva s main activities include life insurance, investments and superannuation. We have over 150 years of continuous operation. Aviva has an established reputation in life insurance, investments and superannuation. Aviva s consistent record of innovation in the financial planning market dates back to the early 1990s when its Navigator technology and platform first allowed a range of investments to be consolidated into one portfolio. Today, Aviva continues to lead the industry with awardwinning wealth creation and wealth protection products. Aviva s wealth creation products include the Navigator Portfolio Administration Service which offers a range of investment funds, share service, cash and a margin lending service, and its award-winning superannuation products. Our wealth protection products include life, critical illness and income protection. All products are distributed through independent financial advisers. For further details contact your financial adviser or Aviva Investor Services on *Figures quoted above are accurate as at December

7 Section four About the issuer and responsible entity, Deutsche Asset Management (Australia) Limited Deutsche Asset Management (Australia) Limited is part of Deutsche Asset Management, an integral part of Deutsche Bank AG (the Bank ), one of the world s strongest financial institutions. Globally, Deutsche Asset Management manages around $868 billion 1. In Australia, we are one of a few truly global fund managers with a strong local presence managing around $14 billion 1, 2 for local clients across international asset classes. The Bank s extensive resources, combined with our established investment capabilities, means investors are offered global expertise and research capacity. 1 As at 29 February, Please refer to our website for the most up-to-date information. 2 Includes funds under management managed under joint venture arrangements with Spark Infrastructure. 5

8 Section five Fund features at a glance You are invited to invest in the Pre Select 100%+ Cap. Protected Growth (2) Fund ( the Fund ). The Fund is an open-ended unlisted unit trust and is a registered managed investment scheme for the purposes of the Corporations Act. The table below is a summary of the key features of the Fund and a guide to where more detailed information can be found in this PDS. Product features Investment objective The Pre Select 100%+ Cap. Protected Growth (2) Fund aims to provide investors with exposure to growth and cash assets via a portfolio that is managed with the objective to provide long term capital growth, with an element of protection of initial capital invested. There is no guarantee that this investment objective will be achieved. Fund inception date 1 June 2008 Application period 30 June May 2009 Capital protection The value of each unit redeemed on the capital protection maturity date will be at least equal to the capital protected price applying at that time (adjusted for transaction costs). Having regard to the basis upon which the initial capital protected price is determined, the initial capital protected price may be higher than the price paid for your units this is the 100%+ feature of the Fund. For further details see page 9. Capital protection period 30 June May 2014 The capital protection only applies to investments (including distributions which are reinvested) held until and redeemed on the capital protection maturity date. Capital protection is subject to the creditworthiness of the capital protection provider. For further details see pages 9 and 26. 6

9 Product features (continued) Capital protected price The capital protected price will initially be determined at the end of the application period by reference to the highest net asset value the Fund achieves on the last business day of any one month during the application period (ignoring any distribution entitlements), divided by the number of units on issue that day. Capital protection maturity date 30 May 2014 The capital protected price will be adjusted to take into account the effect of distributions which are reinvested before the capital protection maturity date. For further details see page 9. Suggested minimum investment period The suggested investment period is to the capital protection maturity date. Minimum transaction and balance requirements We recommend that you review the appropriateness of the investment period regularly with your financial adviser to ensure it continues to meet your investment needs. Indirect investors We suggest you contact your Portfolio Administration Service for minimum transaction and balance requirements. What are the costs of investing in the Fund? Fees and other costs For details regarding the fees and costs payable, please see page 18. Distributions Income distributions Any income available for distribution is usually distributed annually after 30 June. Any distributions will be automatically reinvested as additional units in the Fund as detailed on page 17 of this PDS. The capital protection also applies in respect of reinvestments, however distribution reinvestment reduces the capital protected price per unit. For further details see page 9. Transaction confirmations and reporting Monthly and quarterly investment reports Monthly and quarterly investment reports providing updates on the Fund can be viewed at soon after the end of the relevant month or quarter. Unit pricing Valuation and unit pricing Unit prices are generally calculated on the last business day of each month based upon the net asset value of the Fund divided by the number of units on issue in the Fund. In unusual circumstances, however, unit prices may be calculated more frequently. Unit prices for the last business day of each month from 30 June 2008 to 30 May 2014 will be available at For further details see page 16. 7

10 Section six About the Fund The Fund offers unitholders the opportunity to invest in an actively managed portfolio of diversified assets managed by the responsible entity and a number of investment managers across a range of asset classes and investment styles, with an element of protection of initial capital invested 1. The Fund will invest in the DWS Multi-manager Growth Fund to gain exposure to growth oriented assets. The Fund will have exposure to derivative investments and may also have exposure to cash deposits to facilitate the offering of capital protection on the initial capital invested by unitholders. The DWS Multi-manager Growth Fund is operated by Deutsche Asset Management (Australia) Limited (the responsible entity of the Fund) and aims to provide investors with exposure to growth and cash assets via a portfolio that is managed with the objective to provide long term capital growth. It seeks to achieve this objective by investing in funds managed by a number of investment managers across a range of asset classes and investment styles. It invests in growth biased and income biased assets and has a benchmark exposure to growth biased assets of approximately 70%, and to income biased assets of approximately 30% at the time of this PDS. While we generally actively adjust the investment allocation within these investment ranges, we may temporarily move outside of these. If this occurs, we aim to bring the DWS Multimanager Growth Fund back to within its asset allocation ranges as soon as is practicable. The underlying investment managers for the DWS Multimanager Growth Fund at the date of this PDS are as follows: Asset class Australian Equities International Equities Listed Property Fixed Interest Cash/Alternatives Investment Manager van Eyk Research Limited (ABN AFSL ) van Eyk Research Limited Deutsche Asset Management RREEF (part of Deutsche Asset Management) Macquarie Investment Management Limited (ABN AFSL ) Deutsche Asset Management Deutsche Bank AG The underlying investment managers in the DWS Multimanager Growth Fund will change from time to time at the responsible entity s discretion. Who is the Fund best suited to? The Fund is best suited to investors who seek: capital protection at the capital protection maturity date; diversified exposure to assets invested across a number of quality investment managers, asset classes and investment styles; strong long-term capital growth but seek protection against investment loss; and more certainty in their retirement portfolio. 1 The capital protection only applies to investments held from the Application Period until the capital protection maturity date. Capital protection is subject to the creditworthiness and the fulfilment of its commitments by the capital protection provider. See pages 9 and 26 of this PDS for details. 8

11 The Fund is best suited to investors who can accept: a holding period until at least the capital protection maturity date on 30 May 2014; the possibility of losing part of their initial capital invested if units are not held until and redeemed on the capital protection maturity date in accordance with the Fund s withdrawal requirements; and the risk that volatility in investment returns may be experienced. What does the capital protection mean? Normally the net asset value of a fund may rise or fall depending on movements in the value of the underlying fund assets. The capital protection offered by this Fund is intended to lock in the highest net asset value achieved, ignoring any distribution entitlements (discussed below), by the Fund on the last business day of any one month during the application period (30 June May 2009) for an investor who redeems on the capital protection maturity date in accordance with the Fund s withdrawal requirements. This means that, depending on the change in the Fund s net asset value during the application period, the initial capital protected price may be higher than the price paid for your units. This is the 100%+ feature of the Fund. An investor redeeming on the capital protection maturity date (30 May 2014) in accordance with the Fund withdrawal requirements will receive at least the capital protected price for each unit redeemed on that date (less any applicable transaction costs). The capital protected price for all investors will initially be determined at the end of the application period by reference to the highest net asset value achieved by the Fund on the last business day of any one month during the application period, divided by the number of units on issue on that day. For the purposes of determining the initial capital protected price, where the end of a month is the end of a distribution period the net asset value will be reduced to take into account distribution entitlements. The capital protected price will also be adjusted downwards to reflect any distributions reinvested prior to the capital protection maturity date. This means, for example, that if you held your initial investment until the capital protection maturity date, it is likely that you will have a greater number of units in the Fund due to distribution reinvestment, and the capital protected price at that time is likely to be lower than the initial capital protected price. However, the amount of your investment which obtains the benefits of capital protection through the Fund should remain the same notwithstanding your investment is represented by more units. The following example illustrates how distributions will affect the Capital Protected Price. Example: Assume that the Fund distributes 13 cents per unit at 30 June The entire distribution is reinvested in accordance with the distribution policy as set out on page 17. Pre distribution Capital Protected Price $1.00 No. of units held 10,000 Capital Protected Amount $10,000 Post distribution Capital Protected Price No. of units held Capital Protected Amount $ , ($10,000 / $0.87) $10,000 (11, x $0.87) The example illustrates that extra units will be created through the reinvestment of distributions. The Capital Protected Amount will remain unchanged. The figures are not indicative of future distribution amounts and are shown for illustrative purposes only. The capital protection only applies to units held until and redeemed on the capital protection maturity date in accordance with the Fund s withdrawal requirements. This means that withdrawals of units requested prior to the end of the capital protection period will not receive the benefit of capital protection. Similarly, withdrawal of units after the capital protection maturity date will not get the benefit of capital protection and will be redeemed at the withdrawal price on the date of withdrawal. Where a partial withdrawal of units is made prior to the end of the capital protection period, capital protection will only apply to the remaining units held in the Fund provided that they are redeemed by the investor on the capital protection maturity date in accordance with the Fund s withdrawal requirements. In respect of their investment, an investor should seek expert advice from their financial adviser well ahead of the capital protection maturity date to determine what their ongoing investment strategy should be. What does the Fund invest in during the capital protection period? During the capital protection period, we will implement a strategy known as Constant Proportion Portfolio Insurance (CPPI) as a mechanism to provide the capital protection in respect of the capital invested by unitholders. Essentially the CPPI strategy involves dynamically allocating the assets of the Fund between a low risk asset class (in this case cash deposits with Deutsche Bank AG (London branch or such other Deutsche Bank AG branch)) and a growth oriented asset class (in this case, the DWS Multi-manager Growth Fund). The CPPI strategy aims to ensure that there is sufficient cash on deposit during the capital protection period so that at the capital protection maturity date, units can be redeemed at the capital protected price. In a falling market, the allocation of the Fund to growth oriented assets under a CPPI strategy would normally reduce and could be 9

12 as low as 0%. As an example, the allocation to cash deposits for the Pre Select Cap. Protected Growth (1) Fund was 24% as at 29 February Coupled with the CPPI strategy, the Fund will also invest in a derivative instrument issued by Deutsche Bank AG (London branch or such other Deutsche Bank AG branch) in order to cover the risk that the Fund might not hold sufficient cash deposits to deliver the capital protected price on the capital protection maturity date in the event of an unexpected market movement. If this derivative instrument is exercised during the capital protection period, the Fund assets will be allocated wholly to cash deposits for the remainder of the capital protection period until the capital protection maturity date. If the CPPI strategy dictates a relatively high allocation towards the low risk asset class (cash deposits) early in the capital protection period, the Fund s potential for growth during the capital protection period may be adversely impacted. This is because the Fund relies upon the growth assets (the investment in the DWS Multi-manager Growth Fund) to provide the Fund with growth. If the Fund holds a substantial amount of cash deposits instead, there will be less opportunity for the Fund to obtain growth beyond the return it can earn on those cash deposits given the Funds larger allocation to cash deposits. Any allocation to cash deposits may also make it more difficult to regain exposure to growth assets as higher performance would be required to enact the change. Further, an investor who withdraws from the Fund prior to the capital protection maturity date will not obtain any benefit from capital protection and their investment will be redeemed at the relevant unit price as set out on page 16, not withstanding that the CPPI strategy will mean the Fund s assets are invested in a manner consistent with that strategy. You should be aware that the capital protected price per unit as at the capital protection maturity date is unlikely to have the same real value as it would today due to the effect of both the time value of money and inflation over the capital protection period. In addition, and as identified above, the capital protected price per unit is likely to reduce over time having regard to the effect of distribution reinvestments. Although it is not likely, the provider of the capital protection could fail to honour its commitments. If this situation arises you could lose some or all of your investment in the Fund. For further details about Deutsche Bank AG see page 26. The responsible entity may from time to time use derivatives in lieu of direct exposure to growth oriented assets. During the capital protection period, the Fund has the following asset allocation investment ranges: DWS Multi-manager Growth Fund Minimum (%) Maximum (%) Cash deposits You should be aware that the investment allocation can change significantly and sometimes quickly. If there is a material change in the nature or liquidity of the DWS Multi-manager Growth Fund, the capital protection provider may require that this fund be substituted with another fund with similar strategy, objectives, guidelines and investment policy. If this occurs, we will notify unitholders within 30 days of the change occurring. For the most recent asset allocations of the Fund and the DWS Multi-manager Growth Fund, please contact your financial adviser or Aviva Investor Services on What does the Fund invest in after the capital protection period? After expiry of the capital protection period following the capital protection maturity date, the Fund will no longer be implementing the CPPI strategy involving the dynamic allocation between the low risk asset class and growth oriented asset class. As a result, it is intended that the Fund s asset allocation will be directed predominantly towards the growth asset class. Following the capital protection maturity date, it is intended that the Fund will generally have the following asset allocation investment ranges: DWS Multi-manager Growth Fund Minimum (%) Maximum (%) Cash deposits 0 10 We will generally actively adjust the investment allocation within these investment ranges. However, we may temporarily move outside of these ranges due to factors such as significant cash flows into the Fund. We will aim to bring the Fund back to within its asset allocation ranges as soon as is practicable. You should be aware that the investment allocation can change within the ranges significantly and sometimes quickly without notice to you. We may change the name of the Fund following the capital protection maturity date to reflect the fact that the capital protection has expired. We may also consider accepting further applications into the Fund, and changing the frequency of when we can accept applications and withdrawals. We may also consider terminating the Fund. An investor may want to seek expert advice from their financial adviser to determine the Fund remains suitable to their ongoing investment strategy. What about the Fund s size and performance? The Fund was launched on 1 June 2008 so no performance history or asset allocations were available at the date of this PDS. For the most recent fund size, asset allocation or performance information, please contact your financial adviser or Aviva Investor Services on A paper copy of any updated information will be provided to you free of charge on request. It is important to remember that returns are volatile and, subject to the capital protection feature, may go up and down significantly and sometimes quickly. 10

13 Section seven Risks of investing Understanding investment risk All investments are subject to varying risks and generally all go down as well as up in value (that is, subject to the capital protection feature, you can experience investment losses or investment gains). Volatility can be used as a measure of investment risk. In general, the higher the volatility of returns from an investment, the higher the risk and potential return. Different types of investments perform differently at different times and have varying risk characteristics and volatility. You should be aware that the value of your investment will rise and fall depending on the value of underlying assets. Changes in the value of an investment can be significant and can happen quickly. Managing risk You can assist in reducing your overall level of volatility by diversifying your investments across a number of asset classes. This is due to the fact that usually if one asset class moves up, another asset class usually moves down, resulting in a less volatile total investment portfolio and smoothing out of returns. It is important that you plan your investment strategy before investing. This should be discussed with your financial adviser and should take into consideration matters such as: how long you would like to invest for; what level of volatility you are willing to tolerate; the level of diversification of your investment portfolio across the asset classes; and your expected level of return from the Fund (be it growth or income return). The risks associated with investing in a managed fund may be general or specific to a particular asset class or fund. The responsible entity aims to manage the impact of the risks of this Fund by using prudent investment guidelines. We can t eliminate all risks and can t promise that the way we manage them will always be successful. In such an event, the amount of any distributions from the Fund may be lower than expected, or there may be none at all, and the value of your investment could fall. General risks Investment objective risk is the risk that an investor s objectives will not be met by their choice of investments. Liquidity risk exists when particular investments are difficult to purchase or sell, preventing a fund from repositioning or rebalancing within a timely period and at a fair price. While every effort is made for the Fund to be able to meet all redemptions, the nature of the underlying securities and the capital protection mechanism means that in certain circumstances, we may not be able to meet all redemption requests soon after they are received. Inflation risk is the risk that the prices of goods and services will rise faster than the value of the investments. Manager risk refers to the risk that the underlying managers of the DWS Multi-manager Growth Fund will not achieve their performance objectives or not produce returns that compare favourably against their peers. Risks specific to this Fund The main investment risks that apply to this Fund are explained below. Counterparty risk. The Fund is exposed to counterparty risk (by virtue of entering into various contracts with Deutsche Bank AG (London branch or such other Deutsche Bank AG branch)) to facilitate the provision of 11

14 capital protection. Although it is not likely, the provider of the capital protection, Deutsche Bank AG (London branch or such other Deutsche Bank AG branch) could fail to honour its commitments. If this occurs, an investor could lose some or all of their investment. For more information about Deutsche Bank AG, please refer to page 26. Manager performance risk/potential cash exposure. If the CPPI strategy dictates a relatively high allocation towards the low risk asset class (cash deposits) early in the capital protection period, the Fund s potential for growth during the capital protection period may be adversely impacted. This is because the Fund relies upon the growth assets to provide the Fund with growth. If the Fund holds a substantial amount of cash deposits instead, there will be less opportunity for the Fund to obtain growth beyond the returns it can earn on those cash deposits. Substitution risk. If there is a material change in the nature or liquidity of the DWS Multi-manager Growth Fund, the capital protection provider may require that this fund be substituted with another fund with similar strategy, objectives, guidelines and investment policy. Active management. The underlying investment managers actively seek attractive securities to invest in, rather than investing in a predetermined basket of securities such as an index. An underlying fund may underperform relative to its stated primary investment universe due to securities choices and short term variations in asset allocation away from the primary investment universe. Individual investment risk. Individual investments the underlying managers buy, for example, securities on a stock exchange, can and do fall in value for many reasons such as changes in a company s internal operations or management, or in its business environment. The underlying managers normally aim to reduce these risks with careful analysis of research from many sources and by talking to those people who run companies and are responsible for changes which may impact on our investments. Market risk. Economic, technological, political, tax, regulatory or legal conditions, and even market sentiment, can (and do) change, and changes in the value of investment markets can affect the value of the investments in the underlying funds and therefore the Fund. We use research and analysis to form a view on these matters as best we can and then rebalance the investment mix of the Fund to reduce their impact. Fund risk. Risks particular to a managed fund include potential termination of a fund, change of the fees and expenses, or change in investment professionals. There is also a risk that investing in a fund may give different results than investing individually because of income or capital gains accrued, and the consequences of applications and withdrawals by other investors. We aim to keep this risk to a minimum by monitoring the Fund and acting in your best interests. Risks of small capitalisation investing. The underlying funds may invest in small capitalisation securities, which generally have a lower degree of liquidity (i.e. they are generally more difficult to trade) than larger capitalisation securities. Underlying strength of the cashflows. Returns are affected by the underlying strength of the cashflows, balance sheets and management of the entities in which the underlying funds invest. Emerging markets securities risk. The underlying funds may have exposure to developing markets, which generally have economic structures that are less mature, have less stable political systems and may have high inflation and volatile interest and currency exchange rates. Emerging markets may lack the stable social, political and economic characteristics of more developed countries. Such investments generally tend to be more illiquid (more difficult to trade) and more volatile than those of other foreign investments. Accordingly, they carry a higher risk. Currency risk. The underlying fund managers may invest in overseas markets and have exposure to movements in the currencies concerned. Currency movements relative to the Australian dollar may add or detract to/from the domestic value of the Fund s overseas investments and the income from those investments. Distributions and taxing risk. As Fund distributions are reinvested, unitholders will have to pay tax on distributions from their own sources (and will need to ensure that such sources are sufficient). For further information about distributions, please refer to page 17. Use of financial derivatives and associated risks In addition to derivatives used for capital protection purposes, derivatives may be used to reduce risk or gain exposure to other types of investments when appropriate. Derivatives are not used by the Fund for speculative purposes, or to gear the Fund. When derivatives are used, the Fund must be in a position to pay all of the associated obligations from the investments of the Fund. Risks associated with using these tools might include the values of the derivative failing to move in line with the underlying asset, potential illiquidity of the derivative, and counterparty risk (this is where the counterparty to the derivative contract cannot meet its obligations under the contract). The aim is to keep derivative risk to a minimum by constantly monitoring the Fund s use of derivatives, by making sure that its obligations are met with respect to the derivative contracts and by entering into derivative contracts with reputable counterparties. The responsible entity has a Derivatives Risk Statement (DRS) which is reviewed annually. The DRS summarises the policies we have in place covering the use of derivatives, the controls on their use and the processes for assessing compliance with those controls. A DRS is available upon request from the responsible entity s client service team toll free on

15 Section eight Investing in the Fund Your interest as an indirect investor in the Fund Investment in this Fund is only available through a Portfolio Administration Service administered or operated by Navigator or related company or entity. References in this PDS to the unitholder are references to the operator/trustee of the Portfolio Administration Service. People who invest through a Portfolio Administration Service are referred to as indirect investors. We authorise the use of this PDS as disclosure to indirect investors and prospective indirect investors acquiring interests in the Fund through the Portfolio Administration Service. The rights and liabilities of indirect investors investing through the Portfolio Administration Service are governed by the terms and conditions of the Portfolio Administration Service. Indirect investors should carefully read the relevant terms and conditions before investing in the Fund. As an indirect investor you may use the information in this PDS to direct the Portfolio Administration Service to acquire units in this Fund on your behalf. Investors investing in the Fund indirectly via a Portfolio Administration Service do not themselves become investors in the Fund, and accordingly have no rights as a unitholder. The operator/trustee of the Portfolio Administration Service becomes the unitholder and acquires these rights. The offer document for the relevant Navigator Portfolio Administration Service has further details. For example, as an indirect investor: you won t receive reports directly from the Fund, but you will get updates from your Portfolio Administration Service you do not attend or vote at Fund unitholder meetings there will be a time lag from when you request an investment or redemption and when it is processed information is not directly available from the Fund, however you can contact your Portfolio Administration Service with your requests any complaints you have should be directed to your Portfolio Administration Service the tax information in this PDS does not specifically cater for you as an indirect investor. You should refer to the relevant Portfolio Administration Service offer document for further information. The offer document for the relevant Navigator Portfolio Administration Service has further details in relation to the rights and liabilities of indirect investors, including information on any fees and charges applicable to your investment through the Portfolio Administration Service. Information regarding how to apply for units in the Fund (including an application form where applicable) will also be contained in the offer document for the relevant Portfolio Administration Service. To invest in this Fund you will need to complete the Investment Allocation Authority found in the relevant Portfolio Administration Service offer document. If you want to make an additional investment or withdraw from this Fund you will have to direct the request to the Portfolio Administration Service to do so. We will provide confirmation of transactions, transaction statements, tax statements and financial reports to the operator/trustee of the Portfolio Administration Service. You should also refer to the relevant Portfolio Administration Service offer document for your rights and entitlements, including any relevant cooling off provisions and minimum application amounts. This is available from your financial adviser. You will also incur the fees and expenses applicable to the Portfolio Administration Service, as well as the Fund fees and costs. 13

16 Making an application Applications by the Portfolio Administration Service into the Fund can only be made before 2:00pm on the fourth last business day of each month from the Fund inception date (1 June 2008). Units will be issued during the application period, which commences on 30 June 2008 and closes on 29 May For the purpose of this PDS business day means any day on which banks are open for business in Sydney excluding a Saturday, Sunday or public holiday. No further applications can be made after this date, except for reinvestment of distributions, unless otherwise advised. The effective date for valid applications by the Portfolio Administration Service will be the date our administrators receive both a valid application form, and the application money is received into our bank account. If these are received by the administrator before 2:00pm on the fourth last business day of the month, units will be issued at the price calculated for the last business day of the month. If a valid application is received by the administrator after 2.00pm on the fourth last business day of the month, units will be issued at the unit price calculated for the last business day of the following month. You should check with your Portfolio Administration Service to determine the cut-off times applicable to you at the time of your application, any minimum application amounts and for details regarding Portfolio Administration Service transaction statements. Where cleared funds are not received by us, allocated units will be cancelled and the investor may be liable for reasonable administrative and transaction costs incurred by us or the Fund and any tax payable. We may, in our absolute discretion, accept or reject any application in whole or in part. In certain circumstances we can suspend the processing of applications. Please see under the heading Constitution on page 27 for more information. Additional investments Applications for additional investments by the Portfolio Administration Service into the Fund during the application period can be made in accordance with the procedure described above. However, no further additional contributions can be made after 29 May 2009 until after the capital protection maturity date, except for reinvestment of distributions. We may accept further applications after the capital protection maturity date. Additional investment requests during the application period should be directed to your Portfolio Administration Service. You should check with your Portfolio Administration Service to determine the cut-off times applicable to you and any minimum application amounts. Where funds are electronically transferred or deposited directly to the bank account, details of the deposit must accompany the application form. We will accept notice of electronic transfer of funds as if deposited and cleared. 14

17 Section nine Accessing your money You may request to withdraw part or all of your investment at any time. Funds will be paid in accordance with the terms of your Portfolio Administration Service. Withdrawals requested prior to the end of the capital protection period will not receive the benefit of capital protection. Where a partial withdrawal is made prior to the end of the capital protection period, capital protection will continue to apply to the remaining units held in the Fund if they are redeemed on the capital protection maturity date in accordance with Fund withdrawal procedures. Under these circumstances, the balance that would be payable on the capital protection maturity date would be determined by calculating the number of units held on the capital protection maturity date multiplied by the higher of the capital protected price or the redemption unit price for that date. Withdrawals made up until 31 May 2010 may be subject to a greater sell differential on redemption as detailed in the Fee details section on page 21. Withdrawal payments will not be paid to third parties. Withdrawal requests should be directed to your Portfolio Administration Service. Please refer to the relevant Portfolio Administration Service offer document for details on minimum withdrawal amounts. Making a withdrawal Valid withdrawal requests received from the Portfolio Administration Service by the administrator before 2:00pm on the fourth last business day of each month will be processed using the unit price next calculated after 2:00pm on the last business day of the month. Valid withdrawal requests received from the Portfolio Administration Service by the administrator after 2:00pm on the fourth last business day of the month will be processed using the unit price calculated for the last business day of the following month. Valid withdrawal requests are normally paid within 10 business days of the last business day of the month (though we have a much longer period to do so in accordance with the Constitution of the Fund and may suspend the redemption of any units in certain circumstances). Please see under the heading Constitution on page 27 for more information. You should check with your Portfolio Administration Service to determine the cut-off times applicable at the time of your withdrawal request and for details regarding Portfolio Administration Service transaction statements. In certain circumstances we can suspend the redemption of any units. Please see under the heading Constitution on page 27 for more information. The Fund is not listed on any stock exchange like the Australian Stock Exchange, so units cannot be sold through a stockbroker. 15

18 Section ten Unit pricing Unit prices are generally calculated on the last business day of each month based upon the net asset value of the Fund divided by the number of units on issue in the Fund. In unusual circumstances, however, unit prices may be calculated more frequently. There may be a short delay in determining unit prices where the Fund or its underlying investments are determining distribution entitlements. The Constitution allows unit prices to be adjusted for transaction costs. For more information, please see the Fees and Other Costs section of the PDS on page 21. We will exercise any discretion that we have under the Constitution for the Fund in relation to unit pricing in accordance with our unit pricing policy. We will provide unitholders with a copy of our unit pricing policy at any time on request, at no charge. Monthly unit prices for the Fund can be obtained by contacting Aviva Investor Services on Timing changes Unitholders will be notified if we change the frequency of distributions or valuing the Fund, or the frequency or timing of unit pricing. 16