Goldman Sachs JBWere Keystone Funds Series II

Transcription

1 Goldman Sachs JBWere Keystone Funds Series II Product Disclosure Statement Dated 16 January 2008 Capital Guarantee* by * The National Australia Bank (NAB) Capital Guarantee is subject to the terms referred to in About the NAB Capital Guarantee on page 18. The units are not deposits or other liabilities of National Australia Bank. National Australia Bank does not guarantee the performance of the Funds.

2 Contents Overview of the Keystone Funds 3 About the Investment 8 About the BRIC II Fund 12 About the Food, Feed, Fuel Fund 15 About the NAB Capital Guarantee 18 NAB Capital Guarantee Deed 19 What are the significant risks? 22 Fees and other costs 24 Additional explanation of fees and costs 26 Taxation 29 Investment instructions 32 Who do I contact with enquiries about my investment? 34 Additional important information 35 Glossary of terms 41 Forms 43 Offices of the Manager 49 This Product Disclosure Statement ( PDS ) is dated 16 January 2008, being the date the preparation of this PDS was completed, and will be circulated throughout Australia. Units in the Goldman Sachs JBWere Keystone Funds Series II (each a Keystone Fund or Fund, and together the Keystone Funds or Funds ) are offered by Goldman Sachs JBWere Managed Funds Limited ABN , which is the Responsible Entity for the Keystone Funds. Goldman Sachs JBWere Managed Funds Limited carries on business in relation to the Keystone Funds under the name Goldman Sachs JBWere Asset Management and is also referred to throughout this PDS as the Responsible Entity, we, us or our. Goldman Sachs JBWere Managed Funds Limited has been issued with an Australian Financial Services Licence, number All dollar amounts in this PDS are quoted in Australian dollars, unless specified otherwise. In preparing this PDS, we have not taken into account any particular Unitholder s individual investment objectives, financial situation or needs. Before making an investment decision on the basis of this PDS, you need to consider whether this investment is appropriate in light of your own circumstances. The Responsible Entity is the issuer of this PDS. The offer of units ( Units ) in this PDS is available to persons receiving the PDS in Australia (including in electronic form). Units can only be applied for by providing us with a completed Application Form issued together with this PDS and, where required, a completed Client Identification Form accompanying this PDS. The PDS does not constitute an offer or invitation in any place outside Australia unless expressly authorised by us. In particular, Units in the Keystone Funds are not available for purchase in the United States or by any other United States person or persons (see Offer terms and conditions on page 39). The PDS is not to be distributed in jurisdictions outside Australia unless expressly authorised by us. Any failure to comply with such restrictions may constitute a violation of applicable securities law. None of Goldman Sachs JBWere Pty Ltd, Goldman Sachs JBWere Group Holdings Pty Ltd and their respective subsidiaries including Goldman Sachs JBWere Managed Funds Limited and Goldman Sachs JBWere Investment Management Pty Ltd (together, the Goldman Sachs JBWere Group ), the Goldman Sachs Group, Inc., Goldman, Sachs & Co., Goldman Sachs Asset Management, L.P., Goldman Sachs International and their respective subsidiaries (together Goldman Sachs ) nor the appointed custodian or administrator of the Funds guarantees the performance or success of the Keystone Funds, the Participation Rates, the rate of return from, or the repayment of investments in the Keystone Funds, nor (other than the Responsible Entity or where stated otherwise) is any of them responsible for any information or statement in this PDS. Subject to the terms of the NAB Capital Guarantee as set out in the NAB Capital Guarantee Deed on page 19, the return of capital to Unitholders on the relevant Guarantee Effective Date is guaranteed by National Australia Bank. The Units are not deposits or other liabilities of National Australia Bank and neither National Australia Bank nor any other company in the National Australia Group guarantees the performance of the Funds. Neither the Funds, the Responsible Entity, the Goldman Sachs JBWere Group nor Goldman Sachs are members of the National Australia Group. Investment in the Units is subject to investment risk, including possible delays in repayment and, except as provided in the NAB Capital Guarantee, loss of income and principal invested. National Australia Bank does not in any way stand behind the capital value or performance of the Units or the investments made by the Keystone Funds, except as provided in the NAB Capital Guarantee. To the maximum extent permitted by law, National Australia Bank expressly disclaims and takes no responsibility for any part of this PDS other than references to its name and (to the extent the inclusion of the text of the deed poll guarantee in the section titled NAB Capital Guarantee Deed on page 19, constitutes a statement by National Australia Bank) the inclusion of text of the deed poll guarantee. National Australia Bank has given its consent (which has not been withdrawn as at the date of this PDS) to the issue of this PDS with the inclusions of: (a) the text of the deed poll guarantee in the section titled NAB Capital Guarantee Deed on page 19, and (b) references to National Australia Bank, in the form and context in which they are included. National Australia Bank has not made or consented to any other statement in this PDS, including references to the NAB Capital Guarantee and descriptions of other documents to which National Australia Bank is a party. National Australia Bank has not caused or authorised the issue of this PDS. National Australia Bank disclaims and takes no responsibility for any part of this PDS other than the inclusions detailed above, to which it has consented. National Australia Bank has adopted the Code of Banking Practice 2004 and the relevant provisions of the Code apply to the NAB Capital Guarantee, if a Unitholder is an individual or a small business customer (as defined in the Code). Unitholders can obtain from National Australia Bank upon request general descriptive information concerning National Australia Bank s banking services and a copy of the Code of Banking Practice If any of the information contained in this PDS changes in a manner that is not materially adverse to Unitholders, we may update that information by posting the updated information on our website, This information is available at any time. A paper copy of any information updated in this way will be given to you free of charge, if you request it. Goldman Sachs is a registered trade mark of Goldman, Sachs & Co. Electronic PDS A copy of this PDS is available at Any person receiving this PDS electronically should note that applications can only be accepted if the Responsible Entity receives a completed, current Application Form which accompanied the electronic or paper copy of this PDS. Paper copies of this PDS (with attached Application Form) will be sent to any person free of charge. To obtain a paper copy, please call Investor Service team on Membership of IFSA Goldman Sachs JBWere Asset Management is a member of the Investment and Financial Services Association Limited ( IFSA ). 2

3 Overview of the Keystone Funds The Goldman Sachs JBWere Keystone Funds Series II are new Australian domiciled managed funds being offered for the first time as at the date of this PDS. The assets of each Keystone Fund will consist of a Deposit made and a Swap entered into with Goldman Sachs JBWere Capital Markets Limited. Detail on the structure of the Keystone Funds can be found on page 8 and the Glossary of terms on page 41, provides an explanation of the terms used in this PDS. The table below summarises the key aspects of the Keystone Funds. ou should read the entire PDS for full details before investing. Please see the sections Key benefits of the Keystone Funds on page 8 and What are the significant risks? on page 22 to consider the benefits and risks involved in investing in the Keystone Funds. The section Fees and other costs on page 24, sets out the costs of investing in the Keystone Funds. Type of investment Funds investments and Participation Rates Units in the following Australian domiciled unit trusts: Goldman Sachs JBWere BRIC II Keystone Fund ARSN ( BRIC II Fund ) Goldman Sachs JBWere Food, Feed, Fuel Keystone Fund ARSN ( Food, Feed, Fuel Fund ) Collectively referred to as the Keystone Funds or Funds. The Offer is for ordinary Units in one or both of these Keystone Funds. Each Keystone Fund offers economic exposure to a different Underlying Basket. Further information on the individual Underlying Baskets can be found in Introducing the BRIC II Basket on page 12 and Introducing the Food, Feed, Fuel Basket on page 15. Each Keystone Fund will enter into a Swap to provide economic exposure to different Underlying Baskets: Fund Underlying Basket Indicative Participation Term Participation Rate* Floor % % BRIC II Fund Food, Feed, Fuel Fund The BRIC II Basket: linked to an index representing equities in Brazil, Russia, India and China (see page 12) The Food, Feed, Fuel Basket: linked to a strategy tracking four agriculture commodities used in biofuel production (see page 15) years years See What is the Participation Rate? on page 9 for details on how and when the final Participation Rates are determined. * The Indicative Participation Rate is the rate that would have applied if the date of this PDS were the Issue Date. The actual Participation Rate will be set on the Issue Date of the Units. It may be more or less than the Indicative Participation Rate shown but it will not be less than the Participation Floor. If an actual Participation Rate of the Participation Floor or above cannot be achieved for a particular Fund, the issue of Units may not proceed and your Investment Amount will be refunded without interest. See What is the Participation Rate? on page 9 for further details. 3

4 Overview of the Keystone Funds continued Responsible Entity Investment Manager Swap Counterparty Deposit Holder Capital Guarantor NAB Capital Guarantee Capital Guaranteed Amount per Unit Minimum Investment Amount Currency Guarantee Effective Date Withdrawals Unit Pricing Income Distributions Goldman Sachs JBWere Managed Funds Limited. Goldman Sachs JBWere Investment Management Pty Ltd. Goldman Sachs JBWere Capital Markets Limited. Goldman Sachs JBWere Capital Markets Limited. National Australia Bank Limited (NAB). NAB provides the NAB Capital Guarantee to Unitholders who are invested in a Keystone Fund on the relevant Guarantee Effective Date. This means that, on the Guarantee Effective Date, all Unitholders will at least receive back their initial Investment Amount, that is the $1.00 Capital Guaranteed Amount per Unit (for example, if you invest $10,000, your Capital Guaranteed Amount would be $10,000 on the Guarantee Effective Date). ou should note that there is no NAB Capital Guarantee on Early Withdrawal. The NAB Capital Guarantee is subject to the terms and conditions referred to in section About the NAB Capital Guarantee on page 18. ou should read and understand these terms and conditions before investing in the Keystone Funds. Each Keystone Fund is separately guaranteed, and the performance of any Keystone Fund is independent of the performance of the other Keystone Funds. The Issue Price $1 per Unit issued. An initial investment of at least A$10,000 into a Keystone Fund and A$5,000 for a subsequent investment into the other Keystone Fund. All investments must be made in increments of $1.00. If we do not receive a Total Investment Amount of at least $10 million into a Keystone Fund, the issue of Units in that Fund may not proceed and we may refund your Investment Amount to you (without interest). We reserve the right to proceed with the Offer even if less than $10 million is raised. Units in the Keystone Funds are denominated in Australian Dollars. Under the Swap, each Keystone Fund s respective economic exposures to each Underlying Basket will be fully currency hedged into Australian Dollars. 2 April 2013 for the Food, Feed, Fuel Fund 2 April 2014 for the BRIC II Fund These are the dates on which Unitholders in each of the Keystone Funds will receive the benefit of the NAB Capital Guarantee.* our Units will be withdrawn as at this date. See At the Guarantee Effective Dates on page 10 for further details. Investment should be made with a five year view for the Food, Feed, Fuel Fund or a six year view for the BRIC II Fund. However, prior to the Guarantee Effective Date, Early Withdrawal of all the Units you hold in a particular Keystone Fund is provided for on a monthly basis, subject to our discretion. The NAB Capital Guarantee only applies to withdrawals on the relevant Guarantee Effective Date. No NAB Capital Guarantee is provided for any withdrawal before the relevant Guarantee Effective Date (refer to page 18), and a Withdrawal Fee applies (refer to page 26). For further details on how to withdraw, please see the How do I withdraw my investment? section on page 33. Monthly Up until the relevant Guarantee Effective Date it is anticipated that the Keystone Funds will not pay any income distributions. The Keystone Funds may however, distribute income on withdrawal of Units (refer to the Will the Keystone Funds pay distributions? section on page 9) for further details. * Please note that each of the Keystone Funds offered under this PDS has a different Guarantee Effective Date. 4

5 Swap Agreements Deposit Agreement Withdrawal price on the Guarantee Effective Date Each of the Keystone Funds will enter into a Swap with the Swap Counterparty to provide economic exposure to the relevant Underlying Basket. At the relevant Guarantee Effective Date, the Swap Counterparty must pay the Swap Maturity Value to the relevant Keystone Fund. The Swap Maturity Value represents the relevant Underlying Basket Growth multiplied by the relevant Participation Rate. The Swap Maturity Value will be dependent on the performance of the Underlying Basket relevant to the Fund over the term of the Swap. Refer to Calculation of the Swap Maturity Value on page 10 for more detail on how the Swap Maturity Value is calculated. Where there has been no growth in the Underlying Basket, or the Swap Maturity Value would be negative, the Swap Counterparty is not obliged to make a payment to the Fund at Maturity. In return for economic exposure to the relevant Underlying Baskets, the Fund agrees to pay to the Swap Counterparty an amount equal to the interest it receives on the Deposit from the Deposit Holder minus an amount retained to meet ongoing Fund expenses. Each Keystone Fund will put the Total Investment Amount it receives on deposit with the Deposit Holder ( Deposit ) to provide for the NAB Capital Guarantee. The Deposit Holder will pay the Fund interest on this Deposit over the term of the Swap. The Fund will use some of this interest to meet ongoing fees and expenses associated with operating the Funds. The residual interest equals a payment required to be made to the Swap Counterparty under the terms of the Swap. At Maturity, the Deposit Holder will return the Deposit to the Fund. The Value of the Deposit will fluctuate until the relevant Guarantee Effective Date, but will have a value equal to the Capital Guaranteed Amount at the relevant Guarantee Effective Date. The withdrawal price per Unit on the relevant Guarantee Effective Date in the Keystone Funds will be the Final Unit Price. The Final Unit Price will be paid in the form of a distribution plus the return of your Investment Amount. The Final Unit Price for each Unit in a Keystone Fund held on the relevant Guarantee Effective Date will equal the Swap Maturity Value received from the Swap Counterparty (if any) plus the Deposit received back from the Deposit Holder divided by the number of Units on issue in that Fund as at the relevant Guarantee Effective Date. The Swap Maturity Value for each Keystone Fund is equal to: Participation Rate x Underlying Basket Growth (if any) x Total Investment Amount The Deposit for each Keystone Fund, as at the relevant Guarantee Effective Date will be equal to the Capital Guaranteed Amount for that Keystone Fund. This means that you will receive back at least the amount you invested if you remain invested until the relevant Guarantee Effective Date. Refer to Calculation of the Swap Maturity Value on page 10 for more detail on how the Swap Maturity Value is calculated. 5

6 Overview of the Keystone Funds continued Key dates Offer Open Date 29 January 2008 Offer Close Date 20 March 2008 See the section headed How do I invest? on page 32 for details on the documentation that you are required to complete and when it needs to be lodged with us. We have the discretion to shorten or extend the Offer Period, which may change the Issue Date and the Guarantee Effective Date. Should the Offer Period be amended, the revised Offer Period details for each Fund will be posted on Issue Date 3 April 2008 This is the date on which the actual Participation Rate relevant for each Keystone Fund and the BRIC II Basket Annual Growth Cap is set and your investment exposure begins. The Participation Rate for each Fund and the BRIC II Basket Annual Growth Cap will be posted on and will be included in your Confirmation Statement. Please note, the Issue Date may change if we exercise our discretion and change the Offer Close Date. Should the Issue Date be amended, the revised Issue Date details for each Fund will be posted on Guarantee Effective Dates 2 April 2013 for the Food, Feed, Fuel Fund 2 April 2014 for the BRIC II Fund These are the dates on which your Units will be withdrawn (provided not previously withdrawn) and your initial Investment Amount is guaranteed. Fees and commissions The following is a summary of the fees and commissions attributable to the Keystone Funds. Please refer to the Fees and other costs section on page 24 for details of the fees and costs applicable to each of the Keystone Funds, as well as commissions payable and worked dollar examples. Ongoing Management Costs Withdrawal Fee Guarantee Fee Commissions An ongoing Management Fee of 0.60% per annum of the Capital Guaranteed Amount will be charged quarterly to each Keystone Fund. In the case of Early Withdrawal: (a) Until and including 30 April 2010: 2.00% of your Withdrawal amount. (b) After 30 April 2010 to the relevant Guarantee Effective Date: 0.50% of your Withdrawal amount. No Withdrawal Fee is payable on Withdrawal of your Units as at the relevant Guarantee Effective Date. The Swap Counterparty will pay to NAB an Upfront Guarantee Fee of 0.10% of the Capital Guaranteed Amount and an Ongoing Guarantee Fee of 0.25% per annum of the Capital Guaranteed Amount on a quarterly basis for the provision of the NAB Capital Guarantee to Unitholders. The Swap Counterparty may pay your financial adviser up to 2.20% of your Investment Amount as an upfront commission (equivalent to up to $220 on a $10,000 investment) out of its own funds. This means any upfront commissions do not affect your Investment Amount or Capital Guaranteed Amount. our adviser may elect to rebate to you all or some of their upfront commission net of the effect of GST as additional Units as part of their fee arrangements with you. For example, if you agree with your adviser to rebate this commission, on an investment of $10,000 you will be credited with an additional $200 worth of Units i.e. you will receive 10,200 Units at an Issue Price of $1 each. The rebate of the upfront commission to you is an arrangement between you and your adviser. The Swap Counterparty may also, in its absolute discretion, pay your adviser or adviser group up to 1.00% of your Investment Amount as an additional upfront commission (equivalent to up to $100 on a $10,000 investment) out of its own funds. This means any such upfront discretionary commissions do not affect your Investment Amount or Capital Guaranteed Amount. 6

7 The Keystone Funds are new funds with no performance history as at the date of the PDS. Please read this PDS carefully before deciding to invest. ou should satisfy yourself that this type of product is appropriate to your requirements and that you are comfortable with the risks associated with this product (refer to page 22 for detail on the risks associated with the Keystone Funds). Investments should be made with a minimum investment horizon of either five years for the Food, Feed, Fuel Fund or six years for the BRIC II Fund, and fees apply for Early Withdrawal. We recommend Unitholders seek the advice of a qualified financial adviser before making any decision about the suitability of an investment into one of the Keystone Funds. A qualified financial adviser can thoroughly assess your personal financial circumstances and determine whether an investment into the Keystone Funds is suitable for you, and how it will fit into your strategic allocation. ou should be aware that we have the right, at our discretion, to extend or reduce the length of the Offer Period by changing the Offer Close Date (and any other relevant dates). In the event that a Total Investment Amount of at least A$10 million for either Keystone Fund is not received by the Offer Close Date (refer to page 6), or if the Participation Floor is not met (refer to page 3), then we have the discretion to refund all Applications and Application monies (without interest) relating to that Fund to Unitholders, and the issue of Units in that Fund may not proceed. After the Keystone Funds have commenced operations the latest performance can be viewed at or may be obtained by phoning our Investor Service team on or investorservices@gsjbw.com. Alternatively, your financial adviser may be able to provide you with details. When reviewing any past performance information, please remember that past performance is not a reliable guide to future performance. For nab customers, please call nab on or visit nabcapital.com/keystoneii. 7

8 About the Investment About the Investment opportunity The Keystone Funds have been designed to deliver Unitholders with a simple and efficient way to gain exposure to some of the most popular current international investment themes, including equity exposure to emerging economies around the globe, and exposure to commodity investments. Key benefits of the Keystone Funds Unitholders may be attracted by some of the key benefits of the Keystone Funds: Capital safety through the provision of the NAB Capital Guarantee Choice of two investment options, you may invest in one or more Funds Simplicity each Fund s investments offer fixed exposure to each Underlying Basket from the Issue Date to the relevant Guarantee Effective Date Growth potential through economic exposure to the different Underlying Baskets Diversification potential through investing in one or more Keystone Funds with different economic exposures Currency hedging investment return delivered in Australian dollars, each Swap removes any currency complexities up until the Guarantee Effective Date making the Underlying Basket performance straightforward and easy to track. Many of the above benefits are designed to give Unitholders a greater degree of certainty surrounding their investment. Unlike some other investments where variable capital protection mechanisms can lead to changing degrees of exposure to an investment, the Keystone Funds offer Participation Rates which are fixed on the Issue Date and do not vary during the term of the Swap. For example, where the Swap Counterparty sets a Participation Rate of 100% on the Issue Date, Unitholders in that Fund will always have 100% exposure to any Underlying Basket Growth at Maturity regardless of the performance or the volatility of the Underlying Basket. Each Keystone Fund will also be fully currency hedged through the Swap and will not be exposed to currency movements up until the Guarantee Effective Date. There are risks associated with the Keystone Funds, refer to What are the significant risks? on page 22. Investment objective The Keystone Funds have been designed to provide economic exposure to the growth potential of a selection of international investment themes with the safety of a NAB Capital Guarantee* at the relevant Guarantee Effective Date. Investment structure This section outlines the investment structure that each Keystone Fund uses to achieve this objective and illustrates how the components of the investment structure fit together. The following diagram illustrates the structure of each Keystone Fund. $ Investor Units 100% NAB Capital Guarantee* NAB Capital Guarantor Goldman Sachs JBWere Keystone Fund Deposit Deposit Holder Swap Swap Counterparty Underlying Basket *See About the NAB Capital Guarantee on page 18 of this PDS. 8

9 Each Keystone Fund will own two primary assets, being the Swap entered into with the Swap Counterparty and the Deposit placed with the Deposit Holder. Entering into the Swap with the Swap Counterparty provides each of the Keystone Funds with economic exposure to the relevant Underlying Basket. The Deposit placed with the Deposit Holder ensures capital surety to underpin the NAB Capital Guarantee provided to Unitholders on the relevant Guarantee Effective Date. In addition the Deposit will pay sufficient interest to the Fund to enable it to meet ongoing expenses associated with operating the Fund. Swap Agreements Each Keystone Fund will enter into a Swap with the Swap Counterparty. The Swap provides economic exposure to the relevant Underlying Basket for each Fund. The Swap Maturity Date is the Business Day before the Guarantee Effective Date. Under the Swap, the Swap Counterparty agrees to pay the Fund the Swap Maturity Value, and the Fund agrees to pay the Swap Counterparty an amount equal to the interest it earns on the Deposit, minus an amount retained to meet ongoing fees and expenses of the Fund. At the Guarantee Effective Date, each Keystone Fund will receive a payment from the Swap Counterparty under the Swap equal to the Swap Maturity Value. The drivers of the Swap Maturity Value are the performance of the relevant Underlying Basket over the term of the Swap (as defined on pages 13 and 16) and the relevant Participation Rate. Where the Swap Maturity Value is negative, the Swap Counterparty will not make a payment under the Swap and no payment to the Swap Counterparty would be required by the Fund. Prior to Maturity, if any portion of the Swap is unwound to finance an Early Withdrawal, depending on the Value of the Swap at that time, the Fund may either receive a payment from, or make a payment to, the Swap Counterparty. Deposit Each Keystone Fund will enter into a Deposit Agreement under which it agrees to place the Total Investment Amount it receives on deposit with the Deposit Holder to underpin the NAB Capital Guarantee. The Deposit Holder will pay the Fund interest on this Deposit over the term to the Guarantee Effective Date. We may use some of this interest to meet ongoing fees and expenses of the Fund. At the Guarantee Effective Date, the Deposit Holder will return the Deposit to the Fund. The Deposit will have a value equal to the Capital Guaranteed Amount at the Guarantee Effective Date. What is the Participation Rate? The Participation Rate represents the degree to which the Fund participates in the performance of the Underlying Basket and is one of the key factors in determining the Swap Maturity Value each Keystone Fund will receive under the Swap. For example, for a Participation Rate of 100%, the Fund would receive one for one exposure to any positive Underlying Basket Growth derived from the relevant Fund. The Indicative Participation Rates and the Participation Floors for each Fund are set out on page 3. The actual Participation Rate relevant to each Keystone Fund will be determined by the Swap Counterparty on the Issue Date. If the actual Participation Rate is less than the Indicative Participation Rate (but not lower than the Participation Floor), the Fund will participate less in the performance of the Underlying Basket. That is, the Swap Maturity Value is likely to be lower as a result of a lower Participation Rate. If the Participation Rate is less than the Participation Floor, the Fund will not proceed and we will return your Investment Amount to you without interest. The calculation that takes place to determine the actual Participation Rate on the Issue Date is influenced by a number of market variables that change daily. Market driven factors will cause the Participation Rate to vary from the Indicative Participation Rate as at the date of this PDS. The table below sets out the three most important market driven factors in determining the Participation Rate and their effect on the Indicative Participation Rates quoted in this PDS and the Participation Rate that the Swap Counterparty determines on the Issue Date. Variable Volatility of the Underlying Basket Australian five and six year interest rates Interest rates relevant to the Underlying Basket Change in variable Up Up Up Effect on Participation Rate Down Up Down These variables are subject to continuous market movement. Where there is a move in one of the factors above, this could have a significant effect on the actual Participation Rate set on the Issue Date. On the Issue Date the Swap Counterparty will set the Participation Rate according to the prevailing market driven variables and subject to the Participation Floor. This Participation Rate will be communicated to all Unitholders in the Confirmation Statement, and posted on Will the Keystone Funds pay distributions? Prior to the Guarantee Effective Date, it is not anticipated that the Keystone Funds will pay any distributions. Should you request an Early Withdrawal of your Units, the relevant Keystone Fund will need to terminate a proportional amount of the Swap and the Deposit to finance your withdrawal request. This may result in that Fund making a gain. Where that occurs, a portion of the proceeds of your Early Withdrawal will be a distribution equal to the value of the gain made by the Fund. 9

10 About the Investment continued Should any of the Keystone Funds receive a payment under the Swap on the Swap Maturity Date, that payment will be distributed to all Unitholders in that Keystone Fund as at the Guarantee Effective Date. The amount of distribution that you will receive will be based on the number of Units you hold in the Fund relative to the total number of Units on issue in that Fund. Unit Price before the Guarantee Effective Date During the term of your investment, we will make available a Monthly Unit Price. Generally, the Unit Price of a Keystone Fund will be equal to the Value of the Swap plus the Value of the Deposit held by the Fund, divided by the number of Units in the Fund. The Value of the Swap is the unwind value of the Swap as reasonably calculated by the Swap Counterparty on the relevant calculation date. This could be either a positive or negative value. If the value is positive, the Swap Counterparty will pay the value to the Fund. If the value is negative, the Fund must pay the absolute value to the Swap Counterparty, therefore, in extreme circumstances you may potentially lose your entire investment. The Swap Counterparty will have regard to a number of market forces in determining the Value of the Swap, including the then current level of the relevant Underlying Basket, the liquidity of relevant hedging instruments, volatility of the Underlying Basket, prevailing market conditions, prevailing interest rates, the time remaining to Maturity of the Swap and any hedging instruments, and any other factors it considers relevant. The Value of the Deposit will equal the Deposit amount plus any interest accrued and/or receivable. It is important to note that because of the number of factors that go into determining the Value of the Swap, the Unit Price will not necessarily move in line with movements in the Underlying Basket, nor will it represent the value that would be derived using calculations used to derive the Final Unit Price and the Swap Maturity Value as if the relevant calculation date was the Guarantee Effective Date. No NAB Capital Guarantee is provided for Early Withdrawals, and if you choose to withdraw before the Guarantee Effective Date, you may receive less than the amount you originally invested. Please also note, the Unit Price does not take into account the effect of any applicable Withdrawal Fee and any associated Withdrawal Costs and Taxes (see Fees and other costs on page 24 for further details). We have in place a formal pricing policy in relation to the guidelines and relevant factors (including discretions) taken into account when calculating the Unit Price and we record any exercise of our discretion which is outside the scope of, or inconsistent with this pricing policy. A copy of this policy is available on request free of charge. At the Guarantee Effective Date We will send a Withdrawal Notice to Unitholders at least 20 days prior to the relevant Guarantee Effective Date. The Withdrawal Notice will seek instructions from you for the payment of your distribution payment on the relevant Guarantee Effective Date (if any) and the withdrawal value of your Units. Please note we reserve the right not to accept directions to pay withdrawal proceeds to third parties. The total of your distribution payment at the relevant Guarantee Effective Date will represent your portion of the payment of the cash proceeds received by the Fund equal to the Swap Maturity Value. Once the final distribution payment has been made (if any), we will automatically withdraw your Units. The withdrawal value of your Units at the relevant Guarantee Effective Date will represent your portion of the Deposit held by the Fund. To ensure that your payment is promptly made, you will need to: complete the Withdrawal Notice, and lodge it with us before the Withdrawal Notice Due Date (detailed in the Withdrawal Notice). Once all distribution payment amounts and withdrawal payment amounts have been finalised, we will transfer cash amounts required to make these payments from each Keystone Fund to a trust account(s) operated by us. Distribution (if any) and withdrawal payments will then be paid to you. We will pay the proceeds from withdrawal on or before the Settlement Date, which is 15 Business Days after the relevant Guarantee Effective Date. If you do not return the Withdrawal Notice, we will automatically forward a cheque for your distribution and withdrawal payments to your recorded address. Should we not be able to pay you your distribution and withdrawal proceeds (i.e. if your cheque is returned to us, we cannot successfully credit your nominated bank account or we cannot contact you), these amounts will be dealt with as unclaimed monies. Calculation of the Swap Maturity Value Where there has been positive Underlying Basket Growth, the Swap Counterparty will pay to the Fund the Swap Maturity Value on the Guarantee Effective Date. The Swap Maturity Value per Unit for each Keystone Fund on the Swap Maturity Date is equal to: Participation Rate x Underlying Basket Growth x Issue Price per Unit* Under the Swap, the Swap Counterparty agrees to pay this amount to the Fund on the Guarantee Effective Date which is the next Business Day after the Swap Maturity Date. Where this amount would be a negative number, the Swap Counterparty is not obliged to make a payment under the Swap and no payment to the Swap Counterparty would be required by the Fund. *This is the Total Investment Amount on a per Unit basis. 10

11 Refer to the sections titled Swap Maturity Value on page 13 for the BRIC II Fund and page 16 for the Food, Feed, Fuel Fund for details of how the Swap Maturity Value for each Keystone Fund is determined. Deposit at the relevant Guarantee Effective Date The Deposit will be returned to the Fund on the relevant Guarantee Effective Date. The Deposit amount per Unit on the relevant Guarantee Effective Date will equal the initial Issue Price per Unit held in the Fund at the relevant Guarantee Effective Date, which is also equal to the Capital Guaranteed Amount per Unit (or $1.00). This means that you will receive back at least the amount you invested in a Keystone Fund when your Units are withdrawn as at the relevant Guarantee Effective Date. In addition, because of the operation of the NAB Capital Guarantee, even if something were to happen to the Deposit Holder, the Fund you have invested in, or us, you would still receive your Capital Guaranteed Amount per Unit directly from the Guarantor. Calculation of the Final Unit Price Where the Underlying Basket has performed positively, the Fund will receive a payment from the Swap Counterparty of the Swap Maturity Value representing any positive Underlying Basket Growth multiplied by the relevant Participation Rate. The Final Unit Price for a Keystone Fund will therefore equal: Capital Guaranteed Amount per Unit + (Participation Rate x Underlying Basket Growth (if any) x Issue Price per Unit*) Scenario The following scenario calculations are provided to demonstrate the Final Unit Price calculation process. Please note that the following are examples only and are not a guarantee or simulation of actual performance of the Keystone Funds. In addition, the Participation Rates used are indicative only. Actual Participation Rates will be set by the Swap Counterparty on the Issue Date, subject to the Participation Floors set out in Fund Investment and Participation Rates on page 3. The basis for determining the Underlying Basket Growth for each of the Keystone Funds can be found on page 13 for the BRIC II Fund and page 16 for the Food, Feed, Fuel Fund. If on the relevant Swap Maturity Date, the Underlying Basket Growth for a Keystone Fund is calculated as + 30%, then the Final Unit Price for that Keystone Fund would be: Deposit per Unit = Capital Guaranteed Amount per Unit, or $1 Swap Maturity Value = Participation Rate x Underlying Basket Growth x Issue Price per Unit* = 100% x 30% x $1.00 = $0.30 Therefore, Final Unit Price = $ $0.30 = $1.30 This would therefore give a Final Unit Price of $1.30 If on the Swap Maturity Date, the Underlying Basket Growth for a Keystone Fund is calculated as 30%, the Final Unit Price for that Keystone Fund would be: Deposit per Unit = Capital Guaranteed Amount per Unit, or $1 Swap Maturity Value = Participation Rate x Underlying Basket Growth x Issue Price per Unit* = 100% x 30% x $1.00 = $0.30 This is a negative number, and the Swap Counterparty would therefore not make a payment to the Fund under the Swap and no payment to the Swap Counterparty would be required by the Fund. Because of the NAB Capital Guarantee, the Final Unit Price would still be $1.00, meaning that the Unitholder would still receive back their initial Investment Amount. The Final Unit Price will be paid in the form of an income distribution (representing the Swap Maturity Value) plus the return of your Investment Amount. * This is the Total Investment Amount on a per Unit basis. The NAB Capital Guarantee is subject to the terms referred to in About the NAB Guarantee on page

12 About the BRIC II Fund Introducing the BRIC II Basket The BRIC II Fund is linked to the growth of the BRIC II Basket. At Maturity of the Swap, the Swap Counterparty is required to deliver to the Fund the Swap Maturity Value, which reflects the Underlying Basket Growth (if any) of the BRIC II Basket. The Underlying Index for the BRIC II Basket is the S&P BRIC 40 Index. The S&P BRIC 40 Index provides exposure to the four emerging markets commonly referred to as the BRICs Brazil, Russia, India and China. These countries can be considered attractive investment opportunities in recognition of their potential to move from emerging market status to developed markets, and indeed global economic leaders. The S&P BRIC 40 Index includes 40 leading companies from these four countries. All constituents trade on developed market exchanges (Hong Kong Stock Exchange, London Stock Exchange, NASDAQ, and NSE). The index used is priced in US dollars. Further information on the S&P BRIC 40 Index can, at the date of this PDS be found at under <Equity Indices>, <Emerging Markets Indices> and then <S&P BRIC 40>. S&P BRIC 40 Index description Country Index Weight Sample of constituents* Brazil 26.69% Petroleo Brasileiro S.A, Bco Itau Hldg Finaceira (ADR) China 39.07% China Mobile (Hong Kong) Limited, PetroChina Company Limited, China Life Insurance Company Limited, China Construction bank India 7.18% Infosys Technologies Ltd. Russia 27.06% Oao Gasprom-Spon Adr Reg S, Lukoil-Spon Adr, Surgutneftegaz-Sp Adr *as at June 2007 Participation Rate and Participation Floor The Indicative Participation Rate on the BRIC II Fund is 100% The Participation Floor on the BRIC II Fund is 100% Please refer to What is the Participation Rate on page 9 for an explanation of the Participation Rate, when it is calculated and what variables may influence the actual Participation Rate calculated on the Issue Date. Historical Performance of the BRIC II Basket Feb Sep Apr Nov Jun Jan Aug-07 Data Source: Bloomberg, as at November 2007 Please note that performance data for the S&P BRIC 40 Index is only available from February Please note that past performance is not a reliable indicator of future performance. In addition, because of the structure of the BRIC II Fund and its investment in the Swap, the performance of the Unit Price will not necessarily track the performance of the BRIC II Basket during the term of the Swap. The above graph represents the performance of the BRIC II Basket over the last 3 years and is not a representation or forecast of the performance of the BRIC II Fund historically or in the future. Over this time period, the performance of the Fund would not have tracked the BRIC Basket in this manner, given the impact of such things as the structure of the investment (including the NAB Capital Guarantee and use of Observation Dates), fees, interest rates and volatility. For information on risks associated with Observation Dates, please see page 22. The historical performance of the BRIC II Basket should not be used by you as the sole or dominant reason for investing in the BRIC II Fund. ou need to consider your personal financial circumstances, advice from your adviser and that performance of the BRIC II Fund will not necessarily track the BRIC II Basket until Maturity before deciding whether to invest. 12

13 Swap Maturity Value At Maturity of the Swap, the Fund will receive a payment from the Swap Counterparty equal to the Swap Maturity Value, which represents the participation in the growth (if any) of the BRIC II Basket (as defined by the BRIC II Basket Growth formula) multiplied by the Total Investment Amount; or: Swap Maturity Value = BRIC II Basket Growth x Participation Rate x Total Investment Amount BRIC II Basket Growth The BRIC II Basket Growth is calculated using annual observations of the BRIC II Basket Closing Level. These annual observations, subject to the BRIC II Basket Annual Growth Cap, are added together at Maturity to calculate the BRIC II Basket Growth. The BRIC II Basket Annual Growth Cap effectively limits the amount of annual growth which is added together at Maturity, meaning that Unitholders do not participate in annual returns above the cap level. If the date of the PDS were the Issue Date, the BRIC II Basket Annual Growth Cap would be 28%. The actual BRIC II Basket Annual Growth Cap will be set by the Swap Counterparty on the Issue Date, subject to a minimum of 20%. If an actual BRIC II Basket Annual Growth Cap of greater than 20% cannot be achieved, the issue of Units will not proceed and your Investment Amount will be returned without interest. The calculation of the BRIC II Basket Annual Growth Cap is driven by the same variables that relate to setting the Participation Rate such as the volatility of the Underlying Basket, interest rates and prevailing market conditions. It is important to note that any negative BRIC II Basket Annual Growth is included in the calculation of the BRIC II Basket Growth at Maturity. The inclusion of negative returns, plus the BRIC II Basket Annual Growth Cap means that BRIC II Basket Growth may be less than if these were not included in the calculation. The BRIC II Basket Growth is calculated as: BRIC II Basket Growth = Sum of BRIC II Basket Annual Growth, for t years 1-6, x 100% Where: BRIC II Basket Annual Growth = BRIC II Basket Final t /BRIC II Basket Final t-1 1, subject to the BRIC II Basket Annual Growth Cap BRIC II Basket Annual Growth Cap = Final level to be set on Issue Date, indicative 28% BRIC II Basket Final t = Closing Level of the BRIC II Basket on the Observation Date of each year t BRIC II Basket Final t-1 = Closing Level of the BRIC II Basket on the Observation Date of each year t-1 BRIC II Basket Closing Level = Closing Level of the S&P BRIC 40 Index on the relevant Observation Date Observation Dates The performance of the BRIC II Basket is the sum of the annual returns of the S&P BRIC 40 Index. The annual returns are measured between the following dates: Observation Date 0 (Issue Date) 3 April 2008 Observation Date 1 2 April 2009 Observation Date 2 2 April 2010 Observation Date 3 4 April 2011 Observation Date 4 2 April 2012 Observation Date 5 2 April 2013 Observation Date 6 (Maturity Date) 2 April

14 About the BRIC II Fund continued Example of BRIC II Basket Growth and Swap Maturity Value calculation The tables below give examples of the calculations used to derive the BRIC II Basket Growth, and also the Swap Maturity Value and Final Unit Price. As set out above, there are 6 Observation Dates applicable to the BRIC II Basket. For simplicity we have used non sensible Closing Levels. This is not a forecast of performance, and merely an example of a sample calculation. Example 1 Assuming 10 investors each invest $1million, giving a Total Investment Amount of $10million. Also assume a Participation Rate of 100%, the BRIC II Basket Annual Growth Cap is 25% and the below hypothetical performance scenario for the BRIC II Basket. The BRIC II Basket Growth, the Swap Maturity Value and the Final Unit Price would each be calculated at Maturity as follows: Hypothetical Performance Scenario: Date BRIC II Basket Closing Level BRIC II Basket Annual Growth BRIC II Basket Annual Growth capped at 25% Issue Date 3000 Observation Date % 3.3% Observation Date % -19.4% Observation Date % 20.0% Observation Date % 25.0% Observation Date % 7.5% Observation Date % 11.6% Total 48.1% Calculations at Maturity: Observation Formula Outcome BRIC II Basket Growth Sum of BRIC II Basket Annual Growth, years 1-6, x 100% 48.11% Swap Maturity Value BRIC II Basket Growth x Participation Rate x Total Invesment Amount $4,811,000 Final Unit Value (Swap Maturity Value + Deposit) / Total Number of Units on Issue $ In this example, the BRIC II Basket Growth was 48%, giving a Final Unit Value of $1.48 at Maturity. 14

15 About the Food, Feed, Fuel Fund Introducing the Food, Feed, Fuel Basket Global warming, melting glaciers, rising sea levels, desertification and other such global phenomena are making climate change an ever impending reality. Along with the drive to secure energy supply, governments around the world are increasingly pushing to create more environmental-friendly technologies and energy sources. Thus we enter into a new era of clean energy. Biofuel is created from alternative sources: agriculture commodities such as corn, wheat, sugar and soybean oil. The Food, Feed, Fuel Fund has been structured to capture the growth potential from these agriculture commodities. The Food, Feed, Fuel Fund provides exposure to the growth of the S&P GSCI Biofuel E40 Excess Return Strategy from the Issue Date to Maturity Date, taking into account the averaging process described in the examples on the following page. The Underlying Basket for the Food, Feed, Fuel Basket is the S&P GSCI Biofuel E40 Excess Return* Strategy, which is based on the S&P GSCI Biofuel Excess Return Index. The S&P GSCI Biofuel Excess Return index ( Index ) was established in June 2007 with the composition fixed as set out in the chart below. * Excess Return refers to the return generated by adding up the two return drivers set out at 1 and 2 below, that is price return plus the return derived from the roll process described at 2 below. Wheat, 9% Sugar, 28% Corn, 38% Soybean oil, 25% The S&P GSCI Biofuel Excess Return Index is non-rebalancing. Therefore, while the percentage allocation to each underlying commodity was fixed as set out in the pie chart above in June 2007, as prices of contracts for different underlying commodities change over time, the actual commodity dollar weights in the index will change. This reflects changes in the supply and demand for the underlying commodities and means that if, for example, wheat prices moved higher relative to the other underlying commodities, wheat would have a greater impact on returns of the Underlying Basket. It is important that Unitholders understand the two primary drivers of the S&P GSCI Biofuel Excess Return Index returns: 1. Changes in prices of the commodities which comprise the Index; and 2. Rolling the underlying futures contracts which comprise the Index. This is a common feature of most commodity based indices where investors effectively avoid physical delivery of the underlying commodity. This involves initially buying a futures contract to gain exposure to an underlying commodity and then selling that futures contract and simultaneously purchasing the next futures contract in order to maintain exposure to the underlying commodity. This process of buying and selling futures contracts inevitably leads to either profits or losses being made as prices for these contracts change. Over time, these profits or losses can have a positive or negative impact on the value of an index. Please refer to page 24 Food, Feed, Fuel Fund Risk. The S&P GSCI Biofuel E40 Excess Return Strategy is a rules-based long only passive non-discretionary excess return strategy. It is designed to generate an enhanced return as compared to the S&P GSCI Biofuel Excess Return Index by optimising the roll characteristics of the Index by taking advantage of seasonality. For example, the wheat contracts are rolled only in the months of September and December, which in the Northern Hemisphere is the new crop season, when inventories are expected to be at their lowest point, thus taking advantage of potentially higher prices for wheat at these times. This is an example of taking advantage of seasonality. Please note that because the strategy is rules-based there is no ability to change the investments characteristics, for example rolling the wheat contract in July if prices happened to be higher. Further information about the S&P GSCI Biofuel E40 Excess Return Strategy is available on our website at 15