Walter Scott Global Equity Fund

Transcription

1 MACQUARIE Professional series Walter Scott Global Equity Fund Product Disclosure Statement Contents Section 1: About Macquarie Investment Management Limited 02 Section 2: How the Walter Scott Global Equity Fund works 02 Section 3: Benefits of investing in the Walter Scott Global Equity Fund 03 Section 4: Risks of managed investment schemes 04 Section 5: How we invest your money 05 Section 6: Fees and costs 06 Section 7: How managed investment schemes are taxed 08 Walter Scott Global Equity Fund ARSN , APIR Code MAQ0410AU Issued 22 June 2012 Issued by Macquarie Investment Management Limited ABN , AFSL Section 8: How to apply 08 This Product Disclosure Statement (PDS) is a summary of significant information and contains a number of references to other important information contained in a separate information booklet titled Walter Scott Global Equity Fund Additional Information to the Product Disclosure Statement (Information Booklet), which together forms the product disclosure statement for the Walter Scott Global Equity Fund (Fund). The PDS and the Information Booklet should be read together and considered before making a decision to invest in the Fund. You can access the Information Booklet and PDS on our website, Contact details Macquarie Professional Series client service team Mail GPO Box 2912 Brisbane QLD 4001 Financial advisers Institutional investors Master trusts and wrap operators Prospective direct retail investors Call your financial adviser or Macquarie on Facsimile Website macquarie.com.au/professionalseries professionalseries@macquarie.com download a copy or request a copy free of charge by calling us. If you are investing through an Investor Directed Portfolio Service (IDPS) operator, you should contact your IDPS operator with any queries. The information provided in this PDS and the Information Booklet is general information only and does not take account of your personal objectives, financial situation or needs. You should obtain financial advice tailored to your personal circumstances. This offer is only open to persons receiving this PDS and Information Booklet within Australia and to whom it would not be unlawful to make such an offer or such other jurisdiction approved by Macquarie Investment Management Limited (Macquarie, MIML, we, us, our). The information in this PDS is current as at the issue date but may change from time to time. Where information that changes is not materially adverse to investors, we will update this information by publishing changes on our website at macquarie.com.au/professionalseries. A paper copy of any updated information is available free on request. We will notify you if there is a materially adverse change to information contained in this PDS. Investments in the Fund are not deposits or liabilities of Macquarie Bank Limited ABN or any member of the Macquarie Group and are subject to investment risk, including possible delays in repayment and loss of income and principal invested. Neither Macquarie Bank Limited, MIML nor any other member company of the Macquarie Group guarantees the performance of the Fund or the repayment of capital from the Fund or any particular rate of return. 1

2 Section 1: About Macquarie Investment Management Limited Macquarie Investment Management Limited (Macquarie, MIML, we, us, our) is the responsible entity for the Walter Scott Global Equity Fund (Fund). We are responsible for operating the Fund, including management and administration of the Fund. We may delegate some of these functions to third parties. MIML is a member of the Macquarie Group, which is a leading provider of funds management services. MIML manages over $A45 billion as at 31 March To complement its in-house expertise, MIML also partners with leading global investment managers. We have appointed Walter Scott & Partners Limited (Walter Scott, the Manager) as investment manager of the Fund. Walter Scott is a global equity manager based in Edinburgh and regulated by the Financial Services Authority of the United Kingdom. Walter Scott was established in 1983 to offer global equity portfolio management to institutional investors around the world. Walter Scott has been a wholly owned subsidiary of The Bank of New York Mellon Corporation since You should bear in mind we have the discretion to replace the manager of the Fund with one or more investment managers. In certain circumstances we may replace the manager of the Fund without notice to you if we think it is in the best interests of investors in the Fund as a whole to do so. You should read the important information about About Macquarie Investment Management Limited before making a decision. Go to Section 1 of the Information Booklet at macquarie.com.au/walterscottglobalequityfund/ informationbooklet. The material relating to About Macquarie Investment Management Limited may change between the time when you read this PDS and the day when you acquire the product. Section 2: How the Walter Scott Global Equity Fund works The Walter Scott Global Equity Fund is a unit trust registered under the Corporations Act 2001 (Cth) (Corporations Act) as a managed investment scheme. Each investor s investment amount is pooled and invested in the manner described in Section 5. This means that, through the Fund, you may have access to certain investments that you would not otherwise be able to access on your own and you have access to the knowledge and expertise of Walter Scott s skilled investment managers through an investment in the Fund. For direct investors in the Fund, in exchange for your invested money you are issued with interests in the Fund called units. A unit gives an investor an interest in the Fund as a whole, but not an entitlement or interest in any particular asset of the Fund. The terms of the units, including an investor s rights and obligations, are set out in this PDS, the Information Booklet and the Fund s constitution (which we can provide to you on request). The constitution can be amended in certain circumstances. Where we reasonably consider that the proposed amendment is not adverse to investors rights, we are permitted to amend the constitution without investor approval. Otherwise, investor approval must be sought to amend the constitution. The net asset value per unit will generally be calculated daily, and will be based on the value of the Fund s assets, less liabilities, divided by the total number of units on issue. The net asset value per unit and accordingly the application price and the withdrawal price for units will vary as the market value of the assets in the Fund rises or falls. Application and withdrawal prices take into account our estimate of transaction costs (the buy/sell spread). The application price and withdrawal price will differ from the Fund s net asset value per unit as a result of the buy/sell spread. See Section 6 for further details on the buy/sell spread. Making investments in the Fund To invest directly in the Fund, you need to complete the application form and send it to us with your initial payment. See Section 8 for further details on how to apply for units in the Fund. Payment can be made by cheque, bank transfer or by real time gross settlement (RTGS). Cheque payments should be made out to: MIML Walter Scott Global Equity Fund a/c [applicant s name] Business day is a day other than a Saturday or Sunday on which banks are open for general business in Sydney. Application cut-off time (Application Cut-off) 1.00pm Sydney time on a business day Minimum initial investment amount $20,000 The minimum initial investment amount requirement may be waived at our discretion or we may establish a higher minimum amount. There is no minimum additional investment amount. If we receive an application request before Application Cut-off on a business day, and it is completed to our satisfaction, we will process the application and investors will generally receive the application price based on the valuation of assets at the close of business on that day. For applications received and accepted after Application Cut-off on a business day; or on a non-business day, investors will generally receive the application price calculated for the next business day. If for any reason, we are unable to process your application or if your application is not completed to our satisfaction, we may delay your application for up to one month in which case your application monies will be held in a non interest bearing trust account. Income will not be paid on amounts held in this trust account. If your application is not processed by the end of the one month period, your application monies will be returned to you. Additional investments can be made at any time by sending us a cheque with your account details, or by depositing funds in the account provided to you at the time of your initial investment (Investment Account). Deposits into the Investment Account will be deemed to be an application for additional units in the Fund. We will not be responsible for any losses incurred by you as a result of incorrect payment of funds into the Investment Account or an incorrect bank account. We reserve the right to accept or reject an application at our discretion. To invest in the Fund, indirect investors need to follow the instructions of their IDPS operator. 2

3 How to withdraw your investment in the Fund For direct investors in the Fund, you may request to withdraw part or all of your investment in the Fund at any time. Funds will be paid by electronic transfer to an Australian bank account. To make a withdrawal, write to us or fax us a signed request providing your account number, the Fund name, the amount to be withdrawn, and bank details. Withdrawal cut-off time (Withdrawal Cut-off) 1.00pm Sydney time on a business day Minimum withdrawal amount There is no minimum withdrawal amount The minimum balance amount is $20,000. If we receive a withdrawal request before Withdrawal Cut-off on a business day, and it is completed to our satisfaction, we will process the withdrawal and investors will generally receive the withdrawal price based on the valuation of assets at the close of business on that day. We will generally pay withdrawal proceeds within five business days. However, the Fund s constitution allows for up to 90 days to pay withdrawal proceeds. For withdrawals received and accepted after Withdrawal Cut-off on a business day; or on a non-business day for us, investors will generally receive the withdrawal price calculated for the next business day. Indirect investors need to follow the instructions of their IDPS operator to make a withdrawal from the Fund. Restrictions on withdrawal When the Fund is liquid we may refuse or delay a withdrawal request from you, for example, during adverse market conditions or where we receive a large number of withdrawal requests over a short period of time. Such a freeze on withdrawals could mean that you are not able to withdraw your investment within the usual period upon request. In some circumstances, we can redeem some or all of your units without the need for a withdrawal request from you. Please refer to Section 2 of the Information Booklet for further details. In accordance with the Corporations Act, we may make some money available if the Fund becomes illiquid and we may be required to allocate it on a pro rata basis amongst those wanting to withdraw. When the Fund is illiquid, withdrawals may only be via a withdrawal offer made in accordance with the Corporations Act. Distributions From the underlying investments, the Fund may receive or generate distributions consisting of dividends, interest, gains or losses from futures trading, foreign exchange gains or losses, foreign tax credits, tax deferred income and return of capital and realised capital gains. The Fund will generally distribute income, if any, semi-annually in proportion to investors unit holdings at that time. Capital gains, if any, are generally distributed annually in proportion to investors unit holdings at that time. Distributions available to investors will be calculated based on the net income and capital gains of the Fund. Unit prices may fall after the end of each distribution period as a result of allocation of the distribution which reduces the Fund s assets. You can choose to have your distributions automatically reinvested into additional units in the Fund or paid directly into your nominated bank account. There is no buy/sell spread on distributions that are reinvested. If you do not make an election on the Application Form, your distributions will be automatically reinvested. Indirect investors Macquarie authorises the use of this PDS by investor directed portfolio service (IDPS) operators, such as master trusts, wrap accounts or nominee services that include the Fund on their investment menus. You are known as an indirect investor if you invest through an IDPS operator. Indirect investors gaining exposure to the Fund through IDPS operators do not themselves become investors in the Fund and may be subject to different terms and conditions from those referred to in this PDS. Instead it is the IDPS operator that invests for you that has the rights of a direct investor, and they may choose to exercise these rights in accordance with their arrangements with you. Please contact your financial adviser or IDPS operator with any queries. You should read the important information about How the Walter Scott Global Equity Fund works before making a decision. Go to Section 2 of the Information Booklet at macquarie.com.au/walterscottglobalequityfund/ informationbooklet. The material relating to How the Walter Scott Global Equity Fund works may change between the time when you read this PDS and the day when you acquire the product. Section 3: Benefits of investing in the Walter Scott Global Equity Fund Significant features The Walter Scott Global Equity Fund is actively managed and offers a concentrated portfolio of approximately stocks which the Manager believes offer strong and sustained earnings growth and therefore warrant long-term investment. The benchmark of the Fund is the MSCI World ex Australia Index, in $A unhedged with net dividends reinvested (Benchmark). The differentiating features of the Fund include: > > a strong basis for long-term returns: The Manager s strategy reflects a bias towards strong growth companies in the belief that the financial and strategic strengths and earnings potential of the companies in which it invests should enable long-term out-performance of the Benchmark. > > an approach which constructs portfolios without adhering to the Benchmark: While the Benchmark may be helpful in benchmarking investment returns, the Manager does not use the Benchmark as a tool for active portfolio construction. Unlike a top-down investment approach which allocates funds to country or industry sectors, the Manager s investment approach focuses on companies that it believes are capable of generating high earnings growth. As a result, both sector and geographic allocation will generally be significantly different from the Benchmark. It is this intense focus on research at a stock specific level that leads the Manager to invest in companies that have tended to offer low levels of volatility relative to the market. > > a focus on proprietorial research: While many international share managers rely heavily on secondary information (eg stock broker research), the Manager s highly experienced investment team conduct their own research. Meetings with company management are key to the process and take place on a regular basis, both prior to and subsequent to an investment being made. All investment ideas are discussed amongst the investment team and an idea must gain unanimous support before a stock will be considered for the portfolio. 3

4 4 > > a unique team structure: The Manager s senior investment professionals, with experience ranging from 11 to 48 years, work closely together in an environment where a team approach is strongly encouraged. Unlike many other international fund managers, the Manager s investment team is generally home grown with training conducted by the Manager s principals and research responsibilities rotated from region to region during the training period. This fosters a globalist approach to investment management and a strong culture and low staff turnover within the organisation. > > a concentrated portfolio of strong growth companies: The Manager believes that the long-term returns generated from investing in a company are primarily determined by the wealth the company generates through the growth of its earnings, a competitive return on equity and solid free cash flow generation. The Manager believes that a focused portfolio of 40 to 60 companies capable of strong and sustained earnings growth should meet the investment objective of the Fund over the long term. > > low turnover, buy and hold approach: The Manager believes that a patient approach allows the companies in which it invests to realise their growth potential and compound returns. Portfolio turnover associated with the Manager s strategy averages approximately 15 to 25 per cent of the stocks in those portfolios each year. This implies a typical investment holding period of approximately five years which is consistent with the Manager s long-term buy and hold approach. Significant benefits Investing in the Fund offers investors a range of key benefits as follows: > > potential for higher long-term returns than the Benchmark > > potential for attractive long-term returns > > a low correlation with the Benchmark > > access to the knowledge and investment expertise of Walter Scott through an investment in the Fund. Section 4: Risks of managed investment schemes All investments carry risk. The likely investment return and the risk of losing money is different for each managed investment scheme as different investment strategies carry different levels of risk depending on the underlying mix of assets that make up each fund. Generally, those assets with potentially the highest long term return may also carry the highest short term risk. The appropriate level of risk for you will depend on your age, investment time frame, where other parts of your wealth are invested and your individual risk tolerance. As well as considering the risks, you should also consider how an investment in the Fund fits into your overall investment portfolio. By diversifying your investment portfolio, you can reduce your exposure to failure or underperformance of any one investment, manager or asset class. It is important to understand that: > > the value of your investment will go up and down > > investment returns will vary and future returns may be different from past returns > > returns are not guaranteed and there is always the chance that you may lose some or all of the money you invest in the Fund, and > > laws affecting your investment in a registered managed investment scheme may change over time. When you make an investment, you are accepting the risks of that investment. It is important to understand these risks before deciding to invest. The significant risks for the Fund are described below, but these risks are not exhaustive and there could be other risks that may adversely affect the Fund. You should seek your own professional advice on the appropriateness of this investment for your particular circumstances and financial objectives. Concentration risk: Is the risk that poor performance in a group of stocks common to a particular region, industry, or other grouping to which the Fund has material exposure, will significantly affect the performance and unit price of the Fund. The risk is higher for this Fund than for other more diversified funds. This is because it s generally invested in 40 to 60 different stocks and therefore significant concentrations will arise. This may also mean that fluctuations in the unit price of this Fund within short periods of time are larger than for more diversified funds. Investment risk: The Fund seeks to outperform the Benchmark and to generate higher income returns than traditional cash investments. The risk of an investment in the Fund is therefore likely to be higher than an investment in a bank account or term deposit. Amounts distributed (if any) to unitholders may fluctuate, as may the Fund s unit price. The unit price may vary by material amounts, even over short periods of time, including during the period between a redemption request being made and the time the redemption unit price is calculated. Share market risk: Refers to changes in share prices that may result in loss of principal or large fluctuations in the unit price of the Fund within short periods of time. Factors that drive changes in share prices include changing profitability of companies and industries, economic cycles, volume of share issuance, investor demand levels, business confidence and government and central bank policies. Volatility risk: Generally the higher the potential return for your portfolio the higher the risk, and the greater the chance of substantial fluctuations in returns (including the possibility of losses) that may occur over time (especially over shorter periods of time). Investing in periods where highly volatile conditions exist implies a greater level of risk for investors than an investment made in a more stable market. You should carefully consider this additional volatility risk before making any investment in the Fund. Company specific risk: Is inherent in a particular company s performance due to factors that are pertinent to that company, the sector of the market to which the stock belongs, or the share market generally. These factors may cause a stock to perform adversely and where the Fund has exposure to that stock, may reduce the unit price of the Fund. Given the Fund only invests in a small number of companies, its exposure to company specific risk is higher. Emerging market risk: The Fund may make investments that provide exposure to emerging markets. This may include investing in companies in developing countries or investing in companies in developed countries with activities exposed to emerging markets. Emerging market risk refers to potential adverse political, economic or social developments affecting investment returns from these investments. Emerging markets are generally considered riskier than developed markets due to factors such as lower liquidity, the potential for political unrest leading to recession or war, the increased likelihood of sovereign intervention (including default and currency intervention), currency volatility, and increased legal risk. Emerging market investments therefore may experience increased asset price volatility and face higher currency, default and liquidity risk.

5 Country risk: Refers to potential adverse political, economic or social developments affecting the return on an investment in that country. Examples are political instability, recession and war. Currency risk: Is the risk that fluctuations in exchange rates between the Australian Dollar and foreign currencies may cause the value of the Fund s investments to decline. The Fund s exposure to international assets will not be hedged back to Australian dollars and therefore your investment is fully exposed to currency risk. For example, a gain made on an offshore investment could be reduced or eliminated as a consequence of an adverse currency movement. Manager risk: Refers to the risk that the Manager will not achieve its performance objectives or not produce returns that compare favourably against its peers. Many factors can negatively impact the Manager s ability to generate acceptable returns from its stock selection process (eg loss of key staff). Liquidity risk: Exists when particular investments are difficult to purchase or sell, preventing the Fund from closing out its position or rebalancing within a timely period and at a fair price. While every effort is made for the Fund to be able to satisfy all withdrawal requests within 90 days, the nature of the underlying securities means that in certain circumstances (eg if trading in a particular security has been restricted or suspended in the market), we may not be able to fully meet all withdrawal requests when they are received. This may lead to the processing of redemption requests and payment of the redemption proceeds being deferred until the Responsible Entity forms the view that it is in the best interest of all unitholders to process the outstanding redemption requests and payment of redemption proceeds. Derivative risk: Derivatives are financial instruments that are used to obtain or reduce market exposures. The use of derivatives may expose the Fund to risks including counterparty default, legal and documentation risks. They can also potentially be used to create leveraged positions, where exposures are obtained that are greater than the value of assets required to support them. As the market value of derivatives positions are variable, gains or losses can be incurred, and can be greater than unleveraged positions. Derivatives will not be used for gearing or leverage purposes. Issuer and counterparty default risk: Is the risk of loss due to counterparty or issuer default. Counterparties include stockbrokers, clearing brokers and counterparties to derivative contracts. Fund risk: This is the risk that the Fund could terminate, the fees and expenses could change, or key investment professionals could change. There is also the risk that investing in the Fund may give different results than investing individually because of the income or capital gains accrued in the Fund and the consequences of investment and withdrawal by other investors. Valuation risk: The carrying value of the Fund s investments used to generate the Fund s unit price may not reflect their liquidation value. This may be due to a range of factors, including buy/sell spreads, liquidity pressures, market sentiment at the time of liquidation, and the volume of securities being liquidated. This may mean that the Fund s unit price does not reflect the value that will be achieved when processing a withdrawal. Change of law and other statutory and trading restrictions: Changes in laws or their interpretations including taxation and corporate regulatory laws, practice and policy could have a negative impact on the returns of investors. In certain circumstances, statutory or internal Macquarie Group imposed restrictions may preclude the acquisition or disposal of securities by the Fund. Without limitation, this includes where the acquisition would cause the Macquarie Group s aggregated holdings in a company (including holdings that the Macquarie Group is required to aggregate) to exceed applicable takeover or other thresholds. In addition, where, due to such restrictions, there is limited capacity to acquire particular securities, the Fund will not have priority over any member of, or any other fund associated with, the Macquarie Group to acquire those securities. Such restrictions may result in an adverse effect on the value of the Fund s investments due to the Fund being unable to enter into positions or exit positions as and when desired. Section 5: How we invest your money You should consider the likely investment return, risk and your investment time frame when choosing to invest into the Fund. The Walter Scott Global Equity Fund is managed in accordance with the Manager s global equities investment strategy (Strategy) which offers a concentrated portfolio of approximately 40 to 60 stocks which the Manager believes offer strong and sustained earnings growth and therefore warrant long-term investment. This is the only investment option of the Fund. The Fund may be suitable for investors who are looking for an investment with the objective of the Fund listed below and are prepared to accept the risks of the Fund set out in Section 4. Investment return objective Suggested minimum investment timeframe The Fund s objective is to seek to achieve a long-term total return before fees and expenses that exceeds the MSCI World ex Australia Index, in $A unhedged with net dividends reinvested At least 5 7 years Asset allocation Exposure to international shares: 90% to 100%; exposure to Cash: 0 to 10% The Fund may temporarily move outside these ranges due to certain factors such as the receipt of significant cash flows or due to differing settlement cycles or applications and withdrawals made by investors. If this occurs, action will be taken to bring the Fund back within these ranges as soon as practicable. Where we believe it is in the best interests of investors as a whole, we may change the investment ranges from time to time without prior notice to investors. Benchmark MSCI World ex Australia Index, in $A unhedged with net dividends reinvested 5

6 Description of the Fund Risk Level Fund Performance Labour, Environmental, Social and Ethical Considerations The Fund is managed in accordance with the Manager s global equities investment strategy, which offers a concentrated portfolio of approximately 40 to 60 stocks which the Manager believes offer strong and sustained earnings growth and therefore warrant long-term investment. The Manager adopts a buy and hold strategy to allow time for a company s earnings growth to translate into strong share price performance over time. The Manager believes that companies offering strong wealth generation typically exhibit key strengths such as: > > strong earnings growth > > high return on equity > > high free cash flow. The Fund is actively managed using a bottom-up investment approach driven by in-depth financial analysis and qualitative research that aims to identify companies capable of generating strong and sustained earnings growth. The Manager expects that on average and based on long term experience, 15 to 25 per cent of the stocks in the fund s portfolio will be turned over each year which reflects the Manager s long-term buy and hold approach. The Manager s investment portfolio is constructed with a primary focus on stock-based analysis. Country and sector exposures are a consequence of the search for what are in the Manager s view the best companies operating in the best sectors. As a result of this investment approach, the structure of the portfolio is likely to differ substantially from the composition of the Benchmark. The Manager s fundamental bottom-up investment approach combines detailed financial analysis with business and management analysis. The Manager screens the global share universe for companies that are likely to meet its investment criteria. Once identified, the Manager then conducts intensive financial analysis to review the company s financial history. Revenue patterns are identified and profit growth and cash generation are considered over a business cycle. The structure and strength of the balance sheet is also considered in depth. If the preliminary financial analysis suggests the company is capable of meeting the Manager s wealth generating criteria, detailed qualitative analysis is then undertaken. The Fund may use spot foreign exchange contracts to facilitate settlement of stock purchases. Derivatives will not be used for leverage or gearing purposes. The Fund s exposure to international assets is not hedged back to Australian dollars. This means that investors will be exposed to currency risk that is, the value of units in the Fund will change not only according to changes in asset values, but also because of movements in exchange rates. We consider the risk level of the Fund to be between medium and high. This is our assessment of the potential for loss and unit price variability over the short term. Refer to Section 4 for more information on the risks of an investment in the Fund. For performance information on the Fund, please contact us using details on page 1 or refer to the website for the latest Fund review: macquarie.com.au/walterscottglobalequityfund/fundreview To calculate the performance of the Fund, we will adhere to the standards set by the Financial Services Council. All returns and performance will be historical and will be quoted net of fees but before taxes and will assume that the income is reinvested and that the investment is held for the full period. Past performance is not a reliable indicator of future returns, which can differ materially. Generally, and in normal circumstances the Fund s investment decisions do not take into account labour standards, environmental, social or ethical considerations. However, these considerations may be taken into account if they have the potential to materially affect the value of the investments, but no specific methodology is applied. Section 6: Fees and costs Did you know? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of two per cent of your fund balance rather than one per cent could reduce your final return by up to 20 per cent over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask Macquarie or your financial adviser. To find out more If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (moneysmart.gov.au) has a managed funds calculator to help you check out different fee options and which can be used to calculate the effect of fees and costs on account balances. 6

7 This table provides summary information about the main fees and costs that you may be charged. These fees and costs may be deducted from your money or from the returns on your investment or from the Fund assets as a whole. For information on tax, see Section 7. You should read all of the information about fees and costs, as it is important to understand their impact on your investment. You can also use this information to compare the fees and costs with those of other investment funds. All amounts shown in this table include the net effect of GST. Please refer to Section 7 of the Information Booklet for information about proposed amendments to the GST law which may change the net effect of GST. Type of fee or cost Amount Fees when your money moves in or out of the Fund. You may incur a buy/sell spread when your money moves in or out of the Fund. 1 Establishment fee: The fee to open your investment Nil Contribution fee: The fee on each amount contributed to your Nil investment by you Withdrawal fee: The fee on each amount you take out of Nil your investment Termination fee: The fee to close your investment Nil Management costs The fees and costs for managing your investment 1.28% pa of the net asset value of the Fund (inclusive of GST) and is comprised of the management fee and recoverable expenses. We pay the Manager s fees out of this amount. The management fee and recoverable expenses are calculated daily and paid monthly from the assets of the Fund. Example of annual fees and costs for the Fund This table gives an example of how the fees and costs for the Fund can affect your investment over a one-year period. You should use this table to compare this product with other managed investment products. Example Balance of $50,000 with a contribution of $5,000 during the year 2 Contribution fees Nil For every additional $5,000 you invest you will not be charged any contribution fee Plus Management costs Issuer fee $50,000 x 1.28% = $640 And, for every $50,000 you have in the Fund, you will be charged $640 each year Equals Cost of Fund If you had an investment of $50,000 at the beginning of the year and you invest an additional $5,000 during that year you would be charged a fee of $640 3 The actual cost of investing depends on how much you invest, your investment balance in the Fund (as this varies over time) and the number and types of transactions you make. Additional explanation of fees and costs Changes to fees The fees are current as at the preparation date of this PDS and include the net effect of GST. This means that fees stated in this PDS represent the fee charged plus applicable GST, less any reduced input tax credits that may be claimed by the Fund. Please refer to Section 7 for information about proposed amendments to the GST law which may change the reduced input tax credit entitlement of the Fund. Subject to the Fund constitution, we reserve the right to increase fees, and to introduce additional fees. Factors which may lead us to vary fees include legal, economic, policy and procedural changes. This is not an exhaustive list of circumstances which would lead us to vary the fees of the Fund. We will give you 30 days notice of any changes to the current fee and/or the introduction of any additional fee. Transaction costs and buy/sell spread Transaction costs are paid from the Fund s assets. When you invest or withdraw all or part of your investment, we use what is called a buy/sell spread to recover transaction costs associated with buying and selling the Fund s assets. We use the buy/sell spread to direct these costs to transacting investors rather than investors remaining in the Fund. The buy/sell spreads are paid by an investor to the Fund and are not fees paid to Macquarie. The transaction costs reflected in the above spreads comprise brokerage paid on share transactions, stamp duty and other taxes and the differential between the bid/offer price of the shares transacted. Estimates of these costs were arrived at by analysing broker quotes, taxes, duties and levies, and the difference between the market bid and offer prices of securities held for a portfolio with the same investment strategy as that of the Fund. We review the buy/sell spread at least annually and may vary them at any time, taking into account changes in transaction costs. For the latest buy/sell spread, please contact us using details on page 1 or refer to the website for the latest Fund review: macquarie.com.au/walterscottglobalequityfund/ fundreview 1 For further information on the buy/sell spread please refer to the Transaction costs and buy/sell spread item in Section 6 on Additional explanation of fees and costs. 2 This example assumes the $5,000 contribution occurs at the end of the first year, therefore management costs are calculated using the $50,000 balance only. 3 Additional fees may apply. Please note that this example does not capture all the fees and costs that may apply to you such as the buy/sell spread. 7

8 Fees to financial advisors Additional fees may be payable by you if you consult a financial adviser. The Statement of Advice issued by your financial adviser will set out details of those additional fees. We do not pay any commissions to your financial adviser. However, if you have an adviser the dealer group to which your adviser belongs and your Investor Directed Portfolio Service (IDPS) operator may receive certain payments or other non-monetary benefits from us, such as business and technical support, professional development and entertainment. These payments and benefits are not an additional cost to you. You should read the important information about Fees and costs before making a decision. Go to Section 6 of the Information Booklet at macquarie.com.au/ walterscottglobalequityfund/informationbooklet. The material relating to Fees and costs may change between the time you read this PDS and the day when you acquire the product. Section 7: How managed investment schemes are taxed Investing in a registered managed investment scheme is likely to have tax consequences. The information contained in the following summary is intended to be of a general nature only. It does not constitute tax advice and should not be relied on as such. You are strongly advised to seek independent professional advice on the tax consequences of an investment in the Fund, based on your particular circumstances, before making an investment decision. As investors in the Fund will be presently entitled to the entire amount of the income of the Fund (including any capital gains) for each relevant financial year, the Fund should not be liable to Australian income tax under present income tax legislation. Investors in the Fund will be assessed for tax on their share of the net income of the Fund (including any capital gains) for a financial year. Capital gains or income arising from securities sold to meet a significant withdrawal can be distributed to the withdrawing investor. A significant withdrawal is one where an investor s withdrawals for the financial year have a value of five per cent or more of the Fund s net asset value. In these circumstances, the objective would be for remaining investors not to be affected by the capital gains resulting from a disposal of the assets where both the Fund and the withdrawing investor make a capital gain in the relevant financial year. The five per cent threshold may be varied by us with advance notice to investors. You should read the information about How managed investment schemes are taxed before making a decision. Go to Section 7 of the Information Booklet at macquarie.com.au/walterscottglobalequityfund/ informationbooklet. The material relating to How managed investment schemes are taxed may change between the time when you read this PDS and the day when you acquire the product. Section 8: How to apply Read this PDS together with the Additional Information to the Product Disclosure Statement available on macquarie.com.au/professionalseries Direct investors should complete the application form that accompanies this PDS. You can send the completed application form and required verification documents to us by either: Mail: Macquarie Professional Series GPO Box 2912 Brisbane QLD 4001, or Fax: See the Application Form accompanying this PDS for further information on how to apply. Only an original signed application form will be accepted for making an initial investment. If you are a retail investor (as defined in the Corporations Act) investing directly in the Fund, you will have a 14 day cooling off period. Enquiries and complaints If you have any concerns or complaints, it should be made in writing to: The Complaints Officer Macquarie Investment Management Limited GPO Box 1459 Brisbane QLD 4001 We will always acknowledge any complaint in writing and respond within 45 days. If you believe that your matter has not been dealt with satisfactorily, you can contact the Financial Ombudsman Service (FOS) by calling and quote our membership number 10635, or write to FOS at: Financial Ombudsman Service (FOS) GPO Box 3 Melbourne, VIC, 3001 Indirect investors should contact their IDPS operator about how to apply, your cooling off rights, and how to make a complaint. You should read the information about How to apply before making a decision. Go to Section 8 of the Information Booklet at macquarie.com.au/walterscottglobalequityfund/ informationbooklet. The material relating to How to apply may change between the time when you read this Statement and the day when you acquire this product. OFD /12 8